EXHIBIT 10.3


                       SETTLEMENT AGREEMENT AND RELEASES

     This Settlement Agreement and Release (the "Agreement") is made and entered
into as of December 31, 1997 by and among Artra Group Incorporated  ("Artra"), a
corporation organized under the laws of the State of Pennsylvania,  Peter Harvey
and John Harvey,  on the one hand, and Salomon  Brothers  Holding Company Inc, a
corporation  organized  under the laws of the State of Delaware,  and any of its
successors  (collectively  "SBHC"),  Salomon Brothers Inc ("SBI"), a corporation
organized under the laws of the State of Delaware (along with SBHC,  "Salomon"),
D.P. Kelly & Associates,  L.P. ("DPK"), a Delaware Limited Partnership,  Charles
K. Bobrinskoy,  Donald P. Kelly,  James L. Massey,  William Rifkin  (erroneously
sued in the actions defined below as the "Original Action", the "Federal Action"
and  the  "Elghanian   Action"  as  William   Rifkind),   Michael  J.  Zimmerman
(collectively without Salomon and DPK, the "Individual Defendants"),  Envirodyne
Industries,  Inc.,  a  corporation  organized  under  the  laws of the  State of
Delaware,  and any of its predecessors  ("Envirodyne"),  and Emerald Acquisition
Corporation ("Emerald"),  a corporation organized under the laws of the State of
Delaware, on the other hand.

     WHEREAS,  Artra  has  instituted  an  action  in the  Circuit  Court of the
Eighteenth  Judicial  District,  Du  Page  County,  Wheaton,  Illinois,  against
Salomon, DPK and the Individual Defendants, entitled Artra Group Incorporated v.
Salomon Brothers Holding Company Inc, et al., Index No. 93 L 2198 (the "Original
Action");

     WHEREAS,  the Original Action allegedly was removed by Salomon, DPK and the
Individual  Defendants to the bankruptcy  proceedings of both Emerald,  Case No.
93-B-17632 (the "Emerald  Bankruptcy") and Envirodyne,  Case No. 93-B-00319 (the
"Envirodyne Bankruptcy"), in the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division (the "Bankruptcy Court");

     WHEREAS, certain causes of action were remanded to the Circuit Court of the
Eighteenth  Judicial  District,  Du Page County,  Wheaton,  Illinois (the "State
Action"),  and the remaining  causes of action  remained  before the  Bankruptcy
Court in both the  Emerald  Bankruptcy,  as  Adversary  No.  93 A 01616  and the
Envirodyne  Bankruptcy,  as Adversary No. 93 A 01617,  each entitled Artra Group
Incorporated v. Salomon  Brothers  Holding  Company,  Inc., et al. (the "Federal
Action");

     WHEREAS,  the Federal Action was dismissed by the Bankruptcy  Court,  which
dismissal  was  affirmed by the United  States  District  Court for the Northern
District  of  Illinois,  Eastern  Division;

     WHEREAS,  Artra has  appealed the  dismissal  of the Federal  Action to the
United  States  Court of Appeals  for the  Seventh  Circuit,  No.  96-3997  (the
"Appeal"), which appeal is currently pending;

     WHEREAS,  the State Action is currently  pending against  Salomon,  Charles
Bobrinskoy  and Michael  Zimmerman,  and has been  dismissed  as against DPK and
Donald P. Kelly;

     WHEREAS,  Salomon,  DPK and  the  Individual  Defendants  have  denied  any
liability  to Artra with  respect to the causes of action  asserted in the State
Action and in the Federal Action;

     WHEREAS,  Artra  commenced an action related to certain  pay-in-kind  notes
issued  by  Emerald  in favor of Artra in the  Circuit  Court of the  Eighteenth
Judicial District, Du Page County, Wheaton,  Illinois, against Emerald, Case No.
93 L 0812 (the "Bond Action");

     WHEREAS,  judgment was entered in favor of Artra and against Emerald in the
amount of $38,906,434.02 in the Bond Action;

     WHEREAS,  Emerald  has  appealed  the  judgment  in the Bond  Action to the
Appellate Court of Illinois,  Second District, which appeal is currently pending
and has been stayed by the Emerald Bankruptcy;

