SARATOGA RESOURCES INC, S-4, 1999-05-14

SARATOGA RESOURCES INC
S-4, 1999-05-14
CRUDE PETROLEUM & NATURAL GAS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1999
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
-----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
SARATOGA RESOURCES, INC.
(Exact name of registrant as specified in charter)

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<S> <C> <C>
DELAWARE 8741 76-0453392
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation) Classification)
</TABLE>

301 CONGRESS AVENUE -- SUITE 1550
AUSTIN, TEXAS 78701
(512) 478-5717
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
-----------------
THOMAS F. COOKE
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SARATOGA RESOURCES, INC.
301 CONGRESS AVENUE -- SUITE 1550
AUSTIN, TEXAS 78701
(512) 478-5717
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------
Copy to:
ROBERT L. LAWRENCE, ESQ.
KANE KESSLER, P.C.
1350 AVENUE OF THE AMERICAS
NEW YORK, NY 10019
(212) 541-6222
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement and the
satisfaction or waiver of all other conditions to the mergers as described in
the Agreement and Plan of Merger described in the enclosed Proxy
Statement/Prospectus.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) SHARE(2) PRICE(2) FEE
- --------------------------------- --------------- -------------------- -------------------- -------------
<S> <C> <C> <C> <C>
Common Stock, par
value $0.001 per share......... 8,800,000 $ 0.90625 $7,975,000 $ 2,218.00
</TABLE>

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(1) Represents the maximum number of shares of common stock of Saratoga
Resources, Inc. potentially issuable upon consummation of the mergers and
the transactions contemplated thereby.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933, as amended (the
"Securities Act"), and based on the market value (average of the bid and
asked price) as of May 11, 1999, of the shares of common stock of
Saratoga Resource, Inc. as reported on the OTC Bulletin Board of the
National Association of Securities Dealers, Inc.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
<PAGE>

SARATOGA RESOURCES, INC.
301 CONGRESS AVENUE -- SUITE 1550
AUSTIN, TEXAS 78701

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To the Stockholders of Saratoga Resources, Inc.

A Special Meeting of Stockholders of Saratoga Resources, Inc., a Delaware
corporation ("Saratoga"), will be held at [ ], 2:00 p.m. local time, on
, 1999, or any adjournment or postponement thereof, for the following
purposes:

Proposal 1 -- To elect 5 new members of Saratoga's board of directors
(the "Director Election Proposal").

Proposal 2 -- To vote upon a proposal to amend the certificate of
incorporation of Saratoga to effect a 1 for 0.0651 reverse stock split (the
"Reverse Split") of the issued and outstanding common stock of Saratoga
(the "Reverse Split Proposal").

Proposal 3 -- To vote upon a proposal to amend the certificate of
incorporation to change the name (the "Name Change") of Saratoga Resources,
Inc., to OptiCare Health Systems, Inc. (the "Name Change Proposal");

Proposal 4 -- To vote upon a proposal to amend the certificate of
incorporation to require Saratoga to indemnify directors and officers to
the maximum extent permitted by law (the "Indemnification Proposal");

Proposal 5 -- To vote upon a proposal to adopt the Performance Stock
Program (the "Program Proposal").

Proposal 6 -- To vote upon a proposal to adopt the Employee Stock
Purchase Plan (the "Purchase Plan Proposal").

To transact such other business as may properly come before the meeting
or any adjournment or postponement.

The purpose of proposals 1, 2, 3 and 5, is to enable Saratoga to carry out
mergers of OptiCare Eye Health Centers, Inc., a Connecticut corporation, and
PrimeVision Health, Inc., a Delaware corporation, into wholly owned
subsidiaries of Saratoga. All the above-referenced proposals, if adopted at the
meeting, will become effective only upon consummation of the mergers.

Saratoga stockholders do not have to approve the mergers and are not being
asked to do so. However, if the Saratoga stockholders do not approve the name
change, reverse split, election of directors and Performance Stock Program, the
mergers will not be carried out.

The obligations of all parties to the mergers are subject to the
satisfaction or waiver of numerous conditions prior to the proposed closing
date. There is no assurance that such conditions will be satisfied or waived or
that the mergers will be completed.

THOMAS F. COOKE, CHAIRMAN AND CEO OF SARATOGA, IS THE HOLDER OF MORE THAN 64%
OF THE OUTSTANDING COMMON STOCK OF SARATOGA AT THE PRESENT TIME. MR. COOKE
INTENDS TO VOTE ALL HIS SHARES IN FAVOR OF ALL THE PROPOSALS, AND SO THE
APPROVAL BY SARATOGA'S STOCKHOLDERS OF THE ACTIONS REQUIRED BY SARATOGA FOR THE
MERGERS IS VIRTUALLY ASSURED.

The board of directors has fixed the close of business on , 1999 as
the record date for the determination of the holders of common stock entitled
to notice of, and to vote at, the meeting or any adjournment or postponement.
Your attention is directed to the accompanying Proxy Statement/ Prospectus.

A list of stockholders entitled to vote will be kept by Saratoga at 301
Congress Avenue, Suite 1550, Austin, Texas 78701, for ten days before the
meeting.
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ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO ENSURE
YOUR REPRESENTATION AT THE MEETING, HOWEVER, YOU ARE URGED TO COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. A
POSTAGE-PREPAID ENVELOPE IS ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER
ATTENDING THE MEETING MAY VOTE IN PERSON EVEN IF THAT STOCKHOLDER HAS RETURNED
A PROXY CARD.

By Order of the Board of Directors

Thomas F. Cooke,
Chairman and Chief Executive
Officer

Dated: , 1999

ii
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TABLE OF CONTENTS

<TABLE>
<S> <C>
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS ......................................... -i-
AVAILABLE INFORMATION ............................................................. 3
TRADEMARKS ........................................................................ 4
FORWARD-LOOKING STATEMENTS ........................................................ 4
SUMMARY ........................................................................... 5
RISK FACTORS ...................................................................... 11
Forward-looking Statements ....................................................... 11
Substantial Indebtedness ......................................................... 12
Recent Historical and Pro Forma Losses ........................................... 12
Potential Dilution ............................................................... 12
Risks Associated with Business Plan .............................................. 12
Risks Associated with Managed Care Contracts and Capitated Fee Arrangements. ..... 13
Government Regulation ............................................................ 14
Cost Containment And Reimbursement Trends ........................................ 15
Dependence on Key Individuals .................................................... 15
Risks Arising From Health Care Reform ............................................ 15
Risks Related to Amortization of Intangible Assets ............................... 15
Non-competition Covenants ........................................................ 16
Medical Malpractice Claims ....................................................... 16
Competition ...................................................................... 16
Certain Anti-takeover Provisions ................................................. 16
Restrictions on Payment of Dividends ............................................. 17
Potential Conflicts of Interest from Related Party Transactions. ................. 17
Possible Volatility of Stock Price. .............................................. 17
Listing of Common Stock and Penny Stock Rules .................................... 17
HISTORICAL MARKET PRICES OF SARATOGA COMMON STOCK AND DIVIDEND
POLICY ........................................................................... 19
SELECTED HISTORICAL FINANCIAL DATA -- SARATOGA RESOURCES, INC. .................... 20
SELECTED HISTORICAL COMBINED FINANCIAL DATA OF OPTICARE EYE
HEALTH CENTERS, INC. ............................................................. 21
SELECTED HISTORICAL FINANCIAL DATA OF PRIME AND PRO FORMA
COMBINED FINANCIAL DATA OF THE COMBINED COMPANY .................................. 22
COMPARATIVE PER SHARE INFORMATION ................................................. 23
SPECIAL MEETING ................................................................... 24
Date, Time and Place of Special Meeting .......................................... 24
Purpose .......................................................................... 24
Record Date and Outstanding Shares ............................................... 24
Quorum ........................................................................... 24
Required Vote .................................................................... 25
Proxies .......................................................................... 25
Solicitation of Proxies; Expenses ................................................ 25
PROPOSAL 1 -- DIRECTOR ELECTION PROPOSAL ......................................... 26
PROPOSAL 2 -- REVERSE SPLIT PROPOSAL ............................................. 26
PROPOSAL 3 -- NAME CHANGE PROPOSAL ............................................... 28
PROPOSAL 4 -- INDEMNIFICATION PROPOSAL ........................................... 28
PROPOSAL 5 -- ADOPTION OF PERFORMANCE STOCK PROGRAM .............................. 29
</TABLE>

iii
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<TABLE>
<S> <C>
PROPOSAL 6 -- ADOPTION OF EMPLOYEE STOCK PURCHASE PLAN ................................ 33
DESCRIPTION OF THE MERGERS ............................................................. 36
Material Contacts and Board Deliberations ............................................. 36
Saratoga's Business Strategy and Reasons for the Mergers .............................. 38
Recommendation of Saratoga's Board of Directors ....................................... 39
OptiCare's Reasons for the Merger ..................................................... 39
Prime's Reasons for the Merger ........................................................ 40
Structure of the Mergers and Conversion of OptiCare and Prime Common Stock ............ 41
Exchange of OptiCare and Prime Stock Certificates for Saratoga Stock Certificates ..... 42
Material Federal Income Tax Consequences of the Mergers ............................... 42
Accounting Treatment of the Mergers ................................................... 43
Regulatory Filings and Approvals Required to Complete the Mergers ..................... 43
Stock Exchange Listing ................................................................ 44
Stockholders' Appraisal Rights--Saratoga .............................................. 44
Stockholders' Appraisal Rights--OptiCare .............................................. 44
Stockholders' Appraisal Rights--Prime ................................................. 47
Board of Directors and Management of Saratoga Following the Mergers ................... 49
Operations after the Mergers .......................................................... 49
Employment Agreements ................................................................. 49
Restrictions on Sales of Shares by Affiliates of Saratoga, OptiCare and Prime ......... 49
Disposition of Saratoga's Subsidiaries ................................................ 49
SUMMARY OF THE MERGER AGREEMENT ........................................................ 51
Representations and Warranties ........................................................ 51
Conduct of Business Before Completion of the Mergers .................................. 52
Additional Agreements ................................................................. 52
Conditions to Completion of the Mergers ............................................... 53
Treatment of OptiCare and Prime Stock Options and Warrants ............................ 55
Fractional Saratoga Shares ............................................................ 56
Termination of the Merger Agreement ................................................... 56
Extension, Waiver and Amendment of the Merger Agreement ............................... 56
RELATED AGREEMENTS ..................................................................... 57
Affiliate Agreements .................................................................. 57
Settlement Agreement .................................................................. 57
Lock-up Agreements .................................................................... 57
Treatment of Prime Class A Preferred Stock ............................................ 58
Amendment of Certain OptiCare Agreements .............................................. 58
INFORMATION ABOUT SARATOGA ............................................................. 59
Saratoga Management's Discussion and Analysis of Financial Condition and Results of
Operations .......................................................................... 59
Business of Saratoga Prior to the Mergers ............................................. 60
BUSINESS OF OPTICARE, PRIME AND THE COMBINED COMPANY ................................... 64
Business of OptiCare Prior to the Merger .............................................. 64
OptiCare Management's Discussion and Analysis of Financial Condition and Results of
Operations .......................................................................... 65
OptiCare Security Ownership ........................................................... 70
Business of Prime Prior to the Mergers ................................................ 71
Prime Management's Discussion and Analysis of Financial Condition and Results of
Operations .......................................................................... 73
</TABLE>

iv
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<TABLE>
<S> <C>
Business of the Combined Company Following Consummation of the Mergers ............. 75
Combined Company Management's Discussion and Analysis of Pro Forma Combined
Financial Condition and Results of Operations .................................... 82
MANAGEMENT OF THE COMBINED COMPANY FOLLOWING CONSUMMATION
OF THE MERGERS ..................................................................... 83
Directors ........................................................................ 83
Executive Officers of the Combined Company ....................................... 84
Committees of the Board of Directors ............................................. 84
Compensation of Directors And Executive Officers of The Combined Company After
The Mergers ..................................................................... 85
Security Ownership of Certain Beneficial Owners and Management. .................. 85
Certain Relationships and Related Transactions ................................... 86
DESCRIPTION OF THE SARATOGA CAPITAL STOCK ........................................... 89
COMPARISON OF STOCKHOLDER RIGHTS .................................................... 91
INDEPENDENT AUDITORS ................................................................ 102
LEGAL MATTERS ....................................................................... 102
EXPERTS ............................................................................. 102
STOCKHOLDER PROPOSALS ............................................................... 102
INDEX TO FINANCIAL STATEMENTS ....................................................... F-1
ANNEX
Annex A: Agreement and Plan of Merger ............................................... A-1
Annex B: Proposed Certificate of Amendment of
the Certificate of Incorporation of Saratoga ................................. B-1
Annex C: Performance Stock Program .................................................. C-1
Annex D: Employee Stock Purchase Plan ............................................... D-1
</TABLE>

v
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PROXY STATEMENT/PROSPECTUS
-------------------------
SARATOGA RESOURCES, INC.
UP TO 8,800,000 SHARES OF COMMON STOCK
-------------------------
PROXY STATEMENT
FOR
SPECIAL MEETINGS OF STOCKHOLDERS
TO BE HELD ON , 1999

This Proxy Statement/Prospectus of Saratoga Resources, Inc., a Delaware
corporation ("Saratoga" or the "Company") is furnished in connection with the
solicitation by the board of Saratoga of proxies from holders of its common
stock for use at the special meeting of stockholders to be held on ,
1999, or any adjournments or postponements thereof (the "Special Meeting") for
the purposes set forth in the attached Notice of Special Meeting. This Proxy
Statement/Prospectus relates to the mergers of OptiCare Eye Health Centers,
Inc., a Connecticut corporation ("OptiCare") with OptiCare Shellco Merger
Corporation, a Delaware corporation ("OptiCare Sub") which is wholly-owned by
Saratoga, and PrimeVision Health, Inc., a Delaware corporation ("Prime") with
Prime Shellco Merger Corporation, a Delaware corporation ("Prime Sub") which is
also wholly owned by Saratoga, pursuant to the Agreement and Plan of Merger,
dated as of April 12, 1999 (the "Merger Agreement"), among Saratoga, OptiCare,
OptiCare Sub, Prime and Prime Sub.

The approximate date of mailing of this Proxy Statement/Prospectus is
, 1999.

The purpose of the proposals set forth in the Notice of Special Meeting
(except for the Indemnification Proposal and the Purchase Plan Proposal) is to
enable Saratoga to carry out mergers of OptiCare and Prime into wholly owned
subsidiaries of Saratoga. The proposals set forth in the Notice of Special
Meeting, if adopted at the meeting, will become effective only upon
consummation of the mergers.

THOMAS F. COOKE, CHAIRMAN AND CEO OF SARATOGA, IS THE HOLDER OF MORE THAN
64% OF THE OUTSTANDING COMMON STOCK OF SARATOGA AT THE PRESENT TIME. MR. COOKE
INTENDS TO VOTE ALL HIS SHARES IN FAVOR OF ALL THE PROPOSALS, AND SO THE
APPROVAL BY SARATOGA'S STOCKHOLDERS OF THE ACTIONS REQUIRED BY SARATOGA FOR THE
MERGERS IS VIRTUALLY ASSURED.

This Proxy Statement/Prospectus serves as a prospectus under the
Securities Act of 1933, as amended (the "Securities Act"), for (i) the issuance
of up to 8,800,000 shares (giving effect to the Reverse Split) of Saratoga
common stock which will be issued at the effective time of the mergers. Upon
consummation of the mergers, the stockholders of Saratoga, Prime and OptiCare
immediately before the effective time will have a number of shares of Saratoga
common stock which will constitute approximately 2.5%, 48.755%, and 48.745%,
respectively, of the total amount of Saratoga common stock.

The Saratoga shares to be issued to stockholders of OptiCare and Prime
(collectively, the "Constituent Companies") will be issued after the
distribution to the stockholders of Saratoga of the capital stock of Saratoga
Holdings I, Inc., a Texas corporation which is currently a subsidiary of
Saratoga. Saratoga's Board also proposes to dispose of Saratoga Resources,
Inc., a Texas corporation ("Saratoga Texas"), which is a wholly-owned
subsidiary of Saratoga by way of a distribution to the Saratoga stockholders,
on a pro rata basis, of 100% of the capital stock of Saratoga-Texas. In
addition, the stockholders of the Constituent Companies will not participate in
any distribution of the stock or proceeds from any sale, as the case may be, of
Saratoga Holdings I, Inc., Saratoga-Texas, or any other currently existing
subsidiary of Saratoga. See "Description of the Mergers--Disposition of
Saratoga's Subsidiaries."

Saratoga intends to apply for listing of its common stock on the American
Stock Exchange, Inc. ("AMEX"). The listing on AMEX or NASDAQ is a condition
precedent of the mergers. Prior to the date
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of this Proxy Statement/Prospectus, Saratoga common stock has traded over the
counter and quotes are reported on the OTC Bulletin Board operated by the
National Association of Securities Dealers. On April 12, 1999, the last trading
day before the public announcement of the proposed mergers, the average of the
closing bid and asked price of Saratoga common stock was $0.56 (without giving
effect to adjustment for the proposed Reverse Split).

THE ABOVE MATTERS ARE DISCUSSED IN DETAIL IN THIS PROXY STATEMENT/PROSPECTUS.
THE STOCKHOLDERS ARE URGED TO READ AND CONSIDER CAREFULLY THIS PROXY
STATEMENT/PROSPECTUS IN ITS ENTIRETY, INCLUDING THE MATTERS REFERRED TO
BEGINNING ON PAGE UNDER "RISK FACTORS".

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORS HAVE APPROVED THE SARATOGA STOCK TO BE ISSUED UNDER THIS PROXY
STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS IS
ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

----------------
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROXY STATEMENT/PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
----------------
The date of this Proxy Statement/Prospectus is , 1999

2
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AVAILABLE INFORMATION

Saratoga is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by Saratoga with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission, at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following
regional offices of the Commission: Midwest Regional Office: Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Northeast
Regional Office: 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of
the Commission, at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a
site on the World Wide Web at http: //www.sec.gov that contains reports, proxy
and information statements and other information regarding registrants,
including Saratoga, that file electronically with the Commission.

Saratoga has filed with the Commission a Registration Statement on Form
S-4 (herein, together with all amendments and exhibits, the "Registration
Statement") under the Securities Act with the Commission covering the Saratoga
common stock to be issued pursuant to the Merger Agreement. As permitted by the
rules and regulations of the Commission, this Proxy Statement/Prospectus does
not contain all information set forth in the Registration Statement and
exhibits thereto, all of which are available for inspection at the offices of
the Commission at the addresses set forth above. For further information,
please refer to the Registration Statement, including the exhibits thereto.
Statements contained in this Proxy Statement/Prospectus relating to the
contents of any contract or other document referred to herein are not
necessarily complete, and reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such
reference.

No person has been authorized to give any information or to make any
representation not contained in, or incorporated by reference in, this Proxy
Statement/Prospectus, and, if given or made, such information or representation
should not be relied upon as having been authorized. The delivery of this Proxy
Statement/Prospectus to any person does not constitute an offer to sell, or the
solicitation of an offer to purchase, the securities offered hereby or a
solicitation of a proxy in any jurisdiction where such offer or solicitation
would be unlawful. Neither the delivery of this Proxy Statement/Prospectus nor
the issuance of any securities hereunder shall under any circumstances create
any implication that there has been no change in the information regarding
Saratoga set forth herein since the date hereof or incorporated by reference
since the date hereof.

3
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TRADEMARKS

This Proxy Statement/Prospectus contains reference to trademarks or
service marks of OptiCare and Prime and may contain references to trademarks or
service marks of others.

FORWARD-LOOKING STATEMENTS

This Proxy Statement/Prospectus contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict.
Additionally, statements concerning future matters such as the addition of new
products or services, or new agreements, enhancements or technologies, and
other statements regarding matters that are not historical fact are
forward-looking statements. The forward-looking statements reflect the best
judgment of the management of Saratoga, OptiCare and Prime, as appropriate,
based on factors currently known and involve risks and uncertainties. Actual
results and outcomes may differ materially from the results and outcomes
discussed in the forward-looking statements. The matters set forth under the
caption "Risk Factors" in this Proxy Statement/Prospectus, as well as those
discussed elsewhere in this Proxy Statement/Prospectus or in documents that are
incorporated herein by reference. constitute cautionary statements identifying
important factors with respect to such forward-looking statements, including
certain risks and uncertainties, that could cause actual results or outcomes to
differ materially from those in such forward-looking statements.

Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which reflect the analysis of the management of
Saratoga, OptiCare and Prime, as appropriate, only as of the date hereof.
Saratoga does not undertake any obligation to revise or update these
forward-looking statements to reflect any events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

4
<PAGE>

SUMMARY

THE COMPANIES

Saratoga Resources, Inc.
301 Congress Avenue
Suite 1550
Austin, TX 78701
(512) 478-5717

Saratoga Resources, Inc., a Delaware corporation ("Saratoga") operated as
an energy acquisition and development company until the liquidation of its oil-
and gas-producing properties in 1996. Since that time, management has sought
new business opportunities through acquisitions and through use of Saratoga's
database and expertise in the oil and gas business. In December 1998, Saratoga
Holdings I, Inc., a wholly owned subsidiary of Saratoga, acquired a portfolio
of consumer debt receivables at a deep discount and commenced a business of
acquiring, reselling, managing and collecting portfolios of delinquent and
defaulted accounts receivable.

OptiCare Eye Health Centers, Inc.
87 Grandview Avenue
Waterbury, CT 06708
(203) 596-2236

OptiCare Eye Health Centers, Inc., a Connecticut corporation ("OptiCare")
is headquartered in Waterbury, Connecticut. OptiCare is a diversified eye
health services company that delivers a range of services to eye care
professionals and managed care plans. OptiCare has four business divisions, all
located primarily in Connecticut:

(i) ophthalmology services, which owns and operates eye health
centers and provides services to ophthalmologists in
Connecticut;

(ii) retail optometry, which owns and operates retail optometry
locations in Connecticut;

(iii) managed care, which contracts with managed care plans to
establish and manage networks of eye care providers to
render eye care services to persons covered by managed care
plans; and

(iv) ambulatory surgery centers ("ASC's"), which provide
outpatient surgical services for eye-related diseases in
three facilities in Connecticut plus one refractive laser
center.

PrimeVision Health, Inc.
First Union Capital Center
150 Fayetteville Street Mall
Suite 1000
Raleigh, NC 27601
(800) 784-7466

PrimeVision Health, Inc. ("Prime") is a vision services company
incorporated in Delaware and headquartered in North Carolina. Prime is involved
in three vision-related lines of business: (1) managed vision care, (2) buying
group and distribution and (3) optometric practice management and retail
optical. In December 1998, the board of directors approved the disposal of
Prime's ophthalmology practice management division and related administrative
support functions while continuing the management of ambulatory surgery centers
("ASC's") in California, Kentucky and Indiana.

We refer to the "combined company" frequently in this Proxy
Statement/Prospectus. We use that term to refer to the business of Saratoga as
it will exist after the consummation of the mergers with OptiCare and Prime. We
assume when we use that term that the mergers will occur.

5
<PAGE>

REASONS FOR THE MERGERS

The Prime board and OptiCare board believe that: (i) the combination
offers OptiCare and Prime stockholders the opportunity to own a publicly traded
stock; (ii) OptiCare's and Prime's stockholders would participate in a bigger
company with enhanced scale and potential to leverage operating infrastructure;
and (iii) OptiCare's management expertise will improve the profitability of
Prime.

Saratoga's board of directors wants to effect the mergers as a
continuation of its strategy of pursuing potential business opportunities and
preserving stockholder value. Saratoga's board of directors believes, after
three years of efforts to find other business opportunities, that the mergers,
as they have been structured, represent a reasonable opportunity for Saratoga
to utilize its assets for the benefit of its stockholders.

At a meeting held on March 26, 1999, the board of directors of Saratoga
concluded that the mergers were in the best interests of Saratoga and its
stockholders and determined to recommend that the stockholders approve the
proposals in connection with the mergers.

To review the reasons for the mergers in greater detail, see "Description
of the Mergers."

THE MERGERS

The Merger Agreement is attached as Annex A to this Proxy
Statement/Prospectus. We encourage you to read the Merger Agreement as it is
the legal document that governs the mergers.

Structure of the Mergers and Conversion of OptiCare and Prime Common Stock

Prime Shellco Merger Corporation, a newly-formed and wholly-owned
subsidiary of Saratoga, will be merged with and into Prime. As a result of the
merger, the separate corporate existence of Prime Shellco Merger Corporation
will cease and Prime will survive the merger as a wholly-owned subsidiary of
Saratoga.

Thereafter, OptiCare Shellco Merger Corporation, a newly-formed and
wholly-owned subsidiary of Saratoga, will be merged with and into OptiCare. As
a result of the merger, the separate corporate existence of OptiCare Shellco
Merger Corporation will cease and OptiCare will survive the merger as a
wholly-owned subsidiary of Saratoga.

As a result of the mergers, Prime stockholders will receive for each share
of Prime common stock, the number of shares of Saratoga common stock determined
by multiplying each share of Prime common stock by the Prime exchange ratio, as
described in greater detail in the section entitled "Description of the
Merger--Structure of the Mergers and Conversion of OptiCare and Prime Stock."
Based upon current available information, Prime stockholders will receive, for
each share of Prime common stock, 0.3134 shares of Saratoga common stock.

As a result of the mergers, OptiCare stockholders will receive for each
share of OptiCare stock, the number of shares of Saratoga common stock
determined by multiplying each share of OptiCare stock by the OptiCare Exchange
Ratio, as described in greater detail in the section entitled "Description of
the Mergers--Structure of the Mergers and Conversion of OptiCare and Prime
Stock." Based upon current available information, OptiCare stockholders will
receive, for each share of OptiCare stock, 11.7364 shares of Saratoga common
stock.

Listing of Saratoga Common Stock

It is a condition to the mergers that the shares of Saratoga common stock
to be issued in connection with the mergers be approved for listing on either
the American Stock Exchange or NASDAQ. Saratoga intends to list its securities
on the American Stock Exchange.

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Stock Ownership following the Mergers

Upon consummation of the mergers, the stockholders of Saratoga, Prime and
OptiCare immediately before the effective time will own approximately the
following percentages of common stock of the combined company:

<TABLE>
<S> <C>
Pre-merger Saratoga stockholders ......... 2.500%
Former OptiCare stockholders ............. 48.745%
Former Prime stockholders ................ 48.755%
-------
Total .............................................. 100.00%
</TABLE>

The foregoing amounts have been calculated on a primary basis, giving
effect to the Reverse Split and the mergers.

Appraisal Rights

Saratoga. Saratoga stockholders are not entitled to appraisal rights in
connection with the mergers or the related proposals.

Prime. Prime stockholders are entitled to have the fair value of their
stock appraised by a court and paid to them in cash. To do this, the holders of
Prime common stock must follow these required procedures:

o Prime stockholders must deliver a written demand for appraisal to Prime
on or before the vote is taken at the Prime special meeting.

o Prime stockholders must not vote in favor of or abstain from voting on
the merger.

o Prime stockholders must hold such shares of Prime common stock from the
date of the making of the demand through the closing of the Prime merger.

If a Prime stockholder follows the required formalities, his/her shares
will not be converted into the right to receive Saratoga common stock in the
merger. Instead, such holder's only right will be to receive the appraised
value of his/her shares in cash as determined by a court.

OptiCare. Because OptiCare is a constituent corporation in the merger of
OptiCare and OptiCare Shellco Merger Corporation (the "OptiCare Merger"), the
Connecticut Business Corporation Act (the "CBCA") provides that OptiCare
stockholders are entitled to dissent from the OptiCare Merger. Any OptiCare
stockholder who objects to the OptiCare Merger has the right to be paid the
fair value of all shares of OptiCare stock owned by such stockholder in
accordance with the provisions of CBCA Sections 33-855 to 33-872, a complete
text of which will be mailed to the OptiCare stockholders.

Any OptiCare stockholder who wishes to assert dissenters' rights (i) must
deliver to OptiCare before the vote is taken on the OptiCare Merger written
notice of such stockholder's intent to demand payment for such stockholder's
shares if the OptiCare Merger is consummated and (ii) must not vote such shares
in favor of the OptiCare Merger. Such notice may be addressed to OptiCare's
registered agent at its registered office or to OptiCare or its Secretary at
the following address: OptiCare Eye Health Centers, Inc., 87 Grandview Avenue,
Waterbury, CT 06708.

An OptiCare stockholder who votes in favor of the OptiCare Merger will be
precluded from exercising dissenters' rights.

An OptiCare stockholder who returns a signed proxy which does not specify
in the proxy either a vote "AGAINST" adoption of the OptiCare Merger or an
instruction to abstain, will be deemed to have voted "FOR" adoption of the
OptiCare Merger, which will have the effect of waiving the dissenters' rights
of that OptiCare stockholder. Abstaining from voting or voting against the
adoption of the OptiCare Merger will not constitute a waiver of dissenters'
rights.

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A vote against the OptiCare Merger will not of itself satisfy the
requirements that a dissenting OptiCare stockholder deliver his or her written
notice of intent to demand payment if the OptiCare Merger is consummated, nor
will such vote satisfy any other notice requirement under Connecticut law with
respect to dissenters' rights.

See "Description of the Mergers--Stockholders' Appraisal
Rights--OptiCare."

Board of Directors following the Mergers

Pursuant to the Merger Agreement, upon consummation of the mergers, the
Saratoga directors shall resign, and the board of directors of Saratoga shall
be reconstituted. Saratoga is now seeking approval for the election of Dean J.
Yimoyines, Steven L. Ditman, Martin E. Franklin, Allan L.M. Barker and John F.
Croweak. After the mergers, the designees of Prime to the combined company
board of directors, after consultation with the other directors of the combined
company, will designate two more directors, so that the entire board will be
comprised of seven members.

Interest of Officers and Directors in the Mergers

You should be aware that a number of Prime and OptiCare officers and
directors may have interests in the mergers that may be different from, or in
addition to, yours. See "Management of the Combined Company Following
Consummation of the Mergers."

Accounting Treatment

The Prime merger has been accounted for as a reverse acquisition by Prime
of Saratoga at book value with no adjustments reflected to historical values.
The acquisition of OptiCare by Saratoga has been accounted for under the
purchase method of accounting with the excess of purchase price over the
estimated fair value of net assets acquired being recorded as goodwill.

Material Federal Income Tax Consequences of the Mergers

The mergers are intended to be structured as "tax-free reorganizations"
for federal income tax purposes. Accordingly, holders of Prime and OptiCare
stock generally will not recognize any gain or loss for federal income tax
purposes on the exchange of their stock for Saratoga stock in the mergers,
except for any gain or loss recognized in connection with the receipt of cash
instead of a fractional share of Saratoga common stock. The companies
themselves, as well as holders of Saratoga stock, will not recognize gain or
loss as a result of the mergers.

The federal income tax consequences described above may not apply to some
stockholders of Saratoga, Prime and OptiCare. Your tax consequences will depend
upon your personal situation. You should consult your tax advisor for a full
understanding of the tax consequences of the mergers to you.

Our obligations to complete the mergers are not conditioned on the
delivery of an opinion regarding federal income tax consequences of the
mergers. Each of Saratoga, Prime, and OptiCare is not intending to obtain such
a tax opinion. We believe that the mergers will have the federal income tax
consequences discussed above. However, no assurance can be given that contrary
positions will not be successfully asserted by the IRS or adopted by a court if
the issues are litigated.

See "Description of the Mergers--Material Federal Income Tax Consequences
of the Mergers."

Conditions to Completion of the Mergers

The obligations of each of Saratoga, Prime and OptiCare to complete the
mergers and the other transactions contemplated by the Merger Agreement are
subject to the satisfaction, or waiver, of numerous conditions. To review the
conditions to completion of the mergers, see "Summary of the Merger
Agreement--Conditions to Completion of the Mergers."

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Regulatory Approvals

The mergers are subject to the requirements of the Hart-Scott-Rodino
Antitrust Improvements Act, which prevents certain transactions from being
completed until required information and materials are furnished to the
Antitrust Division of the Department of Justice and the Federal Trade
Commission and the appropriate waiting periods end or expire. We intend to file
the required information and materials with the Department of Justice and the
Federal Trade Commission and request early termination of the applicable
waiting period.

Other regulatory approvals include:

o consents to change of control with respect to two ASC's in
Connecticut;

o consents to change of control with respect to two HMO's in North
Carolina and Texas;

o compliance with applicable state securities laws.

Saratoga is not aware of any other material governmental or regulatory
approval required for completion of the mergers, other than the effectiveness
of the registration statement of which this Prospectus/Proxy Statement is a
part, and compliance with applicable corporate law of Delaware and
Connecticut. See "Risk Factors--Government Regulation--Insurance Licensure" and
"Description of the Mergers--Regulatory Filings and Approvals Required to
Complete the Mergers."

THE PROPOSALS AT THE SARATOGA SPECIAL MEETING.

The Saratoga stockholders will be asked to consider and vote upon
resolutions to adopt the following proposals:

Proposal 1 -- To elect five new members of Saratoga's board of directors
(the "Director Election Proposal").

Proposal 2 -- To vote upon a proposal to amend the certificate of
incorporation of Saratoga to effect a 1 for 0.0651 reverse stock
split (the "Reverse Split") of the issued and outstanding common
stock of Saratoga (the "Reverse Split Proposal");

Proposal 3 -- To vote upon a proposal to amend the certificate of
incorporation to change the name (the "Name Change") of Saratoga
Resources, Inc., to "OptiCare Health Systems, Inc." (the "Name
Change Proposal");

Proposal 4 -- To vote upon a proposal to amend the certificate of
incorporation to require Saratoga to indemnify directors and
officers to the maximum extent permitted by law (the
"Indemnification Proposal");

Proposal 5 -- To vote upon a proposal to adopt the Performance Stock
Program (the "Program Proposal"); and

Proposal 6 -- To vote upon a proposal to adopt the Employee Stock Purchase
Plan (the "Purchase Plan Proposal").

The purpose of proposals 1, 2, 3 and 5 is to enable Saratoga to carry out
mergers of OptiCare and Prime with wholly owned subsidiaries of Saratoga. The
foregoing proposals, if adopted at the meeting, will become effective only upon
consummation of the mergers.

Saratoga stockholders do not have to approve the mergers and are not being
asked to do so. However, if the Saratoga stockholders do not approve the
amendments to the certificate of incorporation to effect the Name Change and
Reverse Split, adopt the Performance Stock Program and elect five new
directors, the mergers will not be carried out.

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<PAGE>

REQUIRED VOTE

Pursuant to the Delaware General Corporation Law, an affirmative vote of
the holders of a majority of the outstanding shares of Saratoga common stock
entitled to vote at the Special Meeting is required for the adoption of the
amendments to Saratoga's certificate of incorporation contemplated by each of
the Reverse Split Proposal, Name Change Proposal and Indemnification Proposal
to be presented at the Special Meeting. Abstentions and broker non-votes will
have the legal effect of a vote against those proposals. As noted above, Mr.
Cooke intends to vote his shares, constituting more than 64% of the Saratoga
common stock outstanding prior to the effective time of the mergers, in favor
of the proposals, and so approval of the proposals is virtually assured.

For the election of directors, a plurality of the votes cast by the
holders of Saratoga common stock present in person or by proxy at the Special
Meeting is required for the election of the nominees for directors under the
Director Election Proposal. As noted above, Mr. Cooke intends to vote his
shares, constituting more than 64% of the Saratoga common stock outstanding
prior to the effective time of the mergers, in favor of the election of
directors, and so the election of the directors is virtually assured.

A majority of the shares of Saratoga common stock present in person or
represented by proxy at the Special Meeting and entitled to vote, is required
for the approval and adoption of each of the Performance Stock Program and the
Employee Stock Purchase Plan. Abstentions will have the legal effect of a vote
against each of the Program Proposal and the Purchase Plan Proposal. With
respect to a broker non-vote on the Program Proposal and the Purchase Plan
Proposal, such shares will not be considered present at the Special Meeting,
and, since they will not be counted in the voting with respect to those
matters, will have the practical effect of reducing the number of affirmative
votes necessary to achieve the required majority vote by reducing the total
number of shares from which the majority is calculated. As noted above, Mr.
Cooke intends to vote his shares, constituting more than 64% of the Saratoga
common stock outstanding prior to the effective time of the mergers, in favor
of each of the Program Proposal and the Purchase Plan Proposal and so approval
of the Program Proposal and the Purchase Plan Proposal is virtually assured.

The proposals will become effective only if and when the mergers are
consummated.

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RISK FACTORS

An investment in the shares of common stock of Saratoga, after
consummation of the mergers with OptiCare and Prime (the "combined company"),
involves a high degree of risk. Prospective investors should carefully consider
the following risk factors, in addition to the other information set forth in
this Proxy Statement/Prospectus, in connection with an investment in the common
stock of the combined company.

Forward-looking Statements. This Proxy Statement/Prospectus and certain
information provided periodically in writing and orally by Saratoga's
designated officers and agents contain statements which constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
The words "expect," "believe," "goal," "plan," "intend," "estimate," and
similar expressions and variations thereof used in this Proxy Statement/
Prospectus are intended to specifically identify forward-looking statements.
Those statements appear in a number of places in this Proxy
Statement/Prospectus, particularly in the Management's Discussions and Analyses
of Financial Condition and Results of Operations and Reasons for the Mergers,
and include statements regarding the intent, belief or current expectations of
the combined company, its directors or its officers with respect to, among
other things:

o the financial prospects of the combined company;

o the ability of the combined company to efficiently and effectively
manage its existing business and grow its business profitably;

o the combined company's financing plans, including the combined company's
ability to raise additional debt and equity capital;

o trends affecting the combined company's financial condition and results
of operations, including the stock price of the combined company and its
potential impact on the number of shares utilized in acquisitions and on
future earnings per share;

o the combined company's growth strategy and operating strategy;

o the impact of current and future governmental regulations;

o the combined company's current and future managed care contracts; and

o the combined company's ability to continue to recruit eye care providers
and to maintain satisfactory business relationships with its network of
eye care providers.

Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors. The
factors that might cause such differences include, among others, the following:

o the combined company's experiencing future operating and net losses;

o any material inability of the combined company to successfully integrate
and profitably operate OptiCare and Prime;

o any material inability of the combined company to obtain sufficient
capital and financing to fund its business strategy and operations;

o the inability of the combined company to expand its managed care
business, renew existing managed care contracts at profitable price
structures and maintain and expand its network of eye care providers;

o changes in state and/or federal governmental regulations which could
materially affect the combined company's ability to operate or materially
affect the combined company's profitability;

o the inability of the combined company to maintain or obtain required
licensure in the states in which it operates and in the states in which
it may seek to operate in the future;

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<PAGE>

o the combined company's inability to meet its financing covenants and
commitments.

The combined company undertakes no obligation to publicly update or revise
forward-looking statements to reflect events or circumstances after the date of
this Proxy Statement/Prospectus or to reflect the occurrence of unanticipated
events.

The risk factors set forth below should be read in light of the above
explanation of the uncertainties of forward-looking statements.

SUBSTANTIAL INDEBTEDNESS

Upon consummation of the mergers and related transactions, the combined
company anticipates bank indebtedness of approximately $25 million and net
equity of approximately $4 million. Bank Austria AG, Prime's current lender, is
working with Prime to amend its existing credit agreement to provide a
combination term and revolving facility to the combined company. As of December
31, 1998 and currently, Prime is in default of certain of its financial
covenants and the entire outstanding balance of its bank debt has been
accordingly classified as short-term. It is anticipated that the amended credit
agreement will provide for no maturities within one year. It is also
anticipated that substantially all of the combined company's assets will be
pledged to secure this new debt and certain financial covenants will be
required. In addition to the anticipated bank debt described above, the
combined company will have approximately $12 million of unsecured subordinated
debt subject to market interest rates. The resulting total indebtedness will
therefore be approximately $37 million.

In the event of default of its financial covenants, the bank could
foreclose on its security interest in the combined company's assets, which
would have a material adverse effect on the results and financial position of
the combined company. Furthermore, there can be no assurance that the combined
company's debt to equity ratio will improve in the short-term.

RECENT HISTORICAL AND PRO FORMA LOSSES

Prime, OptiCare and Saratoga experienced net losses from continuing
operations for the year ended December 31, 1998 of $3.2 million, $.5 million
and $.3 million, respectively. On a pro forma combined basis, the net loss for
the year ended December 31, 1998 was $1.9 million. Although management believes
that the combined company has a viable business plan and potential for future
earnings, there can be no assurance that the combined company will not incur
further losses.

POTENTIAL DILUTION

At the current time, the combined company believes that its near term
working capital needs can be met from existing cash and debt sources. However,
the combined company may in the future determine that additional funding may be
required to provide the combined company with funding to support its working
capital and other growth needs for capital. In such case, the combined company
may elect to obtain additional financing through the issuance of equity or
convertible subordinated debt. Should such a financing be initiated, the
stockholders of the combined company may incur dilution in proportion to their
equity interest in the combined company.

RISKS ASSOCIATED WITH BUSINESS PLAN

General. The combined company's business plan is to grow its managed care
business, improve the profitability of its ophthalmology business and expand
its buying group services and retail optometry operations. The success of the
combined company's business strategy will depend on factors which include the
following:

Managed Care Contract Expansion. The success of the combined company will
depend on its ability to maintain and expand its managed care contract
relationships with HMO's and other third party payors. To be successful in
managed care, the combined company must accurately assess its costs in
providing such services and negotiate pricing structures that are adequate to
support such costs and provide sufficient profit. The combined company will
also have to maintain and expand its network of eye care

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providers and retail affiliations, so that it can service the patients covered
by these managed care contracts. See also, "Risks Associated with Managed Care
Contracts and Capitated Fee Arrangements," and "Government
Regulation--Insurance Licensure."

Information Systems--General. Management of the combined company believes
that an asset of OptiCare has been its information systems, which OptiCare
believes are well-tailored to the requirements of eye care providers. However,
rapid changes in technology, obsolescence of existing systems, or the emergence
of competitors with superior information systems could prevent the combined
company in the future from maintaining this competitive edge.

Information Systems--Year 2000 Issue. The combined company is currently in
the process of modifying its information systems to be Year 2000 compliant. The
combined company expects its information systems to be Year 2000 compliant
within a sufficient amount of time to meet its needs. The combined company will
have to incur further expenses in connection with its effort to make these
modifications. While the combined company also expects to initiate
communications with significant suppliers, customers and other third parties
with which the combined company does business in an attempt to minimize the
potential disruption to the combined company's operations resulting from Year
2000 problems at such other places, there can be no assurances that the
computer systems of other companies would not have an adverse effect on the
combined company's operations.

Reliance on Eye Care Providers. The combined company's revenue depends in
part on revenue earned by the eye care providers who are its customers in its
ophthalmology services business. There can be no assurance that these providers
will continue to be successful, or that the agreements between the combined
company and these providers will not be terminated.

The combined company's ability to expand the managed care business will
depend upon its ability to recruit and maintain additional licensed
practitioners for its provider network, and to market such network successfully
to managed care plans and other third-party payors. The inability to
effectively expand the provider network or contractual relationships with
payors would have a material adverse effect on the combined company's business
strategy. Additionally, the fees earned by the combined company in its
ophthalmology services and managed care businesses will fluctuate depending on
variances in revenues and expenses of its providers, and thus the combined
company's revenue and profitability in connection with its agreements will be
directly and adversely affected by poor operating results of its provider
network.

Integration of Future Acquisitions. While the combined company's business
strategy does not currently anticipate any material business acquisitions, it
may find material acquisition opportunities which it may elect to pursue. If
the combined company does consummate any such acquisition, its financial
results in the fiscal quarters immediately following a material acquisition may
be adversely impacted while the combined company integrates the acquisition.

RISKS ASSOCIATED WITH MANAGED CARE CONTRACTS AND CAPITATED FEE ARRANGEMENTS.

General. The combined company's managed care business has increased
significantly in 1998 and 1999. Management of the combined company believes
that the percentage of the population covered by managed care plans will grow,
and so the combined company's success will depend, in part, upon its ability to
negotiate profitable managed care contracts with HMO's, health insurance
companies and other third party payors under which eye care services will be
provided to patients on a risk-sharing or capitated basis. Most of the combined
company's managed care contracts are for one-year terms which automatically
renew unless terminated by either party on 60 days' notice.

Capitation Agreements and other Assumptions of Risk. Under some managed
care contracts, known as "capitation" contracts, the combined company (or any
other health care provider) accepts a fixed payment per member per month,
whether or not a member (i.e., a person covered by a managed care plan)
receives any services, but the combined company (or the health care provider)
is obligated to provide all necessary covered services to the patients covered
under the agreement. These contracts pass much of the risk of providing care
from the payor (i.e., an HMO, health insurer, employee welfare plan or
self-insured employer) to the provider. The growth of capitation contracts in
markets served by the

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combined company could result in less certainty with respect to profitability
and will require a higher level of actuarial acumen in evaluating such
contracts. The combined company does not know whether it will be able to
negotiate profitable arrangements on a capitated or other risk-sharing basis.
In addition, to the extent that patients or enrollees covered by capitation
contracts require, in the aggregate, more frequent or extensive care than is
anticipated, operating margins may be reduced and the revenue derived from
these contracts may be insufficient to cover the costs of the services
provided. Any such developments could have a material adverse effect on the
combined company's results of operations or financial condition. See, also,
"Government Regulation--Insurance Licensure."

GOVERNMENT REGULATION

The federal and state governments extensively regulate the health care
business. The combined company's business will be subject to numerous federal
and state laws and regulations including:

o Corporate Practice of Optometry and Ophthalmology. The laws of many
states prohibit corporations that are not owned entirely by eye care
professionals from (i) employing eye care professionals, (ii) receiving
for their own account reimbursements from third party payors for health
care services rendered by licensed professionals, (iii) controlling
clinical decision-making, or (iv) engaging in other activities that are
deemed to constitute the practice of optometry and/or ophthalmology.

o Fee-Splitting and Anti-kickback Law. Federal law and most states have
laws prohibiting the paying or receiving of any remuneration, direct or
indirect, that is intended to induce referrals for health care products
or services and governing "fee-splitting" by health care professionals.

o Advertising Restrictions. Many states, including Connecticut, prohibit
licensed eye care professionals from using advertising which includes any
name other than their own, or from advertising in any manner that is
likely to lead a person to believe that a non-licensed professional is
engaged in the delivery of eye care services.

o Insurance Licensure. Most states impose strict licensure requirements
on health insurance companies, HMO's and other companies that engage in
the business of insurance or pre-paid health care.

o Regulation of the Combined Company's HMO Subsidiaries. Two of the
combined company's subsidiaries are HMO's which are subject to extensive
regulation under the insurance laws of the states in which they are
organized or operate, i.e., North Carolina and Texas. In the last two
years, these subsidiaries contributed to the combined company's revenue,
on a pro forma combined basis, an aggregate of $12,189,000 (6.5%).

o Physician Incentive Plans. Medicare regulations impose certain
disclosure requirements on managed care networks that compensate
providers in a manner that is related to the volume or services provided
to Medicare patients (other than services personally provided by the
provider).

o "Any Willing Provider" Laws. Some states have adopted, and others are
considering, legislation that requires managed care networks to include
any qualified and credentialed provider who is willing to abide by the
terms of the network's contracts and/or prohibit termination of providers
without cause.

o Antitrust Laws. The combined company and its providers are subject to a
range of antitrust laws that prohibit anti-competitive conduct, including
price fixing, concerted refusals to deal and divisions of markets.

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company and eye care providers or third-party payors will not be held invalid
and unenforceable. In addition, these laws and their interpretation vary from
state to state and are subject to change. The regulatory framework of certain
jurisdictions may limit the combined company's expansion into, or ability to
continue operations within, such jurisdictions if the combined company in
unable to modify its operational structure to conform with such regulatory
framework. Any limitation on the combined company's ability to continue
operating in the manner in which OptiCare and Prime have operated prior to the
mergers could have an adverse effect on the combined company. See "Business of
the Combined Company Following Consummation of the Mergers--Government
Regulation."

COST CONTAINMENT AND REIMBURSEMENT TRENDS

Significant portions of the revenues received by the combined company's
providers are derived from government-sponsored health care programs and
private third-party payors. The health care industry has experienced a trend
toward cost containment as government and private third-party payors seek to
impose lower reimbursement and utilization rates and negotiate reduced payment
schedules with service providers. Management of the combined company believes
that these trends may result in a reduction from historical levels in per
patient revenue received by the eye care providers. This in turn may put
pressure on the eye care providers--the combined company's customers, current
and prospective--to reduce their costs, which may compel them to negotiate a
lower fee structure from the combined company.

DEPENDENCE ON KEY INDIVIDUALS

The success of the combined company depends upon the continued services of
Dean J. Yimoyines, M.D., who will be the chairman, president and chief
executive officer of the combined company . The loss of the services of Dr.
Yimoyines could have a material adverse effect on the combined company. The
combined company and Dr. Yimoyines will be parties to an employment agreement
which will become effective upon the closing of the mergers, will expire three
years thereafter and will be renewable for subsequent terms.

The combined company believes that its future success will also depend in
part upon its ability to attract and retain other qualified management
personnel. Competition for such personnel is intense, and the combined company
competes for qualified personnel with numerous other employers, some of whom
have greater financial and other resources than the combined company. There can
be no assurance that the combined company will be successful in attracting and
retaining such personnel.

RISKS ARISING FROM HEALTH CARE REFORM

There can be no assurance that the laws and regulations of the states in
which the combined company operates will not change or be interpreted in the
future either to restrict or adversely affect the combined company's
relationships with its eye care providers. Federal and state governments are
currently considering various types of health care initiatives and
comprehensive revisions to the health care and health insurance systems. Some
of the proposals under consideration, or others that may be introduced, could,
if adopted, have a material adverse effect on the combined company's financial
condition and results of operations. It is uncertain what legislative programs,
if any, will be adopted in the future, or what actions Congress or state
legislatures may take regarding health care reform proposals or legislation.

RISKS RELATED TO AMORTIZATION OF INTANGIBLE ASSETS

The combined company's pro forma total assets include substantial
intangible assets in the form of goodwill and other intangibles. The intangible
asset value represents the excess of cost over the fair value of the separate
tangible net assets acquired in various transactions. There can be no assurance
that the value of such assets will ever be realized by the combined company.
These intangible assets are generally amortized on a straight-line method over
an expected useful life of 25 years. The combined company evaluates on a
regular basis whether events and circumstances have occurred that indicate that
all or a portion of the carrying amount of the asset may no longer be
recoverable, in which case an additional charge to earnings would become
necessary. Any determination requiring the write off of a significant

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<PAGE>

portion of unamortized intangible assets would adversely affect the combined
company's results of operations and may result in defaults under the covenants
or other terms of its funding agreements. See "Saratoga Resources, Inc., Pro
Forma Combined Financial Statements."

NON-COMPETITION COVENANTS

The combined company generally requires the eye care providers (i.e., the
professional corporations, professional associations or partnerships wholly
owned by licensed professionals) who contract directly with the combined
company to require the licensed professionals with whom they have employment
agreements to agree not to compete with their employers or the combined company
during the term of and between one and five years after termination of their
employment. The enforceability of these non-compete covenants varies from state
to state and also varies based upon facts and circumstances in particular
cases.

MEDICAL MALPRACTICE CLAIMS

The combined company is exposed to direct medical malpractice liability by
its ownership and operation of ASC's. In addition, the combined company is
exposed to indirect medical malpractice liability risks on account of its
contractual relationships with eye care providers. Medical malpractice claims,
if successful, could be substantial and may exceed the limits of the combined
company's insurance coverages. Insurance against medical malpractice can be
expensive and from time to time is unavailable at any price. The combined
company is indemnified by its eye care providers under its service agreements,
but the ability of such eye care providers to pay such indemnification is not
assured.

Accordingly, the combined company may be materially adversely affected by
large medical malpractice judgements. The combined company believes it
maintains reasonable and customary levels of liability insurance coverage, but
there can be no assurance that a pending or future claim or claims will not
exceed the limits of insurance coverage or that such coverage will continue to
be available at acceptable costs and favorable terms.

COMPETITION

The health care industry is highly competitive and subject to continual
changes in the methods by which services are provided and the manner in which
health care providers are selected and compensated. The combined company
believes that private and public reforms in the health care industry
emphasizing cost containment and accountability will result in an increasing
shift of eye care from highly fragmented, individual or small practice
providers to larger group practices, affiliated practice groups or other eye
care delivery systems. The combined company competes with other physician
practice management companies which seek to acquire the business assets of and
provide management services to eye care professionals, and some of these
competitors have substantially greater financial resources than the combined
company. Companies in other health care industry segments, such as managers of
other hospital-based specialties or currently expanding large group practices,
some of which have financial and other resources greater than those of the
combined company, may become competitors in providing management to providers
of eye care services. Increased competition could have a material adverse
effect on the combined company's financial condition and results of operations.

The combined company also competes with other providers of eye care
services, including HMO's, and private insurers, among others for managed care
contracts, and many of such entities have larger provider networks and greater
financial and other resources than the combined company. The combined company
also competes with other buying group organizations for group members and
retail optometry businesses. See "Business of the Combined Company Following
Consummation of the Mergers."

CERTAIN ANTI-TAKEOVER PROVISIONS

In the last several years, a number of states have adopted laws designed
to make certain kinds of "unfriendly" corporate takeovers or other transactions
involving a corporation and one or more of its

16
<PAGE>

significant stockholders, more difficult. Under Section 203 of the Delaware
General Corporation Law, certain "business combinations" by a Delaware
corporation with "interested stockholders" are subject to a three-year
moratorium, unless specified conditions are met.

Saratoga has 5,000,000 shares of authorized and unissued preferred stock,
none of which are presently outstanding or required or expected to be issued in
the mergers. The preferred stock could be issued to third parties selected by
management or used as the basis for a stockholders' rights plan, which could
have the effect of deterring potential acquirers. The ability of the Board of
Directors to establish the terms and provisions of different series of
preferred stock could discourage unsolicited takeover bids from third parties.

RESTRICTIONS ON PAYMENT OF DIVIDENDS

The combined company's credit facility is expected to place certain
restrictions on the future payment of dividends. Furthermore, the combined
company currently intends to retain all future earnings for the operation and
expansion of its business, and, accordingly, the combined company does not
anticipate that any dividends will be declared or paid for the foreseeable
future. See "Combined Company Management's Discussion and Analysis of Combined
Pro Forma Financial Conditions and Results of Operations--Liquidity and Capital
Resources."

As noted above under "Government Regulation", two of the combined
company's subsidiaries are HMO's. They contributed an aggregate of $12,189,000
(6.5%) to the combined company's revenue in the last 2 years. Under applicable
state law (North Carolina and Texas), those HMO's may not pay dividends to the
combined company above certain minimum levels without the prior written
approval of the applicable state insurance departments. These restrictions may
delay or prevent the combined company from receiving cash from the earnings of
these subsidiaries.

POTENTIAL CONFLICTS OF INTEREST FROM RELATED PARTY TRANSACTIONS.

There are currently contractual agreements existing between the combined
company and eye care provider entities owned and controlled by several of the
combined company's officers, directors and key employees, which agreements
could create the potential for possible conflicts of interests for such
individuals. Any future transactions and agreements or modifications of current
agreements between the combined company and such individuals, other affiliates
and their professional associations will be approved by a majority of the
combined company's independent directors and will be on terms no less favorable
to the combined company than those that could be obtained from unaffiliated
parties. See "Management of the Combined Company Following Consummation of the
Mergers--Certain Relationships and Related Transactions."

POSSIBLE VOLATILITY OF STOCK PRICE.

The market price of the common stock could be subject to significant
fluctuations in response to variations in financial results or announcements of
material events by the combined company or its competitors. Quarterly operating
results of the combined company, changes in general conditions in the economy
or the health care industry, or other developments affecting the combined
company or its competitors, could cause the market price of the common stock to
fluctuate substantially. The equity markets have on occasion experienced
significant price and volume fluctuations that have affected the market prices
for many companies' securities, and sometimes such fluctuations have been
unrelated to the operating performance of these companies. Concern about the
potential effects of health care reform and regulatory measures has contributed
to the volatility of stock prices of companies in health care and related
industries and may similarly affect the price of the combined company's common
stock

LISTING OF COMMON STOCK AND PENNY STOCK RULES

Saratoga intends to apply for listing on the American Stock Exchange, Inc.
("AMEX"). There can be no assurance that the combined company's common stock
will be listed on the AMEX. In addition, under the applicable rules for
continual listings on the AMEX, a company must maintain, among other

17
<PAGE>

things, certain stockholders' equity and market value requirements. If the
combined company experiences losses, it may be unable to maintain the standards
for continued listing and the common stock could be subject to delisting from
the AMEX. Trading, if any, in the combined company's common stock would
thereafter be conducted, if at all, in the over-the-counter market on an
electronic bulletin board or in what is commonly referred to as the "pink
sheets." As a result, a stockholder may find it more difficult to dispose of,
or to obtain accurate quotations as to the price of, the combined company's
common stock. In addition, if the combined company's common stock were
delisted, it would be subject to a rule that imposes additional sales practice
requirements on broker-dealers who sell the common stock to persons other than
established customers and accredited investors (generally defined as an
investor with a net worth in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with a spouse). For transactions covered by this
rule, the broker-dealer must make a special suitability determination for the
purchaser and must receive the purchaser's written consent to the transaction
prior to sale. Consequently, delisting, if it occurred, may affect the ability
of broker-dealers to sell the combined company's common stock and the ability
of stockholders to sell their common stock in the secondary market. See
"Description of the Saratoga Capital Stock."

The Securities and Exchange Commission has adopted regulations that define
a "penny stock" to be any equity security that has a market price of less than
$5.00 per share, subject to certain exceptions. For any transaction involving a
penny stock (unless exempt), the rules require the delivery, prior to the
transaction, of a disclosure schedule prepared by the SEC relating to the penny
stock market. A broker-dealer must also disclose the commissions payable to
both the broker-dealer and the registered representative, current quotations
for the securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and information on
the limited market in penny stocks. Many securities listed on the AMEX would be
covered by the definition of penny stock, but transactions in a security listed
on the AMEX are exempt from all penny stock requirements except the "sole
market-maker" provision, if (i) the issuer has $2,000,000 in tangible assets,
(ii) the customer is an institutional accredited investor, and (iii) the
transaction is not recommended by the broker-dealer. These disclosure
requirements may have the effect of reducing the level of trading activity in
the secondary market for a stock that becomes subject to the penny stock rules.

18
<PAGE>

HISTORICAL MARKET PRICES OF SARATOGA COMMON STOCK
AND DIVIDEND POLICY

The following information about the historical market prices of the
Saratoga common stock should be evaluated in light of the material and
substantial qualitative change in the business of Saratoga if the mergers are
consummated.

Saratoga's common stock has not, prior to the date hereof, been listed on
any stock exchange but from time to time has been reported by the NASD on the
OTC Bulletin Board under the symbol "SRIK". The range of high and low bid
information for the shares of Saratoga's common stock for the last two complete
fiscal years, and for each quarter of 1999 through [[LAST DAY BEFORE DATE OF
PROXY STATEMENT/ PROSPECTUS]] as reported by the National Quotation Bureau, is
set forth below. Such quotations represent prices between dealers, do not
include retail markup, markdown or commission, and may not represent actual
transactions.

<TABLE>
<CAPTION>
HIGH LOW
----------- -----------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1997
First Quarter ....................... $ 0.281 $ 0.094
Second Quarter ...................... 0.219 0.094
Third Quarter ....................... 0.219 0.094
Fourth Quarter ...................... 1.125 0.063
YEAR ENDED DECEMBER 31, 1998
First Quarter ....................... 0.188 0.188
Second Quarter ...................... 1.125 0.188
Third Quarter ....................... 0.25 0.25
Fourth Quarter ...................... 0.25 0.063
YEAR BEGINNING JANUARY 1, 1999
First Quarter ....................... 0.063 0.063
Second Quarter (through ) ......... [ ] [ ]

</TABLE>

The foregoing quotations have not been adjusted to give effect to the
proposed 1 for 0.0651 Reverse Split. As of May 12, 1999, 3,465,292 shares of
Saratoga's common stock (without adjustment for the Reverse Split) were issued
and outstanding and held by approximately 1,350 holders of record.

Saratoga has never paid cash dividends. Future dividend policy will be
determined by the board of directors of the combined company after the mergers
and is discussed in "Risk Factors" and "Combined Company Management's
Discussion and Analysis of Pro Forma Financial Condition and Results of
Operations." Any future determination as to the payment of dividends on the
common stock will be at the discretion of the board of directors and will
depend upon the combined company's operating results, financial condition,
capital requirements, restrictions imposed by lenders (if any) and such other
factors as the board of directors of the combined company may deem relevant.
The combined company currently does not intend to pay any cash dividends on the
common stock. The combined company currently intends to retain any earnings for
working capital, repayment of indebtedness, capital expenditures and general
corporate purposes. In addition, the combined company's credit facility will
contain restrictions on the combined company's ability to pay dividends or make
other distributions.

19
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA--SARATOGA RESOURCES, INC.

The following historical financial data is taken from Saratoga's financial
statements, which are included in this Proxy Statement/Prospectus beginning at
page F-3. This information should be evaluated in light of Saratoga's being in
a period of transition, in which management is seeking to develop new
businesses that will ultimately generate earnings and otherwise enhance
stockholder value. If the mergers are consummated, Saratoga will thereafter be
engaged in a completely different business.

(In thousands, except per share data)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
---------------------
1998 1997
--------- ---------
<S> <C> <C>
Operations Data:
Revenue ............................................ $ 39 $ 35
Net loss ........................................... (324) (118)
Basic and diluted loss per share ................... (0.09) (0.03)
Balance Sheet Data:
Total current assets ............................... 311 666
Equipment, net of accumulated depreciation ......... 36 44
------- -------
Total assets ....................................... 347 710
======= =======
Total current liabilities .......................... 15 22
Long-term debt, net of current portion ............. 16 21
Total stockholders' equity ...................... 316 667
------- -------
Total liabilities and stockholders' equity ......... $ 347 $ 710
======= =======
</TABLE>

20
<PAGE>

SELECTED HISTORICAL COMBINED FINANCIAL DATA OF
OPTICARE EYE HEALTH CENTERS, INC.

The following selected combined financial information has been derived
from the historical combined financial statements of OptiCare. This information
should be read in conjunction with OptiCare's combined financial statements and
notes thereto which are included in this Proxy Statement/ Prospectus (see
Index to Financial Statements, beginning at page F-1).

(Dollars in Thousands)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenue ............................ $34,745 $27,242 $24,720 $17,832 $15,885
Net income (loss) ...................... (502) 327 143 (870) 760
Balance Sheet Data
Total current assets ................... 10,197 10,927 6,252 4,839 3,897
Property and equipment, net ............ 5,766 3,434 2,488 1,673 1,115
Total assets ........................... 19,515 15,049 8,958 6,781 5,197
Total current liabilities .............. 6,880 2,928 2,634 2,505 2,562
Long-term liabilities .................. 1,135 169 38 53 2,501
Total stockholders' equity (1) ......... 11,500 11,952 6,285 4,224 135
Total liabilities and stockholders'
equity ............................... $19,515 $15,049 $ 8,958 $ 6,781 $ 5,197
</TABLE>

- ----------
(1) During 1995 and 1997, OptiCare entered into stock purchase agreements
whereby OptiCare sold 51,900 and 64,048 shares of stock for $5.2 million
and $6.0 million in cash, respectively. During 1996, OptiCare issued
20,494 shares of stock for $1.7 million in cash related to the exercise
of warrants.

21
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA OF PRIME
AND PRO FORMA COMBINED FINANCIAL DATA OF THE COMBINED COMPANY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected historical financial data of Prime has been derived
from the audited historical financial statements of Prime as of and for the
years ended December 31, 1998, 1997, 1996 and 1995 included herein. Prior to
1995, Prime did not exist.

The following selected pro forma combined financial data of the combined
company has been derived from the audited financial statements of Prime,
Saratoga and OptiCare and gives effect to the mergers and related transactions
upon which the mergers are conditioned.

The Prime merger has been accounted for as a reverse acquisition by Prime
of Saratoga at book value with no adjustments reflected to historical values,
resulting in Prime being the acquirer for accounting purposes. The acquisition
of OptiCare by Saratoga has been accounted for under the purchase method of
accounting with the excess of purchase price over the estimated fair value of
net assets acquired being recorded as goodwill.

No dividends have been declared or paid during the periods presented other
than preferred stock dividends.

The following information should be read in conjunction with Prime's
audited financial statements and notes thereto and Saratoga's pro forma
combined financial statements and notes thereto which are included in this
Proxy Statement/Prospectus (see Index to Financial Statements, beginning on
F-1).

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
HISTORICAL
---------------------------------------------------
PRO FORMA
1998 1998 1997 1996 1995
------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenue .................................... $103,982 $ 64,612 $ 58,346 $52,157 $38,523
Net loss from continuing operations ............ (1,938) (3,239) (2,034) (767) (391)
Weighted average shares outstanding ............ 9,000 7,191 5,914 2,210 --
Net loss from continuing operations per
share ........................................ $ (0.22) $ (0.80) $ (0.34) $ (0.35) $ --

Balance Sheet Data:
Investment in discontinued operations .......... -- $ 5,582 $ 69,473 $13,845 --
Total current assets ........................... $ 18,502 20,237 79,274 20,306 $ 5,315
Property and equipment, net .................... 10,276 4,510 4,825 4,012 4,496
Total assets ................................... 61,914 26,557 86,397 26,296 11,873
Total current liabilities ...................... 20,398 51,198 8,289 4,138 2,941
Long-term debt and other long-term
liabilities .................................. 37,365 849 73,562 17,475 22,105
Mandatorily redeemable preferred stock ......... -- 9,200 -- -- 40
Total stockholders' equity (common and
preferred) ................................... 4,151 (34,690) 4,546 4,683 $23,036

</TABLE>

22
<PAGE>

COMPARATIVE PER SHARE INFORMATION

The following represents per share information for Saratoga on a pro forma
combined and historical basis and equivalent per share information for both pro
forma combined and historcial amounts. The equivalents presented are calculated
by multiplying the historical and pro forma combined amounts by the exchange
ratio of Saratoga shares of 0.0651.

<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS
ENDED DECEMBER 31,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
UNAUDITED PRO FORMA COMBINED:
Basic and diluted loss from continuing operations per share ......... $ (0.22)
Book value per common share ......................................... $ 0.46
HISTORICAL:
Basic and diluted loss from continuing operations per share ......... $ (0.09) $ (0.03)
Book value per share ................................................ 0.09 $ 0.19
PER SHARE EQUIVALENT PRO FORMA COMBINED:
Basic and diluted loss from continuing operations per share ......... $ (0.01)
Book value per share ................................................ $ 0.03
PER SHARE EQUIVALENT HISTORICAL:
Basic and diluted loss from continuing operations per share ......... $ (0.01) $ (0.00)
Book value per share ................................................ $ 0.01 $ 0.01
</TABLE>

23
<PAGE>

SPECIAL MEETING

DATE, TIME AND PLACE OF SPECIAL MEETING

The Special Meeting of Saratoga stockholders will be held at 2:00 P.M.,
local time, on , 1999, at .

PURPOSE

The Saratoga stockholders will be asked to consider and vote upon
resolutions to adopt the following proposals:

Proposal 1 -- To elect five new members of Saratoga's board of directors
(the "Director Election Proposal").

Proposal 2 -- To vote upon a proposal to amend the certificate of
incorporation of Saratoga to effect a 1 for 0.0651 reverse
stock split (the "Reverse Split") of the issued and
outstanding common stock of Saratoga (the "Reverse Split
Proposal").

Proposal 3 -- To vote upon a proposal to amend the certificate of
incorporation to change the name (the "Name Change") of
Saratoga Resources, Inc., to "OptiCare Health Systems, Inc."
(the "Name Change Proposal");

Proposal 4 -- To vote upon a proposal to amend the certificate of
incorporation to require Saratoga to indemnify directors and
officers to the maximum extent permitted by law (the
"Indemnification Proposal");

Proposal 5 -- To vote upon a proposal to adopt the Performance Stock
Program (the "Program Proposal").

Proposal 6 -- To vote upon a proposal to adopt the Employee Stock
Purchase Plan (the "Purchase Plan Proposal").

The foregoing proposals, if adopted at the meeting, will become effective
only upon consummation of the mergers. The purpose of proposals 1, 2, 3 and 5
is to enable Saratoga to carry out mergers of OptiCare and Prime into
wholly-owned subsidiaries of Saratoga.

THOMAS F. COOKE, CHAIRMAN AND CEO OF SARATOGA, IS THE HOLDER OF MORE THAN
64% OF THE OUTSTANDING COMMON STOCK OF SARATOGA AT THE PRESENT TIME. MR. COOKE
INTENDS TO VOTE ALL HIS SHARES IN FAVOR OF ALL THE PROPOSALS, AND SO THE
APPROVAL BY SARATOGA'S STOCKHOLDERS OF THE ACTIONS REQUIRED BY SARATOGA FOR THE
MERGERS IS VIRTUALLY ASSURED.

RECORD DATE AND OUTSTANDING SHARES

The Saratoga board of directors has fixed the close of business on ,
1999, as the record date for determining stockholders entitled to notice of and
to vote at the Special Meeting. As of the record date, there were
stockholders of record of Saratoga common stock and 3,465,292 shares (without
adjustment for the Reverse Split) of Saratoga common stock outstanding and
entitled to vote, with each share entitled to one vote.

QUORUM

The presence in person or by properly executed proxy of holders of a
majority of the votes entitled to be cast at the Special Meeting is necessary
to constitute a quorum. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. As noted above, Mr. Cooke has agreed to attend the meeting, and so
a quorum is virtually assured.

24
<PAGE>

REQUIRED VOTE

Pursuant to the Delaware General Corporation Law, an affirmative vote of
the holders of a majority of the shares of Saratoga common stock present in
person or represented by proxy at the Special Meeting and entitled to vote, is
required for the approval and adoption of each of the Performance Stock Program
and the Employee Stock Purchase Plan. Abstentions will have the legal effect of
a vote against the Program Proposal and the Purchase Plan Proposal. With
respect to a broker non-vote on the Program Proposal and the Purchase Plan
Proposal, such shares will not be considered present at the Special Meeting,
and, since they will not be counted in the voting with respect to such matter,
will have the practical effect of reducing the number of affirmative votes
necessary to achieve the required majority vote by reducing the total number of
shares from which the majority is calculated. As noted above, Mr. Cooke intends
to vote his shares, constituting more than 64% of the Saratoga common stock
outstanding prior to the effective time of the mergers, in favor of the Program
Proposal and the Purchase Plan Proposal and so approval of each of the Program
Proposal and the Purchase Plan Proposal is virtually assured.

The proposals will become effective only if and when the mergers are
consummated.

PROXIES

All shares of common stock represented at the Special Meeting either in
person or by properly executed proxies received prior to or at the Special
Meeting and not duly and timely revoked will be voted at the Special Meeting in
accordance with the instructions in such proxies. If no such instructions are
indicated, such shares will be voted in favor of all the proposals and, in the
discretion of the proxy holder as to any other matter which may be incidental
to the Special Meeting as may properly come before such meeting. Saratoga knows
of no other matters other than as described in the Notice of Special Meeting
that are to come before the Special Meeting. If any other matter or matters are
properly presented for action at the Special Meeting, the persons named in the
enclosed form of proxy and acting thereunder will have the discretion to vote
on such matters in accordance with their best judgment, including any
adjournment or postponement of the Special Meeting, unless such authorization
is withheld.

A stockholder who has given a proxy may revoke it at any time prior to its
exercise by: (i) giving written notice thereof to the Secretary of Saratoga at
or prior to the taking of the vote at the Special Meeting; (ii) signing and
returning to Saratoga a later dated proxy prior to the taking of the vote; or
(iii) voting in person at the Special Meeting; however, mere attendance at the
Special Meeting will not itself have the effect of revoking the proxy.

SOLICITATION OF PROXIES; EXPENSES

The cost of the solicitation of Saratoga stockholders will be borne
equally by OptiCare and Prime. In addition, they may reimburse brokerage firms
and other persons representing beneficial owners of shares for their expenses
in forwarding solicitation materials to such beneficial owners.

25
<PAGE>

PROPOSAL 1--DIRECTOR ELECTION PROPOSAL

At the Special Meeting, five (5) directors are to be elected to the board
of directors of the combined company, to hold office commencing upon the
consummation of the mergers. If the mergers are not consummated, the nominees
will not become directors of Saratoga. None of the nominees currently serves as
a director of Saratoga. Nominees receiving a plurality of the votes cast at the
Special Meeting will be elected.

Saratoga's Bylaws provide that the number of directors shall be determined
by the board. Pursuant to the Merger Agreement, upon consummation of the
mergers, the current two Saratoga directors will resign, and the board of
directors of Saratoga will be reconstituted.

Saratoga is now seeking approval for the election of Dean J. Yimoyines,
Steven L. Ditman, Martin E. Franklin, Allan L.M. Barker and John F. Croweak.
After the mergers, the designees of Prime to the combined company board of
directors, after consultation with the other directors of the combined company
will designate two more directors, so that the entire board will be comprised
of seven members.

After the mergers, the board of directors of Saratoga, as reconstituted,
intends to elect two additional directors.

The Saratoga Board recommends a vote FOR each of the nominees. Unless
otherwise specified, the proxies solicited by Saratoga will be voted "FOR" the
nominees mentioned above. In case any such nominee becomes unavailable for
election to the Saratoga board, which is not anticipated, the persons named in
the enclosed form of proxy will have full discretion to vote or refrain from
voting for any other nominee in accordance with their best judgment.

The nominees, their ages, and the positions they will hold if the mergers
are consummated, and certain other information about the nominees, is set forth
in "Management of the Combined Company Following Consummation of the Mergers."

Vote Required. For the election of directors, a plurality of the votes
cast by the holders of Saratoga common stock present in person or by proxy at
the Special Meeting is required. As noted above, Mr. Cooke intends to vote his
shares, constituting more than 64% of the Saratoga common stock outstanding
prior to the effective time of the mergers, in favor of the election of the
five nominees as directors.

THE BOARD OF DIRECTORS UNANIMOUSLY APPROVED THE NOMINEES FOR THE BOARD OF
DIRECTORS AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THE
NOMINEES.

PROPOSAL 2--REVERSE SPLIT PROPOSAL

At the Special Meeting, the Saratoga stockholders will be asked to approve
the amendment of the certificate of incorporation to authorize the reverse
split of the outstanding common stock at the rate of 1 for 0.0651. The text of
the amendment is set forth in Article FOURTH of the certificate of amendment of
the certificate of incorporation, which is attached to this Proxy
Statement/Prospectus as Annex B. Implementation of the Reverse Split is
contingent upon approval and adoption by the Saratoga stockholders and the
impending effectiveness of the mergers.

The certificate of incorporation of Saratoga currently authorizes an
aggregate of 55,000,000 shares of stock, of which 50,000,000 are shares of
common stock, $0.001 par value per share, and 5,000,000 are shares of preferred
stock. In connection with the Mergers, the authorized capital of Saratoga is
being proposed to be restructured so that:

o there will be sufficient authorized common stock to issue in the
Mergers,

o there will be sufficient authorized common stock to be used for future
incentive compensation schemes, including the Performance Stock Program,
and

o there will be sufficient authorized common stock to enable the combined
company to raise additional funds in the future.

26
<PAGE>

OptiCare and Prime are requiring Saratoga to engage in the Reverse Split,
rather than to increase the authorized capital stock of Saratoga, because the
Saratoga stock, in the period from January 1, 1997, through April 12, 1999
(i.e., the last date before the mergers were announced) has been very thinly
traded at prices below $1.13 per share. By reducing the number of shares
issuable in the mergers, management of the combined company hopes to maintain
or increase the price per share of common stock. By itself, the Reverse Split
would not necessarily improve shareholder value of the combined company.

The effective date of the Reverse Split will be the date on which the
certificate of amendment of the certificate of incorporation of Saratoga is
filed with the Delaware Secretary of State, which is expected to be just prior
to the consummation of the mergers.

As of the Record Date, there were issued and outstanding 3,465,292 shares
(before giving effect to the Reverse Split) of Saratoga common stock and no
options. After giving effect to the Reverse Split, the stockholders of Saratoga
will own approximately 225,000 shares of common stock before the mergers.

Dissenters' Rights. Pursuant to the Delaware General Corporation Law,
holders of the Saratoga common stock are not entitled to appraisal rights with
respect to the Reverse Split.

Vote Required. For the approval of the Reverse Split, a simple majority of
all outstanding Saratoga common stock is required. As noted above, Mr. Cooke
intends to vote his shares, constituting more than 64% of the Saratoga common
stock outstanding prior to the effective time of the mergers, FOR approval of
the Reverse Split.

Federal Income Tax Consequences to Present Holders of Saratoga Common
Stock. The following summary of the federal income tax consequences of the
Reverse Split to present holders of Saratoga common stock is based on current
law, including the Internal Revenue Code, and is for general information only.
The tax treatment of a stockholder may vary depending upon the particular facts
and the circumstances of such stockholder. Certain stockholders, including
insurance companies, tax-exempt organizations, financial institutions,
broker-dealers, non-resident aliens, foreign corporations and persons who do
not hold common stock as a capital asset, may be subject to special rules not
discussed below. ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT HIS OR HER TAX
ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE
REVERSE SPLIT, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL OR
FOREIGN INCOME TAXES AND OTHER LAWS.

The receipt of new shares in the Reverse Split by pre-merger stockholders
of Saratoga should be a non-taxable transaction under the Internal Revenue Code
for federal income tax purposes. Consequently, a stockholder receiving new
shares will not recognize either gain or loss, or any other type of income,
with respect to whole new shares received as a result of the Reverse Split. In
addition, the tax basis of such stockholder's common stock prior to the Reverse
Split will carry over as the tax basis of the holder's new shares. The holding
period of the new shares should also include the stockholder's holding period
of the common stock prior to the Reverse Split, provided that such common stock
was held by the stockholder as a capital asset on the effective date of the
Reverse Split.

The receipt by a stockholder of cash in lieu of a fractional new share
pursuant to the Reverse Split will be a taxable transaction for federal income
tax purposes. Accordingly, a stockholder who receives cash in lieu of a
fractional new share should recognize gain or loss equal to the difference
between the amount of cash received and the portion of the aggregate tax basis
in his or her shares of common stock allocable to the fractional new share
interest for which he/she received cash. If the shares of common stock were
held as a capital asset on the effective date of the Reverse Split, then the
stockholder's gain or loss will be a capital gain or loss. Such capital gain or
loss will be long-term capital gain or loss if the stockholder's holding period
for the shares of common stock is longer than one year.

Based on certain exceptions contained in regulations issued by the
Internal Revenue Service, Saratoga does not believe that it or its stockholders
will be subject to backup withholding or informational reporting with respect
to cash distributed in lieu of fractional new shares.

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Exchange of Shares--Holders of Saratoga Common Stock Prior to the
Mergers. On or after the effective date of the mergers, Saratoga will mail to
each stockholder of record a letter of transmittal and instructions on
exchanging his/her share certificate for new certificates. A stockholder will
be able to receive a certificate representing new shares and, if applicable,
cash in lieu of a fractional new share, only by transmitting to the Exchange
Agent such stockholder's stock certificate(s) for shares of common stock
outstanding prior to the Reverse Split, together with the properly executed and
completed letter of transmittal, and such evidence of ownership of such shares
as the Exchange Agent may require. Stockholders will not receive certificates
for new shares unless and until the certificates representing their shares of
common stock outstanding prior to the Mergers are surrendered. Stockholders
should not forward their certificates to the Exchange Agent until they receive
the letter of transmittal and should surrender their certificates only with
such letter of transmittal. (Holders of OptiCare and Prime securities will
receive a different letter of transmittal which explains the procedure for
exchanging their certificates representing securities of OptiCare and/or Prime
for certificates representing new shares.)

Payment in lieu of a fractional new share will be made to any Saratoga
stockholder entitled thereto promptly after receipt of a properly completed
letter of transmittal and stock certificate(s) for all of his or her shares of
common stock outstanding prior to the Reverse Split. There will be no service
charge payable by stockholders in connection with the exchange of certificates
or in connection with the payment of cash in lieu of the issuance of a
fractional new share. These costs will be borne by the combined company.

THE BOARD OF DIRECTORS UNANIMOUSLY APPROVED THE REVERSE SPLIT. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE REVERSE
SPLIT PROPOSAL.

PROPOSAL 3--NAME CHANGE PROPOSAL

The Merger Agreement requires Saratoga to change its name, if and when the
mergers are consummated, to "OptiCare Health Systems, Inc." The name "OptiCare
Health Systems, Inc." more accurately describes the business of Saratoga after
the Merger. The name change will become effective only if and when the mergers
are consummated. The American Stock Exchange has advised Saratoga that if and
when the listing application is approved, the shares will be traded under the
symbol .

Implementation of the name change is contingent upon approval by the
Saratoga stockholders and the consummation of the mergers.

A copy of the proposed certificate of amendment to the certificate of
incorporation, incorporating the foregoing change, is attached to this Proxy
Statement/Prospectus as Annex B. The name change appears in Article FIRST of
the certificate.

Vote Required. For the approval of the Name Change Proposal, a simple
majority of all outstanding Saratoga common stock is required. As noted above,
Mr. Cooke intends to vote his shares, constituting more than 64% of the
Saratoga common stock outstanding prior to the effective time of the Mergers,
FOR approval of the Name Change Proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY APPROVED THE NAME CHANGE. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE NAME CHANGE
PROPOSAL.

PROPOSAL 4--INDEMNIFICATION PROPOSAL

At the Special Meeting, the stockholders will be asked to approve a new
Article TWELFTH of the certificate of incorporation which will require the
combined company to indemnify its officers and directors to the maximum extent
permitted under law. The text of the amendment is contained in Article TWELFTH
of the proposed certificate of amendment to the certificate of incorporation,
which is included in this Proxy Statement/Prospectus as Annex B.

Implementation of the Indemnification Proposal is contingent upon approval
and adoption by the Saratoga stockholders and the effectiveness of the mergers.

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The boards of directors of Saratoga, OptiCare and Prime each has concluded
that the combined company will be better able to attract and retain qualified
outside directors by requiring the combined company to provide indemnification
of officers, directors and certain other agents of the combined company to the
maximum extent authorized by the Delaware General Corporation Law.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the combined company pursuant to the foregoing provisions, or otherwise, the
combined company has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

Vote Required. For the approval of the Indemnification Proposal, a simple
majority of all outstanding Saratoga common stock is required. As noted above,
Mr. Cooke intends to vote his shares, constituting more than 64% of the
Saratoga common stock outstanding prior to the effective time of the Mergers,
FOR approval of the Indemnification Proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY APPROVED THE INDEMNIFICATION PROPOSAL.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE INDEMNIFICATION PROPOSAL.

PROPOSAL 5--ADOPTION OF PERFORMANCE STOCK PROGRAM

The board of directors on May 14, 1999, approved, subject to shareholder
approval and the effectiveness of the mergers, and recommends to the
shareholders for their approval, the adoption of the Performance Stock Program
(the "Program"). The following is a brief summary of certain information
relating to the Program. This summary does not purport to be complete and is
subject in all respects to the applicable provisions of the Program, a copy of
which is included in this Proxy Statement/Prospectus as Annex C.

GENERAL

The Program provides for the issuance of awards ("Awards") of an aggregate
maximum of up to the lesser of (i) 3,000,000 shares (after giving effect to the
Reverse Split) of common stock of the combined company and (ii) 15% of the sum
of (x) the number of shares outstanding at the time the limitation in this
clause (ii) is calculated, (y) the number of shares subject to options and
performance shares then outstanding and (z) the number of shares then available
for future Awards under the Program. Awards may be comprised of incentive stock
options, nonqualified stock options, restricted stock, performance shares or
cash units, each as described below. No single individual may receive Awards
for more than 600,000 shares in 1999 (excluding substitute options granted to
option holders of OptiCare and Prime pursuant to the Merger Agreement) or more
than 200,000 shares in any subsequent calendar year. The number of employees
and service providers currently eligible for Awards is approximately 950.
Authorized but previously unissued shares, treasury shares and shares forfeited
under the Program may be issued under the Program up to the maximum aggregate
limit.

The Program will be administered by the board of directors of the combined
company or the Compensation Committee of the board of directors, consisting of
at least two members of the Board, each of whom will be a "Non-Employee
Director" as defined in Rule 16b-3 under the Securities Exchange Act of 1934,
as amended, and an "outside director" as defined in Treasury Regulations
Section 1.162-27(e)(3) (the "Compensation Committee"). The Compensation
Committee will have the general authority to interpret the provisions of the
Program and adopt such rules as it deems necessary or desirable for the
administration of the Program. Its further functions will involve such matters
as the selection of employees, consultants and other service providers who will
participate in the Program subject to the terms of the Program and the
determination of the size and terms of Awards made under the Program to such
persons.

The granting of Awards pursuant to the Program is discretionary with the
Compensation Committee, and nothing in the Program may be deemed to give any
employee or service provider the right to participate in the Program or receive
Awards thereunder. The granting of Awards to any employee or

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service provider does not impose upon the combined company any obligation to
employ or continue to employ the employee or to utilize the services of a
service provider. In addition, the rights of the combined company to terminate
the employment of any employee or the provision of services by any service
provider is not diminished by reason of the fact that an Award has been granted
to such person. Each Award granted under the Program is embodied in a written
Award agreement.

