CERTIFICATE OF DESIGNATIONS, RIGHTS AND
                               PREFERENCES OF THE
                            SERIES D PREFERRED STOCK

                                       OF

                          OPTICARE HEALTH SYSTEMS, INC.

                     PURSUANT TO SECTION 151 OF THE GENERAL
                    Corporation Law of the State of Delaware

         The undersigned, being the President or Secretary of OptiCare Health
     Systems, Inc., a Delaware corporation (the "Corporation"), does hereby
     certify, in his capacity as such, that the following resolution has been
     duly adopted by the board of directors of the Corporation:

             RESOLVED, that pursuant to the authority expressly granted to and
             vested in the board of directors of the Corporation (the "Board")
             by the provisions of Article Fourth of the Corporation's
             Certificate of Incorporation, as amended to date (the "Certificate
             of Incorporation"), the Board hereby creates a series of preferred
             stock of the Corporation, par value $0.001 per share, consisting of
             280,618 shares, which series shall have the following powers,
             designations, preferences and relative participating, optional or
             other rights, and the following qualifications, limitations or
             restrictions:

         1. Designation and Amount. The shares of such series shall have a par
     value of $0.001 per share and shall be designated the "Series D Preferred
     Stock" (the "Series D Preferred Stock") and the number of shares
     constituting the Series D Preferred Stock shall be 280,618.

         2. Rank. The Series D Preferred Stock shall, with respect to rights on
     liquidation, winding up, corporate reorganization and dissolution, rank
     senior to (i) the common stock, par value $0.001 per share, of the
     Corporation (the "Common Stock"), (ii) each other class and series of stock
     of the Corporation now issued or outstanding (the "Existing Stock") and
     (iii) each other class and series of equity securities that may be
     authorized, issued or outstanding in the future and that by its terms does
     not rank senior to or on parity with the Series D Preferred Stock (together
     with the Common Stock and Existing Stock, the "Junior Stock").

         3. Dividends. The holders of shares of the Series D Preferred Stock
     shall be entitled to receive, equally, ratably and on a parity with the
     holders of Common Stock, out of funds legally available therefor, dividends
     in an amount equal to the amount of dividends such holders would receive if
     such shares of Series D Preferred Stock had been converted into Common
     Stock, on each date on which dividends are declared on Common Stock, other
     than dividends payable in Common Stock. Such




     dividends shall be cumulative and shall be payable on the date specified by
     the Board of Directors at the time such dividend is declared (the "Dividend
     Payment Date"), to holders of record as of the close of business on the
     date specified by the Board of Directors at the time such dividend is
     declared (the "Record Date"), concurrently as it shall declare and pay
     dividends to the holders of shares of Common Stock. Any such Record Date
     shall be not less than ten days and not more than 30 days prior to the
     relevant Dividend Payment Date.

         4. Preference on Liquidation. In the event of any voluntary or
     involuntary liquidation, dissolution or winding up of the affairs of the
     Corporation, the holders of shares of Series D Preferred Stock then
     outstanding shall be entitled to be paid, out of the assets of the
     Corporation available for distribution to its stockholders, before any
     payment shall be made or any assets distributed to the holders of any of
     the shares of Series B 12.5% Voting Cumulative Convertible Participating
     Preferred Stock (the "12.5% Preferred Stock"), Series C Preferred Stock or
     Junior Stock an amount in cash for each share of Series D Preferred Stock
     outstanding, equal to $15.84 per share (the "Liquidation Value"), plus an
     amount in cash equal to all accrued but unpaid dividends thereon to the
     date of such payment. If the assets of the Corporation, or the proceeds
     thereof, are not sufficient to pay in full the aggregate amount payable to
     the holders of outstanding shares of the Series D Preferred Stock pursuant
     to the terms of the preceding sentence, then the holders of all such shares
     shall share ratably in such distribution of assets, or the proceeds
     thereof, in accordance with the amount which would be payable on such
     distribution if the amounts to which the holders of outstanding shares of
     Series D Preferred Stock are entitled were paid in full.