<PAGE>


    WHEREAS,  all of the parties  hereto,  with the exception of Envirodyne and
Emerald,  have had claims  asserted  against them in an action  commenced in the
Supreme Court of the State of New York for the County of New York,  Elghanian v.
Harvey, et al., Index No. 103826/95 (the "Elghanian  Action"),  which action has
been dismissed and is being appealed;

     WHEREAS,  the  parties  hereto  believe  that the  claims  asserted  in the
Elghanian Action are without merit;

     WHEREAS,  the parties hereto desire to settle the differences  between them
as set forth herein;

     NOW,  THEREFORE,  in consideration of the covenants and promises  contained
herein below, the parties hereto have agreed as follows:

     1. Upon execution of the  Agreement,  Salomon shall pay to Artra the sum of
Eleven  ($11,000,000)  Dollars.  The payment  shall be made by wire  transfer of
$9,761,379.07 to the account of Artra Group Incorporated, First National Bank of
Chicago, 400 Central Avenue,  Northfield,  IL 60093, ABA No. 071000013,  Account
No. 1115001120773,  Attn: Ms. Suad Lubbat (847/441-1363) and delivery to Moses &
Singer, 1301 Avenue of the Americas,  New York, New York 10019, of a check drawn
on a Salomon  account  or the  account of a Salomon  affiliate  in the amount of
$1,238,620.93 payable to Moses & Singer LLP.

     2. Artra represents that it does not have any complaints,  suits,  actions,
charges,  claims,  causes,  appeals and/or proceedings presently pending against
Salomon, DPK, the Individual  Defendants,  Envirodyne and/or Emerald, other than
the State Action, the Federal Action,  the Appeal,  Emerald's appeal of the Bond
Action and any proofs of claim filed in the Emerald Bankruptcy.

     3.  Concurrently  with the receipt of the payment provided for in paragraph
1, Artra shall execute and deliver to Salomon withdrawals or dismissals,  as the
case may be, with prejudice, of the State Action and the Appeal.  Thereafter, at
Salomon's  request  Artra shall take such  additional  steps as are necessary to
effectuate the withdrawals or dismissals,  with prejudice,  of the State Action,
the Federal Action and the Appeal.

     4.  Concurrently  with  Emerald's  execution and delivery of the Agreement,
duly approved by the Bankruptcy Court, to Artra,  Artra shall deliver to Emerald
an executed  satisfaction  of judgment to be entered in the Circuit Court of the
Eighteenth Judicial District, Du Page County, Wheaton, Illinois for the judgment
obtained in the Bond Action,  as well as take all steps necessary to dismiss and
withdraw,  with  prejudice,  any and all  proofs of claim  filed by Artra in the
Emerald  Bankruptcy  and to waive any right to any  distribution  in the Emerald
Bankruptcy.

     5. Concurrently  with Artra's execution and delivery of the Agreement,  DPK
shall  execute and deliver to Artra a withdrawal  of its motion for costs in the
State  Action.  Thereafter,  at Artra's  request DPK shall take such  additional
steps as are necessary to effectuate  the  withdrawal of its motion for costs in
the State Action.

     6. Artra, for itself and its successors and assigns,  irrevocably  releases
and  forever  discharges  SBHC,  SBI,  Travelers  Group  Inc.  ("Travelers"),  a
corporation organized under the laws of the State of Delaware,  DPK, Emerald and
each of the Individual Defendants,  and each of their predecessors,  successors,
assigns, present and former officers,  directors,  employees, agents, attorneys,
representatives,   affiliates,   parent   corporations,   direct  and   indirect
subsidiaries,  heirs,  executors  and  administrators,  from any and all claims,
actions, causes of action, debts, damages,  expenses, losses, costs, grievances,
indemnity claims, contribution claims, subrogation claims and liabilities of any
kind or any nature  whatsoever,  whether actual or potential,  known or unknown,
suspected or  unsuspected,  direct or indirect,  fixed or  contingent,  that may
exist in law or in equity, which Artra may have or claim to have arising from or
in any way  connected  with (i) the claims  asserted  in the State  Action,  the
Federal  Action,  the  Elghanian  Action or the Bond Action,  (ii) the leveraged
buyout of Envirodyne in 1989, (iii) Envirodyne, (iv) Emerald, (v) the Envirodyne
Bankruptcy,  or (vi) the Emerald Bankruptcy,  including, but not limited to, all
causes of action  actually  asserted  or which  could have been  asserted in the
Emerald  Bankruptcy,  the Envirodyne  Bankruptcy,  the State Action, the Federal
Action, the Elghanian Action or the Bond Action.