Notwithstanding the foregoing, the Compensation Committee shall grant
options to purchase an aggregate of approximately 705,000 shares of common
stock under the Program to option holders of OptiCare and Prime effective as of
the mergers in substitution for such options, which shall contain substantially
identical terms as the options substituted for, except for a change in the
exercise price and the shares for which options can be exercised to reflect the
mergers.

NON-QUALIFIED AND INCENTIVE STOCK OPTIONS

The Compensation Committee may designate options as either non-qualified
stock options (i.e., options not entitled to special tax benefits under the
Internal Revenue Code of 1986, as amended (the "Code")) or incentive stock
options pursuant to Section 422 of the Code. See "Federal Income Tax
Consequences". Incentive stock options may only be issued to employees and must
be issued at an option price no less than the fair market value of the combined
company's common stock on the date of the grant (110% of fair market value in
the case of 10% shareholders). Subject to the foregoing, the price of the
shares subject to each option is set by the Compensation Committee.

The exercise of options granted under the Program is subject to terms and
conditions set by the Compensation Committee and set forth in the agreement
evidencing the option. The purchase price for the shares acquired upon exercise
of the option may be paid (i) in cash or by certified check, or (ii) at the
discretion of the Committee, by delivery of one or more stock certificates
evidencing other shares of the combined company with a fair market value on the
date of exercise equal to the option price or (iii) by a combination of the
methods described in (i) or (ii). The date of expiration of the option is fixed
by the Committee, but in the case of incentive stock options, may not be longer
than ten years from the date of the grant (five years in the case of 10%
shareholders).

All incentive stock options will terminate on the earlier of the
expiration date or one year following termination of employment due to
disability or death. Upon termination of employment for any reason other than
disability or death, all options will expire on the earlier of their expiration
date or ninety days following termination of employment, unless otherwise
provided in an applicable agreement or instrument. Non-qualified stock options
may be subject to the same provisions with respect to termination, or may
contain such other provisions as the Compensation Committee determines.

Options are not transferable or assignable other than by will or the laws
of descent and distribution and are exercisable during the participant's
lifetime only by the participant, except that the Compensation Committee may,
in its sole discretion, allow for transfers of Awards (other than incentive
stock options) to other persons or entities.

RESTRICTED STOCK

An Award of a share of restricted stock is an Award to a participant of a
share of the common stock of the combined company generally conditioned upon
the attainment of performance goals established by the Compensation Committee
for the performance period to which the Award relates and the continued
employment or retention as a service provider of the participant with the
combined company or any majority-owned subsidiary of the combined company
through the end of the performance period. During the performance period, the
participant has all of the rights of a shareholder of the combined company,
including the right to receive dividends, except that the participant shall not
have custody of the shares of common stock nor the right to transfer ownership
of the shares during the performance period.

Generally, a participant's termination of employment or provision of
services to the combined company prior to the end of the relevant performance
period results in forfeiture of an award of restricted stock, although the
Compensation Committee is authorized to determine that all or any portion of
the

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award shall not be forfeited. If a portion of a restricted stock award is
forfeited, the non-forfeited portion is reduced by the amount of any dividends
previously paid to the participant with respect to the forfeited portion.

A participant may elect, by written form provided to the Compensation
Committee no later than December 24 of the year prior to the year in which an
award of restricted stock is made, to have such award made in the form of
performance shares instead, as described below.

PERFORMANCE SHARES OR CASH UNITS

The Compensation Committee may establish performance programs and grant
awards of performance shares or cash units pursuant to such programs. The
Compensation Committee will establish performance goals and a schedule relating
to such goals to determine the performance awards to be granted to
participants. At the completion of a performance award period, the Compensation
Committee shall determine the award to be made to each participant by
multiplying the number of performance units granted to each participant by a
performance factor representing the degree of attainment of the performance
goals.

Performance shares shall generally be paid in the form of common stock,
and cash units shall be paid in cash, provided that the Compensation Committee
may pay performance shares in the form of cash at the request of a participant.
Payments of performance awards shall be made as soon as practicable after the
end of an award period, provided that participants may instead elect, by filing
a written form with the Compensation Committee by December 24 of the year prior
to which an Award is made, to have such award credited to a performance share
account instead (with cash units being converted to performance shares at their
current fair market value). Such account will be a bookkeeping account, which
will be credited with the performance shares earned, as well as the equivalent
(in additional performance shares) of any dividends that would be payable on
common stock, and will be paid in the form of common stock upon the termination
of a participant's employment or provision of services to the combined company,
unless the participant elects to have payment occur on another date by a
written election filed with the Compensation Committee at least one year prior
to the date on which the payment would otherwise occur. However, in the event
of a participant's disability or death, the participant or the participant's
beneficiary will be entitled to receive an immediate payment with respect to
the entire performance account.

Participants who have elected to have performance accounts established for
them will also be able to receive payments from such accounts earlier than
elected in the event they suffer an unforeseeable financial emergency, as
determined in the sole discretion of the Compensation Committee. They may also
elect to receive early payments if they agree to forfeit six percent of the
amount of such payment.

CHANGE-IN-CONTROL

In the event of a change-in-control of the combined company, as defined in
the program, all Awards will become fully vested and all options will become
immediately exercisable if the Compensation Committee so provides, if an Award
so provides or if an employment agreement with a recipient of an Award so
provides.

AMENDMENT, SUSPENSION AND TERMINATION OF THE PROGRAM.

The Board may amend, suspend or discontinue the Program, provided that the
Board may not take any action which would cause the Program not to comply with
Rule 16b-3 under the Securities Exchange Act of 1934, or Section 422 of the
Code, or any successor rules.

The Program will terminate upon adoption by the Board of a resolution
terminating the Program, or upon the award and vesting of the maximum aggregate
number of shares of common stock available under the Program.

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EFFECTIVENESS OF THE PROGRAM

Assuming that the Program is approved by the stockholders, the proposed
Program would become effective upon the consummation of the mergers. As noted
above, Mr. Cooke, holder of more than 64% of Saratoga's common stock, is
expected to vote in favor of the Program.

FEDERAL INCOME TAX CONSEQUENCES

Non-Qualified Stock Options. Holders of non-qualified stock options do not
realize income as a result of the grant of the non-qualified stock options, but
normally realize compensation income taxable at ordinary income rates upon the
exercise of a non-qualified stock option, to the extent that the fair market
value of the shares on the date of the exercise of the non-qualified stock
options exceeds the option exercise price paid. However, in the case of an
optionee subject to Section 16(b) of the Exchange Act who has held
non-qualified stock options for less than six months and exercises such
non-qualified stock options, the ordinary income portion generally would be
calculated using the fair market value of the shares upon the lapse of the
six-month period from the date of grant of such non-qualified stock options
rather than the fair market value on the date of exercise, unless the optionee
elects to recognize income immediately upon exercise in accordance with Section
83(b) of the Code. The combined company will be entitled to a tax deduction in
an amount equal to the amount that the optionee is required to include in
ordinary income at the time of such inclusion and will be required to withhold
taxes on such ordinary income. The optionee's initial tax basis for shares
acquired upon the exercise of a non-qualified stock option will be the option
exercise price paid plus the amount of ordinary income realized by the
optionee. Any appreciation in the value of such shares subsequent to the date
such ordinary income is recognized will qualify for long-term capital gains
treatment if held for more than 12 months.

Incentive Stock Options. Holders of incentive stock options will not be
considered to have received taxable income upon either the grant of an
incentive stock option or its exercise. Upon the sale or other taxable
disposition of the shares of the common stock so acquired, long-term capital
gain normally will be recognized in the full amount of the difference between
the amount realized upon such disposition and the option exercise price if no
disposition of the shares has taken place within either (a) two years from the
date of grant of the incentive stock option or (b) one year from the date of
transfer of the shares of the common stock to the optionee upon exercise. If
the shares of the common stock are sold or otherwise disposed of before the end
of the one-year or two-year periods, the difference between the incentive stock
option exercise price and the fair market value of the shares of the common
stock on the date of the incentive stock option's exercise will be taxed as
ordinary income; the balance of the gain, if any, will be taxed as capital
gain. If the shares of the common stock are disposed of before the expiration
of the one-year or two-year periods and the amount realized is less than the
fair market value of the shares at the date of exercise, the optionee's
ordinary income is limited to the amount realized less the option exercise
price paid. The combined company will be entitled to a tax deduction in regard
to an incentive stock option only to the extent the optionee has ordinary
income upon sale or other disposition of the shares of the common stock.

If an optionee transfers shares of the common stock acquired upon the
exercise of an incentive stock option to acquire other shares of the common
stock in connection with the exercise of another incentive stock option, the
optionee will recognize income on the transaction if the transferred shares
have not been held for the required holding periods.

The difference between the fair market value of the common stock on the
exercise date and the exercise price of an incentive stock option is deemed to
be a "tax preference" under the alternative minimum tax rules of the Code.

Restricted Stock. A recipient of restricted stock will recognize as
additional compensation taxable as ordinary income for federal income tax
purposes an amount equal to the fair market value of the stock at the time of
the lapse of restrictions on the stock plus the amount of any dividends or
other distributions not previously received and recognized as additional
compensation with respect to such stock, unless the recipient makes an election
to include such award in ordinary income at the time of award. In addition,
unless such an election is made, a recipient subject to Section 16(b) of the
Securities Exchange Act of 1934

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who receives restricted stock will recognize ordinary income at the later of
the time of the lapse of restrictions or six months after the date of the
award. When a participant disposes of shares of common stock acquired under the
Program, any amount received in excess of the value of the shares of common
stock on which the participant was previously taxed will be treated as
long-term or short-term capital gain, depending upon the holding period of the
shares. If the amount received is less than that value, the loss will be
treated as long-term or short-term capital loss, depending upon the holding
period of the shares.

The combined company is entitled to claim a federal income tax deduction
in the same amount and at the same time as the recipient recognizes ordinary
income.

Performance Shares and Cash Units. A participant who receives a
performance share or cash unit will recognize ordinary compensation income when
paid the performance share (in an amount equal to the fair market value of the
share when paid, subject to the special six month rule for recipients subject
to Section 16(b) of the Securities Exchange Act of 1934, as described above) or
cash is paid. Participants who elect to have performance shares or cash units
deferred in a performance share account will delay taxability until amounts are
paid with respect to such accounts. The combined company will recognize a
deduction when and in the amount that participants recognize ordinary income.

When a participant disposes of shares of common stock acquired as a
performance share, or attributable to a performance share account, any amount
received in excess of the value of the shares of common stock on which the
participant was previously taxed will be treated as long-term or short-term
capital gain, depending upon the holding period of the shares. If the amount
received is less than that value, the loss will be treated as long-term or
short-term capital loss, depending upon the holding period of the shares.

Vote Required. For the approval of the Program, a majority of the shares
of Saratoga common stock present in person or represented by proxy at the
Special Meeting and entitled to vote, is required. As noted above, Mr. Cooke
intends to vote his shares, constituting more than 64% of the Saratoga common
stock outstanding prior to the effective time of the mergers, FOR approval of
the Program.

THE BOARD OF DIRECTORS UNANIMOUSLY APPROVED THE PROGRAM. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE PROGRAM.

PROPOSAL 6--ADOPTION OF
EMPLOYEE STOCK PURCHASE PLAN

The board of directors on May 14, 1999, approved, subject to stockholder
approval, and recommends to the stockholders for their approval, the adoption
of the Saratoga Resources, Inc. 1999 Employee Stock Purchase Plan (the "Plan").
The following is a brief summary of certain information relating to the Plan.
This summary does not purport to be complete and is subject in all respects to
the applicable provisions of the Plan, a copy of which is attached hereto as
Annex D.

GENERAL

The Plan provides for an aggregate maximum of up to 450,000 shares of
common stock of the combined company to be sold to employees under the terms of
the Plan. Authorized but previously unissued shares and treasury shares may be
issued under the Plan up to the maximum aggregate limit.

The Plan will be administered by the Compensation Committee of the board
of directors, consisting of at least two members of the Board (the
"Compensation Committee"). The Compensation Committee will have the general
authority to interpret the provisions of the Plan and adopt such rules as it
deems necessary or desirable for the administration of the Plan.

ELIGIBILITY

All employees of the combined company and its subsidiaries, other than
certain 5% shareholders, are eligible to participate in the Plan if they
customarily work at least 20 hours per week for at least 5 months in a year.

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ELECTION TO PARTICIPATE

Eligible employees elect to participate in the Plan by contributing a
portion of their compensation (not to exceed the lesser of 20% of base pay or
$21,250) to purchase shares of common stock under the Plan. Participating
employees may change their elections at any time, but not more than once in a
calendar quarter.

PURCHASE PRICE

Employee contributions will be used to purchase shares of common stock as
of the last business day of each calendar quarter at a price equal to 85% of
the then fair market value of such shares. Only whole numbers of shares will be
purchased for each employee, with any excess contributions being carried over
to the next quarter.

AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN.

The Board may amend, suspend or discontinue the Plan, provided that the
Board may not take any action which would cause the Plan not to comply with
Section 423 of the Code, or any successor rules, or change the number of shares
reserved under the Plan (other than due to stock splits, stock dividends or
other such events).

The Plan will terminate upon adoption by the Board of a resolution
terminating the Plan, or upon the sale of the maximum aggregate number of
shares of common stock available under the Plan.

EFFECTIVENESS OF THE PLAN

The proposed plan shall become effective upon the consummation of the
mergers.

FEDERAL INCOME TAX CONSEQUENCES

The Plan will qualify as a plan adopted under Section 423 of the Code,
and, therefore, an employee will not realize income for federal income tax
purposes at the time shares of common stock are purchased. Instead, if the
holding period requirement (described below) is satisfied, or if the
disposition occurs due to the death of the employee, an employee will recognize
as compensation income at the time of sale or other disposition of common stock
acquired under the Plan an amount equal to the lesser of (i) the "amount of the
discount" or (ii) the amount by which the amount realized on such sale or
disposition exceeds the amount paid by the employee for the shares. For federal
income tax purposes, the term "amount of the discount" with respect to such
shares is equal to 15% of the fair market value of the shares on the date of
purchase. Any additional gain on the sale or other disposition of common stock
will be taxed as long-term capital gain. Any loss on the sale or other
disposition of common stock will be treated as long-term capital loss. To meet
the holding period requirement under the Code, the common stock must not be
sold or otherwise disposed of until at least two years after the purchase.

If an employee sells or otherwise disposes of the common stock within two
years after the date of purchase (other than due to death), then the employee
will recognize as compensation income the full amount of the excess of the
market price of common stock at the date of purchase over the amount paid by
the employee for the common stock. Any additional gain realized on the sale or
other disposition of the common stock will be taxed as a capital gain, which
will be long-term if the employee has held the common stock for more than one
year, and any loss (after increasing the employee's basis as described below)
will be a capital loss. The employee's basis in the common stock will be equal
to the purchase price increased by any amount included in income as
compensation with respect to such common stock under the foregoing rules. The
holding period of the common stock will begin on the day following the date of
purchase.

The combined company will be entitled to a deduction for the amount of
compensation income recognized by an employee who sells or otherwise disposes
of the common stock within two years of the date of purchase (other than due to
death). The combined company will not be entitled to a deduction for any
compensation income recognized by an employee who holds the common stock for at
least two years after purchase or who transfers the common stock due to death,
or for any capital gain recognized by an employee.

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Vote Required. For the approval of the Plan, a majority of the shares of
Saratoga common stock present in person or represented by proxy at the Special
Meeting and entitled to vote, is required. As noted above, Mr. Cooke intends to
vote his shares, constituting more than 64% of the Saratoga common stock
outstanding prior to the effective time of the mergers, FOR approval of the
Program.

THE BOARD OF DIRECTORS UNANIMOUSLY APPROVED THE PLAN. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE PLAN.

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DESCRIPTION OF THE MERGERS

MATERIAL CONTACTS AND BOARD DELIBERATIONS

On October 23, 1998, the Board of Directors of Prime (the "Prime Board")
met and authorized Marlin Capital, L.P. ("Marlin") to explore strategic
alternatives for Prime, which might include a business combination with another
company. Mr. Martin E. Franklin, who is a director of Prime, is also the Chief
Executive Officer and principal stockholder of Marlin Holdings, Inc., which is
the general partner of Marlin. Marlin currently holds Preferred Stock and
detachable warrants in Prime.

On October 30, 1998 Thomas Cooke, CEO of Saratoga, and Mr. Franklin met in
Rye, New York and discussed a proposed transaction between Saratoga and Prime.

In early November, 1998, Mr. Franklin contacted Dean J. Yimoyines, M.D.,
Chairman and Chief Executive Officer of OptiCare, to explore whether OptiCare
would be interested in a potential business combination with Prime and
Saratoga. Mr. Franklin indicated that Marlin had been asked by the Prime Board
to explore strategic alternatives for Prime, which might include a business
combination with another company.

During the November 16, 1998 OptiCare Board of Directors (the "OptiCare
Board") meeting, OptiCare management advised the board of this initial
conversation with Prime and management was authorized by the OptiCare Board to
continue discussions with Prime. Based on this guidance, representatives of
OptiCare and J.P. Morgan Securities, Inc., adviser to OptiCare, met with
representatives of Prime and Marlin in mid- and late November, 1998, to better
understand each company's organization, structure and financial position.

On November 29, 1998, Mr. Cooke met with both Mr. Franklin and Ian Ashken
of Marlin to discuss proposed terms of a transaction involving Saratoga, Prime
and OptiCare.

The results of these meetings were reviewed with the OptiCare Board during
its meeting of December 8, 1998. In that meeting, the OptiCare Board authorized
OptiCare management to pursue discussions of a potential business combination
with Prime and Saratoga and to develop those discussions into a more detailed
summary of terms.

On December 10, 1998, the Prime Board met and discussed the meetings with
management of OptiCare. In that meeting, among other things, the Prime Board
authorized Prime to enter into a non-binding letter of intent with OptiCare and
Saratoga.

In mid-December, 1998, representatives of OptiCare and Prime began more
detailed discussions regarding the form of a potential combination. A
preliminary discussion of potential relative contributions by the parties was
also reviewed among the principals during those meetings as well as by J.P.
Morgan Securities, Inc.

On December 21, 1998, the Board of Directors of Saratoga met and
authorized Mr. Cooke to enter into a non-binding letter of intent for the
purpose of merging Saratoga with Prime and OptiCare.

Based on the outcome of the mid-December discussions, Saratoga, Prime and
OptiCare developed a non-binding letter of intent which was signed by all three
parties on December 22, 1998. However, the parties agreed to develop a more
detailed memorandum of understanding to memorialize a more specific description
of the terms of a potential combination.

Discussions among the parties regarding the components of this memorandum
of understanding continued in late December and early January, 1999. An
important part of these discussions was the treatment of the status of Prime's
ophthalmology business. In particular, the parties discussed the failure of
Prime to successfully and profitably perform under its service agreements and
the need to alter the way Prime operates this business.

A proposed memorandum of understanding was presented to the OptiCare Board
prior to and then reviewed during its meeting of January 13, 1999. J.P. Morgan
Securities, Inc., participated in that meeting and advised the Board that, on
the basis of financial information provided by OptiCare and Prime as well

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as the proposed memorandum of understanding, the transaction appears to be a
favorable transaction for OptiCare. At that meeting, the OptiCare Board
authorized OptiCare management to execute the memorandum of understanding.

On January 22, 1999, the parties executed the memorandum of understanding.

In the weeks subsequent to the signing of the memorandum of understanding,
each of OptiCare, Prime and Saratoga conducted due diligence with respect to
the other parties.

On February 22, 1999, the parties and/or their legal counsel attended a
meeting at OptiCare's offices in Connecticut in order to initiate negotiations
of a merger agreement among OptiCare, Prime and Saratoga.

On February 23, 1999, the Prime Board met and discussed the status and
timetable of the mergers.

During a meeting of the OptiCare Board on March 5, 1999, management and
counsel to OptiCare advised the OptiCare Board of the status of OptiCare's due
diligence. In that meeting, the OptiCare Board authorized OptiCare management
to proceed with the possible transaction and pursue continued work on a set of
definitive agreements.

During March, 1999, representatives of OptiCare, Prime and Saratoga and
their respective financial and legal advisors negotiated the terms of a merger
agreement among the respective companies and engaged in further due diligence.

In its meeting on March 8, 1999 the Prime Board reviewed and discussed the
proposed mergers and the Merger Agreement and authorized the execution of the
Merger Agreement. The Merger Agreement was approved by the Prime board, with
Drs. Allan Barker and Blair Harrold abstaining from the vote. The Prime board
considered it to be in the best interest of its stockholders to merge Prime
pursuant to the terms of the Merger Agreement.

On March 26, 1999, the Saratoga Board met and discussed, among other
things, the proposed merger agreement, the merger consideration and the
mergers. The Saratoga Board considered it in the best interest of its
stockholders to enter into the Merger Agreement and to consummate the
transactions contemplated thereby. In reaching this determination, the Saratoga
Board assumed that the spinoff of Saratoga Holdings I, Inc. and the spinoff or
divestiture of its other three subsidiaries, Lobo Energy, Inc. Lobo Operating,
Inc. and Saratoga-Texas, would be consummated prior to the mergers.

The OptiCare Board met on March 29, 1999 to review the proposed merger
agreement and authorized Dr. Yimoyines, in his judgment, to sign the definitive
agreement as soon as a number of then open items were resolved. The OptiCare
board considered it in the best interests of OptiCare's stockholders to enter
into the Merger Agreement if the open items could be satisfactorily resolved.
These open items included, among others, successful negotiation with Drs.
Harrold and Barker of Prime on the terms of their participation in the combined
company after consummation of the mergers as substantial stockholders,
directors and senior officers. On March 29, 1999, OptiCare management invited
all of its Class B preferred shareholders to an informational meeting to review
the terms of the proposed merger with Prime and Saratoga. Along with many of
OptiCare's Class B preferred shareholders, representatives from OptiCare and
J.P. Morgan Securities, Inc. participated in the meeting in which questions
about the potential business combination were raised and addressed.

On March 30, 1999, Drs. Harrold and Barker sued Prime and certain other
parties. Thereafter, the plaintiffs and defendants in that litigation
negotiated terms of a potential settlement, which resulted in the execution of
a settlement agreement between the parties dated April 9, 1999. After reviewing
the terms of the settlement agreement, Saratoga, OptiCare and Prime negotiated
several amendments to the draft merger agreement. See "Summary of the Merger
Agreement."

On April 7, 1999, the Prime Board met and discussed in detail the draft of
the negotiated settlement agreement with Drs. Barker and Harrold. After
considerable discussion, the Prime Board authorized Prime to accept the
settlement agreement.

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On April 12, 1999, the Prime Board approved the terms of the Merger
Agreement and authorized an officer to execute the Merger Agreement.

On April 12, 1999, the Saratoga Board approved the terms of the Merger
Agreement and authorized Mr. Cooke to execute the Merger Agreement.

The Merger Agreement was signed on April 12, 1999. On April 13, 1999,
Saratoga issued a press release announcing the execution of the Merger
Agreement.

SARATOGA'S BUSINESS STRATEGY AND REASONS FOR THE MERGERS

Saratoga's board of directors wants to effect the mergers as a
continuation of its strategy of pursuing potential business opportunities and
preserving stockholder value. In 1996, Saratoga (through its wholly owned
subsidiary, named Saratoga Resources, Inc., a Texas corporation
("Saratoga-Texas")) sold its oil-producing properties and eliminated its
substantial bank debt, leaving Saratoga with approximately $1,500,000 in liquid
assets, and certain other assets that Saratoga continues to utilize (through
Saratoga-Texas) in its oil and gas exploration and development business.

In 1998, Saratoga commenced operation of a consumer finance business
through a newly organized subsidiary, Saratoga Holdings, I, Inc., a Texas
corporation ("SHI"), by the acquisition of a portfolio of consumer debt
receivables at a deep discount. Prior to the consummation of the Mergers,
Saratoga intends to distribute to its stockholders (the "SHI Spinoff"), on a
pro rata basis, substantially all the capital stock of SHI (except for SHI
capital stock held by Saratoga-Texas). Saratoga's Board also proposes to
dispose of Saratoga-Texas by distributing to the Saratoga stockholders, on a
pro rata basis, 100% of the capital stock of Saratoga-Texas (the
"Saratoga-Texas Spinoff"). However, Saratoga cannot assure that either the SHI
Spinoff or the Saratoga-Texas Spinoff will be consummated. Assuming the
completion of the Saratoga spinoffs, all the present assets of Saratoga will be
distributed to its current stockholders, other than approximately $150,000 in
cash. The spinoffs will be carried out immediately prior to the consummation of
the mergers, and the holders of securities of OptiCare and Prime will not
participate in the SHI Spinoff or the Saratoga-Texas Spinoff. See "Disposition
of Saratoga's Subsidiaries" below.

Saratoga Stock Ownership. Upon consummation of the mergers, the
stockholders of Saratoga immediately before the effective time of the mergers
will have a number of shares of Saratoga Common Stock which will constitute
2.5% of the total amount of Saratoga Common Stock calculated on a primary basis
to be outstanding immediately after the effective time, giving effect to the
Reverse Split and the mergers and taking into account any shares of Saratoga
Common Stock which are not issued in the mergers and the Reverse Split because
they are attributable to former stockholders of OptiCare and Prime who may have
demanded and perfected statutory dissenters' rights.

Saratoga's Board of Directors believes, after three years of efforts to
find other business opportunities, that the mergers, as they have been
structured, represent a reasonable opportunity for Saratoga to utilize its
assets for the benefit of its stockholders. The number of Saratoga shares to be
issued to the OptiCare and Prime securities holders was determined by
negotiation between Saratoga, on the one hand, and Prime and OptiCare, on the
other. The amount is not necessarily reflective of the assets or business
prospects of any of the parties to the mergers but represents the results of
extensive negotiations.

On April 12, 1999, the Board of Directors of Saratoga concluded that the
mergers were in the best interests of Saratoga and its stockholders and
determined to recommend that the stockholders approve the stockholder proposals
in connection with the mergers.

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The evaluation of the mergers and the decision of the board of directors
of Saratoga to pursue the mergers were based upon several factors and potential
benefits of the mergers including, but not limited to, the following:

o historical information concerning Saratoga's, OptiCare's and Prime's
respective businesses, financial performance and condition, operations,
and management;

o Saratoga management's view of the financial condition, results of
operations and businesses of Saratoga, OptiCare and Prime before and
after giving effect to the mergers and the Saratoga board's determination
of the mergers' effect on stockholder value;

o current financial market conditions and historical market prices,
volatility and trading information of Saratoga;

o the consideration OptiCare and Prime stockholders will receive in the
mergers;

o the belief that the terms of the Merger Agreement are reasonable;

o the spinoffs will be carried out immediately prior to the consummation
of the mergers, and the holders of securities of OptiCare and Prime will
not participate in the SHI Spinoff, the Saratoga- Texas Spinoff or other
disposition of SHI or Saratoga-Texas; and

o substantially all the costs of carrying out the Merger Agreement, even
if the mergers are not consummated, are being paid by OptiCare and Prime.

The Saratoga Board also identified and considered a number of potentially
negative factors in its deliberations concerning the mergers, including the
following:

o the risk that the potential benefits of the mergers may not be realized;

o the possibility that the mergers may not be consummated, even if
approved by the stockholders;

o other risks described in this Prospectus/Proxy Statement under "Risk
Factors."

The Saratoga Board concluded, however, that, on balance, the potential
benefits to Saratoga and its stockholders of the mergers outweighed the risks
associated with the mergers.

The discussion of the information and factors considered by the Saratoga
Board is not intended to be exhaustive. In view of the variety of factors
considered in connection with its evaluation of the mergers, the Saratoga board
did not find it practicable to, and did not quantify or otherwise assign
relative weight to, the specific factors considered in reaching its
determination.

RECOMMENDATION OF SARATOGA'S BOARD OF DIRECTORS

After careful consideration, the Saratoga board of directors has
determined the Merger Agreement and the mergers to be fair to and in the best
interests of the Saratoga stockholders. In connection with the mergers,
Saratoga's board of directors recommends approval of the amendments of
Saratoga's certificate of incorporation and the other proposals as described in
this Prospectus/Proxy Statement.

OPTICARE'S REASONS FOR THE MERGER

During the last five years, OptiCare has evolved into a company focused on
four core businesses: ophthalmology services, retail optometry, managed care
services and ambulatory surgery centers ("ASC's"), primarily in Connecticut.
During that period, OptiCare has developed the management and systems to
successfully operate those businesses.

Given OptiCare's emphasis on operations and systems, management and the
board of directors increasingly believed that consolidation opportunities would
be available to OptiCare as other eye care companies determined they would
benefit from OptiCare's operating capabilities to manage their growing
businesses. As a result, in early 1998, OptiCare management recommended to the
OptiCare board that OptiCare be available and opportunistic if business
combinations in the eye care industry become available. The OptiCare Board was
presented with an opportunity to consider a potential business combination with
Prime and Saratoga during the period from late 1998 to early 1999.

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Prior to executing the Merger Agreement, the OptiCare board considered the
following factors: (i) the terms and conditions of the proposed mergers,
including the relative valuation of OptiCare; (ii) the financial condition,
results of operations, business, market position, prospects and strategic
objectives of OptiCare as a stand alone business; (iii) the financial
condition, results of operations, business, market position, prospects and
strategic objectives of Prime and Saratoga; and (iv) the attractiveness of
Saratoga's common stock and Saratoga's status as a public company.

The OptiCare Board chose to proceed with executing the Merger Agreement
because, in its view: (i) the combination offered OptiCare shareholders the
opportunity to own a publicly traded stock; (ii) OptiCare's shareholders would
participate in a much bigger company with significantly enhanced scale and
potential to leverage OptiCare's operating infrastructure; (iii) the
discontinuation of Prime's ophthalmology business and the implementation of a
health service organization model and several other structural changes to
Prime's organization would improve the value of Prime to the combined company;
and (iv) the transaction was fair and favorable to OptiCare's shareholders.

The OptiCare Board also evaluated several potentially negative elements to
the proposed transaction. These included: (i) the possibility that the combined
company would have difficulty integrating OptiCare and Prime, producing
unfavorable financial results for the combined company; (ii) the risk that the
merger might not be consummated based on, for example, failure to satisfy some
of the closing conditions; and (iii) other risks described in this Proxy
Statement/Prospectus under "Risk Factors."

The discussion of the information and factors considered by the OptiCare
board is not intended to be exhaustive. In view of the variety of factors
considered in connection with its evaluation of the mergers, the OptiCare board
did not find it practicable to, and did not quantify or otherwise assign
relative weight to, the specific factors considered in reaching its
determination.

PRIME'S REASONS FOR THE MERGER

Prime had been engaged in a program of acquisitions of ophthalmology and
optometry practices from 1996 through 1998. Most acquisitions were made with a
combination of cash, promissory notes and Prime common stock, and the aggregate
purchase prices were based upon multiples of the historical earnings of the
practices. As these acquisitions were integrated into Prime, earnings did not
meet expectations. In 1996 and 1997, Prime suffered losses of $2,204,177 and
$1,405,261, respectively. In the second quarter of 1998, recognizing the need
for additional capital, Prime issued convertible preferred stock and warrants
for $8,000,000 in cash. By the fourth quarter of 1998, it had become clear to
management that Prime would suffer further losses in 1998, due to the poor
performance and high debt of the ophthalmology division, in addition to high
administration costs. The losses were the principal reason that Prime was in
default of various financial covenants of its credit facility with Bank
Austria.

Accordingly, the Prime board of directors determined to (i) dispose of its
ophthalmology operations, (ii) seek a merger partner or other reorganization
that would provide quality management for Prime's core businesses of retail
optometry services, buying group services and managed care services, and (iii)
execute a reorganization which would enable Prime to restructure its existing
debt and access other credit facilities for Prime's core businesses.

Representatives of Prime first met with representatives of OptiCare in
November 1998, and the two companies exchanged information about their
operations, business strategies, financial condition, and management. The Prime
board determined that OptiCare's management and systems would be of value to
Prime, and believed that a combination of the two companies could enable Prime
to operate its core businesses profitably in the long run and to meet its
objectives discussed in items (ii) and (iii) in the preceding paragraph.

The Prime board chose to proceed with executing the Merger Agreement
because, in its view: (i) the combination offered Prime shareholders the
opportunity to own a publicly traded stock; and (ii) the transaction was fair
and favorable to Prime's shareholders.

The discussion of the information and factors considered by the Prime
board is not intended to be exhaustive. In view of the variety of factors
considered in connection with its evaluation of the merger, the

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Prime board did not find it practicable to, and did not quantify or otherwise
assign relative weight to, the specific factors considered in reaching its
determination.

STRUCTURE OF THE MERGERS AND CONVERSION OF OPTICARE AND PRIME COMMON STOCK

Upon completion of the mergers, each outstanding share of Prime common
stock ("Prime Stock"), other than shares held by Prime and its subsidiaries,
will be converted into the right to receive, and, upon surrender of the
certificate or certificates representing such shares of Prime Stock, shall be
exchangeable for, the number of shares of Saratoga common stock determined by
multiplying each share of Prime Stock by the Prime Exchange Ratio, as described
below. Based upon current available information, Prime stockholders will
receive, for each share of Prime common stock, 0.3134 shares of Saratoga common
stock. The Prime Exchange Ratio shall be the quotient of (a) the number of
shares of Saratoga Common stock which shall equal 48.755% of the total amount
of Saratoga common stock calculated on a primary basis to be outstanding
immediately after the Effective Time, giving effect to the Reverse Split and
the mergers and taking into account any shares of Saratoga common stock which
are not issued in the mergers and the Reverse Split because they are
attributable to stockholders of Saratoga and former stockholders of OptiCare
and Prime who may have demanded and perfected statutory dissenters rights;
divided by (b) the number of outstanding shares of Prime Stock calculated on a
primary basis.

Upon completion of the mergers, each outstanding share of OptiCare
preferred stock (the "OptiCare Stock"), other than shares held by OptiCare and
its subsidiaries, will be converted into the right to receive, and, upon
surrender of the certificate or certificates representing such shares of
OptiCare Stock, shall be exchangeable for, the number of shares of Saratoga
common stock determined by multiplying each share of OptiCare Stock by the
OptiCare Exchange Ratio, as described below. Based upon current available
information, OptiCare stockholders will receive, for each share of OptiCare
Stock, 11.7364 shares of Saratoga common stock. The OptiCare Exchange Ratio
shall be the quotient of (a) the number of shares of Saratoga common stock
which shall equal 48.745% of the total amount of Saratoga common stock
calculated on a primary basis to be outstanding immediately after the Effective
Time, giving effect to the Reverse Split and the mergers and taking into
account any shares of Saratoga Common Stock which are not issued in the Mergers
and the Reverse Split because they are attributable to stockholders of Saratoga
and former stockholders of OptiCare and Prime who may have demanded and
perfected statutory dissenters rights; divided by (b) the number of outstanding
shares of OptiCare Stock calculated on a primary basis. Saratoga shall issue to
holders of OptiCare Stock the number of shares of Saratoga common stock
calculated by applying the OptiCare Exchange Ratio, in exchange for each such
share of OptiCare Stock. OptiCare does not have any outstanding common stock.

The number of shares of Saratoga common stock issuable in the mergers will
be proportionately adjusted for any stock split, stock dividend or similar
event with respect to OptiCare Stock or Prime common stock or Saratoga common
stock effected between the date of the Merger Agreement and the consummation of
the mergers other than the Reverse Split.

No certificate or scrip representing fractional shares of Saratoga's
common stock will be issued in connection with the mergers. Instead OptiCare
and Prime stockholders will receive cash, without interest, in lieu of a
fraction of a share of Saratoga common stock.

EXCHANGE OF OPTICARE AND PRIME STOCK CERTIFICATES FOR SARATOGA STOCK
CERTIFICATES

When the mergers are completed, Saratoga's exchange agent will mail to
OptiCare and Prime stockholders a letter of transmittal and instructions for
use in surrendering OptiCare and Prime stock

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certificates in exchange for Saratoga certificates. When the OptiCare and Prime
stockholders deliver their stock certificates to the exchange agent along with
an executed letter of transmittal and any other required documents, their stock
certificates will be canceled, and they will receive Saratoga stock
certificates representing the number of full shares of Saratoga common stock to
which they are entitled under the Merger Agreement. OptiCare and Prime
stockholders will receive payment in cash, without interest, in lieu of any
fractional shares of Saratoga common stock which would have been otherwise
issuable to them in the mergers.

OPTICARE AND PRIME STOCKHOLDERS SHOULD NOT SUBMIT THEIR STOCK CERTIFICATES
FOR EXCHANGE UNLESS AND UNTIL THEY RECEIVE THE TRANSMITTAL INSTRUCTIONS AND A
FORM OF LETTER OF TRANSMITTAL FROM THE EXCHANGE AGENT.

OptiCare and Prime stockholders are not entitled to receive any dividends
or other distributions on Saratoga common stock until the mergers are completed
and they have surrendered their stock certificates in exchange for Saratoga
stock certificates. In particular, they will not participate in the spinoffs or
other dispositions of SHI and Saratoga--Texas.

Subject to the effect of applicable laws, promptly following surrender of
OptiCare or Prime stock certificates, as the case may be, and the issuance of
the corresponding Saratoga certificates, OptiCare or Prime stockholders, as the
case may be, will be paid the amount of dividends or other distributions,
without interest, with a record date after the completion of the mergers which
were previously paid with respect to their whole shares of Saratoga common
stock. At the appropriate payment date, OptiCare and Prime stockholders, as the
case may be, will also receive the amount of dividends or other distributions,
without interest, with a record date after the completion of the mergers and a
payment date after they exchange their stock certificates for Saratoga stock
certificates.

Saratoga will only issue OptiCare and Prime stockholders a Saratoga stock
certificate or a check in lieu of a fractional share in the name in which the
surrendered stock certificate is registered. If OptiCare or Prime stockholders
wish to have certificates issued in another name, they must present the
exchange agent with all documents required to show and effect the unrecorded
transfer of ownership and show the payment of any applicable stock transfer
taxes.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS

The following general discussion summarizes certain material federal
income tax consequences of the mergers. This discussion is based on the
Internal Revenue Code, the related regulations promulgated, existing
administrative interpretations and court decisions, all of which are subject to
change, possibly for retroactive effect. This discussion assumes that OptiCare
and Prime stockholders hold their shares of OptiCare Stock and Prime Stock as
capital assets within the meaning of Section 1221 of the Internal Revenue Code.
This discussion does not address all aspects of federal income taxation that
may be important to stockholders in light of their particular circumstances or
if they are subject to special rules. These special rules include rules
relating to:

o stockholders who are not citizens or residents of the United States

o financial institutions

o tax-exempt organizations

o insurance companies

o dealers in securities

o stockholders who acquired their shares of stock through the exercise of
options or similar derivative securities or otherwise as compensation.

The obligations of the parties to complete the mergers are not conditioned
on the delivery of an opinion regarding federal income tax consequences of the
mergers. Each of Saratoga, Prime, and OptiCare is not intending to obtain such
a tax opinion.

We understand that the mergers will have the federal income tax
consequences discussed below. However, no assurance can be given that contrary
positions will not be successfully asserted by the IRS or adopted by a court if
the issues are litigated.

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Tax Implications to Saratoga Stockholders. Current stockholders of
Saratoga will not recognize gain or loss for federal income tax purposes as a
result of the mergers. See "Proposal 2--Reverse Split Proposal" for a
discussion of certain tax effects of the Reverse Split.

Tax Implications to OptiCare and Prime Stockholders. Except as discussed
below, current stockholders of OptiCare and Prime should not recognize gain or
loss for federal income tax purposes on the exchange of their stock for
Saratoga common stock in the mergers. The aggregate tax basis of the Saratoga
common stock received as a result of the mergers should be the same as the
aggregate tax basis in the stock surrendered in the exchange, reduced by the
tax basis of any shares of stock for which cash is received instead of
fractional shares of Saratoga common stock. The holding period of the Saratoga
common stock received as a result of the exchange should include the period
during which the stock exchanged in the merger was held. OptiCare and Prime
stockholders should recognize gain or loss for federal income tax purposes with
respect to the cash they receive instead of a fractional share interest in
Saratoga common stock. The gain or loss will be measured by the difference
between the amount of cash they receive and the portion of the tax basis of
their shares of OptiCare and Prime stock allocable to the shares of stock
exchanged for the fractional share interest. This gain or loss will be capital
gain or loss and will be a long-term capital gain or loss if the shares of
stock have been held for more than one year at the time the merger is
completed.

Tax Implications to Saratoga, OptiCare and Prime. Saratoga, including its
merger subsidiaries, and each of OptiCare and Prime should not recognize gain
or loss for federal income tax purposes as a result of the mergers.

THIS DISCUSSION IS ONLY A GENERAL SUMMARY, AND IT IS NOT INTENDED TO BE A
COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL FEDERAL INCOME TAX
CONSEQUENCES OR ANY OTHER TAX CONSEQUENCES OF THE MERGERS. IN ADDITION, THIS
DISCUSSION DOES NOT ADDRESS TAX CONSEQUENCES WHICH MAY VARY WITH, OR ARE
CONTINGENT ON, YOUR INDIVIDUAL CIRCUMSTANCES. MOREOVER, THIS DISCUSSION DOES
NOT ADDRESS ANY NON-INCOME TAX OR ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES
OF THE MERGERS. ACCORDINGLY, STOCKHOLDERS ARE STRONGLY URGED TO CONSULT WITH
THEIR TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL, STATE, LOCAL OR FOREIGN
INCOME OR OTHER TAX CONSEQUENCES OF THE MERGERS.

ACCOUNTING TREATMENT OF THE MERGERS

The Prime acquisition has been accounted for as a reverse acquisition by
Prime of Saratoga at book value with no adjustments reflected to historical
values. The acquisition of OptiCare by Saratoga has been accounted for under
the purchase method of accounting with the excess of purchase price over the
fair value of net assets acquired being recorded as goodwill.

REGULATORY FILINGS AND APPROVALS REQUIRED TO COMPLETE THE MERGER

The Antitrust Division of the Department of Justice or the Federal Trade
Commission may challenge the mergers on antitrust grounds either before or
after expiration of the waiting period. Accordingly, at any time before or
after the completion of the mergers, either the Antitrust Division of the
Department of Justice or the Federal Trade Commission could take action under
the antitrust laws. Certain other persons could take action under the antitrust
laws, including seeking to enjoin the mergers. Additionally, at any time before
or after the completion of the mergers, notwithstanding that the applicable
waiting period expired or ended, any state could take action under the
antitrust laws. A challenge to the mergers could be made and if a challenge is
made we may not prevail.

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Other regulatory approvals include:

o compliance with applicable state securities laws;

o consents to change of control with respect to two ASC's in
Connecticut;

o consents to change of control with respect to two HMO's in North
Carolina and Texas.

Saratoga is not aware of any other material governmental or regulatory
approval required for completion of the merger, other than the effectiveness of
the registration statement of which this Prospectus/Proxy Statement is a part,
compliance with applicable corporate law of Delaware and Connecticut and
regulatory approvals of the insurance departments of North Carolina and Texas.

The parties are not required to close unless the regulatory conditions to
the completion of the mergers are satisfied.

STOCK EXCHANGE LISTING

STOCKHOLDERS' APPRAISAL RIGHTS--SARATOGA

Stockholders of Saratoga are not entitled to appraisal rights under the
Delaware General Corporation Law in connection with the mergers or the Reverse
Split.

STOCKHOLDERS' APPRAISAL RIGHTS--OPTICARE

Because OptiCare is a constituent corporation in the merger of OptiCare
and OptiCare Shellco Merger Corporation (the "OptiCare Merger"), the
Connecticut Business Corporation Act (the "CBCA") provides that OptiCare
shareholders are entitled to dissent from that OptiCare Merger. Any OptiCare
shareholder who objects to the OptiCare Merger shall have the right to be paid
the fair value of all shares of OptiCare stock owned by such shareholder in
accordance with the provisions of CBCA Sections 33-855 to 33-872, a complete
text of which will be mailed to the OptiCare shareholders.

This section presents a summary of the procedures set forth in CBCA
Sections 33-855 to 33-872 which must be followed by holders of shares of
OptiCare's Class A Preferred Stock and Class B Preferred Stock who wish to
dissent from the OptiCare Merger and demand that OptiCare purchase their shares
at fair value, which means the value of the shares immediately before the
OptiCare Merger takes place. Dissenting OptiCare shareholders are advised to
seek independent counsel concerning the exercise of their dissenters' rights.
The following discussion is not a complete statement of the law pertaining to
such rights. It is qualified in its entirety by reference to CBCA Sections
33-855 to 33-872. The right to be paid the value of such shares shall be such
shareholder's exclusive remedy as holder of such shares with respect to the
OptiCare Merger, whether or not such shareholder proceeds as provided in CBCA
Sections 33-855 to 33-872. This Proxy Statement/Prospectus constitutes notice
to holders of shares of OptiCare's Class A Preferred Stock and Class B
Preferred Stock concerning the availability of OptiCare dissenters' rights
under CBCA Sections 33-855 to 33-872.

As provided in CBCA Section 33-861(a), any OptiCare shareholder who wishes
to assert dissenters' rights (i) must deliver to OptiCare before the vote is
taken on the OptiCare Merger written notice of such shareholder's intent to
demand payment for such shareholder's shares if the OptiCare Merger is
consummated and (ii) must not vote such shares in favor of the OptiCare Merger.
Such notice may be addressed to OptiCare's registered agent at its registered
office or to OptiCare or its Secretary at the following address: OptiCare Eye
Health Centers, Inc., 87 Grandview Avenue, Waterbury, CT 06708. OptiCare
suggests that shareholders use registered or certified mail, return receipt
requested for this purpose.

AN OPTICARE SHAREHOLDER WHO VOTES IN FAVOR OF THE OPTICARE MERGER WILL BE
PRECLUDED FROM EXERCISING DISSENTERS' RIGHTS.

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AN OPTICARE SHAREHOLDER WHO RETURNS A SIGNED PROXY WHICH DOES NOT SPECIFY
IN THE PROXY EITHER A VOTE "AGAINST" APPROVAL OF THE OPTICARE MERGER OR AN
INSTRUCTION TO ABSTAIN, WILL BE DEEMED TO HAVE VOTED "FOR" APPROVAL OF THE
OPTICARE MERGER, WHICH WILL HAVE THE EFFECT OF WAIVING THE RIGHTS OF THAT
OPTICARE SHAREHOLDER WITH RESPECT TO DISSENTERS' RIGHTS. ABSTAINING FROM VOTING
OR VOTING AGAINST THE APPROVAL OF THE OPTICARE MERGER WILL NOT CONSTITUTE A
WAIVER OF SUCH SHAREHOLDER'S RIGHTS.

A VOTE AGAINST THE OPTICARE MERGER WILL NOT OF ITSELF SATISFY THE
REQUIREMENTS THAT A DISSENTING OPTICARE SHAREHOLDER DELIVER HIS OR HER WRITTEN
NOTICE OF INTENT TO DEMAND PAYMENT IF THE OPTICARE MERGER IS CONSUMMATED, NOR
WILL SUCH VOTE SATISFY ANY OTHER NOTICE REQUIREMENT UNDER CONNECTICUT LAW WITH
RESPECT TO DISSENTERS' RIGHTS.

A demand for payment must be executed by or for the shareholder of record
fully and correctly, as the shareholder's name appears on the share
certificate. A beneficial owner of shares of OptiCare stock who is not the
record owner may make such demand for payment with respect to all (but not less
than all) shares held on his or her behalf if the beneficial owner submits to
OptiCare at or before the assertion of his or her dissenter's rights a written
consent of the record holder.

If the OptiCare Merger is approved, any shareholder notifying OptiCare of
his or her intent to demand payment for his or her shares as provided in CBCA
Section 33-861(a), provided none of such shareholder's shares shall have been
voted in favor of the OptiCare Merger, may require OptiCare to purchase such
shareholder's shares at fair value. As provided in CBCA Section 33-862, if the
OptiCare Merger is approved and the OptiCare Merger is consummated, no later
than 10 days after such consummation, OptiCare shall deliver a written
dissenters' notice to all shareholders who have satisfied the above described
requirements of CBCA Section 33-861(a). Such dissenters' notice shall (i) state
where the payment demand must be sent and where and when certificates for
certificated shares must be deposited; (ii) supply a form for demanding payment
that includes the date of the first announcement to news media or to
shareholders of the terms of the OptiCare Merger and requires that each
shareholder asserting dissenters' rights certify whether or not such
shareholder acquired beneficial ownership of the shares before that date; (iii)
set a date by which OptiCare must receive the payment demand, which date may
not be fewer than 30 nor more than 60 days after the date that the written
dissenters' notice is delivered by OptiCare; and (iv) be accompanied by a copy
of CBCA Sections 33-855 to 33-872.

As provided in CBCA Section 33-863(a), a shareholder sent a dissenters'
notice must (i) demand payment, (ii) certify whether such shareholder acquired
beneficial ownership of such shares before the date of the first announcement
to news media or to shareholders of the terms of the OptiCare Merger as set
forth in the dissenters' notice and (iii) deposit the certificate or
certificates representing such shareholder's shares in accordance with the
terms of the dissenters' notice. A SHAREHOLDER WHO DOES NOT DEMAND PAYMENT OR
DEPOSIT HIS SHARE CERTIFICATES, EACH BY THE DATE SET FORTH IN THE DISSENTERS'
NOTICE, IS NOT ENTITLED TO PAYMENT FOR HIS SHARES UNDER CBCA SECTIONS 33-855 TO
33-872.

Except as provided below, upon receipt of a payment demand, OptiCare shall
pay each shareholder who makes a proper demand for payment pursuant to CBCA
Section 33-863(a) the amount OptiCare estimates to be the fair value of such
shareholder's shares, plus accrued interest, as provided in CBCA Section
33-865(a). Such payment shall be accompanied by: (i) OptiCare's balance sheet
as of the end of a fiscal year ending not more than sixteen months before the
date of payment, an income statement for that year and a statement of changes
in shareholders' equity for that year; and the latest available interim
financial statements, if any; (ii) a statement of OptiCare's estimate of the
fair value of the shares; (iii) an explanation of how the interest was
calculated; (iv) a statement of the shareholder's right to demand payment under
CBCA Section 33-868; and (v) a copy of CBCA Sections 33-855 to 33-872.

Pursuant to CBCA Section 33-867(a), OptiCare may elect to withhold payment
required by CBCA Section 33-865 from a shareholder unless the shareholder was
the beneficial owner of shares before the date of the first announcement to
news media or to shareholders of the terms of the OptiCare Merger. To the
extent that OptiCare elects to withhold payment under CBCA Section 33-867(a),
after the OptiCare Merger, it shall estimate the fair value of the shares, plus
accrued interest, and shall pay this amount to each shareholder who agrees to
accept it in full satisfaction of the shareholder's demand. OptiCare shall send
with its offer a statement of OptiCare's estimate of the fair value of the
shares, an explanation of how OptiCare calculated interest and a statement of
the shareholder's right to demand payment under CBCA Section 33-868.

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Pursuant to CBCA Section 33-868, a dissenting shareholder may notify
OptiCare in writing of such shareholder's own estimate of the fair value of his
shares and the amount of interest due, and demand payment of his estimate, less
any payment by OptiCare under CBCA Section 33-865, if: (i) such shareholder
believes that the amount paid under CBCA Section 33-865 is less than the fair
value of such shareholder's shares or that the interest due is incorrectly
calculated; or (ii) OptiCare fails to make payment under CBCA Section 33-865
within 60 days after the date set for such shareholder's demand payment; or
(iii) OptiCare, having failed to complete the OptiCare Merger, does not return
the deposited certificates or release the transfer restrictions imposed on
uncertificated shares within 60 days after the date set for demanding payment.
A dissenting shareholder waives his right to demand payment under CBCA Section
33-868 unless he notifies OptiCare of his demand in writing within 30 days
after OptiCare makes payment for such shareholder's shares.

Pursuant to CBCA Section 33-871(a) and (b), if a dissenting shareholder's
demand for payment under CBCA Section 33-868 remains unsettled, OptiCare shall
commence a proceeding within 60 days after receipt of such shareholder's demand
for payment and petition the superior court for the judicial district where
OptiCare's principal office is located to determine the fair value of such
shareholder's shares and accrued interest. If OptiCare fails to timely commence
such proceeding, OptiCare shall pay each dissenting shareholder whose demand
remains unsettled the amount demanded. All dissenting shareholders making such
demand for payment as described above, whose demands remain unsettled, wherever
residing, shall be made parties to the proceeding and all parties must be
served with a copy of the petition. Dissenting shareholders not resident in
Connecticut may be served by registered or certified mail or by publication as
provided by law. The jurisdiction of the court shall be plenary and exclusive.
The court may, if it so elects, appoint one or more persons as appraisers to
receive evidence and recommend a decision on the question of fair value. The
appraisers shall have the powers described in the order appointing them, or in
any amendment to it. All dissenting shareholders are entitled to the same
discovery rights as parties in other civil proceedings. Each OptiCare
shareholder made a party to the proceeding is entitled to judgment (i) for the
amount, if any, by which the court finds the fair value of such shareholder's
shares, plus interest, exceeds the amount paid by OptiCare; or (ii) for the
fair value plus accrued interest, of the OptiCare shareholder's after-acquired
shares for which OptiCare elected to withhold payment under CBCA Section
33-867. The costs and expenses, including the reasonable compensation and
expenses of court-appointed appraisers, if any, of such proceeding shall be
determined by the court and shall be assessed against OptiCare, except that the
court may assess costs against all or some dissenting shareholders, in amounts
the court finds equitable, to the extent the court finds that they acted
arbitrarily, vexatiously or not in good faith in demanding payment under CBCA
Section 33-868. The court may also assess the fees and expenses of counsel and
experts employed by any party, in amounts the court finds equitable: (i)
against OptiCare in favor of any or all dissenting shareholders if the court
finds that OptiCare failed to substantially comply with the requirements of
CBCA Sections 33-860 to 33-868, inclusive, or (ii) against either OptiCare or a
dissenting shareholder, in favor of any other party, if the court finds that
the party against whom the fees and expenses are assessed acted arbitrarily,
vexatiously or not in good faith with respect to rights provided by CBCA
Sections 33-855 to 33-872, inclusive. If the court finds that the services of
counsel for any dissenting shareholder were of substantial benefit to other
dissenting shareholders similarly situated, and that such fees should not be
assessed against OptiCare, the court may award to these counsel reasonable fees
to be paid out of the amounts awarded to the dissenting shareholders who were
benefitted.

The foregoing is only a summary of the dissenters' rights of holders of
OptiCare preferred stock. Any holder of OptiCare preferred stock who intends to
exercise dissenters' rights should carefully review the text of the applicable
provisions of the CBCA and should also consult with such holder's attorney. THE
FAILURE OF A HOLDER OF OPTICARE PREFERRED STOCK TO FOLLOW PRECISELY THE
PROCEDURES SUMMARIZED ABOVE MAY RESULT IN LOSS OF DISSENTERS' RIGHTS.

HOLDERS OF SHARES OF OPTICARE PREFERRED STOCK CONSIDERING DEMANDING THE
PURCHASE OF THEIR SHARES AT FAIR VALUE SHOULD KEEP IN MIND THAT THE FAIR VALUE
OF THEIR SHARES DETERMINED UNDER CBCA SECTIONS 33-855 TO 33-872 COULD BE MORE,
THE SAME, OR LESS THAN THE MERGER CONSIDERATION THEY ARE ENTITLED TO RECEIVE
PURSUANT TO THE OPTICARE MERGER IF THEY DO NOT DEMAND THE PURCHASE OF THEIR
SHARES AT FAIR VALUE. ALSO, SUCH HOLDERS SHOULD CONSIDER THE FEDERAL INCOME TAX
CONSEQUENCES OF EXERCISING DISSENTERS' APPRAISAL RIGHTS.

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Completion of the merger is subject to a number of conditions including
the requirement that shares of OptiCare stock with respect to which dissenters'
rights have been asserted and perfected under Section 33-855 to 33-872 of the
CBCA shall not constitute more than 5% of the issued and outstanding shares of
OptiCare stock. See Summary of the Merger Agreement--Conditions to Completion
of the Mergers."

STOCKHOLDERS' APPRAISAL RIGHTS--PRIME

Pursuant to Delaware law, any Prime stockholder who does not wish to
accept the merger consideration to be paid to Prime stockholders pursuant to
the Merger Agreement may dissent from the Prime Merger and elect to have the
fair value of his shares of Prime common stock judicially determined and paid
in cash, provided that he complies with the provisions of Delaware law.

The following is a brief summary of the statutory procedures to be
followed by a Prime stockholder in order to dissent from the merger and perfect
appraisal rights under the Delaware law. THIS SUMMARY IS NOT INTENDED TO BE
COMPLETE. WE URGE YOU TO READ SECTION 262 OF THE DELAWARE GENERAL CORPORATION
LAW IN ITS ENTIRETY.

If any Prime stockholder elects to exercise his/her right to dissent from
the merger and demand appraisal, such stockholder must satisfy each of the
following instructions:

o Deliver a written demand for appraisal to Prime on or before the vote is
taken at the Prime special meeting. This written demand for appraisal
must be separate from your proxy or vote against the Merger Agreement.

o Not vote in favor of the Merger Agreement. If you vote in favor of the
Merger Agreement, by proxy or in person, if you return a signed proxy and
fail to vote against approval or if you abstain from voting, you will
have waived your right of appraisal, even if you previously filed a
written demand for appraisal.

o Continuously hold such shares of Prime common stock from the date of the
making of the demand through the closing of the Prime Merger. You should
read the paragraphs below for more details on making a demand for
appraisal.

If a Prime stockholder fails to comply with any of these conditions and
the Prime Merger becomes effective, such stockholder will only be entitled to
receive the Prime merger consideration provided in the Merger Agreement; i.e.,
shares of Saratoga common stock.

All written demands for appraisal should be addressed to: Gregg Luchs,
Esq., PrimeVision Health, Inc., 150 Fayetteville Street Mall--Suite 1000,
Raleigh, N.C. 27601 before the taking of the vote concerning the Merger
Agreement at the Prime special meeting, and should be executed by, or on behalf
of, the stockholder of record. Such demand must reasonably inform Prime of the
identity of the stockholder and that such stockholder is thereby demanding
appraisal of his shares.

TO BE EFFECTIVE, A DEMAND FOR APPRAISAL MUST BE EXECUTED BY OR FOR THE
STOCKHOLDER OF RECORD WHO HELD SUCH SHARES ON THE DATE OF MAKING SUCH DEMAND,
AS SUCH STOCKHOLDER'S NAME APPEARS ON HIS CERTIFICATE(S) AND CANNOT BE MADE BY
THE BENEFICIAL OWNER IF HE/SHE DOES NOT ALSO HOLD THE SHARES OF RECORD. THE
BENEFICIAL HOLDER MUST, IN SUCH CASE, HAVE THE REGISTERED OWNER SUBMIT THE
REQUIRED DEMAND IN RESPECT OF SUCH SHARES.

Within 10 days after the closing of the merger, Prime (as the surviving
corporation in the merger) must give written notice that the merger has become
effective to each stockholder who files a demand for appraisal and who did not
vote in favor of the Merger Agreement. Within 120 days after the closing of the
merger, either Prime, or any holder of shares of Prime common stock who has
complied with the requirements of Section 262 of the Delaware General
Corporation Law, may file a petition in the Delaware court of chancery
demanding a determination of the value of the shares of Prime common stock held
by all stockholders entitled to appraisal. Prime does not presently intend to
file such a petition. Inasmuch as Prime has no obligation to file such a
petition, the failure of a stockholder to do so within the period specified
could nullify such stockholder's previous written demands for appraisal. In any
event, at any time within 60 days after the closing of the merger or at any
time thereafter with the written consent

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of Prime, any stockholder who has demanded appraisal has the right to withdraw
the demand and to accept payment of the merger consideration provided in the
Merger Agreement.

Within 120 days after the closing of the merger, any stockholder who has
complied with the provisions of Section 262 of the Delaware General Corporation
Law to that point in time will be entitled to receive from Prime as the
surviving corporation, upon written request, a statement setting forth the
aggregate number of shares not voted in favor of the Merger Agreement and with
respect to which demands for appraisal have been received and the aggregate
number of holders of such shares. After the merger, Prime must mail such
statement to the stockholder within 10 days of receipt of such request.

If a petition for appraisal is duly filed by a stockholder and a copy
thereof is delivered to Prime, Prime will then be obligated within 20 days to
provide the court of chancery with a duly verified list containing the names
and addresses of all Prime stockholders who have demanded an appraisal of their
shares and with whom agreement as to the value of such shares has not been
reached. After notice to such stockholders, the Delaware court of chancery is
empowered to conduct a hearing upon the petition to determine those
stockholders who have complied with Section 262 of the Delaware General
Corporation Law and who have become entitled to appraisal rights under that
section. The court of chancery may require the stockholders who demanded
payment for their shares to submit their stock certificates to the registry in
chancery for notation thereon of the pendency of the appraisal proceedings; and
if any stockholder fails to comply with such direction, the court of chancery
may dismiss the proceedings as to such stockholder.

After determination of the stockholders entitled to an appraisal, the
court of chancery will appraise the shares of Prime common stock, determining
their fair value exclusive of any element of value arising from the
accomplishment or expectation of the Prime merger. When the value is so
determined, the court of chancery will direct the payment by Prime of such
value, with interest thereon, simply or compound, if the court of chancery so
determines, to the stockholders entitled to receive the same, upon surrender to
Prime by such stockholders of the certificates representing such Prime common
stock.

THE FAIR VALUE OF THEIR SHARES OF PRIME COMMON STOCK DETERMINED UNDER
SECTION 262 OF THE DELAWARE CORPORATION LAW COULD BE MORE THAN, THE SAME AS, OR
LESS THAN THE MERGER CONSIDERATION THAT PRIME STOCKHOLDERS ARE TO RECEIVE
PURSUANT TO THE MERGER AGREEMENT IF THEY DO NOT SEEK APPRAISAL OF THEIR SHARES
OF PRIME COMMON STOCK. PRIME STOCKHOLDERS SHOULD ALSO CONSIDER THE FEDERAL TAX
CONSEQUENCES OF EXERCISING DISSENTERS' APPRAISAL RIGHTS.

Costs of the appraisal proceeding may be assessed against Prime and the
stockholders participating in the appraisal proceeding by the court of
chancery, as the Delaware court deems equitable under the circumstances. Upon
application of any stockholder, the court of chancery may determine the amount
of interest, if any, to be paid upon the value of the Prime common stock owned
by stockholders entitled to the payment of interest. Upon application of a
stockholder, the court of chancery may order all or a portion of the expenses
incurred by any stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable counsel fees and the fees and
expenses of experts, to be charged pro rata against the value of all shares
entitled to appraisal. Any stockholder who has demanded appraisal rights will
not, after the closing of the merger, be entitled to:

o vote the Prime common stock subject to such demand for any purpose;

o receive the Saratoga common stock subject to such demand for any
purpose;

o receive payment of dividends or any other distribution with respect to
such shares other than dividends or distributions, if any, payable to
holders of record as of a record date prior to the effective time of the
merger;

o receive the payment of the consideration provided for in the Merger
Agreement.

However, if no petition for an appraisal is filed within 120 days after
the closing of the merger or if such stockholder delivers to Prime a written
withdrawal of his demand for an appraisal and an acceptance of the merger,
either within 60 days after the closing of the merger, or thereafter with the
written approval

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of Prime, then the right of such stockholder to an appraisal will cease.
Notwithstanding the foregoing, no appraisal proceeding in the court of chancery
will be dismissed as to any stockholder without the approval of the court, and
such approval may be conditioned upon such terms as the court deems just.

FAILURE TO COMPLY STRICTLY WITH THESE PROCEDURES WILL CAUSE THE
STOCKHOLDER TO LOSE HIS/HER DISSENTERS' RIGHTS. CONSEQUENTLY, ANY PRIME
STOCKHOLDER WHO DESIRES TO EXERCISE DISSENTERS' RIGHTS IS URGED TO CONSULT A
LEGAL ADVISOR BEFORE ATTEMPTING TO EXERCISE SUCH RIGHTS.

Completion of the merger is subject to a number of conditions including
the requirement that shares of Prime common stock with respect to which
dissenters' rights have been asserted and perfected under Section 262 of the
Delaware General Corporation Law shall not constitute more than 5% of the
issued and outstanding shares of Prime common stock. See "Summary of the Merger
Agreement--Conditions to Completion of the Mergers."

BOARD OF DIRECTORS AND MANAGEMENT OF SARATOGA FOLLOWING THE MERGERS

The Merger Agreement specifies certain persons who shall be directors and
officers of the combined company following the mergers. See "Management of the
Combined Company following Consummation of the Mergers."

OPERATIONS AFTER THE MERGERS

Following the mergers, each of OptiCare and Prime will continue its
operations as a wholly-owned subsidiary of Saratoga. The stockholders of
OptiCare and Prime will become stockholders of Saratoga, and their rights as
stockholders will be governed by Saratoga's certificate of incorporation, the
Saratoga By-laws and the laws of the State of Delaware. See "Comparison of
Stockholder Rights." It is the intention of the parties that the management of
OptiCare prior to the mergers will control the operations of Saratoga and its
subsidiaries after the effective time of the mergers.

EMPLOYMENT AGREEMENTS

As a condition of the mergers, Saratoga shall enter into employment
agreements with (i) Dean Yimoyines, M.D. as Chairman, President and Chief
Executive Officer and (ii) management personnel who report directly to Dr.
Yimoyines containing such terms and conditions as shall be approved by
OptiCare, Prime and Saratoga. Also, all existing employment agreements between
(i) OptiCare or any subsidiary of OptiCare and their respective employees and
(ii) Prime or any subsidiary of Prime and their respective employees (except
for Drs. Barker and Harrold) shall continue in accordance with their terms
until replaced with new agreements.

RESTRICTIONS ON SALES OF SHARES BY AFFILIATES OF SARATOGA, OPTICARE AND PRIME

The shares of Saratoga common stock to be issued in the mergers will be
registered under the Securities Act. These shares will be freely transferable
under the Securities Act, except for shares of Saratoga common stock issued to
any person who is an affiliate of Saratoga, OptiCare or Prime. Persons who may
be deemed to be affiliates include individuals or entities that control, are
controlled by, or under common control of any of them and may include some of
their officers and directors, as well as their principal stockholders.
Affiliates may not sell their shares of Saratoga Common Stock acquired in the
merger, except pursuant to (1) an effective registration statement under the
Securities Act covering the resale of those shares, (2) an exemption under
paragraph (d) of Rule 145 under the Securities Act, or (3) any other applicable
exemption under the Securities Act. Certain holders of Saratoga common stock
will also be subject to contractual restrictions on sales of their shares. See
"Related Agreements--Lock-Up Agreements."

DISPOSITION OF SARATOGA'S SUBSIDIARIES

As a condition to the merger, Saratoga is required to dispose of the stock
of all of its subsidiary corporations, other than OptiCare Sub and Prime Sub,
and shall have no liabilities or obligations with respect to such subsidiaries.

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In 1998, Saratoga commenced operation of a consumer finance business
through a newly organized subsidiary, Saratoga Holdings I, Inc., a Texas
corporation ("SHI"), by the acquisition of a portfolio of consumer debt
receivables at a deep discount. SHI has filed a registration statement on Form
SB-2 to register up to 3,465,292 shares (approximately 90%) of SHI's
outstanding common stock, to effect a proposed spinoff of SHI to the
stockholders of Saratoga. The proposed spinoff is a part of Saratoga's strategy
of enhancing stockholder value and would be necessary if the mergers come to
fruition. The unregistered shares of SHI will be retained by Saratoga-Texas.

A condition of the Merger Agreement is that Saratoga at the time of
closing shall generally have no assets or liabilities, other than cash in the
amount of approximately $150,000. Saratoga has conducted its business through
three subsidiaries (Saratoga-Texas, Lobo Operations, Inc. ("LOI") and Lobo
Energy, Inc. ("LEI")), in addition to its newly formed subsidiary, Saratoga
Holdings I, Inc. Each of these subsidiaries is currently wholly-owned by
Saratoga.

To satisfy the condition of the Merger Agreement described above, Saratoga
proposes to make a contribution of all of the stock of LOI and LEI to
Saratoga-Texas and, separately, to cause Saratoga-Texas to make a cash
distribution to Saratoga of $150,000. In addition, if the registered
distribution of SHI has not occurred as of the effective time of the mergers,
Saratoga will also make a contribution of all of the outstanding shares of SHI
to Saratoga-Texas.

Following the contributions described above, but before the effective
time, Saratoga will make a pro rata distribution of the stock of Saratoga-Texas
to each of the then existing shareholders of Saratoga. This distribution will
be made on the basis of one share of Saratoga-Texas for each outstanding share
of Saratoga and will represent all of the outstanding stock of Saratoga-Texas.

As a result of the above, Saratoga-Texas will have the same assets and
liabilities (other than the $150,000 to be held by Saratoga), the same
shareholder base and the same number of shares of stock outstanding as shall
exist for Saratoga immediately before the effective time. Moreover,
Saratoga-Texas will continue the business that has been conducted by Saratoga
prior to the mergers.

Following the effective time, Saratoga-Texas' class of common stock,
pursuant to Rule 12g-3 under the Exchange Act, will be deemed to continue to be
registered under Section 12(g) of the Exchange Act. Accordingly, Saratoga-Texas
will continue to be subject to the periodic reporting requirements and other
applicable provisions of the Exchange Act, in the same manner as has been
applicable to Saratoga.

Inasmuch as the disposition of the subsidiaries of Saratoga will occur
prior to the mergers, the Prime and OptiCare stockholders will not participate
in any such distribution of the stock.

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SUMMARY OF THE MERGER AGREEMENT

This section of the Proxy Statement/Prospectus describes the Merger
Agreement. While we believe that the description covers the material terms of
the Merger Agreement, this summary may not contain all of the information that
may be important to you. The Merger Agreement is attached to this Proxy
Statement/Prospectus as Annex A, and we urge you to read it carefully.

The parties to the Merger Agreement are OptiCare, Prime (collectively, the
"Constituent Companies"), Saratoga, and two wholly-owned subsidiaries of
Saratoga, OptiCare Shellco Merger Corporation, a Delaware corporation
("OptiCare Sub"), and PrimeVision Shellco Merger Corporation, a Delaware
corporation ("Prime Sub"). OptiCare Sub will be merged with and into OptiCare,
and OptiCare will be the surviving corporation in that merger. Prime Sub will
be merged with and into Prime and Prime will be the surviving corporation in
that merger. Upon consummation of the mergers, OptiCare and Prime will become
wholly-owned subsidiaries of Saratoga.

REPRESENTATIONS AND WARRANTIES

Each of the parties to the Merger Agreement made to the others a number of
representations and warranties regarding aspects of their respective
businesses, financial conditions, structures and other facts pertinent to the
mergers. (At the present time, OptiCare Sub and Prime Sub are "corporate
shells", with no material assets or liabilities.) Such representations and
warranties include:

o Corporate organization and qualifications to do business

o Authorization of Merger Agreement; absence of conflict with other
obligations

o Capitalization; absence of other obligations concerning capital stock

o Financial statements

o Books and records

o Title to properties; encumbrances

o Condition and sufficiency of assets

o Absence of undisclosed liabilities

o Taxes

o Retirement plans, welfare and other employee benefit plans

o Compliance with legal requirements; governmental authorizations

o Legal proceedings; court and governmental orders

o Absence of changes, amendments, other actions and events since
December 31, 1998

o Material contracts; compliance and absence of defaults

o Insurance

o Environmental matters

o Employees; proprietary rights of others

o Labor relations; compliance and absence of major events

o Intellectual property used in business

o Absence of prohibited payments

o Relationships with related or affiliated persons

o Brokers or finders

o SEC filings of Saratoga

o Disclosure of all material facts in disclosure schedules

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CONDUCT OF BUSINESS BEFORE COMPLETION OF THE MERGERS

Until completion of the mergers, unless otherwise agreed, the various
parties agree to:

o Conduct their respective businesses in the ordinary course

o Preserve their respective capitalizations, voting stock, assets and
agreements

o Maintain existing employee agreements, benefit plans and tax or
accounting methods

o Refrain from sale or change of stock, from entering into new debt,
from settling any claim, action or proceeding except in the ordinary
course of business, and from taking any action causing
representations and warranties to become untrue or conditions to the
mergers to become unsatisfied

o As to Prime and OptiCare, to take any action required under the
Merger Agreement; and to refrain from any activity prohibited by it

THE UNDERTAKINGS RELATED TO THE CONDUCT OF THE RESPECTIVE BUSINESSES OF
THE PARTIES SET FORTH IN THE MERGER AGREEMENT ARE COMPLEX AND DIFFICULT TO
SUMMARIZE. ACCORDINGLY, WE URGE YOU TO READ ARTICLE IV OF THE MERGER AGREEMENT
ENTITLED "CONDUCT OF BUSINESS PENDING THE MERGERS."

ADDITIONAL AGREEMENTS

The parties have agreed to additional undertakings and actions, including
the following:

o All parties agreed to provide the other parties access to their
respective properties, books, contracts and the like, to enable each
other party to review the same

o Saratoga agreed to prepare and file a registration statement covering
the common stock to be issued in the mergers, and OptiCare and Prime
agreed to provide information about their respective businesses,
financial condition and operations needed for the registration
statement to be declared effective.

o Except for the officers and employees of Saratoga (who shall resign),
the parties agreed to continue after the Mergers their employment
relationships and benefit plans

o OptiCare and Prime are required to modify and extend certain
employment agreements with certain senior executives.

o All parties agreed to perpetuate existing indemnification and
directors' and officers' liability insurance arrangements for six
years following the mergers; in addition, Saratoga agreed to amend
its certificate of incorporation to require indemnification of
officers and directors to the fullest extent allowed by law

o All parties agreed to defend vigorously any action, suit, proceeding
or investigation related to the mergers or the Merger Agreement

o All parties agreed to file the appropriate disclosures required under
the Hart-Scott-Rdino Act in connection with the mergers

o All parties agreed to do or take all necessary acts or action with
the SEC, the Federal Trade Commission, the Antitrust Division of the
Department of Justice, any third party or governmental body in order
to carry out the intention of the Merger Agreement and to effect the
mergers

o OptiCare and Prime agreed to confer at reasonably regular intervals
on operational matters

o All parties agreed, if requested by another party, to restructure the
Prime Merger into a forward subsidiary merger of Prime into Prime Sub
or the OptiCare Merger into either a merger of Saratoga into OptiCare
or of a forward or reverse subsidiary merger of OptiCare into or with
another subsidiary of Saratoga as required.

o All parties agreed to take such steps as shall be appropriate to
comply with any applicable state takeover law

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o All parties agreed to obtain from each "affiliate" (as defined in of
SEC Rule 145) of Prime or OptiCare an appropriate undertaking
restricting disposition of shares of the combined company received in
the Mergers

o All parties agreed to obtain consent letters from the independent
auditors and accountants of each of the principal parties

o Saratoga agreed to vote the shares of OptiCare Sub and Prime Sub in
favor of the OptiCare Merger and Prime Merger, respectively

o All parties agreed to cause their respective officers and directors
to act in favor of the mergers

o All parties agreed to conduct meetings of stockholders of Prime,
OptiCare and Saratoga

THE UNDERTAKINGS RELATED TO THE FURTHER ACTIONS THE PARTIES WILL TAKE
CONCERNING THE MERGER AGREEMENT ARE COMPLICATED AND NOT EASY TO SUMMARIZE.
ACCORDINGLY, YOU SHOULD READ CAREFULLY ARTICLE V OF THE MERGER AGREEMENT
ENTITLED "ADDITIONAL AGREEMENTS".

CONDITIONS TO COMPLETION OF THE MERGERS

The obligations of Saratoga and the Constituent Companies to complete the
mergers and the other transactions contemplated by the Merger Agreement are
subject to the satisfaction, or waiver, of each of the following conditions
before completion of the mergers:

o The Merger Agreement and the mergers and other transactions must be
approved by the requisite vote of each party's stockholders.

o All applicable waiting periods under applicable antitrust laws must
have expired or been terminated.

o No regulation or order may be in effect which would make the mergers
illegal or which would otherwise prohibit completion of the mergers
substantially on the terms contemplated by the Merger Agreement.

o All approvals, consents or authorizations of or by any administrative
body, required in connection with the Merger Agreement or related
transactions, must be obtained unless the absence of any such consent
or order would not materially harm the respective businesses of the
parties following the mergers.

o Each of the parties must have completed all actions that it undertook
to complete prior to the mergers, and their respective
representations and warranties contained in the Merger Agreement must
be correct.

o The shares of Saratoga common stock to be issued to the securities
holders of OptiCare and Prime upon consummation of the mergers must
have been approved for listing on either the American Stock Exchange
or NASDAQ.

o No material adverse change in the business, financial condition,
operating results, assets or customer base of OptiCare or Prime must
have occurred prior to the date of the mergers.

o Saratoga must have disposed of the capital stock of its two
subsidiaries (Saratoga-Texas and SHI) and its other assets, other
than approximately $150,000 in cash.

o Saratoga must have authorized the change of its corporate name as
agreed among OptiCare, Prime and Saratoga.

o Messrs. Yimoyines, Ditman, Franklin and either Dr. Barker or Dr.
Harrold, as well as three other persons as agreed between OptiCare
and Prime, must have been elected as the new board of directors of
Saratoga.

o Saratoga must have entered into employment agreement with Dr.
Yimoyines and management personnel reporting directly to him and all
existing employment agreements of Prime (except for Drs. Harrold and
Barker) and OptiCare must continue in accordance with their terms or
be replaced with new agreements acceptable to the Constituent
Companies.

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o Saratoga, Prime and OptiCare must have audited financial statements,
for the year ending December 31, 1998, which must be satisfactory to
each of the other parties.

o The shares of common stock of Saratoga to be issued to the former
securities holders of OptiCare and Prime must be registered with the
SEC pursuant to the appropriate registration statement.

o All warrants to purchase shares of the common stock of Prime must
have been converted into shares of Prime common stock or otherwise
disposed of prior to the date of the mergers

o Saratoga must have adopted a new stock option plan in a form
acceptable to OptiCare and Prime.

o The credit facility between Prime and Bank Austria Credit Anstalt (or
its affiliate) must have been revised to reduce the outstanding
indebtedness to $25 million, and in certain other respects.

o The promissory notes issued by Prime in connection with the
acquisition of various ophthalmology practices must have been revised
as provided in the Merger Agreement and an HSO agreement must be in
place with each such practice; the aggregate principal amount of the
notes must be reduced from $21,000,000 to $4,000,000.

o Officers, directors, 10% stockholders and specified other
stockholders of Saratoga following the Mergers must have entered into
lock-up agreements with Saratoga

o Either OptiCare or Prime may elect not to proceed with its Merger if
more than 5% of the outstanding shares of any class of capital stock
of each of OptiCare, Prime or Saratoga has valid and perfected
dissenters' rights in connection with the contemplated transactions.

o Saratoga shall have authorized a reverse stock split in a ratio
agreed to among OptiCare, Prime and Saratoga, and its capital stock
shall be as agreed among such parties.

o Prime must have entered into HSO agreements acceptable to OptiCare
with its physician practices

o An amendment to the certificate of incorporation of OptiCare shall
have been filed with the Secretary of State of Connecticut providing
that the OptiCare Merger will not constitute a liquidation,
dissolution or winding up and, as such, will not entitle stockholders
to receive any cash, securities or other property other than the
consideration provided for in the OptiCare Merger, i.e., Saratoga
common stock.

o The stockholders (prior to the mergers) of Saratoga will own,
following the consummation of the mergers, 2.5% of its common stock,
as calculated in accordance with the Merger Agreement.

o Saratoga shall have disposed of the stock of, and shall have no
liabilities or obligations with respect to, all its subsidiary
corporations other than OptiCare Sub and Prime Sub.

o The respective Certificates of Merger shall provide that the OptiCare
Merger and the Prime Merger shall be effective at the same time

o Certain securities holders of OptiCare must agree to revisions of
certain stockholders' agreements to permit the mergers, and the
revisions must be acceptable to Prime.

o Steven B. Waite and Prime must make a written agreement providing for
the termination of his employment and of his options to purchase
Prime shares, and for lock-up of the common stock of Saratoga that
Mr. Waite may receive in the mergers.

o OptiCare shall have received lien searches on Prime and its
subsidiaries, showing no material encumbrances.

o The Settlement Agreement of April 9, 1999, concerning litigation
brought by Drs. Harrold and Barker and others will have been signed
and performed, including all agreements, documents and actions set
forth in such agreement, and Drs. Barker and Harrold and the other
plaintiffs shall have executed and delivered all documents needed to
completely terminate the litigation. See "Related
Agreements--Settlement Agreement" below.

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o The pending Request for Declaratory Ruling from the North Carolina
State Board of Examiners in Optometry filed by Drs. Barker and
Harrold regarding Prime shall have been finally resolved and disposed
of in a manner satisfactory to Prime and OptiCare.

o The parties, and each of them, must have delivered at Closing the
documents referred to in the Merger Agreement.

THE CONDITIONS PRECEDENT TO THE OBLIGATION OF EACH PARTY TO EFFECT THE
MERGERS SET FORTH IN ARTICLE VI OF THE MERGER AGREEMENT ARE COMPLICATED AND NOT
EASILY SUMMARIZED. ACCORDINGLY, WE URGE YOU TO READ CAREFULLY ARTICLE VI OF THE
MERGER AGREEMENT ENTITLED "CONDITIONS PRECEDENT."

TREATMENT OF OPTICARE AND PRIME STOCK OPTIONS AND WARRANTS.

At or prior to the effective time of the mergers, each of Saratoga, Prime
and OptiCare shall take all action necessary to cause the assumption by
Saratoga of, or the reissuance by Saratoga of substitutes for, all of the
following which remain outstanding as of the Effective Time:

(i) each outstanding option to purchase OptiCare Stock and Prime common
stock, whether vested or unvested, which has been issued under OptiCare's
Stock Option Plans and Prime's Stock Option Plans (the "Stock Option
Plans");

(ii) options to purchase OptiCare Stock and Prime common stock which have
been issued pursuant to option agreements outside of the Stock Option
Plans, with certain exceptions; and

(iii) the warrants to purchase OptiCare Stock issued pursuant to warrant
agreements.

All the foregoing OptiCare and Prime options and warrants are hereinafter
called the "Outstanding Options and Outstanding Warrants."

To the fullest extent permitted under applicable law and the applicable
stock option agreements, the Stock Option Plans and the warrant agreements,
each of the Outstanding Options and Outstanding Warrants shall be exchanged or
substituted without any action on the part of the holder thereof into an option
or warrant to purchase shares of Saratoga common stock as of the effective
time.

The number of shares of Saratoga common stock that the holder of an
assumed or substituted Outstanding Option or Outstanding Warrant shall be
entitled to receive upon the exercise of such option or warrant shall be the
same number of shares of Saratoga common stock as the holder of such
Outstanding Option or Outstanding Warrant would have been entitled to receive
pursuant to the mergers as if such holder had exercised such option or warrant
in full immediately prior to the effective time.

The exercise price per share of Saratoga common stock acquirable under the
Outstanding Options or Outstanding Warrants after the effective time shall
equal (i) the aggregate exercise price for the shares of OptiCare Stock or
Prime common stock otherwise purchasable pursuant to such Outstanding Option or
Outstanding Warrant, divided by (ii) the number of shares of Saratoga common
stock (including any fraction of a share) purchasable pursuant to such
Outstanding Option or Outstanding Warrant.

Other than as set forth in the Outstanding Options and Outstanding
Warrants or as contemplated by this Agreement, the assumption and substitution
of options and warrants as provided herein shall not give the holders of such
options and warrants additional benefits or additional vesting rights which
they did not have immediately prior to the effective time or relieve the
holders of any obligations or restrictions applicable to their options and
warrants or the shares obtainable upon exercise of their options and warrants.
Only whole shares of Saratoga common stock shall be issued upon exercise of any
Outstanding Option or Outstanding Warrant, and no certificates or scrip
representing fractional shares of Saratoga common stock and no cash in lieu of
fractional shares shall be issued upon such exercise. Fractional shares of
Saratoga common stock which a holder of any Outstanding Option or Outstanding
Warrant would otherwise be entitled to receive shall be rounded off to the
nearest whole share.

Saratoga intends to file a registration statement on Form S-8 or a
successor form under the Securities Act with respect to the shares of Saratoga
common stock issuable under the Outstanding Options and Outstanding Warrants,
to the extent that Form S-8 (or a successor form) is available to register the

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Outstanding Options and Outstanding Warrants and the underlying shares, and
shall use its best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as the Outstanding
Options and Outstanding Warrants remain outstanding.

FRACTIONAL SARATOGA SHARES

No certificates or scrip representing fractional shares of Saratoga common
stock shall be issued in the mergers. All fractional shares of Saratoga common
stock to which a holder of OptiCare Stock or Prime common stock immediately
prior to the effective time of the mergers would otherwise be entitled at the
effective time shall be aggregated. If a fractional share results from such
aggregation, in lieu thereof Saratoga (or the exchange agent on its behalf)
shall pay to each person entitled to receive any such fractional interest an
amount in cash (without interest) equal to the closing sale price, or if not
available, closing bid price, on the closing date of the mergers of one share
of Saratoga common stock multiplied by such fraction of a share.

