LOAN AND OPTION AGREEMENT

                                    LOAN AND
                                OPTION AGREEMENT

         THIS  LOAN  AND  OPTION  AGREEMENT,  dated  as of 31  July,  2009  (the
"Agreement"),  is by and among Lazarus Energy Holdings,  LLC, a Delaware limited
liability  company  ("LEH") , Lazarus  Louisiana  Refinery  II,  LLC, a Delaware
limited liability company,  ("LLRII"),  Lazarus Energy,  LLC, a Delaware limited
liability  company  ("LE"),  Lazarus  Environmental,  LLC,  a  Delaware  limited
liability  company  ("LEN") (LE,  LEH,  LLRII,  LEN are  sometimes  collectively
referred to herein as the "Lazarus Entities") and Blue Dolphin Energy Company, a
Delaware corporation ("Blue Dolphin"). The Lazarus Entities and Blue Dolphin are
sometimes referred to herein as the "Parties").

                                    RECITALS

         WHEREAS,  it has  been  proposed  that (i) Blue  Dolphin  loan  certain
amounts to the Lazarus Entities,  (ii) the Parties enter into certain agreements
pursuant to which Blue Dolphin may in its discretion loan additional  amounts to
the Lazarus  Entities,  and (iii) the Lazarus  Entities  grant an option to Blue
Dolphin to require the closing of a transaction pursuant to which certain assets
of the Lazarus  Entities  will be  transferred  to Blue  Dolphin in exchange for
shares of the stock of Blue Dolphin;

         WHEREAS, the Board of Directors of Blue Dolphin and the managers of the
Lazarus Entity have determined  that the  transactions  contemplated  hereby are
consistent  with, and in  furtherance  of, the best interests of the parties and
their respective stockholders and members;

         WHEREAS,   the  parties   desire  to  make   certain   representations,
warranties,  covenants and agreements in connection  with this  transaction  and
also to prescribe various conditions to various aspects of the transactions; and

         WHERAS,  in  anticipation  of the  execution  of this  Agreement,  Blue
Dolphin has prior to the date hereof loaned to LLRII $300,000;

         NOW,   THEREFORE,   in   consideration   of  the   premises   and   the
representations,  warranties,  covenants and agreements  contained  herein,  the
parties  hereto,  intending  to be  legally  bound,  enter  into  the  following
agreements.

                                    ARTICLE I
                            CONTRUCTION OF AGREEMENT

         Section 1.1. Definitions. The definitions of certain terms used in this
Agreement are set forth in Section 10.1.



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         Section 1.2. Interpretative Provisions.

                  (a) The words "hereof,"  "herein" and "hereunder" and words of
similar  impact when used in this  Agreement  refer to this Agreement as a whole
and not to any particular  provision of this  Agreement,  and article,  section,
schedule  and  exhibit   references  are  to  this  Agreement  unless  otherwise
specified.

                  (b) The meaning of defined  terms shall be equally  applicable
to the singular and plural forms of the defined terms.

                  (c) The terms  "include" and  "including" are not limiting and
mean "including without limitation."

                  (d) No consideration shall be given to the fact or presumption
that one party had a greater or lesser hand in drafting the Agreement.

                                   ARTICLE II
                                    THE LOANS

         Section  2.1.  The  Bridge  Loan.   At  the  Bridge  Loan  Closing  (as
hereinafter  defined),  upon the  satisfaction  of the  conditions  set forth in
Section 2.2, Blue Dolphin will loan  $1,700,000  to LLRII,  resulting in a total
loan of $2,000,000  from Blue Dolphin to LLRII pursuant to the terms hereof (the
"Bridge Loan"). The transaction  described in the first sentence of this Section
2.1 is referred to herein as the "Bridge Loan Transaction."

         Section  2.2.  Conditions  to the Bridge  Loan.  Blue Dolphin will loan
$1,700,000  to LLRII at the Bridge  Loan  Closing  only if all of the  following
conditions are satisfied.  The Lazarus Entities will cause such conditions to be
satisfied prior to the Bridge Loan Closing.