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<PAGE>


     7. Artra, for itself and its successors and assigns,  irrevocably  releases
and forever  discharges  Envirodyne,  and each of its predecessors,  successors,
assigns, present and former officers,  directors,  employees, agents, attorneys,
representatives,   affiliates,   parent   corporations,   direct  and   indirect
subsidiaries,  heirs,  executors  and  administrators,  from any and all claims,
actions, causes of action, debts, damages,  expenses, losses, costs, grievances,
indemnity claims, contribution claims, subrogation claims and liabilities of any
kind or any nature  whatsoever,  whether actual or potential,  known or unknown,
suspected or  unsuspected,  direct or indirect,  fixed or  contingent,  that may
exist in law or in equity, which Artra may have or claim to have arising from or
in any way  connected  with (i) the claims  asserted  in the State  Action,  the
Federal  Action,  the  Elghanian  Action or the Bond Action,  (ii) the leveraged
buyout of Envirodyne in 1989, (iii) Envirodyne, (iv) Emerald, (v) the Envirodyne
Bankruptcy,  or (vi) the Emerald Bankruptcy,  including, but not limited to, all
causes of action  actually  asserted  or which  could have been  asserted in the
Emerald  Bankruptcy,  the Envirodyne  Bankruptcy,  the State Action, the Federal
Action, the Elghanian Action or the Bond Action,  except that Artra specifically
reserves  and  does  not  release  or  discharge  any  defenses,  counterclaims,
crossclaims,  claims,  actions,  causes of  action,  debts,  damages,  expenses,
losses, costs, grievances and liabilities of any kind arising in connection with
claims which may be asserted by the PSC  Resources  Site PRP Group,  Envirodyne,
Monsanto Company, Marane Oil Corp or any other third-party, related to a Palmer,
Massachusetts, environmental clean-up site.

     8. SBHC, for itself and its successors  and assigns,  irrevocably  releases
and forever  discharges  Artra,  Peter  Harvey,  John Harvey,  DPK,  Envirodyne,
Emerald  and  Donald  P.  Kelly,  and  each of their  predecessors,  successors,
assigns, present and former officers,  directors,  employees, agents, attorneys,
representatives,   affiliates,   parent   corporations,   direct  and   indirect
subsidiaries,  heirs,  executors  and  administrators,  from any and all claims,
actions, causes of action, debts, damages,  expenses, losses, costs, grievances,
indemnity claims, contribution claims, subrogation claims and liabilities of any
kind or any nature  whatsoever,  whether actual or potential,  known or unknown,
suspected or  unsuspected,  direct or indirect,  fixed or  contingent,  that may
exist in law or in equity,  which SBHC may have or claim to have arising from or
in any way  connected  with (i) the claims  asserted  in the State  Action,  the
Federal  Action,  the  Elghanian  Action or the Bond Action,  (ii) the leveraged
buyout of Envirodyne in 1989, (iii) Envirodyne, (iv) Emerald, (v) the Envirodyne
Bankruptcy,  or (vi) the Emerald Bankruptcy,  including, but not limited to, all
causes of action  actually  asserted  or which  could have been  asserted in the
Emerald  Bankruptcy,  the Envirodyne  Bankruptcy,  the State Action, the Federal
Action, the Elghanian Action or the Bond Action.

     9. SBI, for itself and its successors and assigns, irrevocably releases and
forever discharges Artra, Peter Harvey,  John Harvey, DPK,  Envirodyne,  Emerald
and  Donald  P.  Kelly,  and each of their  predecessors,  successors,  assigns,
present  and  former  officers,   directors,   employees,   agents,   attorneys,
representatives,   affiliates,   parent   corporations,   direct  and   indirect
subsidiaries,  heirs,  executors  and  administrators,  from any and all claims,
actions, causes of action, debts, damages,  expenses, losses, costs, grievances,
indemnity claims, contribution claims, subrogation claims and liabilities of any
kind or any nature  whatsoever,  whether actual or potential,  known or unknown,
suspected or  unsuspected,  direct or indirect,  fixed or  contingent,  that may
exist in law or in equity,  which SBI may have or claim to have  arising from or
in any way  connected  with (i) the claims  asserted  in the State  Action,  the
Federal  Action,  the  Elghanian  Action or the Bond Action,  (ii) the leveraged
buyout of Envirodyne in 1989, (iii) Envirodyne, (iv) Emerald, (v) the Envirodyne
Bankruptcy,  or (vi) the Emerald Bankruptcy,  including, but not limited to, all
causes of action  actually  asserted  or which  could have been  asserted in the
Emerald  Bankruptcy,  the Envirodyne  Bankruptcy,  the State Action, the Federal
Action, the Elghanian Action or the Bond Action.