TERMINATION OF THE MERGER AGREEMENT

The Merger Agreement may be terminated and the mergers may be abandoned at
any time prior to the Closing, whether before or after stockholder approval of
the Merger Agreement:

o by any of Saratoga, OptiCare or Prime, if the mergers have not been
consummated by September 30, 1999, provided that the party seeking to
terminate the Merger Agreement shall not have breached its
obligations under the Merger Agreement in any manner that caused, or
contributed in a material manner to, the failure to consummate the
mergers

o by any of Saratoga, OptiCare or Prime, if the Merger Agreement shall
not have been approved by the stockholders of OptiCare or Prime at
the meeting thereof, as provided in the Merger Agreement

o by any of Saratoga, OptiCare or Prime, if there is any order of a
court or governmental authority having jurisdiction over the parties,
permanently restraining, enjoining or otherwise prohibiting the
mergers and the related transactions, which is or becomes final and
no longer subject to appeal, provided that the party(ies) seeking to
terminate the Merger Agreement shall have used its (their) best
efforts to remove (or to contest) such injunction, order or decree

o by any party, if there has been a breach by any other party of any
representation or warranty contained in the Merger Agreement, which
would have (or be reasonably likely to have) a material adverse
effect on such other party; provided that, if OptiCare committed such
breach, it shall be liable to Prime and, if Prime committed such
breach, it shall be liable to OptiCare, in either case for the costs
and expenses, including reasonable attorneys' fees and expenses,
incurred in connection with the Merger Agreement and the transactions
contemplated thereunder (including such costs and expenses of
Saratoga)

o by any party, if there has been a material breach of any of the
covenants or agreements set forth in the Merger Agreement on the part
of another party, which breach is not curable or is not cured;
provided that, if OptiCare committed such breach, it shall be liable
to Prime and, if Prime committed such breach, it shall be liable to
OptiCare, for the costs and expenses, including reasonable attorneys'
fees and expenses, incurred in connection with the Merger Agreement
and the transactions contemplated thereunder (including such costs
and expenses of Saratoga)

EXTENSION, WAIVER AND AMENDMENT OF THE MERGER AGREEMENT

With the consent of the other parties, we may amend the Merger Agreement
prior to consummation of the mergers, provided that we comply with applicable
state laws in so doing.

Any party may extend another party's time for the performance of any
obligation or other act under the Merger Agreement, may waive inaccuracies in
such other party's representations and warranties and may waive compliance with
any of the agreements or conditions contained in the Merger Agreement.

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Any amendment of the Merger Agreement following approval by the
stockholders of the parties may not be made without further approval of such
stockholders if any such amendment changes the amount or the form of the
consideration to be delivered to them.

RELATED AGREEMENTS

This section of the Prospectus/Proxy Statement describes agreements
related to the Merger Agreement to be entered into with certain stockholders or
affiliates of either OptiCare or Prime, as appropriate, who will receive shares
of the common stock of Saratoga, in connection with the Merger Agreement.

AFFILIATE AGREEMENTS

The Affiliate Agreements will be entered into with each stockholder who
may, at the time the Merger Agreement is submitted to the stockholders of Prime
or OptiCare, as appropriate, be an "affiliate" of Prime or OptiCare. The
Affiliate Agreements restrict those stockholders from making any sale, transfer
or other disposition of such shares in violation of the Securities Act of 1933
or the rules and regulations of the Securities and Exchange Commission in
connection with such statute. Accordingly, those shareholders must hold their
shares indefinitely unless the shares have been registered under the Securities
Act, a sale of such shares is made under Rule 145, or some exemption from
registration (affirmed by an opinion of counsel) is available.

Each certificate representing the shares received by stockholders
executing an Affiliate Agreement will bear a legend stating that the shares
were issued in a transaction to which Rule 145 under the Securities Act of 1933
applies and referring to appropriate restrictions on the sale of such shares.
This legend may be removed by delivery of a substitute certificate, if a
stockholder who has executed an Affiliate Agreement delivers to Saratoga a copy
of a letter from the staff of the Securities and Exchange Commission or an
opinion of counsel in form and substance satisfactory to Saratoga; in either
event, providing that the legend is not required for the purposes of the
Securities Act.

SETTLEMENT AGREEMENT

Background. In 1996, Drs. D. Blair Harrold and Allan L.M. Barker, majority
shareholders in Optometric Eye Care Center, P.A. ("OECC") and Consolidated Eye
Care, Inc. ("CEC") sold CEC to Prime. At the same time, Drs. Barker and Harrold
became executive officers and directors of Prime. CEC and OECC had previously
entered an administrative services agreement ("ASA") which continued after the
sale of CEC to Prime. Among other factors, the impending mergers prompted Drs.
Barker and Harrold to begin proceedings to terminate the ASA between CEC and
OECC and to submit their resignations from Prime forthwith. In conjunction with
these actions, Drs. Barker and Harrold submitted a Request for Declaratory
Ruling from the North Carolina Board of Examiners in Optometry (the "Optometry
Board") and instituted a lawsuit in North Carolina Superior Court, asking the
court to grant a Temporary Restraining Order, which was issued, enjoining,
among other things, the mergers.

Basis of Settlement. Since OptiCare's board had identified retention of
Drs. Barker and Harrold as a key requirement of executing the Merger Agreement,
Prime determined that it was in its best interest to negotiate a mutually
agreeable settlement agreement with Drs. Barker and Harrold. On April 9, 1999,
Drs. Harrold and Barker entered into a settlement agreement among OECC, Prime,
CEC and the other parties to the lawsuit. The settlement agreement requires,
among other things: (i) a new ASA between CEC and OECC with an initial term of
15 years, with automatic renewal options; (ii) $2.5 million in cash be placed
in escrow to be paid to Drs. Harrold and Barker if and when certain
intermediate events occur, in particular, consummation of the merger among
OptiCare, Prime and Saratoga and an outcome satisfactory to OptiCare of the
Optometry Board proceedings; (iii) execution of new employment agreements with
Drs. Barker and Harrold; (iv) that Prime issue additional shares of the common
stock of Prime, which, together with shares previously owned, shall constitute
32% of the common stock of Prime, calculated on a primary basis, immediately
prior to the mergers.

LOCK-UP AGREEMENTS

All officers, directors and 10% stockholders of Saratoga immediately after
the closing and certain other stockholders of Saratoga as required by OptiCare
and Prime (the "Saratoga Insiders") will enter

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into lock-up agreements with Saratoga pursuant to which such Saratoga Insiders
(i) will agree not to sell their shares of Saratoga common stock for a period
of 180 days following the closing of the mergers and (ii) will agree they will
thereafter notify Saratoga in advance of any sales or will give Saratoga a
right of first refusal to purchase any shares of Saratoga common stock they
wish to sell, as OptiCare and Prime may require. Physicians who have agreements
with OptiCare or Prime as of the closing shall enter into lock-up agreements
with Saratoga pursuant to which each of them will agree not to sell more than
25% (on a non-cumulative basis) of his or her Saratoga common stock in any six
month period.

TREATMENT OF PRIME CLASS A PREFERRED STOCK

On or prior to the effective time of the mergers, the 8,000 shares of
Prime Class A preferred stock owned by Marlin Capital, L.P. shall be exchanged
with Prime as follows:

(i) 2,000 shares of preferred stock converted into or exchanged for shares
of Prime common stock;

(ii) 2,000 shares of preferred stock exchanged for a promissory note of
Saratoga in the principal amount of $2,000,000, due on the third
anniversary of the effective time, bearing interest at a market rate as
agreed to by OptiCare and Prime with Marlin Capital, L.P., and
subordinated in right of payment to the bank debt of Saratoga and the
Surviving Corporations; and

(iii) 4,000 shares of preferred stock exchanged for a redeemable,
non-interest-bearing promissory note of Saratoga in the principal
amount of $4,000,000, due on the third anniversary of the effective
time of the mergers, subordinated in right of payment to the bank debt
of Saratoga, Prime and OptiCare, having terms (except the rate of
interest) like the promissory note referred to in clause (ii) above,
with a target redemption date of no more than 180 days after the
effective time of the mergers, subject to the determination by the
board of directors of Saratoga that market conditions are favorable
for Saratoga to raise at least $4,000,000 of net proceeds from a
public or private sale of Saratoga common stock during that 180-day
period, and with the further provision that if Saratoga does not
complete such a sale within that 180-day period, the promissory note
would begin to bear interest after that 180-day period at the rate of
9% per annum and would be redeemed at such later date as Saratoga
first raised at least $4,000,000 of net proceeds from a public or
private sale of Saratoga common stock; provided, however, that if
Saratoga does not redeem such promissory note within 365 days after
the effective time, then Marlin Capital, L.P., shall thereafter have
the option to convert such promissory note into Saratoga common stock
at a conversion price equal to the greater of (x) the closing market
price of Saratoga common stock on the first trading day after the
effective time of the mergers and (y) 90% of the average closing price
of Saratoga common stock for the 20 trading days next preceding the
conversion date.

AMENDMENT OF CERTAIN OPTICARE AGREEMENTS

OptiCare is currently a party to agreements with certain of its
stockholders that are required to be amended to accommodate the mergers. These
agreements include, among others, an amended and restated stockholders
agreement, a warrant agreement and a registration rights agreement. The
stockholders agreement contains many provisions, such as restrictions on
transfers of shares, rights of first refusal, co-sale rights and election of
the board of directors, that are customary for a privately held company but not
appropriate for a company whose shares will be listed on a national stock
exchange and publicly traded. Similarly, the warrant agreement and registration
rights agreement previously entered into between OptiCare and certain of its
stockholders contain provisions that require amendment in view of the fact that
the OptiCare warrants will be exchanged for Saratoga warrants in the mergers,
and the outstanding shares of OptiCare stock will be converted into shares of
Saratoga common stock, which shares will be registered under the Securities
Act. Consequently, these and other agreements between OptiCare and certain of
its stockholders will need to be amended to the satisfaction of OptiCare and
Prime to accommodate the mergers. We cannot be sure that persons not under the
direct control of OptiCare will agree to these changes.

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INFORMATION ABOUT SARATOGA

SARATOGA MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview. Since the consummation of the ING-P/Energy Agreement (see
"History of Saratoga's Business-- ING-P/Energy Agreement") in May 1996,
management has sought new business opportunities through acquisitions and
through use of Saratoga's database and expertise in the oil and gas business,
with a view to enhancing stockholder value. Results of operations should be
evaluated in light of Saratoga's being in a period of transition, in which
management is seeking to develop new businesses that will ultimately generate
earnings and otherwise enhance stockholder value. If the mergers are
consummated, Saratoga will thereafter be engaged in a completely different
business. In December 1998, Saratoga Holdings I, Inc., a wholly owned
subsidiary of Saratoga, acquired a portfolio of consumer debt receivables at a
deep discount and commenced a business of acquiring, reselling, managing and
collecting portfolios of delinquent and defaulted accounts receivable.

RESULTS OF OPERATIONS

Revenues. Total revenues for fiscal 1998 were $39,000, as compared to
$35,000 for fiscal 1997. Revenue from consumer debt finance was negligible in
1998, as Saratoga started the business only in December of 1998.

Costs and Expenses. Cost and expenses were reduced in 1998 as a result of
determined cost control efforts of management. Costs and expenses for fiscal
1998 totaled approximately $363,000, compared to $462,000 for fiscal 1997.

Net Loss. Saratoga's consolidated net loss was approximately $324,000 in
1998, compared to a net loss of $118,000, an increase of approximately
$206,000. In fiscal 1997, Saratoga had a non-recurring gain of approximately
$309,000 that was attributable to the settlement of litigation with a former
officer and stockholder. Excluding the effect of such non-recurring gain,
Saratoga's net loss in 1998 would be $103,000 less than the net loss in 1997,
which management attributes to its cost control efforts.

LIQUIDITY AND CAPITAL RESOURCES

Saratoga's assets at December 31, 1998, consist almost entirely of cash in
the amount of $290,000. Saratoga believes that its current cash balance will be
sufficient to conduct its business for the next 12 months. Management believes
that its cost control efforts will enable Saratoga to continue its operations
for the next 12 months without additional cash on hand.

YEAR 2000 ISSUE

Saratoga utilizes software and related technologies that may be affected
by the Year 2000 problem, which is common to most businesses. Saratoga is
addressing the effect of the potential Year 2000 problem on all its critical
systems and with all of its critical vendors, customers and clients. At this
time, critical information systems throughout Saratoga are Year 2000 compliant.
No extra costs were incurred in obtaining this compliance. Management has
determined that no critical business areas will be adversely affected by Year
2000 issues, but Saratoga continues to work with its vendors, customers and
others to ensure a smooth transition. Based on the foregoing, management does
not consider any contingency plan to be necessary, and management believes that
any costs and risks related to Year 2000 compliance will not have a material
adverse impact on the liquidity or financial position of Saratoga. If Saratoga
hereafter engages in acquisitions or business combinations, such as the
purchase of the consumer debt accounts receivable in 1998 or the mergers,
management will address possible new Year 2000 problems related to such
transactions at the time of such transactions.

FORWARD-LOOKING STATEMENTS

Statements contained herein that relate to Saratoga's future performance,
including without limitation statements with respect to Saratoga's anticipated
results for any portion of 1999, shall be

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deemed forward-looking statements within the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. A number of factors affecting
Saratoga's business and operations could cause actual results to differ
materially from those contemplated by the forward-looking statements. Those
factors include, but are not limited to, demand and competition for Saratoga's
products and services, changes in the requirements of clients and customers,
and changes in general economic conditions that may affect demand for
Saratoga's products and services or otherwise affect results of operations or
the value of Saratoga's assets. The forward-looking statements that are
included in this Proxy Statement/Prospectus were prepared by management and
have not been audited by, examined by, compiled by or subjected to agreed-upon
procedures by independent accountants, and no third party has independently
verified or reviewed such statements. Readers of this Proxy
Statement/Prospectus should consider these facts in evaluating the information
and are cautioned not to place undue reliance on the forward-looking statements
contained herein.

BUSINESS OF SARATOGA PRIOR TO THE MERGERS

Recent Developments

Since the completion in 1996 of the sale of a majority of Saratoga's oil
and gas producing properties (see "History of Saratoga's Business--ING-P/Energy
Agreement"), Saratoga has been in the process of pursuing various potential
business opportunities, while continuing its oil and gas efforts. In this
regard, Saratoga recently entered into a purchase and sale agreement for the
acquisition of certain oil and gas properties for a purchase price of $27.5
million. Saratoga was ultimately unsuccessful in consummating the acquisition,
but was awarded a $400,000 transaction break-up fee. Saratoga continues to
pursue hydrocarbon production and mineral lease acquisitions, as well as
prospect development. Saratoga has retained consultants for the purpose of
evaluating mineral lease acquisitions in Houston County, Texas, and production
purchases in the Los Angeles basin. Additionally, Saratoga has retained a
geological/ geophysical firm to utilize Saratoga's data to identify
exploration and development prospects. Saratoga continues to evaluate potential
acquisitions. In 1998, Saratoga considered the acquisition or development of
numerous businesses, and these efforts resulted in the transactions hereinafter
described.

On March 27, 1998, Saratoga Resources, Inc., a Texas corporation
("Saratoga-Texas"), which is a wholly owned subsidiary of Saratoga, entered
into a consulting agreement with an independent oil and gas exploration company
to utilize Saratoga's extensive seismic and well log data for the
identification of oil and gas exploration and development prospects. In this
regard, Saratoga-Texas is now pursuing a re-entry project in Dawson County,
Texas. On March 18, 1999, Saratoga-Texas entered into a second agreement with
the same company to evaluate opportunities in the Louisiana Cretaceous shelf
and extended the 1998 agreement. Under these agreements, Saratoga-Texas
provides advisory services and receives compensation in the form of a working
interest and/or royalties generated from identified prospects of up to 33%.

Consumer Debt-collection Finance. Saratoga formed Saratoga Holdings I
Inc., a Texas corporation ("SHI"), as a wholly owned subsidiary in October 1998
and commenced operation of a consumer finance business in December 1998 by the
acquisition of a portfolio of consumer debt receivables at a deep discount,
upon which SHI is now realizing collections. SHI expects to collect the debt or
resell the portfolio in its current or a restructured configuration. SHI is not
a licensed collection agency - it retains a licensed collection agency to
collect the accounts on a commission basis.

SHI has filed a registration statement on Form SB-2 with the Securities
and Exchange Commission to register up to 3,465,292 shares (approximately 90%)
of SHI's outstanding common stock, to effect a proposed spinoff of SHI to the
stockholders of Saratoga. The proposed spinoff is a part of Saratoga's strategy
of enhancing stockholder value and would be necessary if the mergers come to
fruition. The unregistered shares of SHI will be retained by Saratoga-Texas.

PROPOSED ACTIONS BY SARATOGA PRIOR TO THE COMPLETION OF THE MERGERS

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business through three subsidiaries (Saratoga-Texas, Lobo Operations, Inc.
("LOI") and Lobo Energy, Inc. ("LEI")), in addition to its newly formed
subsidiary, SHI. Each of these subsidiaries is currently wholly-owned by
Saratoga.

To satisfy the condition of the Merger Agreement described above, Saratoga
proposes to make a contribution of all of the stock of LOI and LEI to
Saratoga-Texas and, separately, to cause Saratoga Texas to make a cash
distribution to Saratoga of $150,000. In addition, if the registered
distribution of Saratoga Holdings has not occurred as of the Effective Time,
Saratoga will also make a contribution of all of the outstanding shares of
Saratoga Holdings to Saratoga-Texas.

Following the contributions described above, but before the effective time
of the mergers, Saratoga will make a pro rata distribution of the stock of
Saratoga-Texas to each of the then existing shareholders of Saratoga. This
distribution will be made on the basis of one share of Saratoga-Texas for each
outstanding share of Saratoga and will represent all of the outstanding stock
of Saratoga-Texas.

Inasmuch as the disposition of the subsidiaries of Saratoga will occur
prior to the mergers, the Prime and OptiCare stockholders will not participate
in any such distribution.

HISTORY OF SARATOGA'S BUSINESS

On September 8, 1993, Saratoga (which was then known as "Sterling
Resources Corporation") underwent a comprehensive change in management and was
recapitalized through acquisition of Saratoga Resources, Inc., a Texas
corporation ("Saratoga-Texas"). The then existing five stockholders of
Saratoga-Texas exchanged 100% of Saratoga-Texas stock for over 90% of the
outstanding voting rights of Sterling and provided new management for Saratoga.
Prior to this date, Saratoga had been a "shell" with virtually no business
assets or capital. In January 1994, Saratoga changed its domicile from Utah to
Delaware and changed its name to Saratoga Resources, Inc.

On November 12, 1993, Saratoga entered into a Purchase and Sale Agreement
(the "Hunter Agreement") with Hunter Petroleum, Inc. ("Hunter") pursuant to
which Saratoga acquired certain oil and gas interests in South Texas (the
"Hunter Properties"). Financing for this acquisition was provided pursuant to a
Loan Agreement with BankOne Texas, N.A. ("BankOne") under which the bank agreed
to provide Saratoga with a $20 million revolving credit facility.

On May 25, 1994, Saratoga established a new lending relationship with
Internationale Nederlanden (U.S.) Capital Corporation, a Delaware corporation
("ING"), by executing a credit agreement and related documents (the
"Pre-existing Credit Agreement"). As of that date, Saratoga used the various
credit facilities that were provided by ING to (i) acquire, through
Saratoga-Texas, 57.15% of the outstanding common stock of Lobo Energy, Inc., a
Texas corporation ("LEI"), (ii) pay off all debt associated with those
properties at the time of acquisition, (iii) retire all credit facilities at
BankOne, (iv) develop existing oil and gas properties, and (v) provide general
working capital. Saratoga-Texas paid a purchase price of $6,000,375 for the LEI
common stock.

On March 31, 1995, Saratoga and ING entered into a new credit agreement
(the "Credit Agreement") to refinance the existing debt to ING, to purchase the
remaining LEI common stock and provide additional money for acquisitions of
additional properties. On that date, Saratoga acquired the remaining 42.85% of
the common stock of LEI from Mr. Peter P. Pickup ("Pickup"). As a result of
this acquisition, Saratoga, through Saratoga-Texas, owned and controlled 100%
of the common stock outstanding of LEI. Concurrently with the purchase of the
LEI common stock, LEI assigned to

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Saratoga-Texas all of LEI's oil and gas assets. The total purchase price paid
by Saratoga-Texas was $5,401,000. Saratoga also refinanced $2,411,000 in debt
due ING allocable to LEI and its properties.

ING-P/Energy Agreement. On May 7, 1996, Saratoga entered into an agreement
(the "ING-P/
Energy Agreement") by and among Saratoga, Saratoga-Texas, Lobo Operating, Inc.,
a Texas corporation ("LOI"), Lobo Energy, Inc., a Texas corporation ("LEI")
(Saratoga and Saratoga-Texas, LOI and LEI, its direct or indirect subsidiaries,
being sometimes collectively referred to herein as the "Saratoga Companies"),
Thomas F. Cooke ("Cooke"), Joseph T. Kaminski ("Kaminski"), Randall F. Dryer
("Dryer") (the Saratoga Companies, Cooke, Kaminski and Dryer sometimes referred
to herein as the "Saratoga Parties"), Prime Energy Corporation, a Delaware
corporation ("P/Energy"), and ING. (Prime Energy Corporation has no affiliation
with PrimeVision Health, Inc., referred to elsewhere herein.)

The ING-P/Energy Agreement provided for a sale of virtually all of the
assets (the "Interests") of Saratoga-Texas, LOI and LEI (Saratoga-Texas, LOI
and LEI sometimes collectively referred to herein as the "Saratoga Entities")
to ING pursuant to ING's rights under the Credit Agreement and related
documents dated March 31, 1995, by and among Saratoga, Saratoga-Texas, LEI and
ING. Upon consummation of the ING-P/Energy Agreement on May 7, 1996, at which
ING was the highest bidder, ING concurrently sold the Interests to P/Energy for
cash consideration of $7,180,000 and additional consideration as provided in
the agreement. The cash proceeds from the sale were applied to the settlement
of outstanding vendor debt and other related liabilities of the Saratoga
Companies, and $1,500,000 was paid to Saratoga. As a result of the settlement
of all such liabilities, Saratoga had no material liabilities going forward.
Its principal asset at that time consisted of approximately $1,500,000 in cash
which was available for the pursuit of new business opportunities or for other
proper corporate purposes.

Background of ING-P/Energy Agreement. Saratoga, Saratoga-Texas, LEI and
ING entered into the Credit Agreement to facilitate the acquisition by
Saratoga-Texas of the LEI assets previously owned by Pickup. Under the terms of
the Credit Agreement, ING established two credit facilities in favor of
Saratoga-Texas in the combined maximum principal amount of $19,000,000, subject
to the borrowing base limitations set forth therein. All oil and gas properties
(the "Properties") owned by the Saratoga Entities were pledged as collateral
under the Credit Agreement and all obligations to ING were also guaranteed by
Saratoga and all of its subsidiaries. Funds obtained from these credit
facilities were anticipated to be used for the development of the Properties by
Saratoga.

Subsequent to entering into the Credit Agreement, Saratoga engaged
Internationale Nederlanden (U.S.) Securities Corporation ("ING Securities"), a
subsidiary of ING, to assist Saratoga in a private placement of Saratoga stock.
The private placement efforts were not successful and additional funds
necessary for the development of the Properties were not provided by ING.

The failure of the private placement efforts--combined with the shortage
of funds for the development of its Properties -- placed Saratoga in a severe
financial crisis. At about that time, therefore, Saratoga replaced its existing
chief executive officer with Mr. Thomas F. Cooke, who was then (and continues
to be) the Chairman of the Board. In an attempt to salvage the maximum value of
the Saratoga Companies for the benefit of the other creditors and Saratoga and
its stockholders, the Saratoga Companies spent several months examining and
pursuing various alternatives with respect to (i) the possible refinancing
and/or restructuring of the debt of the Saratoga Companies, (ii) the sale of
the Saratoga Companies or their underlying assets, and (iii) the prosecution or
settlement of certain potential claims against ING.

Facing what Saratoga believed to be an eminent foreclosure action by ING
which would restrict Saratoga's objectives and its ability to consummate
negotiations with P/Energy, in April of 1996, the Saratoga Companies filed a
lawsuit against ING and ING Securities, the principal relief sought therein
being injunctive relief from the threatened foreclosure. Subsequently, Saratoga
and ING entered into discussions in an attempt to reach a final resolution of
ING's rights under the Credit Agreement and Saratoga's asserted claims. In
reviewing its options, Saratoga believed that sale of assets pursuant to the
ING-P/Energy Agreement would leave Saratoga in a better financial position than
a contested foreclosure sale by ING.

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EMPLOYEES

At December 31, 1998, Saratoga employed two full time employees consisting
of one executive officer (the Chief Executive Officer) and an office manager.

DESCRIPTION OF PROPERTY

Saratoga maintains an office in Austin, Texas, on a month-to-month basis
at a current rate of $2,175 per month.

CERTAIN TRANSACTIONS

Mr. Cooke and certain other directors (who resigned prior to 1998) acted
as individual guarantors of $500,000 of Saratoga's debt associated with an
acquisition made in 1994. In consideration for such guarantee, the board of
directors granted Mr. Cooke and the other directors options (the "Special
Options") to purchase an aggregate of 250,000 shares of Saratoga's common stock
at $1.60 per share, of which Mr. Cooke was granted 100,000 Special Options.
These options were exercisable from May 11, 1994 and were to expire five years
thereafter.

Effective May 17, 1997, Saratoga purchased 870,737 shares of common stock
and all Special Options from one former director of Saratoga, who resigned as a
Director. The total purchase price for the common stock and the options was
$175,000. The Special Options awarded to one other director were extinguished
as part of the settlement of a lawsuit by such director against Saratoga, Mr.
Cooke and certain other persons.

EXECUTIVE OFFICERS OF SARATOGA PRIOR TO THE MERGER

Executive officers of Saratoga serve at the pleasure of the board of
directors and are elected annually at a meeting of the board of directors. Set
forth are the directors and executive officers at May 12, 1999:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- ----- -------------------------
<S> <C> <C>
Thomas F. Cooke .......... 50 Chairman of the Board,
Chief Executive Officer,
President, Treasurer and
Secretary
Kevin M. Smith ........... 54 Director
</TABLE>

BIOGRAPHICAL INFORMATION

Thomas F. Cooke, Chairman of the Board, Chief Executive Officer,
President, Treasurer and Secretary, age 50, was one of the co-founders of
Saratoga Resources, Inc. in 1990. Mr. Cooke has been a self employed
independent oil and gas producer for the last 17 years. Sterling acquired
Saratoga-Texas in September 1993, at which time Mr. Cooke was elected Chairman
of the Board and Chief Operating Officer of Sterling. Mr. Cooke is a member of
the Texas Independent Producer and Royalty Owner Association and serves as
Director and Chairman of the North American Energy Issues Committee. Mr. Cooke
replaced Joseph T. Kaminski as Chief Executive Officer on April 3, 1996.

Kevin M. Smith, Director, has in excess of 30 years experience as an
exploration geophysicist. In 1977, after ten years with Amoco Production, Mr.
Smith joined R. Brewer and Company, a geophysical consulting firm. In 1984, he
formed his own geophysical consulting firm (Kevin M. Smith, Inc.), which he
continues to operate. Mr. Smith completed three years of undergraduate work at
the University of Texas in 1966 and received a Bachelor of Science degree with
a dual major of Geology and Geophysics at the University of Houston in 1967. He
also did post graduate studies in Geology and Geophysics at the University of
Houston. Mr. Smith has written professional papers on innovative uses of
geophysics in horizontal drilling projects.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

During the fiscal year ended December 31, 1998, based on a review of Forms
3 and 4 furnished to Saratoga during its most recent fiscal year and Forms 5
furnished to Saratoga with respect to its most recent fiscal year, all
reporting persons of Saratoga were in compliance with Section 16(a) of the
Exchange Act.

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SUMMARY COMPENSATION TABLE

The following Summary Compensation Table sets forth all cash compensation
paid, distributed or accrued for services, including salary and bonus amounts
rendered in all capacities, for Saratoga during the fiscal years ended December
31, 1998, 1997, and 1996. All other tables required to be reported have been
omitted as there has been no compensation awarded to, earned by or paid to any
of Saratoga's executives in any fiscal year covered by the tables.

<TABLE>
<CAPTION>
Annual Compensation
------------------------------
Fiscal Year
Name and Principal Position Ended Salary
- --------------------------------- ------------ -----------------
<S> <C> <C>
Thomas F. Cooke, CEO 1998 $ 120,000
1997 $ 120,000(1)
1996 $ 116,500(2)
</TABLE>

- ----------
(1) During fiscal years 1996 and 1997, the Company deferred portions of
salary due to Mr. Cooke, which were paid in full later in 1997, together
with $8,048 in interest. The salary information set forth in the Summary
Compensation Table for 1997 does not include (i) cash paid in 1997 for
salary deferred from prior years or (ii) interest payments on any
deferred salary.

(2) Includes $60,000 which was earned in fiscal year 1996, but deferred and
paid to Mr. Cooke in fiscal year 1997.

DIRECTOR COMPENSATION

Directors of Saratoga currently serve without any compensation for their
services, either in the form of monetary compensation, stock or stock options.

BUSINESS OF OPTICARE, PRIME AND THE COMBINED COMPANY

BUSINESS OF OPTICARE PRIOR TO THE MERGER

OptiCare Eye Health Centers, Inc., a Connecticut corporation ("OptiCare")
was founded in 1987 and is headquartered in Waterbury, Connecticut. OptiCare is
a diversified eye health services company that delivers a range of services to
eye care professionals and managed care plans. OptiCare has four business
divisions, all located primarily in Connecticut:

(i) ophthalmology services, which owns and operates eye health centers and
provides services to ophthalmologists in Connecticut;

(ii) retail optometry, which owns and operates retail optometry stores in
Connecticut;

(iii) managed care, which contracts with managed care plans to establish
and manage panels of eye care providers to render eye care services to
persons covered by managed care plans.

(iv) ambulatory surgery centers, which provide outpatient surgical services
for eye-related diseases in three facilities in Connecticut.

In its ophthalmology services business, OptiCare operates eye health
centers, including the administration, support and contracting for
ophthalmology and optometry providers. OptiCare has entered into an
administrative services agreement (the "ASA") with OptiCare P.C., a Connecticut
professional corporation (the "Professional Corporation"), in which the
Professional Corporation provides medical services at OptiCare eye health
centers.

In its retail optometry business, OptiCare owns 23 retail optometry
locations in Connecticut. OptiCare's locations are either freestanding or
co-located with ophthalmologists' or optometrists' practices. At the retail
optometry locations, OptiCare provides all the applicable optical goods and

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provides all the billing, collection, and information systems to support
OptiCare's optometry operations. OptiCare also has a complete manufacturing
facility in which lenses are manufactured, surfaced and ground to
specifications and supplied to all of the Connecticut optometry locations.

In its managed care business, OptiCare contracts with managed care plans
to organize and provide eye care for participants in the managed care plan.
OptiCare develops and operates a statewide network of eye care professionals,
performs credentialing services, quality assurance and utilization review
functions, among other services, based on the needs and requirements of the
customer. OptiCare receives compensation on a fee-for-service arrangement or on
a capitation basis (i.e., a fixed fee per member per month). Most managed care
contracts have a term of three years and contain renewal provisions for
additional one year periods.

In the ambulatory surgery center ("ASC") business, OptiCare owns and
operates three eye care ASC's in Connecticut, one of which is being converted
from an eye-care-only facility to a multi-specialty ASC. Physicians perform
surgical procedures in those ASC's. OptiCare bills patients (or the appropriate
third-party payors) for the use of the facility. In addition, OptiCare owns and
operates a refractive laser center.

To operate these four businesses, OptiCare has licensed (as licensee) or
developed comprehensive information systems and has linked them into an
enterprise-wide operating system. OptiCare management believes that OptiCare's
advanced systems capabilities permit OptiCare to understand its underlying
business operations on a timely and accurate basis, making it possible to
manage the businesses more effectively.

LITIGATION

OptiCare Physicians Action and Countersuits. Seven physicians employed by
OptiCare, P.C. commenced a multi-count action in the Connecticut Superior Court
complaining of inducements that led them to affiliate with OptiCare. Shortly
after the commencement of the action, three of the plaintiffs withdrew from the
lawsuit. The remaining four plaintiffs seek damages for individual harm they
claim to have suffered. One plaintiff also purports to sue derivatively on
behalf of OptiCare for harm suffered by the shareholders. The defendants deny
the factual and legal validity of the claims asserted and have moved to dismiss
the complaint.

OptiCare and OptiCare P.C., instituted actions in the Connecticut Superior
Court against two of the physicians for unfair trade practices, tortious
interference and abuse of process based on defendants' course of conduct that
plaintiffs complain is unlawfully designed to force plaintiffs to modify the
defendants' employment contracts. Defendants have moved to strike the
complaint. OptiCare and OptiCare, P.C. are opposing the motion to strike, and
if successful in their opposition intend to vigorously pursue their claims.

EMPLOYEES

OptiCare has approximately 450 employees, of whom 150 are part-time.

OPTICARE MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Overview. OptiCare Eye Health Centers, Inc. ("OptiCare") is in the
business of operating comprehensive integrated eye health centers and eye
health provider networks, including the administration, support, and
contracting for ophthalmology practices and services, optometry practice and
services, ambulatory surgery centers, retail eye wear sales and fitting
services, and eye wear manufacturing. OptiCare P.C. (the "Professional
Corporation") is engaged in the practice of medicine and surgery through the
work of ophthalmologists, optometrists, nurses and others who are either
employed by or under contract to provide medical or surgery services, and who
are licensed under the laws of the State of Connecticut. OptiCare has entered
into a professional services and support agreement with the Professional
Corporation, whereby the Professional Corporation provides the medical services
necessary to support OptiCare's business on an exclusive basis for
ophthalmology and optometry services. The Professional Corporation employs 26
ophthalmologists and 19 optometrists.

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<PAGE>

OptiCare offers optical retail services at 23 locations and, via the
Professional Corporation, provides medical eye health services at 17 locations.
OptiCare's stores are both freestanding as well co-located with
ophthalmologists or optometrists practices. In its retail optometry locations,
OptiCare provides all the applicable optical goods and provides all the
billing, collection, and information systems to support OptiCare's optometry
operations. OptiCare also has a complete manufacturing facility in which lenses
are manufactured, surfaced and ground to specifications and supplied to all of
the Connecticut optometry locations, OptiCare utilizes proprietary information
systems in support of these activities.

OptiCare believes that large retail optometry centers are an increasingly
important initial entry point for eye care patients. Beyond the economic
contribution of its stores, OptiCare believes that its optometry operations
provide a strong strategic link and patient referral source for its
ophthalmologic and other integrated eye health services.

In addition, OptiCare owns and operates three ambulatory surgery centers
("ASC's") in Connecticut. In its ASC's, ophthalmic surgeons perform a range of
specialized eye care surgical procedures, including cataracts. One of its ASC
facilities is being converted from an eye-care-only center to multi-specialty
care, permitting both ophthalmic surgery and other types of non-eye care
surgical procedures to be performed. In addition, OptiCare owns and operates a
refractive laser center.

OptiCare operates an eye care network in Connecticut that includes over
450 contracted eye care providers and has contracts with managed care plans to
provide comprehensive eye care services to over 500,000 covered lives. In each
managed care contract, OptiCare creates and/or contracts with panels of
ophthalmologists and optometrists who provide eye care services under a
contract between OptiCare and the managed care plan. In these contracts,
OptiCare also performs credentialing services, quality assurance and
utilization review functions. OptiCare is paid on either a fee-for-service or
fixed fee per covered life or "capitated" basis. Most contracts have a term of
three years and contain renewal provisions for additional one-year periods.

OptiCare believes there will be increasing demand for specialized eye care
management for populations enrolled in health plans. This belief is based
partially on demographic trends, as well as the growing recognition among
health plans that the treatment of eye health lends itself to specialized
management.

Recent Developments. In April 1999, OptiCare signed a letter of intent to
purchase managed care contracts, which operate in three states, from Eye Health
Network, a wholly owned subsidiary of Omega Health Systems, Inc.

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial
statements and notes thereto of OptiCare included elsewhere in this Proxy
Statement/Prospectus. See the Index to Financial Statements, beginning at page
F-1.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Net patient revenues. Net patient revenues increased from $25.3 million
for the year ended December 31, 1997 to $29.6 million for the year ended
December 31, 1998, an increase of $4.3 million or 17.2%. This increase was
primarily the result of OptiCare's acquisition in 1998 of seven optometric
medical and retail optical practices and a full year of revenue associated with
the 1997 practice acquisition as well as internal growth. The 1998 and 1997
acquisitions accounted for approximately $2.4 million of the increase in net
patient revenue.

Net managed care revenues. Net managed care revenues increased from $2.0
million in 1997 to $5.1 million in 1998, an increase of $3.1 million or 160.5%.
This change resulted from an increase in member lives associated with existing
contracts as well as the addition of one new contract. The lives managed under
these contracts totaled 533,000 and 184,000 at December 31, 1998 and 1997,
respectively.

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<PAGE>

Staff compensation. Staff compensation (excluding ophthalmologists and
optometrists) increased $3.1 million or 37% from $8.5 million in 1997 to $11.6
million in 1998. This increase was primarily due to medical staff related to
practice acquisitions and corporate staff to support managed care growth.

Physician compensation. Physician compensation increased from $8.2 million
for the year ended December 31, 1997 to $8.6 million for the year ended
December 31, 1998, an increase of $0.4 million or 4.9%. This increase was
primarily due to the addition of seven optometrists resulting from the practice
acquisitions in 1998.

Surgical and eye care supplies. Surgical and eye care supplies increased
from $3.1 million in 1997 to $4.4 million in 1998, an increase of $1.3 million
or 4.4%. This increase is primarily due to an increase in optical product sales
resulting from the additional optical locations connected with the practice
acquisitions in 1998.

General and administrative. General and administrative expenses increased
from $2.8 million for the year ended December 31, 1997 to $3.6 million for the
year ended December 31, 1998, an increase of $0.8 or 27.0%. This increase
includes $0.3 million for the rental of a refractive laser in 1998 and costs
related to OptiCare's expanding business. General and administrative expenses
as a percentage of total net revenue remained relatively constant at 10.3% and
10.4% for the years ended December 31, 1998 and 1997, respectively.

Facility rental. Facility rental increased from $2.0 million for the year
ended December 31, 1998 to $2.4 million for the year ended December 31, 1997.
This increase of $0.4 million or 23.7% is primarily due to the addition of
eight new leases entered into by OptiCare as a result of the 1998 and 1997
practice acquisitions and the expansion of the managed care business.

Managed care claims. Managed care claims increased from $1.1 million in
1997 to $3.1 million in 1998, an increase of $2.0 million or 181.6 %. This
increase is the result of OptiCare's growth in lives under managed care
contracts and is consistent with the increase in managed care revenues.

Depreciation and amortization. Depreciation and amortization expense
increased from $0.6 million in 1997 to $1.1 million in 1998, an increase of
$0.4 million or 64.9%. This increase is a result of increases in property and
equipment and the amortization of intangibles attributed to the practice
acquisitions and systems development in 1998 and 1997.

Marketing. Marketing expense increased from $0.6 million in 1997 to $1.0
million in 1998, an increase of $0.3 million or 56.1%. This increase includes
$0.1 million related to marketing efforts for refractive laser surgery. The
remaining increase is attributed to continued marketing related to OptiCare's
growth.

Net income (loss). OptiCare incurred a net loss of $0.5 million for the
year ended December 31, 1998 as compared to net income of $0.3 million for the
year ended December 31, 1997. This decrease of $0.8 million is primarily due to
increased costs associated with OptiCare's development of infrastructure for
its managed care division.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Net patient revenue. Net patient revenue increased from $23.7 million for
the year ended December 31, 1996 to $25.3 million for the year ended December
31, 1997, an increase of $1.6 million or 6.7%. This increase was primarily the
result of OptiCare's continuing efforts to cross-sell multiple products and
services.

Net managed care revenue. Managed care revenues increased from $1.0
million in 1996 to $2.0 million in 1997, an increase of $1.0 million or 91.8%.
This increase was primarily the result of the addition of a significant managed
care contract.

Staff compensation. Staff compensation increased $1.3 million or 18.1%
from $7.2 million in 1996 to $8.5 million in 1997. This increase was primarily
a result of the increase in corporate staff added to support OptiCare's managed
care operations.

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Physician compensation. Physician compensation increased from $7.8 million
for the year ended December 31, 1996 to $8.2 million for the year ended
December 31, 1997, an increase of $0.4 million or 5.8%. This increase is
primarily attributed to increased cash collections as a result of OptiCare's
growth.

Surgical and eyecare supplies. Surgical and eyecare supplies increased
from $2.7 million in 1996 to $3.1 million in 1997, an increase of $0.3 million
or 12.2%. This increase is due to an increase in optical product supplies to
support an increase in retail sales.

General and administrative. General and administrative expenses decreased
from $3.0 million for the year ended December 31, 1996 to $2.8 million for the
year ended December 31, 1997, a decrease of $0.2 million or 5.2%. This decrease
was caused primarily by increased economies of scale resulting from OptiCare's
expanding business. General and administrative expenses as a percentage of
total net revenues decreased from 12.1% to 10.4% for the years ended December
31, 1996 and 1997, respectively.

Facility rental. Facility rental increased from $1.9 million for the year
ended December 31, 1996 to $2.0 million for the year ended December 31, 1997.
This increase of $0.1 million or 4.3% is primarily due to increases in rented
premises.

Managed care claims. Managed care claims expense increased from $0.7
million in 1996 to $1.1 million in 1997, an increase of $.3 million or 45.4 %.
This increase is the result of the addition of a significant managed care
contract.

Depreciation and amortization. Depreciation and amortization expense
increased from $0.5 million in 1996 to $0.6 million in 1997, an increase of
$0.1 million or 17.8%. This increase is a result of increases in property and
equipment.

Marketing. Marketing expense remained constant at $0.6 million for the
years ended December 31, 1996 and 1997.

Net income. OptiCare had net income of $0.3 million and $0.1 million for
the years ended December 31, 1997 and 1996, respectively. This increase of $0.2
million is primarily due to an increase in revenues associated with a new
managed care contract and overall practice growth and is partially offset by an
increase in expenses related to the growth in its operations as described
above.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 1998, OptiCare had cash and cash equivalents of
approximately $0.9 million and $1.2 million of additional borrowing capacity
under its revolving line of credit with a bank. OptiCare was in violation of
certain covenants related to its line of credit during 1998 and received a
waiver from the bank with respect to these violations. Management believes that
the combination of the funds expected to be provided by its operations and line
of credit will be sufficient to meet its current and anticipated funding needs
for the next twelve months. OptiCare may incur additional indebtedness and may
issue notes or equity securities, in public or private transactions, in order
to fund future acquisitions.

For the year ended December 31, 1998, OptiCare used $0.5 million in
operating activities and $5.2 million in investing activities while financing
activities provided cash of $1.7 million. Cash flows used in operating
activities included a non-cash charge/(credit) of $1.1 million of depreciation
and amortization and ($0.4) million of deferred income taxes. Cash used in
investing activities consisted of $2.6 million of capital expenditures and $2.6
million in cash paid to acquire practices in 1998. Net cash provided by
financing activities was primarily the result of borrowings under OptiCare's
revolving line of credit, which was used to fund expansion and acquisition
activities. These proceeds were partially offset by principal payments on debt.

For the year ended December 31, 1997, OptiCare used $0.3 million in
operating activities and $1.6 million in investing activities while financing
activities provided $5.2 million in cash. Cash flows used in operating
activities included a non-cash charge/(credit) of $0.6 million in depreciation
and amortization and ($0.3) million in deferred income taxes. Cash flows used
in investing activities consisted principally of $1.5 million in capital
expenditures. Financing activities consisted principally of $5.8 million of
proceeds from the sale of Class A convertible preferred stock and is partially
offset by $0.6 million in cash used to repurchase stock from an employee
shareholder.

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For the year ended December 31, 1996, OptiCare used $1.0 million in
investing activities, which consisted primarily of capital expenditures. Cash
provided by financing activities was $1.4 million and consisted principally of
$1.7 million of proceeds from the issuance of stock as the result of the
exercise of a warrant by a shareholder and is partially offset by $0.3 million
in principal payments on debt.

IMPACT OF INFLATION AND CHANGING PRICES

OptiCare is subject to pre-determined Medicare reimbursement rates which,
for certain products and services, have decreased over the past three years.
For the year ended December 31, 1998, Medicare generated approximately 25 % of
OptiCare's total net revenue. A decrease in Medicare reimbursement rates could
have an adverse affect on OptiCare's results of operations if it can not manage
these reductions through increases in revenues or decreases in operating costs.
To some degree, prices for health care are driven by Medicare reimbursement
rates, so that OptiCare's non-Medicare business is also affected by changes in
Medicare reimbursement rates.

Management believes that inflation has not had a material effect on
OptiCare's revenue during the past three years.

YEAR 2000 ISSUE

OptiCare has taken steps to ensure that all of its computer systems are
Year 2000 compliant. Management has developed a plan and arranged for the
required resources to complete the necessary remediation efforts for both
information technology ("IT") and non-information technology systems. These
systems include those used in practice management, managed care administration
and corporate functions, as well as any "imbedded systems" in medical
equipment. OptiCare is devoting the necessary internal and external resources
to replace, upgrade or modify any significant systems which do not correctly
identify the Year 2000. Substantially all necessary modifications and testing
of OptiCare significant systems have been completed.

All of OptiCare's critical and non-critical systems are anticipated to be
Year 2000 compliant by September 30, 1999 and to date management believes
substantially all of the critical systems are compliant. Contingency plans are
in place to address unexpected Year 2000 issues that include manual processing
of data or seeking alternative processing sites while awaiting remediation of
existing software or hardware from its vendors under existing maintenance
contracts.

OptiCare is also considering the potential impact of Year 2000 problems
with other entities with which OptiCare has business relationships that impact
its operation. All key vendors, service providers, and customers have been
contacted to obtain written and verbal verification as to their Year 2000
readiness. OptiCare expects these procedures to be complete by September 30,
1999.

OptiCare believes its greatest risk related to the Year 2000 involves the
potential inability of external entities, with which OptiCare transacts
business, to be Year 2000 compliant. Since OptiCare relies on certain external
entities, in particular, third party payors for a considerable portion of its
revenues, a significant failure of these parties in maintaining payments could
have a material adverse impact on OptiCare's operations.

As of December 31, 1998, OptiCare has not incurred any external costs
related to the Year 2000 since any system upgrades related to Year 2000
compliance were made under existing maintenance contracts with vendors or were
made under scheduled system upgrades as part of OptiCare's aggressive strategy
to maintain state of the art technology. As a result, OptiCare estimates that
future expenses and capital expenditures related to the Year 2000 issue will
not be material to its financial position or results of operations.

The cost to bring internal systems and equipment into compliance has not
been and is not expected to be material to OptiCare's combined financial
statements and OptiCare does not expect Year 2000 issues to have a material
adverse effect on its results of operations, liquidity or financial condition.

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<PAGE>

OPTICARE SECURITY OWNERSHIP

The following table sets forth certain information regarding the
beneficial ownership of OptiCare's capital stock as of May 12, 1999 by (i) each
of OptiCare's directors and executive officers, (ii) all directors and
executive officers of OptiCare as a group, and (iii) each person known by
OptiCare to own beneficially more than five percent of the outstanding shares
of each class of OptiCare's capital stock.

<TABLE>
<CAPTION>
CLASS A PERCENT
NAME AND ADDRESS(1) PREFERRED STOCK OF CLASS
- --------------------------------------- ----------------- -----------------
<S> <C> <C>
Dean J. Yimoyines, M.D.
President and Chief Executive
Officer and Director ................. -- *
Steven L. Ditman
Executive Vice President and Chief
Financial Officer .................... -- *
Eugene Huang, M.D.
Executive Vice President ............. 2,669 1.7%
Mark Ruchman, M.D.
Medical Director ..................... -- *
W. Scott Peterson, M.D.
Director ............................. -- *
Michael Koetters
Director ............................. -- *
John F. Croweak
Director ............................. -- *
Fred Nazem
Director ............................. 23,484(12) 15.4%(12)
All directors and executive
officers as a group .................. 26,153 17.1%
Anthem Blue Cross Blue Shield of
Connecticut .......................... 88,706 58.1%
Oxford Health Plans, Inc. ............. 37,361 24.5%
Nazem OptiCare Partners, LP ........... 20,901 13.7%
Richard Getnick ....................... -- *
Vincent P. deLuise .................... -- *
Richard D. Gilbert .................... -- *
Doris Yimoyines ....................... -- *

<CAPTION>
CLASS B
PREFERRED PERCENT COMMON PERCENT
NAME AND ADDRESS(1) STOCK(2) OF CLASS(2) STOCK(3) OF CLASS(3)
- --------------------------------------- ----------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Dean J. Yimoyines, M.D.
President and Chief Executive
Officer and Director ................. 21,116(4) 7.5%(4) 45,523(5) 9.5%(5)
Steven L. Ditman
Executive Vice President and Chief
Financial Officer .................... -- * 6,218(6) 1.3%(6)
Eugene Huang, M.D.
Executive Vice President ............. -- * 8,669(7) 4.4%(7)
Mark Ruchman, M.D.
Medical Director ..................... 21,123(8) 7.5%(8) 24,123(9) 5.0%(9)
W. Scott Peterson, M.D.
Director ............................. 21,123(10) 7.5%(10) 21,123(11) 4.4 (11)
Michael Koetters
Director ............................. -- * -- *
John F. Croweak
Director ............................. -- * -- *
Fred Nazem
Director ............................. 16,924 6.0% 40,408(13) 8.4%(13)
All directors and executive
officers as a group .................. 80,286 28.5% 146,064 33%
Anthem Blue Cross Blue Shield of
Connecticut .......................... 24,011 8.5% 112,717(14) 23.5%(14)
Oxford Health Plans, Inc. ............. 28,758 10.2% 66,119(15) 13.8%(15)
Nazem OptiCare Partners, LP ........... -- * 20,901(16) 4.4%(16)
Richard Getnick ....................... 21,123(15) 7.5%(17) 21,123(18) 4.4%(18)
Vincent P. deLuise .................... 21,123 7.5% 21,123(18) 4.4%(18)
Richard D. Gilbert .................... 21,123 7.5% 21,123(18) 4.4%(18)
Doris Yimoyines ....................... 21,118 7.5% 21,118(19) 4.4%(19)
</TABLE>

- ----------
* Less than 1%

(1) The mailing address of each director and executive officer of OptiCare is
c/o OptiCare, 87 Grandview Avenue, Waterbury, CT 06708.

(2) The figures in these columns assume the exercise of all Class B Preferred
Stock Warrants by the holders thereof.

(3) No shares of Common Stock were outstanding as of May 12, 1999. These
columns assume the conversion of all outstanding Class A Preferred Stock
and Class B Preferred Stock, and the exercise of all outstanding Class B
Preferred Stock Warrants and options to purchase Common Stock, by the
holders thereof.

(4) These shares are held by the wife of Dean J. Yimoyines.

(5) Includes 21,116 shares issuable upon conversion of the Class B Preferred
Stock and 24,407 shares issuable upon the exercise of options.

(6) Includes 6,218 shares issuable upon the exercise of options.

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<PAGE>

(7) Includes 2,669 shares issuable upon conversion of the Class B Preferred
Stock and 6,000 shares issuable upon the exercise of options.

(8) Includes 15,843 shares held by the wife of Mark Ruchman and 5,280 shares
held by a family limited partnership.

(9) Includes 21,123 shares issuable upon conversion of the Class B Preferred
Stock and 3,000 shares issuable upon the exercise of options.

(10) Includes 12,007 shares held by a family limited partnership.

(11) Includes 21,123 shares issuable upon conversion of the Class B Preferred
Stock.

(12) Includes 20,901 shares held by Nazem OptiCare Partners, L.P., a limited
partnership of which Mr. Nazem is the general partner. Mr. Nazem
disclaims beneficial ownership of such shares.

(13) Includes 23,484 shares issuable upon conversion of the Class A Preferred
Stock and 16,924 shares issuable upon conversion of the Class B Preferred
Stock.

(14) Includes 88,706 shares issuable upon conversion of this series of the
Class A Preferred Stock and 24,011 shares issuable upon conversion of the
Class B Preferred Stock.

(15) Includes 37,361 shares issuable upon conversion of the Class A Preferred
Stock and 28,758 shares issuable upon conversion of the Class B Preferred
Stock.

(16) Includes 20,901 shares issuable upon conversion of the Class A Preferred
Stock.

(17) Includes 15,843 shares held by the wife of Richard Getnick and 5,280
shares held by a family limited partnership.

(18) Includes 21,123 shares issuable upon conversion of the Class B Preferred
Stock.

(19) Includes 21,118 shares issuable upon conversion of the Class B Preferred
Stock.

BUSINESS OF PRIME PRIOR TO THE MERGERS

HISTORY AND RECENT DEVELOPMENTS

Prime is an integrated vision services company incorporated in Delaware
and headquartered in North Carolina. Prime is involved in three vision-related
lines of business: (1) managed vision care, (2) buying group and distribution
and (3) optometric practice management and retail optical. In December 1998,
the board of directors approved the disposal of Prime ophthalmology practice
management division and related administrative support functions (the
"ophthalmology division").

Prime is a result of a merger between Consolidated Eye Care (CEC) and
Prime Vision Group (PVG) which occurred on July 3, 1996 whereby CEC exchanged
all of its outstanding voting common stock for 3,966,771 shares of voting
preferred stock of PVG. Since the former CEC shareholders retained the majority
of the voting rights in the combined company, CEC was treated as the acquirer
in the business combination. These shareholders, acting as a group, have the
independent right to split up Prime. The stated period of time for a split-up
to occur commences in January 2001 and ends 60 days later. This right
terminates if Prime completes an initial public offering and terminates upon
consummation of the mergers.

Prime's optometry and retail optical division provides consulting,
administrative and other support services to 27 optometry eye care centers
located in North Carolina. All of these optometry centers are owned by
shareholders of Prime who were formerly shareholders of CEC.

Prime's managed vision care business is conducted primarily through two
wholly owned subsidiaries which are licensed as single service health
maintenance organizations (HMOs) in North Carolina and Texas.

Prime conducts its buying group and distribution business with
approximately 4,000 individual ophthalmology and optometry practices throughout
the United States.

For the year ended December 31, 1998, Prime recorded a $3.2 million net
loss. Prime is highly leveraged and is not in compliance with its bank debt
covenants. Accordingly, all bank debt has been

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<PAGE>

classified as a current liability. Management has determined that the
ophthalmology business is the main contributing factor to Prime's liquidity
problems due to lower than expected cash flows from the ophthalmology service
agreements and excessive purchase prices of those practices as evidenced by the
historical operating losses experienced by the division and significant
goodwill write-downs this year and in prior years within the division. Prime's
headquarters in Raleigh, North Carolina exist primarily to support the
ophthalmology division and such headquarter expenses were higher than justified
by operating earnings of the ophthalmology division.

EMPLOYEES

Prime currently has 926 employees, 178 of which are part time and 582 of
which are part of the ophthalmology and corporate discontinued operations.

LITIGATION

Missouri Action and Related Put Option. Prime commenced an action (the
"Missouri Action") in United States District Court for the Eastern District of
Missouri, in August 1998, seeking damages from an ophthalmologist (the
"Missouri Seller") from whom Prime acquired from which the Missouri Seller's
practiced ophthalmology. Prime has alleged that the Missouri Seller falsely and
fraudulently inflated the value of the corporation he sold to Prime, in the
amount of approximately $2 million. The litigation is in its earliest stages.

As part of the purchase transaction, Prime issued a put option by which
the Missouri Seller, at his election, may require Prime to purchase the balance
of his ophthalmology practice, based on substantially the same valuation which
Prime is challenging in court. The exercise price that would be payable by
Prime under the put option is approximately $4 million. In January 1999, the
Missouri Seller exercised the put option. Prime has asserted to the Missouri
Seller that Prime is not obligated to honor the put for the same reasons that
Prime is seeking damages in the Missouri Action--that the value of the
corporation sold by the Missouri Seller to Prime was falsely inflated. Prime
anticipates that the Missouri Seller will attempt to enforce the put by
litigation.

After acquiring the Missouri Seller's corporation, Prime reviewed selected
medical records of the corporation and determined that the Missouri Seller was
performing unnecessary surgery and billing third party payors, including
Medicare, for the unnecessary surgery.

Management of Prime believes that it will prevail in the pending Missouri
Action and in any attempt to enforce the put, but the expenses of the Missouri
Action and the defense of the Missouri Seller's attempts, if any, to enforce
the put could be substantial.

Maryland Action and Counterclaim. Prime commenced an action in United
States District Court in Maryland, in January 1999, against a Maryland
ophthalmology practice and its stockholders (the "Maryland Sellers") seeking
damages for the refusal of the Maryland Sellers to honor certain terms of an
administrative services agreement (the "ASA") they made with Prime. Prime
purchased a corporation from which the Maryland sellers practiced ophthalmology
from the Maryland Sellers and simultaneously entered into the ASA with the
Maryland Sellers for a term of 40 years. The Maryland Sellers have
counterclaimed against Prime and others alleging that the ASA is unenforceable,
and they have refused to pay fees and other moneys owed to Prime under the
terms of the ASA.

Prime is seeking damages in the action but cannot be sure that it will win
a judgment. The Maryland Sellers have asserted counterclaims. Prime is in the
process of phasing out its ASA's, and so any adverse determination with respect
to the enforceability of the ASA will not have a material adverse effect beyond
the immediate losses of revenue, if any, that may result from the Maryland
Sellers' allegations.

Tennessee Action and Counterclaim. Prime commenced an action in United
States District Court in Tennessee in February, 1999 against a Tennessee
ophthalmology practice and its sole shareholder (the "Tennessee Sellers")
seeking damages for the refusal of the Tennessee Sellers to honor certain terms
of an administrative services agreement (the "ASA") they made with Prime. Prime
purchased a corporation from which the Tennessee sellers practiced
ophthalmology, and simultaneously entered into the ASA with

72
<PAGE>

the Tennessee Sellers for a term of 40 years. The Tennessee Sellers have
counterclaimed against Prime and others, alleging that the ASA is
unenforceable, and they have refused to pay fees and other moneys owed to Prime
under the terms of the ASA.

The total amount that Prime is seeking in the action is approximately $3.6
million, but Prime can not be sure that it will win a judgment for that amount,
or that it will collect the full value of any judgment. The Tennessee Sellers
have asserted counterclaims in an amount to be proved at trial. Prime is in the
process of phasing out its ASA's, so any adverse determination with respect to
the enforceability of the ASA will not have a materially adverse effect beyond
the immediate losses of revenue, if any, that may result from the Tennessee
Sellers' allegations.

Application to the North Carolina Board of Examiners in Optometry. In
1996, Prime purchased 100% of the capital stock of Consolidated Eye Care, Inc.,
a North Carolina corporation ("CEC"), from Drs. Allan L.M. Barker and D. Blair
Harrold. CEC is now a wholly owned subsidiary of Prime, and Drs. Barker and
Harrold are directors, officers and principal stockholders of Prime, and Dr.
Barker will become a director of the combined company. See "Management of the
Combined Company Following Consummation of the Mergers."

In connection with the sale of the CEC capital stock to Prime in 1996,
Optometric Eye Care Center, P.A., a North Carolina professional association
("OECC") engaged in the practice of optometry, entered into an administrative
service agreement (the "ASA") with Prime. Drs. Harrold and Barker are the sole
stockholders of OECC.

In March 1999, Drs. Barker and Harrold applied to the North Carolina Board
of Examiners in Optometry for a determination of whether or not the ASA between
Prime and OECC is permissible under the laws and regulations governing the
practice of optometry in North Carolina. Drs. Barker and Harrold have now
agreed to withdraw the application, and the Board of Examiners in Optometry has
indicated that it will agree to honor that request for withdrawal. If the Board
of Examiners determines that the ASA is not permissible, then Prime and Drs.
Barker and Harrold would have to agree upon a new service contract, and other
ASA's between Prime and other eye care providers may be found unenforceable.
Prime is already in the process of restructuring its legal relationships with
its eye care providers, but an abrupt requirement to restructure these
relationships could have a material adverse effect on Prime's business.
However, even if the agreements are restructured, there is no assurance that
they will be on economic terms favorable to Prime. See "Related
Agreements--Settlement Agreement."

PRIME MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview:

For the year ended December 31, 1998, Prime has recorded a net loss of
approximately $38.1 million. Prime is highly leveraged and is not in compliance
with its bank debt covenants. Accordingly, all bank debt has been classified in
current liabilities. Management has determined that the ophthalmology segment
is the main contributing factor to Prime's liquidity problems, due to lower
than anticipated cash flows from the ophthalmology practices, as evidenced by
the historical operating losses experienced by the ophthalmology segment.
Prime's headquarters in Raleigh, North Carolina exists primarily to support the
ophthalmology segment, and such headquarter expenses were higher than justified
by operating earnings of the ophthalmology segment.

On December 15, 1998, in recognition of the significant losses and the
fact that the physician practice management business model as operated by Prime
has been largely unsuccessful, Prime determined that the business should be
disposed of and that a combination should be sought with a related business
with a stronger infrastructure. Subsequent to such decision by the board, the
merger was approved.

Results of continuing operations:

Year ended December 31, 1998 compared to year ended December 31, 1997

Revenues for the year ended December 31, 1998 were $64.6 million, a $6.3
million or 11% increase from prior year's $58.3 million primarily due to 100%
growth in Prime's managed care division of its eye

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<PAGE>

care services business segment. Also within the eye care services business
segment, revenues in the buying group division decreased slightly offset by a
small increase in the optometry division.

Cost of sales in 1998 was $46.2 million compared to $42.0 million in 1997.
The 10% increase was in line with the related increase in revenues.

General and administrative expenses increased from $5.2 million in 1997 to
$6.0 million in 1998 primarily due to additional costs to support revenue
growth in the managed care division.

Interest expense for the year ended December 31, 1998 was $4.5 million
versus $3.9 million for the year ended December 31, 1997. This increase is due
to increased borrowings on Prime's bank credit facility resulting from
acquisitions and lower than expected cash generation in the discontinued
ophthalmology business.

Prime's effective tax rate for the year ended December 31, 1998 of (15.5%)
represents the tax benefit expected on the significant tax losses during 1998.
The book basis loss before income taxes is significantly more than the tax
basis loss. Accordingly, the effective tax rate is significantly lower than the
statutory rate. The Company's effective tax rate in 1997 was 33.7%.

Year ended December 31, 1997 compared to year ended December 31, 1996

Revenue increased 12% to $58.3 million for the year ended December 31,
1997 from $52.2 million for the year ended December 31, 1996. This increase
consisted of increases in all three of Prime's continuing operations.

Cost of sales for the year ended December 31, 1997 was $42.0 million
compared to 37.4 million for the year ended December 31, 1996 but remained
constant as a percentage of revenues, which is consistent with the growth
across all three divisions.

General and administrative expenses decreased from $5.5 million in 1996 to
$5.2 million in 1997 due to cost savings achieved within the continuing
operations.

Interest expense increased from $1.0 million in 1996 to $3.9 million in
1997 largely due to the increased debt as a result of the significant
acquisitions completed during 1996 and 1997 by the ophthalmology division.

Prime's effective tax rate for the year ended December 31, 1997 was 33.7%
compared to an effective rate of 21.1% in 1996.

Liquidity and Capital Resources

Cash provided by continuing operating activities of Prime during 1996
totalled approximately $308,000. This amount is stated after cash interest and
income taxes paid of approximately $6.1 million. Prime also raised $8 million
of capital in 1998 via the issuance of mandatorily redeemable preferred stock.
This cash and cash from operations was primarily used to fund the $.6 million
of capital expenditures and the repayment of $6 million of bank indebtedness.

As of December 31, 1998 and currently, Prime is in default of the
covenants of its bank credit facility. Accordingly, all bank indebtedness has
been classified as a current liability. The bank is currently monitoring
Prime's restructuring plans and progress. If the transactions contemplated
herein are not consummated, it is unlikely that Prime's cash flows from
operations will be sufficient to fund its commitments.

Year 2000

Prime utilizes software and related technologies throughout its operations
that may be affected by the Year 2000 problem, which is common to most
businesses. Prime is addressing the effect of the potential Year 2000 problem
on all its critical systems and with all of its critical vendors and customers.
Specifically, Prime has completed upgrades to all but one of its critical
systems. Such upgrade is currently in process and is expected to be completed
by September 30, 1999. Through discussions with its vendors and customers,
Prime has determined that no critical business areas will be adversely affected
by

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<PAGE>

Year 2000 issues, but continues to cooperate with its vendors and customers to
ensure a smooth transition. No contingency plan has been developed or deemed
necessary at this time and management believes that any costs and risks related
to Year 2000 compliance will not have a material adverse affect on the
liquidity or financial position of the Prime.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF PRIME

The following table sets forth information concerning the shares of
Prime's common stock beneficially owned by each director and executive officer
of Prime and all directors and executive officers as a group and each holder of
over 5% of the outstanding common stock as of May 10, 1999.

<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER SHARES(1) PERCENT
- ----------------------------------------------------------------------- ----------- --------
<S> <C> <C>
Allan L.M. Barker, O.D. ............................................... 712,408 9.4%
D. Blair Harrold, O.D. ................................................ 712,408 9.4%
Martin E. Franklin(2) ................................................. 1,333,333 15.0%
Charlie W. Sydnor ..................................................... 183,245 2.4%
David A. Durfee(3) .................................................... 136,500 1.8%
Walter H. Wilkinson, Jr. .............................................. 0 *
Nicholas R. Rader, M.D. ............................................... 87,508 1.2%
Samuel B. Petteway(4) ................................................. 140,000 1.8%
Thomas S. Harbin, Jr. M.D.(5) ......................................... 107,483 1.4%
W. Andrew Maxwell, M.D. ............................................... 62,790 *
Steven B. Waite(6) .................................................... 518,334 6.9%
Julia C. Lewis(7) ..................................................... 152,000 2.0%
Kitty Hawk Capital Limted Partnership ................................. 553,334 7.3%
Marlin Capital, L.P.(2) ............................................... 1,333,333 15.0%
All executive officers and directors as a group (11 persons) .......... 3,627,675 39.4%
</TABLE>

- ----------
* Less than 1%.

(1) Shares not outstanding but deemed beneficially owned by virtue of the
right of an individual to acquire them within 60 days upon the exercise
of an option are treated as outstanding for purposes of determining
beneficial ownership and the percent beneficially owned by such
individual and for the executive officers and directors as a group.

(2) Represents approximately 1,333,333 shares issuable upon conversion of
warrants held by Marlin Capital, L.P. Mr. Martin E. Franklin, who is a
director of Prime, is the Chairman, Chief Executive Officer and principal
stockholder of Marlin Holdings, Inc. which is the general partner of
Marlin Capital, L.P. Mr. Franklin disclaims beneficial ownership of such
shares. The address of Marlin Capital, L.P. is 555 Theodore Fremd Ave.,
Rye, New York 10584.

(3) Includes 15,000 shares subject to currently exercisable outstanding
options.

(4) Includes 60,000 shares subject to currently exercisable outstanding
options.

(5) Includes 15,000 shares subject to currently exercisable outstanding
options.

(6) Includes 65,000 shares subject to currently exercisable outstanding
options.

(7) Includes 150,000 shares subject to currently exercisable outstanding
options.

BUSINESS OF THE COMBINED COMPANY FOLLOWING CONSUMMATION OF THE MERGERS

Following the consummation of the mergers, the combined company will be an
integrated eye care company that will deliver diversified services to
ophthalmologists, optometrists and opticians and managed care plans that
provide eye care to their participants. The combined company engages in four
complementary business lines in the eye care marketplace:

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<PAGE>

(i) ophthalmology services, by which the combined company owns and
operates eye health centers and provides other services for
ophthalmologists and optometrists (the "Administrative Services" or "ASA"
model) and in independent physician offices (the health services
organization or "HSO" model) in various states;

(ii) retail optometry, by which the combined company owns and operates
retail optometry locations in Connecticut and North Carolina;

(iii) buying group services, by which the combined company provides
wholesale optical goods purchasing for licensed practitioners; and,

(iv) managed care services, by which the combined company contracts with
managed care plans to establish and manage networks of eye health care
providers on behalf of the enrolled members of its client managed care
plans.

These four classes of services are more fully described in the following
paragraphs.

Ophthalmology Services. The combined company manages owns and operates
multiple eye health centers in Connecticut. The combined company contracts with
OptiCare P.C., a professional corporation, for a range of services, including
administration, marketing, billing and other services. This professional
corporation is wholly owned by Dean J. Yimoyines, M.D., who will be the
Chairman of the Board, President and Chief Executive Officer of the combined
company and a beneficial holder of 5.9% of the common stock of the combined
company upon consummation of the mergers. This professional corporation employs
26 ophthalmologists and 19 optometrists throughout Connecticut. The combined
company contracts with the professional corporation to provide services at
company-owned centers throughout the state. Management is provided under a
renewable 5-year administrative services agreement. The current term expires in
December 2000 and is expected to be renewed.

In the combined company's HSO model, the combined company provides a range
of specific services which individual ophthalmology and optometry practices can
purchase on a "menu" basis, including buying group access, marketing
assistance, information systems support, among others. At the expected time of
the consummation of the mergers, management of the combined company expects to
have HSO contracts with 43 ophthalmology practices in 11 states.

As part of its ophthalmology services, the combined company owns and
operates three ambulatory surgery centers ("ASC's") and one refractive laser
center in Connecticut. In its ASC's, ophthalmic surgeons perform a range of
specialized eye care surgical procedures, including cataract surgery. One of
the ASC's is being converted from an eye-care-only center to a multi-specialty
facility, permitting ophthalmic surgery and other types of non-eye-care surgery
to be performed there. The combined company does not have any agreements with
any surgeons or practice groups other than ophthalmologists at the present
time. The combined company charges a fee to patients (or their insurers, HMO's,
Medicare, Medicaid or other responsible third-party payors) for use of the ASC
facility, and the surgeons are responsible for separately billing the patients
for surgical services.

The combined company has a formal quality improvement program which
includes responsibility and accountability for all federal, state and third
party corporate compliance issues. Connecticut based operations have received
full three-year accreditation from the Accreditation Association for Ambulatory
Health Care in Skokie, Illinois.

In addition to its intent to grow the practice management and ASC
operations, the management of the combined company believes there will be
increasing demand for its HSO services from independent physicians who are not
interested in an ASA model. Management of the combined company believes these
independent physicians, while unaffiliated with a national practice management
company, still require assistance in a range of administrative, marketing and,
in particular, information systems areas and have the potential to materially
benefit from the combined company's capabilities in these areas.

Retail Optometry. Upon consummation of the mergers, the combined company
will own 50 retail optometry locations in Connecticut and North Carolina. The
combined company's locations are either free-standing or co-located with
ophthalmology or optometry practices. In its retail optometry locations,

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<PAGE>

the combined company provides all the customary optical goods and provides all
the billing, collection, and information systems to support the combined
company's optometry operations. In Connecticut, the combined company also has a
complete manufacturing facility in which lenses are manufactured, surfaced and
ground to specifications and supplied to all of the combined company's
Connecticut optometry locations as well as to network doctors for certain
managed care contracts.

In addition to its owned and operated locations, the combined company has
30 franchised retail optometry locations in North Carolina and South Carolina.
In its franchise arrangements, the combined company provides a range of
marketing, managed care support and other services to the franchisee store in
return for a fixed fee.

Management of the combined company believes that large retail optometry
centers are an increasingly important initial entry point for eye care
patients. Beyond the economic contribution of the combined company's owned and
franchised stores, management of the combined company believes that its
optometry operations provide a strong strategic link and patient referral
source for its ophthalmic and other integrated services, particularly in North
Carolina and Connecticut.

Buying Group. The combined company operates one of the largest wholesale
eye products buying groups in the United States. This business unit,
headquartered in Rocky Mount, North Carolina, contracts with over 4,000
ophthalmology and optometry practices nationwide for the purchase of optical
and ophthalmic goods and medical supplies. In these arrangements, the combined
company enters into a non-exclusive account relationship with the buying
ophthalmologists and optometrists who join the buying group. These licensed
practitioners, by joining the buying group, agree to place `bill to -- ship to"
orders directly with a vendor, notifying the vendor that the licensed
practitioners are using the combined company's buying group services; the
vendor is then obligated to furnish a discount to the purchasers. The vendor
then ships the product directly to the practice and bills the combined company
at the predetermined price. The combined company derives revenue from the
buying group solely by the spread between its costs for merchandise and the
prices paid by group participants.

The combined company believes there is a significant opportunity to expand
the scope of its buying group services with additional products and with
professional service offerings. As the combined company expands its HSO and
managed care network operations, management of the combined company believes
the buying group business unit will benefit as well, demonstrating the value of
the combined company's strategy.

Managed Care Services. The combined company has managed care contracts in
nine states which are serviced by licensed practitioners under contract with
the combined company to provide comprehensive eye care services to over 2.5
million covered lives. The combined company's customers are generally managed
health plans, but the managed care business unit also provides these services
directly to employers.

In each managed care contract, the combined company creates and/or
contracts with networks of ophthalmologists and optometrists who provide eye
care services under a contract between the combined company and the managed
care plan. In these contracts, the combined company also performs credentialing
services, quality assurance and utilization review functions for the managed
care plans. The combined company is paid on either a fee for service or fixed
fee per covered live or "capitated" basis. Most contracts have a term of three
years and contain renewal provisions for additional one-year periods.

The combined company has developed proprietary systems to administer the
eye care of the managed care populations, including specialized analytic tools
which permit the combined company and its managed care plan customers to
understand the frequency and cost of services rendered to the managed care
plan's covered population. In addition, the combined company performs
prospective-outcome studies and other quality assessment studies on the care
rendered by its contracted network of providers.

The combined company's managed care credentialing functions are based on
Rocky Mount, North Carolina, and have received certification from the National
Committee for Quality Assurance in

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Washington, D.C. Such accreditation (or similar accreditation from certain
other recognized accreditation associations) is a requirement for obtaining
certain managed care contracts, or, if not expressly required, enhances the
quality of the combined company as seen by prospective managed care customers.

Management of the combined company believes there will be increasing
demand for specialized eye care management for populations enrolled in health
plans. This belief is based partially on demographic trends, and partially upon
the growing recognition among health plans that the treatment of eye health
lends itself to specialized management.

COMPETITION

The health care industry is highly competitive and subject to continual
changes in the methods by which services are provided and the manner in which
health care providers are selected and compensated. The combined company
believes that private and public reforms in the health care industry
emphasizing cost containment and accountability will result in an increasing
shift of eye care from highly fragmented, individual or small practice
providers to larger group practices, affiliated practice groups or other eye
care delivery systems. The combined company competes with other physician
practice management companies which seek to acquire the business assets of and
provide management services to eye care professionals, and some of these
competitors have substantially greater financial resources than the combined
company. Companies in other health care industry segments, such as managers of
other hospital-based specialties or currently expanding large group practices,
may become competitors in providing management to providers of eye care
services, and some them have financial and other resources substantially
greater than the resources of the combined company. Increased competition could
have a material adverse effect on the combined company's financial condition
and results of operations.

The bases for competition in the ophthalmology services area are pricing,
strength of the delivery network, strength of operational systems, the degree
of cost efficiencies and synergies, marketing strength, management information
systems, managed care expertise, patient access and quality assessment
programs. The combined company also competes with other providers of eye care
services, including HMO'S, PPO's and private insurers, for managed care
contracts, and many HMO's, PPO's and insurers have larger provider networks and
greater financial and other resources than the combined company. Managed care
organizations compete on the basis of administrative strength, size, quality
and geographic coverage of their provider networks, marketing abilities,
informational systems, the strategy of their managed care contracts, operating
efficiencies and price. The combined company also competes with other buying
group organizations for group members. Buying group organizations compete on
the basis of size and purchasing power of their member buying group, the
strength of their credit, and the strength of their supplier agreements and
relationships. The retail optometry business competes with numerous optometry
operators, including several national chains which have greater financial and
other resources than the combined company. Retail optometry operators compete
on price, service, product availability and location. See "Business of the
Combined Company Following Consummation of the Mergers."

GOVERNMENT REGULATION

The federal and state governments extensively regulate the health care
business. The combined company's business will be subject to numerous federal
and state laws and regulations, including the following:

Corporate Practice of Optometry and Ophthalmology. The laws of many states
prohibit corporations that are not owned entirely by eye care professionals
from (i) employing eye care professionals, (ii) receiving for their own account
reimbursements from third party payors for health care services rendered by
licensed professionals, (iii) controlling clinical decision-making, or (iv)
engaging in other activities that are deemed to constitute the practice of
optometry and/or ophthalmology. The combined company contracts with
professional associations (which are owned by one or more licensed optometrists
or ophthalmologists), which in turn employ or contract with licensed
optometrists or ophthalmologists to provide professional services to patients.
The combined company performs only non-professional services, does not
represent to the public or its customers that it provides professional eye care
services,

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and does not exercise influence or control over the practices of the eye care
practitioners employed by the professional associations. The agreements between
the combined company and the eye care providers specifically provide that all
decisions required by law to be made by licensed ophthalmologists or
optometrists shall be made only by such licensed persons, and that the combined
company shall not engage in any services or activities which would constitute
the practice of ophthalmology or optometry.

The North Carolina State Board of Examiners in Optometry ("Optometry
Board") has expressed concerns regarding contractual arrangements between
business corporations and professional associations or corporations of
optometrists which may "indirectly" violate the corporate practice prohibition
or other North Carolina law even though the arrangements do not involve direct
employment of optometrists. In certain situations, the following practices,
among others, have been determined by the Board, formally or informally, to be
indirect violations of the corporate practice prohibition:

o Business corporations which in effect take over the entire
decision-making process for the optometrist on matters such as hiring
capable clinical assistants, firing clinical assistant and
non-shareholder optometrist employees, and management companies which
exert an undue amount of influence over the billing and receipts of the
optometric practice, such that the practice is essentially paid a wage by
the company or vice-versa.

o Companies which attempt to exercise control over the sale of the assets
or shares of the optometric practice, such as setting the price at which
such assets or shares may be sold, delineating the entities or class of
entities to whom such assets or shares may be sold, and which attempt to
exercise control over the business records of the practice in the interim
between the cessation of the original optometric practice and the
beginning of the successor practice.

There is a risk that the Optometry Board could determine that the combined
company's arrangements with optometrists indirectly violate the corporate
practice prohibition. The combined company's administrative service agreements
("ASA's") with optometrists provide that they are not intended to represent the
unlawful practice of optometry and that the parties will take such steps,
including consultation with the Optometry Board and modification of the
Management Agreements, as are appropriate to implement such intention while
preserving the overall relationship of the parties. If the Optometry Board ever
determine that the Management Agreements must be modified and the parties are
unable to agree on a satisfactory modification, there could be a material
adverse impact on the combined company's current North Carolina management
agreements and therefore, the combined company's results of operations.

Fee-Splitting and Anti-kickback Law--State Law. Most states have laws
prohibiting the paying or receiving of any remuneration, direct or indirect,
that is intended to induce referrals for health care products or services. Many
states also prohibit "fee-splitting" by health care professionals with any
party except other health care professionals in the same professional
corporation or practice association. In most cases, these laws apply to the
paying of a fee to another person for referring a patient or otherwise
generating business, and do not prohibit payment of reasonable compensation for
facilities and services (other than the generation of business), even if the
payment is based on a percentage of the revenues of the professional practice.
However, in some states, "fee-splitting" has been interpreted to include
payments by health professionals of a portion of fees in return for certain
services.

The North Carolina Medical Board ("Medical Board") stated in an Official
Position Statement (adopted in 1993 and amended in 1996) that sharing profits
between a non-physician and physician partner on a percentage basis is fee
splitting and is grounds for disciplinary action. In the past year, this issue
has been raised in several lawsuits in the state. In each of these cases, the
court was asked to find that the profit sharing arrangement between a physician
or physician group and management company is unethical and void as against
public policy. To date, no court in North Carolina has ruled on this issue.
There is a risk that a court could find that the combined company's
arrangements with physicians are unethical and void as against public policy
and/or that the Medical Board could determine that the combined company's
arrangements with physicians in the state constitute unethical fee-splitting
and that these physicians are subject to disciplinary action. This risks could
also extend to arrangements with optometrists since the Optometry Board has
informally indicated that it takes a similar view on fee-splitting.

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North Carolina law also prohibits health care providers from paying any
type of financial compensation to any person, firm or corporation for
recommending or securing the provider's employment by a patient, or as a reward
for having made a recommendation resulting in the provider's employment by a
patient.

Fee-Splitting and Anti-kickback Law--Federal Law. Federal law prohibits
the offer, payment, solicitation or receipt of any form of remuneration in
return for the referral of patients covered by federally funded health care
programs such as Medicare and Medicaid, or in return for purchasing, leasing,
ordering or arranging for the purchase, lease or order of any product or
service that is covered by a federal program.

On April 15, 1998 the Office of Inspector General of the U.S. Department
of Health and Human Services (the "OIG") issued Advisory Opinion 98--4, which
raised questions about whether a percentage of revenue management fee
arrangement could be viewed as violating the federal anti-kickback law if the
manager is involved in helping generate revenues derived from Medicare and
Medicaid programs. Under the arrangement reviewed by the OIG, the manager's
duties included management and marketing services, negotiation and oversight of
health care contracts with various payors, including Federal healthcare
programs, and setting up provider networks that included physicians. Payments
to the management company included a "fair market value payment" for operating
services provided by the manager, a payment based on a percentage of the cost
of capital assets, and an additional 20% of net revenues of the practice for
management services. The OIG noted that since the manager was paid a percentage
of net revenue, including revenue from business derived from managed care
contracts arranged by the manager, that a potential technical violation of the
anti-kickback statute existed. The OIG further noted that since the manager
would presumably receive some compensation for management efforts in connection
with the development and operation of specialist networks, any evaluation by
the OIG would require information about the relevant financial relationships.
The OIG summarized that while the management arrangement "may" violate the
anti-kickback statute, a definitive conclusion would require a determination of
the parties' intent, which is beyond the scope of the advisory opinion process.

The combined company's services agreements are different from the
arrangements reviewed by the OIG in its advisory opinion. Therefore, management
of the combined company believes that the opinion is inapplicable to the
relationships between the combined company and its Affiliated Providers. As a
result, management has no present plans to change the terms of these
relationships because of the advisory opinion, but will continue to monitor any
clarifications or determinations in this area. If the forms of services
agreements utilized by the combined company are ever determined to be in
violation of the federal anti-kickback statute, it is likely that there would
be a material adverse impact on the combined company and its results of
operation.

Advertising Restrictions. Many states, including Connecticut, prohibit
licensed eye care professionals from using advertising which includes any name
other than their own, or from advertising in any manner that is likely to lead
a person to believe that a non-licensed professional is engaged in the delivery
of eye care services. Certain of the combined company's forms of services
agreements provide that all advertising shall conform to these requirements,
but there can be no assurance that the interpretation of the applicable laws or
the combined company's advertising will not inhibit the combined company or
result in legal violations that could have a material adverse effect on the
combined company.

Insurance Licensure. Most states impose strict licensure requirements on
health insurance companies, HMO's, and other companies that engage in the
business of insurance or pre-paid health care. In most states, these laws do
not apply to discounted fee-for-service arrangements or networks that are paid
on a capitated basis, i.e. based on the number of covered persons
the network is required to serve without regard to the actual rendering of eye
care service to patients, provided that the association with which the network
provider is contracting is a licensed health insurer or HMO. There are
exceptions to these rules in some states. For example, certain states require a
license for a capitated arrangement with any party unless the risk-bearing
association is a professional corporation that employs the eye care providers.
If the combined company is required to become licensed under these laws, the

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licensure process can be lengthy and time consuming and, unless the regulatory
authority permits the combined company to continue to operate while the
licensure process is progressing, the combined company could suffer losses of
revenue that would result in material adverse changes in its business while the
licensure process is pending. In addition, many of the licensing requirements
mandate strict financial and other requirements which the combined company may
not immediately be able to meet. Once licensed, the combined company would be
subject to continuing oversight by and reporting to the respective regulatory
agency.

Regulation of the Combined Company's HMO Subsidiaries. The combined
company holds two single service HMO licenses, one in North Carolina and one in
Texas. The two states require the filing of quarterly and annual reports as
well as periodic on-site audits.

The Florida, North Carolina and Texas managed care business is highly
regulated. Such regulation can include, but is not limited to, caps on
permissible premiums charged to customers; mandated benefits; and rules
governing relationships with, and payments to, network providers. Each of these
states also require pre-approval from their respective Departments of Insurance
prior to allowing a significant change of ownership control to take place.
There are no guarantees that approval will be forthcoming prior to the
effective time of the mergers.

In North Carolina, in addition to adequate reserves for unpaid bills and
unearned members' fees, an HMO must, until such reserves equal 3 times its
average monthly expenditures, maintain reserves equal to 4% of the first
$200,000 of members' fees, 2% of the next $200,000 of members' fees, and 1% of
all members' fees in excess of $400,000. This reserve may not exceed 6 times
the HMO's average monthly expenditures.

