ENTRADE INC, 424B3, 1999-08-20

ENTRADE INC
424B3, 1999-08-20
CONVERTED PAPER & PAPERBOARD PRODS (NO CONTANERS/BOXES)

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<PAGE> 1
Filed Pursuant to Rule 424B3
Registration No. 333-79175

ARTRA GROUP INCORPORATED
500 CENTRAL AVENUE
NORTHFIELD, ILLINOIS 60093

Dear Shareholder:

You are cordially invited to attend the annual meeting of shareholders of
Artra Group Incorporated. We will hold the meeting at 10:30 a.m., local time, on
September 22, 1999 at the Sheraton North Shore Hotel, 933 Skokie Boulevard,
Northbrook, Illinois.

As you may know, Artra has entered into an agreement with Entrade Inc. and
WorldWide Web NetworX Corporation, providing for the merger of Entrade with
Artra. Upon the closing of the merger, Entrade will be the parent company for
Artra and Entrade's business-to-business Internet e-commerce company. Artra's
current headquarters in Chicago will become Entrade's headquarters after the
merger. Entrade and Artra intend to apply to list the Entrade common stock on
the New York Stock Exchange under the trading symbol "ETA."

THE "RISK FACTORS" SECTION BEGINNING ON PAGE 8 DESCRIBES MATERIAL RISKS
THAT YOU SHOULD CONSIDER IN DECIDING WHETHER TO VOTE FOR APPROVAL OF THE MERGER
AGREEMENT AND THE MERGER.

At the Artra annual meeting, in addition to the customary election of
directors and auditors, we will ask you to approve the merger agreement and the
merger. The Artra board of directors has approved the merger agreement and the
merger and recommends that you approve the merger agreement and the merger.

This document gives you detailed information about the proposed merger. We
encourage you to read the entire document carefully.

This Proxy Statement/Prospectus and proxy card are being mailed to
shareholders of Artra on or about August 20, 1999.

On behalf of the Artra board of directors, I thank you for your support and
ask you to vote in favor of the merger agreement and the merger.

Sincerely,

Mark F. Santacrose
President

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE ENTRADE COMMON STOCK TO BE ISSUED
UNDER THIS PROXY STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY
STATEMENT/PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

The date of this Proxy Statement/Prospectus is August 20, 1999.
<PAGE> 2

ARTRA GROUP INCORPORATED

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 22, 1999

To the Shareholders of
ARTRA GROUP INCORPORATED:

On September 22, 1999, Artra Group Incorporated will hold an annual meeting
of shareholders at the Sheraton North Shore Hotel, 933 Skokie Boulevard,
Northbrook, Illinois. The Artra annual meeting will begin at 10:30 a.m., local
time.

Only shareholders who owned Artra common stock or Artra Series A preferred
stock at the close of business on June 25, 1999 are entitled to notice of and to
vote at the Artra annual meeting or any adjournment that may take place. At the
Artra annual meeting, we will ask you to:

1. Vote upon a proposal to approve and adopt an Agreement and Plan of
Merger dated as of February 23, 1999, as amended, among Artra, Entrade
Inc., WorldWide Web NetworX Corporation and an Entrade merger subsidiary
and to approve the merger.

2. Vote on the election of nine directors to serve until the 2000
annual meeting of shareholders and until their successors are elected.

3. Ratify the appointment of PricewaterhouseCoopers LLP as Artra's
independent auditors for 1999.

4. Transact any other business that may properly come before the Artra
annual meeting and any adjournment, postponement or continuation of the
Artra annual meeting.

The accompanying Proxy Statement/Prospectus includes a copy of the merger
agreement and amendments to the merger agreement as Appendix A. Holders of Artra
Series A preferred stock have the right to dissent from the merger and to obtain
payment for their shares by following the procedures prescribed in Sections 1571
to 1580 of the Pennsylvania Business Corporation Law of 1988. We summarized
these procedures under "The Artra Annual Meeting -- Artra Preferred Stock
Dissenters' Rights" and are attaching these Sections as Appendix B in the
accompanying Proxy Statement/ Prospectus.

THE BOARD OF DIRECTORS OF ARTRA HAS CAREFULLY CONSIDERED THE TERMS OF THE
MERGER AGREEMENT AND HAS UNANIMOUSLY CONCLUDED THAT ITS TERMS ARE FAIR AND THAT
THE PROPOSED MERGER IS IN THE BEST INTERESTS OF ARTRA AND ITS SHAREHOLDERS.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL TO APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER
AT THE ARTRA ANNUAL MEETING.

By Order of the Board of Directors,
Mark F. Santacrose, President

August 20, 1999
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MERGER...................... v
SUMMARY..................................................... 1
The Companies............................................. 1
Information About the Merger.............................. 2
The Proposed Merger.................................... 2
What Artra Shareholders Will Receive in the Merger..... 3
Entrade Will Not Issue Fractional Shares in the
Merger................................................ 3
Accounting Treatment of the Merger..................... 3
Important Federal Income Tax Consequences of the
Merger................................................ 3
Vote Required to Approve the Merger and the Merger
Agreement............................................. 3
Artra Reasons for the Merger; Recommendation of the
Artra Board of Directors to the Artra Shareholders.... 4
Risks of the Merger.................................... 4
Information About the Merger Agreement.................... 4
Conditions to the Closing of the Merger................ 4
Reasons Why the Parties Could Terminate the Merger
Agreement Prior to the Closing........................ 5
Termination Fees and Expenses.......................... 5
No Solicitation of Offers from Another Party........... 5
Information About the Artra Annual Meeting................ 6
Date, Time, Place and Purposes of the Artra Annual
Meeting............................................... 6
Record Date for Voting at the Artra Annual Meeting..... 6
Voting Rights at the Artra Annual Meeting.............. 6
Payment of Costs of Solicitation of Proxies............ 6
Artra Preferred Stock Dissenters' Rights............... 6
Other Merger Related Information.......................... 7
New York Stock Exchange Listing of Entrade Common
Stock................................................. 7
Other Interests of Artra and Entrade Officers and
Directors and WorldWide Officers, Directors and
Stockholders in the Merger............................ 7
RISK FACTORS................................................ 8
Risk Factors Relating to Entrade and Its entrade.com
Operations............................................. 8
Entrade is an early stage company. We have no operating
history upon which you may evaluate us................ 8
We anticipate we will incur continued losses for the
foreseeable future.................................... 8
We may have difficulty obtaining future funding
sources, if needed, and we might have to accept terms
that would adversely affect shareholders.............. 9
Fluctuations in our quarterly results may adversely
affect our stock price................................ 9
We intend to rely initially on revenues from the
utilities and large industrial companies, and if we do
not generate revenues from these two markets, or the
revenues are lower than we anticipate, we might not
have the resources to launch additional websites or
form new strategic alliances.......................... 9
We may not develop additional revenue sources.......... 10
Marketing and distribution alliances may not generate
the expected number of new customers or may be
terminated............................................ 10
We may not be able to compete effectively with other
providers of e-commerce services...................... 10
We may not be able to protect our proprietary rights,
and we may infringe the proprietary rights of
others................................................ 11
Our business depends on the effective development of
the Internet as an effective e-commerce business and
marketing forum....................................... 12
</TABLE>

i
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<TABLE>
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<S> <C>
We may be subject to legal liability for publishing or
distributing content over the Internet................ 13
We depend on the continual introduction of enhanced
software capabilities and expansion of our software
systems for our services to handle increases in
traffic on our websites, which we may not be able to
accurately project.................................... 14
Acquisitions and new strategic alliances may disrupt or
otherwise have a negative impact on our business...... 14
Our success is dependent on retaining our current key
personnel and attracting additional key personnel,
particularly in the areas of sales, technical services
and customer support.................................. 14
Our systems may not be Year 2000 compliant............. 15
The interests of our significant shareholders after the
merger may conflict with our interests and the
interests of our other shareholders................... 15
Our minority interest in asseTrade.com and the
potential for deadlock in stockholder and board
actions may impede the growth and development of
asseTrade.com's operations............................ 15
Shares eligible for future sales by our current
shareholders may adversely affect our stock price..... 16
Anti-takeover provisions and our right to issue
preferred stock could make a third party acquisition
of us difficult....................................... 16
The Entrade common stock price is likely to be highly
volatile.............................................. 16
Risk Factors Related to Artra............................. 17
Lack of compliance with New York Stock Exchange listing
criteria may result in delisting of Artra common stock
or, after the merger, Entrade common stock............ 17
Artra's potential environmental liabilities and other
potential liabilities from other claims may result in
future costs to Artra that are difficult to
estimate.............................................. 17
WHERE YOU CAN FIND MORE INFORMATION......................... 18
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE............. 19
SELECTED HISTORICAL CONDENSED FINANCIAL INFORMATION AND
COMPARATIVE PER SHARE DATA................................ 20
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION............................................... 22
MARKET FOR ARTRA'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS................................................... 27
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL
ARTRA SHAREHOLDERS AND MANAGEMENT......................... 28
THE ARTRA ANNUAL MEETING.................................... 31
Time, Date and Place, Purpose of the Artra Annual
Meeting................................................ 31
Record Date; Vote Required................................ 32
Revocability of Proxies................................... 32
Artra Preferred Stock Dissenters' Rights.................. 32
THE MERGER.................................................. 35
Background of the Merger.................................. 35
Management of Entrade after the Merger.................... 36
Artra Reasons for the Merger.............................. 36
Merger Consideration...................................... 36
The Merger Closing Date................................... 38
Federal Income Tax Consequences........................... 39
Accounting Treatment...................................... 40
INTERESTS OF CERTAIN PERSONS IN THE MERGER AND
RELATED MATTERS........................................... 41
Interests of Artra Officers and Directors................. 41
Interests of Entrade Officers and Directors............... 41
Agreement with Broker..................................... 41
</TABLE>