                  (a) The Lazarus  Entities shall have executed and delivered to
Blue Dolphin a promissory  note in the form attached  hereto as Exhibit  2.2(a),
jointly  and  severally  payable by the  Lazarus  Entities  to the order of Blue
Dolphin in the original principal amount of $2,000,000 (the "Note");

                  (b) LLRII shall have  executed and delivered to Blue Dolphin a
mortgage in the form attached  hereto as Exhibit 2.2(b) (the "LLRII  Mortgage"),
granting to Blue  Dolphin a lien second in priority  only to the Notre Dame Lien
and pari passu with the Rio Vista Lien  against the real  property  described as
Parcel 1 in the attached  LLRII Mortgage (the  "Mermentau  Property") and a lien
first  in  priority  against  the real  property  described  as  Parcel 2 in the
attached LLRII Mortgage (the "Disposal Well Property") securing the repayment of
the Bridge Loan;

                  (c) LLRII shall have  executed and delivered to Blue Dolphin a
commercial security agreement in the form attached hereto as Exhibit 2.2(c) (the
"LLRII Security  Agreement")  granting to Blue Dolphin a lien second in priority
only to the Notre Dame Lien and pari passu with the Rio Vista Lien  against  the
personal  property  described  on  Exhibit  A to  the  attached  LLRII  Security


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Agreement  (the  "Mermentau  Personal  Property")  and a lien first in  priority
against  the  personal  property  associated  with the  Disposal  Well  Property
described in the attached LLRII Security  Agreement (the "Disposal Well Personal
Property") securing the repayment of the Bridge Loan;

                  (d) None of the Lazarus  Entities  shall have been  subject to
any Material Adverse Effect since June 1, 2009;

                  (f) No preliminary  or permanent  injunction or other order or
decree by any federal or state court which prevents the  consummation  of any of
the  Transactions  shall  have been  issued  and  remain in effect  (each  party
agreeing to use its  reasonable  efforts to have any such  injunction,  order or
decree lifted);

                  (g) No action shall have been taken,  and no statute,  rule or
regulation  shall  have been  enacted,  by any state or  federal  government  or
governmental  agency  which  would  prevent  the  consummation  of  any  of  the
Transactions or make the consummation of the Transactions illegal;

                  (h) The Lazarus  Entities shall have performed in all material
respects  (or in all  respects  in the  case  of any  agreement  containing  any
materiality   qualification)  their  respective  agreements  contained  in  this
Agreement  required to be performed on or prior to the Bridge Loan Closing Date;
and

                  (i) The  representations  and  warranties of Lazarus  Entities
contained in this Agreement  shall be true and correct in all material  respects
(or in all respects in the case of any representation or warranty containing any
materiality  qualification)  on  and as of the  date  made  and on and as of the
Bridge Loan Closing as if made at and as of such date,  and Blue  Dolphin  shall
have received a certificate  executed on behalf of LEH by the Director of LEH to
that effect.

         Section 2.3. Closing.  The closing of the Bridge Loan (the "Bridge Loan
Closing") shall take place at the offices of counsel to Blue Dolphin in Houston,
Texas on July 31st,  2009 or if later on the third  business day  following  the
date on which the last of the  conditions  set forth in Section 2.2 is fulfilled
or waived,  or at such other time and place as LEH and Blue Dolphin shall agree.
At the Bridge Loan  Closing,  each of the parties  hereto will take  actions and
execute  such  documents  and  instruments  as may  be  reasonably  required  to
consummate the Bridge Loan.

         Section  2.4.  The  Regional  Acquisition.  LEH must keep Blue  Dolphin
apprised  of the  status  of any  negotiations  of any of the  Lazarus  Entities
relating to the proposed  acquisition by one or more of the Lazarus  Entities of
the assets described on Exhibit 2.4-1 (the "Regional  Acquisition") at all times
prior to the payment of the Bridge Loan, and shall in particular, but not by way
of  limitation,  provide  Blue  Dolphin  with copies of all drafts of  documents
relating to the Regional  Acquisition as such drafts are provided from one party
to the other,  and shall provide to Blue Dolphin  prompt and complete  access to
the  due  diligence  materials  relating  to the  Regional  Acquisition  as such
materials become available to LEH.

         Section  2.5.  Use of  Proceeds.  The  Lazarus  Entities  shall use the
proceeds of the Bridge Loan solely for the following purposes:


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                  (a) Making  expenditures which are permitted to be capitalized
under GAAP to renovate  the  Mermentau  Assets,  the Disposal  Well Assets,  the
assets  described  on Exhibit  1.6(a) (the  "Nixon  Assets"),  and the  Regional
Assets;

                  (b) Partially funding the payment of the purchase price or any
deposit thereof payable pursuant to the Regional Acquisition; and

                  (c) The  payment  of the fees  provided  for  pursuant  to the
Consulting Agreement (as hereinafter defined).