In Texas, a single service HMO must maintain a reserve of $500,000, net of
accrued unpaid liabilities. However, if such a reserve is currently
unavailable, the HMO must achieve and maintain a current reserve of $200,000;
this reserve must increase to $275,000 by December 31, 1999; $350,000 by
December 31, 2000; $425,000 by December 31, 2001; and $500,000 by December 31,
2002.

Third Party Administration Licensing. Some states require licensing for
companies providing administrative services in connection with managed care
business. The combined company holds a third-party administrator license in
Florida. The combined company intends to seek such licenses in those states
where it is available for eye care networks. However, the combined company may
not be able to meet such requirements in all cases, and this may have a
material adverse effect on the combined company's business and operating
results or inhibit the growth of the combined company's business.

Physician Incentive Plans. Medicare regulations impose certain disclosure
requirements on managed care networks that compensate providers in a manner
that is related to the volume of services provided to Medicare patients (other
than services personally provided by the provider). If such incentive payments
exceed 25 percent of the provider's potential payments, the network is also
required to show that the providers have certain "stop loss" financial
protections and to conduct certain Medicare enrollee surveys.

"Any Willing Provider" Laws. Some states have adopted, and others are
considering, legislation that requires managed care networks to include any
qualified and credentialed provider who is willing to abide by the terms of the
network's contracts and/or prohibit termination of providers without cause.
Such laws would limit the ability of the combined company to develop effective
managed care networks in such states.

Antitrust Laws. The combined company is subject to a range of antitrust
laws that prohibit anti-competitive conduct, including price fixing, concerted
refusals to deal and divisions of markets. Among other things, these laws limit
the ability of the combined company to build smaller, more competititive
provider networks that rely on exclusive services agreements with separate
practice groups that compete with one another in the same geographic market.
This does not apply to professionals within the same practice group. In
addition, these laws prevent acquisitions of business assets that would be
integrated into existing professional associations if such acquisitions
substantially lessen competition or tend to create a monopoly.

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<PAGE>

The laws described above have civil and criminal penalties and have been
subject to limited judicial and regulatory interpretation. They are enforced by
regulatory agencies that are vested with broad discretion in interpreting their
meaning. The combined company's agreements and activities have not been
examined by federal or state authorities under these laws and regulations.
There can be no assurance that review of the combined company's business
arrangements will not result in determinations that adversely affect the
combined company's operations or that certain material agreements between the
combined company and eye care providers or third-party payors will not be held
invalid and unenforceable. In addition, these laws and their interpretation
vary from state to state. The regulatory framework of certain jurisdictions may
limit the combined company's expansion into, or ability to continue operations
within, such jurisdictions if the combined company is unable to modify its
operational structure to conform with such regulatory framework. Any limitation
on the combined company's ability to continue operating in the manner in which
OptiCare and Prime have operated prior to the mergers could have an adverse
effect on the combined company.

LITIGATION

See "Business of OptiCare Prior to the Mergers -- Litigation" and
"Business of Prime Prior to the Mergers -- Litigation."

COMBINED COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF PRO FORMA COMBINED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

On a pro forma basis, combining the results of Prime and OptiCare as if
the mergers had occurred on January 1, 1998, the combined company's sales for
the year ended December 31, 1998 were $104.0 million. The compensation expense
was $34.1 million consisting of physician and other employee compensation
expenses. Other operating expenses of $66.7 million do not include any
estimates of synergies or additional costs associated with public company
operations. Depreciation and amortization was $3.8 million which included $1.3
million of amortization of intangibles estimated to be recorded in conjunction
with the mergers. Management has estimated the useful life of the goodwill to
be 25 years. The pro forma balance sheet shows bank debt of approximately $24.8
million in addition to seller debt of approximately $6.2 million and
convertible and other subordinated debt of approximately $6.4 million at
assumed interest rates ranging between 7.5% for the bank and seller debt and 8%
to 9% for the subordinated debt. Accordingly, the pro forma interest expense
for the year ended December 31, 1998 was $2.7 million. The pro forma results
assume a statutory tax rate of 40%.

Liquidity

Upon consummation of the mergers and related transactions, the combined
company anticipates bank indebtedness of approximately $25 million and net
equity of approximately $4 million. Bank Austria AG, Prime's current lender, is
working with Prime to amend its existing credit agreement to provide a
combination term and revolving facility to the combined company. As of December
31, 1998 and currently, Prime is in default of certain of its financial
covenants and the entire outstanding balance of its bank debt has therefore
been classified as short-term. It is anticipated that the amended credit
agreement will provide for no maturities within one year. It is also
anticipated that substantially all of the combined company's assets will be
pledged to secure this new debt and certain financial covenants will be
required. In addition to the anticipated bank debt described above, the
combined company will have approximately $12 million of unsecured subordinated
debt subject to market interest rates. The resulting total indebtedness will
therefore be approximately $37 million.

In the event of default of its financial covenants, the bank may foreclose
on its security interest in the combined company's assets, which would have a
material adverse effect on the results and financial position of the combined
company. Furthermore, there can be no assurance that the combined company's
debt to equity ratio will improve in the short-term.

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MANAGEMENT OF THE COMBINED COMPANY
FOLLOWING CONSUMMATION OF THE MERGERS

The discussion in this section of the Proxy Statement/Prospectus sets
forth information about the combined company if and when the mergers are
consummated.

DIRECTORS

At the Special Meeting, five (5) directors are to be elected to hold
office commencing upon the consummation of the mergers. After the mergers, the
designees of Prime to the combined company board of directors, after
consultation with the other directors of the combined company, will designate
two more directors, so that the entire board will be comprised of seven
members. None of the nominees currently serves as a director of Saratoga.
Nominees receiving a plurality of the votes cast at the Special Meeting will be
elected. If the Mergers are not consummated, none of these nominees will serve
as directors of Saratoga. The new directors of the combined company, their
ages, and the positions they will hold if the Mergers are consummated, are as
follows:

<TABLE>
<CAPTION>
NAME AGE EXPECTED POSITIONS WITH THE COMBINED COMPANY AFTER MERGERS
- ----------------------------------- ----- -----------------------------------------------------------
<S> <C> <C>
Dean J. Yimoyines, M.D. ........... 51 Chairman of the Board of Directors, President and
Chief Executive Officer
Steven L. Ditman .................. 44 Executive Vice President, Chief Financial Officer and
Director
Allan L. M. Barker, O.D. .......... 51 President of the Buying Group Division and Director
Martin E. Franklin ................ 34 Director
John F. Croweak ................... 63 Director
</TABLE>

Dr. Yimoyines is a founder of OptiCare Eye Health Centers, Inc. He is
presently Chairman, President, and Chief Executive Officer of OptiCare, titles
he has held since 1985. Dr. Yimoyines has been instrumental in the development
and implementation of OptiCare's business for nearly twenty years. He graduated
with distinction from the George Washington School of Medicine. He completed
his ophthalmology residency at the Massachusetts Eye and Ear Infirmary, Harvard
Medical School. His fellowship training in vitreoretinal surgery was completed
at the Retina Associates in Boston. Dr. Yimoyines is a graduate of the OPM
(Owner/President Management) program at Harvard Business School and a Fellow of
the American Academy of Ophthalmology.

Mr. Ditman has served as a director of OptiCare since July 1989. He became
the Chief Financial Officer and Treasurer in March, 1992. Mr. Ditman has served
as Chief Operating Officer of the Company since May, 1998. From October, 1986
until March 1992, Mr. Ditman served as Director, Chief Financial Officer and
Treasurer of the Daytona Group and Drubner Broadcasting. During the same period
of time, Mr. Ditman also served as Chief Financial Officer and Treasurer of The
Drubner Investment Group. In November, 1981, Mr. Ditman served as Corporate
Controller of Victor Electric Wire and Cable Corporation from November 1981
until October, 1986. Mr. Ditman served as a senior auditor for KPMG Peat
Marwick from 1977 to 1981. Mr. Ditman became a Certified Public Accountant in
1980 and was licensed in the State of Rhode Island. Mr. Ditman received his
Bachelor of Science in Accounting from Northeastern University in June 1977.

Dr. Barker has been a senior executive officer and director of Prime since
1996. He is a licensed optometrist with 25 years experience in the eye care
industry. From 1993 to 1996, Dr. Barker served as co-president of Consolidated
Eye Care, Inc., the parent company of AECC/Pearlman Buying Group and AECC Total
Vision Health Plan, Inc. Also during this period Dr. Barker served as vice
president and secretary of Optometric Eye Care Center, P.A. Dr. Barker received
his Doctor of Optometry degree in 1975 from Southern College of Optometry in
Memphis, Tennessee.

Mr. Franklin has served as a Director of Prime since 1998. Since February
1997, Mr. Franklin has served as Chairman of the Board of Directors of Bolle
Inc., a NASDAQ National Market company, which

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is a manufacturer, marketer and distributor of premium eyewear. Mr. Franklin
has been Chairman and Chief Executive Officer of Marlin Holdings, Inc., the
general partner of Marlin Capital, L.P., a private investment partnership since
October 1996. From May 1996 until December 1998, Mr. Franklin served as
Chairman and Chief Executive Officer of Lumen Technologies, Inc., a NYSE
company, a manufacturer and distributor of specialty lighting equipment and
served as Executive Chairman from May 1996 until December 1998. Mr. Franklin
was Chairman of the Board and Chief Executive Officer of Lumen's predecessor,
Benson Eyecare Corporation from October 1992 to May 1996 and President from
November 1993 until May 1996. Mr. Franklin was non-executive Chairman and a
director of Eyecare Products plc, a London Stock Exchange Company, from
December 1993 until February 1999. In addition, Mr Franklin served as a
director of Specialty Catalog Corp., a NASDAQ listed company, since 1994. Mr.
Franklin also serves on the boards of a number of privately held companies and
charitable organizations. Mr. Franklin received a B.A. in Political Science
from the University of Pennsylvania in 1986.

Mr. Croweak has served as a Director of OptiCare since 1995. Mr Croweak
has been Chairman of the Board of Directors of Anthem Blue Cross Blue Shield of
Connecticut since August, 1997. From April 1988 through August, 1997, Mr.
Croweak was Chief Executive Officer of Blue Cross Blue Shield of Connecticut.
Mr. Croweak has been a director of Anthem, Inc., a multi-state health insurance
company based in Indianapolis, Indiana, since August, 1997. He is also a
director of United Illuminating, a diversified utility operator based in New
Haven, Connecticut. Mr. Croweak received a BBA degree from the University of
Cincinnati in 1959.

EXECUTIVE OFFICERS OF THE COMBINED COMPANY

The executive officers of Saratoga following the Mergers are expected to
be the following persons, and their business backgrounds are set forth below,
or, if they are also nominees for the Board of Directors, are set forth above.

Dean J. Yimoyines, M.D.--Chairman of the Board, President and Chief
Executive Officer

Steven L. Ditman--Executive Vice President and Chief Financial Officer

Allan L. M. Barker, O.D.--President, Buying Group Division

D. Blair Harrold, O.D.--President, Retail Optometry Division

Samuel B. Petteway--President, Managed Care Division

Dr. Harrold has served as a senior executive and director of Prime since
its acquisition of Consolidated Eye Care, Inc. ("CEC") in July of 1996. Dr.
Harrold founded CEC in 1989 and served as its Co-President until its
acquisition by Prime. Dr. Harrold is a licensed optometrist, having graduated
from Ohio State University with a B.S. in physiological optics and a Doctor of
Optometry degree in 1971. Dr. Harrold has also served as President of
Optometric Eye Care Center, PA, a North Carolina professional association. Dr.
Harrold is a member of the American Optometric Association, the North Carolina
State Optometric Association and is a Fellow in the American Academy of
Optometry.

Mr. Petteway has been President of Prime's managed care business
operations since July 1996 and, prior to Prime's acquisition of Consolidated
Eye Care, Inc., ("CEC"), the managed care business operations of CEC since
1989. Currently, Mr. Petteway serves as Chairman of the Board and Chief
Executive Officer for both Association of Eye Care Centers Total Vision Health
Plan, Inc. and AECC Total Vision Health Plan of Texas, Inc., which are both
owned by Prime. Prior to 1989, Mr. Petteway was President of Strategic Health
Services, providing consulting services to hospitals, physicians, pharmacies
and companies. Mr. Petteway graduated from the University of North Carolina at
Chapel Hill with a Bachelor of Science in Pharmacy in 1979 and received a
Masters in Business Administration with Distinction from Campbell University in
1985.

COMMITTEES OF THE BOARD OF DIRECTORS

The nominees for the Board of Directors following consummation of the
Mergers expect to designate two committees of the Board of Directors:

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o Compensation Committee, which will administer the Performance Stock
Program and establish compensation policy for senior management; the
Compensation Committee will have three members, who will not be officers,
employees or principal stockholders of the combined company; and

o Audit Committee, which will recommend the selection of independent
auditors to the Board of Directors, review their reports to management,
and meet from time to time as they deem necessary or advisable to review
the combined company's systems of internal financial controls; the Audit
Committee will have three members, who will not be officers, employees or
principal stockholders of the combined company; at their discretion from
time to time, the Audit Committee may invite the principal financial
officer to participate in meetings of the Committee.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS OF THE COMBINED COMPANY AFTER
THE MERGERS

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION
------------------ OTHER ANNUAL ALL OTHER
<S> <C> <C> <C> <C> <C>
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION COMPENSATION
- ---------------------------------- ----- -------- -------
Dean J. Yimoyines, M.D. ..........
Steven L. Ditman .................
Allan L. M. Barker, O.D. .........
D. Blair Harrold, O.D. ...........
Samuel B. Petteway ...............
</TABLE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information concerning the shares of
Saratoga's common stock beneficially owned by each director and executive
officer of Saratoga and all directors and executive officers as a group and
each holder of over five percent of the outstanding common stock as of May 12,
1999 and as it is expected to be upon consummation of the mergers.

<TABLE>
<CAPTION>
PRESENT (BEFORE MERGERS)
(1)(2) AFTER MERGERS(1)(3)
---------------------------- -------------------------
NAME OF BENEFICIAL OWNER SHARES PERCENT SHARES PERCENT
- ------------------------------------------- ---------------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Thomas F. Cooke ........................... 151,059(4) 64% 151,059 1.6%
Kevin M. Smith ............................ 15,513(5) 6.9% 15,513 *
All executive officers and directors as
a group (2 persons before the
mergers) ................................. 166,572 70.8% -- --
Allan L.M. Barker, O.D. ................... -- -- 223,268 2.5%
D. Blair Harrold, O.D. .................... -- -- 223,268 2.5%
Marlin E. Franklin(6) ..................... -- -- [ ] [ ]%
Samuel B. Petteway(7) ..................... -- -- 43,876 *
Dean J. Yimoyines M.D.(8) ................. -- -- 534,286 5.9%
Steven L. Ditman(9) ....................... -- -- 72,977 *
John F. Croweak(10) ....................... -- -- -- --
Anthem Health Plans(11) ................... -- -- 1,315,845 14.6%
Oxford Blue Cross Blue Shield of
Connecticut(12) .......................... -- -- 775,996 8.6%
Nazem OptiCare Partners, L.P.(13) ......... -- -- 474,243 5.3%
All executive officers and directors as
a group (7 persons after the
mergers) .................................
</TABLE>

- ----------
* Less than 1%

(2) Based on 275,000 shares outstanding after the Reverse Split but before
the mergers.

(3) Based on 9,000,000 shares expected to be outstanding after the Reverse
Split and the mergers.

(4) Includes warrants to purchase 100,000 shares (before the Reverse Split
and the mergers) of Saratoga

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common stock, which were exercisable on or before May 26, 1999; includes
109,148 (before the Reverse Split and the mergers) shares held by June
Cooke, Mr. Cooke's spouse, of which Mr. Cooke disclaims beneficial
ownership.

(5) Includes 20,000 shares (before the Reverse Split and the mergers) held by
Sandra Smith, Mr. Smith's spouse, of which Mr. Smith disclaims beneficial
ownership.

(6) The shares are held by Marlin Capital, L.P. Mr. Martin E. Franklin, who
is a director of Prime, is the Chairman, Chief Executive Officer and
principal stockholder of Marlin Holdings, Inc. which is the general
partner of Marlin Capital, L.P. ("Marlin"). Mr. Franklin disclaims
beneficial ownership of such shares.

(7) Includes 18,804 shares subject to currently exercisable outstanding
options.

(8) Include 247,825 shares held by Linda Yimoyines, wife of Dean J. Yimoyines
and 286,461 shares issuable upon the exercise of currently exercisable
outstanding options.

(9) Represents 72,977 shares issuable upon the exercise of currently
exercisable oustanding options.

(10) Excludes any shares held by Anthem Blue Cross Blue Shield of Connecticut
as to which Mr. Croweak disclaims beneficial ownership. Mr. Croweak is
Chairman of the Board of Directors of Anthem Blue Cross Blue Shield of
Connecticut .

(11) Includes 144,979 shares subject to currently exercisable warrants.

(12) Includes 337,514 shares subject to currently exercisable warrants.

(13) Includes 233,683 shares subject to currently exercisable warrants.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

OptiCare has entered into a Professional Services and Support Agreement
with OptiCare P.C. effective December 1, 1995 pursuant to which OptiCare P.C.
provides OptiCare with ophthalmology and optometry services on an exclusive
basis, and OptiCare provides the facilities and administrative services
necessary to support the ophthalmology and optometry practice. The term of the
agreement is five years and is automatically renewable. Pursuant to the
agreement OptiCare shall bill, collect, and receive payment for medical
services rendered by the medical staff of the OptiCare P.C. OptiCare shall pay
to the OptiCare P.C. compensation in accordance with the OptiCare P.C.'s annual
compensation plan. The sole shareholder of OptiCare P.C. is Dean J. Yimoyines,
the Chairman, Chief Executive Officer and a director of OptiCare, who will
become the Chief Executive officer and a director of the combined company upon
consummation of the mergers.

OptiCare is the tenant under a Lease Agreement dated September 1, 1995
with O.C. Realty Associates Limited Partnership, as landlord. The leased
premises are located in New Milford, Connecticut and are used for the practice
of ophthalmology and optometry and incidental activities such as the sale of
eye glasses and corrective lenses. The term of the lease is fifteen years.
Pursuant to the Lease Agreement, during the first five years of the leasehold
term, OptiCare pays a minimum annual rental to O.C. Realty Associates Limited
Partnership of $50,400, subject to adjustment at the end of the first five
years and every five years thereafter plus all taxes, assessments, utilities
and insurance related to the property being leased. In addition, OptiCare has
guaranteed the mortgage of O.C. Realty Associates Limited Partnership, the
amount of which was approximately $222,000 as of December 31, 1998. Dean
Yimoyines, John Yimoyines (brother of Dean Yimoyines), and Steven Ditman, the
Chief Operating Officer and a director of OptiCare, who will become the
Executive Vice President, Chief Financial Officer and a director of the
combined company following the Mergers, each owns a 4.11% interest in O.C.
Realty Associates Limited Partnership.

OptiCare is the tenant under a Lease Agreement dated September 1, 1995
with French's Mill Associates, as landlord. The leased premises are located in
Waterbury, Connecticut and are used for the practice of ophthalmology and
optometry, an ambulatory surgery center, and incidental activities such as the
sale of eye glasses and corrective lenses. The term of the lease is fifteen
years. Pursuant to the Lease Agreement, during the first five years of the
leasehold term, OptiCare pays annual rental to French's Mill Associates of
$604,000, subject to adjustment at the end of the first five years and every
five years

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thereafter. In addition, OptiCare pays all taxes, assessments, utilities and
insurance related to the property being leased. Linda Yimoyines and John
Yimoyines, the wife and brother, respectively, of Dean Yimoyines, each owns a
14.28% interest in French's Mill Associates.

OptiCare is the tenant under a Lease dated September 30, 1997 with
French's Mill Associates II, LLP, as landlord. The leased premises are located
in Waterbury, Connecticut and are the location of OptiCare's main headquarters.
The term of the lease is fifteen years. Pursuant to the lease, during the first
five years of the leasehold term, OptiCare pays a minimum annual rental to
French's Mill Associates II, LLP of $76,800, subject to adjustment at the end
of the first five years and every five years thereafter. In addition, OptiCare
pays all taxes, assessments, utilities and insurance related to the property
being leased. Linda Yimoyines and John Yimoyines each owns a 12.5% interest in
French's Mill Associates II, LLP.

O.N.B. Associates owns approximately a 25% interest in Cross Street
Medical Building Partnership, the landlord under a lease dated September 22,
1987 and a Lease Extension Agreement dated December 12, 1997 with Ophthalmic
Physicians and Surgeons, P.C., an entity that merged with and into OptiCare in
1987. The leased premises are located in Norwalk, Connecticut and are used for
the practice of ophthalmology and optometry, an ambulatory surgery center, and
incidental activities such as the sale of eyeglasses and corrective lenses. The
term of the lease is three years. Pursuant to the Lease, OptiCare pays a
minimum annual rental to Cross Street Medical Building Partnership of $427,600.
In addition, OptiCare pays all taxes, assessments, utilities and insurance
related to the property being leased. Linda Yimoyines and John Yimoyines each
own an 11% interest in O.N.B. Associates and Steven Ditman owns a 1.5% interest
in O.N.B. Associates.

OptiCare is also the tenant under a second Lease Agreement dated September
1, 1995 with French's Mill Associates II, L.L.P. as landlord. The leased
premises are located in Waterbury, Connecticut and are also part of OptiCare's
main headquarters. The term of the lease is fifteen years. Pursuant to the
Lease Agreement, during the first five years of the leasehold term, OptiCare
pays a minimum annual rental to French's Mill Associates II of $54,210, subject
to adjustment at the end of the first five years and every five years
thereafter. In addition, OptiCare pays all taxes, assessments, utilities and
insurance related to the property being leased.

OptiCare is currently negotiating a lease for 10,000 square foot of space
with French's Mill Associates II, L.L.P., a portion of which will be used as
OptiCare's new corporate headquarters.

Prime is a party to the Settlement Agreement with Drs. Barker and Harrold
(see "Related Agreements--Settlement Agreement"). Pursuant to the Settlement
Agreement, Drs. Barker and Harrold are to receive $2.5 million in cash, subject
to various conditions.

CEC (a subsidiary of Prime) is guarantor for a $298,530 liability of
Kirkland Drive Associates, an entity which, at the time of the guarantee, was
owned 50% by Prime and 50% by Drs. Barker and Harrold, two officers and
directors of Prime. Kirkland Drive Associates is currently owned 100% by Drs.
Barker and Harrold.

CERTAIN TRANSACTION RELATING TO PRIME

Pursuant to the terms of the Stock Purchase Agreement (the "Preferred
Stock Agreement"), dated as of June 4, 1998, between Prime and Marlin Capital,
L.P. ("Marlin"), Prime sold to Marlin (i) 8,000 of Prime's Class A Preferred
Stock and (ii) warrants to purchase 1,333,333 shares of Prime's common stock
for an aggregate purchase price of $8,000,000. Pursuant to the terms of the
Certificate of Designation of Class A Preferred Stock of Prime, the holders of
the Series A Preferred Stock are entitled to receive dividends on a cumulative
basis, whether or not declared, out of funds legally available therefore, at
the guaranteed annual rate of [30%] over the first four years of the Preferred
Stock Agreement. The number of shares of Prime common stock purchasable and the
exercise price of the warrant are subject to adjustment in order for the
holders to achieve the guaranteed rate of return. The Preferred Stock Agreement
also contains restrictive financial covenants which Prime has violated as of
December 31, 1998. As a result of the violations, the preferred stockholder has
the right to redeem the preferred stock as of December 31, 1998. Mr. Martin E.
Franklin, who is a current director of Prime and a nominee to the Board of
Directors of the Combined Company commencing upon the consummation of the
mergers, is

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the Chairman, Chief Executive Officer and principal stockholder of Marlin
Holdings, Inc., which is the general partner of Marlin Capital, L.P., a private
investment partnership since October 1996.

In connection with the mergers, the 8,000 shares of Prime Class A
Preferred Stock owned by Marlin shall be transferred to Prime in exchange for
the following: (i) 2,000 shares of preferred stock shall be converted into or
exchanged for shares of Prime Common Stock; (ii) 2,000 shares of preferred
stock shall be exchanged for a promissory note of Saratoga in the principal
amount of $2,000,000, due on the third anniversary of the Effective Time,
bearing interest at a market rate as agreed to by OptiCare and Prime with
Marlin, and subordinated in right of payment to the bank debt of Saratoga and
the Surviving Corporations; and (iii) 4,000 shares of preferred stock shall be
exchanged for a redeemable, non-interest-bearing promissory note of Saratoga in
the principal amount of $4,000,000, due on the third anniversary of the
effective time, subordinated in right of payment to the bank debt of Saratoga
and the Surviving Corporations, having terms (except the rate of interest) like
the promissory note referred to in clause (ii) above, with certain exceptions.
See Additional Agreements--Treatment of Prime Class A Preferred Stock." for
further discussion regarding the terms of such conversion.

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DESCRIPTION OF THE SARATOGA CAPITAL STOCK

The authorized capital stock of Saratoga consists of 5,000,000 shares of
preferred stock and 50,000,000 shares of common stock, $0.001 par value per
share.

Preferred Stock. No preferred stock of Saratoga is outstanding or
committed to be outstanding as a consequence of the mergers or otherwise. The
Saratoga preferred stock is issuable as determined from time to time by the
Board of Directors, in one or more series, and the Board is authorized to fix
the rights, preferences, privileges and restrictions granted to or imposed upon
any unissued and undesignated shares of preferred stock and to fix the number
of shares constituting any series and the designations of such series, without
any further vote or action by the stockholders. Although it presently has no
intention to do so, the Board, without stockholder approval, can issue
preferred stock with voting and conversion rights which could adversely affect
the voting power or other rights of the holders of the Common Stock. The
issuance of preferred stock may also have the effect of delaying, deferring or
preventing a change in control of Saratoga. As noted in "Combined Company
Management's Discussion and Analysis of Pro Forma Financial Condition and
Results of Operations," the combined company is expected to need additional
financing in the foreseeable future, and the board of directors may at any time
after consummation of the mergers issue preferred stock to obtain funds for the
combined company's business.

Common Stock. As of the Record Date, there were shares of Saratoga
common stock outstanding (before giving effect to the proposed Reverse Split).
If the Reverse Split becomes effective, the number of shares of outstanding
common stock (before issuance of common stock in the mergers) will be 225,000,
and the additional number of shares to be issued in the mergers will be
8,775,000. In addition, the combined company will reserve an aggregate of
705,680 shares of common stock to be issued under options on securities of
OptiCare and Prime for which the combined company will be responsible after the
mergers and additional shares to be issued pursuant to the Performance Stock
Program and the Employee Stock Purchase Plan. Saratoga's common stock has not,
prior to the date hereof, been listed on any stock exchange but from time to
time has been reported by the NASD on the OTC Bulletin Board under the symbol
"SRIK." Saratoga has applied to the American Stock Exchange for listing, which
listing is expected to be approved before the expected date of the consummation
of the mergers. All outstanding shares of Common Stock are fully paid and
non-assessable, and the shares of Common Stock to be outstanding upon
completion of the mergers will be fully paid and non-assessable. Other
principal terms, rights and privileges of the common stock are as follows.

Voting: Holders of the common stock are entitled to one vote per
share on all matters to be voted upon by the stockholders.
They may not cumulate votes in connection with the election of
directors.

Dividends: Holders of the common stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time
by the Board of Directors in its absolute discretion out of
funds legally available therefor, subject to the payment or of
dividends on preferred stock, if any. (There is no preferred
stock outstanding at the present time.)

Liquidation: In the event of a liquidation, dissolution or winding up of
Saratoga, holders of the common stock are entitled to share
ratably in all assets remaining after payment of liabilities.

Pre-emptive rights, conversion rights, subscription rights, sinking fund
provisions:

None.

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Limitation of Directors' and Officers' Liability. The certificate of
incorporation of Saratoga eliminates the liability of directors to the fullest
extent permissible under Delaware law, as such law exists currently or as it
may be amended in the future. Under the DGCL, such provision may not eliminate
or limit director monetary liability for:

(i) breaches of the director's duty of loyalty to the corporation or
its stockholders;

(ii) acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law;

(iii) the payment of unlawful dividends or unlawful stock repurchases or
redemptions; or

(iv) transactions in which the director received an improper personal
benefit.

Such limitation of liability provisions also may not limit a director's
liability for violation of, or otherwise relieve Saratoga or its directors from
the necessity of complying with, federal or state securities laws, or affect
the availability of non-monetary remedies such as injunctive relief or
rescission.

EXCHANGE AGENT, TRANSFER AGENT AND REGISTRAR

The Exchange Agent, Transfer Agent and Registrar of the Common Stock is
ChaseMellon Shareholder Services, L.L.C. Its telephone number is 214-965-2235.

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COMPARISON OF STOCKHOLDER RIGHTS

OPTICARE TO SARATOGA

GENERAL

Saratoga is a Delaware corporation subject to the provisions of the
Delaware General Corporation Law (the "DGCL") and OptiCare is a Connecticut
corporation subject to the provisions of the Connecticut Business Corporation
Act (the "CBCA"). Upon consummation of the OptiCare Merger, shareholders of
OptiCare will become shareholders of Saratoga and their rights as shareholders
of Saratoga will be governed by the Certificate of Incorporation of Saratoga
(the "Saratoga Certificate"), the Bylaws of Saratoga (the "Saratoga Bylaws"),
the DGCL and Delaware law.

The following is a comparison of certain provisions of the CBCA, the DGCL
and the respective certificates of incorporation and by-laws of OptiCare and
Saratoga. This summary does not purport to be complete and is qualified in its
entirety by reference to the CBCA and the DGCL, which may change from time to
time, and the certificates of incorporation and bylaws, as amended, of Saratoga
and OptiCare.

AUTHORIZED CAPITAL STOCK

Saratoga. The authorized capital stock of Saratoga consists of 50,000,000
shares of common stock (the "Saratoga Common Stock") and 5,000,000 shares of
preferred stock (the "Saratoga Preferred Stock"). As of the Record Date, there
were 3,456,292 shares of Saratoga Common Stock outstanding (before giving
effect to the proposed Reverse Split). If the Reverse Split becomes effective,
the number of shares of outstanding common stock (before issuance of common
stock in the mergers) will be 225,000, and the additional number of shares to
be issued in the mergers will be 8,750,000. In addition, the combined company
will reserve an aggregate of 705,680 shares of Saratoga Common Stock to be
issued under options on securities of OptiCare and Prime for which the combined
company will be responsible after the mergers and additional shares to be
issued under the Performance Stock Plan and the Employee Stock Purchase Plan.
No Saratoga Preferred Stock is outstanding or committed to be outstanding as a
consequence of the Mergers or otherwise.

OptiCare. The authorized capital stock of OptiCare consists of 1,200,000
shares of OptiCare Common Stock, 160,000 shares of Class A Convertible
Preferred Stock ("OptiCare Class A Preferred Stock"), and 640,000 shares of
Class B Convertible Preferred Stock ("OptiCare Class B Preferred Stock"),
(collectively, the "OptiCare Preferred Stock"). Each share of OptiCare
Preferred Stock is convertible by the holder into one share of OptiCare Common
Stock, subject to adjustment for anti-dilution events described in the
Certificate of Incorporation of OptiCare, as amended (the "OptiCare
Certificate"). As of the date of this Proxy Statement/Prospectus, 152,754
shares of OptiCare Class A Preferred Stock were issued and outstanding, 221,046
shares of OptiCare Class B Preferred Stock were issued and outstanding and
61,022 shares of OptiCare Class B Preferred Stock were reserved for issuance
upon the exercise of outstanding warrants. As of such date, no shares of
OptiCare Common Stock were issued or outstanding, and 45,497 shares of OptiCare
Common Stock were reserved for issuance upon the exercise of outstanding stock
options.

ISSUANCE OF CAPITAL STOCK

Saratoga. Under the DGCL, Saratoga may issue rights or options for the
purchase of shares of capital stock of Saratoga. Such rights or options may be
issued to directors, officers or employees of Saratoga or its subsidiaries and
the issuance or plan pursuant to which they are issued need not be approved by
the holders of Saratoga Common Stock. However, stockholder approval for
stock-related compensation plans may also be sought in certain instances in
order to qualify such plans for favorable federal income tax treatment under
current laws and regulations.

Under the terms of the Saratoga Certificate, the Saratoga Preferred Stock
may be issued from time to time in one or more series, and the Saratoga Board
of Directors has authority to issue shares of preferred stock in such series,
and to fix from time to time before issuance the number of shares to be

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included in any series as well as the designation, relative powers,
preferences, rights, qualifications, limitations and restrictions of all shares
of such series. The Saratoga Board may also increase or decrease the number of
shares comprising such series (but not below the number of shares then
outstanding) from time to time. See "Description of the Saratoga Capital
Stock".

OptiCare. The OptiCare Board of Directors (the "OptiCare Board") has the
authority, subject to limitations set forth by law, to issue three classes of
shares: the OptiCare Class A Preferred Stock, the OptiCare Class B Preferred
Stock and the OptiCare Common Stock, and to issue rights or options for the
purchase of such shares. See "Authorized Capital Stock" above.

VOTING RIGHTS

Saratoga. According to the Saratoga Certificate, holders of Saratoga
Common Stock have the right to vote for the election of directors and for all
other purposes and each share of Saratoga Common Stock entitles the holder to
one vote, in person or by proxy, at any and all meetings of the stockholders of
the corporation on all propositions before such meetings. No holder of Saratoga
Common Stock has the right to cumulate such holder's votes for the election of
directors.

OptiCare. According to the OptiCare Certificate, the holder of each share
of OptiCare Common Stock issued and outstanding shall have one vote per share
and the holder of each share of OptiCare Preferred Stock shall be entitled to
the number of votes equal to the number of shares of OptiCare Common Stock into
which such holder's share of OptiCare Preferred Stock could be converted.

Neither the OptiCare Certificate nor the OptiCare Bylaws permit
stockholders to cumulate their votes in an election of directors.

DIVIDENDS AND OTHER DISTRIBUTIONS

Saratoga. Under the DGCL, Saratoga may, unless otherwise restricted by the
Saratoga Certificate, pay dividends in cash, property or shares of capital
stock out of surplus or, if no surplus exists, out of net profits for the
fiscal year in which declared or out of net profits for the preceding fiscal
year (provided that such payment will not reduce capital below the amount of
capital represented by classes of stock having preference upon distribution of
assets). The Saratoga Certificate does not currently restrict the payment of
dividends, and holders of Saratoga Common Stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time by the Board of
Directors in its absolute discretion, subject to the payment of or dividends on
Saratoga Preferred Stock. The Saratoga Bylaws authorizes the Saratoga Board to
declare dividends on the capital stock at any regular or special meeting.
Before payment of such dividend, the Saratoga Board must set aside a reserve
the Saratoga Board deems proper for meet contingencies related to the payment
of such dividends. There is no Saratoga Preferred Stock at the present time.

Under the DGCL, a corporation may repurchase or redeem its shares only out
of surplus and only if such purchase does not impair capital. However, a
corporation may redeem preferred stock out of capital if such shares will be
retired upon redemption and the stated capital of the corporation is thereupon
reduced in accordance with Delaware law.

OptiCare. Under the CBCA, a corporation may make distributions, including
dividends, to its shareholders subject to restriction by its certificate of
incorporation unless, after giving effect to the dividend or distribution,
either the corporation would not be able to pay its debts as they become due in
the usual course of business or the corporation's total assets would be less
than the sum of its total liabilities plus, unless its certificate of
incorporation permits otherwise, the amount that would be needed, if the
corporation were to be dissolved at that time, to satisfy the preferential
rights of shareholders whose rights are superior to those shareholders
receiving the dividend or distribution.

The OptiCare Certificate permits dividends and distributions to be paid on
any share of OptiCare Common Stock only after dividends are first paid to all
holders of OptiCare Preferred Stock in a per share amount equal to or greater
than the aggregate amount of such dividends for all shares of OptiCare Common
Stock into which the OptiCare Preferred Stock could be converted. No dividend
may be paid

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on shares of OptiCare Preferred Stock unless an equivalent dividend, based on
the number of shares of OptiCare Common Stock the OptiCare Preferred Stock
could be converted into, is paid on shares for all other classes of OptiCare
Preferred Stock.

DIRECTOR VACANCIES AND REMOVAL OF DIRECTORS

Saratoga. Pursuant to the DGCL, any director or the entire Saratoga Board
may be removed with or without cause by the affirmative vote of a majority of
the outstanding shares of Saratoga capital stock entitled to vote in the
election of directors. Under the Saratoga Bylaws, any director may be removed,
with or without cause, by the holders of a majority of shares then entitled to
vote at an election of directors; provided that, if the Saratoga Board is
elected by class or classes or series thereof, then the stockholders may remove
the director only for cause. The Saratoga Bylaws provide that any vacancy
occurring on the Saratoga Board may be filled by the vote of a majority of
directors remaining in office at the time of the vacancy, even if less than a
quorum. The successors may serve the remaining terms of the replaced directors.

OptiCare. Under the CBCA, a director may be removed by shareholders with
or without cause unless the certificate of incorporation provides that
directors may be removed only for cause. According to the CBCA, a director may
be removed by shareholders only at a meeting called for the purpose of removing
such director, and the meeting notice must state that the purpose or one of the
purposes of the meeting is removal of the director. The OptiCare Bylaws provide
that a director may be removed with or without cause by action of the
shareholders. The OptiCare Certificate contains no provision on the removal of
directors.

Under the CBCA, unless a corporation's certificate of incorporation
provides otherwise, any vacancy in a board of directors may be filled, (i) by
the shareholders, (ii) by such board of directors, or (iii) if the directors
remaining in office constitute fewer than a quorum of such board, by the
affirmative vote of a majority of all the directors remaining in office. The
OptiCare Bylaws provide for vacancies to be filled in the manner consistent
with the CBCA.

DUTIES OF DIRECTORS

Saratoga. The DGCL does not contain a specific provision elaborating on
the duties of a board of directors with respect to the best interests of the
corporation. The scope of the fiduciary duties of the Board of Directors of
Saratoga is thus determined by the courts of Delaware. In connection with
business combination transactions, Delaware courts have permitted directors to
consider various constituencies provided that there be some rationally related
benefit to the shareholders.

OptiCare. The CBCA requires that a director of OptiCare discharge his
duties as a director in good faith, with the care an ordinarily prudent person
in a like position would exercise under similar circumstances, and in a manner
such director reasonably believes to be in the best interests of the
corporation. In connection with the directors' consideration of certain
business combination transactions, the CBCA requires that a director consider,
in determining what such director reasonably believes to be in the best
interests of the corporation, (1) the long-term as well as the short-term
interests of the corporation, (2) the interests of the shareholders, long-term
as well as short-term, including the possibility that those interest may be
best served by the continued independence of the corporation, (3) the interest
of the corporation's employees, customers, creditors and suppliers, and (4)
community and societal considerations including those of any community in which
any office or other facility of the corporation is located. A director may also
in such director's discretion consider any other factors he or she reasonably
considers appropriate in determining what he reasonably believes to be in the
best interest of the corporation with respect to such a business combination
transaction. Those requirements for business combinations do not now apply to
the directors of OptiCare because it does not file periodic reports with the
Securities and Exchange Commission under the Securities Exchange Act. There is
no provision in the OptiCare Certificate or the OptiCare Bylaws concerning the
duties of directors.

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MEETINGS OF STOCKHOLDERS

Saratoga. Pursuant to the Saratoga Bylaws, a special meeting of the
stockholders may be called by the Chairman of the Board, the President, by the
Saratoga Board, by written order of a majority of the Saratoga Board or at the
written request of stockholders owning a majority of Saratoga Common Stock
issued and outstanding and entitled to vote. Special meetings of the holders of
outstanding Saratoga Preferred Stock may be called in the manner and for the
purposes provided in the Saratoga Board resolutions providing for issue of the
preferred stock. Under the Saratoga Bylaws, the holders of stock having a
majority of voting power entitled to vote at any stockholders' meeting shall
constitute a quorum at any meeting of stockholders for the transaction of
business.

OptiCare. Under the CBCA, a corporation is required to hold a special
meeting of shareholders if the board of directors calls such a meeting, or if
holders of at least 10% of all votes entitled to be cast on any issue proposed
to be considered at the special meeting make one or more written demands to the
corporation's secretary describing the purpose for the proposed special
meeting. The OptiCare Bylaws also authorize the President to call a special
meeting.

Under the CBCA, unless the certificate of incorporation or the CBCA
provides otherwise, a majority of the votes entitled to be cast on a matter
constitutes a quorum for action on that matter. The CBCA provides that unless
the CBCA or the certificate of incorporation requires a greater number of
affirmative votes, if a quorum exists, action on a matter, other than the
election of directors, is approved if the votes cast favoring the action exceed
the votes cast opposing the action. Under the OptiCare Bylaws, except as
otherwise provided by applicable law or by the OptiCare Certificate, a majority
of the votes entitled to be cast on a matter constitutes a quorum for action on
the matter.

STOCKHOLDER ACTION WITHOUT A MEETING

Saratoga. Under the Saratoga Bylaws, and according to the DGCL, any action
which may be taken by the Saratoga stockholders at any annual or special
meeting of stockholders may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action to be so taken, is signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote were present and voted.

OptiCare. Under Section 33-698 of the CBCA, any action which may be taken
by shareholders at any annual or special meeting may be taken (1) without a
meeting by unanimous written consent of all the persons who would be entitled
to vote upon such action at a meeting (or by their duly authorized attorneys),
or (2) if the corporation's certificate of incorporation so provides, by
written consent of a majority of the persons who would be entitled to vote upon
such action at a meeting. The CBCA prohibits election of directors by action of
shareholders without a meeting except by unanimous written consent, or pursuant
to a plan of merger. Under the OptiCare Certificate, any action which may be
taken by shareholders at a meeting, except for the election of directors, may
be taken by written consent of the holders of the number of shares that would
be required to approve the action at a meeting where all shareholders entitled
to vote on the action were present.

AMENDMENT OF CORPORATE CHARTER AND BYLAWS

Saratoga. Under the DGCL, an amendment to the certificate of incorporation
generally requires the recommendation of the board of directors, the approval
of a majority of all shares entitled to vote thereon, voting together as a
single class, and the majority of the outstanding stock of each class entitled
to vote thereon as a class. Under the Saratoga Certificate, the corporation may
adopt, repeal, rescind, alter or amend the Saratoga Certificate in accordance
with the DGCL.

Under the DGCL, a corporation's board of directors may amend the bylaws if
its certificate of incorporation contains a provision entitling the directors
to amend the bylaws. Even if the certificate of incorporation contains such a
provision, the shareholders also have the power to amend the bylaws. The
Saratoga Certificate authorizes the Saratoga Board to adopt, repeal, rescind,
alter or amend in any respect the Saratoga Bylaws.

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OptiCare. Under the CBCA, a corporation's certificate of incorporation may
be amended in certain limited respects by the board of directors of such
corporation without shareholder action. A corporation's certificate of
incorporation may also be amended in any respect by recommendation of the board
of directors (unless the board determines that because of conflict of interest
or other special circumstances it should make no recommendation and
communicates the basis for its determination to the shareholders with the
amendment) and, unless the certificate of incorporation or directors require a
greater vote, by approval of (1) a majority of the votes entitled to be cast on
the amendment by each voting group, if any, with respect to which the amendment
would create dissenters' rights, and (2) a majority of the votes cast by every
other voting group entitled to vote on the amendment. The OptiCare Certificate
contains no provision on amendment of the certificate of incorporation.

Under the CBCA, a corporation's board of directors may amend or repeal the
bylaws unless the corporation's certificate of incorporation or the CBCA
reserves this power exclusively to the shareholders in whole or in part or
unless in amending or repealing a particular bylaw the shareholders have
expressly provided that the board of directors may not amend or repeal such
bylaw. The OptiCare Bylaws provide that except as otherwise provided by
applicable law, or by the Stockholders Agreement (to which OptiCare and certain
of its stockholders are parties) while it remains in effect, the Board shall
have power, equal in all respects to that of the shareholders, to adopt, amend
or repeal the Bylaws of OptiCare.

SALE OF ASSETS, MERGER AND CONSOLIDATION

Saratoga. Under the DGCL, a sale, lease or exchange of all or
substantially all of the property or assets of Saratoga requires approval first
by the Saratoga Board and then by a majority of the outstanding stock entitled
to vote thereon. A sale of less than substantially all of the assets of
Saratoga, a merger of Saratoga with a company in which it owns 90% or more of
the outstanding capital stock or reclassification of Saratoga's securities not
involving an amendment to the Saratoga Certificate would not require
stockholder approval. Subject to the provisions of Section 203 of the DGCL
described below under "State Antitakeover Statutes," no vote of the
stockholders of Saratoga would be required if Saratoga were the surviving
corporation of a merger and (1) the merger agreement does not amend the
Saratoga Certificate, (2) each share of stock of Saratoga outstanding
immediately before the merger is to be an identical outstanding or treasury
share of stock of Saratoga stock after the merger and (3) the number of shares
of Saratoga Common Stock to be issued in the merger (or to be issuable upon
conversion of any convertible instruments to be issued in the merger) will not
exceed 20% of the shares of Saratoga Common Stock outstanding immediately
before the merger. If Saratoga fails this test under the DGCL, the
recommendation of the Saratoga Board and the approval of a majority of all
votes entitled to be cast by the Saratoga stockholders on the proposal in
person or by proxy are required to effect a merger.

The Saratoga Certificate authorizes the Saratoga Board to sell, lease or
otherwise dispose of any part or parts of the properties of Saratoga and to
cease to conduct the business connected therewith to the extent permitted by
the DGCL.

OptiCare. Under the CBCA, for a plan of merger or exchange to be approved,
the board of directors must adopt the plan of merger or exchange and recommend
it to the shareholders for approval, unless the board determines that, due to a
conflict of interest or other special circumstances, it should make no
recommendation and communicates the basis for its determination to the
shareholders. According to CBCA Section 33-817(j), for corporations
incorporated before January 1, 1997, including OptiCare, a plan of merger must
be approved by each voting group entitled to vote separately on the plan by at
least two-thirds of the voting power of such voting group, unless the
certificate of incorporation provides otherwise. The OptiCare Certificate makes
inapplicable the two-thirds voting requirements of CBCA Section 33-817(j)
pertaining to a plan of merger or share exchange. Action by shareholders of the
surviving corporation on a plan of merger is not required if (1) the
certificate of incorporation of such surviving corporation will not differ,
except for amendments enumerated in Section 33-796 of the CBCA, from its
certificate of incorporation before the merger, (2) each shareholder of the
surviving corporation whose shares were outstanding immediately before the
effective date of the merger will hold the same number of shares with identical
designations, preferences, limitations and relative rights, immediately after,
(3) the number of voting shares outstanding immediately after the merger, plus
the number of voting

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shares issuable as a result of the merger, will not exceed by more than 20% the
total number of voting shares of the surviving corporation outstanding before
the merger, and (4) the number of participating shares (as defined in the CBCA)
outstanding immediately after the merger, plus the number of participating
shares issuable as a result of the merger, will not exceed by more than 20% the
total number of participating shares outstanding immediately before the merger.

APPRAISAL RIGHTS

Saratoga. The DGCL provides appraisal rights for stockholders who dissent
in a merger or consolidation, subject to certain circumstances. Where the right
of appraisal is available to a stockholder objecting to such a transaction,
appraisal is his or her exclusive remedy as a holder of such shares against
such transactions.

OptiCare. Under the CBCA, a shareholder is entitled to dissent from and
receive the fair value of shares owned in the event of a plan of merger or
share exchange to which the corporation is a party as the corporation whose
shares will be acquired, if shareholder approval is required for the merger or
the share exchange and the shareholder is entitled to vote on the transaction.
See "Description of the Mergers--Stockholders' Appraisal Rights--OptiCare." The
CBCA also provides for appraisal rights (1) in the case of a sale or exchange
of all, or substantially all, of the property of the corporation other than in
the usual and regular course of business if the shareholder is entitled to vote
thereon but not including a sale pursuant to a court order or a sale for cash
all of the net proceeds of which will be distributed to shareholders within one
year of the sale, (2) in the case of amendments to the certificate of
incorporation that materially and adversely affect rights in respect of the
dissenter's shares, and (3) any corporate action taken pursuant to a
shareholder vote to the extent the certificate of incorporation, bylaws or a
resolution of the board of directors provides that shareholders are entitled to
dissent and obtain payment for their shares. Neither the OptiCare Certificate
nor the OptiCare Bylaws contain provisions concerning appraisal and dissenters'
rights.

LIQUIDATION PREFERENCE

Saratoga. Saratoga currently has only one class of capital stock
outstanding, the Saratoga Common Stock, which has no liquidation preference
upon a liquidation, dissolution or winding up of Saratoga.

OptiCare. In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of OptiCare, the holders of OptiCare Class A
Preferred Stock are entitled to receive, prior to distribution of any assets to
holders of any other class or series of stock, $93.68 per share (adjusted for
any stock dividends, combinations or splits with respect to such shares) plus
an amount equal to all declared but unpaid dividends on such shares. If the
amount of assets of OptiCare available for such distribution is less than the
full amount to which the holders of OptiCare Class A Preferred Stock are
entitled, then the entire amount of available assets shall be distributed among
the holders of OptiCare Class A Preferred Stock in proportion to the shares
held by them.

If any assets remain after such distribution to OptiCare Class A Preferred
Stock holders, the holders of OptiCare Class B Preferred Stock shall receive,
prior to distribution of any assets to holders of any other class or series of
stock, $93.68 per share (adjusted for any stock dividends, combinations or
splits with respect to such shares) plus an amount equal to all declared but
unpaid dividends on such shares. If the amount of assets remaining for such
distribution is less than the full amount to which the holders of OptiCare
Class B Preferred Stock are entitled, then the entire amount of remaining
assets shall be distributed among the holders of OptiCare Class B Preferred
Stock in proportion to the shares held by them.

The entire remaining assets, if any, available for distribution after
distribution to holders of OptiCare Class A Preferred Stock and OptiCare Class
B Preferred Stock shall be distributed among the holders of OptiCare Common
Stock and among the holders of OptiCare Preferred Stock in proportion to the
shares of common stock held by them and/or the shares of common stock which
they have a right to acquire upon conversion of their OptiCare Preferred Stock.

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CONFLICT-OF-INTEREST TRANSACTIONS

Saratoga. The DGCL permits transactions involving a Delaware corporation
and an interested director or officer of that corporation so long as (1) the
material facts are disclosed and a majority of disinterested directors
consents, (2) the material facts are disclosed and a majority of shares
entitled to vote thereon consents or (3) the transaction is fair to the
corporation at the time it is authorized by the board of directors, a
committee, or the shareholders. The Saratoga Certificate and the Saratoga
Bylaws contain no provision on conflict-of-interest transactions.

OptiCare. Similar to the DGCL, the CBCA permits transactions involving a
Connecticut corporation and an interested director of that corporation so long
as (1) the transaction is approved by an affirmative vote of a majority, but no
fewer than two, of those qualified directors (as defined in the CBCA) on the
board of directors or on a duly empowered committee thereof who voted on the
transaction after the existence and nature of the director's conflicting
interest and all facts known to him respecting the subject matter of the
conflicting interest transaction that an ordinarily prudent person would
reasonably believe to be material to a judgment about whether or not to proceed
with the transaction are known or disclosed to them, (2) a majority of the
votes entitled to be cast by the holders of all qualified shares (as defined in
the CBCA) were cast in favor of the transaction after the existence and nature
of the director's conflicting interest and all facts known to the interested
director respecting the subject matter of the conflicting interest transaction
that an ordinarily prudent person would reasonably believe to be material to a
judgment about whether or not to proceed with the transaction are known or
disclosed to the holders of such shares, or (3) the transaction, judged
according to the circumstances at the time of commitment, is established to
have been fair to the corporation. Unlike the DGCL, the CBCA contains no
provisions explicitly treating conflict-of-interest transactions to be
undertaken by officers of a corporation.

LIMITATION ON DIRECTORS' LIABILITY

Saratoga. Section 102 of the DGCL allows a corporation to limit or
eliminate the personal liability of directors to the corporation and its
shareholders for monetary damages for breach of fiduciary duty as a director.
However, this provision excludes any limitation on liability (1) for any breach
of the director's duty of loyalty to the corporation or its shareholders, (2)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (3) for intentional or negligent payment of
unlawful dividends or stock purchase or redemption or (4) for any transaction
from which the director derived an improper personal benefit. The Saratoga
Certificate provides for the limitations on director's liability to the fullest
extent permitted by such Section 102.

OptiCare. Section 33-636 of the CBCA allows a corporation to limit the
personal liability of a director to the corporation or its shareholders for
monetary damages for breach of duty as a director to an amount that is not less
than the compensation received by the director for serving the corporation
during the year of the violation if such breach did not (a) involve a knowing
and culpable violation of law by the director, (b) enable the director or an
associate to receive an improper personal economic gain, (c) show a lack of
good faith and a conscious disregard for the duty of the director to the
corporation under circumstances in which the director was aware that his
conduct or omission created an unjustifiable risk of serious injury to the
corporation, (d) constitute a sustained and unexcused pattern of inattention
that amounted to an abdication of the director's duty to the corporation, or
(e) create liability for unlawful distributions. The OptiCare Certificate
provides for the limitation of directors' liability permitted by Section
33-636.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Saratoga. Section 145 of the DGCL provides that a corporation may
indemnify its officers and directors who were or are a party to any action,
suit or proceeding by reason of the fact that he or she was a director,
officer, or employee of the corporation by, among other things, a majority vote
of a quorum consisting of directors who were not parties to such action, suit,
or proceeding, provided that such officers and directors acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation.

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The Saratoga Bylaws authorize indemnification of directors, officers,
employees and agents of Saratoga in a manner consistent with Section 145 of the
DGCL. The Saratoga Bylaws prohibit indemnification of persons adjudged to be
liable to Saratoga unless a court determines otherwise. The Saratoga Bylaws
also authorize the corporation to purchase and maintain insurance on behalf of
any director, officer, employee or agent of Saratoga for liability incurred by
such individuals in their capacity as director, officer, employee or agent of
Saratoga.

As more fully discussed in "Special Meeting--Proposal 4--Indemnification
Proposal," the Saratoga stockholders will be asked to approve an amendment of
the Saratoga certificate of incorporation which will require Saratoga to
indemnify directors, officers and other agents of the combined company to the
fullest extent allowed under applicable law.

OptiCare. Under the CBCA, unless the certificate of incorporation provides
otherwise, a corporation formed prior to January 1, 1997 shall indemnify its
officers, directors, employees or agents against liability incurred by them in
connection with proceedings, if they acted in good faith and, in the case of
conduct in their official capacity, in a manner they reasonably believed to be
in the best interests of the corporation and, in all other cases, that their
conduct was at least not opposed to the best interest of the corporation, and
with respect to criminal proceedings, had no reasonable cause to believe that
their conduct was unlawful. A corporation may advance expenses to its officers,
directors, employees or agents prior to final adjudication, as long as they
deliver to the corporation a written affirmation of their good faith belief
that they have satisfied the required standard of conduct and undertake to
repay the amounts advanced if it is ultimately determined that they were not
entitled to be indemnified. There is no contrary provision in the OptiCare
Certificate concerning indemnification of directors and officers.

STATE ANTITAKEOVER STATUTES

Saratoga. Section 203 of the DGCL ("Section 203") prohibits a "business
combination" (as defined in Section 203, generally including mergers, sales and
leases of assets, issuances of securities and similar transactions) by a
corporation or a subsidiary with an "interested stockholder" (as defined in
Section 203, generally the beneficial owner of 15% or more of a corporation's
voting stock) within 3 years after the person or entity becomes an interested
stockholder, unless (1) prior to the person or entity becoming an interested
stockholder, the business combination or the transaction pursuant to which such
person or entity became an interested stockholder is approved by the board of
directors of the target, (2) upon the consummation of the transaction in which
the person or entity became an interested stockholder, the interested
stockholder holds at least 85% of the voting stock of the corporation
(excluding for purposes of determining the number of shares outstanding, shares
held by persons who are both officers and directors of Saratoga and shares held
by certain employee benefit plans) or (3) after the person become an interested
shareholder the business combination is approved by the Saratoga Board and by
the holders of at least two-thirds of the outstanding voting stock of Saratoga,
excluding shares held by the interested stockholder.

OptiCare. The CBCA provides that any business combination (as generally
defined in Section 33-840(4) of the CBCA, to include (i) merger, consolidations
or share exchanges with, (ii) sales, exchanges, leases, mortgage pledges,
transfers or other dispositions, other than in the usual and regular course of
business, of any assets of the corporation or any of its subsidiaries having an
aggregate book value of 10% or more of the total market value of the
outstanding shares of the corporation or of its net worth to, (iii) issuance or
transfer by the corporation or any of its subsidiaries of any equity securities
of the corporation or any of its subsidiaries which have an aggregate market
value of 5% or more of the total market value of the outstanding shares of the
corporation to, an "interested shareholder" (generally defined as the
beneficial owner of 10% or more of the voting power of the outstanding shares
of voting stock of a corporation) or its affiliates or associates, in each case
subject to certain limitations) must, with certain exceptions, be approved by
affirmative vote of at least the holders of 80% of the voting power of the
outstanding shares of voting stock of the corporation other than voting stock
held by the interested shareholder who is, or whose affiliate or associate is,
a party to the business combination or held by an affiliate or associate of the
interested shareholder. This supermajority voting provision will not be
applicable if either certain fair price criteria set forth in Section 33-842(b)
of the CBCA are met or, unless

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the certificate of incorporation otherwise provides, the board of directors
approves the business combination prior to the time the interested shareholder
became such.

The CBCA has a second business combination statute set forth in Sections
33-843 to 33-845. Pursuant to this statute a resident domestic corporation (as
defined in Section 33-843(11) of the CBCA) may not engage in a business
combination (which is defined similarly to the definition contained in Section
33-840(4) of the CBCA) with an interested shareholder of such corporation for a
period of 5 years following the date that the interested shareholder became
such unless such business combination or the purchase of stock made by such
interested person on the date that the interested shareholder became such is
approved by the board of directors of such corporation and by a majority of the
nonemployee directors, of which there must be at least two, prior to such
interested shareholder's stock acquisition date.

Neither of those two Connecticut business combination statutes now applies
to OptiCare because it does not file reports with the Securities and Exchange
Commission under the Securities Exchange Act.

COMPARISON OF PRIME TO SARATOGA

Saratoga and Prime are both Delaware corporations subject to the
provisions of Delaware law. Prime stockholders, whose rights are governed by
Prime's charter and bylaws and Delaware law, will, upon the completion of the
merger, become stockholders of Saratoga, and their rights will then be governed
by Saratoga's charter and bylaws and Delaware law. The following is a summary
of the material differences in the rights of the stockholders of Saratoga and
Prime, and is qualified in its entirety by reference to Saratoga's charter and
bylaws, Prime's charter and bylaws and Delaware law. Certain topics discussed
below are also subject to federal law and the regulations promulgated
thereunder. Copies of Saratoga's charter and bylaws, Prime's charter and bylaws
are incorporated by reference in this document, and will be sent to
stockholders upon request.

VOTING RIGHTS

Delaware law. Delaware law provides that the vote or written consent of
the holder of majority of the shares of the then outstanding common stock is
required to be authorize a plan of merger or consolidation, unless the charter
or bylaws of a corporation otherwise provide. On substantially all other
matters, the stockholders act by simple majority, unless the charter or bylaws
otherwise provide.

Saratoga. Saratoga has two classes of authorized capital stock, preferred
and common. At the present time, and upon consummation of the mergers, there
will be only one class of issued and outstanding capital stock, i.e., the
Saratoga Common Stock, which has unrestricted voting rights. The board of
directors is authorized to issue so-called "blank check" preferred stock in its
absolute discretion, on such terms as the board may determine, and such
preferred stock may carry voting rights as determined by the board of
directors. See "Description of the Saratoga Common Stock" and "Risk
Factors--Certain Anti-takeover Provisions."

Prime. Prime currently has two classes of issued and outstanding capital
stock, preferred and common. The preferred stock has the right to elect a
member of the Prime board of directors. A condition of the Merger Agreement
requires the holder of the outstanding preferred stock to exchange such
preferred stock for common stock and notes of Saratoga. See "Related
Agreements--Treatment of Prime Class A Preferred Stock."

CLASSIFICATION OF DIRECTORS

Delaware law permits the charter or bylaws of a corporation to provide for
classification of the directors, with the effect that a majority of the
directors will not stand for election at any single annual meeting of
stockholders.

Saratoga. The Saratoga charter and bylaws do not presently provide for a
classified board of directors. Presently, or following the consummation of the
mergers, the board of directors could adopt an amendment of the bylaws to
provide for classification of the board of directors.

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Prime currently has a classified board of directors.

NUMBER OF DIRECTORS

Saratoga. Saratoga's bylaws provide that the number of directors which
shall constitute the Saratoga board of directors shall be determined by a vote
of the Saratoga board of directors. The Saratoga board of directors has fixed
the current number of directors at two.

Prime. Prime's bylaws provide that the number of directors which shall
constitute the Prime board of directors shall be determined by a vote of the
Prime board of directors, but not less than 3 nor more than 17. The Prime board
of directors has fixed the current number of directors at 9.

REMOVAL OF DIRECTORS

Delaware law. Delaware law provides that the stockholders of a corporation
may remove directors with or without cause, with certain exceptions, unless the
charter provides that directors may be removed only for cause. The vote for
removal shall be by a majority of shares entitled to vote at an election of
directors, except that the charter may require a higher vote for removal
without cause.

Saratoga. Saratoga's charter contains no provision affecting the rights of
stockholders to remove directors as permitted by Delaware law.

Prime. Prime's bylaws provide that so long as the board of directors is
classified, a director may be removed only for cause.

FILLING BOARD VACANCIES

Saratoga. Saratoga's bylaws provide that vacancies and newly created
directorships resulting from any increase in the authorized number of directors
may be filled by a majority of the directors then in office, though less than a
quorum, or by a sole remaining director.

Prime. Prime's bylaws provide that vacancies on the board may be filled by
a two-thirds vote of the stockholders or a majority vote of the directors then
in office, even if less than a quorum.

APPRAISAL/DISSENTERS' RIGHTS

Delaware law. Under Delaware law, stockholders of a Delaware corporation
have appraisal rights in a merger or consolidation, except for (i) certain
mergers not requiring any vote by stockholders if the corporation is the
surviving corporation in the merger and (ii) corporations whose shares are
listed on a national securities exchange or designated as a national market
system security on an interdealer quotation systems by the National Association
of Securities Dealers (the "NASD") or held of record by more than 2,000
persons. However, even with respect to shares so listed or so held, appraisal
rights exist if, pursuant to a plan of merger, the stockholder is to receive in
exchange for his shares anything other than stock of the surviving corporation,
stock of any corporation listed on a national securities exchange or designated
as a national market system security on an interdealer quotation system by the
NASD or held of record by more than 2,000 holders or cash in lieu of fractional
shares.

Saratoga. Holders of Saratoga common stock are not entitled to appraisal
rights in connection with the merger, because Saratoga is not a direct party to
the merger--Saratoga's wholly owned subsidiary is the actual party to the
merger.

Prime. Holders of Prime common stock are entitled to appraisal rights in
connection with the merger. Pursuant to Delaware law, any Prime stockholder who
does not wish to accept the merger consideration to be paid pursuant to the
merger agreement may dissent from the merger and elect to have the fair value
of his shares of Prime common stock judicially determined and paid in cash,
provided that he complies with the provisions of Delaware law. See "Description
of the Mergers--Stockholders' Appraisal Rights--Prime."

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AMENDMENT OF CHARTER

Delaware law. Under Delaware law, holders of the outstanding shares of a
class of stock are entitled to vote as a class on any amendment of the
corporation's charter if the amendment would increase or decrease the number of
authorized shares of the class, increase or decrease its par value, or
adversely alter or affect the powers, preferences or rights of the class.
Delaware law further provides, however, that a corporation, in its original
charter, or in any amendment which creates any class of stock or which is
adopted prior to the issuance of any shares of such class, or in any amendment
approved by the affected class, may provide that the number of authorized
shares of any such class may be increased or decreased, but not below the
number of shares of the class then outstanding, by vote of a simple majority of
all the stock of the corporation entitled to vote.

Saratoga. Saratoga's charter contains no provision altering the provisions
of Delaware law with respect to the amendment of the Saratoga charter.

Prime. Prime's charter requires a supermajority vote of two thirds of all
outstanding voting stock to authorize any amendment of Prime's certificate of
incorporation.

AMENDMENT OF BYLAWS

Saratoga. Under Delaware law and Saratoga's bylaws, Saratoga laws may be
amended or repealed or new by-laws may be adopted, by a majority of the holders
of the outstanding capital stock of Saratoga entitled to vote thereon or by a
majority of Saratoga board of directors then in office; provided, however that
notice of such alteration, amendment, repeal or adoption of new bylaws be
contained in the notice of such meeting of stockholder or directors as the case
may be.

Prime. Under Delaware law and Prime's bylaws, the Prime bylaws may be
amended or repealed, or new by-laws adopted, by a two-thirds vote of the Prime
stockholders or majority vote of the Prime board of directors, except that the
Prime board of directors may not amend, repeal or adopt new bylaws regarding an
impending election of directors without notice to the Prime stockholders in the
notice of the next annual meeting for the election of directors.

SPECIAL MEETINGS OF STOCKHOLDERS

Delaware law. Under Delaware law, special meetings of stockholders may be
called by the board of directors or by such person or persons as may be
authorized by a corporation's charter or bylaws.

Saratoga. Saratoga's bylaws provide that special meetings may be called by
any of the chairman, the president, any vice president, the secretary or any
assistant secretary and shall be called by any such officer at the request in
writing of a majority of the Saratoga board of directors or at the request in
writing of stockholders owning a majority of the capital stock of Saratoga
entitled to vote at such meeting.

Prime. Prime's bylaws provide that special meetings may be called by the
directors, chief executive officer or the president, and shall be called by the
chief executive officer, the president or secretary upon written application of
a majority of the directors or by two-thirds of the holders of all outstanding
stock.

ACTION BY STOCKHOLDERS BY WRITTEN CONSENT IN LIEU OF A MEETING

Delaware law. Delaware law permits any action by stockholders to be taken
by majority written consent in lieu of a meeting.

Saratoga. Saratoga's bylaws do not narrow the scope of the authority of
the stockholders to take action by written consent.

Prime. Prime's bylaws provide that any action that may be taken by vote
may be taken without a meeting on written consent, signed by the holders of at
least two-thirds of all the outstanding shares entitled to vote thereon.

Except as discussed above, there are no material differences in the rights
of the stockholders of Saratoga and Prime.

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INDEPENDENT AUDITORS

Saratoga has been advised that representatives of Ernst & Young LLP,
independent auditors for Saratoga for 1998 and Prime for 1998 and 1997, and
Deloitte & Touche LLP, independent auditors of OptiCare for 1998 and 1997, will
attend the Special Meeting, will have an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.

LEGAL MATTERS

Certain legal matters with respect to the validity of the securities
offered hereby will be passed upon for Saratoga by Kane Kessler, P.C., 1350
Avenue of the Americas, New York, New York 10019.

EXPERTS

The consolidated financial statements of Saratoga Resources, Inc. and
Subsidiaries at December 31, 1998, and for the year then ended, appearing in
this Prospectus and Registration Statement have been audited by Ernst & Young
LLP, independent auditors, and at December 31, 1997, and for the year then
ended, by Hein + Associates LLP, independent auditors, as set forth in their
respective reports thereon appearing elsewhere herein, and are included in
reliance upon such reports given on the authority of such firms as experts in
accounting and auditing.

The combined financial statements of OptiCare Eye Health Centers, Inc. and
Affiliate, included in this Proxy Statement/Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report
appearing herein and are included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

The consolidated financial statements of PrimeVision Health, Inc. at
December 31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998, appearing in this Proxy Statement/Prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon (which contains an explanatory
paragraph describing conditions that raise substantial doubt about the
Company's ability to continue as a going concern as described in Note 2 to the
consolidated financial statements) appearing elsewhere herein, and are included
in reliance upon such report given on the authority of such firm as experts in
accounting and auditing.

STOCKHOLDER PROPOSALS

Any stockholder who wishes to submit a proposal for presentation to the
Year 2000 Annual Meeting of Stockholders must submit the proposal to Saratoga
at its present corporate offices, 301 Congress Avenue--Suite 1550, Austin,
Texas 78701, Attention: Mr. Thomas F. Cooke, or to Saratoga c/o OptiCare Health
Systems, Inc. 87 Grandview Avenue, Waterbury, Connecticut 06708, Attention:
Dean J. Yimoyines, M.D., not later than for inclusion, if appropriate, in
the proxy statement and form of proxy to be distributed by management in
connection with the Year 2000 Annual Meeting.

Stockholders are advised that management will be permitted to exercise
discretionary voting authority under proxies it solicits and obtains for the
2000 annual meeting of stockholders with respect to any proposal presented by a
stockholder at such meeting, without any discussion of the proposal in the
company's proxy statement for such meeting, unless the company receives notice
of such proposal at its principal office in Waterbury, Connecticut, not later
than , 2000.

102
<PAGE>

INDEX TO FINANCIAL STATEMENTS

PRO FORMA COMBINED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Introduction ......................................................................... F-2
Pro Forma Combined Balance Sheet ..................................................... F-3
Pro Forma Combined Statement of Operations ........................................... F-5
Notes to Pro Forma Combined Financial Statements ..................................... F-6

SARATOGA RESOURCES, INC. AND SUBSIDIARIES
Reports of Independent Auditors ...................................................... F-8
Consolidated Balance Sheets as of December 31, 1998 and 1997 ......................... F-9
Consolidated Statements of Operations for the years ended December 31, 1998 and 1997 . F-10
Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 1998 and 1997 .......................................................... F-11
Consolidated Statements of Cash Flows for the years ended December 31, 1998 and 1997 . F-12
Notes to Consolidated Financial Statements ........................................... F-13

PRIMEVISION HEALTH, INC.
Report of Independent Auditors ....................................................... F-19
Consolidated Balance Sheets as of December 31, 1998 and 1997 ......................... F-20
Consolidated Statements of Operations for the years ended December 31, 1998, 1997 and
1996 ................................................................................ F-21
Consolidated Statements of Shareholders' (Deficit) Equity for the years ended December
31, 1998, 1997 and 1996 ............................................................. F-22
Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1997 and
1996 ................................................................................ F-23
Notes to Consolidated Financial Statements ........................................... F-24

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATES
Report of Independent Auditors ....................................................... F-38
Combined Balance Sheets as of December 31, 1998 and 1997 ............................. F-39
Combined Statements of Operations for the years ended December 31, 1998, 1997 and
1996 ................................................................................ F-40
Combined Statements of Shareholders' Equity for the years ended December 31, 1998,
1997 and 1996 ....................................................................... F-41
Combined Statements of Cash Flows for the years ended December 31, 1998, 1997 and
1996 ................................................................................ F-42
Notes to Combined Financial Statements ............................................... F-43
</TABLE>

F-1
<PAGE>

SARATOGA RESOURCES, INC.
PRO FORMA COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined balance sheet as of December
31, 1998 and the pro forma combined statement of operations for the year then
ended give effect to the mergers and related transactions upon which the
mergers are conditioned including: (i) substantial completion of the disposal
of Prime's ophthalmology segment; (ii) the restructuring and amendment of
Prime's credit agreement required to cure existing covenant violations and
effect the mergers; (iii) the new administrative services agreement required by
the Settlement Agreement; and, (iv) the disposition of Saratoga subsidiaries.

The Prime acquisition has been accounted for as a reverse acquisition by
Prime of Saratoga at book value with no adjustments reflected to historical
values. The acquisition of OptiCare by Saratoga has been accounted for under
the purchase method of accounting with the excess of purchase price over
estimated fair value of the net assets acquired being recorded as goodwill.

Pro forma adjustments are based upon preliminary estimates, available
information and certain assumptions that management deems appropriate.
Management does not expect material changes to purchase accounting and other
pro forma adjustments upon final allocation of purchase price and completion of
the mergers and related transactions. The unaudited pro forma combined
financial information presented herein is not necessarily indicative of the
results of operations or financial position that the combined company would
have obtained had such events occurred at the beginning of the period, as
assumed, or of the future results or financial position of the combined
company.

The pro forma combined financial statements should be read in conjunction
with the audited financial statements of Prime, OptiCare and Saratoga contained
herein.

F-2
<PAGE>

SARATOGA RESOURCES, INC.
PRO FORMA COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1998

ASSETS

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PRIME OPTICARE SARATOGA ADJUSTMENTS COMBINED
------------- -------------- ------------ ---------------------- -------------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash & cash
equivalents .................. $ 5,955,527 $ 938,927 $ 290,000 $ (2,500,000)(a) $ 544,454
(2,000,000)(b)
(2,000,000)(c)
(140,000)(d)
Trade receivables, net ......... 4,571,392 6,349,548 10,920,940
Inventories .................... 1,359,524 1,717,964 3,077,488
Investment in
discontinued
operations ................... 5,582,428 (5,582,428)(e)
Other current assets ........... 2,768,062 1,191,294 21,000 (21,000)(d) 3,959,356
----------- ----------- --------- ------------- -----------
Total current assets ......... 20,236,933 10,197,733 311,000 (12,243,428) 18,502,238
PROPERTY AND
EQUIPMENT, net ................. 4,510,254 5,766,167 36,000 (36,000)(d) 10,276,421
Intangible assets, net .......... 1,356,069 3,301,744 11,013,123 (a) 31,026,726
2,000,000 (c)
(451,916)(j)
13,807,706 (i)
OTHER ASSETS ................... 453,316 249,273 1,406,250 (f) 2,108,839
----------- ----------- ------------- -----------
TOTAL ASSETS ................. $26,556,572 $19,514,917 $ 347,000 $ 15,495,735 $61,914,224
=========== =========== ========= ============= ===========
</TABLE>

F-3
<PAGE>

SARATOGA RESOURCES, INC.
PRO FORMA COMBINED BALANCE SHEET (CONTINUED)
AS OF DECEMBER 31, 1998

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PRIME OPTICARE SARATOGA ADJUSTMENTS COMBINED
---------------- -------------- ---------- ----------------------- --------------
<S> <C> <C> <C> <C> <C>
CURRENT LIABILITIES:
Bank debt ........................ $ 39,750,850 $ 1,800,000 $ 5,000 $ (11,924,177)(e)
(2,000,000)(b)
(2,861,809)(e)
(5,000)(d)
(24,764,864)(h)
Accounts payable and
accrued expenses ............... 9,701,918 3,290,383 10,000 (10,000)(d) $16,863,425
3,871,124 (e)
Other ............................ 1,745,250 1,789,470 3,534,720
------------- ----------- -------- -------------- -----------
Total current liabilities ......... 51,198,018 6,879,853 15,000 (37,694,726) 20,398,145
Long-term bank debt ............... 24,764,864 (h) 24,764,864
Convertible subordinated
debt ............................. 4,000,000 (g) 4,000,000
Seller debt ....................... 1,135,462 5,067,720 (e) 6,203,182
Other long-term debt and
capital leases ................... 846,471 16,000 2,000,000 (g) 2,394,555
(451,916)(j)
(16,000)(d)
Deferred tax liability ............ 2,055 2,055
------------- ----------- -------- -------------- -----------
Total liabilities ................. 52,046,544 8,015,315 31,000 (2,330,058) 57,762,801
Mandatorily
redeemable preferred
stock ............................ 9,200,000 (9,200,000)(g)
Stockholders' equity
(deficit) ........................ (34,689,972) 11,499,602 316,000 264,714 (e) 4,151,423
8,513,123 (a)
3,200,000 (g)
(166,000)(d)
1,406,250 (f)
13,807,706 (i)
------------- ----------- -------- -------------- -----------
Total liabilities,
preferred stock and
stockholders' equity
(deficit) ...................... $ 26,556,572 $19,514,917 $347,000 $ 15,495,735 $61,914,224
============= =========== ======== ============== ===========
</TABLE>

F-4
<PAGE>

SARATOGA RESOURCES, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PRIME OPTICARE SARATOGA ADJUSTMENTS COMBINED
---------------- -------------- -------------- ----------------------- ---------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Net revenues .............. $ 64,612,298 $34,744,629 $ 20,000 $ (20,000)(d) $103,981,886
4,624,959 (k)

COSTS AND EXPENSES:
Compensation
expense ................. 9,275,371 20,178,772 4,624,959 (k) 34,079,102
Other operating
expenses ................ 52,226,689 14,443,525 351,000 (351,000)(d) 66,670,214

Interest expense, net ..... 4,498,081 (73,477) (18,000) 18,000 (d) 2,701,967
(2,622,716)(l)
160,000 (m)
360,000 (n)
380,079 (o)
Depreciation and
amortization ............ 1,417,296 1,063,074 11,000 (11,000)(d) 3,761,032
367,104 (p)
632,308 (q)
281,250 (r)
------------ ----------- ---------- -------------- ------------
Total costs and
expenses ............... 67,417,437 35,611,894 344,000 3,838,984 107,212,315
------------ ----------- ---------- -------------- ------------
Income (loss) from
continuing
operations before
income taxes ............ (2,805,139) (867,265) (324,000) 765,975 (3,230,429)
Provision for (benefit
from) income
taxes ................... 433,516 (364,877) (1,360,811)(s) (1,292,172)
------------ ----------- ---------- -------------- ------------
Net income (loss)
from continuing
operations .............. $ (3,238,655) $ (502,388) $ (324,000) $ 2,126,786 $ (1,938,257)
============ =========== ========== ============== ============

Pro forma basic
weighted average
shares outstanding ...... 3,465,292 (3,240,292)(t) 9,000,000
8,775,000 (u)
Pro forma basic loss
per share ............... $ (0.09) $ (0.22)

</TABLE>

F-5
<PAGE>

SARATOGA RESOURCES, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS

(a) Adjustment to reflect consideration for the new administrative
services agreement required by the Settlement Agreement.

$ 2,500,000 Cash
8,513,123 Common equity issued by Prime
-----------
$11,013,123
===========

(b) Adjustment to reflect the use of cash on hand to pay down bank
indebtedness in conjunction with the anticipated amendment to the
Prime credit agreement.

(d) Adjustment to reflect disposal of existing Saratoga business
required by the Merger Agreement.

(e) Adjustment to reflect the disposal of the ophthalmology segment of
Prime required to be substantially performed as a condition to the
mergers.

The amounts are estimated based upon signed agreements and ongoing
negotiations.

<TABLE>
<S> <C>
$ 11,924,177 Cash to be received and used to pay down indebtedness
(5,067,720) New subordinated long term debt issued to physicians
2,861,809 New promissory notes from the physicians assigned to the lender, resulting in an
immediate reduction in Prime indebtedness
(264,714) Issuance of new Prime common equity
------------
9,453,552 Total consideration
(3,871,124) Expenses associated with the disposal
------------
$ 5,582,428
============
</TABLE>

(f) Adjustment to reflect common equity in Prime to be issued to the
lender as deferred financing fees for the anticipated amendment to
the credit agreement.

(g) Adjustment to reflect the cancellation of the Prime preferred stock
in conjunction with the mergers. In exchange for such cancellation
the following will be issued:

<TABLE>
<S> <C>
$3,200,000 Common equity issued by Prime
4,000,000 Convertible subordinated debt
2,000,000 Subordinated long term debt
----------
$9,200,000
==========
</TABLE>

(h) Adjustment to reflect the anticipated classification of the bank
debt as long-term.

(i) Adjustment to reflect the purchase of OptiCare via the issuance of
approximately 4.87 million shares of Saratoga:

<TABLE>
<S> <C>
$ 25,307,308 Common equity issued by Saratoga
(11,499,602) Estimated fair value of net assets acquired
-------------
13,807,706 Goodwill
=============
</TABLE>
<PAGE>
(j) Adjustment to reflect the cancelation of note payable to related
parties in conjunction with the settlement agreement and the new
administrative services agreement.

(k) Adjustment to reflect reclassification of Prime physician
compensation under new method of accounting in conjunction with the
new administrative services agreement.

(l) Adjustment to reflect reduction of interest expense based upon
anticipated new bank indebtedness of 7.5% per annum.

(m) Adjustment to reflect estimated interest expense of 8% per annum on
the $2 million of subordinated promissory notes. See Note (g).

(n) Adjustment to reflect estimated interest expense on the convertible
subordinated debt of 9% per annum. See Note (g).

(o) Adjustment to reflect estimated interest expense on new physician
debt of 7.5% per annum. See Note (e).

F-6
<PAGE>

(p) Adjustment to reflect amortization of intangibles recorded on the
new administrative service agreement referenced in Note (a) over an
estimated contract term of thirty years on straight line basis.

(q) Adjustment to reflect amortization of goodwill recorded on the
purchase of OptiCare referenced in Note (i) over an estimated useful
life of 25 years.

(r) Adjustment to reflect the amortization of deferred financing fees
reflected in Note (f) over the anticipated term of the amended
credit agreement of five years.

(s) Adjustment to reflect estimated tax at the statutory rate of 40%.

(t) Adjustment to reflect reverse stock split of Saratoga contemplated
herein and in conjunction with the mergers.

(u) Adjustment to reflect the issuance of new Saratoga common shares to
effect mergers.

F-7
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors
Saratoga Resources, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Saratoga
Resources, Inc. and Subsidiaries as of December 31, 1998, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Saratoga Resources, Inc. and Subsidiaries at December 31, 1998, and the
consolidated results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP

Austin, Texas
March 31, 1999

F-8
<PAGE>

INDEPENDENT AUDITORS REPORT

Board of Directors and Stockholders
Saratoga Resources, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheet of Saratoga
Resources, Inc. and Subsidiaries as of December 31, 1997 and the related
consolidated statements of operations, changes in stockholders' equity
(deficit), and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based upon our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Saratoga Resources, Inc.
and Subsidiaries as of December 31, 1997, and the results of their operations
and their cash flows for year then ended, in conformity with generally accepted
accounting principles.

Hein + Associates LLP

/s/ Hein + Associates LLP

Houston, Texas
January 15, 1998

F-9
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------
1998 1997
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................................. $ 290 $ 666
Marketable securities ................................................. 11 --
Trade receivables, less allowance for doubtful accounts of $23
at December 31, 1998 and 1997 ....................................... -- --
Investment in past due accounts receivable ............................ 10 --
------- -------
Total current assets ................................................ 311 666
------- -------
EQUIPMENT, NET OF ACCUMULATED DEPRECIATION 36 44
------- -------
TOTAL ASSETS ........................................................... $ 347 $ 710
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities .............................. $ 10 $ 2
Accrued legal ......................................................... -- 16
Current maturities of debt ............................................ 5 4
------- -------
Total current liabilities ........................................... 15 22
------- -------
Long-term debt, net of current portion ................................ 16 21
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value; 5,000,000 shares authorized ......... -- --
Common Stock, $.001 par value; 50,000,000 shares authorized,
3,465,292 shares issued and outstanding at December 31,
1998 and 1997 ....................................................... 3 3
Additional paid-in capital ............................................ 2,490 2,490
Accumulated deficit ................................................... (2,148) (1,824)
Treasury stock, at cost ............................................... (2) (2)
Other comprehensive loss .............................................. (27) --
--------- ---------
Total stockholders' equity .......................................... 316 667
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............................. $ 347 $ 710
========= =========
</TABLE>

See accompanying notes.

F-10
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31
---------------------
1998 1997
--------- ---------
<S> <C> <C>
REVENUES:
Gain on sale of marketable securities ........................ $ 19 $ --
Interest income .............................................. 19 31
Other ........................................................ 1 4
------ ------
39 35
COSTS AND EXPENSES:
Depreciation ................................................. 11 7
General and administrative ................................... 350 446
Loss on marketable securities ................................ 1 --
Interest expense ............................................. 1 9
------ ------
363 462
------ ------
Gain arising from settlement of lawsuit ...................... -- 309
------ ------
Loss before income taxes ..................................... (324) (118)
Income tax benefit ........................................... -- --
------ ------
Net loss ..................................................... $ (324) $ (118)
====== ======
Basic and diluted loss per share: ............................ $ (.09) $ (.03)
====== ======
Weighted-average number of common shares outstanding ......... 3,465 4,260
====== ======
</TABLE>

See accompanying notes.

F-11
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL OTHER TOTAL
------------------------ PAID-IN ACCUMULATED TREASURY COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT STOCK LOSS EQUITY
------------- ---------- ------------ ------------- ---------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31,
1996 ............................ 6,809 $ 7 $2,909 $(1,706) $(2) $ -- $1,208
Acquisition of stock arising from
settlement of lawsuit .......... (2,465) (3) (244) -- -- -- (247)
Purchase of stock arising from
settlement of lawsuit .......... (8) -- (1) -- -- -- (1)
Purchase of stock from former
director ....................... (871) (1) (174) -- -- -- (175)
Net loss ........................ -- -- -- (118) -- -- (118)
-------- ----- ------ ------- --- --- -------
BALANCES AT DECEMBER 31,
1997 ............................ 3,465 3 2,490 (1,824) (2) -- 667
Net loss ........................ -- -- -- (324) -- -- (324)
Unrealized loss on marketable
securities ..................... -- -- -- -- -- (27) (27)
----
Comprehensive loss .............. -- -- -- -- -- -- (351)
-------- ----- ------ ------- --- ---- -----
BALANCES AT DECEMBER 31,
1998 ............................ 3,465 $ 3 $2,490 $(2,148) $(2) $ (27) $ 316
======== ===== ====== ======= === ===== =====
</TABLE>

See accompanying notes.