         5. Voting Rights. Each holder of shares of Series D Preferred Stock
     shall be entitled to vote in the same manner and with the same effect as
     the holders of the Common Stock on all matters to be voted on by the
     holders of the Common Stock. Except as otherwise expressly provided herein
     or as otherwise required by law, each holder of shares of Series D
     Preferred Stock shall be entitled to the number of votes equal to the
     largest number of full shares of Common Stock into which the shares of
     Series D Preferred Stock of such holder could be converted (even if such
     shares of Common Stock have not yet been authorized and reserved for
     issuance) pursuant to the provisions of Section 6 hereof at the record date
     for the determination of the stockholders entitled to vote on such matters
     or, if no such record date is established, at the date such vote is taken.
     Except as otherwise expressly provided herein or as otherwise required by
     law, the holders of Series D Preferred Stock and any other voting stock
     shall vote together and not as separate classes.

     6. Conversion Rights.

           (a) The shares of Series D Preferred Stock shall be convertible (in
     whole or in part) at the option of the holder thereof on the terms and
     conditions set forth in this Section 6, at any time, to the extent that the
     Corporation has sufficient shares of Common Stock authorized and not
     otherwise reserved, upon surrender to the Corporation of the certificate or
     certificates for the shares to be converted, into a



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     number of fully paid and nonassessable shares of Common Stock equal to the
     Liquidation Value of the Series D Preferred Stock to be converted divided
     by a conversion price (as adjusted as hereinafter provided, the "Conversion
     Price") which initially shall be $0.396.

           (b) Conversion of the Series D Preferred Stock as permitted by
     Section 6(a) hereof may be effected by any holder of shares of Series D
     Preferred Stock upon the surrender to the Corporation at its principal
     office or at such other office or agency maintained by the Corporation for
     that purpose of the certificate for the Series D Preferred Stock to be
     converted accompanied by a written notice substantially in the form of
     Exhibit A attached hereto, stating that such holder elects to convert all
     such shares in accordance with the provisions of this Section 6 and
     specifying the name or names in which such holder wishes the certificate or
     certificates for shares of Common Stock to be issued. The Corporation will
     pay any and all issue transfer and other taxes (other than taxes based on
     income) that may be payable in respect of any issue or delivery of shares
     of Common Stock on conversion of Series D Preferred Stock pursuant hereto
     (except taxes payable because the Common Stock is issued in a new name). As
     promptly as practicable, and in any event within ten (10) Business Days (as
     hereinafter defined) after the surrender of such certificate or
     certificates and the receipt of such notice relating thereto, the
     Corporation shall deliver or cause to be delivered (i) certificates
     representing the number of validly issued, fully paid and nonassessable
     shares of Common Stock to which the holder of shares of Series D Preferred
     Stock being converted shall be entitled, and (ii) payment of all amounts to
     which a holder is entitled pursuant to Sections 6(c) and 6(e) hereof. Such
     conversion shall be deemed to have been made at the close of business on
     the Business Day of giving of such notice and of such surrender of the
     certificate or certificates representing the shares of Series D Preferred
     Stock to be converted so that the rights of the holder thereof as to the
     shares being converted shall cease except for the right to receive shares
     of Common Stock and cash in accordance herewith, and the Person (as
     hereinafter defined) entitled to receive the shares of Common Stock shall
     be treated for all purposes as having become the record holder of such
     shares of Common Stock at such time.

           (c) The Conversion Price shall be subject to adjustment for certain
     events as hereinafter provided. Prior to the conversion of any shares of
     Series D Preferred Stock, the holder thereof shall be entitled to receive,
     out of funds legally available therefor, in cash all accrued unpaid
     dividends declared by the Board of Directors payable up to and including
     the date fixed for conversion.