                                   ARTICLE III
                                     OPTION

         Section 3.1. Option.  Each Lazarus Entity hereby grants to Blue Dolphin
the option (the  "Option"),  exercisable  by written notice from Blue Dolphin to
LEH at any time  prior to the  latter of the date of the  payment in full of the
Bridge Loan or March 1, 2010, to require that the Parties  promptly enter into a
purchase  and  sale  agreement  substantially  in the form of  Exhibit  2.1 (the
"Purchase  Agreement"),  and thereafter  close the transaction  described in the
Purchase Agreement pursuant to its terms, provided, however, that an exercise of
the Option shall not be considered  effective if LEH gives Blue Dolphin  written
notice that a Material  Adverse Effect is then  applicable to Blue Dolphin until
Blue Dolphin has remedied that Material  Adverse  Effect.  The Lazarus  Entities
agree that within  thirty (30) days of the  exercise of the Option,  the Lazarus
Entities  shall  obtain and  provide to Blue  Dolphin  written  evidence  of any
consent  agreed to be granted by any third party to waive any term or  condition
set forth in any  note,  bond,  mortgage,  indenture,  deed of  trust,  license,
franchise, permit, concession,  contract, lease or other instrument,  obligation
or agreement of any kind to which any Lazarus  Entity is a party or by which any
Lazarus Entity or any of their  respective  properties or assets may be bound or
affected that is violated by the exercise of the Option and the  consummation of
any  transactions  contemplated  in the Purchase  Agreement,  including  but not
limited to the 1st International Loan Agreement Blue Dolphin agrees that it will
not  exercise  the Option if the Closing  will cause a violation of any material
term or condition  set forth in any note,  bond,  mortgage,  indenture,  deed of
trust,  license,  franchise,  permit,  concession,   contract,  lease  or  other
instrument,  obligation or agreement of any kind to which Blue Dolphin or any of
its  subsidiaries is a party or by which any of them or any of their  respective
properties  or assets may be bound or affected.  The Parties  agree to negotiate
the final  Purchase  Agreement in good faith based on the terms set forth in the
attached Purchase Agreement, recognizing that certain factual matters may change
subsequent to the date hereof in  compliance  with this  Agreement.  The Parties
will in addition determine pursuant to these good faith negotiations whether the
Option transaction should be structured as an acquisition of assets, as provided
in the attached  Purchase  Agreement,  or as an acquisition of the membership or
other equity interests of the Lazarus Entities which own the respective  Subject
Assets (as hereinafter  defined)  primarily  considering the practicality of the
transfer of the Subject Assets,  and  secondarily  considering the tax effect on
all parties and other reasonable factors. At any time, Blue Dolphin may elect to
terminate the Option by written notice to LEH.


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                                   ARTICLE IV
                        REPRESENTATIONS AND WARRANTIES OF
                                  BLUE DOLPHIN

         Blue  Dolphin  represents  and  warrants  to the  Lazarus  Entities  as
follows:

         Section  4.1.  Organization.   Blue  Dolphin  is  a  corporation,  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware and has the requisite  corporate  power and authority to own, lease and
operate  its assets and  properties  and to carry on its  business  as it is now
being conducted.

         Section  4.2.  Capitalization.  As of June  30,  2009,  the  authorized
capital stock of Blue Dolphin  consisted of  100,000,000  shares of Blue Dolphin
Common Stock and 2,500,000  shares of preferred  stock, par value $.10 per share
("Blue Dolphin Preferred Stock").  As of June 30, 2009, (i) 11,785,299 shares of
Blue Dolphin Common Stock were issued and outstanding, all of which were validly
issued  and  are  fully  paid,  duly  authorized,  non-assessable  and  free  of
preemptive rights, (ii) 0 shares of Blue Dolphin Preferred Stock were issued and
outstanding and (iii) 0 shares of Blue Dolphin Common Stock and 0 shares of Blue
Dolphin Preferred Stock were held in the treasury of Blue Dolphin.

         Section 4.3.  Authority; Non-Contravention; Approvals.