ii
<PAGE> 5

<TABLE>
<CAPTION>
PAGE
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<S> <C>
THE MERGER AGREEMENT AND RELATED AGREEMENTS................. 42
The Merger................................................ 42
The Merger Consideration.................................. 42
Representations and Warranties............................ 42
Covenants................................................. 43
Conditions to the Merger.................................. 46
Termination of the Merger Agreement....................... 47
Effect of Termination and Termination Fees................ 48
Related Agreements........................................ 48
Employment Agreements..................................... 49
COMPARISON OF SHAREHOLDER RIGHTS............................ 52
DESCRIPTION OF ENTRADE CAPITAL STOCK........................ 53
General................................................... 53
Authorized Capital Stock.................................. 53
Common Stock.............................................. 53
Preferred Stock........................................... 53
Transfer Agent............................................ 54
Anti-Takeover Provisions.................................. 54
Limitation of Liability................................... 55
Outstanding Stock Options To Be Assumed by Entrade........ 56
Outstanding Warrants To Be Assumed by Entrade............. 57
INFORMATION ABOUT ENTRADE INC. and entrade.com.............. 58
General................................................... 58
Entrade's Acquisition of the entrade.com Assets and 25% of
the Voting Common Stock of asseTrade.com............... 58
Overview.................................................. 58
entrade.com's Solution.................................... 59
entrade.com's Services.................................... 59
Initial Applications of entrade.com's Systems and
Technologies........................................... 62
Marketing and Strategic Alliances......................... 66
Transaction Fees and License Fees......................... 66
Proprietary Rights........................................ 67
Competition............................................... 67
Employees................................................. 67
Legal Proceedings......................................... 68
ENTRADE PLAN OF OPERATIONS.................................. 68
MANAGEMENT OF ENTRADE....................................... 69
Executive Compensation.................................... 71
Beneficial Ownership of Entrade Common Stock.............. 71
ENTRADE RELATED PARTY TRANSACTIONS.......................... 71
INFORMATION ABOUT ARTRA..................................... 73
General................................................... 73
Employees................................................. 73
Properties................................................ 74
Legal Proceedings......................................... 74
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................. 77
</TABLE>

iii
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<TABLE>
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ELECTION OF DIRECTORS OF ARTRA.............................. 87
MANAGEMENT OF ARTRA......................................... 88
Directors and Executive Officers of Artra................. 88
Section 16(a) Beneficial Reporting Compliance............. 90
ARTRA EXECUTIVE COMPENSATION................................ 90
Directors' Compensation................................... 90
Executive Officer Compensation............................ 91
Mark F. Santacrose Employment Agreement................... 93
Compensation Committee Interlocks and Insider
Participation.......................................... 94
Report of the Board of Directors of Artra Concerning
Compensation........................................... 94
COMPARISON OF TOTAL RETURN ON ARTRA COMMON STOCK WITH
CERTAIN INDICES........................................... 96
ARTRA CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........ 97
ARTRA RATIFICATION OF APPOINTMENT OF PRICEWATERHOUSECOOPERS
LLP....................................................... 100
ARTRA ANNUAL REPORT......................................... 100
SHAREHOLDER PROPOSALS....................................... 100
GENERAL AND OTHER MATTERS................................... 100
LEGAL MATTERS............................................... 101
EXPERTS..................................................... 101
INDEX TO FINANCIAL STATEMENTS............................... F-1
APPENDICES:
Agreement and Plan of Merger, dated as of February 23,
1999, by and among Artra Group Incorporated, WWWX
Merger Subsidiary, Inc., NA Acquisition Corp. (now
known as Entrade Inc.) and WorldWide Web NetworX
Corporation; Amendment to Agreement and Plan of Merger
dated as of April 30, 1999; and Consent and Amendment
to Agreement and Plan of Merger dated as of August 9,
1999................................................... A-1
Sections 1930 and 1571-1580 of the Pennsylvania Business
Corporation Law of 1988................................ B-1
</TABLE>

ORBIT System(R) is a registered trademark of entrade.com, Inc., a wholly
owned subsidiary of Entrade.

iv
<PAGE> 7

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q: WHAT DO I NEED TO DO NOW?

A: After carefully reading and considering the information contained in this
document, please fill out, date and sign your proxy card. Then mail your
signed proxy card in the enclosed postage-prepaid return envelope as soon as
possible so that the designated proxies may represent your shares at the
Artra annual meeting.

Q: IF MY SHARES OF ARTRA COMMON STOCK ARE HELD IN "STREET NAME" BY MY BROKER,
WILL MY BROKER VOTE MY SHARES FOR ME?

A: Your broker will vote your shares only if you instruct your broker on how to
vote. You should follow the directions provided by your broker regarding how
to instruct your broker to vote your shares.

Q: CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?

A: You can change your vote at any time before your proxy is voted at the Artra
annual meeting. You can do this in one of three ways. First, you can send a
written notice stating that you would like to revoke your proxy. Second, you
can complete and submit a new proxy card. If you choose either of these two
methods, you must submit your notice of revocation or your new proxy card to
the Secretary of Artra. Third, you can attend the Artra annual meeting and
vote in person. Simply attending the meeting, however, will not revoke your
proxy. If you have instructed a broker to vote your shares, you must follow
directions received from your broker to change your vote.

Q: SHOULD I SEND IN MY ARTRA STOCK CERTIFICATES NOW?

A: No. Artra will send you written instructions on how to receive your new
Entrade stock certificates after the merger is completed.

Q: WHEN DO YOU EXPECT TO COMPLETE THE MERGER?

A: We hope to complete the merger in the third quarter of 1999. We are working
toward completing the merger as quickly as possible after the Artra annual
meeting.

Q: WILL I OWE ANY FEDERAL INCOME TAX AS A RESULT OF THE MERGER?

A: You will not owe any federal income tax on the exchange of shares of Artra
common stock and Artra preferred stock for Entrade common stock in the
merger.

To review federal income tax consequences in greater detail, see page 39.

Q: WHO CAN HELP ANSWER MY QUESTIONS?

A: If you have any questions about the merger, please call:

Robert S. Gruber, Vice President -- Corporate Relations
(212) 628-2554

v
<PAGE> 8

SUMMARY

This summary highlights selected information from this Proxy
Statement/Prospectus and may not contain all of the information that is
important to you. To understand the proposed merger fully and for a more
complete description of the terms of the proposed merger, you should carefully
read the entire Proxy Statement/Prospectus and the documents we have referred
you to. See "Questions and Answers About the Merger" on page v and "Where You
Can Find More Information" on page 18.

We are attaching a copy of the merger agreement and the amendments to the
merger agreement as Appendix A to this Proxy Statement/Prospectus. We encourage
you to read the merger agreement. It is the legal document that governs the
proposed merger.

THE COMPANIES

ARTRA GROUP INCORPORATED
500 Central Avenue
Northfield, Illinois 60093
Telephone: (847) 441-6650

Artra is a Pennsylvania corporation incorporated in 1933. In recent years
through November 20, 1998, Artra operated as a manufacturer of packaging
products principally serving the food industry. Bagcraft Corporation of America,
a wholly owned subsidiary of Artra, operated the packaging products business.
Artra and Bagcraft completed the sale of Bagcraft's assets on November 20, 1998,
and Artra received net cash proceeds of approximately $28 million. Approximately
$15.2 million was used to pay Artra debt obligations. Artra currently has no
active business operations.

ENTRADE INC.
521 Fellowship Road
Suite 130
Mount Laurel, New Jersey 08054
Telephone: (856) 914-3150

Entrade, a Pennsylvania corporation, was incorporated in February 1999.
Entrade owns all of the outstanding shares of its subsidiary, entrade.com, and
25% of the voting common stock of asseTrade.com.

Entrade intends to operate as an Internet business-to-business electronic
commerce, or "e-commerce," service provider. entrade.com provides
business-to-business e-commerce technologies and related services to facilitate
the purchase and sale of clients' products and services including, inventory,
equipment and other assets. It intends to create and manage industry-specific
websites for marketing, sales and procurement of products and services.

We refer to this kind of website as a "vertical portal," which is a website
dedicated to a specific industry for use by companies in that particular
industry to buy and sell products and services. Under this business model,
entrade.com will generate commissions based upon these transactions and license
fees for its software. entrade.com is directing its initial marketing efforts to
utilities through utiliparts.com and to the heavy equipment industry through
asseTrade.com. entrade.com owns and operates the utiliparts.com

1
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website. asseTrade.com is a strategic alliance in which Entrade holds a 25%
voting interest. entrade.com developed the asseTrade.com website, which also
uses entrade.com's software.

Following the closing of the merger and the other transactions contemplated
by the merger agreement, Entrade will serve as the holding company for Artra,
entrade.com and 25% of the voting common stock of asseTrade.com. Artra's current
headquarters at 500 Central Avenue, Northfield, Illinois 60093 will become the
headquarters for Entrade after the merger. We anticipate that the New York Stock
Exchange will list the Entrade common stock under the symbol "ETA."

INFORMATION ABOUT THE MERGER

The Proposed Merger (Page 35)

The following organizational chart sets forth the structure of Entrade and
Artra before the merger and the structure of Entrade after the merger:

ORGANIZATIONAL CHART

PRIOR TO THE MERGER

ARTRA GROUP INCORPORATED ENTRADE INC.

Artra Shareholders WorldWide Energy Trading Company

(100%) (90%) (10%)

Artra Entrade

(100%) (100%) (25%)

Entrade merger subsidiary entrade.com asseTrade.com

AFTER THE MERGER

ENTRADE INC.

Former Artra Shareholders Worldwide Energy Trading Company

(82.8%) (15.5%) (1.7%)

Entrade

(100%) (100%) (25%)

Artra entrade.com asseTrade.com

The holdings shown in this table reflect the outstanding shares of Artra
common stock and Artra Series A preferred stock as of the June 25, 1999 record
date for the Artra annual meeting of shareholders. The share percentages after
the merger for former Artra shareholders reflect the proposed issuance of
100,000 shares in payment of a fee to a finder in connection with the merger
transaction. Any exercises of warrants or options to purchase Artra common stock
that occur between the record date and the merger closing date will also affect
these percentages.

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<PAGE> 10

Following the merger:

- Artra's senior management will hold positions with Entrade similar to
their current positions with Artra;

- The board of directors of Entrade will consist of the current directors
of Artra and a designee of WorldWide mutually acceptable to WorldWide and
the Entrade board of directors, who initially will be Robert Kohn, the
current Chairman and Chief Executive Officer of Entrade; and

- Robert Kohn will then resign as Chairman and Chief Executive Officer of
Entrade and of WorldWide and become the Chief Executive Officer of the
entrade.com subsidiary.

What Artra Shareholders Will Receive in the Merger (Page 36)

If the merger is completed, Artra shareholders will receive one share of
Entrade common stock for each share of Artra common stock and 329 shares of
Entrade common stock for each share of Artra preferred stock they own. After the
merger, the shareholders of Artra will own approximately 9,588,655 shares, or
82.8%, of the outstanding Entrade common stock, and WorldWide and the other
current shareholder of Entrade, Energy Trading Company, a subsidiary of PECO
Energy, will own an aggregate of 2,000,000 shares, or 17.2%, of the outstanding
Entrade common stock.

Entrade will assume each outstanding stock option plan, stock option and
warrant to purchase Artra common stock, without changing the terms and
conditions of the stock options and warrants assumed, and Entrade will
substitute shares of Entrade common stock for the shares of Artra common stock
purchasable under each assumed stock option and warrant.

Entrade Will Not Issue Fractional Shares in the Merger (Page 37)

Entrade will not issue fractional shares of Entrade common stock in the
merger. Holders of Artra preferred stock otherwise entitled to receive a
fractional share of Entrade common stock following the merger will receive cash
in lieu of any fractional shares, as described in "The Merger -- Merger
Consideration -- Fractional Shares."