F-12
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss .................................................................. $(324) $(118)
Adjustments to reconcile net loss to net cash used in operating activities:
Realized gain on sale of marketable securities, net ..................... (18) --
Depreciation ............................................................ 11 7
Provision for doubtful accounts ......................................... -- 23
Gain arising from settlement of lawsuit ................................. -- (309)
Changes in operating assets and liabilities:
Trade receivables ...................................................... -- 52
Investment in past due accounts receivable ............................. (10) --
Accounts payable and accrued liabilities ............................... 8 (154)
Accrued legal .......................................................... (16) (3)
----- --------
Net cash used in operating activities ................................ (349) (502)
----- -------
INVESTING ACTIVITIES
Purchase of equipment ..................................................... (3) (5)
Purchase of marketable securities ......................................... (62) --
Sale of marketable securities ............................................. 42 --
------- -------
Net cash used in investing activities ................................ (23) (5)
------- --------
FINANCING ACTIVITIES
Purchase of stock from former director .................................... $ -- $(175)
Purchase of stock in settlement of lawsuit ................................ -- (1)
Payments on borrowings .................................................... (4) (1)
-------- --------
Net cash used in financing activities ................................ (4) (177)
-------- -------
Net decrease in cash and cash equivalents .................................. (376) (684)
Cash and cash equivalents at beginning of year ............................. 666 1,350
------- -------
Cash and cash equivalents at end of year ................................... $ 290 $ 666
======= =======
Supplemental Cash Flow Information:
Cash paid for interest .................................................... $ 1 $ 9
Cash paid for income taxes ................................................ $ -- $ --
Equipment acquired with long-term debt .................................... $ -- $ 26
</TABLE>

See accompanying notes.

F-13
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Saratoga Resources, Inc., a Delaware corporation, (the "Company", "Saratoga" or
the "Registrant") had traditionally been engaged in oil and gas exploration and
development of properties located in far southwest and east Texas and in
Louisiana.

During 1997 the Company entered into a purchase and sale agreement for the
acquisition of certain oil and gas properties for a purchase price of $27.5
million. The Company was ultimately unsuccessful in consummating the
acquisition, but was awarded a $400,000 break-up fee, which has been recorded
as a reduction of general and administrative expenses during 1997.

USE OF ESTIMATES

The preparation of the Company's consolidated financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
these estimates.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company and all of its wholly-owned and majority-owned subsidiaries. All
significant intercompany accounts and transactions are eliminated in
consolidation.

CASH AND CASH EQUIVALENTS

The Company considers all investments with maturities of ninety days or less
when purchased to be cash equivalents.

MARKETABLE SECURITIES

All marketable securities are classified as available-for-sale and are
available to support current operations or to take advantage of other
investment opportunities. These securities are stated at estimated fair value
based upon market quotes. Unrealized gains and losses, net of tax, are computed
on the basis of specific identification and are included as a separate
component of stockholders' equity. Realized gains, realized losses, and
declines in value, judged to be other-than-temporary, are included in Other
Income. The cost of securities sold is based on the specific identification
method and interest earned is included in Interest Income.

INVESTMENT IN PAST DUE ACCOUNTS RECEIVABLE

On November 12, 1998, the Company's wholly owned subsidiary Saratoga Holdings
I, Inc. acquired a portfolio of past due accounts receivable for approximately
$10,300 and recorded it at cost. These receivables represent amounts previously
due various major retail businesses arising from the sale of various consumer
products. The face amount of these receivables totals $223,907. The ultimate
collection of these receivables will depend on a variety of factors, many of
which are outside the Company's control. Any collections will reduce the asset
balance until it is $-0-, with any remaining collections recorded as revenue.

EQUIPMENT

Equipment is recorded at cost less accumulated depreciation. Depreciation of
equipment is computed using the straight-line basis over the five year
estimated useful life of the assets.

F-14
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Ordinary maintenance and repairs are charged to expense, and expenditures which
extend the physical or economic life of the assets are capitalized. Gains or
losses on disposition of assets are recognized in income and the related assets
and accumulated depreciation accounts are adjusted accordingly.

INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. This
statement prescribes the use of the liability method whereby deferred tax asset
and liability account balances are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

LOSS PER SHARE

The Company follows the provisions of SFAS No. 128, Earnings Per Share. Basic
net loss per share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted net loss per share is calculated using the weighted average
number of outstanding shares of common stock plus dilutive common stock
equivalents. Diluted net loss per share has not been presented as the effect of
the assumed exercise of warrants is antidilutive due to the Company's net loss.
As such, the numerator and the denominator used in computing both basic and
diluted pro forma net loss per share allocable to holders of common stock are
equal.

COMPREHENSIVE LOSS

Effective January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income, which requires disclosure of total non-stockholder
changes in equity in interim periods and additional disclosures of the
components of non-stockholder changes in equity on an annual basis. Total
comprehensive loss was as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1998 1997
---------- ----------
<S> <C> <C>
Net loss ......................................... $ (324) $ (118)
Unrealized loss on marketable securities ......... (27) --
------ ------
Comprehensive loss ............................... $ (351) $ (118)
====== ======
</TABLE>

SEGMENTS

In 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosures About Segments of an Enterprise and Related Information, which
establishes reporting standards for a company's operating segments in annual
financial statements and the reporting of selected information about operating
segments in financial statements. The adoption of SFAS No. 131 had no effect on
the disclosure of segment information as the Company continues to consider its
business activities as a single segment.

CONCENTRATIONS OF CREDIT RISK

The Company maintains in a single bank deposits which exceed the amount of
federal deposit insurance available. Management believes the possibility of
loss on these deposits is minimal.

RECLASSIFICATIONS

Certain reclassifications have been made in prior year amounts to conform to
the current year's presentation.

F-15
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. EQUIPMENT

Equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
--------------
1998 1997
------ -----
<S> <C> <C>
Office equipment ...................... $25 $22
Automobile ............................ 31 31
--- ---
56 53
Less accumulated depreciation ......... 20 9
--- ---
$36 $44
=== ===
</TABLE>

3. LONG-TERM DEBT

As of December 31, 1998, long-term debt consisted of a note payable to a bank
due in monthly installments of $564, including interest at 10%. The note
payable is due August 27, 2002 and is collateralized by an automobile.

Future maturities of the long-term debt as of December 31, 1998 are as follows:
$5,000 in 1999; $6,000 in 2000; $6,000 in 2001; and $4,000 in 2002.

4. LEASE OBLIGATIONS

At December 31, 1998 the Company maintains an office in Austin, Texas on a
month-to-month basis at a current rate of $2,175 per month. The Company also
leases an office in Houston, Texas from a director of the Company on a
month-to-month basis at no charge.

5. INCOME TAXES

As of December 31, 1998, the Company had federal net operating loss
carryforwards of approximately $420,000. The net operating losses will expire
beginning in 2012, if not utilized.

Utilization of the net operating losses may be subject to a substantial annual
limitation due to the "change in ownership" provisions of the Internal Revenue
Code of 1986. The annual limitation, if applicable, may result in the
expiration of net operating losses.

F-16
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred taxes for the years ended December 31, 1998 and 1997
are as follows:

<TABLE>
<CAPTION>
1998 1997
------------- ------------
<S> <C> <C>
Deferred tax liabilities:
Depreciable assets ........................................ $ (717) $ --
---------- ---------
Total deferred tax liabilities ............................. (717) --
Deferred tax assets:
Tax carryforwards ......................................... 155,414 40,000
Accrual to cash adjustment ................................ 3,700 --
---------- ---------
Total deferred tax assets .................................. 159,114 40,000
---------- ---------
Net deferred tax assets before valuation allowance ......... 158,397 40,000
Valuation allowance for deferred tax assets ................ (158,397) (40,000)
========== =========
Net deferred tax assets (liabilities) ...................... $ -- $ --
========== =========
</TABLE>

The Company has established valuation allowances equal to the net deferred tax
assets due to uncertainties regarding their realization. The valuation
allowance increased by approximately $118,000 during the year ended December
31, 1998 due to net operating losses which were not benefited.

The reconciliation of income tax attributable to continuing operations at the
U.S. federal statutory tax rates to income tax expense is:

<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Pre-tax book income ........................... 34.0% 34.0%
State taxes (net of federal benefit) .......... 3.0% --
Permanent items and other ..................... ( 0.4)% --
Application of valuation allowance ............ (36.6)% (34.0)%
===== =====
0.0% 0.0%
===== =====
</TABLE>

6. LITIGATION

From May, 1996 to May, 1997, the Company was involved in litigation with Joseph
T. Kaminski ("Kaminski"), a former executive officer and director of the
Company. As previously reported by the Company in a report filed with the
Securities and Exchange Commission, the most recent of which was Form 8-K
(filed March 14, 1997), the Company and two of its directors, Thomas F. Cooke
and Randall F. Dryer, entered into a settlement agreement and full and final
release (the "settlement agreement") dated March 10, 1997 with Kaminski, in
full settlement of all matters concerning the lawsuits.

Pursuant to the terms of the settlement agreement, Kaminski transferred all of
his equity interest in the Company, consisting of 2,465,371 shares of common
stock and 100,000 stock warrants, to the Company and forgave amounts owed him
by the Company of $62,000. As a result of this settlement, the Company recorded
a gain of $309,000. Kaminski also agreed to sell to the Company 8,000 shares of
the Company's common stock held in trust in exchange for approximately $1,000.
Both the Company and Kaminski agreed to release and discharge any and all
claims or causes of action of every nature existing between the parties.

F-17
<PAGE>

SARATOGA RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Accordingly, all claims and counterclaims by and against the Company and its
two directors Thomas F. Cooke and Randall F. Dryer have been dismissed, and
there is no pending litigation against the Company or its directors at December
1998 or 1997.

7. STOCKHOLDERS' EQUITY

Preferred stock may be issued from time to time in one or more series. Prior to
each issuance, the board of directors is authorized to determine the number of
shares, relative powers, preferences, rights and qualifications, limitations or
restrictions of all shares of such series. Shares of any series of preferred
stock which have been acquired by the Company or which, if convertible or
exchangeable, have been converted into or exchanged for shares of authorized
and unissued shares of stock of another class, would have the status of
authorized and unissued shares of preferred stock, subject to the conditions
adopted by the board of directors of the Company.

The Company issued warrants to a former consultant to purchase 6,667 shares of
common stock for an exercise price of 120% of the share price that is offered
to the public in any public offering. These warrants were issued in December,
1993 and have no expiration date. The Company issued warrants to the Company's
Chairman to purchase 100,000 shares of common stock for an exercise price of
$1.60 per share. These warrants were issued in December, 1994 and expire in
May, 1999.

8. PENDING TRANSACTIONS

On December 22, 1998 the Company entered into letters of intent with
PrimeVision Health, Inc., a vertically integrated vision services company, and
OptiCare Eye Health Centers, Inc., a provider of consulting, administrative and
other support services to optometry eyecare centers located in Connecticut,
whereby the Company would acquire Prime and OptiCare in an all-stock
transaction by issuing 97.5% of the Company's common stock to the shareholders
of Prime and OptiCare. However, the Company has not yet entered into a formal
binding agreement for these acquisitions.

As contemplated by the PrimeVision/OptiCare merger, Saratoga-Delaware proposes
to contribute substantially all of its assets to Saratoga-Texas, its wholly-
owned subsidiary. Saratoga-Texas will continue its operations in the energy
industry, utilizing its database for oil and gas prospect evaluation and
development. Saratoga-Delaware then proposes to spin-off all of the stock to
Saratoga-Texas to the current stockholders of Saratoga-Delaware on a
one-for-one basis to provide Saratoga-Texas with its own separate management,
control and incentive structure.

Saratoga-Delaware formed Saratoga Holdings in November 1998 as a wholly-owned
subsidiary and has caused it to commence operations in the business of
acquiring, reselling, managing and collecting portfolios of delinquent and
defaulted accounts receivable. Saratoga-Delaware has filed a registration
statement with the Securities and Exchange Commission under the Securities Act
of 1933 to register the proposed spin-off of approximately 90% of the common
stock of Saratoga Holdings to the stockholders of Saratoga-Delaware on a
one-for-one basis. The remaining 10% will be contributed to Saratoga-Texas.

F-18
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Prime Vision Health, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Prime
Vision Health, Inc. and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of operations, shareholders' (deficit) equity
and cash flows for each of the three years in the period ended December 31,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Prime Vision Health, Inc. and subsidiaries at December 31, 1998 and 1997,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
Prime Vision Health, Inc. will continue as a going concern. As more fully
described in Note 2, the Company has incurred recurring operating losses and
has a working capital deficiency. In addition, the Company has not complied
with certain covenants of its loan agreement with a bank. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 2. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the outcome
of this uncertainty.

/s/ ERNST & YOUNG LLP
May 7, 1999
Raleigh, NC

F-19
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------
1998 1997
---------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................................. $ 5,955,527 $ 2,478,142
Accounts receivable, less allowance of $441,476 in 1998 and
$334,085 in 1997..................................................... 4,571,392 4,091,446
Inventories ........................................................... 1,359,524 2,272,073
Net assets of discontinued operations ................................. 5,582,428 69,472,927
Income tax receivable ................................................. 1,088,502 --
Deferred tax asset, current ........................................... 1,499,595 545,274
Other current assets .................................................. 179,965 414,202
------------- ------------
Total current assets ................................................. 20,236,933 79,274,064
Property and equipment, net ............................................ 4,510,254 4,825,044
Intangible assets, net ................................................. 1,356,069 1,630,770
Notes receivable from related parties, less current portion ............ 175,506 159,027
Deferred tax asset, non-current ........................................ 122,903 344,722
Other assets ........................................................... 4,907 13,169
Restricted cash ........................................................ 150,000 150,000
------------- ------------
TOTAL ASSETS ........................................................... $ 26,556,572 $ 86,396,796
============= ============
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued expenses ................................. $ 4,903,381 $ 3,431,732
Accrued salaries and related expenses ................................. 3,404,126 3,381,086
Income tax payable .................................................... -- 280,817
Deferred income tax liability, current ................................ 1,620,443 581,198
Current portion of long-term debt ..................................... 39,784,074 30,628
Current portion of capital lease obligations .......................... 91,583 85,708
Interest payable ...................................................... 1,394,411 497,706
------------- ------------
Total current liabilities ............................................ 51,198,018 8,288,875
Capital lease obligations, less current portion ........................ 202,119 128,238
Long-term debt, less current portion ................................... 192,436 45,928,118
Deferred tax liability ................................................. 2,055 27,142,344
Notes payable to related party ......................................... 451,916 363,431
------------- ------------
TOTAL LIABILITIES ...................................................... 52,046,544 81,851,006
Mandatorily redeemable preferred stock, $.01 par value, 5,000,000
shares authorized, 8,000 shares issued and outstanding ................ 9,200,000 --
Shareholders' (deficit) equity:
Common stock, $.01 par value, 15,000,000 and 80,000,000 shares
authorized; 7,409,574 and 6,916,270 shares issued and
outstanding ......................................................... 74,096 69,163
Additional paid-in capital ............................................ 5,790,232 5,647,527
Accumulated deficit ................................................... (40,554,300) (1,170,900)
------------- ------------
Total shareholders' (deficit) equity ................................... (34,689,972) 4,545,790
------------- ------------
Total liabilities, preferred stock and shareholders' (deficit) equity .. $ 26,556,572 $ 86,396,796
============= ============
</TABLE>

See accompanying notes.

F-20
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1998 1997 1996
---------------- ---------------- ----------------
<S> <C> <C> <C>
REVENUES ................................................... $ 64,612,298 $ 58,346,038 $ 52,156,761
COST AND EXPENSES:
Cost of sales ............................................. 46,231,126 42,003,409 37,418,325
Salaries, wages and benefits .............................. 9,275,371 9,129,948 7,769,806
General and administrative expenses ....................... 5,995,563 5,195,798 5,492,744
Depreciation and amortization ............................. 1,417,296 1,220,085 1,331,254
Interest expense .......................................... 4,498,081 3,856,261 1,039,126
------------- ------------ ------------
Total costs and expenses ................................. 67,417,437 61,405,501 53,051,255
------------- ------------ ------------
Loss from continuing operations before minority interest
and income taxes .......................................... (2,805,139) (3,059,463) (894,494)
Minority interest .......................................... -- 9,166 76,796
------------- ------------ ------------
Loss from continuing operations before income taxes ........ (2,805,139) (3,068,629) (971,290)
Income tax (benefit) expense ............................... 433,516 (1,034,995) (204,577)
------------- ------------ ------------
Loss from continuing operations ............................ (3,238,655) (2,033,634) (766,713)
Discontinued operations:
Income (loss) from discontinued operations (Note 3) ....... (11,287,396) 628,373 (1,437,464)
Loss from disposal of discontinued operations, net
of tax .................................................. (23,564,016) -- --
------------- ------------ ------------
Net loss .................................................. $ (38,090,067) $ (1,405,261) $ (2,204,177)
============= ============ ============
Loss per common share (basic and diluted):
Loss from continuing operations ............................ $ (0.80) $ (0.34) $ (0.35)
Net loss .................................................. $ (5.64) $ (0.24) $ (1.00)
Weighted average shares outstanding ........................ 7,190,762 5,914,374 2,209,839
</TABLE>

See accompanying notes.

F-21
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY

<TABLE>
<CAPTION>
RETAINED
ADDITIONAL EARNINGS
PREFERRED COMMON PAID-IN (ACCUMULATED DEFERRED
STOCK STOCK CAPITAL DEFICIT) COMPENSATION TOTAL
----------- ----------- --------------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 ...... $ -- $ 8,647 $ 183,744 $ 2,438,538 $ (104,778) $ 2,526,151
Issuance of 45,511 shares of
common stock ................... 455 455
Issuance of 3,966,771 shares
of preferred stock in
exchange for 910,221 shares
of common stock in
connection with the merger
with PrimeVision Group ......... $ 39,668 (9,102) (30,566)
Issuance of stock warrant ........ 124,562 124,562
Issuance of 3,166,465 shares
of common stock ................ 31,665 4,099,803 4,131,468
Amortization of deferred
compensation ................... 104,778 104,778
Net loss for 1996 ................ (2,204,177) (2,204,177)
--------- -------- ------------ ------------- ---------- -------------
Balance at December 31, 1996 ...... 39,668 31,665 4,377,543 234,361 -- 4,683,237
Issuance of 1,600,000 shares
of common stock in
exchange for 3,966,771
shares of preferred stock ...... (39,668) 16,000 (26,332) (50,000)
Purchase of minority interest..... 17 1,596 1,613
Issuance of stock warrant ........ 115,093 115,093
Administrative Services
Agreement renegotiation ........ (969,425) (969,425)
Issuance of 2,148,143 shares
of common stock ................ 21,481 2,149,052 2,170,533
Net loss for 1997 ................ (1,405,261) (1,405,261)
--------- -------- ------------ ------------- ---------- -------------
Balance at December 31, 1997 ...... -- 69,163 5,647,527 (1,170,900) -- 4,545,790
Issuance of stock warrant in
connection with the
issuance of redeemable
preferred stock ................ 1,293,333 1,293,333
Accretion of preferred stock ..... (1,293,333) (1,293,333)
Preferred stock dividends ........ (1,200,000) (1,200,000)
Issuance of 493,304 shares of
common stock ................... 4,933 49,372 54,305
Net loss for 1998 ................ (38,090,067) (38,090,067)
--------- -------- ------------ ------------- ---------- -------------
Balance at December 31, 1998 ...... $ -- $ 74,096 $ 5,790,232 $ (40,554,300) $ -- $ (34,689,972)
========= ======== ============ ============= ========== =============
</TABLE>

See accompanying notes.

F-22
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------
1998 1997 1996
---------------- ---------------- ----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss from continuing operations ........................ $ (3,238,655) $ (2,033,634) $ (766,713)
Net income (loss) from discontinued operations ............. (11,287,396) 628,373 (1,437,464)
Adjustments to reconcile net loss from continuing
operations to net cash provided by (used in)
operating activities:
Depreciation ............................................. 1,133,322 1,035,661 1,177,848
Amortization ............................................. 283,974 184,424 153,406
Loss on disposal of discontinued operations .............. (23,564,016) -- --
Loss on sale of equipment ................................ -- -- 14,478
Changes in operating assets and liabilities:
Accounts receivable ..................................... (479,946) (349,735) (1,888,564)
Inventories ............................................. 912,549 611,388 (271,780)
Other current assets .................................... (1,808,584) (645,341) 135,569
Other assets ............................................ 230,081 (49,179) 766,387
Accounts payable and accrued expenses ................... 3,276,131 4,357,026 1,363,784
Cash provided by (used in) discontinued
operations .............................................. 36,750,210 (27,217,408) (9,484,098)
------------- ------------- -------------
Net cash provided by (used in) operating activities ......... 2,207,670 (23,478,425) (10,237,147)
------------- ------------- -------------
INVESTING ACTIVITIES:
Purchases of equipment -- continuing operations ............ (599,462) (1,851,237) (375,244)
Additions to intangible assets -- continuing
operations ............................................... (9,273) -- (708,476)
------------- ------------- -------------
Net cash used in investing activities ..................... (608,735) (1,851,237) (1,083,720)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt ................... 17,764 28,809,392 10,974,626
Principal payments on long-term debt ....................... (6,000,000) -- --
Proceeds from issuance of redeemable preferred
stock .................................................... 8,000,000 -- --
Payment of financing costs ................................. -- (300,000) (460,098)
Payments on capital lease obligations ...................... (139,314) (95,153) (73,259)
------------- ------------- -------------
Net cash provided by financing activities ................... 1,878,450 28,414,239 10,441,269
------------- ------------- -------------
Increase (decrease) in cash and cash equivalents ............ 3,477,385 3,084,577 (879,598)
Cash and cash equivalents at beginning of year .............. 2,478,142 (606,435) 273,163
------------- ------------- -------------
Cash and cash equivalents at end of year .................... $ 5,955,527 $ 2,478,142 $ (606,435)
============= ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest ...................... $ 3,986,581 $ 3,842,730 $ 686,757
Cash paid during the year for income taxes .................. $ 2,154,823 $ 83,750 $ 44,332
</TABLE>

See accompanying notes.

F-23
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

Prime Vision Health ("PVH" or the "Company") is a vertically integrated, vision
services company incorporated in Delaware and headquartered in North Carolina.
PVH, within its eye care services business segment is involved in three
vision-related lines of business: (1) managed vision care, (2) buying group and
distribution and (3) optometric practice management and retail optical. In
December 1998, the Board of Directors approved the reorganization and disposal
of the Company ophthalmology practice management segment and related
administrative support functions (the "ophthalmology segment"). Accordingly,
the ophthalmology division is presented as a discontinued operation for
financial reporting purposes.

PVH is a result of a merger between Consolidated Eye Care (CEC) and Prime
Vision Group (PVG) which occurred on July 3, 1996 whereby CEC exchanged all of
its outstanding voting common stock for 3,966,771 shares of voting preferred
stock of PVG. Since the former CEC shareholders retained the majority of the
voting rights in the combined company, CEC was treated as the acquirer in the
business combination. These shareholders, acting collectively as a group of the
former companies CEC and PVG, have the independent right to dissolve the
Company as defined in the corporate by-laws. The stated period of time for a
dissolution to occur commences in January 2001 and ends 60 days later. This
right of dissolution terminates if the Company completes an initial public
offering or is acquired.

The Company's optometry and retail optical division provides consulting,
administrative and other support services to optometry eye care centers in
North Carolina. All of these optometry centers are owned by shareholders of the
Company who were formerly shareholders of CEC. The administrative services for
these optometry centers are provided under a 30 year contract which provides a
management fee to the Company. Accordingly, the optometry centers are
consolidated herein.

The Company's managed vision care business is conducted primarily through its
two wholly owned subsidiaries which are licensed as single service Health
Maintenance Organizations (HMOs) in North Carolina and Texas.

The Company conducts its buying group and distribution business with
approximately 4,000 individual ophthalmology and optometry practices throughout
the United States.

2. MERGER AND RESTRUCTURING

For the year ended December 31, 1998, the Company has recorded a net loss of
approximately $38.1 million. The Company is highly leveraged and is not in
compliance with its bank debt covenants. Accordingly, all bank debt has been
classified in current liabilities. Management has determined that the
ophthalmology segment is the main contributing factor to the Company's
liquidity problems due to lower than anticipated cash flows from the
ophthalmology service agreements as evidenced by the historical operating
losses experienced by the ophthalmology segment. The Company's headquarters in
Raleigh, North Carolina exists primarily to support the ophthalmology segment
and such headquarter expenses were higher than justified by operating earnings
of the ophthalmology segment.

On December 15, 1998, in recognition of the significant losses and the fact
that the physician's practice management business model as operated by the
Company has been largely unsuccessful, the Company determined that the business
should be disposed of and that a combination should be sought with a related
business with a stronger infrastructure. Subsequent to such decision by the
Board, the Merger described in Note 14 was approved. The Merger and the
disposal of the ophthalmology segment should enable the Company to repay a
substantial portion of its bank debt, resulting in an amendment to such debt to
provide financing to the merged entity. The merger agreement and transition
agreements covering the reorganization of the ophthalmology segment expire on
September 30, 1999 if the merger has not been completed by that date.

F-24
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. DISCONTINUED OPERATIONS

On December 15, 1998, the Board of Directors decided to reorganize and dispose
of its ophthalmology segment. Such disposal is currently in process and is
expected to be completed by September 30, 1999.

The Company's ophthalmology division consisted of 46 managed ophthalmology
practices acquired since 1996 and located throughout the United States. When
acquired, the professional corporation associated with the practice entered
into a 30 or 40 year Administrative Services Agreement ("ASA") whereby PVH
provided consulting, administrative and other support services in return for a
management fee. The management service fee is comprised of a monthly fixed fee,
plus a stated percentage of the net income of the practice. This segment has
performed poorly and accordingly management has decided to reorganize and
dispose of its ophthalmology segment. The Company anticipates that a new
agreement will be entered into with many of these practices following the
reorganization and disposal to provide the services of the Company's other
three divisions. Based upon agreements currently in place or verbally agreed,
the probable loss on the disposal of this segment is estimated to be
approximately $23 million. The investment in discontinued operations on the
balance sheet is shown net of this estimated loss. The ophthalmology segment
has been presented as a discontinued operation.

Summarized information on the discontinued ophthalmology segment follows:

<TABLE>
<CAPTION>
1998 1997 1996
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net revenues ..................................................... $ 69,441,745 $ 54,554,570 $ 10,559,787
(Loss) income from discontinued operations before taxes .......... (17,884,428) 1,041,178 (2,446,971)
Income tax (benefit) expense ..................................... (6,597,032) 412,805 (1,009,507)
------------- ------------ ------------
Income (loss) from discontinued operations ....................... (11,287,396) 628,373 (1,437,464)
(Loss) on disposal of discontinued operations .................... (23,564,016) -- --
------------- ------------ ------------
Total income (loss) from discontinued operations ................. $ (34,851,412) $ 628,373 $ (1,437,464)
============= ============ ============
Loss (income) per share from discontinued operations ............. $ (4.84) $ 0.10 $ (0.65)
============= ============ ============
</TABLE>

4. SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include PVH and all of its wholly-owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in preparing the consolidated financial statements. In September
1997, the Company acquired the remaining 49% ownership interest in ExPec, Inc.,
thus eliminating the minority interest position held by the former owners.

BUSINESS SEGMENTS

The Company operated in two business segments: (1) eye care services, which
includes managed vision care, buying group and distribution and optometric
practice support including retail optical and (2) ophthalmology physician
practice management (ppm) and related administrative support. As discussed in
Note 3, the Board of Directors decided to reorganize and dispose of the
ophthalmology business segment. Segment disclosures relating to the operations
of the ophthalmology ppm business segment are included in the accompanying
financial statements as discontinued operations. Continuing operations of the
Company pertain to the eye care services business segment.

CASH AND CASH EQUIVALENTS

The Company considers highly liquid, short-term investments with a maturity of
three months or less when purchased to be cash equivalents.

F-25
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

INVENTORIES

Inventories consist primarily of eye care products and are stated at the lower
of cost (using the average cost method) or market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation and amortization is
computed using the straight-line method over the estimated useful lives of the
assets ranging from 3 to 10 years.

STOCK BASED COMPENSATION

The Company has adopted Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), which requires
companies to (i) recognize as expense the fair value of all stock-based awards
on the date of grant, or (ii) continue to apply the provisions of APB 25 and
provide pro forma net income disclosures for employee stock option grants as if
the fair-value-based method defined in SFAS 123 had been applied. The Company
has elected to continue to apply the provisions of APB 25 and provide the pro
forma disclosure provisions of SFAS 123 (see Note 12).

ADVERTISING COSTS

The Company expenses advertising costs as incurred. Total advertising expense
was approximately $501,975, $686,704 and $784,830 for 1998, 1997 and 1996,
respectively.

USE OF ESTIMATES

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company follows SFAS 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of". The company reviews the
carrying value of the intangible assets to determine if facts and circumstances
exist which would suggest that the intangible assets may be impaired or that
the amortization period needs to be modified. If indicators are present which
may indicate impairment is probable, PVH prepares a projection of the
undiscounted cash flows of the associated operations to determine whether the
intangible assets are recoverable based on these undiscounted cash flows. If
impairment is probable, an adjustment is made to reduce the carrying amount of
the intangible assets to their fair value.

INSURANCE OPERATIONS

The Company's managed vision care business is conducted primarily through two
wholly-owned subsidiaries which are licensed single service HMOs in the states
of North Carolina and Texas. Each is subject to regulation and supervision by
regulatory authorities of the state in which it operates. The regulatory bodies
have broad administrative powers relating to standards of solvency, minimum
capital and surplus requirements, maintenance of required reserves, payments of
dividends, statutory accounting and reporting practices, and other financial
and operational matters. Each state insurance department requires that
stipulated amounts of paid-in-capital and surplus be maintained at all times.
Dividends generally are limited to the lesser of 10% of statutory-basis capital
and surplus or net income of the preceding year excluding realized capital
gains. At December 31, 1998, the amount of restricted stockholders' equity is
$275,000.

F-26
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Under agreements with the North Carolina and Texas Departments of Insurance,
the Company is required to pledge investments on behalf of the respective
regulatory bodies. The investments pledged amount to $25,000 and $125,000 in
North Carolina and Texas, respectively.

Reserves for estimated insurance losses, included in accounts payable and
accrued expenses, are determined on a case basis for reported claims, and on
estimates based on company experience for loss adjustment expenses and incurred
but not reported claims. These liabilities give effect to trends in claims
severity and other factors which may vary as the losses are ultimately settled.
The Company's management believes that the estimates of the reserves for losses
and loss adjustment expenses are reasonable; however, there is considerable
variability inherent in the reserve estimates. These estimates are continually
reviewed and, as adjustments to these liabilities become necessary, such
adjustments are reflected in current operations of the period of the
adjustment.

CONCENTRATION OF CREDIT RISK

The Company's principal financial instrument subject to potential concentration
of credit risk is accounts receivable which are unsecured. The Company provides
an allowance for doubtful accounts equal to estimated losses expected to be
incurred in the collection of accounts receivable.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities," ("SFAS
133") which is required to be adopted in years beginning after June 15, 1999.
Because of the Company's minimal use of derivatives, management does not
anticipate the adoption of the new Statement will have a significant effect on
earnings or the financial position of the Company.

RECLASSIFICATIONS

Certain 1997 and 1996 financial statement amounts have been reclassified to
conform current classifications. These reclassifications had no effect on net
loss or shareholders' equity as previously reported.

5. REVENUE RECOGNITION AND RECEIVABLES

The following table summarizes the components of the Company's revenues by
business type. A description of each business type follows the table.

<TABLE>
<CAPTION>
1998 1997 1996
-------------- ------------- -------------
<S> <C> <C> <C>
Managed vision care ............................. $14,901,627 $ 7,416,313 $ 4,116,925
Buying group and distribution ................... 30,024,518 31,741,865 29,684,168
Optometric practice management revenue and retail
optical ....................................... 19,686,153 19,187,860 18,355,668
----------- ----------- -----------
$64,612,298 $58,346,038 $52,156,761
=========== =========== ===========
</TABLE>

A significant portion of the optometric eye care centers' medical service
revenues are reimbursements received from Medicare, other governmental programs
and insurance companies. These payors reimburse providers based on pre-set fee
schedules. In the ordinary course of business, providers receiving
reimbursement from Medicare and other governmental programs are potentially
subject to review by regulatory agencies concerning the accuracy of billings
and sufficiency of supporting documentation. Revenues are recognized in the
period the services are rendered and recorded at the net recoverable amount.

REVENUES -- MANAGED VISION CARE

The Company provides vision care services, through its managed vision care
business, as a preferred provider to HMOs, PPOs, third party administrators,
insurance indemnity programs and large employer

F-27
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

groups. The contractual arrangements with these entities operate under
capitated programs, exclusive and non-exclusive fee-for-services, preferred
provider arrangements and other exclusive arrangements.

REVENUES -- BUYING GROUP AND DISTRIBUTION

The Company's buying group and distribution business sells ophthalmic products
and equipment to 4,000 independent doctor practitioners. The buying group
utilizes a bill-to-ship arrangement with its customers and acts as an
intermediary between the doctor and the product manufacturer. The distribution
center buys eye care products in bulk from manufacturers and resells the
product to individual doctors.

REVENUES -- OPTOMETRIC PRACTICE MANAGEMENT AND RETAIL OPTICAL

The Company's optical business provides ophthalmic products through its managed
optometry and ophthalmology associated dispensaries. The dispensaries business
focuses on the retail market. The dispensaries primarily purchase their
products from the Company's Buying Group and Distribution segment and then
resell the products principally to patients served by the optometry and
ophthalmology practices.

6. PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of December 31:

<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
Leasehold improvements .................................. $ 2,085,337 $ 2,171,460
Furniture and equipment ................................. 7,395,830 6,899,513
Computer hardware and software .......................... 1,089,835 1,021,247
------------ ------------
10,571,002 10,092,220
Less accumulated depreciation and amortization .......... (6,060,748) (5,267,176)
------------ ------------
$ 4,510,254 $ 4,825,044
============ ============
</TABLE>

7. INTANGIBLE ASSETS

Intangible assets consist of the following as of December 31:

<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
Optometric administrative services agreements and goodwill .......... $1,405,665 $1,405,665
Capitalized organization and financing costs ........................ 664,615 644,687
Other ............................................................... 30,661 41,416
---------- ----------
2,100,941 2,091,768
Accumulated amortization ............................................ (744,872) (460,998)
---------- ----------
Intangible assets, net .............................................. $1,356,069 $1,630,770
========== ==========
</TABLE>

The intangible assets relate primarily to the acquisition of the assets of
optometry practices, related administrative services agreements and costs
involved in arranging and obtaining long-term financing. Amortization of the
administrative service agreements and goodwill is provided on a straight-line
basis over a twenty-five year period. Other intangible assets are amortized
over their useful lives ranging from five to ten years. Amortization expense
related to these intangible assets was $283,874, $184,424 and $153,406 during
1998, 1997 and 1996, respectively.

F-28
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. CREDIT AGREEMENTS

Long-term debt consists of the following:

<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
Term note payable to bank in 19 quarterly principal amounts of
$1,200,000 from April, 1999 through July 1, 2001, then increasing to
$2,000,000 or until the obligation is paid in full, through January 1,
2004, with interest payable in quarterly installments at prime plus
1 3/4%, collateralized by substantially all assets of the Company . .......... $ 31,820,910 $ 31,784,910
Revolving credit note to bank, due May 1, 2002, interest payable
quarterly at prime plus 1 3/4%, collateralized by substantially all assets
of the Company (net of unamortized discount of $62,228 at
December 31, 1997). .......................................................... 7,929,940 13,948,176
Promissory notes payable due at various dates between 1999 and 2005.
Interest is payable annually at a rate of 8.25% and the notes are
secured by personal guarantees of the shareholders. .......................... 225,660 225,660
------------ ------------
39,976,510 45,958,746
Less current portion ........................................................... 39,784,074 30,628
------------ ------------
$ 192,436 $ 45,928,118
============ ============
</TABLE>

On July 3, 1996, the Company entered into a loan and security agreement with a
bank. The agreement, as amended on November 25, 1996 and May 30, 1997, made
available to the Company a revolving credit facility permitting advances of up
to $18 million at any one time and term loans in the aggregate principal amount
of $32 million. The terms of this agreement include restrictive covenants
which, among other things, require the Company to maintain specific levels of
net worth, not to exceed maximum leverage and fixed charge coverage ratios, and
not to exceed specified cash flow parameters.

The outstanding borrowings under the revolving loan facility and the term loan
facility are individually and collectively limited to specific available
borrowing base amounts, as defined in the agreement. The interest rate of these
loans can be changed, at the Company's option, from prime plus 1 3/4% to a
Quoted Rate, as defined, plus 3 3/4%. During 1998, the company's average
borrowing rate was 9.95%.

As of December 31, 1998 and currently, the Company is in default of certain
restrictive covenants of the term note payable to bank and the revolving credit
note to bank, as amended. Accordingly, all of the debt has been reclassified to
short-term.

Pursuant to the term note payable and the revolving credit agreement and
amendments, the Company issued the Series A, Series B, Series C and Series D
preferred shareholders warrants entitling the holders the right to purchase
57,506, 57,505, 92,020 and 13,250 shares of common stock, respectively, at a
warrant price of $.01 per share. The estimated fair value of the warrants was
recorded as debt discount with a corresponding credit to additional paid-in
capital. The fair value was determined by using the minimum value model with
the following assumptions: risk free interest rate of 5.5%, no dividend yield
and an expected life of five years. The amortization of the debt discount has
increased the stated interest rate to an effective rate of approximately 10.67%
per annum and is being amortized to interest expense using the interest method
over the terms of the related notes. The Series A, B and C warrants are
exercisable upon issuance and expire on November 25, 2006, January 7, 2007,
April 9, 2007 and June 26, 2008 respectively. As of December 31, 1998, the
warrants had not been exercised.

The promissory notes represent debt issued to certain sellers in connection
with acquisition activities. The acquisition terms include an earn-out
component tied to certain future sales of optometric products. The earn-out
component guarantees additional consideration to the seller if future sales of
optometric products exceed a sales threshold. During 1998 and 1997, no
additional consideration was required to be paid or accrued in connection with
the earn-out component.

F-29
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following represents maturities of long-term debt by year and in the
aggregate:

<TABLE>
<S> <C>
1999 ......................... $39,784,074
2000 ......................... 36,041
2001 ......................... 27,097
2002 ......................... 29,333
2003 ......................... 31,753
Thereafter ................... 68,212
-----------
$39,976,510
===========
</TABLE>

At December 31, 1998 and 1997, the Company was a guarantor of debt of related
parties in the amount of $298,530 and $327,005, respectively.

At December 31, 1998 and 1997, the Company had standby letters of credit
outstanding in the amount of $600,000 and $608,000, respectively.

The Company has concluded that it is not practicable to estimate the fair value
of its bank debt. Because of the Company's financial position as outlined in
Note 2, it is highly unlikely that similar debt could be obtained currently.
Therefore, while the fair value of the debt can be assumed to be lower than
its carrying amount, it is not practicable to estimate the fair value.

9. LEASES

The Company leases certain furniture, machinery and equipment under capital
lease agreements that expire through 2003. The Company primarily leases its
facilities under cancelable and noncancelable operating leases expiring in
various years through 2011. Several facility leases have annual rental terms
comprised of base rent at the inception of the lease adjusted annually by a
contingent amount based, in part, upon the increase in the consumer price
index. Also, certain facility leases contain provisions which provide for
additional contingent rents based on a stated percentage of sales. Rent expense
charged to operations during the years ended December 31, 1998, 1997 and 1996
was $2,302,269, $2,193,038 and $1,907,746 of which $132,132, $109,355 and
$159,295, respectively, represent contingent rent expense.

Property and equipment includes the following amounts for capital leases at
December 31:

<TABLE>
<CAPTION>
1998 1997
--------------- -------------
<S> <C> <C>
Furniture, machinery and equipment .......... $ 1,356,412 $1,211,116
Less accumulated amortization ............... (1,057,007) (980,937)
------------ ----------
$ 299,405 $ 230,179
============ ==========
</TABLE>

Capital lease obligations of $219,070 and $614,056 were incurred for
acquisition of new equipment in 1998 and 1997, respectively. Amortization of
capital leases is included in depreciation and amortization expense.

F-30
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Future minimum lease payments, by year and in the aggregate, under capital
leases and operating leases with remaining terms of one year or more consisted
of the following at December 31, 1998:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
----------- -------------
<S> <C> <C>
1999 .................................. $ 139,504 $1,524,414
2000 .................................. 102,668 1,362,108
2001 .................................. 47,557 1,103,340
2002 .................................. 43,031 696,887
2003 .................................. 19,102 681,828
2004 and thereafter ................... 0 1,976,286
--------- ----------
Total minimum lease payments .......... 351,862 $7,344,863
==========
Amounts representing interest ......... (58,160)
---------
$ 293,702
=========
</TABLE>

10. 401(K) SAVINGS PLAN

The Company has a 401(k) Plan and Trust covering substantially all employees
who meet certain age and employment criteria. Contributions are made on a
discretionary basis as authorized by the Board of Directors. Employer
contributions for the years ended December 31, 1998, 1997 and 1996 were
$576,770, $531,666 and $198,310 respectively. Plan administrative expenses paid
by the Company for the years ended December 31, 1998, 1997 and 1996 were
$52,829, $35,069 and $8,846, respectively.

11. RELATED PARTY TRANSACTIONS

The Company incurred rent expense and other fees of approximately $122,889,
$120,064 and $114,995 in 1998, 1997 and 1996, respectively, which was paid to
certain employee doctors for the use of equipment.

The Company incurred rent expense of approximately $450,074, $347,413 and
$831,000 in 1998, 1997 and 1996, respectively, which was paid to entities under
common ownership, primarily for the lease of facilities.

The Company has various notes receivable from related parties with interest
rates ranging from prime plus 1% to 9%, maturing from 1999 through 2006. The
total balance due under these notes receivable was $214,638 and $180,597 at
December 31, 1998 and 1997, respectively, of which $39,132 and $21,570 has been
reflected as a current asset.

The Company has a note payable to a related party with an interest rate of 6%
maturing in 2024. The total balance due, including accrued interest, on this
note payable was $451,916 and $363,431 at December 31, 1998 and 1997,
respectively.

12. SHAREHOLDERS' EQUITY

MANDATORILY REDEEMABLE PREFERRED STOCK

In June of 1998, the Company issued 8,000 shares of redeemable, 8% cumulative
preferred stock, together with a stock purchase warrant enabling the holder to
purchase 1,333,333 shares of the Company's common stock, for $8.0 million.
Under the terms of the agreement, the preferred stockholders are entitled to
receive a guaranteed annual rate of return of 30% over the first four years of
the agreement. Accordingly, the company has recorded accrued dividends of
$1,200,000 or $150 per share as of December 31, 1998. No dividends have been
paid. The number of shares purchasable and the initial exercise price of the
stock purchase warrant of $6.50 per share are subject to adjustment in order
for the preferred stockholder to

F-31
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

achieve the guaranteed rate of return. The preferred stock agreement also
contains restrictive financial covenants which the company has violated as of
December 31, 1998. As a result of the violations, the preferred stockholder has
the right to redeem the preferred stock as of December 31, 1998.

The holder of the mandatorily redeemable preferred stock has full voting rights
and powers and is entitled to one vote for each share held.

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holder of the mandatorily redeemable preferred
stock is entitled to receive payment out of assets of the Company in an amount
equal to $1,000 per share, plus any accumulated and unpaid dividends. If the
assets of the Company available for distribution are insufficient to make the
payment required in full, such assets shall be distributed pro-rata among the
holders of the mandatorily redeemable preferred stock based on the aggregate
liquidation preferences of the shares held by each holder. If the assets of the
Company available for distribution to the holders of the mandatorily redeemable
preferred stock exceed the distribution required, such excess assets shall be
distributed pro-rata to the holders of common stock.

The estimated fair value of the stock purchase warrant was $1,293,333 at the
date of issuance in June 1998. This value was determined using the
Black-Scholes pricing model with the following assumptions: risk free interest
rate of 4.67%, no dividend yield, volatility factor of .7604 and an expected
life of five years. Initially, this value was recorded as a discount to the
redeemable preferred stock balance with a corresponding credit to additional
paid-in capital. This discount was to be amortized through charges to retained
earnings over the initial redemption period of the preferred stock, seven
years. However, in light of the Company's violation of financial covenants in
the preferred stock agreement and the corresponding acceleration of the
redemption period, the remaining unamortized balance of the warrant discount
was fully amortized at December 31, 1998. The warrant expires in June 2005.

STOCK AWARDS

During 1995, the Company granted 44,133 shares of restricted common stock to
certain key employees. Upon issuance, deferred compensation equivalent to the
market value at the date of grant was charged to shareholders' equity and
amortized as compensation expense over the period which the restrictions lapse.
In connection with the merger with PVG on June 3, 1996, the restrictions on the
common stock lapsed when they were exchanged for preferred stock, therefore the
remaining balance of the deferred compensation was recognized as compensation
expense in 1996.

STOCK OPTION PLAN

A summary of the Company's stock option plan activity follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES OPTION PRICE PER SHARE
------------------------------- ----------------------------------
AVAILABLE FOR OPTIONS
GRANT OUTSTANDING RANGE TOTAL
--------------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C>
January 1, 1996
Reserved ................ 1,700,000
Granted ................... (218,000) 218,000 $1.50 - $ 5.00 $ 583,400
--------- ------- ---------------- ------------
December 31, 1996 ......... 1,482,000 218,000 $1.50 - $ 5.00 583,400
Granted ................... (551,000) 551,000 $2.00 - $20.00 9,530,000
Canceled .................. 1,500 (1,500) (22,500)
--------- ------- ---------------- ------------
December 31, 1997 ......... 932,500 767,500 $1.50 - $20.00 10,090,900
Granted ................... (9,500) 9,500 $2.00 - $20.00 70,000
Canceled .................. 124,145 (124,145) (2,183,175)
--------- -------- ---------------- ------------
December 31, 1998 ......... 1,047,145 652,855 $1.50 - $20.00 $ 7,977,725
--------- -------- ---------------- ------------
</TABLE>

F-32
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company's executive stock plan, approved by the Board of Directors in 1996,
provides for the granting of nonqualified incentive stock options. Grant prices
are determined by the Board of Directors. Options may be exercised for 10 years
after grant and become exercisable on the date of grant. In 1996, the Company
issued 218,000 options that became 100% vested and exercisable at the date of
grant. In 1997, the Company issued 551,000 options that vest ratably over 3
years and are exercisable after certain vesting criteria is met. The number of
options exercisable at December 31, 1998, 1997 and 1996 were 363,488, 218,000
and 218,000, respectively. The weighted average exercisable price of
outstanding options at December 31, 1998 is $12.22.

Pro forma information regarding net loss and loss per share is required by SFAS
123, and has been determined as if the Company accounted for its employee stock
options granted subsequent to December 31, 1995, under the fair value method of
SFAS 123. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted average
assumptions for 1998 and 1997:

<TABLE>
<CAPTION>
1998 1997
------------ ----------
<S> <C> <C>
Risk free interest rate .......... 4.67 % 5.50 %
Dividends ........................ -- --
Volatility factor ................ .7604 .6321
Expected Life .................... 8.27 years 5 years
</TABLE>

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
1998 1997 1996
-------------- ------------- -------------
<S> <C> <C> <C>
Net loss as presented ......... $38,090,067 $1,405,261 $2,204,177
Pro forma net loss ............ $38,110,028 $1,415,124 $2,568,497
</TABLE>

The following table summarizes in more detail information regarding the
Company's stock options outstanding at December 31, 1998.

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL OPTIONS
EXERCISE PRICE O/S OPTIONS LIFE EXERCISABLE
- ------------------ ------------- ------------- ------------
<S> <C> <C> <C>
$1.50 ............ 118,000 7.08 118,000
$2 to $6 ......... 37,500 9.15 10,000
$3.00 ............ 30,000 7.92 30,000
$4.04 ............ 35,000 7.75 35,000
$5.00 ............ 35,000 7.84 35,000
$15.00 ........... 140,555 8.02 50,555
$20.00 ........... 256,800 9.00 84,933
------- -------
652,855 363,488
======= =======
</TABLE>

F-33
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RESERVED SHARES

At December 31, 1998, the Company had reserved a total 3,334,497 of its
authorized 15,000,000 shares of common stock for future issuance as follows:

<TABLE>
<S> <C>
Outstanding practice acquisition stock ......... 80,883
Stock options .................................. 1,700,000
Warrants ....................................... 1,553,614
---------
Total shares reserved .......................... 3,334,497
=========
</TABLE>

LOSS PER SHARE

The Company presents per share information in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). Due
to the net losses from continuing operations for each of the three years
presented, potential common shares are considered antidilutive and therefore
there are no differences between basic and diluted earnings per share.

The following table sets forth the computation of earnings per share for the
years ended December 31,

<TABLE>
<CAPTION>
1998 1997 1996
---------------- ---------------- ----------------
<S> <C> <C> <C>
Loss from continuing operations applicable to
common shareholders:
Loss from continuing operations .................... $ (3,238,655) $ (2,033,634) $ (766,713)
Accretion of redemption value of preferred stock
and preferred stock dividends .................... (2,493,333) -- --
------------- ------------- ------------
Loss from continuing operations applicable to
common shareholders: ............................... $ (5,731,988) $ (2,033,634) $ (766,713)
============= ============= ============
Net loss applicable to common shareholders:
Net loss ........................................... $ (38,090,067) $ (1,405,261) $ (2,204,177)
Accretion of redemption value of preferred stock
and preferred stock dividends .................... (2,493,333) -- --
------------- ------------- ------------
Net loss applicable to common shareholders ......... $ (40,583,400) $ (1,405,261) $ (2,204,177)
============= ============= ============
Loss per common share:
Loss from continuing operations .................... $ (0.80) $ (0.34) $ (0.35)
============= ============= ============
Net loss per share ................................. $ (5.64) $ (0.24) $ (1.00)
============= ============= ============
Weighted average shares outstanding ................ 7,190,762 5,914,374 2,209,839
============= ============= ============
</TABLE>

F-34
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets and liabilities consisted of the following
at December 31, 1998 and 1997:

<TABLE>
<CAPTION>
1998 1997
--------------- -------------
<S> <C> <C>
Deferred tax liabilities:
Cash to accrual adjustment ................... $ 1,604,167 $ 563,510
Other ........................................ 16,726 17,688
------------ -----------
Total current deferred tax liabilities ........ 1,620,443 581,198
ASAs basis difference ........................ -- 21,331,613
Fixed assets basis difference ................ -- 4,120,202
Cash to accrual adjustment ................... -- 1,690,529
Other ........................................ 2,055 --
------------ -----------
Total noncurrent deferred tax liabilities ..... 2,055 27,142,344
------------ -----------
Total deferred tax liabilities ................ $ 1,622,498 $27,723,542
============ ===========
Deferred tax assets:
Net operating loss carryforwards ............. $ -- $ 8,534
Discontinued operations ...................... 4,078,084 --
Accruals ..................................... 711,826 368,951
Allowance for bad debts ...................... 163,346 142,755
Other ........................................ 15,540 25,034
------------ -----------
Total current deferred tax assets ............. 4,968,796 545,274
Depreciation and amortization ................ 622,906 293,918
Other ........................................ 36,862 50,804
------------ -----------
Total noncurrent deferred tax asset ........... 659,768 344,722
Valuation allowance ........................... (4,006,066) --
------------ -----------
Total deferred tax assets ..................... $ (1,622,498) $ 889,996
============ ===========
</TABLE>

The components of income tax benefit (expense) for 1998, 1997 and 1996 are as
follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------------- ------------ ----------
<S> <C> <C> <C>
Current:
Federal ................................... $ (141,064) $ -- $ --
State ..................................... (19,757) -- --
---------- ---------- --------
Total current .............................. (160,821) -- --
Deferred:
Federal ................................... (256,535) 984,495 194,595
State ..................................... (16,160) 50,500 9,982
---------- ---------- --------
Total deferred ............................. (272,695) 1,034,995 204,577
---------- ---------- --------
Total income tax benefit (expense) ......... $ (433,516) $1,034,995 $204,577
========== ========== ========
</TABLE>

F-35
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

A reconciliation of the tax provision at the U.S. Statutory Rate to the
effective income tax rate as reported is as follows:

<TABLE>
<CAPTION>
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Tax provision at U.S. Statutory Rate ................ 34.0% 34.0% 34.0%
State income taxes, net of federal benefit .......... 3.0% 3.0% 3.0%
Non-deductible expenses ............................. ( 4.3%) (11.3%) (35.6%)
Change in valuation allowance ....................... (48.2%) 8.0% 19.7%
----- ----- -----
Effective income tax expense rate ................... (15.5%) 33.7% 21.1%
===== ===== =====
</TABLE>

14. SUBSEQUENT EVENTS -- MERGER AGREEMENT

In April 1999, the Company entered into a definitive Merger Agreement with
Saratoga Resources, Inc. and its subsidiaries ("Saratoga") and OptiCare Eye
Health Centers, Inc. ("OptiCare") whereby Company shareholders will receive
approximately 48.755% of the common stock of Saratoga, a publicly traded
company and OptiCare shareholders will receive approximately 48.745% of the
common stock of Saratoga (the "Merger"). The Merger is subject to a number of
conditions including but not limited to shareholder approval by each party and
amendment to the Company's credit facility.

In conjunction with the Merger, the Company will enter into long-term Health
Services Organization ("HSO") service agreements with a number of ophthalmology
practices. In addition to buying group and managed care access, the HSO
agreements provide the physician with a standardized marketing program.

15. COMMITMENT AND CONTINGENCIES

In December 1996, the Company acquired a 51% ownership interest in a managed
care contracting entity. In connection with this agreement, the Company is
obligated to acquire an additional 24% of the outstanding common stock of this
entity on December 20, 1999. Consideration for the additional shares is to be
paid in cash based upon a formula equal to the product of multiplying the gross
managed care revenues, as defined in the agreement, for the twelve preceding
calendar months immediately preceding the calendar month that includes November
1999 by 10% and multiplying the product by a factor of six. This additional
investment will be recorded when the purchase price is no longer contingent and
when the risks and rewards of ownership of the additional shares convey to the
Company. This additional investment will be recorded as an additional element
of the cost of the investment in the managed care contracting entity.

In connection with an Administrative Service Agreement ("ASA") consummated in
1997 between the Company and an ophthalmologist, the company also entered into
a related agreement which granted the ophthalmologist the right, between the
second and fourth anniversary of the ASA, to require the Company to locate a
third party to purchase all of the outstanding shares of the ophthalmologist's
practice for at least $4.0 million in either cash or stock, at the option of
the ophthalmologist.

During 1997, the Company entered into a revolving credit and term loan
agreement with a third party whereby the Company has established, as the
lender, a revolving line of credit not to exceed $1.0 million and a term loan
agreement not to exceed $4.0 million. Borrowings under both credit instruments
can only occur if the borrower is in compliance with stated financial
covenants. Borrowings under the revolving credit agreement can commence on
December 1, 1997 and are initially limited to $500,000. The remaining $500,000
will be made available to the borrower after the borrower has received at least
$2,000,000 in new equity funding, as defined. Any funding under the term loan
agreement requires approval of the Company's Board of Directors. The Company's
commitment to provide any funding under both of these agreements expires on
October 1, 1999. Outstanding borrowings shall accrue interest at the prime rate
of the Company's commercial lender, plus 1 3/4% and are payable in eleven equal
quarterly installments. Any borrowings shall be secured by a) valid perfected
first-priority security interest, as described and b) a guaranty by an
affiliate of the borrower. No funding has been provided under either agreement.

F-36
<PAGE>

PRIME VISION HEALTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)

On April 9, 1999, a settlement agreement was signed between the Company and two
Shareholders providing, among other items, for payment to the Shareholders in
an amount of $2.5 million, a shareholding position of 32% of the Company before
the close of the Merger discussed above, and a new administrative services
agreement between the Company and OECC to be executed in conjunction with the
closing of the Merger. The legal action filed against the Company that charged
the existing ASA agreement between the parties had been breached was dismissed.
The settlement agreement becomes effective with closing of the Merger.

The Company is a party to several lawsuits where they have sued or counter-sued
for alleged breach of the administrative service agreements or the non-compete
agreements. The lawsuits pertain to the ophthalmology segment which
discontinued operations during 1998. Although there can be no assurance as to
the ultimate disposition of these matters and proceedings, it is the opinion of
the Company's management that matters will be substantially resolved by
September 30, 1999. Based on current negotiations, management anticipates that
the outcome, individually or in aggregate, will not have a further material
adverse effect on the results of operations and financial condition of the
Company.

F-37
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
OptiCare Eye Health Centers, Inc. and Affiliate

We have audited the accompanying combined balance sheets of OptiCare Eye
Health Centers, Inc. (OptiCare) and OptiCare, P.C. (an affiliated corporation),
which is under common ownership and common management (collectively, the
"Company"), as of December 31, 1998 and 1997, and the related combined
statements of operations, shareholders' equity and of cash flows for each of
the three years in the period ended December 31, 1998. These combined financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

In our opinion, such combined financial statements present fairly, in all
material respects, the combined financial position of OptiCare and OptiCare,
P.C., as of December 31, 1998 and 1997, and the combined results of their
operations and their combined cash flows for each of the three years in the
period ended December 31, 1998 in conformity with generally accepted accounting
principles.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

March 26, 1999

F-38
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

COMBINED BALANCE SHEETS--DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
1998 1997
ASSETS --------------- ---------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents .................................. $ 938,927 $ 4,901,666
Accounts receivable, net (Note 1) .......................... 6,349,548 4,505,077
Inventory (Note 3) ......................................... 1,717,964 1,067,535
Prepaid expenses and other assets .......................... 584,098 323,665
Deferred income taxes (Note 10) ............................ 467,009 --
Income taxes receivable .................................... 22,236 --
Advances to related parties (Note 12) ...................... 117,951 129,137
------------ -----------
Total current assets ..................................... 10,197,733 10,927,080
PROPERTY AND EQUIPMENT, NET (Note 4) ........................ 5,766,167 3,433,772
DEFERRED INCOME TAXES (Note 10) ............................. 73,007 162,976
INTANGIBLE ASSETS, NET (Note 5) ............................. 3,301,744 262,130
OTHER ASSETS ................................................ 176,266 263,070
------------ -----------
TOTAL ....................................................... $ 19,514,917 $15,049,028
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ........................................... $ 1,905,745 $ 995,859
Accrued expenses (Note 6) .................................. 1,384,638 1,378,587
Managed care claims (Note 1) ............................... 1,405,644 427,757
Deferred income taxes (Note 10) ............................ -- 66,760
Current maturities of long-term debt (Note 7) .............. 2,183,826 59,559
------------ -----------
Total current liabilities ................................ 6,879,853 2,928,522
------------ -----------
NONCURRENT LIABILITIES:
Long-term debt (Note 7) .................................... 1,135,462 168,516
------------ -----------
COMMITMENTS AND CONTINGENCIES (Notes 8 and 14)
SHAREHOLDERS' EQUITY (Note 9):
Class A convertible preferred stock (OptiCare) authorized
160,000 shares; issued and outstanding 152,754 shares in
1998 and 1997, par value $.01 (liquidation value of $93.68
per share) ............................................... 1,527 1,527
Class B convertible preferred stock (OptiCare) authorized
640,000 shares; issued and outstanding 220,824 and 220,424
shares in 1998 and 1997, respectively, par value $.01
(liquidation value of $93.68 per share)................... 2,208 2,204
Common stock (OptiCare)--authorized 1,200,000 shares; none
issued, $.01 par value.................................... -- --
Common stock (OptiCare, P.C.)--authorized 100 shares;
issued and outstanding 100 shares in 1998 and 1997, no par
value .................................................... -- --
Additional paid-in capital (OptiCare) ...................... 12,942,190 12,892,194
Additional paid-in capital (OptiCare, P.C.) ................ 1,000 1,000
Retained earnings (deficit) ................................ (1,447,323) (944,935)
------------ -----------
Total shareholders' equity ............................... 11,499,602 11,951,990
------------ -----------
TOTAL ....................................................... $ 19,514,917 $15,049,028
============ ===========
</TABLE>

See notes to combined financial statements.

F-39
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
-------------- -------------- --------------
<S> <C> <C> <C>
NET PATIENT REVENUE ............................... $29,616,913 $25,274,021 $23,694,164
NET MANAGED CARE REVENUE .......................... 5,127,716 1,968,230 1,026,083
----------- ----------- -----------
TOTAL NET REVENUE ................................. 34,744,629 27,242,251 24,720,247
----------- ----------- -----------
OPERATING EXPENSES:
Staff compensation ............................... 11,579,083 8,450,861 7,154,733
Physician compensation ........................... 8,599,689 8,200,965 7,751,549
Surgical and eyecare supplies .................... 4,401,250 3,066,694 2,734,154
General and administrative ....................... 3,587,533 2,824,863 2,979,691
Facility rental (Note 12) ........................ 2,422,494 1,957,593 1,876,406
Managed care claims (Note 1) ..................... 3,063,902 1,087,964 748,431
Depreciation and amortization .................... 1,063,074 644,683 547,280
Marketing ........................................ 968,346 620,266 634,472
----------- ----------- -----------
Total operating expenses ....................... 35,685,371 26,853,889 24,426,716
----------- ----------- -----------
OPERATING INCOME (LOSS) ........................... (940,742) 388,362 293,531
INTEREST INCOME (EXPENSE):
Interest income .................................. 133,775 75,506 7,525
Interest expense ................................. (60,298) (4,551) --
----------- ----------- -----------
Net interest income ............................ 73,477 70,955 7,525
----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES ................. (867,265) 459,317 301,056
INCOME TAX PROVISION (BENEFIT) (Note 10) .......... (364,877) 132,600 158,252
----------- ----------- -----------
NET INCOME (LOSS) ................................. $ (502,388) $ 326,717 $ 142,804
=========== =========== ===========
</TABLE>

See notes to combined financial statements.

F-40
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

COMBINED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
OPTICARE OPTICARE OPTICARE
CLASS A CLASS B COMMON
PREFERRED PREFERRED STOCK
STOCK STOCK ---------------
<S> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 ................ $ -- $ -- $ 2,595,000
Exercise of warrants (Note 9) ............ -- -- 647,815
Net income ............................... -- -- --
------ ------ -------------
BALANCE, DECEMBER 31, 1996 ................ -- -- 3,242,815
Recapitalization in October 1997
(Note 9) ................................ 887 2,193 (3,242,753)
Sale of shares in October 1997 (Note 9)... 640 -- --
Repurchase of shares (Note 9) ............ -- -- (62)
Shares issued in connection with
Practice Acquisitions in December
1997 (Note 2) ........................... -- 11 --
Net income ............................... -- -- --
------ ------ -------------
BALANCE, DECEMBER 31, 1997 ................ 1,527 2,204 --
Shares issued in connection with
Practice Acquisitions in 1998 (Note 2)... 4
Net loss ................................. -- -- --
------ ------ -------------
BALANCE, DECEMBER 31, 1998 ................ $1,527 $2,208 $ --
====== ====== =============

<CAPTION>
OPTICARE OPTICARE P.C.
ADDITIONAL ADDITIONAL RETAINED
PAID-IN PAID-IN EARNINGS
CAPITAL CAPITAL (DEFICIT) TOTAL
-------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 ................ $ 3,301,131 $1,000 $ (1,414,456) $ 4,482,675
Exercise of warrants (Note 9) ............ 1,012,185 -- -- 1,660,000
Net income ............................... -- -- 142,804 142,804
----------- ------ ------------ -----------
BALANCE, DECEMBER 31, 1996 ................ 4,313,316 1,000 (1,271,652) 6,285,479
Recapitalization in October 1997
(Note 9) ................................ 3,239,673 -- -- --
Sale of shares in October 1997 (Note 9)... 5,783,498 -- -- 5,784,138
Repurchase of shares (Note 9) ............ (586,749) -- -- (586,811)
Shares issued in connection with
Practice Acquisitions in December
1997 (Note 2) ........................... 142,456 -- -- 142,467
Net income ............................... -- -- 326,717 326,717
----------- ------ ------------ -----------
BALANCE, DECEMBER 31, 1997 ................ 12,892,194 1,000 (944,935) 11,951,990
Shares issued in connection with
Practice Acquisitions in 1998 (Note 2)... 49,996 50,000
Net loss ................................. -- -- (502,388) (502,388)
----------- ------ ------------ -----------
BALANCE, DECEMBER 31, 1998 ................ $12,942,190 $1,000 $ (1,447,323) $11,499,602
=========== ====== ============ ===========
</TABLE>

See notes to combined financial statements.

F-41
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

COMBINED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
-------------- --------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ............................................ $ (502,388) $ 326,717 $ 142,804
Adjustments to reconcile net income (loss) to net cash used in
operations:
Depreciation and amortization .............................. 1,063,074 644,683 547,280
Deferred income taxes ...................................... (443,800) (299,724) (200,090)
(Gain) loss on disposal of fixed assets .................... -- (3,900) 6,321
Changes in operating assets and liabilities:
Accounts receivable, net .................................. (1,794,471) (944,865) (347,183)
Inventory ................................................. (250,475) (157,572) (91,510)
Prepaid expenses and other assets ......................... (260,433) (185,655) 15,308
Advances to related parties ............................... 11,186 (60,067) 40,823
Other noncurrent assets ................................... 19,521 (114,001) 17,766
Accounts payable and other liabilities .................... 648,134 119,004 (321,499)
Accrued expenses .......................................... 6,051 87,808 27,329
Managed care claims ....................................... 977,887 427,757 --
Income taxes payable ...................................... -- (190,096) 160,342
------------ ------------ ----------
Net cash used in operating activities ................... (525,714) (349,911) (2,309)
------------ ------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment .......................... (2,622,856) (1,501,185) (986,640)
Proceeds from sale of fixed assets ........................... -- 3,900 16,156
Practice acquisitions ........................................ (2,554,610) (108,680) --
------------ ------------ ----------
Net cash used in investing activities ................... (5,177,466) (1,605,965) (970,484)
------------ ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt ......................... (59,559) (14,364) (252,936)
Borrowings under line of credit .............................. 1,800,000 --
Net proceeds from issuance of stock .......................... -- 5,784,138 1,660,000
Cash used to repurchase stock ................................ -- (586,811) --
------------ ------------ ----------
Net cash provided by financing activities ............... 1,740,441 5,182,963 1,407,064
------------ ------------ ----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS .................................................. (3,962,739) 3,227,087 434,271
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR ......................................................... 4,901,666 1,674,579 1,240,308
------------ ------------ ----------
CASH AND CASH EQUIVALENTS, END OF YEAR ........................ $ 938,927 $ 4,901,666 $1,674,579
============ ============ ==========
SUPPLEMENTAL INFORMATION :
Cash paid for:
Interest ................................................... $ 29,531 $ 4,802 $ 13,807
============ ============ ==========
Income taxes ............................................... $ 130,550 $ 622,974 $ 185,000
============ ============ ==========
</TABLE>

See notes to combined financial statements.

F-42
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Busines

OptiCare Eye Health Centers, Inc. ("OptiCare") and OptiCare, P.C.
(collectively, the "Company") operate in the eye health business providing
general eye care, optical services, outpatient ophthalmic surgery, consultative
services for complicated eye diseases and a managed care network throughout
Connecticut. OptiCare owns and operates the retail eyeglass and eyeglass
manufacturing business and the related assets. OptiCare P.C., was established
for the purpose of rendering ophthalmology and optometry services exclusively
for OptiCare. OptiCare, P.C. entered into a Professional Services and Support
Agreement with OptiCare effective December 1, 1995.

Basis of Presentation

The accompanying combined financial statements include the accounts of OptiCare
and OptiCare, P.C. Due to the related business activities, common management
control and the interdependence of the affiliated entities, combined financial
statements are presented because they are more meaningful. All significant
intercompany accounts and transactions have been eliminated in the combined
financial statements.

Estimates

The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing financial statements, management
is required to make estimates and assumptions, particularly in determining the
adequacy of the allowance for doubtful accounts, insurance disallowances and
managed care claims accrual, that affect the reported amounts of assets and
liabilities as of the balance sheet date and results of operations for the
year. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers investments purchased with an original maturity of three
months or less to be cash equivalents.

Receivables

Receivables are stated net of allowances for doubtful accounts and insurance
disallowances which aggregated $2,196,615 and $1,544,543 as of December 31,
1998 and 1997, respectively.

Inventories

Inventories are valued at the lower of cost or market, determined on the
first-in, first-out (FIFO) basis.

Intangible Assets

The Company uses the straight-line method to amortize intangible assets over
their estimated useful lives which range from 5 to 20 years. The Company's
management periodically evaluates the carrying value of its intangible assets
for impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. Recoverability is based on
estimated future undiscounted cash flows from the use and ultimate disposition
of the asset.

Property and Equipment

Property and equipment consists of furniture, fixtures, equipment, leasehold
improvements and a vehicle and are recorded at cost. Leasehold improvements are
being amortized over the term of the lease or the life of the improvement,
whichever is shorter. Depreciation and amortization are provided primarily
using the straight-line method over the estimated useful lives of the
respective assets as follows:

F-43
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
CLASSIFICATION ESTIMATED USEFUL LIFE
- ------------------------------------------------------- ----------------------
<S> <C>
Furniture, fixtures and equipment .......... 5--7 years
Leasehold improvements ..................... 3--20 years
Vehicle .................................... 5 years
</TABLE>

Stock-based Compensation

Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation", encourages, but does not require companies to record
compensation cost for stock-based employee compensation plans at fair value.
The Company has chosen to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB No. 25), and related
interpretations. Accordingly, compensation cost for the stock options included
under the Company's 1997 Stock Option Plan is measured as the excess, if any,
of the fair value of the Company's stock at the date of the grant over the
amount an employee must pay to acquire the stock.

Fair Value of Financial Instruments

SFAS No. 107, Disclosures about Fair Value of Financial Instruments, requires
the disclosure of fair value information for certain assets and liabilities,
whether or not recorded in the balance sheet, for which it is practicable to
estimate that value. The Company has the following financial instruments: cash
and cash equivalents, receivables, accounts payable, accrued liabilities and
long-term debt. The Company considers the carrying amount of these items,
excluding long-term debt, to approximate their fair values because of the short
period of time between the origination of such instruments and their expected
realization. Refer to Note 7 for fair value disclosures of long-term debt.

Net Patient Revenue

The Company has agreements with third-party payors that provide for payments to
the Company at amounts different from its established rates. Net patient
revenue is reported at the estimated net realizable amounts from patients,
third-party payors, and others for services rendered.

Net Managed Care Revenue

Revenue is derived from monthly capitation payments from health benefits payors
which contract with the Company for the delivery of eye care services. The
Company records this revenue at contractually agreed-upon rates during the
period in which the Company is obligated to provide services to members.

Managed Care Claims Expense

Claims expense is recorded as provider services are rendered and includes an
estimate for claims incurred but not reported.

Malpractice Claims

The Company purchases insurance to cover medical malpractice claims. There are
known claims and incidents as well as potential claims from unknown incidents
that may be asserted from past services provided. Management believes that
these claims, if asserted, would be settled within the limits of insurance
coverage.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" which requires an
asset and liability method of accounting for

F-44
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

deferred income taxes. Under the asset and liability method, deferred tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis using enacted
tax rates expected to apply to taxable income in the years the temporary
differences are expected to reverse.

Reclassification

Certain amounts in the 1997 and 1996 financial statements have been
reclassified to conform to the 1998 presentation.

2. ACQUISITIONS

The Company acquired seven optometric medical and retail optical practices in
1998 for $2,554,610 in cash, $50,000 in stock, and $1,375,000 in notes payable
for a total of $3,979,610 (see also Note 14). The Company acquired one
optometric medical and retail optical practice in 1997 for $108,680 in cash,
$142,467 in stock and $189,324 in notes payable for a total of $440,471. The
Company issued 400 shares and 1,140 shares of OptiCare Class B Preferred stock
in 1998 and 1997, respectively, in connection with these acquisitions.

The 1998 and 1997 acquisitions were accounted for as purchases. Accordingly,
the results of operations of the acquired practices are included in the
combined financial statements from the dates of acquisition and the assets and
liabilities of the acquired entities have been recorded at their estimated fair
values at the dates of acquisition. The excess of the purchase prices over the
estimated fair values of the net assets acquired in the amount of $2,993,752 in
1998 and $258,991 in 1997 is recorded as goodwill and is being amortized on a
straight-line basis over 20 years.

Assuming all of the aforementioned acquisitions had occurred on January 1,
1997, combined net revenues for the Company would have been $38,596,000 for
1998 and $33,023,000 for 1997. Combined net income (loss) for the Company would
have been $(378,000) and $429,000 for 1998 and 1997, respectively.

3. INVENTORY

Inventory as of December 31, 1998 and 1997 consists of the following:

<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
Surgical supplies ....................... $ 168,306 $ 130,484
Eye glasses and contact lenses .......... 1,455,067 851,167
Eye glasses work-in-process ............. 94,591 85,884
---------- ----------
Total ................................... $1,717,964 $1,067,535
========== ==========
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1998 and 1997 consist of the
following:

F-45
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
Equipment .......................................... $ 7,779,516 $ 7,586,877
Furniture and fixtures ............................. 2,193,960 1,024,896
Leasehold improvements ............................. 2,627,781 1,904,993
Vehicle ............................................ 21,853 21,352
------------ ------------
Total .............................................. 12,623,110 10,538,118
Accumulated depreciation and amortization .......... (6,856,943) (7,104,346)
------------ ------------
Property and equipment, net ........................ $ 5,766,167 $ 3,433,772
============ ============
</TABLE>

Depreciation expense was $968,461, $633,680 and $542,752 for the years ended
December 31, 1998, 1997 and 1996, respectively.

5. INTANGIBLE ASSETS

Intangible assets as of December 31, 1998 and 1997 consist of the following:

<TABLE>
<CAPTION>
1998 1997
--------------- -------------
<S> <C> <C>
Goodwill .......................... $ 3,401,091 $ 434,147
Other intangibles ................. 982,946 815,663
------------ ----------
Total ............................. 4,384,037 1,249,810
Accumulated amortization .......... (1,082,293) (987,680)
------------ ----------
Intangible assets, net ............ $ 3,301,744 $ 262,130
============ ==========
</TABLE>

Amortization of the intangible assets for the years ended December 31, 1998,
1997 and 1996 was $94,613, $11,003 and $4,528, respectively.

6. ACCRUED EXPENSES

Accrued expenses as of December 31, 1998 and 1997 consist of the following:

<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
Patient refunds ........... $ 369,935 $ 213,300
Incentives ................ 310,395 266,419
Payroll ................... 262,596 567,447
Vacation .................. 251,744 287,703
Accrued interest .......... 30,767 --
Other ..................... 159,201 43,718
---------- ----------
Total ..................... $1,384,638 $1,378,587
========== ==========
</TABLE>

F-46
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

7. LONG-TERM DEBT

The details of the Company's long-term debt and the provisions thereof at
December 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
1998 1997
------------ ----------
<S> <C> <C>
Note payable due in quarterly payments of $3,100, including interest
at 6.69% per year, through June 2001, collateralized by specific
assets of the Company ............................................... $ 28,516 $ 38,751
Notes payable from acquisitions at various interest rates with various
maturities through September 2001, unsecured (see Note 2) ........... 290,772 189,324
Note payable from acquisition due in annual installments of $240,000
plus interest at 7.0% per year, through October 2003, collateralized
by specific assets of the Company (see Note 2) ...................... 1,200,000 --
Revolving line of credit, unsecured .................................. 1,800,000 --
---------- --------
Total ................................................................ 3,319,288 228,075
Less current maturities .............................................. 2,183,826 59,559
---------- --------
$1,135,462 $168,516
========== ========
</TABLE>

Required principal payments on the obligations discussed above as of December
31, 1998 are as follows:

<TABLE>
<S> <C>
1999 ................... $2,183,826
2000 ................... 327,731
2001 ................... 327,731
2002 ................... 240,000
2003 ................... 240,000
----------
Total .................. $3,319,288
==========
</TABLE>

Notes payable at December 31, 1998 and 1997 represent debt issued to employees
or employee shareholders in connection with practice acquisitions.

In September 1997, the Company obtained a $3,000,000 unsecured revolving line
of credit from a bank which matures on June 30, 1999 and bears interest, at the
Company's option, at Prime or LIBOR plus 1.50%. The interest rate on this line
of credit was 7.75% at December 31, 1998. Additionally, there is a 0.25%
commitment fee on the unused balance of the facility. The Company must comply
with various restrictive covenants in connection with its revolving line of
credit. The Company was in violation of certain covenants in 1998 and received
a waiver from the bank with respect to these violations.

The fair value of each of the Company's debt instruments approximated its
recorded value at December 31, 1998 and 1997, based on the Company's effective
current borrowing rate for debt with similar terms and remaining maturities.

8. LEASES

The Company leases facilities and certain equipment under several cancelable
and noncancelable operating leases expiring in various years through 2010.
Certain of the facility leases provide for renewal periods of up to 10 years,
at the option of the Company, and at rental payments as negotiated under the
respective leases (see Note 12).

Aggregate future minimum rental payments under noncancelable operating leases
as of December 31, 1998 are as follows:

F-47
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,
- -------------------------------
<S> <C>
1999 ........................ $1,864,613
2000 ........................ 1,308,274
2001 ........................ 780,211
2002 ........................ 657,471
2003 ........................ 427,689
Thereafter .................. 354,124
----------
Total ....................... $5,392,382
==========
</TABLE>

9. SHAREHOLDERS' EQUITY

All employee shareholders of OptiCare and OptiCare P.C. have executed a
"Shareholders' Agreement" with their respective entities. The agreements
provide, among other things, that no shareholder can dispose of their stock
without first offering the stock to the entity. The agreements also provide
that certain shareholders, who are also employees of OptiCare or OptiCare P.C.,
must offer their stock to the respective entity upon voluntary termination or
termination for cause, as defined in the agreement.

During 1996, Blue Cross and Blue Shield of Connecticut, Inc. exercised a
warrant to purchase 20,494 shares of Class D common stock, par value $31.64 per
share for a total price of $1,660,000.

On October 15, 1997, OptiCare underwent a recapitalization in connection with
the stock purchase and warrant agreements described below. The new equity
structure established three new classes of stock and canceled all of the
preexisting classes.

Outstanding shares of Class A and C common stock were converted one for one to
new Class B Convertible Preferred Stock, with the exception of 6,264 shares of
Class A common stock and 16,312 shares of Class C common stock. Outstanding
shares of Class B and D common stock, as well as the remaining 16,312 shares
Class C common stock, were all converted one for one to New Class A Convertible
Preferred Stock. Both Series A and B Preferred Shares are convertible into
common stock based on a predetermined formula as defined in the Certificate of
Incorporation. Additionally, all preferred shares shall be automatically
converted into common stock in the event of an initial public offering meeting
certain qualifications as defined in the Certificate of Incorporation.

Series A and B Preferred Shareholders are entitled to $93.68 per share plus any
unpaid dividends upon voluntary or involuntary liquidation. Upon liquidation,
Series A Preferred Shareholders shall be entitled to receive their liquidation
value per share before Series B Preferred Shareholders receive any
distributions. Additionally, Series B Preferred Shareholders shall be entitled
to receive their liquidation value per share before the common stockholders
receive any distributions in liquidation.

On October 15, 1997, OptiCare entered into a stock purchase agreement with a
group of investors (the "New Investors") which provided for the sale of 64,048
shares of New Class A Preferred Stock for $6,000,000 in cash, less expenses of
$215,862. Additionally, OptiCare entered into a warrant agreement which
resulted in the issuance of warrants to the New Investors to purchase 48,669
shares of New Class B Preferred Stock and to existing investors to purchase
12,353 shares of New Class B Preferred Stock. These warrants are exercisable at
a price of $93.68 per share of New Class B Preferred Stock and expire on
October 15, 2002. No warrants were exercised during 1998 or 1997.

In November 1997, OptiCare repurchased the remaining 6,264 shares of Class A
common stock from an employee shareholder for an aggregate price of $586,811.

On January 1, 1998 Opticare adopted the 1997 Stock Option Plan (the "Plan"),
which permits the granting of options to employees of OptiCare and OptiCare
P.C., which shall be either incentive stock options, as defined under Section
422 of the Internal Revenue code, or non-qualified options. The Company is

F-48
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

authorized to grant 48,814 options under the Plan, which expire in 2008. The
options vest ratably over a four-year period. During 1998, 42,497 options were
granted at an exercise price of $30. No options were exercised or canceled
during 1998. The Company applies APB Opinion No. 25 and related interpretations
in accounting for its Plan. Accordingly, no compensation cost has been
recognized for stock options awarded under the Plan. Had compensation cost for
the Company's stock option plan been determined based on the fair value at
grant dates consistent with the methodology prescribed under SFAS No.123, the
Company's net loss for the year ended December 31, 1998 would have been
increased by an immaterial amount.

10. INCOME TAXES

The tax effects of significant items comprising the net deferred tax assets
(liabilities) as of December 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
1998 1997
---------- --------------
<S> <C> <C>
Current:
Cash to accrual conversion .................... $ -- $ (211,857)
Managed care claims ........................... 320,279 31,231
Vacation accrual .............................. 101,377 118,232
Other ......................................... 45,353 (4,366)
-------- ----------
Total net current assets (liabilities) ......... $467,009 $ (66,760)
======== ==========
Noncurrent:
Depreciation .................................. $ 45,814 $ 140,411
Other ......................................... 27,193 22,565
-------- ----------
Total net noncurrent assets .................... $ 73,007 $ 162,976
======== ==========
</TABLE>

The provision (benefit) for income taxes for the years ended December 31, 1998,
1997 and 1996 consists of the following:

<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
Current:
Federal ................ $ 78,923 $ 336,054 $ 265,711
State .................. -- 96,270 92,631
---------- ---------- ----------
Total current .......... 78,923 432,324 358,342
========== ========== ==========
Deferred:
Federal ................ (339,100) (221,324) (144,090)
State .................. (104,700) (78,400) (56,000)
---------- ---------- ----------
Total deferred ......... (443,800) (299,724) (200,090)
---------- ---------- ----------
Total .................. $ (364,877) $ 132,600 $ 158,252
========== ========== ==========
</TABLE>

F-49
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

A reconcilation from the Federal income tax provision (benefit) at the
statutory rate to the effective rate is as follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------------- ----------- -----------
<S> <C> <C> <C>
Federal statutory rate .............................. $ (294,870) $ 156,167 $102,359
State income taxes, net of federal benefit .......... (52,036) 32,589 22,850
Other ............................................... (17,971) (56,156) 33,043
---------- --------- --------
$ (364,877) $ 132,600 $158,252
========== ========= ========
</TABLE>

11. RETIREMENT PLAN

The Company provides a defined contribution 401(k) savings plan (the "Plan"),
in which all full-time employees of the Company with at least one year of
service are eligible to participate. Eligible employees may contribute between
1% to 25% of their salary to the Plan subject to IRS limitations. The Company
provides a matching contribution of 25% of the employee contributions, whereby
only the first 3% of employee salaries are matched. The Company's contribution
to the Plan was $70,916, $55,909 and $40,077 for the years ended December 31,
1998, 1997 and 1996, respectively.

12. RELATED PARTY TRANSACTIONS

The Company has advanced funds to shareholders and employees which are
repayable under various arrangements. All advances are unsecured. Interest
income under these agreements was not significant during the years ended
December 31, 1998, 1997 and 1996.

In addition, the Company leases various facilities from several of its
shareholders and entities owned by several of its shareholders. Payments under
such leases approximated $1,528,000, $1,259,000 and $1,124,000 during the year
ended December 31, 1998, 1997 and 1996, respectively.

OptiCare, Inc. has guaranteed an obligation of O.C. Realty Associates, a
related party. The amount of such indebtedness at December 31, 1998, 1997 and
1996 was $221,853, $233,814 and $244,706, respectively, and is secured by the
assets of O.C. Realty Associates.

In connection with the stock purchase agreement, the Company also entered into
a consulting agreement with one of the New Investors. Under the terms of this
agreement this individual will provide management consulting services for a
period of 36 months beginning October 15, 1997.

The Company, in its normal course of business, has entered into various arm's
length managed care, ambulatory surgery center, and provider agreements with
its health care investors and/or affiliates.

13. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

Medicare represented 25%, 29%, and 28% of total net revenue for the years ended
December 31, 1998, 1997 and 1996, respectively and 13% and 16% of accounts
receivable at December 31, 1998 and 1997, respectively. In addition, one other
customer/shareholder represented approximately 20%, 11% and 12% of total net
revenue during 1998 , 1997 and 1996, respectively and 29% and 22% of accounts
receivable at December 31, 1998 and 1997, respectively.