                  (a) Blue  Dolphin has full  corporate  power and  authority to
execute  and  deliver  this   Agreement  and  to  consummate   the  Bridge  Loan
Transaction.  This Agreement has been approved by the Board of Directors of Blue
Dolphin,  and no other  corporate  proceedings on the part of Blue Dolphin,  are
necessary  to authorize  the  execution  and  delivery of this  Agreement or the
consummation by Blue Dolphin of the Bridge Loan Transaction.  This Agreement has
been  duly  executed  and  delivered  by Blue  Dolphin,  and,  assuming  the due
authorization,  execution  and  delivery  hereof  by  Carroll  and  the  Lazarus
Entities,  constitutes  a valid and legally  binding  agreement  of Blue Dolphin
enforceable   against  it  in  accordance  with  its  terms,  except  that  such
enforcement  may be  subject  to  (i)  bankruptcy,  insolvency,  reorganization,
moratorium  or other  similar  laws  affecting  or  relating to  enforcement  of
creditors' rights generally and (ii) general equitable principles.

                  (b) The  execution  and  delivery  of this  Agreement  by Blue
Dolphin and the  consummation by Blue Dolphin of the Bridge Loan  Transaction do
not and will  not  violate  or  result  in a  breach  of any  provision  of,  or
constitute a default (or an event  which,  with notice or lapse of time or both,
would  constitute  a  default)  under,  or  result  in the  termination  of,  or
accelerate the  performance  required by, or result in a right of termination or
acceleration  under, or result in the creation of any lien,  security  interest,
charge or encumbrance upon any of the properties or assets of Blue Dolphin under
any of the terms, conditions or provisions of (i) the charters or bylaws of Blue
Dolphin, (ii) any statute, law, ordinance,  rule, regulation,  judgment, decree,
order,  injunction,  writ,  permit  or  license  of any  court  or  governmental
authority  applicable to Blue Dolphin or any of their  properties or assets,  or
(iii) any note, bond, mortgage,  indenture,  deed of trust, license,  franchise,
permit, concession, contract, lease or other instrument, obligation or agreement
of any kind to which Blue Dolphin is now a party or by which Blue Dolphin or any
of their respective properties or assets may be bound or affected.


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<PAGE>

         Section 4.4.  Reports and Financial Statements.

                  (a) Blue  Dolphin has filed with the  Securities  and Exchange
Commission  (the "SEC") all material  forms,  statements,  reports and documents
(including all exhibits,  amendments  and  supplements  thereto)  required to be
filed by it under the Securities Act of 1933, as amended (the "Securities Act"),
the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act") and the
respective  rules  and  regulations  thereunder,  all of which  complied  in all
material  respects with all applicable  requirements  of the appropriate act and
the rules and regulations thereunder.

                  (b) Blue Dolphin has previously made available or delivered to
LEH copies of all reports,  including annual,  quarterly and current reports, or
registration  statements  filed by Blue Dolphin with the SEC  including  but not
limited to the Form 10-KSB with respect to the period  ending  December 31, 2007
and Form 10-Q for the period ending March 31, 2009 ("SEC Reports"
                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES
                             OF THE LAZARUS ENTITIES

         Each Lazarus Entity jointly and severally represent and warrant to Blue
Dolphin that:

         Section 5.1.  Organization and Qualification.  Each Lazarus Entity is a
limited liability company duly organized,  validly existing and in good standing
under the laws of the State of Delaware and has the  requisite  corporate  power
and authority to own,  lease and operate its assets and  properties and to carry
on its  business  as it is now  being  conducted.  Each  Lazarus  Entity is duly
qualified  to do  business as a foreign  entity and is in good  standing in each
jurisdiction  in which the properties  owned,  leased,  or operated by it or the
nature of the business conducted by it makes such qualification necessary. True,
accurate and  complete  copies of the  organizational  documents of each Lazarus
Entity,  as amended,  including all amendments  thereto,  have  heretofore  been
delivered to Blue Dolphin.

         Section 5.2.   Authority; Non-Contravention; Approvals.