Accounting Treatment of the Merger (Page 40)

Artra and Entrade intend to account for the merger as a purchase.

Important Federal Income Tax Consequences of the Merger (Page 39)

Artra has received a tax opinion from counsel that the merger will be tax
free for federal income tax purposes to the shareholders of Artra. However,
holders of Artra preferred stock who receive cash in lieu of fractional shares
will be subject to federal income tax with respect to the cash received. Neither
Artra nor Entrade should become subject to federal income taxes solely as a
result of the merger.

Tax matters are very complicated and the tax consequences to you from the
merger will depend on your own circumstances. You should consult your tax
advisors for a full understanding of all of the tax consequences to you from the
merger.

Vote Required to Approve the Merger and the Merger Agreement (Page 32)

We cannot complete the merger unless the holders of Artra common stock and
the holders of Artra Series A preferred stock, voting as separate classes, vote
to approve the merger agreement and the merger by the affirmative vote of a
majority of the votes cast in person or by proxy by the holders of each class at
the Artra annual meeting. Artra will not consider abstentions and broker
non-votes as votes cast, and they

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<PAGE> 11

will have no effect on the outcome of the vote on the merger agreement and the
merger. As of June 25, 1999, the executive officers and directors of Artra as a
group beneficially owned approximately 26.3% of the outstanding shares of Artra
common stock, including currently exercisable options. Also, as of June 25,
1999, executive officers and directors of Artra as a group beneficially owned
approximately 3.8% of the outstanding shares of Artra preferred stock, and a
trust for the benefit of adult children of Artra's Chairman held approximately
50.4% of the outstanding shares of Artra preferred stock.

Artra Reasons for the Merger; Recommendation of the Artra Board of Directors
to the Artra Shareholders (Page 36)

At its meeting on February 15, 1999, the board of directors of Artra
concluded that the merger was in the best interests of Artra and its
shareholders and determined to recommend that the shareholders of Artra approve
the merger agreement and the merger. In reaching these conclusions and
recommendations, the board considered a number of factors, the most important of
which was the need to find a company that would develop into an operating
business for Artra after the sale of its Bagcraft subsidiary's business in
November 1998. The Artra board of directors did not seek a fairness opinion in
making this recommendation.

Risks of the Merger (Page 8)

In considering whether to approve the merger agreement and the merger, you
should consider all of the risks of the merger, including the risks that the
potential benefits of the merger may not be realized, that Entrade's business
may not be successful and the market price of the Entrade common stock may
fluctuate and could decline in the future.

WE ENCOURAGE YOU TO READ THE RISK FACTORS SET FORTH IN THIS PROXY
STATEMENT/PROSPECTUS BEGINNING ON PAGE 8.

INFORMATION ABOUT THE MERGER AGREEMENT

Conditions to the Closing of the Merger (Page 46)

- The approval by Artra shareholders;

- The absence of legal restraints or prohibitions that prevent the
completion of the merger;

- The receipt of all required consents, authorizations, orders, approvals
and written affirmations;

- The listing of all the Entrade common stock on the New York Stock
Exchange, or if the New York Stock Exchange does not approve the listing,
Entrade must file an application for listing with the Nasdaq National
Market System;

- The absence of any material adverse change in the business or financial
condition of Entrade or Artra;

- The repayment of up to $500,000 loaned by WorldWide to Entrade;

- The assignment of employment agreements; and

- No material breach of any representations and warranties by any party to
the merger agreement.

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<PAGE> 12

Reasons Why the Parties Could Terminate the Merger Agreement Prior to the
Closing (Page 47)

Artra and WorldWide may terminate the merger agreement prior to the
effective time of the merger by mutual written consent. Either Artra or
WorldWide may terminate the merger agreement if:

- The parties do not close the merger by September 30, 1999;

- Artra's shareholders do not approve the merger agreement and the merger
at the Artra annual meeting; or

- A governmental entity prohibits or permanently enjoins the merger.

WorldWide may terminate the merger agreement if:

- The WorldWide board of directors determines, in the exercise of its good
faith judgment as to fiduciary duties to its stockholders imposed by law,
that termination is required, including by reason of the receipt of an
alternative proposal regarding a business combination of Entrade with
another party;

- Any of Artra's representations and warranties is not true and correct, if
any breach of the representations and warranties would have or would be
reasonably likely to have a material adverse effect on Artra, as
described in "The Merger Agreement and Related Agreements -- Termination
of the Merger Agreement;"

- Artra fails to perform a material obligation under the merger agreement
and cannot cure that failure within a specified period; or

- The Artra board of directors withdraws or modifies in a manner materially
adverse to WorldWide its approval or recommendation of the merger
agreement or the merger.

Artra may terminate the merger agreement if:

- The WorldWide board of directors withdraws or modifies in a manner
materially adverse to Artra its approval or recommendation of the merger
agreement or the merger;

- Any of WorldWide's or Entrade's representations and warranties is not
true and correct, if any breach of the representations and warranties
would have or would be reasonably likely to have a material adverse
effect on Entrade, as described in "The Merger -- The Merger Agreement
and Related Agreements -- Termination of the Merger Agreement;" or

- WorldWide or Entrade fails to perform a material obligation under the
merger agreement and cannot cure that failure within a specified period.

Termination Fees and Expenses (Page 48)

If the Artra shareholders fail to approve the merger and the merger
agreement, all obligations of WorldWide and Entrade to repay the approximately
$2.0 million in cash loaned to either or both of them by Artra under the loan
agreement (see page 48) and the approximately $250,000 advanced to Entrade by
Artra will terminate.

No Solicitation of Offers from Another Party (Page 44)

Entrade and WorldWide have agreed, subject to exceptions contained in the
merger agreement, not to initiate or engage in discussions regarding a business
combination by Entrade or any subsidiary with another party until the earlier of
the termination of the merger agreement or the date the merger closes.

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INFORMATION ABOUT THE ARTRA ANNUAL MEETING (PAGE 31)

Date, Time, Place and Purposes of the Artra Annual Meeting

Date: September 22, 1999
Time: 10:30 a.m, local time
Place: Sheraton North Shore Hotel
933 Skokie Boulevard
Northbrook, Illinois

Purposes:

1. To elect nine directors to serve until Artra's 2000 annual meeting
of Shareholders and until their successors are elected;

2. To vote upon the proposal to approve and adopt the merger and the
merger agreement;

3. To ratify the appointment of PricewaterhouseCoopers LLP as Artra's
independent accountants for 1999; and

4. To transact any other business that may properly come before the
Artra annual meeting and any adjournment, postponement or continuation of
the Artra annual meeting.

Record Date for Voting at the Artra Annual Meeting (Page 32)

As an Artra shareholder, you may vote at the Artra annual meeting or sign a
proxy card if you owned shares of Artra common stock or Artra preferred stock as
of the close of business on June 25, 1999, the Artra record date. On the Artra
record date, 8,880,223 shares of Artra common stock and 1,849.34 shares of Artra
Series A preferred stock were outstanding.

Voting Rights at the Artra Annual Meeting (Page 32)

You will have one vote for each share of Artra common stock and Artra
preferred stock you own for purposes of each matter voted upon at the Artra
annual meeting. You may cumulate your votes in the election of directors at the
Artra annual meeting, which means that you have the right, in person or by
proxy, to multiply the number of votes that you may cast by the number of
directors to be elected, and to cast the whole number of the votes for one
candidate or to distribute them among two or more candidates.

Payment of Costs of Solicitation of Proxies

Artra will bear the costs of solicitation of proxies for the Artra annual
meeting. Artra's regular officers and employees will make the solicitation on
behalf of Artra in person or by telephone or other means of communication. Artra
has retained ChaseMellon Shareholder Services, L.L.C. to assist in the
solicitation of proxies at a fee of approximately $5,000 plus reasonable
expenses incurred in connection with its services. Upon request, Artra will
reimburse brokers or persons holding shares in their names or in the names of
nominees for their reasonable expenses in sending proxies and proxy material to
beneficial owners.

Artra Preferred Stock Dissenters' Rights (Page 32)

If a holder of Artra preferred stock does not vote for the merger agreement
and the merger, that holder will have the right under Pennsylvania law to
dissent to the merger and request an appraisal of the value of that holder's
shares of Artra preferred stock in connection with the merger.

In order to preserve this right, a dissenting holder must follow the
procedures discussed in Appendix B.
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<PAGE> 14

OTHER MERGER RELATED INFORMATION

New York Stock Exchange Listing of Entrade Common Stock (Page 45)

Entrade and Artra are preparing to file a listing application with the New
York Stock Exchange for the listing of the shares of Entrade common stock that
Entrade will have outstanding after the merger and shares of Entrade common
stock reserved for issuance under the Artra options and warrants that Entrade
will assume in the merger. The proposed trading symbol for the Entrade common
stock is "ETA."

The Entrade listing, if approved by the Exchange, will be as successor to
the Artra listing. As the successor to the Artra listing, the Exchange will
review the continued listing of Entrade on a quarterly basis for compliance with
the business plan submitted by Artra and Entrade to the Exchange. See "Risk
Factors -- Lack of compliance with New York Stock Exchange listing criteria may
result in delisting of Artra common stock or, after the merger, Entrade common
stock."

Other Interests of Artra and Entrade Officers and Directors and WorldWide
Officers, Directors and Stockholders in the Merger (Page 41)

In considering the recommendations of Artra's board of directors that you
approve the merger agreement and the merger, you should note that officers and
directors of Artra and Entrade and officers, directors and stockholders of
WorldWide have interests in the merger that are different from, or in addition
to, your interests. These persons may have divergent interests from those of
Artra shareholders because some of them hold stock in other parties to the
merger agreement or are or will be employees of one or more parties to the
merger agreement. See "Interests of Certain Persons in the Merger and Related
Matters."

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<PAGE> 15

RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND THE OTHER
INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS BEFORE DECIDING HOW TO VOTE. OUR
BUSINESS AND RESULTS OF OPERATIONS COULD BE SERIOUSLY HARMED BY ANY OF THE
FOLLOWING RISKS. THE TRADING PRICE OF THE ENTRADE COMMON STOCK COULD DECLINE DUE
TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.

RISK FACTORS RELATING TO ENTRADE AND ITS ENTRADE.COM OPERATIONS.

The following risk factors relate to the business and operations of Entrade
and its entrade.com operations:

Entrade is an early stage company. We have no operating history upon which you
may evaluate us.

We formed Entrade in February 1999 at which time it acquired the
intellectual property of entrade.com and 25% of the voting common stock of
asseTrade.com. These entities had virtually no operating history prior to that
time. Accordingly, we have no operating history upon which you may evaluate us.
Because our management team as a unit is relatively new, it has a limited track
record upon which you can evaluate them. In addition, our revenue model is
evolving and we have only a limited number of customers to date. Our lack of
operating history, new management unit and evolving revenue model make it
difficult to evaluate our future prospects and evaluate our business strategy.