           (d) The Corporation shall reserve and keep available, free from
     liens, charges and security interests and not subject to any preemptive
     rights, for issuance upon conversion of the Series D Preferred Stock such
     number of its authorized but unissued shares of Common Stock as will from
     time to time be sufficient to permit the conversion of all outstanding
     shares of Series D Preferred Stock.



                                       3


           (e) No fractional shares or scrip representing fractional shares of
     Common Stock shall be issued upon the conversion of any shares of Series D
     Preferred Stock. Instead of any fractional interest in a share of Common
     Stock which would otherwise be deliverable upon the conversion of a share
     of Series D Preferred Stock based upon the total number of shares
     surrendered for conversion by such holder at such time, the number of
     shares of Common Stock to be issued shall be rounded downward to the next
     lowest number of whole shares and the Corporation shall pay a cash
     adjustment in respect of such fractional share in an amount equal to the
     product of such fraction multiplied by the fair market value of one share
     of Common Stock on the conversion date as determined in good faith by the
     Board of Directors. If more than one share shall be surrendered for
     conversion at one time by the same holder, the number of full shares of
     Common Stock issuable upon conversion thereof shall be computed on the
     basis of the Liquidation Value of all of the shares of Series D Preferred
     Stock so surrendered.

           (f) The Conversion Price shall be subject to adjustment as follows in
     case the Corporation shall at any time or from time to time after the date
     of the original issuance of the Series D Preferred Stock (A) pay a dividend
     or make a distribution in shares of Common Stock, (B) subdivide or
     reclassify the outstanding shares of Common Stock into a greater number of
     shares of Common Stock, (C) combine or reclassify the outstanding shares of
     Common Stock into a smaller number of shares, or (D) otherwise issue by
     reclassification of the shares of Common Stock any shares of capital stock
     of the Corporation, then, and in each such case, the Conversion Price shall
     be adjusted so that the holder of any shares of Series D Preferred Stock
     thereafter surrendered for conversion shall be entitled to receive the
     number of shares of Common Stock or other securities of the Corporation
     which such holder would have owned or have been entitled to receive after
     the happening of any of the events described above had such shares of
     Series D Preferred Stock been surrendered for conversion immediately prior
     to the happening of such event or the record date therefor, whichever is
     earlier. An adjustment made pursuant to this Section 6(f) shall become
     applicable (x) in the case of any such dividend or distribution,
     immediately after the close of business on the record date for the
     determination of holders of shares of Common Stock entitled to receive such
     dividend or distribution; provided, however, that an adjustment made
     pursuant to this Section 6(f) shall be reversed if such dividend or
     distribution is not paid or made and (y) in the case of any such
     subdivision, reclassification or combination, at the close of business on
     the day upon which such corporate action becomes effective. Such adjustment
     shall be made successively.

           (g) In case of (x) any capital reorganization or reclassification of
     outstanding shares of Common Stock (other than a reclassification to which
     Section 6(f) hereof shall apply), or (y) any merger or consolidation of the
     Corporation with or into another Person, or (z) any sale or conveyance to
     another Person of all or substantially all of the assets of the Corporation
     , in each case which is effected in such a way that the holders of Common
     Stock are entitled to receive (either directly or upon subsequent
     liquidation) stock, securities or other property (whether such stock,


                                       4


     securities, or other property are issued or distributed by the Corporation
     or any other person) with respect to or in exchange for Common Stock (each
     of the foregoing being referred to as a "Transaction"), each share of
     Series D Preferred Stock then outstanding shall thereafter be convertible
     into, in lieu of the Common Stock issuable upon such conversion prior to
     consummation of such Transaction, the kind and amount of shares of stock
     and other securities and property receivable (including cash) upon the
     consummation of such Transaction by a holder of that number of shares of
     Common Stock into which one share of Series D Preferred Stock was
     convertible immediately prior to such Transaction (including, on a pro rata
     basis, the cash, securities or property received by holders of Common Stock
     in any tender or exchange offer that is a step in such Transaction).