                  (a) Each Lazarus  Entity has full company  power and authority
to execute and deliver this Agreement and to consummate the  Transactions.  This
Agreement has been approved by the managers of each Lazarus Entity, and no other
company  proceedings  on the  part  of any  Lazarus  Entity,  are  necessary  to
authorize the execution and delivery of this  Agreement or the  consummation  by
the Lazarus  Entities of any of the  Transactions.  This Agreement has been duly
executed  and  delivered  by  each  Lazarus  Entity,   and,   assuming  the  due


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authorization,  execution  and delivery  hereof by Blue  Dolphin,  constitutes a
valid and legally binding agreement of each Lazarus Entity  enforceable  against
each Lazarus Entity in accordance with its terms,  except that such  enforcement
may be subject to (i)  bankruptcy,  insolvency,  reorganization,  moratorium  or
other similar laws  affecting or relating to  enforcement  of creditors'  rights
generally and (ii) general equitable principles.

                  (b)  Except  as set  forth  in the  Disclosure  Schedule,  the
execution  and  delivery  of this  Agreement  by  each  Lazarus  Entity  and the
consummation  by each  Lazarus  Entity of the  Transactions  do not and will not
violate or result in a breach of any  provision  of, or constitute a default (or
an event  which,  with  notice  or lapse of time or  both,  would  constitute  a
default)  under,  or result in the termination of, or accelerate the performance
required  by, or result in a right of  termination  or  acceleration  under,  or
result in the creation of any lien,  security  interest,  charge or  encumbrance
upon any of the  properties  or assets of any  Lazarus  Entity  under any of the
terms,  conditions  or  provisions  of (i) the  organizational  documents of any
Lazarus Entity, (ii) any statute, law, ordinance,  rule,  regulation,  judgment,
decree, order, injunction,  writ, permit or license of any court or governmental
authority applicable to any Lazarus Entity or any of their respective properties
or assets, or (iii) any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession,  Contract, lease or other instrument,  obligation
or agreement of any kind to which any Lazarus  Entity is now a party or by which
any Lazarus Entity or any of their respective  properties or assets may be bound
or affected.

                  (c) No declaration, filing or registration with, or notice to,
or authorization, consent or approval of, any governmental or regulatory body or
authority is necessary for the  execution and delivery of this  Agreement by any
Lazarus Entity or the consummation by any Lazarus Entity of the Transactions.

         Section 5.3. Reports and Financial  Statements.  LEH has furnished Blue
Dolphin with audited and  consolidated  balance  sheets,  income  statements and
statements of cash flows for each Lazarus  Entity as of and for the period ended
December 31, 2006 and December 31, 2007, and unaudited and consolidated  balance
sheet and income  statement for the period ended December 31, 2008 and as of and
for the 6th month  period  ending June 30, 2009  (collectively,  the  "Financial
Statements").  The Financial  Statements  have been prepared in accordance  with
GAAP and fairly present the financial condition and result of operations of each
Lazarus Entity.

         Section 5.4. Absence of Undisclosed Liabilities. Except as disclosed in
the Disclosure  Schedule,  no Lazarus Entity is subject to  Liabilities,  except
Liabilities which are provided for in the Financial Statements.

         Section 5.5. Absence of Certain Changes or Events.  Except as disclosed
in Disclosure Schedule,  since July 31, 2006 the business of each Lazarus Entity
has been  conducted  in the  ordinary  course of business  consistent  with past
practices, and there has not been any event, occurrence, development or state of
circumstances  or facts which has had, or could  reasonably  be  anticipated  to
have,  individually or in the aggregate,  a Material Adverse Effect with respect
to any Lazarus Entity.


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         Section 5.6.  Title to and  Condition of Assets.  The Lazarus  Entities
have good and  indefeasible  title to the  Mermentau  Assets,  the Disposal Well
Assets,  and the Nixon Assets  (collectively,  the "Subject  Assets"),  free and
clear of any Liens,  except  for  Permitted  Liens.  The  Subject  Assets are in
adequate  condition for their intended use, after the  performance of reasonable
and customary start up and refurbishment procedures.  Such assets constitute all
of the  properties  necessary for the  respective  Lazarus Entity to conduct its
business as now conducted.

         Section 5.7. Employees.  The only Lazarus Entity which has employees is
LEH.

         Section  5.8.  Litigation.  There are no  claims,  suits,  actions,  or
proceedings  pending or, to the  Knowledge  of each Lazarus  Entity,  threatened
against or  relating  to any  Lazarus  Entity,  before  any court,  governmental
department, commission, agency, instrumentality or authority, or any arbitrator.
To the knowledge of each Lazarus  Entity,  there are no state of facts,  events,
conditions,  or occurrences which would properly  constitute  grounds for or the
basis of any material claim,  suit, action, or proceeding against or relating to
any Lazarus Entity.  Except as set forth in the Disclosure Schedule,  no Lazarus
Entity is  subject to any  judgment,  decree,  injunction,  rule or order of any
court,   governmental  department,   commission,   agency,   instrumentality  or
authority, or any arbitrator.