This means that you will have only limited information upon which to base
an investment and voting decision on the merger agreement and the merger.
Because of our lack of operating history, we also believe that period-to-period
comparisons of our results of operations will not be meaningful in the short
term and should not be relied upon as indicators of future performance.

We will encounter risks and difficulties frequently encountered by
early-stage companies in new and rapidly evolving markets. Many of these risks
are described in more detail in this "Risk Factors" section. We may not
successfully address any of these risks. If we do not successfully address these
risks, our business would be seriously harmed.

We anticipate we will incur continued losses for the foreseeable future.

We expect to incur significant losses for the foreseeable future. To date,
we have generated only minimal revenues and have not been profitable. Our
revenues may not grow. We are relying upon our utiliparts.com website to
generate revenues, which it might not do because it is based on an unproven
business model. We may never be profitable or, if we become profitable, we may
be unable to sustain profitability.

The anticipated losses may result from our plan to increase our operating
expenses to:

- launch additional on-line websites where clients from specific industries
can purchase and sell equipment, inventory and other assets;

- increase our sales and marketing operations;

- broaden our customer support and software capabilities; and

- pursue strategic marketing and distribution alliances.

Some of our expenses are or will be fixed, including non-cancelable
agreements, equipment leases and real estate leases. If our revenues do not
increase, we may not be able to compensate by reducing expenses in a timely
manner. Expenses may also increase due to the potential impact of goodwill and
other charges from any future acquisitions. Continued losses may result in our
inability to develop additional strategic alliances and business-specific
websites, which is important to our plan to generate and grow future revenues.

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<PAGE> 16

We may have difficulty obtaining future funding sources, if needed, and we
might have to accept terms that would adversely affect shareholders.

If revenues from entrade.com's operations are less than anticipated in 1999
and 2000, we may need to raise funds from additional financings. We have no
commitments for any financing other than from Artra, and any financing
commitments may result in dilution to our existing shareholders after the
merger.

We may have difficulty obtaining additional funding, and we may have to
accept terms that would adversely affect our shareholders. For example, the
terms of any future financings may impose restrictions on our right to declare
dividends or on the manner in which we conduct our business. Also, lending
institutions or private investors may impose restrictions on a future decision
by us to make capital expenditures, acquisitions or significant asset sales. We
may not be able to locate additional funding sources at all.

If we cannot raise funds on acceptable terms, if and when needed, we may
not be able to develop or enhance our services to customers, launch additional
websites, take advantage of future opportunities for strategic alliances within
a particular industry, grow our business or respond to competitive pressures or
unanticipated requirements, which could seriously harm our business.

Fluctuations in our quarterly results may adversely affect our stock price.

Our quarterly operating results will likely vary significantly in the
future. Our operating results will likely fall below the expectations of
securities analysts or investors in some future quarter or quarters. Our failure
to meet these expectations would likely adversely affect the market price of our
common stock.

Our quarterly operating results may vary depending on a number of factors,
including:

- demand of buyers and sellers to use our websites to list and purchase
equipment, inventory and parts;

- our ability in both the short and long term to overcome reluctance of
companies to use the Internet to buy and sell equipment, inventory, parts
and other assets;

- actions taken by our competitors, including new product introductions and
enhancements;

- size and timing of sales of our services;

- our ability to control costs;

- budget cycles of buyers and sellers of equipment, inventory and parts and
changes in these budget cycles; and

- general economic factors.

For example, our quarterly revenues are subject to fluctuation because the
potential for the listing and selling of large expensive equipment, such as
multiple sales of steam generators, could be significantly greater in some time
periods than others. As a result, our quarterly operating results may fluctuate
significantly. Also, launching one or more additional websites in one or more
consecutive quarters might increase our costs significantly compared to other
quarters.

We intend to rely initially on revenues from the utilities and large
industrial companies, and if we do not generate revenues from these two markets,
or the revenues are lower than we anticipate, we might not have the resources to
launch additional websites or form new strategic alliances.

We intend to rely on revenues generated from technology license fees,
commission fees from our websites and maintenance and service fees. Our
principal initial targeted markets will be the utility industry and large
industrial manufacturing companies. If we do not generate revenue from these two
markets or they are lower than we anticipate, we may not be able to successfully
create other industry-specific websites that will generate additional license
and commission fees.

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<PAGE> 17

Our inability to generate and increase revenues in these initial markets
may depend on factors stated in other risk factors and other factors, including:

- buyers might not accept purchasing "new" third party equipment and parts
without associated original equipment warranties or aftermarket services
programs; and

- export/import regulations and fees could hamper or halt the international
shipment and transfer of electric generation equipment, particularly
nuclear generation equipment.

We may not develop additional revenue sources.

We plan to generate revenues through revenue sharing relationships with
strategic partners with whom we would form websites for the sale of assets and
services to particular industries. To generate significant revenues from
Internet business-to-business e-commerce, we will have to continue to build
these business relationships through our contacts within that industry and the
expertise of our current or future personnel in that industry. We may not be
able to form new strategic alliances due to a lack of sufficient financial
resources or expertise in the newly targeted industry. If we are not able to
build these relationships with strategic partners, we will have difficulty
developing additional business specific websites in order to generate revenues.

Marketing and distribution alliances may not generate the expected number of
new customers or may be terminated.

We intend to use marketing, distribution and strategic trade-group
alliances with other Internet companies, including our existing alliances with
asseTrade and Butcher Fox, to create traffic on our on-line business communities
and, consequently, to generate revenues. These marketing and distribution
alliances will allow us to link our on-line websites to Internet search engines
and other websites. The success of these relationships depends on the amount of
increased traffic we receive from the alliance partners' websites.

We may have difficulty entering into marketing and distribution alliances.
Also, these arrangements may not generate the number of new customers we expect.
We also cannot assure you that we will be able to enter into these marketing and
distribution alliances or renew any marketing and distribution alliance
agreements that we can establish. If we are unable to establish these alliances
or if any of these agreements are terminated, the traffic on other on-line
websites might not grow and could decrease.

We may not be able to compete effectively with other providers of e-commerce
services.

We believe that the strongest potential competition does not come from
traditional service groups but rather the evolution of the Internet and the
types of business-to-business service providers that evolution will create. As
applications for business-to-business e-commerce begin to proliferate and
mature, entrade.com will compete with other technology companies and traditional
service providers that seek to integrate on-line business technologies with
their traditional service mix.

Competition for Internet products and services and electronic business
commerce is intense. We expect that competition will continue to intensify.
Barriers to entry are minimal, and competitors can launch new websites at a
relatively low cost. We expect that additional companies will establish
competing on-line business communities on a stand-alone basis.

E-commerce applications are in the early stages of development. Currently,
the principal focus of e-commerce business-to-business groups is to provide
information and generate revenues from advertisement. As e-commerce evolves,
however, we expect that other entrepreneurs and large, well-known leaders in
specific industries will create other niche business-to-business services that
may compete with our services.

These large industry leaders, particularly major original equipment
manufacturers of utility and industrial equipment, would have better name
recognition in the market that we may target. We also

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<PAGE> 18

expect competition from large consulting firms and software solutions providers,
which have begun developing e-commerce applications for their existing clients.
The larger financial resources of these competitors may enable them to market to
potential buyers and sellers of equipment, inventory, parts and other assets and
launch more widespread marketing campaigns that would make it more difficult for
us to compete.

We may not be able to protect our proprietary rights, and we may infringe on
the proprietary rights of others.

Trademarks and service marks risks.

Proprietary rights are important to our success and our competitive
position. Our ORBIT System is a federally registered trademark for use on
specified software. We have also applied for federal registration of
"utiliparts.com" and "entrade.com" as service marks for use in connection with
our electronic commerce services.

Although we seek to protect our proprietary rights, our actions may be
inadequate to protect any trademarks and other proprietary rights or to prevent
others from claiming violations of their trademarks and other proprietary
rights. We may not be able to protect our domain names for our on-line industry-
specific websites as trademarks because those names may be too generic or
perceived as describing a product or service or its attributes rather than
serving a trademark function.

If we are unable to protect our proprietary rights in trademarks, service
marks, trade dress and other indications of origin, competitors will be able to
use names and marks that are identical to ours or sufficiently similar to ours
to cause confusion among potential customers between us and our services and our
competitors and their services. This confusion may result in the diversion of
business to our competitors or the loss of potential or existing customers.
Also, to the extent these competitors have problems with the quality of their
services, this confusion may injure our reputation for quality.

Litigation against infringers of our service marks, trademarks and similar
rights may be expensive. Because of the difficulty in proving damages in
trademark litigation, it may be very difficult to recover damages.

We have not conducted searches to determine whether our service marks,
trademarks and similar items may infringe on the rights of third parties. If
third parties successfully assert claims of trademark, service mark or other
infringement, the third party or a court or other administrative body may
require us to change our service marks, trademarks, company names, the design of
our sites and materials and our Internet domain names, as well as to pay damages
for any infringement. A change in service marks, trademarks, company names and
Internet domain names may cause difficulties for our customers in locating us or
not connecting our new names and marks with our prior names and marks, resulting
in loss of business.

Copyrights risks; software license risks.

While we seek to protect our software, text, designs and other works of
authorship by copyright, it is not possible to detect all possible
infringements. Also, copyright protection does not extend to functional features
of software and will not be effective to prevent third parties from duplicating
our software's capabilities through engineering research and development.

We may under limited circumstances grant access to the source code for our
software to some of our licensees. We believe that whenever we grant access to
source code, it is easier for those receiving access to the software to
improperly use and modify the software. This access increases the risk of
infringement to our software and may prevent us from receiving royalties from
unauthorized users of the software.

We have not conducted searches to determine if our software infringes on
any patents of third parties. If our software is found to infringe on the
copyrights or patents of a third party, the third party or a court or other
administrative body could require us to pay royalties for past use and for
continued use, or to

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<PAGE> 19

modify or replace the software to avoid infringement. We cannot assure you that
we will be able to modify or replace the software.

Any of these claims, with or without merit, could subject us to costly
litigation and the diversion of our technical and management personnel.

Difficulty of protecting proprietary rights in other countries.

In addition, effective copyright and trademark protection may be
unenforceable or limited in some countries, and the global nature of the
Internet makes it impossible to control the ultimate destination of our work.

Our business depends on the effective development of the Internet as an
effective e-commerce business and marketing forum.

The Internet poses risks that are applicable to many on-line businesses,
including ours. The following present a description of these risks:

Our success depends on our ability to use an effective Internet marketing
strategy which depends on Internet governance and regulation which is uncertain.