                                       3


<PAGE>

     10.  Envirodyne,  for itself and its predecessors,  successors and assigns,
irrevocably releases and forever discharges Artra, Peter Harvey and John Harvey,
and  each  of  their  predecessors,  successors,  assigns,  present  and  former
officers, directors, employees, agents, attorneys, representatives,  affiliates,
parent  corporations,  direct and indirect  subsidiaries,  heirs,  executors and
administrators,  from any and all  claims,  actions,  causes of  action,  debts,
damages,  expenses,  losses, costs, grievances,  indemnity claims,  contribution
claims, subrogation claims and liabilities of any kind or any nature whatsoever,
whether actual or potential, known or unknown, suspected or unsuspected,  direct
or  indirect,  fixed or  contingent,  that may exist in law or in equity,  which
Envirodyne  may have or claim to have arising from or in any way connected  with
(i) the claims asserted in the State Action,  the Federal Action,  the Elghanian
Action or the Bond Action,  (ii) the  leveraged  buyout of  Envirodyne  in 1989,
(iii)  Envirodyne,  (iv) Emerald,  (v) the  Envirodyne  Bankruptcy,  or (vi) the
Emerald Bankruptcy, including, but not limited to, all causes of action actually
asserted  or which  could have been  asserted  in the  Emerald  Bankruptcy,  the
Envirodyne  Bankruptcy,  the State  Action,  the Federal  Action,  the Elghanian
Action or the Bond Action, except that Envirodyne specifically reserves and does
not release or  discharge  any  defenses,  counterclaims,  crossclaims,  claims,
actions, causes of action, debts, damages,  expenses,  losses, costs, grievances
and  liabilities  of any kind  arising in  connection  with claims  which may be
asserted by the PSC Resources Site PRP Group,  Artra,  Monsanto Company,  Marane
Oil  Corp  or  any  other  third-party,  related  to  a  Palmer,  Massachusetts,
environmental clean-up site, including any absolute or affirmative defenses that
Envirodyne may have,  including,  but not limited to, Artra's  failure to file a
proof of claim in the Envirodyne Bankruptcy.

     11.  Envirodyne,  for itself and its predecessors,  successors and assigns,
irrevocably  releases and forever discharges SBHC, SBI,  Travelers,  and each of
the  Individual  Defendants,  excluding  Donald  P.  Kelly,  and  each of  their
predecessors,  successors,  assigns,  present  and former  officers,  directors,
employees, agents, attorneys, representatives,  affiliates, parent corporations,
direct and indirect subsidiaries, heirs, executors and administrators,  from any
and all claims,  actions,  causes of action, debts, damages,  expenses,  losses,
costs, grievances, indemnity claims, contribution claims, subrogation claims and
liabilities of any kind or any nature  whatsoever,  whether actual or potential,
known or  unknown,  suspected  or  unsuspected,  direct  or  indirect,  fixed or
contingent,  that may exist in law or in equity,  which  Envirodyne  may have or
claim to have arising from or in any way connected with (i) the claims  asserted
in the State  Action,  the Federal  Action,  the Elghanian  Action,  or the Bond
Action, (ii) the leveraged buyout of Envirodyne in 1989, (iii) Envirodyne,  (iv)
Emerald,  (v)  the  Envirodyne  Bankruptcy,  or  (vi)  the  Emerald  Bankruptcy,
including,  but not limited to, all causes of action actually  asserted or which
could have been asserted in the Emerald Bankruptcy,  the Envirodyne  Bankruptcy,
the State Action, the Federal Action, the Elghanian Action or the Bond Action.