         Notwithstanding anything contained herein to the contrary, the
     Corporation will not effect any Transaction unless, prior to the
     consummation thereof, (i) the Surviving Person (as hereinafter defined)
     shall agree that the shares of Series D Preferred Stock shall be treated as
     provided in the first paragraph of this Section 6(g) and the agreements
     governing such Transaction shall so provide, and (ii) the Surviving Person
     thereof shall assume, by written instrument the obligation to deliver to
     such holder such cash or other securities to which, in accordance with the
     foregoing provisions, such holder is entitled.

           (h) In any case, if necessary, appropriate adjustment (as determined
     in good faith by the Board of Directors) shall be made in the application
     of the provisions set forth in this Section 6 with respect to rights and
     interests thereafter of the holders of shares of Series D Preferred Stock
     to the end that the provisions set forth herein for the protection of the
     conversion rights of Series D Preferred Stock shall thereafter be
     applicable, as nearly as reasonably may be, to any such other shares of
     stock and other securities (other than the Common Stock) and property
     deliverable upon conversion of the shares of Series D Preferred Stock
     remaining outstanding with such adjustments in the Conversion Price and
     such other adjustments in the provisions hereof as the Board of Directors
     shall in good faith determine to be appropriate. In case securities or
     property other than Common Stock shall be issuable or deliverable upon
     conversion as aforesaid, then all references in this Section 6 shall be
     deemed to apply, so far as appropriate and as nearly as may be, to such
     other securities or property.

           (i) If the Corporation shall pay any dividend or make any other
     distribution to the holders of its Common Stock or shall offer for
     subscription pro rata to the holders of its Common Stock any additional
     shares of stock of any class or any other right, or there shall be any
     Transaction, or there shall be a voluntary or involuntary dissolution,
     liquidation or winding up of the Corporation, then, in any one or more of
     said cases the Corporation shall, unless such notice is waived by the
     holders of a majority of the outstanding shares of Series D Preferred
     Stock, give at least ten days prior written notice to the holders of Series
     D Preferred Stock by first-class mail, postage prepaid, to each holder at
     its address as it appears in the records of the Corporation of the earlier
     of the dates on which (i) a record shall be taken for such



                                       5


     stock dividend, distribution or subscription rights or (ii) such
     Transaction, dissolution, liquidation or winding up shall take place. Such
     notice shall also specify the date as of which the holders of the Common
     Stock of record shall participate in said dividend, distribution or
     subscription rights or shall be entitled to exchange their Common Stock for
     securities or other property deliverable upon such Transaction or
     participate in such dissolution, liquidation or winding up, as the case may
     be. Failure to give such notice shall not invalidate any action so taken.

           (j) Upon the occurrence of any event specified in Section 6(f) hereof
     that would result in any adjustment of the Conversion Price, then, and in
     each such case, the Corporation shall promptly deliver by first-class mail,
     postage prepaid, to each holder of shares of Series D Preferred Stock at
     its address as it appears in the records of the Corporation, a certificate
     signed by the President or a Vice President and by the Treasurer or an
     Assistant Treasurer or the Secretary or an Assistant Secretary of the
     Corporation setting forth in reasonable detail the event requiring the
     adjustment and the method by which such adjustment was calculated and
     specifying the conversion rate then in effect following such adjustment.
     Where appropriate, such notice to the holders of Series D Preferred Stock
     may be given in advance and included as part of the notice required
     pursuant to Section 6(i) hereof.

         7. No Preemptive Rights. No holder of Series D Preferred Stock shall
     have any preemptive or preferential right of subscription to any shares of
     stock of the Corporation, or to options, warrants or other interests
     therein or therefor, or to any obligations convertible into stock of the
     Corporation, issued or sold, or any right of subscription to any thereof.