The future success of our business is dependent on our ability to use an
effective Internet marketing strategy. Because the original role of the Internet
was to link the government's computers with academic institutions' computers,
the Internet was historically administered by organizations that were involved
in sponsoring research. Private parties have assumed larger roles in the
enhancement and maintenance of the Internet infrastructure. Therefore, it is
unclear what organization, if any, will govern the administration of the
Internet in the future, including the authorization of domain names.

The lack of an appropriate organization to govern the administration of the
Internet infrastructure and the legal uncertainties that may follow, pose risks
to the commercial Internet industry and our specific website business. In
addition, the effective operation of the Internet and our business is also
dependent on the continued mutual cooperation among several organizations that
have widely divergent interests, including the government, Internet service
providers and developers of system software and software language. These
organizations may find that achieving a consensus may become difficult,
impossible, time-consuming and costly.

Although we are not subject to direct regulation in the United States other
than federal and state business regulations generally, changes in the regulatory
environment could result in the Federal Communications Commission or other
United States regulatory agencies directly regulating our business.
Additionally, as Internet use becomes more internationally widespread, there is
an increased likelihood of international regulation. For example, import/export
regulations and related costs may limit the growth of our utiliparts.com
business.

We cannot predict whether or to what extent any new regulation affecting
e-commerce will occur. New regulation could increase our costs. For example, we
do not collect sales or other similar taxes with respect to the equipment,
inventory and other products sold through our on-line communities. One or more
states may seek to impose sales tax collection obligations on out-of-state
companies like us that engage in or facilitate e-commerce. States and local
governments have made proposals that would impose additional taxes on the sale
of goods and services over the Internet. A successful assertion by one or more
states or any foreign country that we should collect sales and other taxes on
the exchange of equipment, inventory and other goods on our system could
increase costs that we could have difficulty recovering from users of our
website.

Governmental agencies and their designees regulate the acquisition and
maintenance of web addresses generally. For example, in the United States, the
National Science Foundation had appointed Network Solutions, Inc. as the
exclusive registrar for the ".com," ".net" and ".org" generic top-level
addresses.

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<PAGE> 20

Although Network Solutions no longer has exclusivity, it remains the dominant
registrar. The regulation of web addresses in the United States and in foreign
countries is subject to change. As a result, we may not be able to acquire or
maintain relevant web addresses in all countries where we conduct business that
are consistent with our brand names and marketing strategy. Furthermore, the
relationship between regulations governing website addresses and laws protecting
trademarks is unclear.

Adoption of the Internet as a medium for utilities and large manufacturing
industry asset trading and distribution is uncertain.

The growth of the Internet for trading and distribution of assets and
equipment for utilities and large manufacturing companies requires validation of
the Internet as an effective medium for this purpose. This validation has yet to
fully occur. For example, critical issues concerning use of the Internet
including security, reliability, cost, ease of use and quality of service remain
unresolved and could adversely affect the growth of and the degree to which
business is conducted over the Internet and our websites.

We may face increased access costs from browser providers and Internet
distribution channels.

Leading web site, browser providers and other Internet distribution
channels may begin to charge us to provide access to our products and services.
If any of these expenses are not accompanied by increased revenues, our losses
may increase.

Concerns regarding security of transactions and transmitting confidential
information over the Internet may negatively impact our e-commerce business.

We believe that concern regarding the security of confidential information
transmitted over the Internet, including, for example, business and supply
requirements, credit card numbers and other forms of payment methods, prevents
many potential customers from engaging in online transactions. If we do not add
sufficient security features to future product releases, our services may not
gain market acceptance or we may face additional legal exposure.

Despite the measures we have taken in the areas of encryption and password
or other authentication software devices, our infrastructure is potentially
vulnerable to physical or electronic break-ins, computer viruses, hackers or
similar problems caused by employees, customers or other Internet users. If a
person circumvents our security measures, that person could misappropriate
proprietary information or cause interruptions in our operations. Security
breaches that result in access to confidential information could damage our
reputation and expose us to a risk of loss or liability. These risks may require
us to make significant investments and efforts to protect against or remedy
security breaches, which would increase the costs of maintaining our websites.

Our computers and telecommunications equipment are maintained by a third
party server hosting company. Any system interruptions may cause our on-line
websites to be unavailable to web browsers and may reduce their attractiveness
to our customers and potential customers.

Also, we could experience delays in switching to a new service provider.
Any delays in response time or performance problems would cause users of our
system to perceive our service as not functioning properly and cause them to use
other methods to sell or procure equipment, excess inventory and other assets.

We may be subject to legal liability for publishing or distributing content
over the Internet.

We may be subject to legal claims relating to the content in our
industry-specific on-line websites, or the downloading and distribution of
content. Claims could also involve matters such as defamation, invasion of
privacy, disclosure of confidential information and copyright infringement.
Providers of Internet products and services have been sued in the past,
sometimes successfully, based on the content of material. The representations as
to the origin and ownership of licensed content that we generally obtain may not
adequately protect us.

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In addition, we draw some of the content provided in our on-line business
communities from data compiled by other parties, including governmental and
commercial sources, and we re-key the data. This data may have errors. If our
content is improperly used or if we supply incorrect information, it could
result in unexpected liability. Our insurance may not cover claims of this type,
or may not provide sufficient coverage. Costs from these claims that are not
covered by our insurance or exceed our coverage would damage our business and
limit our financial resources.

We depend on the continual introduction of enhanced software capabilities and
expansion of our software systems for our services to handle increases in
traffic on our websites, which we may not be able to accurately project.

As traffic in our on-line websites increases, we must expand and upgrade
our technology, transaction processing systems and network hardware and
software. We may not be able to accurately project the rate of increase in our
on-line websites. In addition, we may not be able to expand and upgrade our
systems and network hardware and software capabilities to accommodate increased
use of our on-line websites. If we do not appropriately upgrade our systems,
network hardware and software on an ongoing basis, we may have difficulty
retaining our customers and competing effectively.

The life cycles of the software used to support our e-commerce services are
difficult to predict because the market for our e-commerce websites for sales
and procurement of equipment, inventory and assets is new and emerging and is
characterized by changing customer needs and industry standards. The
introduction of on-line products employing new technologies and industry
standards could render our existing system obsolete and unmarketable. For
example, entrade.com's new software system that we intend to launch in the third
quarter of 1999 is written in the Microsoft's SLQ7.0 computer language. If a new
software language becomes the industry standard, we may need to rewrite the
software to remain competitive. We may not be able to respond in a
cost-effective way and lose business as a result.

Acquisitions and new strategic alliances may disrupt or otherwise have a
negative impact on our business.

We plan to make investments in complementary companies, technologies and
assets. Future acquisitions are subject to the following risks:

- acquisitions may cause a disruption in our ongoing business, distract our
relatively new management team and other resources and make it difficult
to maintain our standards, controls and procedures;

- we may acquire companies or make strategic alliances in markets in which
we have little experience;

- we may not be able to successfully integrate the services, products and
personnel of any acquisition or new alliance into our operations;

- we may be required to incur debt or issue equity securities, which may be
dilutive to existing shareholders, to pay for acquisitions; and

- our acquisitions may not result in any return on our investment and we
may lose our entire investment.

Our success is dependent on retaining our current key personnel and attracting
additional key personnel, particularly in the areas of sales, technical services
and customer support.

We believe that our success will depend on continued employment of our
senior management team and key technical personnel for the development of our
on-line services and the attraction of large businesses to use our on-line
websites for the purchase and sale of equipment, inventory and assets. Their
experience in e-commerce asset sales and procurement is important to the
establishment of our on-line websites in various industries.

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We do not maintain key-man life insurance on our key personnel. The loss of
the services of one or more of our management personnel could seriously harm our
business.

Our success also depends on having a highly trained sales force, telesales
group and technical and customer support personnel. We will need to continue to
hire additional personnel as our business grows. We have perceived a shortage in
the number of trained sales, technical and customer support personnel in the
on-line service industry. This shortage could limit our ability to increase
sales in our on-line websites and to sell services as we launch additional
websites. Competition for personnel, particularly for employees with technical
expertise, is intense. New hires also frequently require extensive training
before they achieve desired levels of productivity. If we cannot hire and retain
suitable personnel, we may not be able to effectively expand and develop new
business communities or support those that are developed, resulting in loss of
customers and revenues.

Our systems may not be Year 2000 compliant.

We may realize exposure and risk if the systems on which we are dependent
to conduct our operations are not Year 2000 compliant. We are in the process of
completing the testing of our internal computer systems and our internal
computer software and our non-IT systems for year 2000 compliance and anticipate
that we will complete all testing by the end of September 1999.

We are in the process of confirming Year 2000 compliance by our third party
service providers through surveys circulated to them. We expect to complete this
survey process by the end of September 1999. Our potential areas of exposure
include products purchased from third parties, computers, software, telephone
systems and other equipment used internally. Also, if clients, distributors,
suppliers and other third parties with which we conduct business do not
successfully address these issues, our business, operating results and financial
position could be materially and adversely affected.

In the event that our web-hosting facilities provided by a third party are
not Year 2000 compliant, our production web sites would be unavailable and we
would not be able to deliver services to our users. In the event that the
production and operational facilities that support our web sites are not Year
2000 compliant, some portions of our websites may become unavailable. Our
contingency plans include hosting the production websites directly from our
office or from a development or staging server that is Year 2000 compliant.
While we believe that we will be able to transfer our servers to another service
provider within a two to three-day period if it is necessary to implement this
plan, we cannot assure you that we can complete that transfer without
significant disruption.

The interests of our significant shareholders after the merger may conflict
with our interests and the interests of our other shareholders.

As a result of its stock ownership, WorldWide may be in a position to
affect significantly our corporate actions, including, for example, mergers or
takeover attempts, in a manner that could conflict with the interests of our
public shareholders. WorldWide will own 1,800,000 shares or approximately 15.5%
of the outstanding shares of Entrade common stock after the merger. Principals
of entrade.com, who will resign from their positions with WorldWide after the
merger, also hold stock options to purchase an aggregate of 1,600,000 shares of
Artra common stock. Although this may not necessarily constitute a controlling
block, the significant block represented could impact significant corporate
transactions and delay or prevent a third party from acquiring control over us.

Our minority interest in asseTrade.com and the potential for deadlock in
stockholder and board actions may impede the growth and development of
asseTrade.com's operations.

Due to our minority interest in asseTrade.com, we may experience a
reduction or loss in the value we derive from asseTrade.com both as an
investment and as a potential source of business, customers and services for our
websites. We currently hold 25% of the voting common stock of asseTrade.com.
Positive Asset Remarketing, Inc. holds a 25% voting interest, and the remaining
50% is held by Butcher Fox LLC. Our minority interest could reduce our ability
to direct the management and operations of asseTrade.com.
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Furthermore, voting interests by the stockholders and board members could become
deadlocked. Any deadlock would impede or prevent the growth and development of
asseTrade.com's operations.

Shares eligible for future sales by our current shareholders may adversely
affect our stock price.