     12.  Emerald,  for  itself  and its  successors  and  assigns,  irrevocably
releases and forever  discharges Artra,  Peter Harvey,  John Harvey,  SBHC, SBI,
Travelers, DPK, Donald P. Kelly and each of the Individual Defendants,  and each
of  their  predecessors,  successors,  assigns,  present  and  former  officers,
directors,  employees, agents, attorneys,  representatives,  affiliates,  parent
corporations,   direct  and  indirect   subsidiaries,   heirs,   executors   and
administrators,  from any and all  claims,  actions,  causes of  action,  debts,
damages,  expenses,  losses, costs, grievances,  indemnity claims,  contribution
claims, subrogation claims and liabilities of any kind or any nature whatsoever,
whether actual or potential, known or unknown, suspected or unsuspected,  direct
or  indirect,  fixed or  contingent,  that may exist in law or in equity,  which
Emerald may have or claim to have arising from or in any way connected  with (i)
the claims  asserted in the State  Action,  the Federal  Action,  the  Elghanian
Action or the Bond Action,  (ii) the  leveraged  buyout of  Envirodyne  in 1989,
(iii)  Envirodyne,  (iv) Emerald,  (v) the  Envirodyne  Bankruptcy,  or (vi) the
Emerald Bankruptcy, including, but not limited to, all causes of action actually
asserted  or which  could have been  asserted  in the  Emerald  Bankruptcy,  the
Envirodyne  Bankruptcy,  the State  Action,  the Federal  Action,  the Elghanian
Action or the Bond Action.

     13.  DPK,  for  itself,  its  partners  and  its  successors  and  assigns,
irrevocably  releases and forever discharges Artra,  Peter Harvey,  John Harvey,
SBHC, SBI, Travelers, Emerald and the Individual Defendants, excluding Donald P.



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<PAGE>

Kelly, and each of their predecessors,  successors,  assigns, present and former
officers, directors, employees, agents, attorneys, representatives,  affiliates,
parent  corporations,  direct and indirect  subsidiaries,  heirs,  executors and
administrators,  from any and all  claims,  actions,  causes of  action,  debts,
damages,  expenses,  losses, costs, grievances,  indemnity claims,  contribution
claims, subrogation claims and liabilities of any kind or any nature whatsoever,
whether actual or potential, known or unknown, suspected or unsuspected,  direct
or indirect, fixed or contingent,  that may exist in law or in equity, which DPK
may have or  claim to have  arising  from or in any way  connected  with (i) the
claims asserted in the State Action, the Federal Action, the Elghanian Action or
the  Bond  Action,  (ii) the  leveraged  buyout  of  Envirodyne  in 1989,  (iii)
Envirodyne,  (iv) Emerald,  (v) the Envirodyne  Bankruptcy,  or (vi) the Emerald
Bankruptcy,  including,  but not  limited  to,  all  causes of  action  actually
asserted  or which  could have been  asserted  in the  Emerald  Bankruptcy,  the
Envirodyne  Bankruptcy,  the State  Action,  the Federal  Action,  the Elghanian
Action or the Bond Action.

     14.  The  Individual  Defendants,  excluding  Donald  P.  Kelly,  each  for
themselves and their heirs, executors,  administrators,  successors and assigns,
irrevocably release and forever discharge Artra, Peter Harvey, John Harvey, DPK,
Donald  P.  Kelly,  Envirodyne  and  Emerald,  and each of  their  predecessors,
successors,  assigns, present and former officers, directors, employees, agents,
attorneys, representatives, affiliates, parent corporations, direct and indirect
subsidiaries,  heirs,  executors  and  administrators,  from any and all claims,
actions, causes of action, debts, damages,  expenses, losses, costs, grievances,
indemnity claims, contribution claims, subrogation claims and liabilities of any
kind or any nature  whatsoever,  whether actual or potential,  known or unknown,
suspected or  unsuspected,  direct or indirect,  fixed or  contingent,  that may
exist in law or in equity,  which the Individual  Defendants,  individually  and
collectively,  may have or claim to have  arising  from or in any way  connected
with (i) the claims  asserted  in the State  Action,  the  Federal  Action,  the
Elghanian Action or the Bond Action,  (ii) the leveraged buyout of Envirodyne in
1989, (iii) Envirodyne, (iv) Emerald, (v) the Envirodyne Bankruptcy, or (vi) the
Emerald Bankruptcy, including, but not limited to, all causes of action actually
asserted  or which  could have been  asserted  in the  Emerald  Bankruptcy,  the
Envirodyne  Bankruptcy,  the State  Action,  the Federal  Action,  the Elghanian
Action or the Bond Action.