         8. Certain Restrictions. So long as any Series D Preferred Stock is
     outstanding, the Corporation shall not, without the consent of holders of
     two-thirds of the then outstanding shares of Series D Preferred Stock, (i)
     purchase, redeem or otherwise acquire any shares of the outstanding Junior
     Stock of the Corporation other than redemptions or acquisitions of (a) the
     12.5% Preferred Stock in accordance with the terms of the Certificate of
     Incorporation, (b) restricted stock, the issuance and repurchase of which
     has been approved by the Board of Directors or any committee thereof, and
     (c) Common Stock from health service organizations in partial consideration
     of the settlement of claims asserted by the Corporation related to services
     agreement by and between the Corporation and such health service
     organizations, the acquisition of which has been approved by the Board of
     Directors or any committee thereof; (ii) issue any class or series of any
     class of capital stock which ranks prior to or on a parity with the Series
     D Preferred Stock with respect to dividend rights or rights on liquidation,
     winding-up or dissolution of the Corporation; (iii) amend, alter or change
     the preferences or rights of any series or class of capital stock of the
     Corporation (including the Series D Preferred Stock) or the qualifications,
     limitations or restrictions thereof if such amendment, alteration or change
     adversely affects the preferences or rights of the Series D Preferred
     Stock; (iv) amend the Corporation's Certificate of Incorporation or the
     Corporation's Amended and Restated Bylaws, as amended, in a manner that
     would adversely affect the



                                       6


     holders of the Series D Preferred Stock; or (v) increase the number of
     authorized shares of Series D Preferred Stock.

         9. Protection of Series D Preferred Stock Rights. Any holder of Series
     D Preferred Stock may proceed to protect and enforce its rights and the
     rights of such holders by any available remedy by proceeding at law or in
     equity to protect and enforce any such rights, whether for the specific
     enforcement of any provision herein or in aid of the exercise of any power
     granted herein, or to enforce any other proper remedy.

         10. Certain Definitions.

         "Business Day" means any day other than a Saturday, a Sunday or a day
     on which commercial banks in New York City are authorized to be closed.

         "Person" means an individual, corporation, partnership, limited
     liability company, trust, association or any other entity or organization,
     including a government or political subdivision or an agency or
     instrumentality thereof.

         "Surviving Person" means the continuing or surviving Person of a
     merger, consolidation or other corporate combination, the Person receiving
     a transfer of all or a substantial part of the properties and assets of the
     Corporation, or the Person consolidating with or merging into the
     Corporation in a merger, consolidation or other corporate combination in
     which the Corporation is the continuing or surviving Person, but in
     connection with which the Series D Preferred Stock or Common Stock of the
     Corporation is exchanged or converted into the securities of any other
     Person or the right to receive cash of any other property.

                  [Remainder of Page Intentionally Left Blank]




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         IN WITNESS WHEREOF, this Certificate is signed as of the 12th day of
January 2005.


                                            OPTICARE HEALTH SYSTEMS, INC.

                                            By: /s/ Christopher J. Walls
                                               -------------------------------
                                            Name:  Christopher J. Walls
                                            Title: President



                                       8



                                    EXHIBIT A

                        [To Certificate of Designations]

                              NOTICE OF CONVERSION

     (To Be Executed By The Registered Holder In Order to Convert Shares Series
D Preferred Stock)

     The undersigned hereby irrevocably elects to convert _______ shares of the
Series D Preferred Stock, par value $0.001 per share (the "Series D Preferred
Stock"), of OptiCare Health Systems, Inc., a Delaware corporation (the
"Corporation"), into shares of common stock of the Corporation, par value $0.001
per share (the "Common Stock"), in accordance with the terms and conditions set
forth in the Certificate of Designations, Rights and Preferences of the Series D
Preferred Stock. The certificate(s) representing the Common Stock should be
issued in the name(s) of ------------------------------.

                                             Signature ______________________

                                             Address _______________________

                                             Dated:  ______________ ___, _____.





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