If our existing shareholders sell substantial amounts of Entrade common
stock, including shares issued on the exercise of outstanding options and
warrants, in the public market following the merger, then the market price of
our common stock could fall. Our current shareholders are:

<TABLE>
<CAPTION>
NAME OF NUMBER OF SHARES
ENTRADE SHAREHOLDER OF ENTRADE COMMON STOCK
- ------------------- -----------------------
<S> <C>
WorldWide 1,800,000 shares
Energy Trading Company 200,000 shares
</TABLE>

WorldWide is subject to a lockup under the merger agreement for sales or
transfers of its Entrade shares until the first anniversary after the closing of
the merger, subject to exceptions for pledges or the distribution of up to 25%
of the Entrade shares to WorldWide's shareholders. Subject to the lock-up
provision applicable to WorldWide, these shareholders may be able to utilize
Rule 144 to sell shares.

We also may file one or more registration statements to register all shares
of Entrade common stock under our stock option plans and warrants that we will
assume from Artra in the merger. After such registration statements are
effective, shares issued upon exercise of stock options and the warrants will be
eligible for sale in the public market without restriction, except that
affiliates of Entrade after the merger must comply with the registration
requirements under the Securities Act or an exemption from the registration
requirements, such as Rule 144.

Anti-takeover provisions and our right to issue preferred stock could make a
third party acquisition of us difficult.

Entrade is a Pennsylvania corporation. Anti-takeover provisions of
Pennsylvania law could make it more difficult for a third party to acquire
control of us, even if a change in control would be beneficial to shareholders.
For a discussion of these anti-takeover provisions, see "Description of Entrade
Capital Stock -- Anti-Takeover Provisions" on page 54.

Our articles of incorporation provide that our board of directors may issue
preferred stock without shareholder approval. The issuance of preferred stock
could make it more difficult for a third party to acquire us. Our board of
directors may issue preferred stock with voting or conversion rights that may
have the effect of delaying, deferring or preventing a change of control of us
and would adversely affect the market price of the Entrade common stock and
voting and other rights of holders of Entrade common stock. We currently have no
plans to issue any preferred stock.

The Entrade common stock price is likely to be highly volatile.

The market price of Entrade common stock is likely to be highly volatile as
the stock market in general, and the market for Internet-related and technology
companies in particular, has been highly volatile. Our shareholders may not be
able to resell their shares of Entrade common stock following periods of
volatility because of the market's adverse reaction to this volatility. The
trading prices of many technology and Internet-related companies' stocks have
reached historical highs within the past 18 months and have reflected relative
valuations substantially above historical levels. During the same period, these
companies' stocks have also been highly volatile and have recorded lows well
below those historical highs. We cannot assure you that our stock will trade at
the same levels of other Internet stocks or that Internet stocks in general will
sustain their current market prices.

Factors that could cause this volatility may include, among other things:

- actual or anticipated variations in quarterly operating results;

- announcements of technological innovations;
16
<PAGE> 24

- new sales formats or new products or services;

- changes in financial estimates by securities analysts;

- conditions or trends in the utilities and large manufacturing industries;

- conditions or trends in the Internet industry;

- changes in the market valuations of other Internet companies;

- announcements by us or our competitors of significant acquisitions,
strategic partnerships or joint ventures;

- changes in capital commitments;

- additions or departures of key personnel; and

- sales of Entrade common stock.

Many of these factors are beyond our control. These factors may materially
adversely affect the market price of our common stock, regardless of our
operating performance.

RISK FACTORS RELATING TO ARTRA

Lack of compliance with New York Stock Exchange listing criteria may result in
delisting of Artra common stock or, after the merger, Entrade common stock.

Artra had fallen below the New York Stock Exchange's quantitative and other
continued listing criteria. These criteria included the New York Stock
Exchange's net tangible assets and average three-year net income requirements.
Also, after the sale of Artra's Bagcraft subsidiary, Artra has lacked an ongoing
operating business as required under the New York Stock Exchange's rules. At the
New York Stock Exchange's request, Artra has provided a definitive action plan
demonstrating Artra's ability to achieve compliance with the Exchange's listing
standards, including the succession of Entrade common stock to this listing
after the merger. Based upon a review of that plan, the New York Stock Exchange
is continuing the listing of Artra common stock.

Artra and, after the merger, Entrade will be subject to ongoing quarterly
monitoring for compliance with the plan. Failure to meet any of the quarterly
plan projections could result in the suspension from trading and subsequent
delisting of Artra common stock and, after the merger, Entrade common stock.
Artra's plan is dependent upon the closing of the merger during the third
quarter of 1999. If the merger is not completed, Artra may not be able to
satisfy the listing requirements of the New York Stock Exchange, and Artra
common stock may be delisted from the New York Stock Exchange.

If the New York Stock Exchange suspends trading in and delists the Artra
common stock, or after the merger the Entrade common stock, Artra or Entrade
would attempt to list the shares on another exchange or quotation system such as
the Nasdaq National Market System. We cannot assure you that we can successfully
effect this new listing. As a result, if we are not able to effect this listing,
you might not be able to sell your shares at all, and if you were able to sell
your shares, you may face lower share prices.

Artra's potential environmental liabilities and other potential liabilities
from other claims may result in future costs to Artra that are difficult to
estimate.

Former operations of Artra and its subsidiaries have been subject to
requirements imposed under federal, state and local environmental and health and
safety laws and regulations, including the Clean Water Act, the Clean Air Act,
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act and the Occupational Safety and Health
Act and comparable state laws, relating to waste water discharges, air
emissions, solid waste management and disposal practices, work place safety and
real property use and ownership.

17
<PAGE> 25

Liability under CERCLA is, in most instances, strict, joint and several,
meaning that Artra could be liable for all response costs incurred. As a result
of these environmental matters, Artra and its subsidiaries have, from time to
time, been and currently are involved in administrative and judicial proceedings
and inquiries. The currently pending proceedings relate primarily to claims for
damages with respect to sites and facilities of Baltimore Paint and Chemical
Company, Harvel Industries, Inc., Dutch Boy Paints and Bagcraft. Artra has
provided accruals for these claims. Various uncertainties, however, with respect
to these and other sites and facilities make it difficult to assess the
likelihood and scope of further investigation or remediation activities or to
estimate the future costs of these activities if undertaken. See "Information
About Artra -- Legal Proceedings" on page 74.

Since 1983, Artra has been a party to product liability asbestos claims
relating to the manufacture of products by The Synkoloid Company, a former
operating subsidiary. As of September 1998, Artra's primary insurance carriers
had paid approximately $13 million in claims related to Synkoloid products, at
which point the primary carriers asserted that primary insurance coverage had
been exhausted. Since that date, some of Artra's excess insurance carriers have
assumed the defense and indemnity costs related to the defense and settlement of
all Synkoloid product liability claims under a temporary agreement.

From September 1998 through August 1, 1999, these carriers had paid
approximately $8.5 million to settle claims. Artra believes that the remaining
excess coverage totals approximately $200 million. Under the temporary
agreement, these carriers could either individually or collectively cease making
indemnity or defense payments at any time or refuse to renew the temporary
agreement, which was due to expire on August 16, 1999. Artra has received an
oral representation from the carriers' lead counsel that the temporary agreement
has been extended to September 30, 1999.

While Artra is currently negotiating a permanent agreement with these
carriers, we cannot assure you that any permanent agreement will be reached or
that the carriers will continue to make payments on the same terms as under the
existing temporary agreement. If the terms of the new agreement are less
favorable than the existing agreement or the temporary agreement expires without
the execution of a new agreement, Artra could become obligated to assume a
percentage of the indemnity payments and defense costs. Artra is not able to
quantify the potential costs of claims that remain outstanding or unasserted. If
claims exceed the insurance coverage, Artra's financial position could be
materially and adversely affected and Artra's ability to fund its operations or
those of its current or future affiliates would be impaired. See "Information
About Artra -- Legal Proceedings" on page 74.

WHERE YOU CAN FIND MORE INFORMATION

Artra files annual, quarterly and current reports, proxy statements and
other information with the Commission. You may read and copy any reports,
statements or other information filed by Artra at the Commission's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms. Artra's filings with the Commission are also available
to the public from commercial document retrieval services and at the web site
maintained by the Commission at http://www.sec.gov.

Entrade filed a registration statement on Form S-4 to register with the
Commission the Entrade common stock to be issued to Artra shareholders in the
merger. This Proxy Statement/Prospectus is a part of the registration statement.
As allowed by the Commission's rules, this Proxy Statement/Prospectus does not
contain all the information you can find in the Registration Statement or the
exhibits to the registration statement. This Proxy Statement/Prospectus
summarizes some of the documents that are exhibits to the registration
statement, and you should refer to the exhibits for a more complete description
of the matters covered by those documents.

Artra has supplied all information contained in the Proxy
Statement/Prospectus relating to Artra and Entrade has supplied all information
relating to Entrade.

-------------------------

18
<PAGE> 26

NEITHER ARTRA NOR ENTRADE HAS AUTHORIZED ANYONE TO GIVE ANY INFORMATION
REGARDING THE SOLICITATION OF CONSENTS OR THE OFFERING OF SHARES OF ENTRADE
COMMON STOCK THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF ANYONE
TO WHOM IT WOULD BE UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. YOU SHOULD NOT
ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IS
ACCURATE AS OF ANY TIME AFTER THE DATE OF THIS PROXY STATEMENT/PROSPECTUS, AND
NEITHER THE MAILING OF THIS PROXY STATEMENT/PROSPECTUS TO SHAREHOLDERS NOR THE
ISSUANCE OF ENTRADE COMMON STOCK IN THE MERGER SHOULD CREATE ANY IMPLICATION TO
THE CONTRARY.

-------------------------

FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE

This Proxy Statement/Prospectus contains "forward-looking statements."
These statements, which include statements regarding expected advantages and
other effects of the merger and the anticipated business operations of Entrade
described in "Summary," "Risk Factors," "The Merger -- Artra Reasons for the
Merger," "Information About Entrade Inc. and entrade.com -- Entrade Plan of
Operations," "Management of Entrade," and elsewhere in this Proxy
Statement/Prospectus relate to expectations concerning matters that are not
historical facts. We intend to identify forward-looking statements with words
such as "projects," "believes," "anticipates," "plans," "expects," "intends,"
"estimates" and similar words and expressions. We have set forth important
factors that would cause actual results to differ materially from these
expectations "Risk Factors" beginning on page 8. These factors include:

- No operating history for entrade.com;

- Probability of continued losses for entrade.com for the foreseeable
future;

- Need for future funding;

- Fluctuations in quarterly results;

- Dependence on utilities and large manufacturing industries;

- Need to develop additional revenue sources;

- A highly competitive environment with providers of Internet services;

- Difficulties in protecting proprietary rights and effective Web
addresses;

- Effective development of the Internet as an effective e-commerce business
and marketing forum; and

- Dependence on key personnel.