F-50
<PAGE>

OPTICARE EYE HEALTH CENTERS, INC. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

14. CONTINGENCIES

In connection with the purchase of a practice in 1998, the Company agreed to
pay, as additional consideration for the acquisition of the assets, a
contingent payment based upon the profitability of the practice for the twelve
month period beginning November 1, 1998. The contingent payment, not to exceed
$320,000, is due in quarterly installments beginning on January 1, 2000 through
October 1, 2003 at an interest rate of 7%. Any such contingent payments will be
recorded, when earned, as goodwill as additional purchase price consideration.

The Company is involved in litigation in the normal course of business. The
Company is vigorously defending its position and, based on discussions with
outside counsel, believes it will prevail with respect to any outstanding
litigation. Therefore, no provision for loss has been recorded.

******

F-51
<PAGE>

ANNEX LIST

Annex A: Agreement and Plan of Merger.

Annex B: Proposed Certificate of Amendment of the Certificate of
Incorporation of Saratoga.

Annex C: Performance Stock Program.

Annex D: Employee Stock Purchase Plan
<PAGE>

ANNEX A

AGREEMENT AND PLAN OF MERGER
BY AND AMONG
SARATOGA RESOURCES, INC.,
OPTICARE SHELLCO MERGER CORPORATION,
PRIMEVISION SHELLCO MERGER CORPORATION,
OPTICARE EYE HEALTH CENTERS, INC.
AND
PRIMEVISION HEALTH, INC.

DATED AS OF APRIL 12, 1999

A-1
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
ARTICLE I
CLOSING; DEFINITIONS ......................................... 1
1.1 CLOSING ............................................. 1
1.2 DEFINITIONS ......................................... 1
ARTICLE II
THE MERGERS .................................................. 14
2.1 THE MERGERS. ........................................ 14
2.2 EFFECTIVE TIME OF THE MERGERS. ...................... 14
2.3 CERTIFICATES OF INCORPORATION. ...................... 14
2.4 BY-LAWS. ............................................ 15
2.5 BOARDS OF DIRECTORS; OFFICERS. ...................... 15
2.6 EFFECTS OF MERGERS. ................................. 15
2.7 MERGER CONSIDERATION. ............................... 15
2.7.1 OptiCare Merger ..................................... 15
2.7.2 Prime Merger ........................................ 16
2.8 FRACTIONAL SARATOGA SHARES. ......................... 17
2.9 DISSENTING SHARES. .................................. 18
2.10 CLOSING OF TRANSFER BOOKS. .......................... 19
2.11 EXCHANGE OF SHARES. ................................. 19
2.12 OPTIONS AND WARRANTS ................................ 20
2.13 DIVIDENDS. .......................................... 22
2.14 STOCKHOLDERS MEETINGS. .............................. 22
2.15 ASSISTANCE IN CONSUMMATION OF THE MERGERS. .......... 22
2.16 TRANSFER TAXES. ..................................... 22
2.17 FURTHER ASSURANCES. ................................. 23
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTIES ................ 23
3.1 ORGANIZATION AND GOOD STANDING ...................... 23
3.2 AUTHORITY; NO CONFLICT .............................. 24
3.3 CAPITALIZATION ...................................... 25
3.4 FINANCIAL STATEMENTS ................................ 27
3.5 BOOKS AND RECORDS ................................... 28
3.6 TITLE TO PROPERTIES; ENCUMBRANCES ................... 28
3.7 CONDITION AND SUFFICIENCY OF ASSETS ................. 28
3.8 NO UNDISCLOSED LIABILITIES .......................... 29
3.9 TAXES ............................................... 29
3.10 NO MATERIAL ADVERSE CHANGE .......................... 30
3.11A 401(k) Plan ......................................... 30
3.11B Welfare Benefit Plans ............................... 32
3.11C Employee Benefit Plans .............................. 35
3.12 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL 37
AUTHORIZATIONS .....................................
3.13 LEGAL PROCEEDINGS; ORDERS ........................... 40
3.14 ABSENCE OF CERTAIN CHANGES AND EVENTS ............... 42
3.15 CONTRACTS; NO DEFAULTS .............................. 43
3.16 INSURANCE ........................................... 46
</TABLE>

A-2
<PAGE>

<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
3.17 ENVIRONMENTAL MATTERS ........................................ 48
3.18 EMPLOYEES .................................................... 49
3.19 LABOR RELATIONS; COMPLIANCE .................................. 49
3.20 INTELLECTUAL PROPERTY ........................................ 50
3.21 CERTAIN PAYMENTS ............................................. 50
3.22 RELATIONSHIPS WITH RELATED PERSONS ........................... 51
3.23 BROKERS OR FINDERS ........................................... 51
3.24 SEC FILINGS .................................................. 51
3.25 DISCLOSURE ................................................... 51
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGERS ............................. 52
4.1 CONDUCT OF BUSINESS PENDING THE MERGERS ...................... 52
4.2 CONDUCT OF BUSINESS OF PRIME SUB AND OPTICARE SUB ............ 54
ARTICLE V
ADDITIONAL AGREEMENTS ............................................... 54
5.1 ACCESS AND INFORMATION ....................................... 54
5.2 PROXY STATEMENT .............................................. 54
5.3 EMPLOYEE MATTERS ............................................. 55
5.4 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE .......... 56
5.5 HSR ACT ...................................................... 57
5.6 ADDITIONAL AGREEMENTS ........................................ 57
5.7 ADVICE OF CHANGES; SEC FILINGS ............................... 57
5.8 RESTRUCTURING OF MERGER ...................................... 57
5.9 STATE TAKEOVER STATUTES ...................................... 58
5.10 AFFILIATE AGREEMENTS ......................................... 58
5.11 ACCOUNTANTS' LETTERS ......................................... 58
5.12 SARATOGA VOTING .............................................. 58
5.13 ACTION BY THE OFFICERS, DIRECTORS, ETC. ...................... 58
5.14 MEETINGS OF STOCKHOLDERS ..................................... 58
ARTICLE VI
CONDITIONS PRECEDENT ................................................ 59
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGERS 59
6.2 DOCUMENTS TO BE DELIVERED .................................... 65
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER ................................... 66
7.1 TERMINATION BY MUTUAL CONSENT ................................ 66
7.2 TERMINATION BY SARATOGA, OPTICARE OR PRIME ................... 66
7.3 EFFECT OF TERMINATION AND ABANDONMENT ........................ 67
7.4 EXTENSION; WAIVER ............................................ 67
7.5 AMENDMENT .................................................... 68
ARTICLE VIII
GENERAL PROVISIONS .................................................. 68
8.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND 68
AGREEMENTS ..................................................
8.2 NOTICES ...................................................... 68
8.3 FEES AND EXPENSES ............................................ 69
8.4 PUBLICITY .................................................... 70
</TABLE>

A-3
<PAGE>

<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
8.5 SPECIFIC PERFORMANCE ................ 70
8.6 ASSIGNMENT; BINDING EFFECT .......... 70
8.7 ENTIRE AGREEMENT .................... 70
8.8 GOVERNING LAW ....................... 70
8.9 COUNTERPARTS ........................ 71
8.10 INTERPRETATION ...................... 71
8.11 INCORPORATION OF EXHIBITS ........... 71
8.12 SEVERABILITY ........................ 71
</TABLE>

A-4
<PAGE>

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made as of April
12, 1999, by and among SARATOGA RESOURCES, INC., a Delaware corporation
("Saratoga"), OPTICARE SHELLCO MERGER CORPORATION, a Delaware corporation and a
wholly owned subsidiary of Saratoga ("OptiCare Sub"), PRIMEVISION SHELLCO
MERGER CORPORATION, a Delaware corporation and a wholly owned subsidiary of
Saratoga ("Prime Sub"), OPTICARE EYE HEALTH CENTERS, INC., a Connecticut
corporation ("OptiCare"), and PRIMEVISION HEALTH, INC., a Delaware corporation
("Prime"). Saratoga, OptiCare Sub, Prime Sub, OptiCare and Prime are sometimes
referred to in this Agreement individually as a "Party" and collectively as the
"Parties."

WITNESSETH:

WHEREAS, the respective boards of directors of Saratoga, OptiCare Sub,
Prime Sub, OptiCare and Prime have approved a plan of reorganization which
contemplates the simultaneous merger of OptiCare Sub with and into OptiCare and
of Prime Sub with and into Prime (individually a "Merger" and collectively the
"Mergers") pursuant to which the outstanding shares of capital stock of each of
OptiCare and Prime will be converted into shares of the $.001 par value common
stock of Saratoga; and

WHEREAS, the Parties desire to enter into this Agreement for the purpose
of setting forth certain representations, warranties, covenants and agreements
by each Party to the other Parties and to set forth the terms and conditions of
the Mergers;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises herein contained, and on the terms and subject to the conditions
herein set forth, the Parties agree as follows:

ARTICLE I.

CLOSING; DEFINITIONS

1.1 CLOSING. The closing of the Contemplated Transactions (the "Closing")
shall take place at a time and place mutually agreeable to the Parties on a
date (the "Closing Date") within two (2) Business Days after the satisfaction
or waiver of all conditions precedent set forth in Article VI hereof. The
Certificates of Merger shall be filed with the appropriate authorities in the
States of Delaware and Connecticut as part of the Closing.

1.2 DEFINITIONS. The terms defined in this Section 1.2, whenever used in
this Agreement (including the Exhibits and the Schedules), shall have the
respective meanings indicated below for all purposes of this Agreement.

"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.

"Agreement" shall have the meaning ascribed to such term in the first
paragraph of this Agreement and Plan of Merger.

"AMEX" shall mean the American Stock Exchange.

"Antitrust Division" shall have the meaning ascribed to such term in
Section 5.5

"Applicable Contract" shall mean any Contract (a) under which a
Representing Party has or may acquire any rights, (b) under which a
Representing Party has or may become subject to any obligation or Liability, or
(c) by which a Representing Party or any of the assets owned or used by it is
or may become bound.

"ASA Agreement" shall have the meaning ascribed to such term in Section
6.1(r).

"Balance Sheet" shall have the meaning ascribed to such term in Section
3.4.

"Basis" shall mean any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or is reasonably likely to
form the basis for any specified consequence.

A-5
<PAGE>

"Best Efforts" shall mean the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such
result is achieved as expeditiously as possible; provided, however, that an
obligation to use Best Efforts under this Agreement does not require the Person
subject to that obligation to take actions that would result in a materially
adverse change in the benefits to such Person of this Agreement and the
Contemplated Transactions.

"Breach" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been any inaccuracy in or breach of, or any failure to perform or comply with,
such representation, warranty, covenant, obligation, or other provision, and
the term "Breach" means any such inaccuracy, breach, failure, claim,
occurrence, or circumstance.

"Business Day" shall mean a day other than a Saturday or Sunday, or such
other day on which commercial banks in New York City are authorized or required
to close.

"Cap" shall have the meaning ascribed to such term in Section 5.4(a).

"CBCA" shall mean the Connecticut Business Corporation Act.

"CEO Employment Agreement" shall mean the employment agreement between Dr.
Dean J. Yimoyines and Saratoga referred to in Section 6.1(n).

"Certificate" shall have the meaning ascribed to such term in Section
2.11(b).

"Certificates of Merger" shall mean the certificates of merger to be filed
with the appropriate authorities in the States of Connecticut and Delaware and
which are required to effect the Mergers in accordance with the CBCA and the
DGCL, respectively.

"Closing" shall have the meaning ascribed to such term in Section 1.1.

"Closing Date" shall have the meaning ascribed to such term in Section
1.1.

"Closing Documents" shall have the meaning ascribed to such term in
Section 6.2.

"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the IRC and Sections 601
through 608 of ERISA, and any amendments thereto and successor provisions
thereof, including any regulations promulgated under the applicable provisions
of the IRC and ERISA.

"Competing Business" shall have the meaning ascribed to such term in
Section 3.22.

"Consent" shall mean any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).

"Contemplated Transactions" shall mean all of the transactions
contemplated by this Agreement, including:

(a) the Reverse Stock Split;

(b) the merger of OptiCare Sub with and into OptiCare and the merger of
Prime Sub with and into Prime;

(c) the execution, delivery, and performance of the CEO Employment
Agreement, the Other Employment Agreements and the Prime Physician
Agreements; and

(d) the performance by the Parties of their respective covenants and
obligations under this Agreement.

"Contract" shall mean any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.

"Controlled Group" shall mean a Party and any entity that is considered a
single employer with a Party pursuant to subsections (b), (c), (m) or (o) of
Section s. 414 of the IRC.

A-6
<PAGE>

"Bank Austria Warrants" shall mean the various warrants to purchase an
aggregate of 220,281 shares of Prime Common Stock or Prime convertible
preferred stock issued to and held by Bank Austria Aktiengesellschaft. Grand
Cayman Branch, or its registered assigns.

"DGCL" shall mean the General Corporation Law of Delaware.

"DOL" shall mean the United States Department of Labor.

"Effective Time" shall have the meaning ascribed to such term in Section
2.2.

"Employee" shall mean an individual who is a common law employee of
another Person.

"Employee Benefit Plan" shall mean all written or oral plans, Contracts or
other arrangements for the benefit or advantage of any officer, director,
Employee, contractor or agent, or any group of such Persons, with respect to
which a Representing Party has or may have a Liability, including, without
limitation, plans described in Section 3(3) of ERISA; deferred compensation
arrangements; supplemental executive retirement plans; rabbi or secular trusts;
corporate-owned life insurance; split-dollar insurance arrangements; letter of
credit or indemnity policies for deferred compensation arrangements; stock or
performance awards; long and short-term incentive plans; golden or tin
parachute agreements; medical, disability, life and other insurance benefits;
severance plans or policies; sick leave; vacation benefits; educational,
transportation, parking and other subsidies; allowances for entertainment;
charitable contributions to be made upon an individual's request; use of an
automobile; payment of club dues; and any other arrangements similar to any of
the foregoing.

"Encumbrance" shall mean any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right
of first refusal, or restriction of any kind, including, without limitation,
any restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.

"Environmental Law" means any federal, state or local law, regulation,
order, decree, permit, authorization, common law or agency requirement with
force of law relating to: (1) the protection or restoration of the environment,
health or safety (in each case as relating to the environment) or natural
resources, or (2) the handling, use, presence, disposal, release or threatened
release of any Hazardous Substance.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, including all regulations and rules issued pursuant thereto. All
citations to ERISA, or to the Department of Labor Regulations promulgated
thereunder, shall include any amendments or any substitute or successor
provisions thereof.

"Exchange Agent" shall have the meaning ascribed to such term in Section
2.11.

"Facilities" shall mean any real property, leaseholds, or other interests
currently or formerly owned or operated by a Representing Party and any
buildings, plants, structures, or equipment (including motor vehicles, tank
cars, and rolling stock) currently or formerly owned or operated by a
Representing Party.

"Fiduciary" shall have the meaning set forth in Section 3(21) of ERISA.

"FTC" shall have the meaning ascribed to such term in Section 5.5.

"GAAP" shall mean generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the Balance Sheets and
the other financial statements referred to in Section 3.4 were prepared.

"Governmental Authorization" shall mean any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise
made available by or under the authority of any Governmental Body or pursuant
to any Legal Requirement.

"Governmental Body" shall mean any:

(a) nation, state, county, city, town, village, borough, district, or
other jurisdiction of any nature;

A-7
<PAGE>

(b) federal, state, local, municipal, foreign, or other government;

(c) governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, commission, commissioner, department,
official, or entity and any court or other tribunal);

(d) multi-national organization or body; or

(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature.

"Hazardous Substance" means any hazardous or toxic substance, material or
waste, including those substances, materials and wastes listed in the United
States Department of Transportation Hazardous Materials Table (49 C.F.R.
Section 172.101), or by the United States Environmental Protection Agency as
hazardous substances (40 C.F.R. Part 302) and amendments thereto, petroleum
products or other such substances, materials and wastes that are or become
regulated under any applicable local, state or federal law, including petroleum
compounds, lead, asbestos and polychlorinated biphenyls.

"HIPAA" shall mean the Health Insurance Portability and Accountability Act
of 1996 as set forth in Sections 9801 through 9806 of the IRC and Sections 701
through 707, 711 through 712, and 731 through 734 of ERISA and any amendments
thereto and successor provisions thereof, including any regulations promulgated
under the applicable provisions of the IRC and ERISA.

"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

"Indemnified Parties"' shall have the meaning ascribed to such term in
Section 5.4.

"IRC" shall mean the Internal Revenue Code of 1986 or any successor law,
and regulations issued by the IRS pursuant to such code or any successor law.

"IRS" shall mean the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.

"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual is actually aware of or
should be aware of such fact or other matter.

A Person (other than an individual) will be deemed to have "Knowledge" of
a particular fact or other matter if any individual who is serving, or who has,
except with respect to Saratoga, at any time served, as a director, officer,
partner, manager, executor, or trustee of such Person (or in any similar
capacity) has, or at any time had, Knowledge of such fact or other matter.

"Legal Requirement" shall mean any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, rule, regulation,
statute, or treaty.

"Liability" shall mean any liability (whether known or unknown, asserted
or unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due), including any liability for Taxes.

"Marlin Capital Warrants" shall mean the warrants to purchase 1,333,333
shares of Prime Common Stock issued to and held by Marlin Capital, L.P.

"Material Adverse Effect" shall mean, with respect to a Party, any
condition, event, fact, change, effect or occurrence that individually or in
the aggregate with similar conditions, events, facts, changes, effects or
occurrences has or will have a material adverse effect on the Contracts,
business, operations, assets, licenses, results of operations, or financial
condition of such Party and its Subsidiaries, if any, taken as a whole.

"Medical Waste Laws" shall have the meaning ascribed to such term in
Section 3.17(b).

"Merger(s)" shall have the meaning ascribed to such term in the Preamble
of this Agreement.

"Merger Consideration" shall have the meaning ascribed to such term in
Section 2.7.2(c).

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"NASDAQ" -- The Nasdaq Stock Market.

"Objecting OptiCare Shares" shall have the meaning ascribed to such term
in Section 2.9(a).

"Objecting Prime Shares" shall have the meaning ascribed to such term in
Section 2.9(b).

"OptiCare" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

"OptiCare Class A Preferred Stock" shall mean the Class A Convertible
Preferred Stock, par value $.01 per share, of OptiCare.

"OptiCare Class B Preferred Stock" shall mean the Class B Convertible
Preferred Stock, par value $.01 per share, of OptiCare.

"OptiCare Common Stock" shall mean the Common Stock, par value $.01 per
share, of OptiCare.

"OptiCare Disclosure Schedule" shall have the meaning ascribed to such
term in the definition of "Representing Party's Disclosure Schedule."

"OptiCare Exchange Ratio" shall have the meaning ascribed to such term in
Section 2.7(c).

"OptiCare Merger" shall have the meaning ascribed to such term in Section
2.1.

"OptiCare Merger Consideration" shall have the meaning ascribed to such
term in Section 2.7(c).

"OptiCare Shares" shall have the meaning ascribed to such term in Section
3.3(b).

"OptiCare Stock" shall have the meaning ascribed to such term in Section
2.7(b).

"OptiCare Sub" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

"OptiCare Sub Common Stock" shall mean the Common Stock, par value $.01
per share, of OptiCare Sub.

"OptiCare Sub Shares" shall have the meaning ascribed to such term in
Section 3.3(d).

"OptiCare Surviving Corporation" shall have the meaning ascribed to such
term in Section 2.1.

"Order" shall mean any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.

"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:

(a) such action is consistent with the past practices of such Person and
is taken in the ordinary course of the normal day-to-day operations of such
Person;

(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority); and

(c) such action is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors of such Person
(or by any Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that
are in the same line of business as such Person.

"Organizational Documents" shall mean (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; (e) the articles of
organization and operating agreement of a limited liability company; and (f)
any amendment to any of the foregoing.

"Other Employment Agreements" shall have the meaning ascribed to such term
in Section 6.1(n).

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"Other Parties" shall mean the Parties other than a Representing Party to
whom such Representing Party makes representations and warranties under Article
III.

"Outstanding Option" shall have the meaning ascribed to such term in
Section 2.12.

"Outstanding Options and Warrants" shall have the meaning ascribed to such
term in Section 2.12.

"Outstanding Warrant" shall have the meaning ascribed to such term in
Section 2.12.

"PBGC" shall mean the Pension Benefit Guaranty Corporation.

"Parties" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

"Party" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

"Pension Benefit Plan" shall mean any plan as defined in Section 3(2) of
ERISA with respect to which a Representing Party has or may have a Liability.

"Person" shall mean any individual, corporation (including any non-profit
corporation), company, general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.

"Prime" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

"Prime Class A Preferred Stock" shall mean the Class A Preferred Stock,
par value $.01 per share, of Prime.

"Prime Common Stock" shall mean the Common Stock, par value $.01 per
share, of Prime.

"Prime Disclosure Schedule" shall have the meaning ascribed to such term
in the definition of "Representing Party's Disclosure Schedule."

"Prime Exchange Ratio" shall have the meaning ascribed to such term in
Section 2.7.2(c).

"Prime Merger" shall have the meaning ascribed to such term in Section
2.1.

"Prime Merger Consideration" shall have the meaning ascribed to such term
in Section 2.7(d).

"Prime Physician Agreements" shall mean the services agreements and
transition agreements between Prime and physician practices which will become
effective no later than the Effective Date.

"Prime Shares" shall have the meaning ascribed to such term in Section
3.3(a).

"Prime Sub" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

"Prime Sub Common Stock" shall mean the Common Stock, par value $.01 per
share, of Prime Sub.

"Prime Sub Shares" shall have the meaning ascribed to such term in Section
3.3(c).

"Prime Surviving Corporation" shall have the meaning ascribed to such term
in Section 2.1.

"Proceeding" shall mean any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought or conducted by, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.

"Proprietary Rights Agreement" shall have the meaning ascribed to such
term in Section 3.18(b).

"Proxy Statement/Prospectus" shall have the meaning ascribed to such term
in Section 5.2.

"Related Person" -- with respect to a particular individual:

(a) each other member of such individual's Family;

(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;

(c) any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and

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(d) any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).

With respect to a specified Person other than an individual:

(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control
with such specified Person;

(b) any Person that holds a Material Interest in such specified Person;

(c) each Person that serves as a director, officer, partner, manager,
executor, or trustee of such specified Person (or in a similar capacity);

(d) any Person in which such specified Person holds a Material Interest;

(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and

(f) any Related Person of any individual described in clause (b) or (c).

For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of voting securities or other voting interests representing at
least 10% of the outstanding voting power of a Person or equity securities or
other equity interests representing at least 10% of the outstanding equity
securities or equity interests in a Person.

"Representative" shall mean, with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other
representative of such Person, including legal counsel, accountants, and
financial advisors.

"Representing Party" shall mean Saratoga, OptiCare Sub, Prime Sub,
OptiCare or Prime, as the case may be, when it is making the representations
and warranties to the Other Parties set forth in Article III.

"Representing Party's Disclosure Schedule" shall mean the disclosure
schedule delivered by a Representing Party to the Other Parties under Article
III concurrently with the execution and delivery of this Agreement (as such may
relate specifically to Prime, the "Prime Disclosure Schedule," as such may
relate specifically to OptiCare, the "OptiCare Disclosure Schedule" and as such
may relate specifically to Saratoga, the "Saratoga Disclosure Schedule").

"Requisite Regulatory Approvals" shall have the meaning ascribed to such
term in Section 6.1(g).

"Reverse Stock Split" shall mean the reverse split referred to in Section
6.1(u) of the common stock, $.001 par value, of Saratoga as it existed before
such split.

"Rule 145 Affiliates" shall have the meaning ascribed to such term in
Section 5.10.

"Saratoga" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

"Saratoga Common Stock" shall mean the Common Stock, $.001 par value, of
Saratoga as it is constituted after the Reverse Stock Split.

"Saratoga Disclosure Schedule" shall have the meaning ascribed to such
term in the definition of "Representing Party's Disclosure Schedule."

"Saratoga Insiders" shall have the meaning ascribed to such term in
Section 6.1(s).

"Saratoga Shares" shall have the meaning ascribed to such term in Section
3.3(e).

"SEC" shall mean the United States Securities and Exchange Commission.

"SEC Filings" shall have the meaning ascribed to such term in Section
3.24.

"Securities Act" shall mean the Securities Act of 1933, as amended, or any
successor law, and all regulations and rules issued pursuant to that Act or any
successor law.

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"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any successor law, and all regulations and rules issued pursuant
to that Act or any successor law.

"Seller Notes" shall have the meaning ascribed to such term in Section
6.1(r).

"Steve Waite Options" shall mean the options to purchase 65,000 shares of
Prime Common Stock granted to and held by Steven B. Waite.

"Stock Option Plans" shall have the meaning ascribed to such term in
Section 2.12.

"Subsidiary" shall mean with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body or otherwise having the power to direct the
business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a
contingency that has not occurred) are held by the Owner or one or more of its
Subsidiaries. Notwithstanding the foregoing, the term "Subsidiary" when used
with respect to Saratoga shall not include any corporation the stock of which
is held by Saratoga on the date of this Agreement but is disposed of by
Saratoga before the Effective Time of the Mergers, provided that Saratoga will
have no liabilities with respect to such corporation after such disposition.

"Surviving Corporation" shall mean one of the corporations which survives
one of the Mergers, as defined in Section 2.1.

"Tax" shall mean any tax (including any income tax, capital gains tax,
value-added tax, sales tax, use tax, property tax, payroll tax, workers
compensation tax, unemployment tax, gift tax or estate tax), levy, assessment,
tariff, duty (including any customs duty), deficiency, or other fee, and any
related charge or amount (including any fine, penalty, interest, or addition to
tax), imposed, assessed, or collected by or under the authority of any
Governmental Body or payable pursuant to any tax-sharing agreement or any other
Contract relating to the sharing or payment of any such tax, levy, assessment,
tariff, duty, deficiency, or fee.

"Tax Return" shall mean any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Legal Requirement relating to any Tax.

"Threatened" -- a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.

"VEBA" shall mean a voluntary Employees' beneficiary association created
pursuant to Section 501(c)(9) of the IRC.

"Welfare Benefit Plan" shall mean any plan as defined in Section 3(1) of
ERISA, any cafeteria plan under Section 125 of the IRC, any dependent care
assistance plan under Section 129 of the IRC, and any educational assistance
plan under Section 127 of the IRC with respect to which a Representing Party
has or may have a Liability.

ARTICLE II

THE MERGERS

2.1 THE MERGERS. Upon the terms and subject to the conditions hereof, at
the Effective Time, (a) Prime Sub shall be merged into Prime and the separate
existence of Prime Sub shall thereupon cease (the "Prime Merger"), and Prime as
the corporation surviving the Prime Merger (the "Prime Surviving Corporation"),
shall by virtue of the Prime Merger continue its corporate existence under the
laws of the State of Delaware and (b) OptiCare Sub shall be merged into
OptiCare and the separate existence of

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OptiCare Sub shall thereupon cease (the "OptiCare Merger"), and OptiCare, as
the corporation surviving the OptiCare Merger (the "OptiCare Surviving
Corporation"), shall by virtue of the OptiCare Merger continue its corporate
existence under the laws of the State of Connecticut.

2.2 EFFECTIVE TIME OF THE MERGERS. The Mergers shall become effective at
the date and time (the "Effective Time") specified in properly executed
Certificates of Merger duly filed with the Secretary of State of the State of
Delaware and the Secretary of the State of the State of Connecticut, which
filings shall be made as soon as practicable following the satisfaction or, if
permissible, waiver of the conditions set forth in Article VI hereof. The
Certificates of Merger shall be in the form required by, and executed in
accordance with the relevant provisions of, the DGCL and the CBCA.

2.3 CERTIFICATES OF INCORPORATION. (a) The Certificate of Incorporation of
Prime shall be the Certificate of Incorporation of the Prime Surviving
Corporation after the Effective Time, until altered or amended.

(b) The Certificate of Incorporation of OptiCare shall be the Certificate
of Incorporation of the OptiCare Surviving Corporation after the Effective
Time, until altered or amended; provided, however, that Section 4.2(b) of
Article 4 of the Certificate of Incorporation of OptiCare shall be amended
and restated in its entirety as follows:

"(b) For purposes of this Section 4.2, (i) any acquisition of the
Corporation by means of merger (other than the merger of OptiCare
Shellco Merger Corporation into the Corporation pursuant to the
Agreement and Plan of Merger by and among Saratoga Resources, Inc.,
OptiCare Shellco Merger Corporation, PrimeVision Shellco Merger
Corporation, OptiCare Eye Health Centers, Inc. and PrimeVision Health,
Inc.), consolidation or other form of corporate reorganization, other
than a mere reincorporation transaction (but excluding such a
transaction as a result of which the stockholders of the Corporation
immediately prior to the transaction have the right, following the
transaction, to elect a majority of the directors of the surviving
corporation), and (ii) a sale of 51% or more of the assets of the
Corporation (but excluding a sale of stock of the Corporation) shall be
treated as a liquidation, dissolution or winding up of the Corporation
and shall entitle the holders of Preferred Stock to receive at the
closing in cash, securities or other property (valued as provided in
Section 4.2(c)) amounts as specified in Sections 4.2(a)(i) and
4.2(a)(ii), respectively."

2.4 BY-LAWS. The By-laws of Prime as in effect on the Effective Time shall
be the By-laws of the Prime Surviving Corporation and the By-laws of OptiCare
as in effect on the Effective Time shall be the By-laws of the OptiCare
Surviving Corporation, and thereafter such By-laws may be amended in accordance
with their terms and as provided by law and this Agreement.

2.5 BOARDS OF DIRECTORS; OFFICERS. Prior to the Closing, OptiCare and
Prime shall mutually agree on the persons who will be the directors and
officers of the OptiCare Surviving Corporation and the Prime Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the respective corporations.

2.6 EFFECTS OF MERGERS. The Prime Merger shall have the effects set forth
in Section 259 and other applicable provisions of the DGCL and the OptiCare
Merger shall have the effects set forth in Section 259 and other applicable
provisions of the DGCL and Section 33-820(a) of the CBCA.

2.7 MERGER CONSIDERATION. At the Effective Time, by virtue of the Merger
and except as may be provided in this Section 2.7, without any action on the
part of OptiCare, OptiCare Sub, Prime, Prime Sub or the holders of any of the
following securities:

2.7.1 OPTICARE MERGER.

(a) Each share of OptiCare Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall, by virtue of the OptiCare
Merger and without any action on the part of the holder thereof, be
converted into and become one validly issued, fully paid and nonassessable
share of common stock of the OptiCare Surviving Corporation.

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(b) All the outstanding shares of OptiCare Class A Preferred Stock,
OptiCare Class B Preferred Stock, and OptiCare Common Stock, (collectively
the "OptiCare Stock") which are held by OptiCare or any Subsidiary of
OptiCare, Prime or any Subsidiary of Prime, or Saratoga or any Subsidiary
of Saratoga, shall be cancelled and extinguished without any conversion
thereof and no payment or distribution shall be made with respect thereto.

(c) Each share of OptiCare Stock issued and outstanding immediately prior
to the Effective Time, other than Objecting OptiCare Shares (as defined
below) and shares of OptiCare Stock cancelled pursuant to Section 2.7.1(b),
shall by virtue of the OptiCare Merger, and without any action on the part
of the holder thereof, be converted into the right to receive, and, upon
surrender of the Certificate or Certificates representing such shares of
OptiCare Stock, shall be exchangeable for, the number of shares of Saratoga
Common Stock determined by multiplying each share of OptiCare Stock by the
OptiCare Exchange Ratio as defined below. The OptiCare Exchange Ratio shall
be the quotient of (a) the number of shares of Saratoga Common Stock which
shall equal forty eight and seven hundred forty-five thousandths percent
(48.745%) of the total amount of Saratoga Common Stock calculated on a
primary basis to be outstanding immediately after the Effective Time,
giving effect to the Reverse Stock Split and the Mergers and taking into
account any shares of Saratoga Common Stock which are not issued in the
Mergers and the Reverse Stock Split because they are attributable to
stockholders of Saratoga and former stockholders of OptiCare and Prime who
may have demanded and perfected statutory dissenters rights; divided by (b)
the number of outstanding shares of OptiCare Stock calculated on a primary
basis. Saratoga shall issue to holders of OptiCare Stock the number of
shares of Saratoga Common Stock calculated by applying the OptiCare
Exchange Ratio, in exchange for each such share of OptiCare Stock (the
"OptiCare Merger Consideration").

(d) If between the date of this Agreement and the Effective Time, the
outstanding shares of Saratoga Common Stock shall be changed into a
different number of shares or a different class of shares by reason of any
reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment (other than the Reverse Stock Split), or if a stock
dividend or extraordinary cash or other dividend thereon shall be declared
with a record date within such period, then the number of shares of
Saratoga Common Stock constituting the OptiCare Merger Consideration and
the OptiCare Exchange Ratio will be appropriately and proportionately
adjusted so that the number of such shares of Saratoga Common Stock (or
such class of shares into which shares of Saratoga Common Stock have been
changed) that will be issued in the OptiCare Merger will equal the number
of such shares and other consideration that holders of shares of OptiCare
Stock would have received pursuant to such classification,
recapitalization, split-up, combination, exchange of shares or readjustment
had the record date therefor been immediately following the Effective Time.

2.7.2 PRIME MERGER.

(a) Each share of Prime Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Prime
Merger and without any action on the part of the holder thereof, be
converted into and become one validly issued, fully paid and nonassessable
share of common stock of the Prime Surviving Corporation.

(b) All of the outstanding shares of Prime Common Stock which are held by
Prime or any Subsidiary of Prime, OptiCare or any Subsidiary of OptiCare,
or Saratoga or any Subsidiary of Saratoga, shall be cancelled and
extinguished without any conversion thereof and no payment or distribution
shall be made with respect thereto.

(c) Each share of Prime Common Stock issued and outstanding immediately
prior to the Effective Time, other than Objecting Prime Shares (as defined
below) and shares of Prime Common Stock cancelled pursuant to Section
2.7.2(b), shall, by virtue of the Prime Merger, and without any action on
the part of the holder thereof, be converted into the right to receive,
and, upon surrender of the Certificate or Certificates representing such
shares of Prime Stock, shall be exchangeable for, the number of shares of
Saratoga Common Stock determined by multiplying each share of Prime Stock
by the Prime Exchange Ratio as defined below. The Prime Exchange Ratio
shall be the

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quotient of (a) the number of shares of Saratoga Common Stock which shall
equal forty eight and seven hundred fifty-five thousandths percent
(48.755%) of the total amount of Saratoga Common Stock calculated on a
primary basis to be outstanding immediately after the Effective Time,
giving effect to the Reverse Stock Split and the Mergers and taking into
account any shares of Saratoga Common Stock which are not issued in the
Mergers and the Reverse Stock Split because they are attributable to
stockholders of Saratoga and former stockholders of OptiCare and Prime who
may have demanded and perfected statutory dissenters rights; divided by (b)
the number of outstanding shares of Prime Stock calculated on a primary
basis. Saratoga shall issue to holders of Prime Stock the number of shares
of Saratoga Common Stock calculated by applying the Prime Exchange Ratio,
in exchange for each such share of Prime Common Stock (the "Prime Merger
Consideration" and, together with the OptiCare Merger Consideration, the
"Merger Consideration").

(d) If between the date of this Agreement and the Effective Time, the
outstanding shares of Saratoga Common Stock shall be changed into a
different number of shares or a different class of shares by reason of any
reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment (other than the Reverse Stock Split), or if a stock
dividend or extraordinary cash or other dividend thereon shall be declared
with a record date within such period, then the number of shares of
Saratoga Common Stock constituting the Prime Merger Consideration and the
Prime Exchange Ratio will be appropriately and proportionately adjusted so
that the number of such shares of Saratoga Common Stock (or such class of
shares into which shares of Saratoga Common Stock have been changed) that
will be issued in the Prime Merger will equal the number of such shares and
other consideration that holders of shares of Prime Common Stock would have
received pursuant to such classification, recapitalization, split-up,
combination, exchange of shares or readjustment had the record date
therefor been immediately following the Effective Time.

2.8 FRACTIONAL SARATOGA SHARES. No certificates or scrip representing
fractional shares of Saratoga Common Stock shall be issued in the Mergers. All
fractional shares of Saratoga Common Stock to which a holder of OptiCare Stock
or Prime Common Stock immediately prior to the Effective Time would otherwise
be entitled at the Effective Time shall be aggregated. If a fractional share
results from such aggregation, in lieu thereof Saratoga (or the Exchange Agent
on its behalf) shall pay to each person entitled to receive any such fractional
interest an amount in cash (without interest) equal to the closing sale price,
or if not available, closing bid price, on the Closing Date of one share of
Saratoga Common Stock multiplied by such fraction of a share.

2.9 DISSENTING SHARES. (a) Notwithstanding anything in this Agreement to
the contrary, shares of OptiCare Stock that are issued and outstanding
immediately prior to the Effective Time and which are held by holders who have
not voted such shares in favor of the OptiCare Merger, who shall have
delivered, prior to any vote on the OptiCare Merger, a written notice of
interest to demand payment for such shares in the manner provided in Sections
33-855 through 33-872 of the CBCA and who, as of the Effective Time, shall not
have effectively withdrawn or lost such right to dissenters rights ("Objecting
OptiCare Shares") shall not be converted into or represent a right to receive
any portion of the OptiCare Merger Consideration pursuant to Section 2.7, but
the holders thereof shall be entitled only to such rights as are granted by
Sections 33-855 through 33-872 of the CBCA. Each holder of Objecting OptiCare
Shares who becomes entitled to payment for such shares pursuant to Sections
33-855 through 33-872 of the CBCA shall receive payment therefor from the
OptiCare Surviving Corporation in accordance with the CBCA; provided, however,
that if any such holder of Objecting OptiCare Shares shall have effectively
withdrawn such holder's demand for appraisal of such shares or lost such
holder's right to appraisal and payment of such shares under Sections 33-855
through 33-872 of the CBCA, such holder or holders (as the case may be) shall
forfeit the right to appraisal of such shares and each such share shall
thereupon be deemed to have been converted into and to have become
exchangeable, as of the Effective Time, for the right to receive, without any
interest thereon, the applicable portion of the OptiCare Merger Consideration,
as provided in Section 2.7, upon surrender of the Certificates evidencing such
shares.

(b) Notwithstanding anything in this Agreement to the contrary, shares of
Prime Common Stock that are issued and outstanding immediately prior to the
Effective Time and which are held by holders who have not voted such shares
in favor of the Prime Merger or consented thereto in writing

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and who shall have demanded properly in writing appraisal for such shares
in accordance with Section 262 of the DGCL and who, as of the Effective
Time, shall not have withdrawn such demand or otherwise have forfeited
appraisal rights (collectively, the "Objecting Prime Shares") shall not be
converted into or represent the right to receive any portion of the Prime
Merger Consideration. Such holders shall be entitled to receive payment of
the appraised value of such shares, except that all Objecting Prime Shares
held by holders who shall have failed to perfect or who effectively shall
have withdrawn or lost their rights to appraisal of such shares under such
Section 262 shall thereupon be deemed to have been converted into and to
have become exchangeable, as of the Effective Time, for the right to
receive, without any interest thereon, the applicable portion of the Prime
Merger Consideration, as provided in Section 2.7, upon surrender of the
Certificates evidencing such shares.

(c) OptiCare and Prime shall give each other and Saratoga (i) prompt
notice of any demands for dissenters' rights or appraisal received by them,
withdrawals of such demands and any other instruments served pursuant to
the DGCL and the CBCA and received by OptiCare or Prime; and (ii) the
opportunity to participate in negotiations and proceedings with respect to
demands for appraisal under the DGCL and the CBCA. OptiCare and Prime shall
not, except with the prior written consent of each other and Saratoga or
except as mandated by applicable law, make any payment with respect to any
demands for appraisal, or offer to settle, or settle, any such demands.

2.10 CLOSING OF TRANSFER BOOKS. After the Effective Time, there shall be
no transfers on the stock transfer books of shares of OptiCare Stock or Prime
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates for shares of OptiCare Stock or
Prime Common Stock (other than Certificates evidencing Objecting OptiCare
Shares or Objecting Prime Shares) are presented to a Surviving Corporation,
they shall be cancelled and exchanged for certificates representing Saratoga
Common Stock as provided in this Article II.

2.11 EXCHANGE OF SHARES. (a) Prior to the Effective Time, Saratoga shall
designate a bank or trust company to act as Exchange Agent in the Mergers (the
"Exchange Agent"). Promptly after the Effective Time, Saratoga shall deliver to
the Exchange Agent certificates for the number of shares of Saratoga Common
Stock issuable in exchange for outstanding shares of OptiCare Stock and Prime
Common Stock pursuant to Section 2.7 and, upon request of the Exchange Agent,
such amounts of cash as shall be payable pursuant to Section 2.8.

(b) Within ten (10) Business Days after the Effective Time, Saratoga
shall cause the Exchange Agent to mail to each record holder, as of the
Effective Time, of a certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of OptiCare Stock or
Prime Common Stock (each a "Certificate"), a customary form letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to a Certificate shall pass only, upon proper delivery of
a Certificate to the Exchange Agent) and instructions for use in effecting
the surrender of the Certificate. Upon surrender to the Exchange Agent of a
Certificate, together with such letter of transmittal duly executed, the
holder of such Certificate shall be entitled to receive in exchange
therefor a certificate representing the applicable number of shares of
Saratoga Common Stock and, if applicable under Section 2.8, cash and such
Certificate shall then be cancelled. No interest will be paid or accrued
upon the surrender of the Certificate. If Saratoga Common Stock is to be
issued to a Person other than the Person in whose name the Certificate
surrendered is registered, it shall be a condition of issue that the
Certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the Person requesting such issue shall
pay transfer or other Taxes required by reason of the issue of Saratoga
Common Stock to a Person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the Exchange
Agent and Saratoga that such Tax has been paid or is not applicable.
Saratoga shall pay all other charges and expenses, including those of the
Exchange Agent, in connection with the exchange of Saratoga Common Stock
for OptiCare Stock and Prime Common Stock. Until surrendered in accordance
with the provisions of this Section 2.11, each Certificate (other than
Certificates representing Objecting OptiCare Shares or Objecting Prime
Shares) shall represent for all purposes the right to receive the
applicable portion of the OptiCare Merger Consideration or the Prime Merger
Consideration, as the case may be, based on the number of shares of
OptiCare Stock or Prime Common Stock evidenced by such Certificate, without
any interest thereon.

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(c) Any shares of Saratoga Common Stock or cash delivered or made
available to the Exchange Agent pursuant to this Section 2.11 and not
exchanged for Certificates within six (6) months after the Effective Time
pursuant to this Section 2.11 shall be returned, at Saratoga's request, by
the Exchange Agent to Saratoga, which shall thereafter act as Exchange
Agent subject to the rights of holders of unsurrendered Certificates under
this Article II and subject to applicable law. Notwithstanding the
foregoing, neither the Exchange Agent nor any party to this Agreement shall
be liable to a holder of shares of OptiCare Stock or Prime Common Stock for
any Saratoga Common Stock, dividends thereon, and cash for fractional
shares delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.

(d)In the event any Certificate for shares of OptiCare Stock or Prime
Common Stock shall have been lost, stolen or destroyed, the Exchange Agent
shall issue and pay in exchange for such lost, stolen or destroyed
Certificate, upon the making of an affidavit of that fact by the holder
thereof in form satisfactory to Saratoga, such shares of Saratoga Common
Stock and cash for fractional shares, if any, as may be required pursuant
to this Agreement; provided, however, that Saratoga may, in its discretion
and as a condition precedent to the issuance and payment thereof, require
the owner of such lost, stolen or destroyed Certificate to deliver a bond
in such sum as it may direct as indemnity against any claim that may be
made against Saratoga, OptiCare, Prime, the Prime Surviving Corporation,
the OptiCare Surviving Corporation, the Exchange Agent or any other party
with respect to the Certificate alleged to have been lost, stolen or
destroyed.

2.12 OPTIONS AND WARRANTS. (a) At or prior to the Effective Time, each of
Saratoga, Prime and OptiCare shall take all action necessary to cause as of the
Effective Time the assumption by Saratoga of, or the reissuance by Saratoga of
substitutes for, all of the following which remain outstanding as of the
Effective Time: (i) the options to purchase OptiCare Stock and Prime Common
Stock listed in the OptiCare Disclosure Schedule and the Prime Disclosure
Schedule, whether vested or unvested, and issued under OptiCare's Stock Option
Plans and Prime's Stock Option Plans described therein (the "Stock Option
Plans"); (ii) options to purchase OptiCare Stock and Prime Common Stock listed
in the OptiCare Disclosure Schedule and the Prime Disclosure Schedule pursuant
to option agreements outside of the Stock Option Plans, except for the Steve
Waite Options; and (iii) the warrants to purchase OptiCare Stock listed in the
OptiCare Disclosure Schedule and issued pursuant to warrant agreements,
(collectively, the "Outstanding Options and Warrants," and each an "Outstanding
Option" or an "Outstanding Warrant"). To the fullest extent permitted under
applicable law and the applicable stock option agreements, the Stock Option
Plans and the warrant agreements, each of the Outstanding Options and
Outstanding Warrants shall be exchanged or substituted without any action on
the part of the holder thereof into an option or warrant to purchase shares of
Saratoga Common Stock as of the Effective Time. The number of shares of
Saratoga Common Stock that the holder of an assumed or substituted Outstanding
Option or Outstanding Warrant shall be entitled to receive upon the exercise of
such option or warrant shall be the same number of shares of Saratoga Common
Stock as the holder of such Outstanding Option or Outstanding Warrant would
have been entitled to receive pursuant to the Mergers had such holder exercised
such option or warrant in full immediately prior to the Effective Time. The
price per share of Saratoga Common Stock after the Effective Time shall be
equal to (x) the aggregate exercise price for the shares of OptiCare Stock or
Prime Common Stock otherwise purchasable pursuant to such Outstanding Option or
Outstanding Warrant divided by (y) the number of shares of Saratoga Common
Stock (including any fraction of a share) deemed purchasable pursuant to such
Outstanding Option or Outstanding Warrant. Other than as set forth in the
Outstanding Options and Warrants or as contemplated by this Agreement, the
assumption and substitution of options and warrants as provided herein shall
not give the holders of such options and warrants additional benefits or
additional vesting rights which they did not have immediately prior to the
Effective Time or relieve the holders of any obligations or restrictions
applicable to their options and warrants or the shares obtainable upon exercise
of their options and warrants. Only whole shares of Saratoga Common Stock shall
be issued upon exercise of any Outstanding Option or Outstanding Warrant, and
no certificates or scrip representing fractional shares of Saratoga Common
Stock and no cash in lieu of fractional shares shall be issued upon such
exercise. All fractional shares of Saratoga Common Stock which a holder of any
Outstanding Option or Outstanding Warrant would otherwise be entitled to
receive upon exercise thereof shall be aggregated at

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the time of such exercise. If a fractional share results from such aggregation,
in lieu thereof such fraction shall be rounded up to one whole share of
Saratoga Common Stock if it is one-half or larger and shall be rounded down to
zero and cancelled without any payment or distribution with respect thereto if
it is less than one-half. Prior to the Effective Time, OptiCare and Prime shall
take such additional actions, if any, as are necessary under applicable law and
the applicable agreements and the Stock Option Plans to assure that each
Outstanding Option and Outstanding Warrant shall, from and after the Effective
Time, represent only the right to purchase, upon exercise, whole shares of
Saratoga Common Stock and cash in lieu of any fractional share in accordance
with the provisions of this Section 2.12.

(b) As soon as practicable after the Effective Time, Saratoga shall file
a registration statement on Form S-8 or a successor form under the
Securities Act with respect to the shares of Saratoga Common Stock subject
to the Outstanding Options and Warrants, to the extent that Form S-8 or
successor form is available to register the Outstanding Options and
Warrants, and shall use its Best Efforts to maintain the effectiveness of
such registration statement or registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for so
long as the Outstanding Options and Warrants remain outstanding.

2.13 DIVIDENDS. No dividends or other distributions that are otherwise
payable on the OptiCare Merger Consideration or the Prime Merger Consideration
shall be paid to Persons entitled to receive any of such Merger Consideration
until such Persons surrender their Certificates. Upon such surrender, there
shall be paid to the Person in whose name a portion of such Merger
Consideration shall be issued any dividends, without any interest thereon,
which shall have become payable with respect to such portion of such Merger
Consideration (less the amount of Taxes, if any, which may be required to be
withheld thereon) between the Effective Time and the time of such surrender.
After such surrender, there shall be paid to such Person any dividends on such
portion of such Merger Consideration with a record date prior to such surrender
and a payment date after such surrender and such payment shall be made on such
payment date.

2.14 STOCKHOLDERS MEETINGS. Saratoga, OptiCare and Prime shall each take
all action necessary, in accordance with applicable law and its Certificate of
Incorporation and By-laws, to convene a special or annual meeting of the
holders of its capital stock entitled to vote as promptly as practicable for
the purpose of considering and taking action upon this Agreement. Subject to
the exercise of its good faith judgment as to its fiduciary duties to its
stockholders imposed by law, as advised by outside counsel, the board of
directors of Saratoga, OptiCare and Prime will each recommend that holders of
its capital stock vote in favor of and approve the respective Mergers and the
adoption of this Agreement at such meeting. At such meeting, all of the shares
of Saratoga, OptiCare and Prime capital stock entitled to vote then owned by
Saratoga, OptiCare, Prime, OptiCare Sub, Prime Sub, or any other Subsidiary of
any of them, or with respect to which Saratoga, OptiCare, Prime, OptiCare Sub,
Prime Sub, or any other Subsidiary of any of them holds the power to direct the
voting, will be voted in favor of approval of the respective Mergers and
adoption of this Agreement.

2.15 ASSISTANCE IN CONSUMMATION OF THE MERGERS. Each of Saratoga, OptiCare
Sub, Prime Sub, OptiCare and Prime shall provide all reasonable assistance to,
and shall cooperate with, each other to bring about the consummation of the
Mergers as soon as possible in accordance with the terms and conditions of this
Agreement. Saratoga shall cause OptiCare Sub and Prime Sub to perform all of
their obligations in connection with this Agreement.

2.16 TRANSFER TAXES. Saratoga, OptiCare and Prime shall cooperate in the
preparation, execution and filing of all Tax Returns, applications or other
documents regarding any Taxes which become payable in connection with the
Mergers other than transfer or stamp taxes payable in respect of transfers
pursuant to any delivery of shares of Saratoga Common Stock to be made to a
Person other than the registered holder of the Certificates surrendered in
exchange therefor in accordance with Section 2.11(b).

2.17 FURTHER ASSURANCES. If at any time after the Effective Time Saratoga,
the Prime Surviving Corporation or the OptiCare Surviving Corporation shall
consider or be advised that any further deeds, assignments or assurances in law
or any other acts are necessary, desirable or proper (a) to

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vest, perfect or confirm, of record or otherwise, in it, the title to any
property or right of Prime, Prime Sub, OptiCare or OptiCare Sub acquired or to
be acquired by reason of, or as a result of, the respective Mergers, or (b)
otherwise to carry out the purposes of this Agreement, Prime, Prime Sub,
OptiCare and OptiCare Sub agree that Saratoga, the Prime Surviving Corporation
or the OptiCare Surviving Corporation, as appropriate, and its proper officers
and directors may, shall and will execute and deliver all such property, deeds,
assignments and assurances in law and do all other acts necessary, desirable or
proper to vest, perfect or confirm title to such property or right in Saratoga,
the Prime Surviving Corporation or the OptiCare Surviving Corporation, as the
case may be, and otherwise to carry out the purposes of this Agreement, and
that the proper officers and directors of Prime, Prime Sub, OptiCare and
OptiCare Sub and the proper officers and directors of Saratoga, the Prime
Surviving Corporation or the OptiCare Surviving Corporation, as the case may
be, are fully authorized in the name of Prime, Prime Sub, OptiCare or OptiCare
Sub or otherwise to take any and all such action.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Each Party represents and warrants to each of the Other Parties as
follows:

3.1 ORGANIZATION AND GOOD STANDING. (a) Part 3.1 of the Representing
Party's Disclosure Schedule contains a complete and accurate list for the
Representing Party and its Subsidiaries of its jurisdiction of incorporation,
other jurisdictions in which it is authorized to do business, and its
capitalization (including in the case of its Subsidiaries the identity of each
stockholder and the number of shares held by each). Each of the Representing
Party and its Subsidiaries is a corporation duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Applicable Contracts. Each of the
Representing Party and its Subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the properties owned
or used by it, or the nature of the activities conducted by it, requires such
qualification. Part 3.1 of the Representing Party's Disclosure Schedule lists
each such state or other jurisdiction. Apart from its Subsidiaries, the
Representing Party does not directly or indirectly own, control or have any
interest in any corporation, company, general or limited partnership, limited
liability company, joint venture, trust, association or other entity.

(b) The Representing Party has delivered to the Other Parties copies of
the Organizational Documents of the Representing Party and its
Subsidiaries, as currently in effect.

3.2 AUTHORITY; NO CONFLICT. (a) The Representing Party has the corporate
power to enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
Contemplated Transactions have been duly authorized by the Representing Party's
board of directors. Except for the approval of the holders of a majority of the
shares of the Representing Party's common stock or, in the case of OptiCare,
the OptiCare Shares, no other corporate proceedings on the part of the
Representing Party are necessary to authorize this Agreement and the
Contemplated Transactions. This Agreement constitutes a valid and binding
obligation of the Representing Party enforceable in accordance with its terms
except as enforcement may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and except that
the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding therefor may
be brought.

(b) Except as set forth in Part 3.2 of the Representing Party's
Disclosure Schedule or in connection or compliance with the HSR Act, the
Securities Act, the Securities Exchange Act, the dissenters' rights
provisions of the DGCL and the CBCA, or the securities or blue sky laws or
regulations of the various states, neither the execution and delivery of
this Agreement nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time):

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(i) contravene, conflict with, or result in a violation of (A) any
provision of the Organizational Documents of the Representing Party, or
(B) any resolution adopted by the board of directors or the stockholders
of the Representing Party;

(ii) contravene, conflict with, or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which the Representing
Party or any of its Subsidiaries, or any of the assets owned or used by
the Representing Party or any of its Subsidiaries, may be subject;

(iii) contravene, conflict with, or result in a violation of any of
the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by the Representing Party or any
of its Subsidiaries or that otherwise relates to the business of, or any
of the assets owned or used by, the Representing Party or any of its
Subsidiaries;

(iv) contravene, conflict with, or result in a violation or Breach of
any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance
of, or to cancel, terminate, or modify, any Applicable Contract; or

(v) result in the imposition or creation of any Encumbrance upon or
with respect to any of the assets owned or used by the Representing
Party or any of its Subsidiaries.

Except for the registration statement and proxy statement referred to in
Section 5.2 and the notifications under the HSR Act referred to in Section 5.5
and except as set forth in Part 3.2 of the Representing Party's Disclosure
Schedule, neither the Representing Party nor any of its Subsidiaries is or will
be required to give any notice to, make any report or other filing with or
obtain any Consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.

3.3 CAPITALIZATION. (a) With respect to Prime, Prime represents and
warrants to the Other Parties that the authorized capital stock of Prime
consists of (i) 15,000,000 shares of Prime Common Stock, of which 7,291,081
shares are issued and outstanding; and (ii) 5,000,000 shares of Prime Class A
Preferred Stock, of which 8,000 shares are issued and outstanding (collectively
the "Prime Shares"). All of the outstanding Prime Shares have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
set forth in Part 3.3 of the Representing Party's Disclosure Schedule there are
no Contracts relating to the issuance, sale, or transfer of any equity
securities or other securities of Prime. None of the outstanding equity
securities or other securities of Prime was issued in violation of the
Securities Act or any other Legal Requirement. Except as set forth in Part 3.3
of the Representing Party's Disclosure Schedule, Prime does not own, or have
any Contract to acquire, any equity securities or other securities of any
Person. As of the date of this Agreement, except as set forth in Part 3.3 of
the Representing Party's Disclosure Schedule, Prime does not have and is not
bound by any outstanding subscriptions, options, warrants, calls, stock
appreciation rights, commitments or agreements of any character calling for the
purchase or issuance of any Prime Shares or any other equity security of Prime
or any securities representing the right to purchase or otherwise receive any
Prime Shares.

(b) With respect to OptiCare, OptiCare represents and warrants to the
Other Parties that the authorized capital stock of OptiCare consists of (i)
1,200,000 shares of OptiCare Common Stock, of which no shares are issued
and outstanding; (ii) 160,000 shares of OptiCare Class A Preferred Stock,
of which 152,754 shares are issued and outstanding; and (iii) 640,000
shares of OptiCare Class B Preferred Stock, of which 221,046 shares are
issued and outstanding (collectively, the "OptiCare Shares"). All of the
outstanding OptiCare Shares have been duly authorized and validly issued
and are fully paid and nonassessable. Except as set forth in Part 3.3 of
the Representing Party's Disclosure Schedule there are no Contracts
relating to the issuance, sale, or transfer of any equity securities or
other securities of OptiCare. None of the outstanding equity securities or
other securities of OptiCare was issued in violation of the Securities Act
or any other Legal Requirement. Except as set forth in Part 3.3 of the
Representing Party's Disclosure Schedule, OptiCare does not own, or have
any

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Contract to acquire, any equity securities or other securities of any
Person. As of the date of this Agreement, except as set forth in Part 3.3
of the Representing Party's Disclosure Schedule, OptiCare does not have and
is not bound by any outstanding subscriptions, options, warrants, calls,
stock appreciation rights, commitments or agreements of any character
calling for the purchase or issuance of any OptiCare Shares or any other
equity security of OptiCare or any securities representing the right to
purchase or otherwise receive any OptiCare Shares.

(c) With respect to Prime Sub, Prime Sub represents and warrants to the
Other Parties that the authorized capital stock of Prime Sub consists of
2,000 shares of Prime Sub Common Stock, of which 100 shares are issued and
outstanding (the "Prime Sub Shares"). All of the outstanding Prime Sub
Shares have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in Part 3.3 of the Representing Party's
Disclosure Schedule there are no Contracts relating to the issuance, sale,
or transfer of any equity securities or other securities of Prime Sub. None
of the outstanding equity securities or other securities of Prime Sub was
issued in violation of the Securities Act or any other Legal Requirement.
Except as set forth in Part 3.3 of the Representing Party's Disclosure
Schedule, Prime Sub does not own, or have any Contract to acquire, any
equity securities or other securities of any Person. As of the date of this
Agreement, except as set forth in Part 3.3 of the Representing Party's
Disclosure Schedule, Prime Sub does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, stock appreciation
rights, commitments or agreements of any character calling for the purchase
or issuance of any Prime Sub Shares or any other equity security of Prime
Sub or any securities representing the right to purchase or otherwise
receive any Prime Sub Shares.

(d) With respect to OptiCare Sub, OptiCare Sub represents and warrants to
the Other Parties that the authorized capital stock of OptiCare Sub
consists of 2,000 shares of OptiCare Sub Common Stock, of which 100 shares
are issued and outstanding (the "OptiCare Sub Shares"). All of the
outstanding OptiCare Sub Shares have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set forth in Part
3.3 of the Representing Party's Disclosure Schedule there are no Contracts
relating to the issuance, sale, or transfer of any equity securities or
other securities of OptiCare Sub. None of the outstanding equity securities
or other securities of OptiCare Sub was issued in violation of the
Securities Act or any other Legal Requirement. Except as set forth in Part
3.3 of the Representing Party's Disclosure Schedule, OptiCare Sub does not
own, or have any Contract to acquire, any equity securities or other
securities of any Person. As of the date of this Agreement, except as set
forth in Part 3.3 of the Representing Party's Disclosure Schedule, OptiCare
Sub does not have and is not bound by any outstanding subscriptions,
options, warrants, calls, stock appreciation rights, commitments or
agreements of any character calling for the purchase or issuance of any
OptiCare Sub Shares or any other equity security of OptiCare Sub or any
securities representing the right to purchase or otherwise receive any
OptiCare Sub Shares.

(e) With respect to Saratoga, Saratoga represents and warrants to the
Other Parties that the authorized capital stock of Saratoga consists of
50,000,000 shares of Saratoga Common Stock, of which 3,465,292 shares are
issued and outstanding (the "Saratoga Shares") and 5,000,000 shares of
preferred stock, of which no shares are issued and outstanding. All of the
outstanding Saratoga Shares have been duly authorized and validly issued
and are fully paid and nonassessable. Except as set forth in Part 3.3 of
the Representing Party's Disclosure Schedule there are no Contracts
relating to the issuance, sale, or transfer of any equity securities or
other securities of Saratoga. None of the outstanding equity securities or
other securities of Saratoga was issued in violation of the Securities Act
or any other Legal Requirement. Except as set forth in Part 3.3 of the
Representing Party's Disclosure Schedule, Saratoga does not own, or have
any Contract to acquire, any equity securities or other securities of any
Person. As of the date of this Agreement, except as set forth in Part 3.3
of the Representing Party's Disclosure Schedule, Saratoga does not have and
is not bound by any outstanding subscriptions, options, warrants, calls,
stock appreciation rights, commitments or agreements of any character
calling for the purchase or issuance of any Saratoga Shares or any other
equity security of Saratoga or any securities representing the right to
purchase or otherwise receive any Saratoga Shares.

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3.4 FINANCIAL STATEMENTS. The Representing Party has delivered to the
Other Parties or will deliver as soon as available: (a) consolidated balance
sheets of the Representing Party and its Subsidiaries as at December 31 in each
of the years 1996 and 1997, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the fiscal years then ended,
together with the report thereon of the independent auditor for such
Representing Party, and (b) a consolidated balance sheet of the Representing
Party and its Subsidiaries as at December 31, 1998 (including the notes
thereto, the "Balance Sheet"), and the related consolidated statements of
income, stockholders' equity, and cash flows for the fiscal year then ended,
together with the report thereon of the auditor for such Representing Party;
provided, however, that, notwithstanding the foregoing, the financial
statements of OptiCare referred to in this Section 3.4 are combined financial
statements of OptiCare and affiliate and not consolidated. Such financial
statements and notes fairly present, or when delivered to the Other Parties
will fairly present, the financial condition and the results of operations,
changes in stockholders' equity, and cash flow of the Representing Party and
its Subsidiaries as at the respective dates of and for the periods referred to
in such financial statements, all in accordance with GAAP. The financial
statements referred to in this Section 3.4 reflect the consistent application
of such accounting principles throughout the periods involved. No financial
statements of any Person other than the Representing Party and its Subsidiaries
are required by GAAP to be included in the consolidated financial statements of
the Representing Party and its Subsidiaries. For purposes of this Agreement,
the term "Balance Sheet" means, in the cases of OptiCare and Saratoga, their
respective audited consolidated balance sheet, including the notes thereto, as
at December 31, 1998 and, in the case of Prime, its audited consolidated
balance sheet, including the notes thereto, as at December 31, 1997.

3.5 BOOKS AND RECORDS. The books of account, minute books, stock record
books, and other records of the Representing Party and its Subsidiaries, all of
which have been made available to the Other Parties, are complete and correct
and have been maintained in accordance with sound business practices, including
the maintenance of an adequate system of internal controls. The minute books of
the Representing Party and its Subsidiaries contain accurate and complete
records of all meetings held of, and corporate action taken by, the
stockholders, the boards of directors, and committees of the boards of
directors of the Representing Party and its Subsidiaries, and no meeting of any
such stockholders, board of directors, or committee has been held for which
minutes have not been prepared and are not contained in such minute books. At
the Closing, all of those books and records will be in the possession of the
Representing Party and its Subsidiaries.

3.6 TITLE TO PROPERTIES; ENCUMBRANCES. Part 3.6 of the Representing
Party's Disclosure Schedule contains a complete and accurate list of all real
property, leaseholds or other interests in real property owned by the
Representing Party and its Subsidiaries. The Representing Party and its
Subsidiaries each own (with good and marketable title in the case of real
property) all the properties and assets (whether real, personal, or mixed and
whether tangible or intangible) that it purports to own, including all of the
properties and assets reflected in the Balance Sheet (except for assets held
under capitalized leases disclosed in Part 3.6 of the Representing Party's
Disclosure Schedule and personal property sold since the date of the Balance
Sheet in the Ordinary Course of Business and consistent with past practice),
and all of the properties and assets purchased or otherwise acquired by the
Representing Party and its Subsidiaries since the date of the Balance Sheet
(except for personal property acquired and sold since the date of the Balance
Sheet in the Ordinary Course of Business and consistent with past practice).
All material properties and assets reflected in the Balance Sheet are free and
clear of all Encumbrances except, with respect to all such properties and
assets, (a) mortgages or security interests shown on the Balance Sheet as
securing specified liabilities or obligations, with respect to which no default
(or event that, with notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests incurred in connection
with the purchase of property or assets after the date of the Balance Sheet
(such mortgages and security interests being limited to the property or assets
so acquired), with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (c) liens for
current Taxes not yet due, and (d) with respect to real property (i) minor
imperfections of title, if any, none of which is material to the operations of
the Representing Party and (ii) zoning laws and land use restrictions that do
not impair the present or future use of the property subject thereto.

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3.7 CONDITION AND SUFFICIENCY OF ASSETS. The buildings, structures,
furniture and equipment of the Representing Party and its Subsidiaries are in
good operating condition and repair, and are adequate for the uses to which
they are being put. The building, structures, furniture and equipment of the
Representing Party and its Subsidiaries are sufficient for the continued
conduct of the business of the Representing Party and its Subsidiaries after
the Closing in substantially the same manner as conducted prior to the Closing.

3.8 NO UNDISCLOSED LIABILITIES. Except as set forth in Part 3.8 of the
Representing Party's Disclosure Schedule, each of the Representing Party and
its Subsidiaries has no liabilities or obligations of the type required to be
reflected on the Representing Party's Balance Sheet under GAAP (whether known
or unknown and whether absolute, accrued, contingent, or otherwise) except for
liabilities or obligations reflected or reserved against in the Balance Sheet
and current liabilities incurred in the Ordinary Course of Business since the
date thereof.

3.9 TAXES. (a) Each of the Representing Party and its Subsidiaries has
filed or caused to be filed (on a timely basis) all Tax Returns that were
required to be filed by or with respect to it, pursuant to applicable Legal
Requirements. The Representing Party has delivered to the Other Parties copies
of, and Part 3.9 of the Representing Party's Disclosure Schedule contains a
complete and accurate list of, all such Tax Returns filed since the later of
December 31, 1995 or the incorporation of the Representing Party. The
Representing Party and its Subsidiaries have paid, or made provision for the
payment of, all Taxes that have or may have become due pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by the
Representing Party or its Subsidiaries, except such Taxes, if any, as are
listed in Part 3.9 of the Representing Party's Disclosure Schedule and are
being contested in good faith and as to which adequate reserves (determined in
accordance with GAAP) have been provided in the Balance Sheet.

(b) The United States federal and state income Tax Returns of the
Representing Party and its Subsidiaries were last audited by the IRS or
relevant state tax authorities for the taxable years set forth in Part 3.9
of the Representing Party's Disclosure Schedule. Part 3.9 of the
Representing Party's Disclosure Schedule contains a complete and accurate
list of the last audits of all such Tax Returns, including a reasonably
detailed description of the nature and outcome of each such audit. All
deficiencies proposed as a result of such audits have been paid, reserved
against, settled, or, as described in Part 3.9 of the Representing Party's
Disclosure Schedule, are being contested in good faith by appropriate
proceedings. Part 3.9 of the Representing Party's Disclosure Schedule
describes all adjustments to the United States federal income Tax Returns
filed by the Representing Party and its Subsidiaries for all taxable years
since the later of December 31, 1995 or the incorporation of the
Representing Party, and the resulting deficiencies proposed by the IRS.
Except as described in Part 3.9 of the Representing Party's Disclosure
Schedule, neither the Representing Party nor any of its Subsidiaries has
given or been requested to give waivers or extensions (or is or would be
subject to a waiver or extension given by any other Person) of any statute
of limitations relating to the payment of Taxes of the Representing Party
or any of its Subsidiaries or for which the Representing Party or any of
its Subsidiaries may be liable.

(c) The charges, accruals, and reserves with respect to Taxes on the
books of the Representing Party and its Subsidiaries are adequate
(determined in accordance with GAAP) and are at least equal to the
Liability of the Representing Party and its Subsidiaries for Taxes. There
exists no proposed tax assessment against the Representing Party and its
Subsidiaries except as disclosed in the Balance Sheet or in Part 3.9 of the
Representing Party's Disclosure Schedule. No consent to the application of
Section 341(f)(2) of the IRC has been filed with respect to any property or
assets held, acquired, or to be acquired by the Representing Party and its
Subsidiaries. All Taxes that each of the Representing Party and its
Subsidiaries is or was required by Legal Requirements to withhold or
collect have been duly withheld or collected and, to the extent required,
have been paid to the proper Governmental Body or other Person.

(d) All Tax Returns filed by the Representing Party and its Subsidiaries
are true, correct, and complete. There is no tax sharing agreement that
will require any payment by the Representing Party and its Subsidiaries
after the date of this Agreement.

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3.10 NO MATERIAL ADVERSE CHANGE. Except as described in the Representing
Party's Disclosure Schedule, since the date of the Balance Sheet, there has
been no change, event, occurrence or development in the business, operations,
properties, prospects, assets, or condition of the Representing Party and its
Subsidiaries that has had or could reasonably be foreseen to have a Material
Adverse Effect on the Representing Party or its ability to consummate the
Contemplated Transactions.

3.11A 401(K) PLAN. (a) Except as otherwise set forth in Part 3.11A of the
Representing Party's Disclosure Schedule, the Representing Party currently
maintains the 401(k) Plan set forth in Part 3.11A of the Representing Party's
Disclosure Schedule. The 401(k) Plan is the only Pension Benefit Plan intended
to be qualified under Section 401(a) or 403(a) of the IRC ever maintained by
the Representing Party or with respect to which the Representing Party has or
may have a Liability.

(b) The Representing Party has heretofore delivered to the Other Parties
with respect to the 401(k) Plan true and correct copies of the following:

(i) the 401(k) Plan including all amendments thereto through the
Closing Date;

(ii) each trust agreement and insurance Contract pertaining to the
investment of assets of the 401(k) Plan or the payment of benefits
thereunder, including all amendments thereto through the Closing Date;

(iii) the most recent determination letter issued by the IRS with
respect to the 401(k) Plan and a copy of any demonstration or amendment
submitted in order to obtain the determination letter;

(iv) IRS Forms 5500, including applicable schedules thereto, filed
with respect to the 401(k) Plan for each of the three (3) most recent
plan years;

(v) all financial statements and accountant's opinions relating to the
401(k) Plan for each of the three (3) most recent plan years;

(vi) the summary plan description with respect to the 401(k) Plan and
any summaries of material modification;

(vii) copies of all correspondence with the IRS, the DOL or the SEC
regarding the 401(k) Plan;

(viii) summary annual reports for the 401(k) Plan for each of the
three (3) most recent plan years;

(ix) all administrative forms and related documents used in connection
with the administration of the 401(k) Plan;

(x) a copy of each Fiduciary liability insurance policy and each
fidelity bond covering any Fiduciary with respect to the 401(k) Plan;

(xi) names and addresses and each Contract with any investment
manager, investment adviser, trustee, independent Fiduciary,
administrator, consultant, auditor, actuary, law firm or record keeper
with respect to the 401(k) Plan;

(xii) a description of all claims threatened or pending with respect
to the 401(k) Plan and any facts that could give rise to any claims or
Liability against the 401(k) Plan or against the Representing Party with
respect to the 401(k) Plan;

(xiii) worksheets demonstrating the 401(k) Plan's compliance for the
three (3) most recent plan years with the following, if applicable: the
coverage requirements of Section 410(b) of the IRC; the actual deferral
percentage and actual contribution percentage tests of Sections 401(k)
and 401(m) of the IRC; the maximum contribution limitations of Section
415 of the IRC; and the top-heavy requirements of Section 416 of the
IRC; and

(c) The 401(k) Plan has complied with the applicable provisions of the
IRC from its initial effective date, except to the extent that any
noncompliance is not likely to have a Material Adverse

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Effect on the Representing Party, the trust adopted in connection therewith
is exempt from Tax pursuant to Section 501(a) of the IRC, and all
contributions ever made to the 401(k) Plan and trust are deductible
pursuant to Section 404 of the IRC, all as evidenced by a favorable
determination letter or letters issued by the IRS with respect to the
401(k) Plan. The Representing Party has no Knowledge of any facts,
circumstances, actions, or failures to act that would adversely affect such
compliance or any such determination by the IRS or would preclude the
issuance of a favorable determination letter by the IRS if the Representing
Party were to seek a determination letter from the IRS on the Closing Date
with respect to the 401(k) Plan.

(d) The Representing Party and each Fiduciary with respect to the 401(k)
Plan has in all respects performed all obligations required to be performed
by it or them under the 401(k) Plan and is not in default under, or in
violation of, the 401(k) Plan, except to the extent any nonperformance or
default or violation is not likely to have a Material Adverse Effect on the
Representing Party, and the Representing Party has no Knowledge of any
default or violation under the terms of the 401(k) Plan, ERISA or the IRC
by any Person with respect to the 401(k) Plan, except to the extent such
default or violation is not likely to have a Material Adverse Effect on the
Representing Party.

(e) Since the initial effective date of the 401(k) Plan, there has not
been with respect to the 401(k) Plan: (i) any "prohibited transaction" as
defined in Section 406 of ERISA and Section 4975 of the IRC; (ii) any
amendments which decrease any accrued benefits, eliminate or reduce any
early retirement benefit or retirement-type subsidy, or eliminate any
optional form of benefit, in violation of Section 411(d)(6) of the IRC or
204(g) of ERISA; or (iii) any other event or condition with respect to the
401(k) Plan creating a Liability under ERISA or the IRC, except to the
extent that such Liability is not likely to have a Material Adverse Effect
on the Representing Party.

(f) All contributions required to have been made under the 401(k) Plan
have been duly made.

(g) The 401(k) Plan has operated since its inception in compliance with
the reporting and disclosure requirements imposed under ERISA and the IRC,
except where noncompliance is not likely to result in a Material Adverse
Effect on the Representing Party.

(h) The 401(k) Plan is not liable for any Taxes.

(i) The 401(k) Plan is not currently under investigation, audit or review
by the IRS or the DOL, and the Representing Party has no Knowledge that any
such action is contemplated or under consideration.

(j) There are no Proceedings pending or threatened with respect to the
401(k) Plan and the Representing Party has no Knowledge of any facts that
could give rise to Proceedings against the 401(k) Plan, any Fiduciary with
respect to the 401(k) Plan or against the Representing Party with respect
to the 401(k) Plan.

3.11B WELFARE BENEFIT PLANS. (a) Set forth in Part 3.11B of the
Representing Party's Disclosure Schedule is a true and complete list of all
Welfare Benefit Plans maintained by the Representing Party or with respect to
which the Representing Party has or may have a Liability. Each Welfare Benefit
Plan has complied since its initial effective date with the applicable
provisions of the IRC and ERISA, except to the extent that any noncompliance is
not likely to have a Material Adverse Effect on the Representing Party. Any
trust adopted in connection with any Welfare Benefit Plan, including any VEBA,
has been exempt since its initial effective date from Federal income Taxes. All
contributions ever made to such Plans and trusts, if any, have been deductible
by the Representing Party for Federal income Tax purposes.

(b) The Representing Party has not at any time maintained, participated
in or contributed to a "multiple employer welfare arrangement", as defined
in Section 3(40) of ERISA, with respect to any of its Employees.

(c) The Representing Party has heretofore delivered to the Other Parties
with respect to its Welfare Benefit Plans true and correct copies of the
following:

(i) each Welfare Benefit Plan document and all amendments thereto;

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(ii) each trust agreement, VEBA and insurance Contract including any
stop-loss policies and, with respect to any VEBA, IRS Form 1024 and any
determination letters obtained with respect to the VEBA;

(iii) IRS Forms 5500, if any, including applicable schedules thereto,
filed with respect to each of the Welfare Benefit Plans for each of the
three (3) most recent plan years;

(iv) all financial statements and accountant's opinions, if any,
relating to the Welfare Benefit Plans for each of the three (3) most
recent plan years;

(v) the summary plan description and summaries of material
modification with respect to each Welfare Benefit Plan;

(vi) copies of all correspondence with the IRS or the DOL regarding
any Welfare Benefit Plan;

(vii) summary annual reports, if any, for each of the Welfare Benefit
Plans for each of the three (3) most recent plan years;

(viii) all administrative forms and related documents used in
connection with the administration of the Welfare Benefit Plans,
including the most recent sample COBRA notices and HIPAA notices and
certificates of creditable coverage;

(ix) each Fiduciary liability insurance policy and each fidelity bond
covering any Fiduciary with respect to the Welfare Benefit Plans;

(x) each Contract with any independent Fiduciary, consultant,
administrator or record keeper relative to any Welfare Benefit Plan;

(xi) a report of the claims experience under any self-insured Welfare
Benefit Plan for the three (3) most recent plan years; and

(xii) a description of all claims threatened or pending with respect
to any Welfare Benefit Plan and any facts that could give rise to any
claims or Liability against any Welfare Benefit Plan or against the
Representing Party with respect to any Welfare Benefit Plan other than
routine claims for benefits under any Welfare Benefit Plan.

(d) The Representing Party and each Fiduciary have performed all
obligations required to be performed under each Welfare Benefit Plan in
accordance with its terms and in compliance with the applicable
requirements of ERISA and the IRC, except to the extent that any
nonperformance or noncompliance is not likely to have a Material Adverse
Effect on the Representing Party, and the Representing Party has no
Knowledge of any default or violation under the terms of any Welfare
Benefit Plan, ERISA or the IRC by any Person with respect to any Welfare
Benefit Plan, except to the extent that any such default or violation is
not likely to have a Material Adverse Effect on the Representing Party.

(e) All contributions required to have been made under each of the
Welfare Benefit Plans have been duly made and all payments due to
third-party administrators or other service providers with respect to each
Welfare Benefit Plan have been made. The Representing Party's Financial
Statements reflect all contributions made by the Employees to any
self-insured Welfare Benefit Plans or made by the Representing Party on
behalf of the Employees to any unfunded or self-insured Welfare Benefit
Plan pursuant to a cafeteria plan under Section 125 of the IRC.

(f) Each Welfare Benefit Plan has operated since its inception in
compliance with the reporting and disclosure requirements imposed under
ERISA and the IRC except where noncompliance is not likely to have a
Material Adverse Effect on the Representing Party.

(g) No Welfare Benefit Plan is liable for any Taxes.

(h) The Representing Party and any member of the Representing Party's
Controlled Group have complied in all respects with the group health plan
continuation coverage requirements of

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COBRA and neither the Representing Party nor any member of the Controlled
Group is or could be liable for an excise Tax under COBRA except to the
extent that any noncompliance or Liability is not likely to have a Material
Adverse Effect on the Representing Party.

(i) No Welfare Benefit Plan is currently under investigation, audit or
review by the IRS or the DOL and the Representing Party has no Knowledge
that any such action is contemplated or under consideration.

(j) There are no Proceedings pending or threatened with respect to any
Welfare Benefit Plan and the Representing Party has no Knowledge of any
facts that could give rise to any Proceedings against any Welfare Benefit
Plan, any Fiduciary with respect to any Welfare Benefit Plan or against the
Representing Party with respect to any Welfare Benefit Plan.

(k) The Representing Party does not maintain, nor has it ever maintained,
a Welfare Benefit Plan that provides benefits to current or former
Employees of the Representing Party beyond their termination of employment
other than on an employee-pay-all basis.

(l) The Representing Party does not maintain, nor has it ever maintained,
a Welfare Benefit Plan or any custom or policy that provides severance
benefits to former Employees of the Representing Party on account of their
termination of employment.

(m) With respect to any Welfare Benefit Plan that is subject to HIPAA,
the Representing Party has complied in all respects with the requirements
of HIPAA, except to the extent that noncompliance is not likely to result
in a Material Adverse Effect on the Representing Party.

3.11C EMPLOYEE BENEFIT PLANS. (a) Set forth in Part 3.11C of the
Representing Party's Disclosure Schedule is a complete list of the Employee
Benefit Plans currently in effect, other than the Employee Benefit Plans set
forth in Parts 3.11A and 3.11B of the Representing Party's Disclosure Schedule.

(b) With respect to the Employee Benefit Plans set forth in Part 3.11C of
the Representing Party's Disclosure Schedule, the Representing Party has
heretofore delivered to the Other Parties true and correct copies of the
following:

(i) a list of each such Employee Benefit Plan maintained by the
Representing Party during the past three (3) years;

(ii) each valuation, if any, of the liabilities and the reserves
associated with each such Employee Benefit Plan consistent with
Statement of Financial Accounting Standards 87; and

(iii) a copy of each employee handbook or other document concerning
any such Employee Benefit Plan in effect during the past three (3)
years.

(c) The Representing Party has performed all obligations required to be
performed by it under the Employee Benefit Plans set forth in Part 3.11C of
the Representing Party's Disclosure Schedule and is not and will not be in
default under, or in violation of, said Employee Benefit Plans, except to
the extent any nonperformance or default or violation is not likely to have
a Material Adverse Effect on the Representing Party, and the Representing
Party has no Knowledge of any such default or violation by any other Person
with respect to such Employee Benefit Plans, except to the extent that such
default or violation is not likely to have a Material Adverse Effect on the
Representing Party.

(d) All contributions required to have been made under the Employee
Benefit Plans set forth in Part 3.11C of the Representing Party's
Disclosure Schedule have been duly made.

(e) No Employee Benefit Plan set forth in Part 3.11C of the Representing
Party's Disclosure Schedule is under investigation, audit or review by the
IRS, the DOL or the SEC and the Representing Party has no Knowledge that
any such action is under consideration.

(f) There are no Proceedings pending or threatened with respect to any
Employee Benefit Plan set forth in Part 3.11C of the Representing Party's
Disclosure Schedule and the Representing Party has no Knowledge of any
facts that could give rise to any Proceedings against any such Employee
Benefit Plan or against the Representing Party with respect to any such
Employee Benefit Plan.

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(g) Each Employee Benefit Plan set forth in Part 3.11C of the
Representing Party's Disclosure Schedule has operated since its inception
in compliance with all applicable Laws except to the extent that any
noncompliance is not likely to have a Material Adverse Effect on the
Representing Party.

(h) Neither the execution of this Agreement or any of the documents
related to this Agreement nor the consummation of the transactions
contemplated hereby or by any of such related documents will:

(i) entitle any Person to severance pay or other compensation, other
than compensation for future services;

(ii) accelerate the time of payment or vesting, or increase the amount
of compensation or benefits due to any Person;

(iii) constitute or result in a prohibited transaction under Section
4975 of the IRC or Sections 406 or 407 of ERISA;

(iv) constitute a "deemed severance" or "deemed termination" under any
Contract or under any State or Federal Law; or

(v) cause any amounts payable under any Employee Benefit Plan or
employment Contract to be non-deductible for Federal income Tax purposes
by reason of IRC Section 280G.

3.12 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS. (a)
Except as set forth in Part 3.12 of the Representing Party's Disclosure
Schedule and except where the existence of facts, actions or conditions
contrary to those set forth below in this subsection would not have a Material
Adverse Effect on the Representing Party, to the Knowledge of the Representing
Party:

(i) each of the Representing Party and its Subsidiaries is, and at all
times since the later of December 31, 1995 or the incorporation of the
Representing Party, has been, in full compliance with each Legal
Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets;

(ii) no event has occurred or circumstance exists that (with or
without notice or lapse of time) (A) may constitute or result in a
violation by the Representing Party and its Subsidiaries of, or a
failure on the part of the Representing Party and its Subsidiaries to
comply with, any Legal Requirement, or (B) may give rise to any
obligation on the part of the Representing Party and its Subsidiaries to
undertake, or to bear all or any portion of the cost of, any remedial
action of any nature; and

(iii) each of the Representing Party and its Subsidiaries has not
received, at any time since the later of December 31, 1995 or the
incorporation of the Representing Party, any notice or other written
communication from any Governmental Body or any other Person regarding
(A) any actual, alleged, possible, or potential violation of, or failure
to comply with, any Legal Requirement, or (B) any actual, alleged,
possible, or potential obligation on the part of the Representing Party
and its Subsidiaries to undertake, or to bear all or any portion of the
cost of, any remedial action of any nature.