     15.  Peter  Harvey and John Harvey,  each for  themselves  and their heirs,
executors,  administrators,  successors  and  assigns,  irrevocably  release and
forever discharge, SBHC, SBI, Travelers, DPK, Emerald and each of the Individual
Defendants,  and each of their predecessors,  successors,  assigns,  present and
former  officers,  directors,  employees,  agents,  attorneys,  representatives,
affiliates,  parent  corporations,  direct  and  indirect  subsidiaries,  heirs,
executors  and  administrators,  from any and all  claims,  actions,  causes  of
action, debts, damages, expenses,  losses, costs, grievances,  indemnity claims,
contribution  claims,  subrogation  claims  and  liabilities  of any kind or any
nature whatsoever,  whether actual or potential,  known or unknown, suspected or
unsuspected,  direct or indirect, fixed or contingent,  that may exist in law or
in equity, which Peter Harvey or John Harvey, individually or collectively,  may
have or claim to have arising from or in any way  connected  with (i) the claims
asserted in the State Action,  the Federal Action,  the Elghanian  Action or the
Bond Action,  (ii) the leveraged buyout of Envirodyne in 1989, (iii) Envirodyne,
(iv) Emerald,  (v) the Envirodyne  Bankruptcy,  or (vi) the Emerald  Bankruptcy,
including,  but not limited to, all causes of action actually  asserted or which
could have been asserted in the Emerald Bankruptcy,  the Envirodyne  Bankruptcy,
the State Action, the Federal Action, the Elghanian Action or the Bond Action.

     16.  Peter  Harvey and John Harvey,  each for  themselves  and their heirs,
executors,  administrators,  successors  and  assigns,  irrevocably  release and
forever discharge Envirodyne, and each of its predecessors, successors, assigns,
present  and  former  officers,   directors,   employees,   agents,   attorneys,
representatives,   affiliates,   parent   corporations,   direct  and   indirect





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<PAGE>

subsidiaries,  heirs,  executors  and  administrators,  from any and all claims,
actions, causes of action, debts, damages,  expenses, losses, costs, grievances,
indemnity claims, contribution claims, subrogation claims and liabilities of any
kind or any nature  whatsoever,  whether actual or potential,  known or unknown,
suspected or  unsuspected,  direct or indirect,  fixed or  contingent,  that may
exist in law or in equity,  which Peter Harvey or John Harvey,  individually  or
collectively,  may have or claim to have  arising  from or in any way  connected
with (i) the claims  asserted  in the State  Action,  the  Federal  Action,  the
Elghanian Action or the Bond Action,  (ii) the leveraged buyout of Envirodyne in
1989, (iii) Envirodyne, (iv) Emerald, (v) the Envirodyne Bankruptcy, or (vi) the
Emerald Bankruptcy, including, but not limited to, all causes of action actually
asserted  or which  could have been  asserted  in the  Emerald  Bankruptcy,  the
Envirodyne  Bankruptcy,  the State  Action,  the Federal  Action,  the Elghanian
Action  or  the  Bond  Action,   except  that  Peter  Harvey  and  John  Harvey,
individually  and  collectively,  specifically  reserve  and do not  release  or
discharge any defenses,  counterclaims,  crossclaims, claims, actions, causes of
action, debts, damages,  expenses,  losses, costs, grievances and liabilities of
any kind  arising in  connection  with  claims  which may be asserted by the PSC
Resources Site PRP Group,  Envirodyne,  Monsanto Company, Marane Oil Corp or any
other third-party,  related to a Palmer,  Massachusetts,  environmental clean-up
site.