All forward-looking statements attributable to Artra are expressly
qualified in their entirety by these factors as described in this Proxy
Statement/Prospectus. All forward-looking statements attributable to Entrade are
expressly qualified in their entirety by these factors as described in this
Proxy Statement/ Prospectus. Neither Artra nor Entrade undertakes any obligation
to update any forward-looking statements. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this Proxy Statement/Prospectus.

19
<PAGE> 27

SELECTED HISTORICAL CONDENSED FINANCIAL INFORMATION AND
COMPARATIVE PER SHARE DATA

This table is a consolidated summary of selected financial data of Artra
for the six-month periods ended June 30, 1999 and 1998 and for each of the last
five fiscal years. The operations of the Bagcraft subsidiary, which was sold
effective November 20, 1998, are included in discontinued operations. The
information for fiscal years 1995 and 1994 presents the operations of Arcar
Graphics, Inc. in discontinued operations. The sale of Arcar Graphics, Inc.,
which was acquired effective April 9, 1994, was completed on October 26, 1995.
The information for fiscal years 1995 and 1994 presents the operations of
Artra's former jewelry business in discontinued operations.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, FISCAL YEAR ENDED(J)
----------------- -------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- ------- ------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales.............................. $ -- $ -- $ -- $ -- $ -- $ -- $ --
Earnings (loss) from continuing
operations(A)(B)(C)(D)............... (4,321) (2,893) (5,707) 1,066 (445) (11,113) (5,833)
Earnings (loss) from discontinued
operations(E)(F)(H).................. -- (810) 38,930 (293) 3,994 (5,820) (23,602)
Extraordinary credits(H)............... -- -- -- -- 9,424 14,030 8,965
Net earnings (loss).................... (4,321) (2,083) 33,223 773 12,973 (2,903) (20,470)
Earnings (loss) per share(I):
Basic
Continuing operations............. (0.54) (0.39) (0.78) -- (0.19) (1.84) (1.17)
Discontinued operations........... -- 0.10 4.94 (0.04) 0.53 (0.86) (4.14)
Extraordinary credits............. -- -- -- -- 1.25 2.07 1.57
Net earnings (loss)............... (0.54) (0.29) 4.16 (0.04) 1.59 (0.63) (3.74)
Diluted
Continuing operations............. (0.54) (0.39) (0.78) -- (0.19) (1.84) (1.17)
Discontinued operations........... -- 0.10 4.94 (0.04) 0.53 (0.86) (4.14)
Extraordinary credits............. -- -- -- -- 1.25 2.07 1.57
Net earnings (loss)............... (0.54) (0.29) 4.16 (0.04) 1.59 (0.63) (3.74)
Weighted average number of shares
outstanding
Basic................................ 8,331 7,914 7,891 7,970 7,525 6,776 5,702
Diluted.............................. 8,331 7,914 7,891 7,970 7,525 6,776 5,702
Total assets........................... 16,921 21,268 73,206 77,379 77,949 93,429
Long-term debt......................... -- -- 50,619 34,207 34,113 19,673
Debt subsequently discharged........... -- -- -- -- -- 9,750
Cash dividends......................... -- -- -- -- -- --
</TABLE>

- ---------------

(A) Earnings from continuing operations for the years ended December 31, 1998,
December 31, 1997 and December 26, 1996 include realized gains of $320,000,
$2,531,000 and $5,818,000, respectively, from dispositions of Comforce
common stock.

(B) Earnings from continuing operations for the year ended December 31, 1997
includes a gain from settlement of litigation of $10,416,000, net of
related legal fees and other expenses, and net related party
compensation/expense reimbursement costs of $2,816,000. See Notes 15 and 16
to Artra's consolidated financial statements.

20
<PAGE> 28

(C) Earnings from continuing operations for the year ended December 26, 1996
includes a gain of $838,000 from an exchange of redeemable preferred stock
of its Bagcraft subsidiary.

(D) Artra incurred a compensation charge of $1,200,000 during the six months
ended June 30, 1999 relating to stock options granted to four individuals
employed to manage Artra's entry into the Internet business-to-business
e-commerce and on-line auction business and also had $1,300,000 of losses
incurred by Entrade. Artra incurred a compensation charge of $575,000
during the six months ended June 30, 1999 relating to stock options granted
to Artra's newly appointed president and chief executive officer.

(E) Earnings from discontinued operations for the year ended December 31, 1998
includes a net gain on disposition of the Bagcraft subsidiary of
$35,985,000. See Note 3 to Artra's consolidated financial statements.

(F) The loss from discontinued operations for the year ended December 28, 1995
includes a charge to operations of $6,430,000 to write-off the remaining
goodwill of Comforce's jewelry business effective June 29, 1995 and a
provision of $1,000,000 for loss on disposal of Comforce's jewelry
business. The loss from discontinued operations for the year ended December
28, 1995 includes a gain on sale of Bagcraft's Arcar subsidiary of
$8,483,000.

(G) The loss from discontinued operations for the year ended December 31, 1994
includes a charge to operations of $10,800,000 representing a write-off of
goodwill at Comforce's New Dimensions subsidiary.

(H) The 1996, 1995 and 1994 extraordinary credits represent gains from net
discharge of bank indebtedness.

(I) In 1997, Artra adopted the provisions of SFAS No. 128, "Earnings Per Share"
and restated prior periods accordingly.

(J) In 1997, Artra changed its fiscal year end to December 31. In prior years,
Artra had operated on a 52/53 week fiscal year ending the last Thursday of
December.

21
<PAGE> 29

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined balance sheet as of
June 30, 1999 presents the financial position of Entrade as if the proposed
merger of Artra with a subsidiary of Entrade and the exchange of Artra common
stock and Artra preferred stock for Entrade common stock had been approved by
Artra's shareholders and was effective as of June 30, 1999.

The following unaudited pro forma condensed combined statement of
operations for the six months ended June 30, 1999 is presented as if proposed
merger of Artra with a subsidiary of Entrade and the exchange of Artra common
stock and Artra preferred stock for Entrade common stock had been approved by
Artra's shareholders and was effective as of January 1, 1999. Entrade had no
operations and no revenues related to the assets acquired. asseTrade.com had no
operations and no revenues when the 25% voting interest was acquired by Entrade.
Accordingly, no pro forma results of operations are presented for the six months
ended June 30, 1998 and the twelve months ended December 31, 1998 as in the
opinion of management this information would not be meaningful.

22
<PAGE> 30

ENTRADE INC. AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1999

<TABLE>
<CAPTION>
ARTRA PRO FORMA
HISTORICAL ENTRADE INC. ADJUSTMENTS PRO FORMA
---------- ------------ ----------- ---------
(UNAUDITED IN THOUSANDS)
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and equivalents............................ $10,495 $ 176 $10,671
Restricted cash and equivalents................. 111 111
Available-for-sale securities................... 4,577 4,577
Other........................................... 221 65 286
------- ------ -------
Total current assets......................... 15,404 241 15,645
------- ------ -------
Advances to Entrade Inc........................... 1,428 $(2,100)(A) --
1,300(B)
(628)(F)
Property, plant & equipment, net.................. 304 304
Intangibles, net.................................. 3,510 4,625(C) 9,763
1,000(E)
628(F)
Investment in asseTrade.com....................... 3,500 3,500
Other............................................. 89 89
------- ------ ------- -------
16,921 7,555 4,825 29,301
======= ====== ======= =======
CURRENT LIABILITIES
Accrued liabilities............................. 590 12 506(E) 1,108
Common stock put warrants....................... 511 511
Accounts payable, including amounts due related
parties...................................... 383 383
Income taxes payable............................ 1,114 1,114
Note payable.................................... 500 500
Due to ARTRA.................................... 2,100 (2,100)(A) --
Liabilities of discontinued operations.......... 8,464 8,464
------- ------ -------
10,679 2,995 12,080
------- ------ -------
Redeemable preferred stock........................ 3,051 (3,051)(D) --
Shareholders' Equity.............................. 3,191 4,560 1,300(B) 17,221
4,625(C)
3,051(D)
494(E)
------- ------ ------- -------
$16,921 $7,555 $ 4,825 $29,301
======= ====== ======= =======
</TABLE>

23
<PAGE> 31

Notes to the pro forma condensed combined balance sheet:

(A) Eliminate Artra advances to Entrade Inc.

(B) Reverse Entrade Inc. expenses reported in Artra's historical financial
statements.

(C) Reflects the market value of Entrade Inc. common shares to be issued as
consideration for the Entrade Inc. transaction. No readily ascertainable
market exists to value the Entrade Inc. common shares. Accordingly, the
valuation of Entrade Inc. common shares is based upon the market price of
Artra common stock, as discounted, as of February 23, 1999, the date of the
merger agreement.

<TABLE>
<S> <C> <C>
Number of common shares to be issued........................ 2,000
Market value of Artra common stock at February 23, 1999..... $5.812500
Less 15% blockage discount.................................. (.871875)
---------
$4.940625
---------
Fair market value of common shares to be issued............. 9,881
Less Entrade equity at February 23, 1999.................... (5,256)
---------
Adjustment to equity........................................ $ 4,625
=========
</TABLE>

(D) Exchange Artra preferred stock for Entrade Inc. common stock at the rate of
329 Entrade Inc. common shares for each share of Artra preferred stock. The
fair value of Entrade Inc. common stock issued will be used as the basis to
account for the exchange of Artra preferred stock. The excess of fair value
of the Entrade Inc. common stock over the book value of the preferred shares
will be accounted for like a preferred stock dividend. Due to its
non-recurring nature, this transaction was not reflected in the pro forma
condensed combined financial statements.

(E) Accrue finders fee and other acquisition related costs.

(F) Reclass acquisition costs and fees paid by Artra.

24
<PAGE> 32

ENTRADE INC. AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
ARTRA PRO FORMA
HISTORICAL ENTRADE INC. ADJUSTMENTS PRO FORMA
---------- ------------ ----------- ---------
(UNAUDITED IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales......................................... $ -- $ 111 $ 111
------- ------- -------
Costs and expenses:
Selling, general and administrative............. 4,528 1,102 5,630
Depreciation and amortization................... 310 700(A) 1,010
------- ------- -------
4,528 1,412 6,640
------- ------- -------
Operating loss.................................... (4,528) (1,301) (6,529)
------- ------- -------
Other income (expense):
Interest income, net............................ 207 1 208
------- ------- -------
207 1 208
------- ------- -------
Loss from continuing operations before income
taxes........................................... (4,321) (1,300) (6,321)
Provision for income taxes........................ -- --
------- ------- ---- -------
Loss from continuing operations................... $(4,321) $(1,300) $700 $(6,321)
======= ======= ==== =======
Per share loss from continuing operations
applicable to common shares:
Basic........................................... $ (0.54) $ (0.59)
======= =======
Diluted......................................... $ (0.54) $ (0.59)
======= =======
Weighted average number of shares of common stock
outstanding:
Basic........................................... 8,331 11,039
======= =======
Diluted......................................... 8,331 11,039
======= =======
</TABLE>

25
<PAGE> 33

Notes to the pro forma condensed combined statement of operations:

(A) Additional amortization of intangible assets, assumes a 5 year life.