(b) Part 3.12 of the Representing Party's Disclosure Schedule contains a
complete and accurate list of each Governmental Authorization that is held
by the Representing Party or any of its Subsidiaries or that otherwise
relates to the business of, or to any of the assets owned or used by, the
Representing Party or any of its Subsidiaries. Each Governmental
Authorization listed or required to be listed in Part 3.12 of the
Representing Party's Disclosure Schedule is valid and in full force and
effect. Except as set forth in Part 3.12 of the Representing Party's
Disclosure Schedule and except where the existence of facts, actions or
conditions contrary to those set forth below in this subsection would not
have a Material Adverse Effect on the Representing Party, to the Knowledge
of the Representing Party:

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(i) each of the Representing Party and its Subsidiaries is, and at all
times since the later of December 31, 1995 or the incorporation of the
Representing Party, has been, in full compliance with all of the terms
and requirements of each Governmental Authorization identified or
required to be identified in Part 3.12 of the Representing Party's
Disclosure Schedule;

(ii) no event has occurred or circumstance exists that may (with or
without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or
requirement of any Governmental Authorization listed or required to be
listed in Part 3.12 of the Representing Party's Disclosure Schedule, or
(B) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any modification to, any
Governmental Authorization listed or required to be listed in Part 3.12
of the Representing Party's Disclosure Schedule;

(iii) each of the Representing Parties and its Subsidiaries has not
received, at any time since the later of December 31, 1995 or the
incorporation of the Representing Party, any notice or other
communication (whether oral or written) from any Governmental Body or
any other Person regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any term or requirement
of any Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to any Governmental Authorization;

(iv) all applications required to have been filed for the renewal of
the Governmental Authorizations listed or required to be listed in Part
3.12 of the Representing Party's Disclosure Schedule have been duly
filed on a timely basis with the appropriate Governmental Bodies, and
all other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely basis with
the appropriate Governmental Bodies;

(v) neither the Representing Party or any of its Subsidiaries, nor, to
the Knowledge of any of them, any employee or independent contractor of
the Representing Party or any Subsidiary has, in connection with the
business of the Representing Party or any Subsidiary, engaged in any
activities which are prohibited, or are cause for civil penalties or
mandatory or permissive exclusion from (A) any private payor program; or
(B) Medicare or Medicaid, under Sections 1320a-7, 1320a-7a, 1320a-7b, or
1395nn of Title 42 of the United States Code, the federal CHAMPUS
statute, or the regulations promulgated pursuant to such statutes or
related state or local statutes or regulations or by rules of
professional conduct, including, but not limited to, the following:

(1) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for
any benefit or payment;

(2) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining
rights to any benefit or payment;

(3) presenting or causing to be presented a claim for reimbursement
for services under CHAMPUS, Medicare, Medicaid, or other state health
care program that is for an item or service that is known to be (x)
not provided as claimed or (y) false or fraudulent;

(4) failing to disclose knowledge by a claimant of the occurrence
of any event affecting the initial or continued right to any benefit
or payment on claimant's own behalf or on behalf of another, with
intent to fraudulently secure such benefit or payment;

(5) knowingly and willfully offering, paying, soliciting or
receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in
kind (x) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part by CHAMPUS, Medicare or
Medicaid, or other state health care program, or (y) in return for
purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing, or ordering of any good, facility, service, or
item for which payment may be made in whole or part by CHAMPUS,
Medicare or Medicaid or other state health care program; or

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(6) knowingly and willfully making or causing to be made or
inducing or seeking to induce the making of any false statement or
representation (or omitting to state a fact required to be stated
therein or necessary to make the statements contained therein not
misleading) of a material fact with respect to (x) the conditions or
operations of a facility in order that the facility may qualify for
CHAMPUS, Medicare, Medicaid or other state health care program
certification, or (y) information required to be provided under 42
U.S.C. Section 1320a-3.

(vi) neither the Representing Party or any of its Subsidiaries, nor,
to the Knowledge of any of them, any agent, Employee or independent
contractor of the Representing Party or any Subsidiary has, in
connection with the business of the Representing Party or any Subsidiary
(A) made or agreed to make any contribution, payment, or gift to any
customer, supplier, landlord, political candidate, governmental
official, employee, or agent where either the contribution, payment, or
gift or the purpose thereof was illegal under any law or regulation; (B)
established or maintained any unrecorded fund or asset for any purpose
or made any false entries on its respective books and records for any
reason; (C) made or agreed to make any contribution, or reimbursed any
political gift or contribution made by any other Person, to any
candidate for federal, state, or local public office in violation of any
law or regulation; or (D) submitted any claim for services rendered or
reimbursement for expenses to any Person where the services were not
actually rendered or the expenses were not actually incurred;

(vii) neither the Representing Party or any of its Subsidiaries, nor,
to the Knowledge of any of them, any agent, employee or independent
contractor of the Representing Party or any Subsidiary has, in
connection with the business of the Representing Party or any
Subsidiary, engaged in any activities which are prohibited under the
federal Controlled Substance Act, 21 U.S.C. Section 801 et seq. or the
regulations promulgated pursuant to such statute or any related state or
local statutes or regulations concerning the dispensing and sale of
controlled substances;

(viii) in connection with all Contracts with any federal, state, or
local governmental body or agency, the Representing Party and its
Subsidiaries have complied with all applicable accounting requirements
and procedures required by such body or agency;

(ix) all educational programs conducted by the Representing Party or
any Subsidiary which purport to be accredited have been accredited by
the Accreditation Council for Continuing Medical Education; and

(x) there is no legal or regulatory requirement that the shareholders,
or any of them, of the Representing Party or any Subsidiary be a
licensed physician in order to conduct its business as currently
conducted.

The Governmental Authorizations listed in Part 3.12 of the Representing
Party's Disclosure Schedule collectively constitute all of the Governmental
Authorizations necessary to permit each of the Representing Party and its
Subsidiaries to lawfully conduct and operate its business in the manner it
currently conducts and operates such businesses and to permit it to own and use
its assets in the manner in which it currently owns and uses such assets.

3.13 LEGAL PROCEEDINGS; ORDERS. (a) Except as set forth in Part 3.13 of
the Representing Party's Disclosure Schedule, there is no pending Proceeding:

(i) that has been commenced by or against the Representing Party or
any of its Subsidiaries or that otherwise relates to or may affect the
business of, or any of the assets owned or used by, the Representing
Party or any of its Subsidiaries; or

(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.

To the Knowledge of the Representing Party, no such Proceeding has been
Threatened. The Representing Party has delivered to the Other Parties copies of
all pleadings, correspondence, and other

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documents relating to each Proceeding listed in Part 3.13 of the Representing
Party's Disclosure Schedule. Except as listed in Part 3.15 of the Disclosure
Schedule, the Proceedings will not have a Material Adverse Effect on the
business, operations, assets, condition, or prospects of the Representing
Party.

(b) Except as set forth in Part 3.13 of the Representing Party's
Disclosure Schedule:

(i) there is no Order to which the Representing Party, any of its
Subsidiaries, or any of the assets owned or used by the Representing
Party or any of its Subsidiaries, is subject;

(ii) none of the Representing Party and its Subsidiaries is subject to
any Order that relates to the business of, or any of the assets owned or
used by, the Representing Party or any of its Subsidiaries; and

(iii) to the Knowledge of the Representing Party, no officer,
director, agent, or employee of the Representing Party or any of its
Subsidiaries is subject to any Order that prohibits such officer,
director, agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of the Representing Party
or any of its Subsidiaries.

(i) each of the Representing Party and its Subsidiaries is, and at all
times since the later of December 31, 1995 or the incorporation of the
Representing Party, has been, in full compliance with all of the terms
and requirements of each Order to which it, or any of the assets owned
or used by it, is or has been subject;

(ii) no event has occurred or circumstance exists that may constitute
or result in (with or without notice or lapse of time) a violation of or
failure to comply with any term or requirement of any Order to which the
Representing Party, any of its Subsidiaries, or any of the assets owned
or used by the Representing Party or any of its Subsidiaries, is
subject; and

(iii) none of the Representing Party and its Subsidiaries has
received, at any time since the later of December 31, 1995 or the
incorporation of the Representing Party, any notice or other
communication (whether oral or written) from any Governmental Body or
any other Person regarding any actual, alleged, possible, or potential
violation of, or failure to comply with, any term or requirement of any
Order to which the Representing Party, any of its Subsidiaries, or any
of the assets owned or used by the Representing Party or any of its
Subsidiaries, is or has been subject.

3.14 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in Part
3.14 of the Representing Party's Disclosure Schedule, since the date of the
Balance Sheet, each of the Representing Party and its Subsidiaries has
conducted its business only in the Ordinary Course of Business and there has
not been any:

(a) change in the authorized or issued capital stock of the Representing
Party or any of its Subsidiaries; grant of any stock option or right to
purchase shares of capital stock of the Representing Party or any of its
Subsidiaries; issuance of any security convertible into such capital stock;
grant of any registration rights; purchase, redemption, retirement, or
other acquisition by the Representing Party or any of its Subsidiaries of
any shares of any such capital stock; or declaration or payment of any
dividend or other distribution or payment in respect of shares of capital
stock;

(b) amendment to the Organizational Documents of the Representing Party
or any of its Subsidiaries;

(c) payment by the Representing Party or any of its Subsidiaries of any
bonuses or material increase in the salaries, or other compensation to any
stockholder, director, officer, or (except in the Ordinary Course of
Business) employee or entry into any employment, severance, or similar
Contract with any director, officer, or employee;

(d) adoption of, or increase in the payments to or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other Employee Benefit Plan for or with any employees of the
Representing Party or any of its Subsidiaries;

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(e) damage to or destruction or loss of any asset or property of the
Representing Party or any of its Subsidiaries, whether or not covered by
insurance, materially and adversely affecting the properties, assets,
business, financial condition, or prospects of the Representing Party or
any of its Subsidiaries;

(f) entry into, termination of, or receipt of notice of termination of
(i) any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement, or (ii) any Contract or transaction
involving a total remaining commitment by or to the Representing Party or
any of its Subsidiaries of at least $25,000;

(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of the
Representing Party or any of its Subsidiaries or mortgage, pledge, or
imposition of any lien or other Encumbrance on any material asset or
property of the Representing Party or any of its Subsidiaries, including
the sale, lease, or other disposition of any of the Intellectual Property
Assets;

(h) cancellation or waiver of any claims or rights with a value to the
Representing Party or any of its Subsidiaries in excess of $25,000;

(i) material change in the accounting methods used by the Representing
Party or any of its Subsidiaries;

(j) increase in the outstanding amount of indebtedness of the
Representing Party and its Subsidiaries, except as shown on the Balance
Sheet or incurred in the Ordinary Course of Business;

(k) giving of any guaranty or other undertaking of the indebtedness or
obligation of any Person, except in the Ordinary Course of Business; or

(l) agreement, whether oral or written, by the Representing Party or any
of its Subsidiaries to do any of the foregoing.

To the Knowledge of the Representing Party, no supplier, customer,
physician or physician group intends to cease doing business with, or
materially alter its business arrangements with, the Representing Party or any
of its Subsidiaries after the Mergers.

3.15 CONTRACTS; NO DEFAULTS. (a) Part 3.15(a) of the Representing Party's
Disclosure Schedule contains a complete and accurate list, and the Representing
Party has delivered to the Other Parties true and complete copies, of:

(i) each Applicable Contract that involves performance of services or
delivery of goods or materials by the Representing Party or any of its
Subsidiaries of an amount or value in excess of $25,000;

(ii) each Applicable Contract that involves performance of services or
delivery of goods or materials to the Representing Party or any of its
Subsidiaries of an amount or value in excess of $25,000;

(iii) each Applicable Contract that was not entered into in the
Ordinary Course of Business and that involves expenditures or receipts
of the Representing Party or any of its Subsidiaries in excess of
$25,000;

(iv) each lease, rental or occupancy agreement, license, installment
and conditional sale agreement, and other Applicable Contract affecting
the ownership of, leasing of, title to, use of, or any leasehold or
other interest in, any real or personal property (except personal
property leases and installment and conditional sales agreements having
a value per item or aggregate payments of less than $25,000 and with
terms of less than one year);

(v) each licensing agreement or other Applicable Contract with respect
to patents, trademarks, copyrights, or other intellectual property,
including agreements with current or former employees, consultants, or
contractors regarding the appropriation or the non-disclosure of any of
the Intellectual Property Assets;

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(vi) each collective bargaining agreement and other Applicable
Contract to or with any labor union or other employee representative of
a group of employees;

(vii) each joint venture, partnership, and other Applicable Contract
(however named) involving a sharing of profits, losses, costs, or
liabilities by the Representing Party or any of its Subsidiaries with
any other Person;

(viii) each Applicable Contract containing covenants that in any way
purport to restrict the business activity of the Representing Party or
any of its Subsidiaries or any Affiliate of the Representing Party or
any of its Subsidiaries or limit the freedom of the Representing Party
or any of its Subsidiaries or any Affiliate of the Representing Party or
any of its Subsidiaries to engage in any line of business or to compete
with any Person;

(ix) each Applicable Contract providing for payments to or by any
Person based on sales, purchases, or profits, other than direct payments
for goods;

(x) each power of attorney that is currently effective and
outstanding;

(xi) each Applicable Contract entered into other than in the Ordinary
Course of Business that contains or provides for an express undertaking
by the Representing Party or any of its Subsidiaries to be responsible
for consequential damages;

(xii) each Applicable Contract for capital expenditures in excess of
$25,000;

(xiii) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by the
Representing Party or any of its Subsidiaries other than in the Ordinary
Course of Business; and

(xiv) each amendment, supplement, and modification (whether oral or
written) in respect of any of the foregoing.

(b) Except as set forth in Part 3.15(b) of the Representing Party's
Disclosure Schedule, to the Knowledge of the Representing Party, no
officer, director, agent, employee, consultant, or contractor of the
Representing Party or any of its Subsidiaries is bound by any Contract that
purports to limit the ability of such officer, director, agent, employee,
consultant, or contractor to (A) engage in or continue any conduct,
activity, or practice relating to the business of the Representing Party or
any of its Subsidiaries, or (B) assign to the Representing Party or any of
its Subsidiaries or to any other Person any rights to any invention,
improvement, or discovery.

(c) Except as set forth in Part 3.15(c) of the Representing Party's
Disclosure Schedule, each Contract identified or required to be identified
in Part 3.15(a) of the Representing Party's Disclosure Schedule is in full
force and effect and is valid and enforceable in accordance with its terms.

(d) Except as set forth in Part 3.15(d) of the Representing Party's
Disclosure Schedule:

(i) each of the Representing Party and its Subsidiaries is, and at all
times since the later of December 31, 1995 or the incorporation of the
Representing Party has been, in full compliance with all applicable
terms and requirements of each Contract under which the Representing
Party or any of its Subsidiaries has or had any obligation or Liability
or by which the Representing Party or any of its Subsidiaries or any of
the assets owned or used by the Representing Party or any of its
Subsidiaries is or was bound;

(ii) each other Person that has or had any obligation or Liability
under any Contract under which the Representing Party or any of its
Subsidiaries has or had any rights is, and at all times since the later
of December 31, 1995 or the incorporation of the Representing Party has
been, in full compliance with all applicable terms and requirements of
such Contract;

(iii) no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or
result in a violation or Breach of, or give the Representing Party or
any of its Subsidiaries or other Person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Applicable
Contract; and

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(iv) the Representing Party and its Subsidiaries have not given to or
received from any other Person, at any time since the later of December
31, 1995 or the incorporation of the Representing Party, any notice or
other communication (whether oral or written) regarding any actual,
alleged, possible, or potential violation or Breach of, or default
under, any Contract.

(e) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to
the Representing Party or any of its Subsidiaries under current or
completed Contracts with any Person and no such Person has made written
demand for such renegotiation, except in the case of Prime for
renegotiations and attempts to renegotiate Contracts which it intends to
replace with the Prime Physician Agreements and its Contract with Bank
Austria.

(f) The Contracts relating to the sale, design, manufacture, or provision
of products or services by the Representing Party and its Subsidiaries have
been entered into in the Ordinary Course of Business and have been entered
into without the commission of any act alone or in concert with any other
Person, or any consideration having been paid or promised, that is or would
be in violation of any Legal Requirement.

3.16 INSURANCE. (a) The Representing Party has delivered to the Other
Parties:

(i) true and complete copies of all policies of insurance to which the
Representing Party or any of its Subsidiaries is a party or under which
the Representing Party or any of its Subsidiaries, or any director of
the Representing Party or any of its Subsidiaries, is or has been
covered at any time within the three (3) years preceding the date of
this Agreement;

(ii) true and complete copies of all pending applications for policies
of insurance; and

(iii) any statement by the auditor of the Representing Party's
financial statements with regard to the adequacy of such entity's
coverage or of the reserves for claims.

(b) Part 3.16(b) of the Representing Party's Disclosure Schedule
describes:

(i) any self-insurance arrangement by or affecting the Representing
Party or any of its Subsidiaries, including any reserves established
thereunder;

(ii) any Contract or arrangement, other than a policy of insurance,
for the transfer or sharing of any risk by the Representing Party or any
of its Subsidiaries; and

(iii) all obligations of the Representing Party or any of its
Subsidiaries to third parties with respect to insurance (including such
obligations under leases and service agreements) and identifies the
policy under which such coverage is provided.

(c) Part 3.16(c) of the Representing Party's Disclosure Schedule sets
forth, by year, for the current policy year and each of the three (3)
preceding policy years:

(i) a summary of the loss experience under each policy;

(ii) a statement describing each claim under an insurance policy for
an amount in excess of $25,000, which sets forth:

(A) the name of the claimant;

(B) a description of the policy by insurer, type of insurance, and
period of coverage; and

(iii) a statement describing the loss experience for all claims that
were self-insured, including the number and aggregate cost of such
claims.

(d) Except as set forth on Part 3.16(d) of the Representing Party's
Disclosure Schedule:

(i) All policies to which the Representing Party or any of its
Subsidiaries is a party or that provide coverage to the Representing
Party or any of its Subsidiaries, or any director or officer of the
Representing Party or any of its Subsidiaries:

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(A) are valid, outstanding, and enforceable;

(B) are issued by an insurer that is financially sound and
reputable;

(C) taken together, provide adequate insurance coverage for the
assets and the operations of the Representing Party and its
Subsidiaries;

(D) are sufficient for compliance with all Legal Requirements and
Contracts to which the Representing Party or any of its Subsidiaries
is a party or by which it is bound;

(E) will continue in full force and effect following the
consummation of the Contemplated Transactions; and

(F) except for policies for worker's compensation insurance, copies
of which have been furnished to the Other Parties and loss experience
under which has been disclosed pursuant to Section 3.16(c), do not
provide for any retrospective premium adjustment or other
experienced-based Liability on the part of the Representing Party or
any of its Subsidiaries.

(ii) None of the Representing Party and its Subsidiaries has received
(A) any refusal of coverage or any notice that a defense will be
afforded with reservation of rights, or (B) any notice of cancellation
or any other indication that any insurance policy is no longer in full
force or effect or will not be renewed or that the issuer of any policy
is not willing or able to perform its obligations thereunder.

(iii) Each of the Representing Party and its Subsidiaries has paid all
premiums due, and has otherwise performed all of its respective
obligations, under each policy to which it is a party or that provides
coverage to it or a director thereof.

(iv) Each of the Representing Party and its Subsidiaries has given
notice to the insurer of all claims that may be insured thereby.

3.17 ENVIRONMENTAL MATTERS. Except as set forth in Part 3.17 of the
Representing Party's Disclosure Schedule and except where the existence of
facts, actions or conditions contrary to those set forth in Subsections (a) and
(b) of this Section would not have a Material Adverse Effect on the
Representing Party, to the Knowledge of the Representing Party:

(a) It and its Subsidiaries have complied at all times with applicable
Environmental Laws; no property (including buildings and any other
structures) currently or formerly owned or operated by it or any of its
Subsidiaries has been contaminated with, or has had any release of, any
Hazardous Substance in such form or substance so as to create any liability
for it or its Subsidiaries; it is not subject to liability for any
Hazardous Substance disposal or contamination on any other third-party
property; within the last six years, it and its Subsidiaries have not
received any notice, demand letter, claim or request for information
alleging any violation of, or liability of it or any of its Subsidiaries
under, any Environmental Law; it and its Subsidiaries are not subject to
any order, decree, injunction or other agreement with any Governmental
Authority or any third party relating to any Environmental Law; it and its
Subsidiaries are not aware of any reasonably likely liability relating to
environmental circumstances or conditions (including the presence of
asbestos, underground storage tanks, lead products or polychlorinated
biphenyls) involving it or one of its Subsidiaries, or any currently or
formerly owned or operated property; and it has made available to the other
Parties copies of all environmental reports, studies, sampling data,
correspondence, filings and other environmental information in its
possession or reasonably available to it relating to it or one of its
Subsidiaries or any currently or formerly owned or operated property.

(b) Neither the Representing Party or any of its Subsidiaries, nor to
their Knowledge, any agent, employee, or independent contractor of the
Representing Party or any Subsidiary is, in connection with the business of
the Representing Party or any Subsidiary, in violation of, or the subject
of any Proceeding by any governmental authority under, the Medical Waste
Tracking Act, 42 U.S.C. Section 6992 et seq., or any applicable state or
local government statute, ordinance or regulation dealing with the disposal
of medical wastes (collectively, "Medical Waste Laws"). The Representing
Party, its

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Subsidiaries, and, to their Knowledge, the agents, employees and
independent contractors of the Representing Party and its Subsidiaries, as
it relates to the business of the Representing Party or any Subsidiary, are
in compliance with any permits required by the Medical Waste Laws relating
to medical waste disposal. All disposal of medical waste by the
Representing Party, its Subsidiaries, and, to their Knowledge, the agents,
employees and independent contractors of the Representing Party and its
Subsidiaries has been in compliance with the Medical Waste Laws, except
where the failure to so comply would not have a Material Adverse Effect on
the Representing Party.

3.18 EMPLOYEES. (a) Part 3.18 of the Representing Party's Disclosure
Schedule contains a complete and accurate list of the following information for
each employee or director of the Representing Party and its Subsidiaries
earning One Hundred Thousand Dollars ($100,000) per year or more, including
each employee on leave of absence or layoff status: employer; name; job title;
current compensation paid or payable and any change in compensation since
January 1, 1998; vacation accrued; and service credited for purposes of vesting
and eligibility to participate under the Representing Party's and its
Subsidiaries' pension, retirement, profit-sharing, thrift-savings, deferred
compensation, stock bonus, stock option, cash bonus, employee stock ownership
(including investment credit or payroll stock ownership), severance pay,
insurance, medical, welfare, or vacation plan, other Employee Benefit Plan or
any director plan.

(b) No employee or director of the Representing Party or any of its
Subsidiaries is a party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality, noncompetition, or proprietary
rights agreement, between such employee or director and any other Person
("Proprietary Rights Agreement") that in any way adversely affects or will
affect (i) the performance of his duties as an employee or director of the
Representing Party or any of its Subsidiaries, or (ii) the ability of the
Representing Party or any of its Subsidiaries to conduct its business,
including any Proprietary Rights Agreement with the Representing Party or
any of its Subsidiaries by any such employee or director. To the Knowledge
of the Representing Party, no director, officer, or other key employee of
the Representing Party or any of its Subsidiaries intends to terminate his
employment with the Representing Party or any of its Subsidiaries.

3.19 LABOR RELATIONS; COMPLIANCE. Neither the Representing Party nor any
of its Subsidiaries has been or is a party to any collective bargaining or
other labor Contract. There has not been, there is not presently pending or
existing, and, to the Knowledge of the Representing Party, there is not
Threatened, (a) any strike, slowdown, picketing, work stoppage, or employee
grievance process, (b) any Proceeding against or affecting the Representing
Party or any of its Subsidiaries relating to the alleged violation of any Legal
Requirement pertaining to labor relations or employment matters, including any
charge or complaint filed by an employee or union with the National Labor
Relations Board, the Equal Employment Opportunity Commission, or any comparable
Governmental Body, organizational activity, or other labor or employment
dispute against or affecting any of the Representing Party and its Subsidiaries
or their premises, or (c) any application for certification of a collective
bargaining agent. No event has occurred or circumstance exists that could
provide the Basis for any work stoppage or other labor dispute. There is no
lockout of any employees by the Representing Party or any of its Subsidiaries,
and no such action is contemplated by the Representing Party and its
Subsidiaries. Each of the Representing Party and its Subsidiaries has complied
in all respects with all Legal Requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours, benefits,
collective bargaining, the payment of social security and similar taxes,
occupational safety and health, and plant closing. Neither the Representing
Party nor any of its Subsidiaries is liable for the payment of any
compensation, damages, Taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements.

3.20 INTELLECTUAL PROPERTY. Part 3.20 of the Representing Party's
Disclosure Schedule lists all patents, trademarks, trade names, service marks,
trade secrets, copyrights, applications and licenses and other proprietary
intellectual property rights and licenses which are owned by the Representing
Party or any of its Subsidiaries and which are material to the businesses of
the Representing Party and its Subsidiaries (the "Intellectual Property") and
all licenses and other agreements pertaining to the Intellectual Property; the
Representing Party or a Subsidiary owns or has valid rights to use the
Intellectual Property; and the Representing Party does not have any Knowledge
of any conflict with the

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rights of it and its Subsidiaries therein or any Knowledge of any conflict by
them with the rights of others therein which have had, or would reasonably be
expected to have, a Material Adverse Effect on the Representing Party. Neither
the Mergers nor the Contemplated Transactions will have a Material Adverse
Effect on the rights of the Representing Party or any of its Subsidiaries in
respect of any of the Intellectual Property.

3.21 CERTAIN PAYMENTS. None of the Representing Party, any of its
Subsidiaries, any director, officer, agent, or employee of the Representing
Party or any of its Subsidiaries, or, to the Knowledge of the Representing
Party or any of its Subsidiaries, any other Person associated with or acting
for or on behalf of the Representing Party or any of its Subsidiaries, has
directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any Person, private or public,
regardless of form, whether in money, property, or services (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions, or for special
concessions already obtained, for or in respect of the Representing Party or
any of its Subsidiaries or any Affiliate of the Representing Party or any of
its Subsidiaries, or (iv) in violation of any Legal Requirement, or (b)
established or maintained any fund or asset that has not been recorded in the
books and records of the Representing Party and its Subsidiaries.

3.22 RELATIONSHIPS WITH RELATED PERSONS. Except as set forth in Part 3.22
of the Representing Party's Disclosure Schedule, no Related Person of the
Representing Party or any of its Subsidiaries has, or since the first day of
the next to last completed fiscal year of the Representing Party has had, any
interest in any property (whether real, personal, or mixed and whether tangible
or intangible), used in or pertaining to the business of the Representing Party
and its Subsidiaries. No Related Person of the Representing Party or any of its
Subsidiaries is, or since the first day of the next to last completed fiscal
year of the Representing Party has owned (of record or as a beneficial owner)
an equity interest or any other financial or profit interest in, a Person that
has (i) had business dealings or a material financial interest in any
transaction with the Representing Party or any of its Subsidiaries, other than
business dealings or transactions conducted in the Ordinary Course of Business
with the Representing Party and its Subsidiaries at substantially prevailing
market prices and on substantially prevailing market terms, or (ii) engaged in
competition with the Representing Party or any of its Subsidiaries with respect
to any line of the products or services of the Representing Party and its
Subsidiaries in any market presently served by the Representing Party or any of
its Subsidiaries (a "Competing Business"), except for less than one percent
(1%) of the outstanding capital stock of any Competing Business that is
publicly traded on any recognized exchange or in the over-the-counter market.
Except as set forth in Part 3.22 of the Representing Party's Disclosure
Schedule, no Related Person of the Representing Party or any of its
Subsidiaries is a party to any Contract with, or has any claim or right
against, the Representing Party or any of its Subsidiaries.

3.23 BROKERS OR FINDERS. Except as set forth in Part 3.23 of the
Representing Party's Disclosure Schedule, the Representing Party and its
Subsidiaries and agents have incurred no obligation or Liability, contingent or
otherwise, or taken any action which would give rise to a valid claim against
any Party, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.

3.24 SEC FILINGS. This representation and warranty is made by Saratoga
only to OptiCare and Prime: Saratoga has filed with the SEC all forms, reports
and documents required to be filed by it with the SEC since January 1, 1997 and
has made available to each of OptiCare and Prime true and complete copies of
its (i) Annual Report on Form 10-K for the year ended December 31, 1997, as
filed with the SEC; and (ii) all other reports, statements and registration
statements (including Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K) filed by it with the SEC since December 31, 1997 (collectively, the
"SEC Filings"). As of their respective dates, the SEC Filings (including all
exhibits and schedules thereto and documents incorporated by reference
therein), did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

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3.25 DISCLOSURE. (a) No representation or warranty of the Representing
Party in this Agreement and no statement in the Representing Party's Disclosure
Schedule omits to state a material fact necessary to make the statements herein
or therein, in the light of the circumstances in which they were made, not
misleading.

(b) No notice given pursuant to this Agreement will contain any untrue
statement or omit to state a material fact necessary to make the statements
therein or in this Agreement, in the light of the circumstances in which
they were made, not misleading.

(c) There is no fact known to the Representing Party that has specific
application to the Representing Party and its Subsidiaries (other than
general economic or industry conditions) and that has had, or, as far as
the Representing Party can reasonably foresee, will have a Material Adverse
Effect on the Representing Party that has not been set forth in this
Agreement or the Representing Party's Disclosure Schedule.

ARTICLE IV

CONDUCT OF BUSINESS PENDING THE MERGERS

4.1 CONDUCT OF BUSINESS PENDING THE MERGERS. Prior to the Effective Date,
except as specifically provided in this Agreement, unless the Parties shall
otherwise agree in writing:

(a) except as set forth in Part 4.1(a) of the Saratoga Disclosure
Schedule, the OptiCare Disclosure Schedule and the Prime Disclosure
Schedule, each of Saratoga, OptiCare and Prime shall, and shall cause its
Subsidiaries to, carry on their respective businesses in the usual, regular
and ordinary course in substantially the same manner as heretofore
conducted, and shall, and shall cause its Subsidiaries to, use their
reasonable efforts to preserve intact their present business organizations
and preserve their relationships with physicians, customers, suppliers and
others having business dealings with them to the end that their goodwill
and ongoing businesses shall be unimpaired at the Effective Time. Each of
Saratoga, OptiCare and Prime shall, and shall cause its Subsidiaries to,
(i) maintain insurance coverages and its books, accounts and records in the
usual manner consistent with prior practices; (ii) comply in all material
respects with all applicable Legal Requirements; (iii) maintain and keep
its properties and equipment in good repair, working order and condition,
ordinary wear and tear excepted; and (iv) perform in all material respects
its obligations under all material Contracts and commitments to which it is
a party or by which it is bound;

(b) except as set forth in Part 4.1(b) of the Saratoga Disclosure
Schedule, the OptiCare Disclosure Schedule and the Prime Disclosure
Schedule, and except as required by this Agreement, each of Saratoga,
OptiCare and Prime shall not and shall not propose to (i) sell or pledge or
agree to sell or pledge any capital stock owned by it in any of its
Subsidiaries, (ii) amend its Certificate of Incorporation or By-laws, (iii)
split, combine or reclassify its outstanding capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock, or declare,
set aside or pay any dividend or other distribution payable in cash, stock
or property, or (iv) directly or indirectly redeem, purchase or otherwise
acquire or agree to redeem, purchase or otherwise acquire any shares of its
capital stock;

(c) except as set forth in Part 4.1(c) of the Saratoga Disclosure
Schedule, the OptiCare Disclosure Schedule and the Prime Disclosure
Schedule, each of Saratoga, OptiCare and Prime shall not, nor shall it
permit any of its Subsidiaries to, (i) issue, deliver or sell or agree to
issue, deliver or sell any additional shares of, or rights of any kind to
acquire any shares of, its capital stock of any class, any indebtedness
having the right to vote on matters on which its shareholders may vote, or
any option, rights or warrants to acquire, or securities, convertible into,
shares of capital stock; (ii) acquire, lease or dispose of or agree to
acquire, lease or dispose of any capital assets or any other assets other
than in the Ordinary Course of Business; (iii) incur additional
indebtedness or encumber or grant a security interest in any asset or enter
into any other material transaction other than in each case in the Ordinary
Course of Business; (iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in, or
by any other manner, any business or any Person; or (v) enter into any
Contract, commitment or arrangement with respect to any of the foregoing;

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(d) except as disclosed in Part 4.1(d) of the Saratoga Disclosure
Schedule, the OptiCare Disclosure Schedule and the Prime Disclosure
Schedule, each of Saratoga, OptiCare and Prime shall not, nor shall it
permit any of its Subsidiaries to, except as required to comply with
applicable law and except as provided in Section 6.1(n), enter into a new
(or amend any existing) Employee Benefit Plan or any new (or amend any
existing) employment, severance or consulting agreement, grant any general
increase in the compensation of directors, officers or Employees (including
any such increase pursuant to any bonus, pension, profit-sharing or other
plan or commitment) or grant any increase in the compensation payable or to
become payable to any director, officer or Employee, except in any of the
foregoing cases in accordance with preexisting contractual provisions or in
the Ordinary Course of Business;

(e) each of Saratoga, OptiCare and Prime shall not, and shall not permit
any of its Subsidiaries to, settle any material claim, action or Proceeding
involving money damages or waive or release any material rights or claims,
except in the Ordinary Course of Business;

(f) each of Saratoga, OptiCare and Prime shall not, and shall not permit
any of its Subsidiaries to, change its methods of accounting in effect at
December 31, 1998, except as required by changes in GAAP as concurred in by
its independent auditors, or change any of its methods of reporting income
and deductions for Federal income tax purposes from those employed in the
preparation of the Federal income tax returns of it and its Subsidiaries
for the taxable years ending December 31, 1998, 1997 and 1996, except as
required by changes in applicable Legal Requirements;

(g) each of Saratoga, OptiCare and Prime shall not, and shall not permit
any of its Subsidiaries to, take any action that is intended or may
reasonably be expected to result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in any
material respect at any time prior to the Effective Time, or in any of the
conditions to the Mergers set forth in Article VI not being satisfied or in
a violation of any provision of this Agreement, except, in every case, as
may be required by applicable Legal Requirements; and

(h) each of Saratoga, OptiCare and Prime shall not, and shall not permit
any of its Subsidiaries to, agree to, or make any commitment to, take any
of the actions prohibited by this Section 4.1.

4.2 CONDUCT OF BUSINESS OF PRIME SUB AND OPTICARE SUB. During the period
from the date of this Agreement to the Effective Time, neither Prime Sub nor
OptiCare Sub shall engage in any activities of any nature except as provided in
or contemplated by this Agreement.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1 ACCESS AND INFORMATION. Each of the Parties and their respective
Subsidiaries shall afford to the Other Parties and to the Other Parties'
Representatives reasonable access during normal business hours (and at such
other times as the Parties may mutually agree) throughout the period prior to
the Effective Time to all of its properties, books, Contracts, commitments,
records and Employees and, during such period, each shall furnish promptly to
the other (a) a copy of each report, schedule and other document filed or
received by it pursuant to the requirements of federal or state securities
laws, and (b) all other information concerning its business, properties and
Employees as the other may reasonably request. Each of the Parties shall hold,
and shall cause their respective Employees and Representatives to hold, in
confidence all such information in accordance with the terms of the
Confidentiality Agreement dated November 5, 1998 between them.

5.2 PROXY STATEMENT. The Parties shall cooperate and Saratoga shall
promptly prepare and file with the SEC as soon as practicable, a proxy
statement with respect to Saratoga's stockholder meeting referred to in Section
2.15 and a registration statement on Form S-4 with respect to the Common Stock
of Saratoga to be issued in the Mergers (the "Proxy Statement/Prospectus"),
which shall comply as to form in all material respects with the applicable
provisions of the Securities Act, the Securities Exchange Act and the rules and
regulations thereunder. OptiCare and Prime shall each pay in advance, at the
request of Saratoga, one-half of the filing fees and the reasonable printing,
mailing and other expenses

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related to the registration statement and the Proxy Statement/Prospectus.
Saratoga shall use its Best Efforts, and the other Parties will cooperate with
Saratoga, to have the Proxy Statement/Prospectus cleared and made effective by
the SEC as promptly as practicable. Saratoga also shall use its Best Efforts to
obtain all necessary state securities law or "Blue Sky" permits and approvals
required to carry out the Contemplated Transactions. Saratoga shall, as
promptly as practicable, provide copies of any written comments received from
the SEC with respect to the Proxy Statement/Prospectus to the Other Parties and
advise the Other Parties of any oral comments with respect to the Proxy
Statement/Prospectus received from the SEC. The Parties agree that none of the
information supplied or to be supplied by them for inclusion or incorporation
by reference in the Proxy Statement/Prospectus and each amendment or supplement
thereto, at the time of mailing thereof and at the time of the Shareholder
Meetings, will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. For purposes of the foregoing, it is understood and
agreed that information concerning or related to each Party and its Shareholder
Meeting will be deemed to have been supplied by such Party. Saratoga will
provide the Other Parties with a reasonable opportunity to review and comment
on any amendment or supplement to the Proxy Statement/Prospectus prior to
filing it with the SEC, and will provide the Other Parties with a copy of all
such filings made with the SEC. No amendment or supplement to the information
supplied by any Party for inclusion in the Proxy Statement/Prospectus shall be
made without the approval of such Party, which approval shall not be
unreasonably withheld or delayed.

5.3 EMPLOYEE MATTERS. As of the Effective Time, the Employees of Saratoga
shall resign and the Employees of OptiCare and Prime and each of their
Subsidiaries shall continue employment with the OptiCare Surviving Corporation
or the Prime Surviving Corporation, as the case may be, and each of their
Subsidiaries, respectively, in the same positions and at the same level of
wages and/or salary and without having incurred a termination of employment or
separation from service; provided, however, except as may be specifically
required by applicable law or any Contract, such Surviving Corporations and
their Subsidiaries shall not be obligated to continue any employment
relationship with any Employee for any specific period of time. Except with
respect to the Stock Option Plans to be terminated as provided by Section 2.12,
as of the Effective Time, such Surviving Corporations shall be the sponsor of
the Employee Benefit Plans sponsored by the respective Parties immediately
prior to the Effective Time, and such Surviving Corporations and their
Subsidiaries shall satisfy all obligations and Liabilities under such Employee
Benefit Plans, provided that nothing herein shall prevent the Surviving
Corporations and their Subsidiaries from modifying or terminating such Employee
Benefit Plans from time to time. To the extent any Employee Benefit Plan is
made available to the Employees of the Surviving Corporations or their
Subsidiaries: (a) service with Prime or OptiCare and their Subsidiaries by any
Employee prior to the Effective Time shall be credited for eligibility and
vesting purposes under such plan, and (b) with respect to any Welfare Benefit
Plans to which such Employees may become eligible, such plans shall provide
credit for any co-payments or deductibles by such Employees and waive all
preexisting condition exclusions and waiting periods, other than limitations or
waiting periods that have not been satisfied under any Welfare Benefit Plans
maintained by the Parties and their Subsidiaries for their Employees prior to
the Effective Date.

5.4 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) The Parties
agree that all rights to indemnification existing in favor of the directors,
officers or Employees of Saratoga, OptiCare, Prime and the Surviving
Corporations (the "Indemnified Parties") as provided in their respective
Certificates of Incorporation or By-laws, as in effect as of the date hereof,
with respect to matters occurring prior to and through the Effective Time,
shall survive the Mergers and shall continue in full force and effect for a
period of not less than six (6) years from the Effective Time. The Parties
agree that Saratoga shall, and shall cause the Surviving Corporations to,
obtain and maintain in effect for not less than six (6) years after the
Effective Time the current policies of directors' and officers' liability
insurance maintained by OptiCare and Prime, respectively, with respect to
matters occurring on or prior to the Effective Time; provided, however, that
the Surviving Corporations may substitute therefor policies of at least the
same coverage (with carriers comparable to OptiCare's and Prime's existing
carriers) containing terms and conditions which are no less advantageous to the
Indemnified Parties; and provided,

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further, that the Surviving Corporations shall not be required in order to
maintain or procure such coverage to pay an annual premium in excess of an
amount to be mutually agreed upon by the Parties before the Effective Time (the
"Cap"); and provided, further, that if equivalent coverage cannot be obtained,
or can be obtained only by paying an annual premium in excess of the Cap, the
Surviving Corporations shall only be required to obtain as much coverage as can
be obtained by paying an annual premium equal to the Cap. In addition, OptiCare
and Prime will investigate, with Saratoga's cooperation, the availability and
cost of acquiring directors' and officers' liability insurance for Saratoga
which will provide coverage for matters occurring on or prior to the Effective
Time and, if OptiCare and Prime then decide in their sole discretion that such
insurance should be purchased, they will agree to Saratoga purchasing such
insurance in such amounts, for such time and on such terms as they, in their
sole discretion, may determine.

(b) In the event that any action, suit, Proceeding or investigation
relating hereto or to the Contemplated Transactions is commenced, whether
before or after the Effective Time, the Parties agree to cooperate and use
their respective reasonable efforts to vigorously defend against and
respond thereto.

(c) In the event Saratoga or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its
properties and assets to any Person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of Saratoga assume the obligations set forth in this Section 5.4.

(d) The provisions of this Section 5.4 are intended to be for the benefit
of, and shall be enforceable by, each of the Indemnified Parties and his or
her heirs, executors, administrators, and legal representatives.

5.5 HSR ACT. The Parties shall use their Best Efforts to file as soon as
practicable notifications required under the HSR Act (and not heretofore
obtained) in connection with the Mergers and the transactions contemplated
hereby, and to respond as promptly as practicable to any inquiries received
from the Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") for additional information or
documentation and to respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other governmental
authority in connection with antitrust matters. Each Party agrees not to, and
will cause its Representatives not to, initiate substantive discussions with
representatives of the applicable antitrust regulatory authorities concerning
their review of the Mergers and the Contemplated Transactions under the HSR Act
without the prior consent of the Other Parties hereto, and will not engage in
substantive discussions with such authorities without notifying the Other
Parties hereto promptly thereafter of the substance and content of such
discussions.

5.6 ADDITIONAL AGREEMENTS. (a) Subject to the terms and conditions herein
provided, each of the Parties hereto agrees to use its Best Efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Contemplated Transactions, including using
their Best Efforts to obtain all necessary waivers, Consents and approvals to
effect all necessary registrations and filings (including, but not limited to,
filings under the HSR Act and with the SEC and all other applicable
Governmental Bodies) and to lift any injunction to the Mergers (and, in such
case, to proceed with the Mergers as expeditiously as possible).

(b) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Saratoga, OptiCare, Prime, OptiCare
Sub, Prime Sub and the Surviving Corporations shall take all such necessary
action.

5.7 ADVICE OF CHANGES; SEC FILINGS. OptiCare and Prime shall confer on a
reasonably regular basis on operational matters. The Parties shall promptly
advise each other orally and in writing of any change or event that has had, or
could reasonably be expected to have, a Material Adverse Effect on them. The
Parties shall promptly provide each other (or their respective counsel) copies
of all filings made by such party with the SEC or any Governmental Body in
connection with this Agreement and the Contemplated Transactions.

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5.8 RESTRUCTURING OF MERGER. Upon the mutual agreement of the Parties, (a)
the Prime Merger shall be restructured in the form of a forward subsidiary
merger of Prime into Prime Sub, with Prime Sub being the surviving corporation,
and/or (b) the OptiCare Merger shall be restructured in the form of a merger of
Saratoga into OptiCare, with OptiCare being the surviving corporation, or in
the form of a forward or reverse subsidiary merger of OptiCare with another
Subsidiary of Saratoga. In such event, this Agreement shall be deemed
appropriately modified to reflect such form or forms of merger.

5.9 STATE TAKEOVER STATUTES. Each Party will take all steps necessary to
exempt (or continue the exemption of) the Mergers and the transactions
contemplated hereby from, and challenge the validity of, any applicable state
takeover law, as now or hereafter in effect.

5.10 AFFILIATE AGREEMENTS. OptiCare and Prime have each included in their
respective Disclosure Schedules a list of each Person that, to its Knowledge,
is or is reasonably likely to be, as of the date of its stockholder meeting
referred to in Section 2.15, deemed to be an "affiliate" of it (each, a "Rule
145 Affiliate") as that term is used in Rule 145 under the Securities Act or
SEC Accounting Series Releases 130 and 135. OptiCare and Prime will each
deliver to Saratoga an updated list of its Rule 145 Affiliates prior to the
Closing Date. OptiCare and Prime will each use their Best Efforts to cause each
person who may be deemed a Rule 145 Affiliate of it to execute and deliver to
it and Saratoga on or before the Closing Date an agreement in the form of
Exhibit A.

5.11 ACCOUNTANTS' LETTERS. Saratoga, OptiCare and Prime shall use its Best
Efforts to cause its independent accountants to deliver to each of them, and to
the directors and officers of Saratoga who sign its Registration Statement on
Form S-4, a letter (1) dated the date on which the Registration Statement shall
become effective and (2) a date shortly before the Effective Time, and
addressed to such other Parties and such directors and officers, in form and
substance customary for "comfort" letters delivered by independent accountants
in accordance with Statement of Accounting Standards No. 72.

5.12 SARATOGA VOTING. Saratoga shall vote the shares of OptiCare Sub and
Prime Sub in favor of the OptiCare Merger and the Prime Merger, respectively.

5.13 ACTION BY THE OFFICERS, DIRECTORS, ETC. OptiCare, Prime and Saratoga
shall each use their respective Best Efforts to cause their respective
directors and executive officers to vote any shares held by them in favor of
the Prime Merger, the OptiCare Merger, and the Reverse Stock Split, as the case
may be.

5.14 MEETINGS OF STOCKHOLDERS. Promptly after the date hereof, each of
Prime, OptiCare and Saratoga will take all action necessary in accordance with
the DGCL and CBCA, as the case may be, and their respective Certificates of
Incorporation and By-laws to convene a stockholder meeting to be held as
promptly as practicable, and in any event (to the extent permissible under
applicable law) within 45 days after the declaration of effectiveness of the
Registration Statement, for the purpose of voting upon this Agreement. The
Parties will consult with each other and use their respective Best Efforts to
hold their stockholders meetings on the same day. The Parties will use their
respective Best Efforts to solicit from their respective stockholders proxies
in favor of the adoption and approval of all matters on which such stockholders
are required to vote in order to permit the carrying out of the Contemplated
Transactions and will take all other action necessary or advisable to secure
the vote or consent of their respective stockholders required by the rules of
the CBCA or the DGCL, as the case may be, to obtain such approvals.

ARTICLE VI

CONDITIONS PRECEDENT

6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGERS. The
respective obligations of each Party to effect the respective Mergers shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:

(a) Shareholder Approval. This Agreement and the Contemplated
Transactions shall have been approved and adopted by the requisite vote of
the holders of each Party's Common Stock and Preferred Stock, as the case
may be.

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(b) HSR Act. The waiting period applicable to the consummation of the
Mergers under the HSR Act shall have expired or been terminated.

(c) No Orders. No preliminary or permanent injunction or other order by
any federal or state court in the United States of competent jurisdiction,
or any other Order, which prevents the consummation of either Merger or the
Mergers shall have been issued and remain in effect (each Party agreeing to
use its Best Efforts to have any such injunction lifted).

(d) Consents Obtained. All Consents, authorizations, orders and approvals
of (or filings or registrations with) any Governmental Body required in
connection with the execution, delivery and performance of this Agreement
shall have been obtained or made, except for filings in connection with the
Mergers and any other documents required to be filed after the Effective
Time and except where the failure to have obtained or made any such
Consent, authorization, order, approval, filing or registration would not
have a Material Adverse Effect on the business of the Parties and their
respective Subsidiaries, taken as a whole, following the Effective Date.

(e) Performance. Unless waived by the other Parties, each Party shall
have performed in all material respects its agreements contained in this
Agreement required to be performed on or prior to the Effective Time, and
the representations and warranties of each Party contained in this
Agreement shall be true and correct as of the date of this Agreement and as
of the Effective Time as though made on and as of the Effective Time
(except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as
of such date).

(f) Stock Exchange Approval. The shares of Saratoga Common Stock which
shall be issued to the shareholders of OptiCare and Prime upon consummation
of the Mergers shall have been approved for listing on the AMEX or NASDAQ,
as OptiCare, Prime and Saratoga shall agree, subject to official notice of
issuance.

(g) Requisite Regulatory Approvals. All regulatory approvals required to
consummate the Contemplated Transactions shall have been obtained and shall
remain in full force and effect and all statutory waiting periods shall
have expired and no such approvals shall contain any conditions or
restrictions which would reasonably be expected to result in a Material
Adverse Effect on any of the Parties (all such approvals and the expiration
of all such waiting periods being referred to herein as the "Requisite
Regulatory Approvals").

(h) No Material Adverse Change. Between the date hereof and the Effective
Time, there shall have been no material adverse change in the business,
financial condition, operating results, assets, customer base of any of the
Parties.

(i) Saratoga Assets. As of the Closing, Saratoga shall have no
liabilities and no assets other than as described in the Saratoga
Disclosure Schedule and other than cash, which cash shall be not less than
One Hundred Fifty Thousand Dollars ($150,000) if the Closing Date is before
July 1, 1999 and which may decrease by Ten Thousand Dollars ($10,000) per
month for each month by which the Closing is delayed beyond June 30, 1999.

(j) Change of Name. Saratoga shall have changed its corporate name to a
name mutually agreed upon by OptiCare, Prime and Saratoga.

(k) 1998 Financial Statements. As of the Closing, the financial
statements referred to in Section 3.4 of Saratoga, OptiCare and Prime for
the year ended December 31, 1998 shall have been audited and shall have
received unqualified audit opinions. Prior to the Closing, Saratoga, Prime
and OptiCare shall each have provided to the Other Parties its audited 1998
financial statements, which OptiCare, Prime and Saratoga shall have
determined to be acceptable.

(l) Saratoga Board of Directors. The Saratoga directors and officers
shall resign effective as of the Effective Time, and the board of directors
of Saratoga shall be reconstituted to consist as of the Effective Time of
(a) Dean J. Yimoyines, Steven L. Ditman, Martin E. Franklin, (b) either
Allan L.M. Barker ("Barker") or D. Blair Harrold ("Harrold"), as they may
determine, and (c) three other persons agreed to by OptiCare and Prime.

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(m) Registration of Saratoga Common Stock. The Saratoga Common Stock to
be issued to the former shareholders of OptiCare and Prime will be
registered with the SEC pursuant to the appropriate registration statement.

(n) Employment Agreements. Saratoga shall have entered into employment
agreements with (i) Dean Yimoyines, M.D. as Chairman, President and Chief
Executive Officer (the "CEO Employment Agreement") and (ii) management
personnel who report directly to Dr. Yimoyines (the "Other Employment
Agreements"), containing such terms and conditions as shall be approved by
OptiCare, Prime and Saratoga. All existing employment agreements between
(i) OptiCare or any Subsidiary of OptiCare and their respective employees
and (ii) Prime or any Subsidiary of Prime and their respective employees,
shall continue in accordance with their terms until replaced with new
agreements, except that the employment agreements between Prime or a
Subsidiary of Prime with Harrold and Barker shall be cancelled and replaced
effective as of the Effective Time with new agreements as described in
Section 6.1(ee). It is the intention of the Parties that the management of
OptiCare prior to the Merger will control the operations of Saratoga and
its Subsidiaries after the Effective Time.

(o) Prime Warrants. All Warrants to purchase shares of Prime Common
Stock, including the Marlin Capital Warrants and the Bank Austria Warrants,
shall be converted into shares of Prime Common Stock prior to the Effective
Time.

(p) Adoption of Stock Option Plan. Saratoga shall adopt a new Stock
Option Plan in a form to be agreed to by OptiCare, Prime and Saratoga
providing for the grant of options to purchase shares of Saratoga Common
Stock.

(q) Bank Austria Credit Anstalt. The credit facility between Prime and
Bank Austria Credit Anstalt or its affiliates, which consists of both term
and revolving loan commitments and has an aggregate principal amount
outstanding of approximately Forty Million Dollars ($40,000,000), shall be
reengineered prior to or as of the Closing to (i) reduce the principal
amount outstanding to a maximum of Twenty-Five Million Dollars
($25,000,000); (ii) revise the interest rate to be no higher than prime;
(iii) provide that no principal payments under the term loan will be due or
payable prior to January 1, 2000; and (iv) provide a repayment schedule and
other terms mutually acceptable to OptiCare, Prime and Saratoga.

(r) Seller Notes. The promissory notes issues by Prime in connection with
the acquisition of the various physicians' ophthalmology practices (the
"Seller Notes"), which have an aggregate principal amount outstanding of
approximately Twenty-One Million Dollars ($21,000,000), shall be
reengineered prior to or as of the Closing to reduce the aggregate
principal amount of Seller Notes outstanding to no more than Four Million
Dollars ($4,000,000) as of the Closing. In connection with the
reengineering of the Seller Notes, the administrative service agreements
entered into between Prime and such physicians' practices (the "ASA
Agreements") shall be replaced by the Prime Physician Agreements which will
revise the fees to be paid by the physicians, the non-competition
provisions and other provisions under the ASA Agreements, in a manner to be
agreed to by Prime and OptiCare.

(s) Lock-up Agreements. All officers, directors and ten percent (10%)
stockholders of Saratoga immediately after the Closing and certain other
stockholders of Saratoga as required by OptiCare and Prime (the "Saratoga
Insiders") shall enter into lock-up agreements with Saratoga pursuant to
which such Saratoga Insiders (i) will agree not to sell their shares of
Saratoga Common Stock for a period of one-hundred and eighty (180) days
following the Closing and (ii) will agree they will thereafter notify
Saratoga in advance of any sales or will give Saratoga a right of first
refusal to purchase any shares of Saratoga Common Stock they wish to sell,
as OptiCare and Prime may require. Physicians who have agreements with
OptiCare or Prime as of the Closing shall enter into lock-up agreements
with Saratoga pursuant to which each of them will agree not to sell more
than twenty-five percent (25%) on a non-cumulative basis of his or her
Saratoga Common Stock in any six (6) month period.

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(t) Dissenting Shareholders. OptiCare will not be required to effect the
OptiCare Merger if more than five percent (5%) of the outstanding shares of
any class of capital stock of OptiCare, Prime or Saratoga, if applicable,
shall have demanded and perfected statutory dissenters rights in connection
with the Contemplated Transactions. Prime will not be required to effect
the Prime Merger if more than five percent (5%) of the outstanding shares
of any class of capital stock of OptiCare, Prime or Saratoga, if
applicable, shall have demanded and perfected statutory dissenters rights
in connection with the Contemplated Transactions.

(u) Reverse Stock Split. Saratoga shall have effected a reverse stock
split of its common stock in a ratio agreed to by OptiCare, Prime and
Saratoga (the "Reverse Stock Split") and the authorized and outstanding
shares of capital stock of Saratoga immediately prior to the Effective Time
shall be as agreed to by OptiCare, Prime and Saratoga.

(v) Prime Physician Agreements. Prime shall have entered into Prime
Physician Agreements with all of its physician practices, which shall be
satisfactory to OptiCare and Saratoga.

(w) OptiCare Charter Amendment. The Certificate of Incorporation of
OptiCare shall have been appropriately amended so that the OptiCare Merger
will not constitute a liquidation, dissolution or winding up and will not
entitle any holders of any OptiCare Stock to receive any cash, securities
or other property other than the OptiCare Merger Consideration.

(x) Saratoga Stockholder Ownership. The Persons who were stockholders of
Saratoga immediately before the Effective Time will own a number of shares
of Saratoga Common Stock which will constitute two and one-half percent
(2.5%) of the total amount of Saratoga Common Stock calculated on a primary
basis to be outstanding immediately after the Effective Time, giving effect
to the Reverse Stock Split and the Mergers and taking into account any
shares of Saratoga Common Stock which are not issued in the Mergers and the
Reverse Stock Split because they are attributable to stockholders of
Saratoga and former stockholders of OptiCare and Prime who may have
demanded and perfected statutory dissenters rights.

(y) Saratoga Subsidiaries. Saratoga shall have disposed of the stock of
all of its subsidiary corporations other than OptiCare Sub and Prime Sub
and shall have no liabilities or obligations with respect to such
corporations.

(z) Simultaneous Effectiveness of Mergers. The Certificates of Merger
shall provide that the OptiCare Merger and the Prime Merger shall be
effective at the same time.

(aa) Prime Class A Preferred Stock. The 8,000 shares of Prime Class A
Preferred Stock owned by Marlin Capital, L.P. as of the date of this
Agreement shall be transferred to Prime prior to the Effective Time in
exchange for the following: (i) 2,000 shares shall be converted into or
exchanged for shares of Prime Common Stock; (ii) 2,000 shares shall be
exchanged for a promissory note of Saratoga in the principal amount of
$2,000,000, due on the third anniversary of the Effective Time, bearing
interest at a market rate as agreed to by OptiCare and Prime with Marlin
Capital, L.P., and subordinated in right of payment to the bank debt of
Saratoga and the Surviving Corporations; and (iii) 4,000 shares shall be
exchanged for a redeemable, non-interest-bearing promissory note of
Saratoga in the principal amount of $4,000,000, due on the third
anniversary of the Effective Time, subordinated in right of payment to the
bank debt of Saratoga and the Surviving Corporations, having terms (except
the rate of interest) like the promissory note referred to in clause (ii)
above, with a target redemption date of no more than 180 days after the
Effective Time, subject to the determination by the Board of Directors of
Saratoga that market conditions are favorable for Saratoga to raise at
least $4,000,000 of net proceeds from a public or private sale of Saratoga
Common Stock during that 180-day period, and with the further provision
that if Saratoga does not complete such a sale within that 180-day period,
the promissory note would begin to bear interest after that 180-day period
at the rate of 9% per annum and would be redeemed at such later date as
Saratoga first raised at least $4,000,000 of net proceeds from a public or
private sale of Saratoga Common Stock; provided, however, that if Saratoga
does not redeem such promissory note within 365 days after the Effective
Time, then Marlin Capital shall thereafter have the option to convert

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such promissory note into Saratoga Common Stock at a conversion price equal
to the greater of (x) the closing market price of Saratoga Common Stock on
the first trading day after the Effective Time and (y) 90% of the average
closing price of Saratoga Common Stock for the 20 trading days next
preceding the conversion date. The terms of those two promissory notes
shall be mutually acceptable to OptiCare, Prime and Saratoga.

(bb) Amendment of Certain OptiCare Agreements. The following agreements
shall have been amended to the satisfaction of OptiCare and Prime to
accommodate the Contemplated Transactions: (i) The Amended and Restated
Stockholders Agreement dated October 15, 1997 among OptiCare, Anthem Blue
Cross and Blue Shield of Connecticut ("Blue Cross"), Oxford Health Plans,
Inc. ("Oxford"), Nazem OptiCare Partners, L.P. ("Nazem Partners"),
Christopher Kaufman ("Kaufman"), Eugene Huang ("Huang"), Fred Nazem
("Nazem"), Richard Racine ("Racine"), Philip Barak ("Barak") and other
stockholders of OptiCare; (ii) Warrant Agreement dated October 15, 1997
among OptiCare, Blue Cross, Oxford, Nazem, Racine and Barak; (iii)
Registration Rights Agreement dated October 15, 1997 among OptiCare, Blue
Cross, Oxford, Nazem Partners, Huang and Kaufman; (iv) Stock Option and Put
Agreement dated September 17, 1987, as amended, between Philip Schub, O.D.,
and OptiCare; and (v) 1995 Stock Purchase Agreement among OptiCare, Blue
Cross and other parties.

(cc) Waite Severance Agreement. Steven B. Waite and Prime shall have
executed and delivered a severance agreement covering, among other things,
the termination of his employment with Prime and the Steven Waite Options
and lock-up provisions for the shares of Saratoga Common Stock he may
receive in the Prime Merger, which severance agreement OptiCare shall have
determined to be acceptable.

(dd) UCC Searches. OptiCare shall have received UCC searches for Prime
and its Subsidiaries and be satisfied with the Encumbrances shown thereon.

(ee) Settlement Matters. The Settlement Agreement entered into on April
9, 1999 (the "Settlement Agreement") with respect to the civil action
entitled D. Blair Harrold, et al. v. PrimeVision Health Inc. et al. filed
in the Nash County Superior Court (docket no. 99-CVS-634), State of North
Carolina (the "Civil Action") shall remain unmodified and in full force and
effect, and the parties to the Settlement Agreement shall have taken all
actions and done all things contemplated to be taken and done under the
Settlement Agreement at or prior to the Effective Time, including, but not
limited to, the execution and delivery of the following agreements provided
for in the Settlement Agreement, all of which agreements shall be in full
force and effect and all of which agreements each of OptiCare and Saratoga
shall have determined to be acceptable:

(1) Barker, Harrold and Optometric Eye Care Center, P.A. ("OECC, PA")
shall have released Prime, PrimeVision of North Carolina, Inc.,
Consolidated Eye Care, Inc. ("CEC"), Steven B. Waite and the other
parties to the Settlement Agreement from claims;

(2) Barker and Harrold shall have delivered in escrow to the Escrow
Agent designated in the Settlement Agreement papers necessary to dismiss
with prejudice the Civil Action, to be filed with the court promptly
following the Effective Time;

(3) Prime, Barker and Harrold shall have executed and delivered a
Share Grant Agreement under which Prime shall have issued to Barker and
Harrold such number of shares of Prime Common Stock as is necessary so
that they together will own an aggregate of 32% of the outstanding
shares of Prime Common Stock, calculated on a primary basis, immediately
before the Prime Merger;

(4) OECC, PA shall cancel and return to CEC at the Closing the
promissory note in the original principal amount of $364,896 dated
August 1, 1994 executed by CEC in favor of OECC, PA;

(5) Barker and Harrold shall have each executed and delivered an
employment agreement with OptiCare, to be effective at the Effective
Time, which employmentagreements will replace and supersede Barker and
Harrold's employment agreements in effect on the date of this Agreement
and which will have the terms summarized in Section 5 of the Settlement
Agreement;

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(6) OptiCare, Barker and Harrold shall have executed and delivered the
option agreement contemplated by Section 6 of the Settlement Agreement
under which Barker and Harrold will have the right to purchase six
specified retail business operations after the Effective Time in the
event of an OptiCare liquidation because of insolvency or bankruptcy and
the failure of OptiCare to meet its obligations under the new employment
agreements with Barker and Harrold because only of its financial
inability to do so;

(7) CEC and OECC, PA shall have executed and delivered a new thirty
(30) year Administrative Services Agreement as contemplated by Section 8
of the Settlement Agreement;

(8) Prime, Barker and Harrold shall have executed and delivered the
Succession Agreement contemplated by Section 9 of the Settlement
Agreement, to take effect at the Effective Time, whereby at the
discretion of OptiCare the ownership of OECC, PA can be passed to
another Doctor of Optometry licensed in North Carolina or, to the extent
permitted by North Carolina law, a Doctor of Medicine licensed in North
Carolina, in either case acceptable to the OptiCare Surviving
Corporation; and

(9) Barker, Harrold and CEC shall have executed and delivered the
Transfer Agreements contemplated by Section 10 of the Settlement
Agreement whereby Barker and Harrold will transfer to CEC the leases for
all OECC, PA retail locations, such transfers to take effect at the
Effective Time.

In addition, Barker, Harrold and OECC, PA shall have released OptiCare
and its affiliates from all claims except their rights under agreements
to become effective at the Effective Time.

(ff) Request for Declaratory Ruling. The Request for Declaratory Ruling
from the North Carolina State Board of Examiners in Optometry referred to
in the Settlement Agreement shall have been finally resolved and disposed
of in a manner satisfactory to Prime and OptiCare.

6.2 DOCUMENTS TO BE DELIVERED. Each Party shall have delivered, or caused
to be delivered, to the Other Parties at the Closing the following
(collectively, the "Closing Documents"):

(a) a certificate of such Party, signed by its President, Chief Executive
Officer or Chief Financial Officer, which shall confirm that the conditions
set forth in Section 6.1 with respect to such Party have been fulfilled;

(b) a copy of the articles or certificate of incorporation of such Party,
certified by the Secretary of State of the state of incorporation of such
Party and a Certificate of Good Standing from the Secretary of State of the
state of incorporation of such Party, and any state in which such Party is
qualified as a foreign corporation, evidencing the good standing of such
Party in such jurisdiction.

(c) a copy of each of (i) the text of the resolutions adopted by the
board of directors of such Party (A) authorizing the execution, delivery
and performance of this Agreement and its Certificate of Merger, if
applicable, and the consummation of the Contemplated Transactions and (B)
recommending to it stockholders that they approve the Contemplated
Transactions applicable to such Party and requiring approval by its
stockholders, (ii) the minutes of the meeting of the shareholders of such
Party held to consider and act on the Mergers and this Agreement and (iii)
the by-laws of such Party; along with a certificate executed on behalf of
such Party by its corporate secretary certifying to the other Parties that
such copies are true, correct and complete copies of such resolutions,
minutes and by-laws, respectively, and that such resolutions, shareholder
action at such meeting and by-laws were duly adopted and have not been
amended or rescinded;

(d) an incumbency certificate executed on behalf of such Party by its
corporate secretary certifying the signature and office of each officer
executing this Agreement and the Certificate of Merger on its behalf;

(e) the agreements and documents called for to satisfy the conditions in
Section 6.1; and

(f) such other documents and instruments as the Parties shall reasonably
request.

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ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER

7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Mergers may be abandoned at any time prior to the Effective Time, before or
after the approval of this Agreement by the stockholders of the Parties, by the
mutual consent of the Parties.

7.2 TERMINATION BY SARATOGA, OPTICARE OR PRIME. (a) This Agreement may be
terminated and the Mergers may be abandoned by action of the board of directors
of either Saratoga, OptiCare or Prime if (i) the Mergers shall not have been
consummated by September 30, 1999, or (ii) the approval of the stockholders of
Saratoga, OptiCare and Prime required by Section 6.1(a) shall not have obtained
at a meeting duly convened therefor or at any adjournment or postponement
thereof, or (iii) a United States federal or state court of competent
jurisdiction or United States federal or state governmental body shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Contemplated Transactions
and such order, decree, ruling or other action shall have become final and
non-appealable; provided, that the party seeking to terminate this Agreement
pursuant to this clause (iii) shall have used its Best Efforts to remove such
injunction, order or decree; and provided, in the case of a termination
pursuant to clause (i) above, that the terminating Party shall not have
breached in any material respect its obligations under this Agreement in any
manner that shall have proximately contributed to the failure to consummate the
Merger by September 30, 1999.

(b) This Agreement may be terminated and the Mergers may be abandoned at
any time prior to the Effective Date, before or after the adoption and
approval by the stockholders of Saratoga, OptiCare and Prime referred to in
Section 6.1(a), by action of the board of directors of any Party, if (i)
there has been a Breach by another Party of any representation or warranty
contained in this Agreement which would have or would be reasonably likely
to have a Material Adverse Effect on such other Party, or (ii) there has
been a material Breach of any of the covenants or agreements set forth in
this Agreement on the part of another Party, which Breach is not curable
or, if curable, is not cured within thirty (30) days after written notice
of such Breach is given to such other Party by the terminating Party. In
the event of a termination pursuant to this Subsection (b), OptiCare if it
committed the Breach shall be liable to Prime, and Prime if it committed
the Breach shall be liable to OptiCare, for all of the costs and expenses
referred to in Section 8.3 and shall pay such costs and expenses within ten
(10) days after written demand therefor.

7.3 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of
this Agreement and the abandonment of the Mergers pursuant to this Article VII,
no Party to this Agreement shall have any liability or further obligation to
any other Party hereunder except (a) as set forth in Sections 5.1, 7.2(b) and
8.3 and (b) that termination will not relieve a breaching party from liability
for any willful Breach of this Agreement.

7.4 EXTENSION; WAIVER. At any time prior to the Effective Time, any Party,
by action taken by its board of directors, may, to the extent legally allowed,
(a) extend the time for the performance of any of the obligations or other acts
of the other Parties hereto, (b) waive any inaccuracies in the representations
and warranties made to such Party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions for the benefit of such Party contained herein. Any agreement on the
part of a Party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such Party. Except as
provided in this Agreement, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any Party,
shall be deemed to constitute a waiver by the Party taking such action of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement. The waiver by any Party of a Breach of any
provision hereunder shall not operate or be construed as a waiver of any prior
or subsequent Breach of the same or any other provision hereunder.

7.5 AMENDMENT. Subject to compliance with applicable law, this Agreement
may be amended by the Parties hereto, by action taken or authorized by their
respective boards of directors, at any time

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before or after approval of the matters presented in connection with the
Mergers by the stockholders of the Parties; provided, however, that after any
approval of the transactions contemplated by this Agreement by the stockholders
of a Party, there may not be, without further approval of such stockholders,
any amendment of this Agreement which changes the amount or the form of the
consideration to be delivered to the holders of such Party's common stock
hereunder other than as contemplated by this Agreement. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
Parties hereto.

ARTICLE VIII

GENERAL PROVISIONS

8.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties set forth in this Agreement shall terminate at
the Effective Date. All covenants and agreements set forth in this Agreement
shall survive in accordance with their terms.

8.2 NOTICES. All notices or other communications under this Agreement
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by facsimile (with proof of proper
transmittal) cable, telegram, telex or other standard form of
telecommunications, or by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

If to OptiCare:

OptiCare Eye Health Centers, Inc.
87 Grandview Avenue
Waterbury, CT 06708
Attention:
Dean J. Yimoyines, M.D.
Telecopy No.: (203) 596-2227

With a copy to:

Day, Berry & Howard LLP
City Place I
Hartford, CT 06106
Attention:
William H. Cuddy, Esq.
Telecopy No.: (860) 275-0343

If to Prime:

PrimeVision Health, Inc.
First Union Capital Center
150 Fayetteville Street Mall
Suite 1620
Raleigh, NC 27601
Attention: President
Telecopy No.: (919) 743-0011

With a copy to:

Greg Luchs, Esq.
PrimeVision Health, Inc.
150 Fayetteville Street Mall
Suite 1620
Raleigh, NC 27601
Telecopy No.: (919) 863-3650

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<PAGE>

If to Saratoga, Prime Sub or OptiCare Sub:

Saratoga Resources, Inc.
2000 S. Dairy Ashford
Suite 410
Houston, TX 77077 Attention: Thomas Cook
Telecopy No.: (281) 531-0022

With a copy to:

Kane, Kessler, P.C.
1350 Avenue of the Americas
New York, NY 10019
Attention: Robert L. Lawrence, Esq.
Telecopy No.: (212) 245-3009

or to such other address as any party may have furnished to the other parties
in writing in accordance with this Section.

8.3 FEES AND EXPENSES. Whether or not the Mergers are consummated, all
costs and expenses, including reasonable attorneys' fees and expenses, incurred
in connection with this Agreement and the Contemplated Transactions, including
such costs and expenses of Saratoga, shall be shared equally by OptiCare and
Prime, except as otherwise provided in Section 7.2(b). The costs and expenses
of Saratoga shall be paid by OptiCare and Prime promptly upon delivery by
Saratoga of an invoice therefor.

8.4 PUBLICITY. So long as this Agreement is in effect, each Party agrees
to consult with the Other Parties in issuing any press release or otherwise
making any public statement with respect to the Contemplated Transactions, and
none of them shall issue any press release or make any public statement prior
to such consultation, except as may be required by Legal Requirements. The
commencement of litigation relating to this Agreement or the transactions
contemplated hereby or any Proceedings in connection therewith shall not be
deemed a violation of this Section 8.4.

8.5 SPECIFIC PERFORMANCE. The Parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent Breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

8.6 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
Parties (whether by operation of law or otherwise) without the prior written
consent of the other Parties. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the Parties and their
respective successors and permitted assigns. Notwithstanding anything contained
in this Agreement to the contrary, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Parties or their
respective successors and permitted assigns any rights, remedies, obligations
or liabilities under or by reason of this Agreement; provided that the
Indemnified Parties shall be third-party beneficiaries of Saratoga's agreements
contained in Section 5.4 hereof and Kane Kessler, P.C. shall be third-party
beneficiaries of the agreements of OptiCare and Prime in Section 8.3 hereof.

8.7 ENTIRE AGREEMENT. This Agreement, Exhibit A, the respective Disclosure
Schedules of Saratoga, OptiCare Sub, Prime Sub, OptiCare and Prime, the
Confidentiality Agreement dated November 5, 1998 and any documents delivered by
the parties in connection herewith and therewith constitute the entire
agreement among the Parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the Parties with
respect thereto. No addition to or modification of any provision of this
Agreement shall be binding upon any Party unless made in writing and signed by
all Parties.

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8.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with laws of the State of Delaware without regard to its rules of
conflict of laws.

8.9 COUNTERPARTS. This Agreement may be executed by the Parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all, of the Parties. Facsimile
signatures may be accepted and will be binding until replaced subsequently by
originally signed signatures.

8.10 INTERPRETATION. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and
vice versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations, partnerships and other
entities and vice versa. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." No provision
of this Agreement shall be construed to require any Party or its Subsidiaries
or Affiliates to take any action which would violate any applicable Legal
Requirement.

8.11 INCORPORATION OF EXHIBITS. The respective Disclosure Schedules of
Saratoga, OptiCare Sub, Prime Sub, OptiCare and Prime and Exhibit A attached
hereto and referred to herein are hereby incorporated herein and made a part
hereof for all purposes as if fully set forth herein.

8.12 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

[BALANCE OF PAGE LEFT INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, Saratoga, OptiCare Sub, Prime Sub, OptiCare and Prime
have caused this Agreement to be signed by their respective officers thereunder
duly authorized all as of the date first written above.

SARATOGA RESOURCES, INC.

By: s/ Thomas F. Cooke
------------------------------------------
Name: Thomas F. Cooke
Title: President

OPTICARE SHELLCO MERGER CORPORATION

By: s/ Thomas F. Cooke
------------------------------------------
Name: Thomas F. Cooke
Title: President

PRIMEVISION SHELLCO MERGER CORPORATION

By: s/ Thomas F. Cooke
------------------------------------------
Name: Thomas F. Cooke
Title: President

OPTICARE EYE HEALTH CENTERS, INC.

By: s/ Dean J. Yimoyines
------------------------------------------
Name: Dean J. Yimoyines
Title: Chairman of the Board, President
and Chief Executive Officer

PRIMEVISION HEALTH, INC.

By: s/ David A. Durfee
------------------------------------------
Name: David A. Durfee
Title: Acting President

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ANNEX B

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<PAGE>

ANNEX C

PERFORMANCE STOCK PROGRAM

1. PURPOSE

The purpose of the Plan is to provide a means through which the Company
may attract able persons to provide services to or enter and remain in the
employ with the Company and its Subsidiaries and to provide a means whereby
they can acquire and maintain common stock ownership, or be paid incentive
compensation measured by reference to the value of common stock, thereby
strengthening their commitment to the welfare of the Company and promoting an
identity of interest between stockholders of the Company and these service
providers and employees.

So that the appropriate incentive can be provided, the Plan provides for
granting Incentive Stock Options, Nonqualified Stock Options, Restricted Stock
Awards, and Performance Share or Cash Unit Awards, or any combination of the
foregoing.

2. DEFINITIONS

The following definitions shall be applicable throughout the Plan.

"Award" means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Restricted Stock Award, or Performance Share or Cash
Unit Award under the Plan.

"Award Agreement" means the agreement between the Company and a
Participant who has been granted an Award which defines the rights and
obligations of the parties with respect to such Award.

"Award Period" means a period of time within which performance is measured
for the purpose of determining whether an Award of Performance Share or Cash
Units has been earned.

"Board" means the board of directors of the Company.

"Code" means the Internal Revenue Code of 1986, as amended. Reference in
the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.

"Committee" means the [Compensation Committee] of the Board, or, if the
Board so directs, the full Board or another committee appointed by the Board to
administer the Plan as described in Section 4.

"Common Stock" means the common stock of the Company.

"Company" means Saratoga Resources, Inc., a Delaware corporation. The name
of the corporation is intended to be changed to "OptiCare Health Systems, Inc."
at about the same time that this Program is to be adopted and approved by the
stockholders of the Company.

"Date of Grant" means the date on which the granting of an Award is
authorized or such other date as may be specified in such authorization.

"Disability" means "permanent and total disability" as defined in Section
22(e)(3) of the Code.

"Eligible Person" means any person regularly employed by or providing
consulting or other services to the Company or a Subsidiary.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fair Market Value" on a given date means (i) if the Stock is listed on a
national securities exchange, the mean between the highest and lowest sale
prices reported as having occurred on the primary exchange on which the Stock
is listed and traded on the date prior to such date, or, if there is no such
sale on that date, then on the last preceding date on which such a sale was
reported; (ii) if the Stock is not listed on any national securities exchange
but is quoted in the National Market System of The Nasdaq Stock Market on a
last sale basis, the average between the high bid price and low ask price
reported on the date prior to such date, or, if there is no such sale on that
date, then on the last preceding date on which a sale

C-1
<PAGE>

was reported; or (iii) if the Stock is not listed on a national securities
exchange nor quoted in the National Market System of The Nasdaq Stock Market on
a last sale basis, the amount determined by the Committee to be the fair market
value based upon a good faith attempt to value the Stock accurately.

"Holder" means a Participant who has been granted an Award, or a permitted
transferee of such a Participant.

"Incentive Stock Option" means an Option granted by the Committee to a
Participant under the Plan which is designated by the Committee as an
"incentive stock option" within the meaning of Section 422 of the Code.

"Nonqualified Stock Option" means an Option granted under the Plan which
is not designated as an Incentive Stock Option.

"Normal Termination" means termination of employment or service with the
Company or a Subsidiary other than by reason of death or Disability:

"Option" means an Award granted under Section 7 of the Plan.

"Option Period" means the period described in Section 7(c).

"Option Price" means the exercise price set for an Option described in
Section 7(a).

"Participant" means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive an Award pursuant to
Section 6.

"Performance Goals" means the performance objectives established by the
Committee with respect to an Award Period or Restricted Period, with respect to
Performance Share or Cash Units or Restricted Stock, respectively, established
for the purpose of determining whether, and to what extent, such Awards will be
earned for an Award Period or Restricted Period.

"Performance Cash Unit" means a hypothetical equivalent to a number of
dollars established by the Committee and granted in connection with an Award
made under Section 8 of the Plan.

"Performance Share Unit" means a hypothetical investment equivalent equal
to one share of Stock granted in connection with an Award made under Section 8
of the Plan.

"Plan" means the Company's Performance Stock Program, as amended.

"Restricted Period" means, with respect to any share of Restricted Stock,
the period of time determined by the Committee during which such Award is
subject to the restrictions set forth in Section 9 of the Plan.

"Restricted Stock" means shares of Stock issued or transferred to a
Participant subject to forfeiture and the other restrictions set forth in
Section 9 of the Plan.

"Restricted Stock Award" means an Award of Restricted Stock granted under
Section 9 of the Plan.

"Securities Act" means the Securities Act of 1933, as amended.

"Stock" means the common stock or such other authorized shares of stock of
the Company as from time to time may be authorized for use under the Plan.

"Subsidiary" means any corporation 50% or more of whose stock having
general voting power is owned by the Company, or by another Subsidiary, as
herein defined, of the Company.

3. EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL

The Plan is effective as of , 1999. The validity of any and all
Awards granted pursuant to the Plan is contingent upon approval of the Plan by
the stockholders of the Company in a manner which complies with Section
422(b)(1) of the Code and Section 162(m)(4)(C)(ii) of the Code.

The expiration date of the Plan, after which no Awards may be granted
hereunder, shall be , 2004; provided, however, that the administration of
the Plan shall continue in effect until all matters relating to the payment of
Awards previously granted have been settled.

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<PAGE>

4. ADMINISTRATION

The Plan shall be administered by the Committee, which shall be composed
of at least two persons, each member of which, at the time he or she takes any
action with respect to an Award under the Plan, shall be a "Non-Employee
Director", as defined in Rule 16b-3 under the Exchange Act, or any successor
rule or regulation, and an "outside director", as defined in Treasury
Regulations Section 1.162-27(e)(3), or any successor regulation. The majority
of the members of the Committee shall constitute a quorum. The acts of a
majority of the members present at any meeting at which a quorum is present or
acts approved in writing by a majority of the Committee shall be deemed the
acts of the Committee.

Subject to the provisions of the Plan, the Committee shall have exclusive
power to:

(a) Select the Eligible Persons to participate in the Plan;

(b) Determine the nature and extent of the Awards to be made to each
Participant;

(d) Determine the duration of each Award Period and Restricted Period;

(e) Determine the conditions to which the payment of Awards may be
subject;

(f) Establish the Performance Goals, if any, for each Award Period;

(g) Prescribe the form of Award Agreement or other form or forms
evidencing Awards; and

(h) Cause records to be established in which there shall be entered, from
time to time as Awards are made to Eligible Persons, the date of each
Award, the number of Incentive Stock Options, Nonqualified Stock Options,
Performance Share or Cash Units, and shares of Restricted Stock awarded by
the Committee to each Eligible Person, and the expiration date and the
duration of any applicable Award Period or Restricted Period.

The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee's interpretation of the Plan
or any documents evidencing Awards granted pursuant thereto and all decisions
and determinations by the Committee with respect to the Plan shall be final,
binding, and conclusive on all parties unless otherwise determined by the
Board.

5. GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN

The Committee may, from time to time, grant Awards of Options, Restricted
Stock, and/or Performance Share or Cash Units to one or more Eligible Persons;
provided, however, that:

(a) The aggregate number of shares of Stock made subject to all Awards
may not exceed the lesser of (i) 3,000,000, subject to Section 12, and (ii)
15% of the sum of (x) the number of shares of Stock outstanding at the time
the limitation in this clause (ii) is calculated, (y) the number of shares
of Stock subject to Options and Performance Shares outstanding at such time
and (z) the number of shares of Stock available at such time for future
Awards under the Plan; and the aggregate number of shares of Stock subject
to Awards to any single individual in 1999 may not exceed 600,000
(excluding Options granted pursuant to Section 7(i)) and in any subsequent
calendar year may not exceed 200,000.

(b) Such shares shall be deemed to have been used in payment of Awards
whether they are actually delivered or the Fair Market Value equivalent of
such shares is paid in cash. In the event any Option, Restricted Stock
Award, or Performance Share or Cash Unit shall be surrendered, terminate,
expire, or be forfeited, the number of shares of Stock no longer subject
thereto shall thereupon be released and shall thereafter be available for
new Awards under the Plan;

(c) Stock delivered by the Company in settlement of Awards under the Plan
may be authorized and unissued Stock or Stock held in the treasury of the
Company or may be purchased on the open market or by private purchase;

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(d) The Committee may, in its sole discretion, require a Participant to
pay consideration for an Award in an amount and in a manner as the
Committee deems appropriate; and

(e) The Committee may only grant Incentive Stock Options to Eligible
Persons who are employees of the Company or a Subsidiary.

6. ELIGIBILITY

Participation shall be limited to Eligible Persons selected by the
Committee.

7. STOCK OPTIONS

Subject to Section 5(e), the Committee is authorized to grant one or more
Incentive Stock Options or Nonqualified Stock Options to any Eligible Person.
Each Option so granted shall be subject to the following conditions or to such
other conditions as may be reflected in the applicable Award Agreement.

(a) OPTION PRICE. The exercise price ("Option Price") per share of Stock
for each Option shall be set by the Committee at the time of grant but
shall not be less than the Fair Market Value of a share of Stock at the
Date of Grant.

(b) MANNER OF EXERCISE AND FORM OF PAYMENT. Options which have become
exercisable may be exercised by delivery of written notice of exercise to
the Committee accompanied by payment of the Option Price. The Option Price
shall be payable either (i) by United States dollars in cash or by check,
(ii) at the discretion of the Committee, through shares of Stock valued at
the Fair Market Value at the time the Option is exercised (provided that
such Stock has been held by the Participant for at least six months), or
(iii) at the discretion of the Committee, by any combination of (i) and
(ii) above.

(c) OPTION PERIOD AND EXPIRATION. Options shall vest and become
exercisable in such manner and on such date or dates determined by the
Committee and shall expire after such period, not to exceed ten years with
respect to Incentive Stock Options, as may be determined by the Committee
(the "Option Period"); provided, however, that notwithstanding any vesting
dates set by the Committee, the Committee may, in its sole discretion,
accelerate the exercisability of any Option, which acceleration shall not
affect the terms and conditions of any such Option other than with respect
to exercisability. If an Option is exercisable in installments, such
installments or portions thereof which become exercisable shall remain
exercisable until the Option expires. Unless otherwise stated in the
applicable Option Award Agreement, an Incentive Stock Option shall expire
earlier than the end of the Option Period in the following circumstances:

(i) If prior to the end of the Option Period, the Participant shall
undergo a Normal Termination, the Incentive Stock Option shall expire
on the earlier of the last day of the Option Period or the date that is
three months after the date of such Normal Termination. In such event,
the Incentive Stock Option shall remain exercisable by the Holder until
its expiration, only to the extent the Option was exercisable at the
time of such Normal Termination;

(ii) If the Participant dies prior to the end of the Option Period and
while still in the employ of the Company or such Participant becomes
Disabled, the Incentive Stock Option shall expire on the earlier of the
last day of the Option Period or the date that is one year after the
date of death or Disability of the Participant. In the event of death
or Disability, the Incentive Stock Option shall remain exercisable by
the Participant or the Holder or Holders to whom the Participant's
rights under the Incentive Stock Option pass by will or the applicable
laws of descent and distribution until its expiration, only to the
extent the Incentive Stock Option was exercisable by the Participant at
the time of death or Disability.

In granting any Nonqualified Stock Option, the Committee may specify that
such Nonqualified Stock Option shall be subject to the restrictions set forth
in Section 7(c)(i) or (ii) herein with respect to Incentive Stock Options, or
such other termination and cancellation provisions as the Committee may
determine.

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(d) OTHER TERMS AND CONDITIONS. In addition, each Option granted under
the Plan shall be evidenced by an Award Agreement, which shall contain such
provisions as may be determined by the Committee and, except as may be
specifically stated otherwise in such Award Agreement, which shall be
subject to the following terms and conditions:

( ) Each Option issued pursuant to this Section 7 or portion thereof that
is exercisable shall be exercisable for the full amount or for any part
thereof.