     17. Donald P. Kelly, for himself and his heirs, executors,  administrators,
successors and assigns, irrevocably releases and forever discharges Artra, Peter
Harvey,  John  Harvey,  SBI,  SBHC,   Travelers,   Emerald  and  the  Individual
Defendants,  and each of their predecessors,  successors,  assigns,  present and
former  officers,  directors,  employees,  agents,  attorneys,  representatives,
affiliates,  parent  corporations,  direct  and  indirect  subsidiaries,  heirs,
executors  and  administrators,  from any and all  claims,  actions,  causes  of
action, debts, damages, expenses,  losses, costs, grievances,  indemnity claims,
contribution  claims,  subrogation  claims  and  liabilities  of any kind or any
nature whatsoever,  whether actual or potential,  known or unknown, suspected or
unsuspected,  direct or indirect, fixed or contingent,  that may exist in law or
in equity,  which  Donald P. Kelly may have or claim to have  arising from or in
any way connected with (i) the claims asserted in the State Action,  the Federal
Action,  the Elghanian  Action or the Bond Action,  (ii) the leveraged buyout of
Envirodyne  in  1989,  (iii)  Envirodyne,   (iv)  Emerald,  (v)  the  Envirodyne
Bankruptcy,  or (vi) the Emerald Bankruptcy,  including, but not limited to, all
causes of action  actually  asserted  or which  could have been  asserted in the
Emerald  Bankruptcy,  the Envirodyne  Bankruptcy,  the State Action, the Federal
Action, the Elghanian Action or the Bond Action.

     18.  Each of the  parties  hereto  represents  that  it has  not  assigned,
transferred  or  otherwise  conveyed  to any  third  party any  rights,  claims,
actions, causes of action, debts, damages,  expenses, losses, costs, grievances,
indemnity claims, contribution claims, subrogation claims and liabilities of any
kind or any nature  whatsoever,  whether actual or potential,  known or unknown,
suspected or  unsuspected,  direct or indirect,  fixed or  contingent,  that may
exist in law or in equity,  against any party hereto, which arose from or are in
any way connected with (i) the claims asserted in the State Action,  the Federal
Action,  the Elghanian  Action or the Bond Action,  (ii) the leveraged buyout of
Envirodyne  in  1989,  (iii)   Envirodyne,   (iv)  Emerald  (v)  the  Envirodyne
Bankruptcy,  or (vi) the Emerald Bankruptcy.  Notwithstanding the foregoing, the
parties hereto  acknowledge  that one or more of the Salomon entities has merged
with a direct or indirect  subsidiary  of Travelers.  As between DPK,  Donald P.
Kelly, Envirodyne,  SBHC, SBI, Travelers,  and their respective affiliates,  the
subject matter of the releases set forth in paragraphs 8, 9, 11, 13 and 17 above
are not  intended  to, and shall  not,  release,  include or alter any  existing
securities  account  relationships,  insurance  policy,  investment  or  trading
account holding equity or debt securities, or mutual or private fund investments
between or among any such person or entity.








                                       6

<PAGE>

     19. Salomon  represents  that: (i) it has incurred legal expenses on behalf
of William Rifkin ("Rifkin") and James L. Massey ("Massey") related to the State
Action,  the Federal Action,  the Appeal and the Elghanian  Action;  (ii) to the
best of its  knowledge  Rifkin and Massey  have not  personally  incurred  legal
expenses  related to the State  Action,  the Federal  Action,  the Appeal or the
Elghanian  Action;  and (iii) it is unaware of any  claims,  actions,  causes of
action, debts, damages,  expenses,  losses, costs, grievances and liabilities of
any  kind or any  nature  whatsoever,  whether  actual  or  potential,  known or
unknown, suspected or unsuspected, direct or indirect, fixed or contingent, that
may exist in law or in equity,  possessed  by Rifkin and Massey  against  Artra,
Peter Harvey or John Harvey. Further, Salomon shall use its best efforts to have
Massey and Rifkin execute the Agreement.

     20. Each party hereto,  other than the  Individual  Defendants,  DPK, Peter
Harvey and John Harvey,  shall bear its or his own attorneys' fees and costs, if
any, in connection with the State Action,  the Federal Action,  the Appeal,  the
Bond  Action,  the  appeal of the Bond  Action,  the  Elghanian  Action  and the
Agreement.  No party hereto shall make any claim in the future against any other
party hereto with respect to such fees and costs,  with the exception of a claim
by any of the Individual Defendants, DPK, Peter Harvey or John Harvey as against
any party  hereto who has been paying such fees and costs on their  behalf prior
to the execution of the Agreement.

     21. The Agreement may be executed in  counterparts,  each of which shall be
deemed  an  original  but  all of  which  shall  constitute  one  and  the  same
instrument.  Delivery of an executed  counterpart  of the signature  page of the
Agreement  by telephone  facsimile  transmission  shall be equally  effective as
manual  delivery of an executed  counterpart.  Any party  delivering an executed
counterpart  of the  signature  page of the  Agreement  by  telephone  facsimile
transmission shall thereafter promptly manually deliver an executed counterpart,
but the failure to manually deliver such executed  counterpart  shall not effect
the validity, enforceability and binding effect of the Agreement.