         Section 5.9. No Violation of Law. No Lazarus  Entity is in violation of
and no Lazarus  Entity has been given notice or been charged with any  violation
of, any law,  statute,  order,  rule,  regulation,  ordinance or judgment of any
governmental  or  regulatory  body or  authority.  Except  as  disclosed  in the
Disclosure Schedule, as of the date of this Agreement,  to the Knowledge of each
Lazarus Entity,  no  investigation  or review by any  governmental or regulatory
body or  authority  is  pending  or  threatened,  nor has  any  governmental  or
regulatory  body or authority  indicated  an intention to conduct the same.  The
Lazarus Entities have all permits, licenses, franchises,  variances, exemptions,
orders and other governmental  authorizations,  consents and approvals necessary
to  conduct  their  businesses  as  presently   conducted   (collectively,   the
"Permits"). No Lazarus Entity is in violation of the terms of any Permits.

         Section 5.10. Insurance Policies. No Lazarus Entity has received notice
from any  current  insurance  carrier of the  intention  of such  carrier (a) to
discontinue any material  insurance  coverage afforded to the Lazarus Entity; or
(b) to  materially  increase the premium costs of such  insurance.  The types of
insurance policies  maintained by the Lazarus Entities and the coverage afforded
by such policies with respect to the  operations of each Lazarus  Entity are, in
the opinion of the Lazarus  Entities,  reasonable  in light of the nature of the
businesses conducted and the risks associated with such businesses.

         Section  5.11.  Taxes.  All returns  and  reports,  including,  without
limitation,  information and  withholding  returns and reports and any schedules
and  attachments  thereto  or any  amendments  of any  of  the  foregoing  ("Tax
Returns"),  of or  relating  to any Taxes,  that are  required to be filed on or
before the date hereof by or with  respect to any Lazarus  Entity have been duly
and timely filed. All such Tax Returns were correct and complete in all material
respects  and all the  Taxes,  including  interest  and  penalties,  owed by any
Lazarus  Entity have been timely  paid.  There are no pending Tax audits by U.S.


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tax authorities  with respect to Tax Returns of any Lazarus Entity.  The Lazarus
Entities  have made all deposits  (including  estimated tax payments for taxable
years for which the  federal  income  tax return is not yet due)  required  with
respect to Taxes.

         Section 5.12.  Environmental Matters.

                  (a) Except as set forth in the Disclosure Schedule:

                    (i) no notice,  demand,  request for information,  citation,
summons  or order  hasbeen  received  by, no  complaint  has been  served on, no
penalty has been assessed against,  and no investigation,  action,  claim, suit,
proceeding or review is pending or, to the Knowledge of each Lazarus Entity,  is
threatened by any governmental entity or other person against any Lazarus Entity
or any  predecessor  of any  Lazarus  Entity,  relating to or arising out of any
Environmental Law (as defined below);

                    (ii)  Each  Lazarus  Entity  is and  has  been  in  material
compliance with all  Environmental  Laws and  Environmental  Permits (as defined
below),  and, to the Knowledge of each Lazarus  Entity,  any  predecessor of any
Lazarus  Entity  was in  material  compliance  with all  Environmental  Laws and
Environmental Permits; or

                    (iii) No Lazarus  Entity has,  and to the  Knowledge of each
Lazarus  Entity,  no predecessor of any Lazarus  Entity,  has,  entered into any
obligation,   Liability,  order,  settlement,  judgment,  injunction  or  decree
involving  uncompleted,  outstanding or unresolved  requirements  relating to or
arising under  Environmental  Law and to the  Knowledge of each Lazarus  Entity,
there are no facts,  conditions,  situations or set of circumstances which could
reasonably  be  expected  to result in or be the basis for any such  obligation,
Liability, order, settlement, judgment, injunction or decree.

                  (b) For purposes of this Agreement,  (i) "Environmental  Laws"
means any and all laws,  statutes,  ordinances,  rules,  regulations,  orders or
determinations of any Governmental  Authority (as defined below) relating to the
protection  of the&n