( ) Each share of Stock purchased through the exercise of an Option issued
pursuant to this Section 7 shall be paid for in full at the time of the
exercise. Each Option shall cease to be exercisable, as to any share of
Stock, when the Holder purchases the share or when the Option expires.

( ) Subject to Section 11(k), Options issued pursuant to this Section 7
shall not be transferable by the Holder except by will or the laws of
descent and distribution and shall be exercisable during the Holder's
lifetime only by the Holder.

( ) Each Option issued pursuant to this Section 7 shall vest and become
exercisable by the Holder in accordance with the vesting schedule
established by the Committee and set forth in the Award Agreement.

( ) Each Award Agreement may contain a provision that, upon demand by the
Committee for such a representation, the Holder shall deliver to the
Committee at the time of any exercise of an Option issued pursuant to
this Section 7 a written representation that the shares to be acquired
upon such exercise are to be acquired for investment and not for resale
or with a view to the distribution thereof. Upon such demand, delivery
of such representation prior to the delivery of any shares issued upon
exercise of an Option issued pursuant to this Section 7 shall be a
condition precedent to the right of the Holder to purchase any shares.
In the event certificates for Stock are delivered under the Plan with
respect to which such investment representation has been obtained, the
Committee may cause a legend or legends to be placed on such
certificates to make appropriate reference to such representation and
to restrict transfer in the absence of compliance with applicable
federal or state securities laws.

( ) Each Incentive Stock Option Award Agreement shall contain a provision
requiring the Holder to notify the Company in writing immediately after
the Holder makes a disqualifying disposition of any Stock acquired
pursuant to the exercise of such Incentive Stock Option. A
disqualifying disposition is any disposition (including any sale) of
such Stock before the later of (a) two years after the Date of Grant of
the Incentive Stock Option or (b) one year after the date the Holder
acquired the Stock by exercising the Incentive Stock Option.

(e) INCENTIVE STOCK OPTION GRANTS TO 10% STOCKHOLDERS. Notwithstanding
anything to the contrary in this Section 7, if an Incentive Stock Option is
granted to a Participant who owns stock representing more than ten percent
of the voting power of all classes of stock of the Company or of a
Subsidiary, the Option Period shall not exceed five years from the Date of
Grant of such Option and the Option Price shall be at least 110 percent of
the Fair Market Value (on the Date of Grant) of the Stock subject to the
Option.

(f) $100,000 PER YEAR LIMITATION FOR INCENTIVE STOCK OPTIONS. To the
extent the aggregate Fair Market Value (determined as of the Date of Grant)
of Stock for which Incentive Stock Options are exercisable for the first
time by any Participant during any calendar year (under all plans of the
Company and its Subsidiaries) exceeds $100,000, such excess Incentive Stock
Options shall be treated as Nonqualified Stock Options.

(g) VOLUNTARY SURRENDER. The Committee may permit the voluntary surrender
of all or any portion of any Nonqualified Stock Option issued pursuant to
this Section 7 granted under the Plan to be conditioned upon the granting
to the Holder of a new Option for the same or a different number of shares
as the Option surrendered or require such voluntary surrender as a
condition precedent to a grant of a new Option to such Participant. Such
new Option shall be exercisable at an Option Price, during an Option
Period, and in accordance with any other terms or conditions specified by
the Committee at the time the new Option is granted, all determined in
accordance with the provisions of the Plan without regard to the Option
Price, Option Period, or any other terms and conditions of the Nonqualified
Stock Option surrendered. Such voluntary surrender shall only be permitted
when necessary to maintain Option value due to extreme circumstances beyond
the control of the optionee and shall not be permitted with respect to
Options for Stock exceeding ten percent of the amount of Stock available
for grant under the Plan.

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<PAGE>

(h) CONVERSION OF INCENTIVE STOCK OPTIONS INTO NONQUALIFIED STOCK
OPTIONS; TERMINATION OF INCENTIVE STOCK OPTIONS. The Committee, at the
written request of any Holder, may in its discretion, take such actions as
may be necessary to convert such Holder's Incentive Stock Options (or any
installments or portions of installments thereof) that have not been
exercised on the date of conversion into Nonqualified Stock Options at any
time prior to the expiration of such Incentive Stock Options, regardless of
whether the Holder is an employee of the Company or a Subsidiary at the
time of such conversion. Such actions may include, but not be limited to,
extending the Option Period or reducing the exercise price of the
appropriate installments of such Incentive Stock Options. At the time of
such conversion, the Committee (with the consent of the Holder) may impose
such conditions on the exercise of the resulting Nonqualified Stock Options
as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with the Plan. Nothing in the Plan
shall be deemed to give any Holder the right to have such Holder's
Incentive Stock Options converted into Nonqualified Stock Options, and no
such conversion shall occur until and unless the Committee takes
appropriate action. The Committee, with the consent of the Holder, may also
terminate any portion of any Incentive Stock Option that has not been
exercised at the time of such termination.

(i) SUBSTITUTION OF OPTIONS. The Committee shall grant Options in
substitution for
options held for stock in OptiCare Eye Health Centers, Inc. and PrimeVision
Health, Inc. in effect on the date of the acquisition of those entities by
the Company through mergers with Subsidiaries of the Company, with terms in
accordance with the terms for such previous options, but with an
appropriate adjustment in the exercise price and number of shares subject
to the options in compliance with the requirements of Section 424 of the
Code.

8. PERFORMANCE SHARE OR CASH UNITS

(a) AWARD GRANTS. The Committee is authorized to establish performance
programs to be effective over designated Award Periods determined by the
Committee. The Committee may grant Awards of Performance Share or Cash Units to
Eligible Persons in accordance with such performance programs. Before or within
90 days after the beginning of each Award Period, the Committee will establish
written Performance Goals based upon financial objectives for the Company for
such Award Period and a schedule relating the accomplishment of the Performance
Goals to the Awards to be earned by Participants. Performance Goals may include
absolute or relative growth in earnings per share or rate of return on
stockholders' equity or other measurement of corporate performance and may be
determined on an individual basis or by categories of Participants. The
Committee shall determine the number of Performance Share or Cash Units to be
awarded, if any, to each Eligible Person who is selected to receive such an
Award.

(b) DETERMINATION OF AWARD. At the completion of a Performance Award
Period, or at other times as specified by the Committee, the Committee shall
calculate the number of shares of Stock or amount of cash earned with respect
to each Participant's Performance Share or Cash Unit Award by multiplying the
number of Performance Units granted to the Participant by a performance factor
representing the degree of attainment of the Performance Goals.

(c) PAYMENT OF PERFORMANCE SHARE OR CASH UNIT AWARDS. Performance Share or
Cash Unit Awards shall be payable in that number of shares of Stock or that
amount of cash determined in accordance with Section 8(b); provided, however,
that, at its discretion, the Committee may make payment to any Participant of
Performance Share Units in the form of cash upon the specific request of such
Participant. The amount of any payment made in cash shall be based upon the
Fair Market Value of the Stock on the business day prior to payment. Payments
of Performance Unit Awards shall be made as soon as practicable after the
completion of an Award Period; provided, however, that if a Participant makes
the election described below, Performance Share or Cash Units (with any Cash
Units being converted into equivalent Performance Shares) shall instead be
credited to the Participant's Performance Share Account. Such credit of
Performance Shares to a Participant's Performance Share Account shall be made
as of the same date as payment of the Award would have been made to the
Participant had no prior election been made.

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(i) ELECTIONS.

Any election to have an Award or a portion of an Award credited to a
Performance Share Account shall be made on a written form provided by the
Company for such purpose and shall only be effective with respect to Awards
that may be made on and after the January 1 following the Company's receipt
of such form, provided that such form is received by the December 24 prior
to the applicable January 1. Any such election shall be made only in
increments of ten percent (10%) of the Award (rounded to the nearest whole
share) and shall be effective only for Awards made during the year in which
the election becomes effective.

(ii) PERFORMANCE SHARE ACCOUNT.

The Company shall maintain on its books and records a Performance Share
Account to record its liability for future payments to the Participant or
his beneficiary pursuant to the Plan. However, a Performance Share Account
under the Plan shall constitute an unfunded arrangement; the Company shall
not be required to segregate or earmark any of its assets for the benefit
of the Participant or his beneficiary, and the amount reflected in a
Performance Share Account shall be available for the Company's general
corporate purposes and shall be available to the Company's general
creditors. The amount reflected in a Performance Share Account shall not be
subject in any manner to anticipation, alienation, transfer or assignment
by the Participant or his or her beneficiary, and any attempt to
anticipate, alienate, transfer or assign the same shall be void. Neither
the Participant nor his or her beneficiary may assert any right or claim
against any specific assets of the Company in respect of a Performance
Share Account, and the Participant and his or her beneficiary shall have
only a contractual right against the Company for the amount reflected in a
Performance Share Account.

Notwithstanding the foregoing, in order to pay amounts which may become
due under the Plan in respect of a Participant's Performance Share Account,
the Company may establish a grantor trust (hereinafter the "Trust") within
the meaning of Section 671 of the Code. Some or all of the assets of the
Trust may be dedicated to providing benefits to the Participants pursuant
to the Plan, but, nevertheless, all assets of the Trust shall at all times
remain subject to the claims of the Company's general creditors in the
event of the Company's bankruptcy or insolvency.

(iii) DIVIDEND EQUIVALENTS.

On every date on which a dividend or other distribution is paid with
respect to common stock, commencing with the first such payment date after
the date on which a Performance Share is credited to a Participant's
Performance Share Account and continuing until such Performance Share is
either forfeited or paid out, there shall be credited to the Participant's
Performance Share Account a Dividend Equivalent in respect of such
Performance Share. A Dividend Equivalent shall mean, with respect to a
whole Performance Share credited to a Participant's Performance Share
Account, a measure of value equal to the fractional share of common stock
that could be purchased with the amount that would have been paid to the
Participant as a dividend or other distribution if the Participant had
owned a whole share of common stock in lieu of said whole Performance
Share, the date of such deemed purchase being the dividend payment date.
Dividend Equivalents are expressed in the form of Performance Shares.

(iv) PARTICIPANT NOT A STOCKHOLDER.

The Participant shall have no stockholder's rights with respect to any
shares of common stock in respect of which Performance Shares are credited
to his or her Performance Share Account.

(v) PAYMENTS IN RESPECT OF PERFORMANCE SHARES.

1. Termination of Employment or Provision of Services: In the event of a
Participant's Normal Termination and without a payment date having
been specified as provided below, such Participant shall be entitled
to receive payment in respect of the entire amount then credited to
his or her Performance Share Account. Such payment shall be made in
the form of the number of shares of common stock equal to the number
of whole Performance Shares then

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<PAGE>

credited to the Participant's Performance Share Account, with any
fractional Performance Share being paid in cash determined on the
basis of the value of a corresponding fractional share of common
stock on the business day preceding the date of payment. Said shares
of common stock and any cash amount shall be transferred to the
Participant within sixty (60) days after the Participant's Normal
Termination.

2. Election of Participant: Upon prior written election by a Participant,
the Participant shall be entitled to receive payment in respect of an
Award of Performance Shares, to the extent then vested, and any
Dividend Equivalents earned on such Award on the date or dates
specified in such written election. Such election must either be made
as part of the election to have such Award of Performance Shares
credited to a Performance Share Account as provided above, or at any
time at least one year prior to the date on which such payment would
otherwise be made. Such payment shall be made in the form of the
number of shares of common stock equal to the number of whole
Performance Shares, including related Dividend Equivalents, then
credited to the Participant's Performance Share Account with respect
to such Award, with any fractional Performance Share being paid in
cash determined on the basis of the value of a corresponding
fractional share of common stock on the business day preceding the
date of payment. The Participant's Performance Share Account
thereafter shall be reduced to reflect the foregoing payment. Nothing
herein shall preclude separate elections with respect to separate
Awards.

3. Disability or Death While Employed by or Providing Services to the
Company: Notwithstanding an election made pursuant to the preceding
section, in the event of a Participant's termination of employment or
provision of services for reasons of Disability or death, the
Participant or his or her beneficiary, as the case may be, shall be
entitled to receive payment in respect of the entire amount then
credited to his or her Performance Share Account. Such payment shall
be made in the form of the number of shares of common stock equal to
the number of whole Performance Shares then credited to the
Participant's Performance Share Account, with any fractional
Performance Share being paid in cash determined on the basis of the
value of a corresponding fractional share of common stock on the
business day preceding the date of payment. Said shares of common
stock and any cash amount shall be transferred to the Participant or
his or her beneficiary within sixty (60) days after the Company has
been notified in writing of the Disability or death of the
Participant and has been provided with any additional information,
forms or other documents it may reasonably request.

4. Hardship Payment: Notwithstanding an election made pursuant the Plan
or the Participant's continued employment with or provision of
services to the Company, if the Committee, upon written petition of
the Participant, determines, in the Committee's sole discretion, that
the Participant has suffered an unforeseeable financial emergency,
the Participant shall be entitled to receive, as soon as practicable
following such determination, payment sufficient to meet the cash
needs arising from the unforeseeable financial emergency, not in
excess of the number of whole Performance Shares then credited to the
Participant's Performance Share Account. Such payment shall be made,
at the election of the Participant, either (i) in the form of the
number of whole shares of common stock, the proceeds from the sale of
which would be sufficient to meet the cash needs arising from the
unforeseeable financial emergency, not in excess of the number of
whole Performance Shares then credited to the Participant's
Performance Share Account; (ii) in cash equal to the value on the
business day preceding the date of payment of the number of whole
shares of common stock available for payment under clause (i) of this
sentence; or (iii) in any combination of the methods of payment
provided for in clauses (i) and (ii) of this sentence. In the event
of a hardship payment in respect of the Participant's entire
Performance Share Account, any fractional Performance Share shall be
paid in cash determined on the basis of the value of a corresponding
fractional share of common stock on the business day preceding the
date of payment. For purposes of the foregoing, an unforeseeable
financial emergency is an

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unexpected need for cash arising from an illness, casualty loss,
sudden financial reversal, or other such unforeseeable occurrence.
Cash needs arising from foreseeable events such as generally the
purchase of a house or educational expenses for children shall not be
considered to be the result of an unforeseeable financial emergency.
Said shares of common stock and any cash amount shall be transferred
to the Participant as soon as practicable after the Committee
determines that the Participant has suffered an unforeseeable
financial emergency. The Participant's Performance Share Account
thereafter shall be reduced to reflect the foregoing payment.

5. Early Withdrawal: Notwithstanding an election made pursuant to the
Plan or the Participant's continued employment with or provision of
services to the Company, the Participant, upon written petition to
the Committee at any time, shall be entitled to receive payment in
respect of all or any portion of the amount then credited to his or
her Performance Share Account, subject to a forfeiture penalty of six
percent (6%) of the amount of the payment requested by the
Participant. Such payment shall be made, at the election of the
Participant, either (i) in the form of the number of shares of common
stock equal to the number of whole Performance Shares requested by
the Participant in the written petition and then credited to the
Participant's Performance Share Account; (ii) in cash equal to the
value on the business day preceding the date of payment of the number
of whole shares of common stock available for payment under clause
(i) of this sentence; or (iii) in any combination of the methods of
payment provided for in clauses (i) and (ii) of this sentence. In the
event of an early withdrawal in respect of the Participant's entire
Performance Share Account, any fractional Performance Share shall be
paid in cash determined on the basis of the value of a corresponding
fractional share of common stock on the business day preceding the
date of payment. Said shares of common stock and any cash amount
shall be transferred to the Participant within sixty (60) days after
the Company has received the Participant's written petition. The
Participant's Performance Share Account thereafter shall be reduced
to reflect the foregoing payment and the six percent (6%) forfeiture
penalty.

(d) ADJUSTMENT OF PERFORMANCE GOALS. The Committee may, during the Award
Period, make such adjustments to Performance Goals as it may deem
appropriate, to compensate for, or reflect, (i) extraordinary or
non-recurring events experienced during an Award Period by the Company or
by any other corporation whose performance is relevant to the determination
of whether Performance Goals have been attained; (ii) any significant
changes that may have occurred during such Award Period in applicable
accounting rules or principles or changes in the Company's method of
accounting or in that of any other corporation whose performance is
relevant to the determination of whether an Award has been earned; (iii)
any significant changes that may have occurred during such Award Period in
tax laws or other laws or regulations that alter or affect the computation
of the measures of Performance Goals used for the calculation of Awards; or
(iv) any other factors which the Committee deems appropriate; provided,
however, that no such change may increase the amount of an Award that would
otherwise be payable to any "covered employee" as defined in Section
162(m)(3) of the Code.

9. RESTRICTED STOCK AWARDS

(a) AWARD OF RESTRICTED STOCK.

(i) The Committee shall have the authority (1) to grant Restricted Stock
Awards, (2) to issue or transfer Restricted Stock to Eligible
Persons, and (3) to establish terms, conditions and restrictions
applicable to such Restricted Stock, including the Restricted Period,
which may differ with respect to each grantee, the time or times at
which Restricted Stock shall be granted or become vested and the
number of shares to be covered by each grant.

(ii) The Holder of a Restricted Stock Award shall execute and deliver to
the Company an Award Agreement with respect to the Restricted Stock
setting forth the restrictions applicable to such Restricted Stock.
If the Committee determines that the Restricted Stock shall be held
in escrow rather than delivered to the Holder pending the release of
the

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<PAGE>

applicable restrictions, the Holder additionally shall execute and
deliver to the Company (1) an escrow agreement satisfactory to the
Committee and (2) the appropriate blank stock powers with respect to
the Restricted Stock covered by such agreements. If a Holder shall
fail to execute a Restricted Stock Award Agreement and, if
applicable, an escrow agreement and stock powers, the Award shall be
null and void. Subject to the restrictions set forth in Section
9(b), the Holder shall generally have the rights and privileges of a
stockholder as to such Restricted Stock, including the right to vote
such Restricted Stock, and to receive dividends paid thereon.

(iii) Upon the Award of Restricted Stock, the Committee shall cause a
Stock certificate registered in the name of the Holder to be issued
and, if it so determines, deposited together with the Stock powers
with an escrow agent designated by the Committee. If an escrow
arrangement is used, the Committee shall cause the escrow agent to
issue to the Holder a receipt evidencing any Stock certificate held
by it registered in the name of the Holder.

(b) RESTRICTIONS.

(i) Restricted Stock awarded to a Participant shall be subject to the
following restrictions until the expiration of the Restricted Period,
and to such other terms and conditions as may be set forth in the
applicable Award Agreement: (1) if an escrow arrangement is used, the
Holder shall not be entitled to delivery of the Stock certificate;
(2) the shares shall be subject to the restrictions on
transferability set forth in the Award Agreement; and (3) the shares
shall be subject to forfeiture to the extent provided in subparagraph
(d) and the Award Agreement and, to the extent such shares are
forfeited, the Stock certificates shall be returned to the Company,
and all rights of the Holder to such shares and as a stockholder
shall terminate without further obligation on the part of the
Company.

(ii) The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Stock whenever it may determine that,
by reason of changes in applicable laws or other changes in
circumstances arising after the date of the Restricted Stock Award,
such action is appropriate.

(c) RESTRICTED PERIOD. The Restricted Period of Restricted Stock shall
commence on the Date of Grant and shall expire from time to time as to that
part of the Restricted Stock indicated in a schedule established by the
Committee and set forth in the written Award Agreement. The Restricted
Period shall generally be at least three years, provided, however, that it
may be no longer than one year if vesting is based on achievement of
Performance Goals.

(d) FORFEITURE PROVISIONS. Except to the extent determined by the
Committee and reflected in the underlying Award Agreement, in the event a
Participant terminates employment with or ceases to provide services to the
Company during a Restricted Period for any reason, that portion of the
Award with respect to which restrictions have not expired shall be
completely forfeited to the Company. In the event of such a forfeiture, the
amount of an Award that would otherwise be payable shall be reduced, but
not below zero, by the amount of any dividends previously paid to the
Holder with respect to the forfeited Restricted Stock.

(e) DELIVERY OF RESTRICTED STOCK. Upon the expiration of the Restricted
Period with respect to any shares of Stock covered by a Restricted Stock
Award, the restrictions set forth in Section 9(b) and the Award Agreement
shall be of no further force or effect with respect to shares of Restricted
Stock which have not then been forfeited. If an escrow arrangement is used,
upon such expiration, the Company shall deliver to the Holder, or his or
her beneficiary, without charge, the Stock certificate evidencing the
shares of Restricted Stock which have not then been forfeited and with
respect to which the Restricted Period has expired (to the nearest full
share) and any cash dividends or Stock dividends credited to the Holder's
account with respect to such Restricted Stock and the interest thereon, if
any.

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<PAGE>

(f) STOCK RESTRICTIONS. Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend until the end of the
Restricted Period with respect to such Stock:

"Transfer of this certificate and the shares represented hereby is
restricted pursuant to the terms of a Restricted Stock Agreement,
dated as of , between [Saratoga Resources, Inc.] and . A copy
of such Agreement is on file at the offices of the Company."

Stop transfer orders shall be entered with the Company's transfer agent and
registrar against the transfer of legended securities.

(g) DEFERRAL. Upon election by a Participant, a whole share of Restricted
Stock that would otherwise have been granted to the Participant shall
instead be made in the form of Performance Shares, and such Performance
Shares shall be credited to the Participant's Performance Share Account,
subject to the provisions of Section 8. Such credit of Performance Shares
shall be made as of the same date as Restricted Stock would have been
awarded to the Participant had no prior election been made. Any such
election shall be made by December 24 prior to the year in which the Award
for which the election is made will be made, and shall otherwise comply
with the requirements for elections in Section 8(c). If an event occurs
which would have caused forfeiture of the Restricted Stock for which an
election pursuant to this paragraph is made, then the equivalent
Performance Shares, along with any related Dividend Equivalents, shall be
forfeited.

10. NON-COMPETITION PROVISIONS

In addition to such other conditions as may be established by the
Committee, in consideration of the granting of Awards under the terms of the
Plan, the Committee, in its discretion, may include non-competition provisions
in the applicable Award Agreement.

11. GENERAL

(a) ADDITIONAL PROVISIONS OF AN AWARD. Awards under the Plan also may be
subject to such other provisions (whether or not applicable to the benefit
awarded to any other Participant) as the Committee determines appropriate
including, without limitation, provisions to assist the Participant in
financing the purchase of Stock upon the exercise of Options, provisions
for the forfeiture of or restrictions on resale or other disposition of
shares of Stock acquired under any Award, provisions giving the Company the
right to repurchase shares of Stock acquired under any Award in the event
the Participant elects to dispose of such shares, and provisions to comply
with Federal and state securities laws and Federal and state tax
withholding requirements. Any such provisions shall be reflected in the
applicable Award Agreement.

(b) PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of
stock ownership in respect of shares of Stock which are subject to Awards
hereunder until such shares have been issued to that person.

(c) GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by
governmental agencies as may be required. Notwithstanding any terms or
conditions of any Award to the contrary, the Company shall be under no
obligation to offer to sell or to sell and shall be prohibited from
offering to sell or selling any shares of Stock pursuant to an Award unless
such shares have been properly registered for sale pursuant to the
Securities Act with the Securities and Exchange Commission or unless the
Company has received an opinion of counsel, satisfactory to the Company,
that such shares may be offered or sold without such registration pursuant
to an available exemption therefrom and the terms and conditions of such
exemption have been fully complied with. The Company shall be under no
obligation to register for sale under the Securities Act any of the shares
of Stock to be offered or sold under the Plan. If the shares of Stock
offered for sale or sold under the Plan are offered or sold pursuant to an
exemption from registration under the Securities Act, the Company may
restrict the transfer of such shares and may legend the Stock certificates
representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.

C-11
<PAGE>

(d) TAX WITHHOLDING. Notwithstanding any other provision of the Plan, the
Company or a Subsidiary, as appropriate, shall have the right to deduct
from all Awards cash and/or Stock, valued at Fair Market Value on the date
of payment, in an amount necessary to satisfy all Federal, state or local
taxes as required by law to be withheld with respect to such Awards and, in
the case of Awards paid in Stock, the Holder may be required to pay to the
Company prior to delivery of such Stock, the amount of any such taxes which
the Company is required to withhold, if any, with respect to such Stock.
The Company shall accept shares of Stock of equivalent Fair Market Value in
payment of such withholding tax obligations if the Holder of the Award
elects to make payment in such manner.

(e) CLAIM TO AWARDS AND EMPLOYMENT OR SERVICE RIGHTS. No employee or
other person shall have any claim or right to be granted an Award under the
Plan or, having been selected for the grant of an Award, to be selected for
a grant of any other Award. Neither the Plan nor any action taken hereunder
shall be construed as giving any Participant any right to be retained in
the employ or service of the Company or any Subsidiary.

(f) DESIGNATION AND CHANGE OF BENEFICIARY. Each Participant may file with
the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the rights or amounts payable
with respect to an Award due under the Plan upon his or her death. A
Participant may, from time to time, revoke or change his or her beneficiary
designation without the consent of any prior beneficiary by filing a new
designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall it be
effective as of a date prior to such receipt. If no beneficiary designation
is filed by the Participant, the beneficiary shall be deemed to be his or
her spouse or, if the Participant is unmarried at the time of death, his or
her estate.

(g) PAYMENTS TO PERSONS OTHER THAN PARTICIPANTS. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable
to care for his or her affairs because of illness or accident, or is a
minor, or has died, then any payment due to such person or his or her
estate (unless a prior claim therefor has been made by a duly appointed
legal representative) may, if the Committee so directs the Company, be paid
to his or her spouse, child, relative, an institution maintaining or having
custody of such person, or any other person deemed by the Committee to be a
proper recipient on behalf of such person otherwise entitled to payment.
Any such payment shall be a complete discharge of the liability of the
Committee and the Company therefor.

(h) NO LIABILITY OF COMMITTEE MEMBERS. No member of the Committee shall
be personally liable by reason of any contract or other instrument executed
by such member or on such member's behalf in such member's capacity as a
member of the Committee nor for any mistake of judgment made in good faith,
and the Company shall indemnify and hold harmless each member of the
Committee and each other employee, officer or director of the Company to
whom any duty or power relating to the administration or interpretation of
the Plan may be allocated or delegated, against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement
of a claim) arising out of any act or omission to act in connection with
the Plan unless arising out of such person's own fraud or willful bad
faith; provided, however, that approval of the Board shall be required for
the payment of any amount in settlement of a claim against any such person.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

(i) GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Connecticut without
regard to the principles of conflicts of law thereof.

(j) FUNDING. No provision of the Plan shall require the Company, for the
purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made
or otherwise to segregate any assets, nor shall the Company maintain
separate bank accounts, books, records or other evidence of the existence
of a segregated or separately maintained or administered fund for such
purposes. Holders shall have no rights under the

C-12
<PAGE>

Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.

(k) NONTRANSFERABILITY. A person's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or
transferred or otherwise disposed of, mortgaged, pledged or encumbered
except, in the event of a Holder's death, to a designated beneficiary to
the extent permitted by the Plan, or in the absence of such designation, by
will or the laws of descent and distribution; provided, however, the
Committee may, in its sole discretion, allow in an Award Agreement for
transfer of Awards other than Incentive Stock Options to other persons or
entities.

(l) RELIANCE ON REPORTS. Each member of the Committee and each member of
the Board shall be fully justified in relying, acting or failing to act,
and shall not be liable for having so relied, acted or failed to act in
good faith, upon any report made by the independent public accountants of
the Company and its Subsidiaries and upon any other information furnished
in connection with the Plan by any person or persons other than such
member.

(m) RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the
Company except as otherwise specifically provided in such other plan.

(n) EXPENSES. The expenses of administering the Plan shall be borne by
the Company.

(o) TITLES AND HEADINGS. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

(p) CHANGE-IN-CONTROL. Notwithstanding anything in the Plan to the
contrary, in the event of a "Change-in-Control", as defined below, all
Awards made pursuant to the Plan shall become fully vested immediately, and
all Options shall be immediately exercisable (provided that if the
"Change-in-Control" occurs with respect to a Subsidiary, only Awards and
Options granted to employees of such Subsidiary shall be affected), (i) if
the Committee so provides before or after a "Change-in-Control", (ii) if
the Committee has so provided in an Award Agreement or (iii) if so provided
in an employment agreement of an employee granted an Award. A
"Change-in-Control" shall be deemed to have occurred if after the date an
Award is granted (i) a public announcement shall be made or a report on
Schedule 13D shall be filed with the Securities and Exchange Commission
pursuant to Section 13(d) of the Exchange Act disclosing that any Person
(as defined below), other than the Company or a Subsidiary or any employee
benefit plan sponsored by the Company or a Subsidiary, is the beneficial
owner (as the term is defined in Rule 13d-3 under the Exchange Act)
directly or indirectly, of thirty percent (30%) or more of the total voting
power represented by the Company's or a Subsidiary's then outstanding
voting common stock (calculated as provided in paragraph (d) of Rule 13d-3
under the Exchange Act in the case of rights to acquire voting common
stock); or (ii) any Person, other than the Company or a Subsidiary or any
employee benefit plan sponsored by the Company or a Subsidiary, shall
purchase shares pursuant to a tender offer or exchange offer to acquire any
voting common stock of the Company or a Subsidiary (or securities
convertible into such voting common stock) for cash, securities or any
other consideration, provided that after consummation of the offer, the
Person in question is the beneficial owner directly or indirectly, of
thirty percent (30%) or more of the total voting power represented by the
Company's or a Subsidiary's then outstanding voting common stock (all as
calculated under clause (i)); or (iii) the stockholders of the Company or a
Subsidiary shall approve (A) any consolidation or merger of the Company or
a Subsidiary in which the Company or a Subsidiary is not the continuing or
surviving corporation (other than a merger of the Company or a Subsidiary
in which holders of the outstanding capital stock of the Company or the
Subsidiary immediately prior to the merger have the same proportionate
ownership of the outstanding capital stock of the surviving corporation
immediately after the merger as immediately before), or pursuant to which
the outstanding capital stock of the Company or a Subsidiary would be
converted into cash, securities or other property, or (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or

C-13
<PAGE>

substantially all the assets of the Company or a Subsidiary; or (iv) there
shall have been a change in the composition of the board of directors of
the Company or a Subsidiary at any time during any consecutive twenty-four
(24) month period such that "continuing directors" cease for any reason to
constitute at least a majority of the Board unless the election, or the
nomination for election of each new Director was approved by a vote of at
least two-thirds (2/3) of the Directors then still in office who were
Directors at the beginning of such period; or (v) the board of directors of
the Company or a Subsidiary, by a vote of a majority of all the Directors,
adopts a resolution to the effect that a "Change-in-Control" has occurred
for purposes of this Agreement. "Person" shall mean any individual,
corporation, partnership, company or other entity, and shall include a
"group" within the meaning of Section 13(d)(3) of the Exchange Act.

12. CHANGES IN CAPITAL STRUCTURE

Awards granted under the Plan and any Award Agreements shall be subject to
equitable adjustment or substitution, as determined by the Committee in its
sole discretion, as to the number, price or kind of a share of Stock or other
consideration subject to such Awards (i) in the event of changes in the
outstanding common stock or in the capital structure of the Company by reason
of stock dividends, stock splits, reverse stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges, or other
relevant changes in capitalization occurring after the Date of Grant of any
such Award, (ii) in the event of any change in applicable laws or any change in
circumstances which results in or would result in any substantial dilution or
enlargement of the rights granted to, or available for, Participants in the
Plan, or (iii) upon the occurrence of any other event which otherwise warrants
equitable adjustment because it interferes with the intended operation of the
Plan. In addition, in the event of any such corporate or other event, the
aggregate number of shares of Stock available under the Plan and the maximum
number of shares of Stock with respect to which any one person may be granted
in connection with Awards shall be appropriately adjusted by the Committee,
whose determination shall be conclusive.

Notwithstanding the above, in the event of any of the following:

A. The Company is merged or consolidated with another corporation or
entity and, in connection therewith, consideration is received by
stockholders of the Company in a form other than stock or other equity
interests of the surviving entity;

B. All or substantially all of the assets of the Company are acquired by
another person;

C. The reorganization or liquidation of the Company; or

D. The Company shall enter into a written agreement to undergo an event
described in clauses A, B or C above,

then the Committee may, in its sole discretion and upon at least 10 days
advance notice to the affected persons, cancel any outstanding Awards and pay
to the Holders thereof, in cash, the value of such Awards based upon the price
per share of Stock received or to be received by other stockholders of the
Company in the event. The terms of this Section 12 may be varied by the
Committee in any particular Award Agreement.

13. NONEXCLUSIVITY OF THE PLAN

Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.

C-14
<PAGE>

14. AMENDMENT AND TERMINATION

The Board may at any time terminate the Plan. With the express written
consent of an individual Participant, the Committee may cancel or reduce or
otherwise alter outstanding Awards. The Committee may, at any time, or from
time to time, amend or suspend and, if suspended, reinstate, the Plan in whole
or in part; provided that any such amendment shall be contingent on obtaining
the approval of the stockholders of the Company if such amendment would
materially increase benefits available to Participants or the Committee
determines that such approval is necessary to comply with any requirement of
law, including the requirements for qualification of Incentive Stock Options or
rule of any stock exchange, stock market or automated quotation system on which
the Company's equity securities are traded or quoted.

C-15
<PAGE>

ANNEX D

EMPLOYEE STOCK PURCHASE PLAN

1. Purpose of the Plan. The purpose of the 1999 Employee Stock Purchase
Plan is to secure for [Saratoga Resources, Inc.] (the Company) and its
stockholders the benefits of the incentive inherent in the ownership of the
Company's common stock by present and future employees of the Company and its
subsidiaries. The Plan is intended to comply with the provisions of Sections
421, 423 and 424 of the Internal Revenue Code of 1986, as amended (the Code),
and the Plan shall be administered, interpreted, and construed in accordance
with such provisions.

2. Shares Reserved for the Plan. There shall be reserved for issuance and
purchase by employees under the Plan an aggregate of 450,000 shares of common
stock of the Company (common stock), subject to adjustment as provided in
Section 12. Shares subject to the Plan may be shares now or hereafter
authorized but unissued, or shares that were once issued and subsequently
reacquired by the Company.

3. Administration of the Plan. The Plan shall be administered at the
expense of the Company by a committee appointed by the board of directors
consisting of not less than two members of the Board who shall serve at the
pleasure of the Board and which shall be designated as the Compensation
Committee (the Committee). No member of the Committee shall be eligible to
participate in the Plan. Subject to the express provisions of the Plan, the
Committee shall have authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, and to make all other
determinations necessary or advisable in administering the Plan, all of which
determinations shall be final and binding upon all persons unless otherwise
determined by the board of directors. A quorum of the Committee shall consist
of a majority of its members and the Committee may act by vote of a majority of
its members at a meeting at which a quorum is present, or without a meeting by
a written consent to the action taken signed by all members of the Committee.

4. Eligible Employees. All employees of the Company, and its subsidiaries
shall be eligible to participate in the Plan, provided each of such employees:

a. has customary employment of a minimum of 20 hours per week,

b. has customary employment for more than five months in a calendar year,
and

c. does not own, immediately after the right is granted, stock possessing
5% or more of the total combined voting power or value of all classes of
stock of the Company or a subsidiary company.

In determining whether a company is a subsidiary, the rules of Section
424(f) of the Code shall be followed, and in determining stock ownership under
this paragraph the rules of Section 424(d) of the Code shall apply and stock
which the employee may purchase under outstanding options shall be treated as
stock owned by the employee. For all purposes of the Plan, "employment" shall
be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Employees eligible to
participate in the Plan pursuant to the provisions of this Section 4 are
hereinafter referred to as "Eligible Employees."

5. Election to Participate. Each Eligible Employee may participate in the
Plan by filing with the Committee an election to purchase form (the Form)
authorizing specified regular payroll deductions. Payroll deductions may be in
any amount specified by an employee, but the annual rate of deductions may not
exceed 20% of the employee's annual rate of base compensation (as defined by
the Committee) in effect at the time of the filing of the Form. All regular
payroll deductions shall be credited to a non-interest bearing account which
the Company shall establish in the name of each participant (Payroll Deduction
Account). Eligible Employees who so elect to participate in the Plan are
hereinafter referred to as "Participating Employees."

All funds in Payroll Deduction Accounts may be used by the Company for any
corporate purpose, subject to the right of a Participating Employee to withdraw
at any time an amount equal to the balance accumulated in the employee's
Payroll Deduction Account. A Participating Employee may at any time, but not
more than once during any calendar quarter, increase or decrease the employee's
payroll deduction by filing a new Form which shall become effective on the
following payroll date.

D-1
<PAGE>

6. Limitation on Number of Shares Which an Employee May Purchase. No
Eligible Employee may be granted an option under the Plan that permits the
employee to purchase stock under the Plan (and any other employee stock
purchase plans qualified under Section 423 of the Code and sponsored by the
Company or any of its subsidiaries) at a rate which exceeds $25,000 in fair
market value of such stock (determined at the time the option is granted) for
each calendar year in which any such option granted to such individual is
outstanding at any time.

The foregoing limitation shall be interpreted by the Committee in
accordance with applicable rules and regulations issued under the Code.

7. Purchase Price. The Purchase Price for each whole and fractional share
of common stock shall be 85% (or such higher percentage as the Committee may
determine from time to time) of the fair market value of such whole or
fractional share on the Investment Date as hereinafter defined, provided that
the Purchase Price shall in no event be less than the par value of such share.

Fair market value on a given date means (i) if the common stock is listed
on a national securities exchange, the mean between the highest and lowest sale
prices reported as having occurred on the primary exchange on which the common
stock is listed and traded on the date prior to such date, or, if there is no
such sale on that date, then on the last preceding date on which such a sale
was reported; (ii) if the common stock is not listed on any national securities
exchange but is quoted in the National Market System of The Nasdaq Stock Market
on a last sale basis, the average between the high bid price and low ask price
reported on the date prior to such date, or, if there is no such sale on that
date, then on the last preceding date on which a sale was reported; or (iii) if
the common stock is not listed on a national securities exchange nor quoted in
the National Market System of The Nasdaq Stock Market on a last sale basis, the
amount determined by the Committee to be the fair market value based upon a
good faith attempt to value the common stock accurately.

8. Method of Purchase and Investment Accounts. The last business day of
the third month in each calendar quarter commencing on or after the effective
date of the Plan shall be known as an Investment Date. Each Participating
Employee having funds in the employee's Payroll Deduction Account on an
Investment Date shall be deemed, without any further action, to have been
granted and have exercised such employee's right to purchase the number of
whole shares which the funds in such employee's Payroll Deduction Account could
purchase at the Purchase Price on such Investment Date, subject to the
restrictions set forth in Section 6. All whole so purchased shall be credited
to each Participating Employee and any balance in the employee's Payroll
Deduction Account shall be retained in such Account.

9. Rights as a Stockholder. Upon each Investment Date, or as soon
thereafter as practicable, a certificate for the shares of common stock
credited to the employee will be forwarded to the employee or such full shares
will otherwise be credited to the employee.

10. Rights Not Transferable. Rights under the Plan are not transferable by
a Participating Employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.

11. Adjustment for Changes in the Company's Stock. In the event of a
subdivision of outstanding shares of common stock, or the payment of a stock
dividend thereon, the number of shares reserved or authorized to be reserved
under the Plan shall be increased proportionately, and such other adjustment
shall be made as may be deemed necessary or equitable by the Committee. In the
event of any other change affecting the common stock, such adjustments shall be
made as may be deemed equitable by the Committee to give proper effect to such
event subject to the limitations of Section 424 of the Code.

12. Retirement, Termination and Death. In the event of a Participating
Employee's retirement or other termination of employment, or in the event that
the employee otherwise ceases to be an Eligible Employee, the amount in the
employee's Payroll Deduction Account shall be refunded to the employee and, in
the event of death, shall be paid to the employee's designated beneficiary
under the Plan.

13. Amendment of the Plan. The board of directors may at any time amend
the Plan in any respect, except that, without the approval of the stockholders
of the Company, no amendment shall be made (a) changing the number of shares to
be reserved under the Plan (other than as provided in Section 11), or (b) the
effect of which will cause it to fail to meet the requirements of Section 423
of the Code.

D-2
<PAGE>

14. Termination of the Plan. The Plan and all rights of employees hereunder
shall terminate:

10. on the Investment Date that Participating Employees become entitled to
purchase a number of shares greater than the number of reserved shares
remaining available for purchase; or

10. at any time, at the discretion of the board of directors, effective as
of the completion of any calendar quarter.

In the event that the Plan terminates under circumstances described in
(a) above, reserved shares remaining as of the termination date shall be
issued to Participating Employees on a pro rata basis.

15. Effective Date of the Plan. The Plan shall become effective on ,
1999; provided the Plan has been approved by the stockholders of the Company in
a manner permitted by Section 423 of the Code by such date.

16. Government and Other Regulations. The Plan, and the grant and exercise
of the rights to purchase shares hereunder, and the Company's obligation to
sell and deliver shares upon the exercise of rights to purchase shares, shall
be subject to all applicable Federal, State and foreign laws, rules and
regulations, and to such approvals by any regulatory or government agency as
may, in the opinion of counsel for the Committee, be required.

D-3

<PAGE>

PROXY

SARATOGA RESOURCES, INC.

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SARATOGA RESOURCES, INC.
FOR THE SPECIAL MEETING OF STOCKHOLDERS -- , 1999

The undersigned stockholder hereby appoints Thomas F. Cooke and and
each of them, the true and lawful attorneys and proxies of the undersigned with
full power of substitution, to vote all shares of Common Stock of Saratoga
Resources, Inc., which the undersigned is entitled to vote at the Special
Meeting of Stockholders of the Saratoga to be held on , 1999 and at any
and all adjournments and postponements thereof, for the transaction of such
business as may properly come before the Meeting, including the items set forth
on the reverse side hereof.

The shares represented by this Proxy will be voted in the manner directed
herein, but if no direction is made with respect to the voting of Common Stock,
this Proxy will be voted FOR (i) Proposal 1 --To elect 5 new members of
Saratoga's board of directors; (ii) Proposal 2 -To vote upon a proposal to
amend the certificate of incorporation of Saratoga to effect a one-for-
reverse stock split of the issued and outstanding common stock of Saratoga;
(iii) Proposal 3 -To vote upon a proposal to amend the certificate of
incorporation to change the name of Saratoga Resources, Inc., to OptiCare
Health Systems, Inc.; (iv) Proposal 4 -To vote upon a proposal to amend the
certificate of incorporation to require Saratoga to indemnify directors and
officers to the maximum extent permitted by law; (v) Proposal 5 -To vote upon a
proposal to adopt the Performance Stock Program; and (vi) Proposal 6 -To vote
upon a proposal to adopt the Employee Stock Purchase Plan.

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
(Please sign on reverse side)
(Over)
<PAGE>

X
PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE. [X]

The Board of Directors recommends a vote FOR the Proposals.

1. To elect 5 new members of Saratoga's board of directors.
[ ]
FOR all nominees listed below
(except as marked to the contrary below) [ ]

WITHHOLD AUTHORITY to vote for all
nominees listed below

----------------------------------------------------------
INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through or otherwise
strike the nominee's name in the list above.

2. To vote upon a proposal to amend the certificate of
incorporation of Saratoga to effect a one-for-
reverse stock split of the issued and outstanding
common stock of Saratoga.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To vote upon a proposal to amend the certificate
of incorporation to change the name of Saratoga
Resources, Inc., to OptiCare Health Systems, Inc.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To vote upon a proposal to amend the certificate
of incorporation to require Saratoga to indemnify
directors and officers to the maximum extent
permitted by law.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

5. To vote upon a proposal to adopt the
Performance Stock Program.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

6. To vote upon a proposal to adopt the Employee
Stock Purchase Plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

In their discretion the proxies are authorized to vote upon such other business
as may properly come before the meeting.

Signature(s)
- -------------------------------------------------------------------------------

Date
- -------------------------------------------------------------------------------

Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law ("Section 145")
permits indemnification of directors, officers, employees, agents and
controlling persons of a corporation under certain conditions and subject to
certain limitations. Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer or agent of the corporation or another enterprise if serving
at the request of the corporation. Depending on the character of the
proceeding, a corporation may indemnify against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the person
indemnified acted in good faith and in a manner he reasonably believed to be in
or not opposed to, the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. In the case of an action by or in the right of the
corporation, no indemnification may be made with respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court of chancery or the
court in which such action or suit was brought shall determine that despite the
adjudication of liability such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Section 145
further provides that to the extent a director or officer of a corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

Saratoga's bylaws (Exhibit 3.2 hereto) provides for the indemnification of
directors, officers and other authorized representatives of Saratoga to the
maximum extent permitted by the Delaware General Corporation Law, as may be
amended (but in the case of such amendment, only to the extent that such
amendment permits Saratoga to provide broader indemnification rights than the
law permitted the Corporation to provide prior to the Amendment) against all
expense, loss and liability (including, without limitation, judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees),
actually and necessarily incurred or suffered by such person in connection with
the defense of or as a result of such proceeding, or in connection with any
appeal therein. Saratoga's bylaws permit it to purchase insurance for the
indemnification of directors, officers and employees to the full extent
permitted by the Delaware General Corporation Law.

The bylaws provide that the right to indemnification conferred in the
bylaws are contract rights and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance
of its final disposition; provided, however, that if the Delaware General
Corporation Law requires: the payment of such expenses incurred by a director
or officer in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be
made only upon delivery to the Corporation of an undertaking by or on behalf of
such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this bylaw or otherwise.

II-1
<PAGE>

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<S> <C>
(a) Exhibits:
2. Agreement and Plan of Merger, dated as of April 12, 1999, among the
Registrant, OptiCare Shellco Merger Corporation, Prime Shellco Merger
Corporation, OptiCare Eye Health Centers, Inc., and PrimeVision Health, Inc.,
Inc., (incorporated by reference from Annex A to the Proxy
Statement/Prospectus).
3.1 Certificate of Incorporation of Registrant. Incorporated by reference to Exhibit
3.1 of the Form 10-KSB filed February 3, 1995.
3.2 Form of Certificate of Amendment of Certificate of Incorporation of Saratoga
Resources, Inc. (incorporated by reference to Annex B to the Proxy
Statement/Prospectus).**
3.3 By-laws of Registrant adopted January 20, 1994, as amended September 14,
1996. Incorporated by referenced to the Form 10-QSB filed November 13, 1996,
and filed as Exhibit 3.2 thereto.
4.1 Form of Performance Stock Program (incorporated by reference to Annex C of
the Proxy Statement/Prospectus).+
4.2 Form of Employee Stock Purchase Plan (incorporated by reference to Annex D
of the Proxy Statement/Prospectus).+
5.1 Opinion of Kane Kessler, P.C.**
10.1 Compromise and Settlement Agreement dated May 7, 1996, by and between
Saratoga Resources, Inc. a Delaware corporation, Saratoga Resources, Inc., a
Texas corporation, Lobo Operating, Inc., a Texas corporation, LEI, Inc., a Texas
corporation, Thomas F. Cooke, Joseph T. Kaminski, Randall F. Dryer, and
Internationale Nederlanden (U.S.) Capital Corporation, filed as Exhibit 1 to the
Company's Report on Form 8-K dated May 7, 1996, incorporated herein by
reference.
10.2 Purchase and Sale Agreement dated May 7, 1996, by and between Internationale
Nederlanden (U.S.) Capital Corporation and Prime Energy Corporation, filed as
Exhibit 2 to the Company's Report on Form 8-K dated May 7, 1996,
incorporated herein by reference.
10.3 Assignment and Bill of Sale dated May 7, 1996, by and between Saratoga
Resources, Inc., a Delaware corporation and Prime Energy Corporation, filed as
Exhibit 3 to the Company's Report on Form 8-K dated May 7, 1996,
incorporated herein by reference.
10.4 Settlement Agreement and Full and Final Release dated March 10, 1997, by and
between Saratoga Resources, Inc., a Delaware corporation, Thomas F. Cooke,
Randall F. Dryer, Dryer, Ltd., a Texas Family Partnership and Joseph T.
Kaminski, filed as Exhibit 1 to the Company's Report on Form 8-K dated
March 12, 1997, incorporated herein by reference.
10.5 Stock Purchase Agreement dated May 17, 1997, by and among the Company,
Randall F. Dryer, and Dryer, Ltd., incorporated herein by reference.
10.6 Purchase and Sale agreement dated effective November 12, 1998, between SHI
and The Premium Group. Incorporated by reference to the Registration
Statement on Form SB-2 of SHI filed with the SEC in December 1, 1998,
Exhibit 10.1, incorporated herein by reference.
</TABLE>

II-2
<PAGE>

<TABLE>
<S> <C>
10.7 Service Agreement dated as of November 12, 1998, between SHI and Premium
Recoveries, Inc. Incorporated by reference to the Registration Statement on
Form SB-2 of SHI filed by Saratoga with the SEC in December 1, 1998, Exhibit
10.2, incorporated herein by reference.
10.8 Settlement agreement dated as of April 9, 1999, among Prime, Dr. Allan L.M.
Barker, Dr. D. Blair Harrold, Optometric Eye Care Center, P.A., Steven B.
Waite, Bank Austria AG, and Bank Austria Bank Austria Corporate
Finance, Inc.
10.9 Vision care capitation agreement between OptiCare and Blue Cross & Blue
Shield of Connecticut, Inc. (and its affiliates) dated 10/23/95.**
10.10 Eye care services agreement between OptiCare and Anthem Health Plans, Inc.
(d/b/a Anthem Blue Cross and Blue Shield of Connecticut), effective 11/1/98.**
10.11 Contracting provider services agreement dated 4/26/96, and amendment thereto
dated as of 1/1/99, between Blue Cross & Blue Shield of Connecticut, Inc., and
OptiCare.**
10.12 Form of employment agreement between the Registrant and Dean J. Yimones,
M.D., to be effective upon consummation of the mergers.**
10.13 Form of employment agreement between the Registrant and Steven L. Ditman,
to be effective upon consummation of the mergers.**
10.14 Form of employment agreement between the Registrant and Dr. Allan L. M.
Barker, to be effective upon consummation of the mergers.**
10.15 Form of employment agreement between the Registrant and Dr. D. Blair
Harrold, to be effective upon consummation of the mergers.**
10.16 Lease dated September 22, 1987 and lease extension agreement dated
December 12, 1997 by and between Cross Street Medical Building Partnership,
as landlord, and Ophthalmic Physicians and Surgeons, P.C., as tenant, for
premises located at 40 Cross Street, Norwalk, Connecticut.**
10.17 Lease agreement dated September 1, 1995 by and between French's Mill
Associates, as landlord, and OptiCare Eye Health Center P.C., as tenant, for
premises located at 87 Grandview Avenue, Waterbury, Connecticut.**
10.18 Lease agreement dated September 30, 1997 by and between French's Mill
Associates II, LLP, as landlord, and OptiCare Eye Health Center P.C., as tenant,
for premises located at 160 Robbins Street, Waterbury, Connecticut (upper
level).**
10.19 Lease agreement dated September 1, 1995 and amendment to lease dated
September 30, 1997 by and between French's Mill Associates II, LLP, as
landlord, and OptiCare Eye Health Center P.C., as tenant, for premises located
at 160 Robbins Street, Waterbury, Connecticut (lower level).**
10.20 Lease agreement dated September 1, 1995 between O.C. Realty Associates
Limited Partnership, as landlord, and OptiCare, as tenant, for premises located
at 54 Park Lane, New Milford, Connecticut.**
10.21 Form of health services organization agreement between Prime and eye care
providers.**
10.22 Professional services and support agreement dated 12/1/95 between OptiCare
Eye Health Systems, Inc., a Connecticut corporation, and OptiCare P.C., a
Connecticut professional corporation.**
</TABLE>

II-3
<PAGE>

<TABLE>
<S> <C>
16 Letter regarding Change in Certifying Accountants. Incorporated by reference to
Exhibit 16 of the Amendment No. 1 filed April 6, 1999, of Registrant's Current
Report on Form 8-K dated March 29, 1999.
21 List of Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP with respect to the financial statements of the
Registrant.
23.2 Consent of Hein + Associates LLP.
23.3 Consent of Deloitte & Touche LLP with respect to the combined financial
statements of Opticare Eye Health Center, Inc. and Affiliate.
23.4 Consent of Ernst & Young LLP with respect to the financial statements of the
PrimeVision Health, Inc.
23.5 Consent of Kane Kessler, P.C. (included in Exhibit 5.1).**
23.6 Consent of Dean J. Yimoyines, M.D.
23.7 Consent of Steven L. Ditman.
23.8 Consent of Martin E. Franklin.
23.9 Consent of Allan L.M. Barker.
23.10 Consent of John F. Croweak.
</TABLE>

- ----------
+ Management or compensatory plan

** To be filed by amendment

(b) Financial Statement Schedules:

All schedules are omitted because of the absence of conditions under which
they are required or because the required information is given in the financial
statements or notes thereto.

II-4
<PAGE>

ITEM 22. UNDERTAKINGS

(1) The undersigned registrant hereby undertakes:

(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;

(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(3) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
such registrant undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.

(4) The registrant undertakes that every prospectus:

(a) that is filed pursuant to paragraph (3) immediately preceding, or

(b) that purports to meet the requirements of Section 10(a)(3) of the
Securities Act of 1933 and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

II-5
<PAGE>

(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(6) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it
was declared effective.

(2) For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

(7) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.

(8) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and Saratoga
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.

II-6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Austin, State of Texas,
on May 14, 1999.

SARATOGA RESOURCES, INC.

By: /s/ Thomas F. Cooke
-------------------------------------------- Date: May 14, 1999
Thomas F. Cooke, Chairman of the Board of Directors,
Chief Executive Officer and Principal Financial and
Accounting Officer

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated:

/s/ Thomas F. Cooke
- ----------------------------------------------- Date: May 14, 1999
Thomas F. Cooke, Director

/s/ Kevin M. Smith
- ----------------------------------------------- Date: May 14, 1999
Kevin M. Smith, Director

II-7
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- --------- ---------------------------------------------------------------------------------------- -----
<S> <C> <C>
2. Agreement and Plan of Merger, dated as of April 12, 1999, among the Registrant,
OptiCare Shellco Merger Corporation, Prime Shellco Merger Corporation, OptiCare
Eye Health Centers, Inc., and PrimeVision Health, Inc., Inc., (incorporated by
reference from Annex A to the Proxy Statement/Prospectus).
3.1 Certificate of Incorporation of Registrant. Incorporated by reference to Exhibit 3.1 of
the Form 10-KSB filed February 3, 1995.
3.2 Form of Certificate of Amendment of Certificate of Incorporation of Saratoga
Resources, Inc. (incorporated by reference to Annex B to the Proxy
Statement/Prospectus).**
3.3 By-laws of Registrant adopted January 20, 1994, as amended September 14, 1996.
Incorporated by referenced to the Form 10-QSB filed November 13, 1996, and filed as
Exhibit 3.2 thereto.
4.1 Form of Performance Stock Program (incorporated by reference to Annex C of the
Proxy Statement/Prospectus).+
4.2 Form of Employee Stock Purchase Plan (incorporated by reference to Annex D of
the Proxy Statement/Prospectus).+
5.1 Opinion of Kane Kessler, P.C.**
10.1 Compromise and Settlement Agreement dated May 7, 1996, by and between Saratoga
Resources, Inc. a Delaware corporation, Saratoga Resources, Inc., a Texas
corporation, Lobo Operating, Inc., a Texas corporation, LEI, Inc., a Texas
corporation, Thomas F. Cooke, Joseph T. Kaminski, Randall F. Dryer, and
Internationale Nederlanden (U.S.) Capital Corporation, filed as Exhibit 1 to the
Company's Report on Form 8-K dated May 7, 1996, incorporated herein by reference.
10.2 Purchase and Sale Agreement dated May 7, 1996, by and between Internationale
Nederlanden (U.S.) Capital Corporation and Prime Energy Corporation, filed as
Exhibit 2 to the Company's Report on Form 8-K dated May 7, 1996, incorporated
herein by reference.
10.3 Assignment and Bill of Sale dated May 7, 1996, by and between Saratoga Resources,
Inc., a Delaware corporation and Prime Energy Corporation, filed as Exhibit 3 to the
Company's Report on Form 8-K dated May 7, 1996, incorporated herein by reference.
10.4 Settlement Agreement and Full and Final Release dated March 10, 1997, by and
between Saratoga Resources, Inc., a Delaware corporation, Thomas F. Cooke, Randall
F. Dryer, Dryer, Ltd., a Texas Family Partnership and Joseph T. Kaminski, filed as
Exhibit 1 to the Company's Report on Form 8-K dated March 12, 1997, incorporated
herein by reference.
10.5 Stock Purchase Agreement dated May 17, 1997, by and among the Company, Randall
F. Dryer, and Dryer, Ltd., incorporated herein by reference.
10.6 Purchase and Sale agreement dated effective November 12, 1998, between SHI and
The Premium Group. Incorporated by reference to the Registration Statement on
Form SB-2 of SHI filed with the SEC in December 1, 1998, Exhibit 10.1, incorporated
herein by reference.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ----------- -------------------------------------------------------------------------------------- -----
<S> <C> <C>
10.7 Service Agreement dated as of November 12, 1998, between SHI and Premium
Recoveries, Inc. Incorporated by reference to the Registration Statement on Form
SB-2 of SHI filed by Saratoga with the SEC in December 1, 1998, Exhibit 10.2,
incorporated herein by reference.
10.8 Settlement agreement dated as of April 9, 1999, among Prime, Dr. Allan L.M. Barker,
Dr. D. Blair Harrold, Optometric Eye Care Center, P.A., Steven B. Waite, Bank
Austria AG, and Bank Austria Bank Austria Corporate Finance, Inc.
10.9 Vision care capitation agreement between OptiCare and Blue Cross & Blue Shield of
Connecticut, Inc. (and its affiliates) dated 10/23/95.**
10.10 Eye care services agreement between OptiCare and Anthem Health Plans, Inc. (d/b/a
Anthem Blue Cross and Blue Shield of Connecticut), effective 11/1/98.**
10.11 Contracting provider services agreement dated 4/26/96, and amendment thereto dated
as of 1/1/99, between Blue Cross & Blue Shield of Connecticut, Inc., and OptiCare.**
10.12 Form of employment agreement between the Registrant and Dean J. Yimones, M.D.,
to be effective upon consummation of the mergers.**
10.13 Form of employment agreement between the Registrant and Steven L. Ditman, to be
effective upon consummation of the mergers.**
10.14 Form of employment agreement between the Registrant and Dr. Allan L. M. Barker,
to be effective upon consummation of the mergers.**
10.15 Form of employment agreement between the Registrant and Dr. D. Blair Harrold, to
be effective upon consummation of the mergers.**
10.16 Lease dated September 22, 1987 and lease extension agreement dated December 12,
1997 by and between Cross Street Medical Building Partnership, as landlord, and
Ophthalmic Physicians and Surgeons, P.C., as tenant, for premises located at 40 Cross
Street, Norwalk, Connecticut.**
10.17 Lease agreement dated September 1, 1995 by and between French's Mill Associates,
as landlord, and OptiCare Eye Health Center P.C., as tenant, for premises located at
87 Grandview Avenue, Waterbury, Connecticut.**
10.18 Lease agreement dated September 30, 1997 by and between French's Mill
Associates II, LLP, as landlord, and OptiCare Eye Health Center P.C., as tenant, for
premises located at 160 Robbins Street, Waterbury, Connecticut (upper level).**
10.19 Lease agreement dated September 1, 1995 and amendment to lease dated
September 30, 1997 by and between French's Mill Associates II, LLP, as landlord, and
OptiCare Eye Health Center P.C., as tenant, for premises located at 160 Robbins
Street, Waterbury, Connecticut (lower level).**
10.20 Lease agreement dated September 1, 1995 between O.C. Realty Associates Limited
Partnership, as landlord, and OptiCare, as tenant, for premises located at 54 Park
Lane, New Milford, Connecticut.**
10.21 Form of health services organization agreement between Prime and eye care
providers.**
10.22 Professional services and support agreement dated 12/1/95 between OptiCare Eye
Health Systems, Inc., a Connecticut corporation, and OptiCare P.C., a Connecticut
professional corporation.**
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ----------- ----------------------------------------------------------------------------------- -----
<S> <C> <C>
16 Letter regarding Change in Certifying Accountants. Incorporated by reference to
Exhibit 16 of the Amendment No. 1 filed April 6, 1999, of Registrant's Current
Report on Form 8-K dated March 29, 1999.
21 List of Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP with respect to the financial statements of the
Registrant.
23.2 Consent of Hein + Associates LLP.
23.3 Consent of Deloitte & Touche LLP with respect to the combined financial statements
of Opticare Eye Health Center, Inc. and Affiliate.
23.4 Consent of Ernst & Young LLP with respect to the financial statements of the
PrimeVision Health, Inc.
23.5 Consent of Kane Kessler, P.C. (included in Exhibit 5.1).**
23.6 Consent of Dean J. Yimoyines, M.D.
23.7 Consent of Steven L. Ditman.
23.8 Consent of Martin E. Franklin.
23.9 Consent of Allan L.M. Barker.
23.10 Consent of John F. Croweak.
</TABLE>

- ----------
+ Management or compensatory plan

** To be filed by amendment

<PAGE>

Exhibit 10-8
NORTH CAROLINA

NASH COUNTY

SETTLEMENT AGREEMENT

This Settlement Agreement ("Agreement") is entered into this 9 day
of April, 1999, by, between and among D. Blair Harrold, O.D., Allan L. M.
Barker, O.D., and Optometric Eye Care Center, P.A. ("OECC, PA"), and
PrimeVision Health, Inc. ("Prime"), PrimeVision of North Carolina, Inc.,
Consolidated Eye Care, Inc. ("CEC"), Steven B. Waite, Bank Austria, AG,
successor by merger to Creditanstalt-Bankverein (the "Bank"), and Bank Austria
Creditanstalt Corporate Finance, Inc. ("Lender"). The above-identified parties
are at times referred to herein collectively as "Parties" and individually as a
"Party."

W I T N E S S E T H:

WHEREAS, the Parties have had, between and among themselves, a number
of business-related disputes; and

WHEREAS, the Parties have heretofore been parties to that certain
lawsuit currently pending in Nash County Superior Court (99-CVS-634) (the
"Court"); and

WHEREAS, the Parties have arrived at a mutually agreeable resolution
to their respective disputes.

NOW THEREFORE, in consideration of the promises and representations
provided for herein, the receipt, sufficiency, and acceptance of which are
hereby acknowledged, the Parties agree as follows:

<PAGE>

1. Upon signing this Agreement, Drs. Harrold and Barker will move the
Court to dismiss without prejudice that certain action between and among the
parties currently pending in Nash County Superior Court (99-CVS-634), including
the Temporary Restraining Order associated with that action ("TRO"). Upon the
filing of such motion for dismissal, without further action on the part of any
Party: (A) that certain letter dated April 1, 1999, purporting to terminate the
Administrative Services Agreement ("ASA") by and between CEC and OECC, PA,
shall be deemed rescinded; (b) Drs. Harrold and Barker shall be deemed to have
rescinded their resignations from Prime, and Prime agrees to restore Drs.
Harrold and Barker to their former positions as Directors of Prime; (c) Drs.
Harrold and Barker shall be deemed to have rescinded their respective
resignations from CEC dated March 30, 1999, and shall be deemed restored to
their former status as Prime employees, with no resulting interruption or
alteration of compensation or benefits, except as specifically referenced
herein. Upon closing of the business combination between Prime and OptiCare Eye
Health Centers, Inc. ("OptiCare"), Drs. Harrold and Barker will move the Court
to dismiss the action referenced above with prejudice. All parties except Bank
and Lender will execute mutually acceptable releases. Bank and Lender will
release only Harrold and Barker.

2. Upon signing this Agreement, the Parties (other than the Bank and
Lender) will cause $1 million in cash to be deposited into an escrow account
agreeable to the Parties from funds previously transferred to the Nash County
Clerk of Superior Court. The Escrow Agreement governing the account ("Escrow
Agreement") will state that the funds will be released as follows to Drs.
Harrold and Barker:

-2-
<PAGE>

(a) $250,000 when any and all investigations of Prime
and its affiliates arising out of that certain
Request for Declaratory Ruling From the North
Carolina State Board of Examiners in Optometry (the
"Request for Declaratory Ruling") have been
concluded on terms and conditions reasonably
satisfactory to the Lender;

(b) $250,000 when OECC, PA and CEC execute a new
Administrative Services Agreement in accordance with
Section 8 hereof;

(c) $500,000 upon the closing of the business
combination between Prime and OptiCare or the
failure of such combination to close by September
30,1999, whichever shall first occur;

The Escrow Agreement will state that the funds will be released to Prime as
follows:

(i) the $250,000 referenced in subparagraph
(a) above if the investigation of Prime and its
affiliates arising out of the Request for
Declaratory Ruling has been concluded on terms that
the Lender has reasonably determined are not
satisfactory to it; or

(ii) any funds remaining in escrow if
Barker, Harrold or OECC, PA (collectively, the "OECC
Parties") breach the terms of this Agreement.

In the event that the funds are released to Drs. Harrold and Barker due to
2(a), (b) and (c) above, such payments, together with, the $250,000 paid to
Drs. Harrold and Barker out of the funds on deposit with the Nash County Clerk
will represent an advance payment against the next $1.25 million due and
payable under the currently effective employment agreements between Prime

-3-
<PAGE>

and Dr. Harrold, and Prime and Dr. Barker, each dated July 1, 1996. In the
event that Prime or Lender determine that the OECC Parties have breached this
Agreement, they shall notify the OECC Parties and the escrow agent under the
Escrow Agreement (the "Escrow Agent") of such default, specifying the nature of
such default. Unless one or more of the OECC Parties notify Prime, the Lender
and the Escrow Agent within seven days of their receipt of such notice, that
such OECC Party disputes the existence of such default, the Escrow Agent shall
disburse the funds to the Lender for application to the term loan of Prime
owing to the Lender. If one or more of the OECC Parties notify Prime, the
Lender and the Escrow Agent within such time period that such OECC Party
disputes the existence of such default, the funds shall be retained by the
Escrow Agent and disbursed in accordance with the dispute resolution provisions
of the Escrow Agreement.

3. Upon the closing of the business combination between Prime and
OptiCare, Prime will pay to Drs. Harrold and Barker another $1.25 million in
cash in the aggregate. OptiCare has represented and the Bank shall request that
OptiCare sign a letter in the form attached as Exhibit A which is incorporated
by reference.

4. By no later than May 6, 1999, Prime and Drs. Harrold and Barker
will execute a Share Grant Agreement under which they will be issued common
stock in Prime at closing of the business combination with OptiCare to produce
a share position on a primary basis of 32% of Prime before and subject to the
closing of the business combination with OptiCare. Such Share Grant Agreement,
and the shares of stock issued thereunder, are granted to Barker and Harrold in
satisfaction of all claims of the OECC Parties arising under or in respect of
(a) that certain promissory note in the original principal amount of $364,896
dated August 1, 1994 executed by

-4-
<PAGE>

CEC in favor of OECC, PA (the "OECC Note") and (b) the $482,193 by the OECC
Parties held by CEC on July 3, 1996 and alleged by the OECC Parties to belong
to OECC, PA (the "1996 Cash"). Upon the execution of the Share Grant Agreement
the OECC Parties shall suspend all efforts to make claims under or in respect
of the OECC Note and/or the 1996 Cash and upon consummation of the business
combination with OptiCare, the OECC Note shall be deemed cancelled and all
rights of the OECC Parties to the 1996 Cash shall terminate. To the extent the
business combination with OptiCare is abandoned after the issuance of the
additional shares under the Share Grant Agreement, the issuance of such shares
shall be rescinded, such shares shall be returned to Prime for cancellation or
other appropriate action, and the OECC Parties shall be free to pursue any and
all such claims against the OECC Note and the 1996 Cash.

5. By no later than May 6, 1999, Drs. Harrold and Barker will each
sign an Employment Agreement with OptiCare to be effective at the closing of
the business combination between Prime and OptiCare, which Employment
Agreements will replace and supersede the current Employment Agreements, and
will have the terms summarized below.

(a) Term of 7 years from execution;

(b) Base salary of $150,000 per year;

(c) Other features (including bonus rights,
non-competition, etc.) identical to the Employment
Agreement between OptiCare and Steven L. Ditman,
dated January 1, 1999, except as provided in 5(d) or
(e) below;

(d) In the event that either Drs. Harrold or Barker or
both are involuntarily terminated without cause or
via a change of control or non-renewal of their
respective Employment Agreements (but explicitly not
in the event of a

-5-
<PAGE>

voluntary termination or a termination for cause or
a voluntary termination upon a change of control),
the non-competition feature of their Employment
Agreements will permit Drs. Harrold and Barker
following such termination to engage in the practice
of optometry in Nash County, North Carolina and
contiguous counties.

(e) In the event that either Drs. Harrold or Barker are
terminated without cause (but explicitly not in the
event of a voluntary termination or a termination
for cause), the base salary for the remaining
balance of the 7 year term of his employment
agreement shall be paid in cash promptly in a lump
sum settlement. In the event that either Dr. Harrold
or Dr. Barker voluntarily terminates his employment
as a result of a change of control of OptiCare, such
terminating person shall be entitled to receive a
lump sum payment in cash equal to one year's base
salary.

6. In the event of an OptiCare liquidation (narrowly defined to mean
insolvency or bankruptcy) and the failure of OptiCare to meet its obligations
under the Employment Agreements due only to financial hardship (and
specifically not due to a dispute between the Parties), Drs. Harrold and Barker
will have the right to:

(a) Purchase the retail business operations referenced
below from OptiCare for cash consideration of 3
times the immediately preceding 12 months earnings
before interest, taxes, depreciation and
amortization excluding the effect of all
extraordinary items and non-recurring charges
(EBITDA) from said retail business operations and
the affiliated practices:

-6-
<PAGE>

o 3 presently in Rocky Mount (Golden East,
Tarrytown, Sunset);

o 1 presently in Roanoke Rapids;

o 1 presently in Wilson;

o 1 presently in New Bern

Said right shall be more fully evidenced in a document executed by the
appropriate Parties on or before May 6, 1999. Prime agrees that proceeds from
such sale shall be applied to the permanent reduction of the indebtedness owed
to Lender.

(b) Such right shall be available to Drs. Harrold and
Barker, until such time as (i) the aggregate market
value (calculated on the basis of the publicly
quoted closing price, as published in The Wall
Street Journal) of their stock in OptiCare (or in
any company of which OptiCare is a subsidiary)
exceeds $7,000,000 and (ii) shares of their stock in
OptiCare (or in any company of which OptiCare is a
subsidiary) are first eligible to be sold in market
transactions, regardless of whether all of their
shares may then be sold in such transactions.

7. Prime will cause the Merger Agreement with OptiCare to provide that
one Board seat on the OptiCare Board of Directors (post closing of the business
combination with Prime) will be offered to either Dr.
Harrold or Dr. Barker, as they may determine.

8. Prime, CEC, OECC, and Drs. Harrold and Barker agree that Prime
shall engage Smith Helms Mulliss & Moore LLP to prepare a new Administrative
Services Agreement between CEC and OECC, PA which is consistent with the rules
and regulations of the North Carolina State Board of Examiners in Optometry
(the "Optometry Board") and is economically

-7-
<PAGE>

similar to the method by which OptiCare contracts with OptiCare, P.C. Such
Administrative Services Agreement shall have a term of thirty (30) years;
provided, however, that such Administrative Services Agreement shall
automatically become terminable on thirty (30) days notice if the business
combination with OptiCare (a) is abandoned or (b) is not closed by September
30, 1999. The Parties agree to execute such Administrative Services Agreement
no later than April 28, 1999. Upon the request of Drs. Barker and Harrold,
Prime will cause additional officers of CEC to be elected and authorized to
execute and deliver such Administrative Services Agreement and will designate a
Doctor of Optometry licensed in North Carolina to be elected as an officer of
OECC, PA to be given the authority to execute and deliver such Administrative
Services Agreement.

9. By no later than May 6, 1999, Prime and Drs. Harrold and Barker
agree to execute a Succession Agreement which would take effect at closing of
the business combination between Prime and OptiCare, whereby ownership of the
OECC, PA can be passed to another Doctor of Optometry licensed in North
Carolina or, to the extent permitted by North Carolina law, a Doctor of
Medicine licensed in North Carolina, acceptable to the post-closing company, at
the discretion of OptiCare. Such Succession Agreement will be a closing
condition of the Merger Agreement between Prime and OptiCare.

10. By no later than May 6, 1999, Drs. Harrold and Barker and CEC will
transfer all OECC, PA retail location leases to CEC, which transfers shall take
effect upon closing of the Merger Agreement between Prime and OptiCare. Such
Transfer Agreements will include elimination of Drs. Harrold and Barker as
guarantors on the applicable leases, or the commitment by OptiCare to use
reasonable efforts to remove Drs. Harrold and Barker as guarantors on such

-8-
<PAGE>

leases (which efforts shall include, if needed, the guaranty of OptiCare of
such leases) together with an indemnification of Drs. Harrold and Barker for
any amounts thereafter required to by paid by them under such guaranties.

11. Promptly upon signing of this Agreement, CEC will transfer such
interest as is currently held by CEC in the Kirkland Drive property to such
real estate partnership as is designated by Drs. Harrold and Barker.

12. Drs. Harrold and Barker will waive their dissenters= rights in
respect of and will vote their shares in Prime for, the merger between Prime
and OptiCare, subject to the percentage ownership of Prime in the combined
company at closing being within 1% of 48.755% of the total ownership calculated
on a primary basis.

13. (a) Upon execution of this Agreement, the Parties agree to
immediately resume a normal, good faith and financially appropriate working
relationship amongst each other. Without limiting the generality of the
foregoing, upon the execution of this Agreement that certain Sublease dated
March 30, 1999, by, between and among D. Blair Harrold, Allan L. M. Barker and
Consolidated Eye Care, Inc., shall be deemed rescinded and shall be void and of
no further effect.

(b) The Parties agree with Lender that (i) the monies,
released from the Nash County Superior Court Clerk, will be applied first to
the payment of $250,000 to Harrold and Barker, second to the extent of
$1,000,000, to the delivery into escrow of the amount required by Section 2
hereof, third, to the extent of $1,906,797.00, to the payment in full of all
past due amounts owed to Lender and legal fees associated herewith, fourth to
provide for the working capital and managed care needs of Prime and its
subsidiaries, as agreed to by Lender and Prime,

-9-
<PAGE>

and last to the prepayment of the Term Loan owed by Prime to Lender; (ii) all
cash received by OECC, PA between the date of the TRO and the date of this
Agreement shall be turned over to CEC and deposited in an account designated by
Prime; and (iii) all cash received by OECC, PA and CEC shall be deposited in
accounts satisfactory to Lender for which, commencing on April 15, 1999, the
sole signature rights will be held by David Durfee or Bruce Broadbelt or their
designees. Prime agrees to provide to Lender, as soon as available but not
later than April 30, 1999, a cash flow analysis satisfactory to Lender of the
working capital and managed care requirements of Prime and its subsidiaries for
the subsequent eight (8) weeks. All cash held by Prime, its subsidiaries or
OECC, PA in excess of the reasonable working capital requirements as set forth
in the cash flow analysis shall be paid to the Bank on May 6, 1999 and applied
to the principal installments of the Term Loan owing to Lender, in the inverse
order of maturity.

(c) CEC's lease payments shall after the execution of this
Agreement continue in the ordinary course of business in accordance with the
terms of applicable leases, on the same basis as the previous three years.

14. If the various agreements referenced in Sections 4, 5, 8, 9, and
10 above are not signed by May 6, 1999, the Parties shall be free to pursue any
and all legal remedies and actions which they may have.

15. The Parties do hereby represent to each other that each has full
power and legal authority to execute and perform this Agreement and that each
has not assigned, transferred, or conveyed to any person or entity nor pledged,
encumbered, or granted any form of security interest in or to any of the
claims, rights, actions or causes of action addressed in this Agreement.

-10-
<PAGE>

16. The Parties acknowledge and agree that this settlement is in
compromise of disputed claims and that nothing herein shall be construed as an
admission of liability on the part of any Party and that said Parties deny any
and all liability and intend merely to avoid litigation and buy their peace.

17. The Parties agree that they will not provide a copy of this
Agreement to anyone, introduce or attempt to introduce this Agreement in any
proceeding, or disclose the terms of this Agreement in any other manner to
anyone, except that: (i) the Parties may, subject to the applicable rules of
procedure and evidence, introduce this Agreement in an action or other
proceeding for violation of this Agreement; (ii) the Parties may, as reasonably
necessary for the conduct of their business affairs, disclose this Agreement
and its terms to their accountants, attorneys and regulators and (iii) the
Parties may disclose this Agreement and its terms to the extent required by
law. The Parties further agree that they shall not disparage each other.

18. The Parties acknowledge and agree that, except for certain
inducements given to the Bank and the Lender by Prime and by Marlin Capital,
L.P., no promise, inducement, agreement, or factual or legal representation not
contained in this Agreement has been made to them and that this Agreement and
the Escrow Agreement contain the entire agreement among them regarding the
subject matter hereof. The Parties further acknowledge and agree that the terms
of this Agreement are contractual and not a mere recital.

19. The Parties represent and acknowledge that each of them has read
and understands the whole of this Agreement. The Parties further acknowledge
that each of them has had available legal counsel for any consultation that
they may have desired concerning the terms of this Agreement or the meaning
thereof before the execution of this Agreement.

-11-
<PAGE>

20. With the exception of Bank and the Lender, whose attorneys= fees
are reimbursed by Prime, the Parties shall bear their own attorney's fees and
costs, including but not limited to those incurred in the Nash County action
(99-CVS-634) referenced above.

21. This Agreement may not be altered or amended except by a writing
signed by all the Parties.

22. The Parties agree that in the event any portion of this Agreement
is held to be void or unenforceable, the remaining portions shall remain in
full force and effect.

23. This Agreement is deemed executed in and shall be construed under
the laws of the State of North Carolina. The Superior Court of Nash County,
North Carolina shall be the exclusive venue of any litigation brought for
enforcement or violation of this Agreement.

24. This Agreement may be executed in several counterparts each of
which shall be considered an original.

25. Nothing contained in this Agreement, the Escrow Agreement or any
other instrument, document and agreement executed pursuant hereto or thereto or
in connection herewith or therewith shall be deemed or construed to limit or
impair any rights the Lender has under that certain Amended and Restated Loan
and Security Agreement, dated as of May 30, 1997, as amended (the "Loan
Agreement"), or under any of the "Loan Documents," as such term is defined in
the Loan Agreement, including, but not limited to, the "Master Guaranty" or
"Master Security Agreement," as such terms are defined in the Loan Agreement.
OECC, PA and Drs. Barker and Harrold, in consideration of the amounts received
hereunder, agree that they shall not challenge, contest or dispute (a) the
validity or enforceability of OECC, PA's

-12-
<PAGE>

obligations under the Master Guaranty and the Master Security Agreement, or (b)
the validity, perfection or first priority status of the liens in the assets of
OECC, PA in favor of the Lender.

26. The Parties hereby agree that their intent is that all agreements,
policies and procedures comply with applicable law, including, but not limited
to, the rules and regulations of the Optometry Board. The Parties agree to
undertake a review of the policies and procedures between CEC and OECC, PA and
will undertake to correct any deficiencies found therein and to demonstrate, in
connection with any investigation undertaken by the Optometry Board, that the
Parties are in compliance with applicable law.

IN WITNESS WHEREOF, the Parties have executed this Agreement, or have
caused their duly authorized representatives to execute this Agreement,
effective as of the date first written above.

[Signatures follow on next page.]

-13-
<PAGE>

PRIMEVISION HEALTH, INC.,
a Delaware corporation

By:__________________________________

_______________, _________________

PRIMEVISION OF NORTH CAROLINA, INC.,
a North Carolina corporation

By:__________________________________

_______________, _________________

CONSOLIDATED EYE CARE, INC., a
North Carolina corporation

By:__________________________________

_______________, _________________

AGREED:
SMITH HELMS MULLISS & MOORE, L.L.P.

By:____________________________
James L. Gale
2 Hannover Square, Suite 2800
Raleigh, NC 27601
Telephone: (919) 755-8700
Attorneys for Prime Vision Health, Inc.,
PrimeVision of North Carolina, Inc., and
Consolidated Eye Care, Inc.

-14-
<PAGE>

_________________________________(SEAL)
Steven B. Waite
AGREED:
FITCH & ASSOCIATES

By:________________________________
Mark L. Bibbs
615 East Nash Street
Wilson, NC 27893
Telephone: (252) 291-6500
Attorneys for Defendant Steven B. Waite

BANK AUSTRIA, AG, successor by merger to
CREDITANSTALT-BANKVEREIN, an
Austrian banking corporation

By:__________________________________

_______________, _________________

BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., a
Delaware corporation

By:__________________________________

_______________, _________________

AGREED:
POYNER & SPRUILL, L.L.P.

By:____________________________
John R. Jolly
3600 Glenwood Avenue
Raleigh, NC 27612
Telephone: (919) 783-6400
Attorneys for Bank Austria, AG, successor by merger
to Creditanstalt-Bankverein, and Bank Austria
Creditanstalt Corporate Finance, Inc.

-15-
<PAGE>

____________________________(SEAL)
D. Blair Harrold

____________________________(SEAL)
Allan L. M. Barker

OPTOMETRIC EYE CARE CENTER, P.A.,
a North Carolina corporation

By:______________________________
D. Blair Harrold, President

AGREED:

- ------------------------------
Nigle B. Barrow, Jr.
150 Fayetteville Street Mall
Suite 1700
Raleigh, NC 27601
Telephone: (919) 834-2116
Attorneys for D. Blair Harrold, O.D.,
Allan L. M. Barker, O.D., and Optometric Eye Care Center, P.A.

MAUPIN TAYLOR & ELLIS, P.A.

By:____________________________
D. Royce Powell

By:____________________________
James E. Gates
3200 Beechleaf Court, Suite 500
Raleigh, NC 27604
Telephone: (919) 981-4000
Attorneys for D. Blair Harrold, O.D.,
Allan L. M. Barker, O.D., and Optometric Eye Care Center, P.A.

-16-

<PAGE>

EXHIBIT 21

SUBSIDIARIES

1. Saratoga Resources, Inc., a Texas corporation.
2. Lobo Operating, Inc., a Texas corporation.
3. Lobo Energy, Inc., a Texas corporation.
4. Saratoga Holdings, I, Inc., a Texas corporation.
5. OptiCare Shellco Merger Corporation, a Delaware corporation.
6. PrimeVision Shellco Merger Corporation, a Delaware corporation.

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 31, 1999, in the Registration Statement (Form S-4
No. 33- ) and related Prospectus of Saratoga Resources, Inc. for the
Registration of 8,800,000 shares of its common stock.

/s/ ERNST & YOUNG LLP

Austin, Texas
May 11, 1999

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the use in this Registration Statement of our report dated
January 15, 1998 relating to the financial statements of Saratoga Resources,
Inc. for the year ended December 31, 1997 and to the reference to our Firm
under the caption, "Experts", in this Registration Statement and related
Prospectus.

HEIN & ASSOCIATES LLP

Houston, Texas
May 13, 1999

<PAGE>

EXHIBIT 23.3

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Saratoga Resources,
Inc. on Form S-4 of our report relating to the combined financial statements of
OptiCare Eye Health Centers, Inc. and Affiliate dated March 26, 1999, appearing
in the Proxy Statement/Prospectus, which is part of this Registration Statement
and to the reference to us under the heading "Experts" in such Proxy
Statement/Prospectus.

Deloitte & Touche LLP
Hartford, Connecticut

May 14, 1999

<PAGE>

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated May 7, 1999, with respect to the financial statements
of PrimeVision Health, Inc. and subsidiaries included in the Registration
Statement Form S-4 and related Proxy Statement/Prospectus of Saratoga
Resources, Inc. for the registration of 8,800,000 shares of its common stock.

/s/ Ernst & Young LLP

Raleigh, North Carolina
May 14, 1999

<PAGE>

EXHIBIT 23.6

CONSENT OF DIRECTOR NOMINEE

I hereby consent to be named in the Registration Statement on Form S-4 of
Saratoga Resources, Inc. as a person who is about to become a director of
Saratoga Resources, Inc. if the mergers described therein are consummated.

/s/ Dean J. Yimoyines, M.D.
-------------------------------------
Name: Dean J. Yimoyines, M.D.

Dated: May 12, 1999

<PAGE>

EXHIBIT 23.7

CONSENT OF DIRECTOR NOMINEE

/s/ Steven L. Ditman
-------------------------------------
Name: Steven L. Ditman

Dated: May 13, 1999

<PAGE>

EXHIBIT 23.8

CONSENT OF DIRECTOR NOMINEE

/s/ Martin E. Franklin
-------------------------------------
Name: Martin E. Franklin

Dated: May 12, 1999

<PAGE>

EXHIBIT 23.9

CONSENT OF DIRECTOR NOMINEE

/s/ Allan L.M. Barker, O.D.
-------------------------------------
Name: Allan L.M. Barker, O.D.

Dated as of the 12 of May, 1999

<PAGE>

EXHIBIT 23.10

CONSENT OF DIRECTOR NOMINEE

Dated: May 12, 1999

/s/ John F. Croweak
-------------------------------------
Name: John F. Croweak