     22. The Agreement and its performance and enforcement  shall be governed by
the laws of the State of New York,  without regard to its rules regarding choice
of law.

     23. The persons executing the Agreement on behalf of Artra,  SBHC, SBI, DPK
and  Envirodyne  represent  that they are authorized to execute the Agreement on
behalf of the  Corporation or partnership on whose behalf they have executed the
Agreement.

     24. The parties' execution, delivery and performance of the Agreement shall
not  create or be deemed to create a  partnership,  joint  venture  or any other
business combination.

     25. The Agreement is the entire  understanding  between Artra, Peter Harvey
and John Harvey,  on the one hand,  and  Salomon,  DPK,  each of the  Individual
Defendants,  Envirodyne and Emerald,  on the other hand, relating to the subject
matter hereof and supersedes and merges all prior and contemporaneous agreements
and discussions,  oral or written, between the parties. No statements,  promises
or representations have been made by any party to any other, or relied upon, and
no consideration has been offered, promised,  expected or held out other than as
expressly  provided  herein.

     26. The Agreement may not be changed,  altered,  modified or amended except
in a writing signed by all parties.

     27. The Agreement  shall be fully and completely  binding as to all parties
immediately upon its execution and delivery by SBI, SBHC,  Artra,  Peter Harvey,
John Harvey, DPK,  Envirodyne,  Donald P. Kelly,  Charles Bobrinskoy and Michael
Zimmerman (the "Required Parties"), except that:




                                        7
<PAGE>


               (a)  the release by Emerald set forth in paragraph 12 hereof,  as
                    well as the release of Emerald by any party, as set forth in
                    the Agreement,  shall not be binding and effective until (i)
                    either the entry of an order by the Bankruptcy  Court (which
                    order shall have become final and unappealable)  authorizing
                    Emerald to execute,  deliver and perform the Agreement,  or,
                    alternatively,  the dismissal of the Emerald Bankruptcy, and
                    (ii) the execution and delivery of the Agreement by Emerald;

               (b)  notwithstanding any failure by Massey to execute and deliver
                    the  Agreement,  any and all  releases  of  Massey  shall be
                    immediately  effective and binding when the Required Parties
                    have executed and delivered the Agreement; and

               (c)  notwithstanding any failure by Rifkin to execute and deliver
                    the  Agreement,  any and all  releases  of  Rifkin  shall be
                    immediately  effective and binding when the Required Parties
                    have executed and delivered the Agreement;


     28.  As soon  as  practicable  after  the  execution  and  delivery  of the
Agreement by the Required  Parties,  Emerald shall apply to the Bankruptcy Court
for authority to execute, deliver and perform the Agreement.

     29.  The  parties  hereto  acknowledge  that  they have read each and every
paragraph of the Agreement and that they understand their respective  rights and
obligations  hereunder and have been advised by their counsel in connection with
entering into the Agreement.  The parties hereto  acknowledge  that they freely,
voluntarily and without coercion enter into the Agreement.


                                        ARTRA GROUP INCORPORATED

                                        By:
                                             --------------------
                                        Title:



                                        SALOMON BROTHERS HOLDING
                                        COMPANY INC

                                        By:
                                             --------------------
                                        Title:


                                        SALOMON BROTHERS INC

                                        By:
                                             --------------------
                                        Title:



                                        D.P. KELLY & ASSOCIATES,
                                        L.P.

                                        By:
                                             ----------------------
                                        Title:







                                       8

<PAGE>


                                        ENVIRODYNE INDUSTRIES, INC.


                                        By:
                                             ----------------------
                                        Title:



                                        EMERALD ACQUISITION CORPORATION


                                        By:
                                             ----------------------
                                        Title:




                                             ---------------------------
                                             CHARLES K. BOBRINSKOY



                                             ---------------------
                                             DONALD P. KELLY



                                             ---------------------
                                             JAMES L. MASSEY



                                             ---------------------
                                             WILLIAM RIFKIN



                                             -------------------------
                                             MICHAEL J. ZIMMERMAN




                                             ---------------------
                                             PETER HARVEY




                                             ---------------------
                                             JOHN HARVEY



                                        9