(B) Pro forma weighted average shares outstanding

<TABLE>
<S> <C>
Historical.................................................. 8,331
Shares issued for Entrade Inc. transaction.................. 2,000
Finder's fee for Entrade Inc. transaction................... 100
Entrade Inc. common shares exchanged for Artra preferred
shares.................................................... 608
------
11,039
======
</TABLE>

(C) The fair value of Entrade Inc. common stock issued will be used as the basis
to account for the exchange of Artra preferred stock. The excess of fair
value of the Entrade Inc. common stock over the book value of the preferred
shares will be accounted for like a preferred stock dividend. Due to its
non-recurring nature, this transaction was not reflected in the pro forma
condensed combined financial statements. Had the transaction been reflected
in the pro forma condensed combined financial statements, the effect on pro
forma loss per share had the exchange been made on February 23, 1999 would
have been as follows:

<TABLE>
<S> <C>
Pro forma loss per share from continuing operations as
presented above........................................... $(0.59)
Effect of the excess of fair value of the Entrade Inc.
common stock over the book value of the Artra preferred
exchanged................................................. $(0.04)
------
Adjusted pro forma loss per share from continuing
operations................................................ $(0.63)
======
</TABLE>

26
<PAGE> 34

MARKET FOR ARTRA'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS

The Artra common stock is traded on the New York Stock Exchange and Pacific
Stock Exchanges. Artra's continued listing is subject to ongoing quarterly
monitoring by the New York Stock Exchange for compliance with Artra's business
plan. That plan is dependent on the closing of the merger during the third
quarter of 1999.

The New York Stock Exchange has informed us that on June 3, 1999, the board
of directors of the New York Stock Exchange approved new quantitative continued
listing standards. The New York Stock Exchange has obtained approval of these
new standards from the Commission. These new standards focus on market
capitalization, stockholders' equity and share price. Given its current
financial condition, Artra believes it satisfies these new standards. The New
York Stock Exchange will continue to review Entrade's status for a period of
twelve months after the closing of the merger.

As of June 25, 1999, the approximate number of holders of Artra common
stock was 2,300.

The high and low sales prices for Artra common stock, as reported in the
New York Stock Exchange Quarterly Market Statistics reports, during the past two
fiscal years were as follows:

<TABLE>
<CAPTION>
1998 1997
----------- -----------
HIGH LOW HIGH LOW
---- --- ---- ---
<S> <C> <C> <C> <C>
First quarter.................................... 4 1/16 3 3/16 6 3/8 4 1/2
Second quarter................................... 3 15/16 3 5 3/4 3 7/8
Third quarter.................................... 4 3 1/4 5 1/8 3 1/2
Fourth quarter................................... 4 1/4 2 1/8 4 1/16 2 1/2
</TABLE>

In the first quarter of 1999, the high and low sale prices for Artra common
stock were $10.625 and $4.25. In the second quarter of 1999, the high and low
sale prices for Artra common stock were $20.4375 and $8.50. On February 22,
1999, the date preceding the public announcement of the proposed merger, the
high and low sales prices of the Artra common stock as reported on the New York
Stock Exchange were $7.125 and $6.50. On August 10, 1999, the high and low sales
prices of Artra common stock as reported on the New York Stock Exchange were
$10.1875 and $9.125.

Artra did not pay dividends in 1998 or 1997 and has no plan to pay
dividends on Artra common stock in 1999. There are no legal restrictions
preventing the payment of cash dividends at this time.

As discussed in Note 9 to Artra's consolidated financial statements, Artra
has outstanding redeemable Artra preferred stock. The dividends accrued on Artra
preferred stock as of June 30, 1999 was $1,338,404.

27
<PAGE> 35

INFORMATION REGARDING BENEFICIAL OWNERSHIP OF
PRINCIPAL ARTRA SHAREHOLDERS AND MANAGEMENT

The following table sets forth, as of the record date for the annual
meeting, the amount and percentage of Artra common stock and Artra preferred
stock by (1) each person who is known by Artra to own beneficially more than 5%
of the outstanding shares of Artra common stock and Artra preferred stock, (2)
each director and nominee for director, (3) each executive officer named in the
Summary Compensation Table and (4) all executive officers and directors of Artra
as a group.

<TABLE>
<CAPTION>
NUMBER OF
ENTRADE
NUMBER OF SHARES
ARTRA BENEFICIALLY ENTRADE
SHARES ARTRA TO BE PERCENT
TITLE OF BENEFICIALLY PERCENT OWNED AFTER AFTER THE
NAME OF BENEFICIAL OWNER ARTRA SHARES OWNED OF CLASS THE MERGER MERGER
- ------------------------ ------------------ ------------ -------- ------------ ---------
<S> <C> <C> <C> <C> <C>
5% HOLDERS:
The Equitable Companies Incorporated(1) Common 559,099 6.3% 559,099 4.8%
Peter R. Harvey(2) Common 590,243 6.5% 590,243 5.0%
John Harvey(3) Common 531,906 5.8% 543,361 4.6%
Series A Preferred 34.82 1.9%
B. Rymer Insurance Trust(4) Series A Preferred 169.74 9.2% 55,844 *
Philip E. Ruben(5) Series A Preferred 949.30 51.3% 312,319 2.7%
DIRECTORS(6):
Gerard M. Kenny(7) Common 180,064 2.0% 180,064 1.5%
Maynard K. Louis(8) Common 84,500 1.0% 84,500 *
Edward A. Celano(9) Common 18,700 * 18,700 *
Howard R. Conant(10) Common 324,000 3.7% 324,000 2.8%
Robert L. Johnson(11) Common 17,873 * 21,139 *
Series A Preferred 9.93 *
Mark F. Santacrose(12) Common 222,500 2.5% 222,500 1.9%
John K. Tull(13) Common 35,143 * 40,587 *
Series A Preferred 16.55 1.0%
EXECUTIVE OFFICERS(14):
John G. Hamm(15) Common 177,232 2.0% 177,232 1.5%
Robert S. Gruber(16) Common 152,354 1.7% 155,620 1.2%
Series A Preferred 9.93 *
James D. Doering(17) Common 147,693 1.6% 147,693 1.2%
All directors and officers as a group Common 2,797,727 26.3% 2,821,158 21.1%
(15 persons)(18) Series A Preferred 71.23 3.8%
</TABLE>

- ---------------

* Less than 1% of the outstanding shares.

(1) The address of The Equitable Companies Incorporated is 1290 Avenue of the
Americas, New York, New York. The shares beneficially owned by The
Equitable Companies consist of 559,100 shares of Artra common stock owned
by four French mutual insurance companies, AXA Assurances I.A.R.D.
Mutuelle, AXA Assurances Vie Mutuelle, Alpha Assurances Vie Mutuelle and
AXA Courtage Assurances Mutuelle, which as a group beneficially own a
majority interest in AXA-UAP, which owns a majority interest in The
Equitable Companies.

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<PAGE> 36

(2) Mr. Peter R. Harvey's business address is 500 Central Avenue, Northfield,
Illinois 60093. The shares of Artra common stock beneficially owned by Mr.
Harvey consist of 373,615 shares held directly by him, 23,001 shares held
as trustee for the benefit of his nieces, 800 shares owned by his wife and
children, 634 shares held in his 401(k) plan, 7,193 shares held in his
individual retirement account, 20,000 shares issuable under an option which
expires September 19, 2001 at an exercise price of $3.65 per share, 15,000
shares issuable under an option which expires January 8, 2003 at an
exercise price of $3.75 per share and 150,000 shares issuable under an
option which expires January 6, 2009 at an exercise price of $4.75 per
share.

(3) Mr. John Harvey's business address is 500 Central Avenue, Northfield,
Illinois 60093. The shares of Artra common stock beneficially owned by Mr.
Harvey consist of 7,452 shares held in his 401(k) plan, 139,806 shares held
as trustee for the benefit of the Harvey Family Trust, 100,000 shares held
by Mr. Harvey's daughters, 47,603 shares issuable under an option which
expires December 19, 2000 at an exercise price of $3.65 per share, 1,000
shares issuable under an option which expires September 19, 2001 at an
exercise price of $3.65 per share, 4,000 shares issuable under an option
which expires January 8, 2003 at an exercise price of $3.75 per share,
131,000 shares issuable under an option which expires October 4, 2006 at an
exercise price of $5.25 per share, 35,000 shares issuable under an option
which expires January 6, 2009 at an exercise price of $4.75 per share and
an aggregate of 66,045 shares issuable under warrants expiring at various
dates in 2000 and 2001 received in 1995 and 1996 as additional compensation
for 1995 and 1996 short-term loans at exercise prices of $3.75 per share to
$6.25 per share.

(4) The address of B. Rymer Insurance Trust is 300 West Washington, Suite 1106,
Chicago, Illinois 60606.

(5) Philip E. Ruben's address is 211 Waukegan Road, Suite 300, Northfield
Illinois 60606. Of the shares of Artra preferred stock, Mr. Ruben holds
932.05 shares as trustee of the IBI Trust W/T/A/D 1/15/96 and 44.25 shares
individually. The beneficiaries of these trusts are adult children of John
Harvey.

(6) Excludes directors listed under "5% Holders."

(7) The shares of Artra common stock beneficially owned by Mr. Kenny consist of
75,652 shares held by Kenny Construction Company, 14,411 shares held by
Clinton Industries, 12,500 shares issuable under an option which expires
May 28, 2008 at an exercise price of $3.125 per share, 2,500 shares
issuable under an option which expires February 1, 2009 at an exercise
price of $5.375 per share and 75,001 shares issuable under a warrant held
by Clinton Industries which expires November 10, 1999 at an exercise price
of $4.00 per share. Mr. Kenny is Executive Vice President, Director and
beneficial owner of 16.66% of the issued and outstanding stock of Kenny
Construction Company. He is also the General Partner and a 14.28%
beneficial owner of Clinton Industries, a limited partnership. See "Artra
Certain Relationships and Related Transactions -- Gerard M. Kenny" on Page
97.

(8) The shares of Artra common stock beneficially owned by Mr. Louis consist of
17,500 shares held directly by him, 12,500 shares issuable under an option
which expires May 28, 2008 at an exercise price of $3.125 per share, 2,500
shares issuable under an option which expires February 1, 2009 at an
exercise price of $5.375 per share and warrants to purchase 52,000 shares
of ARTRA common stock at prices of $5.125 to $8.00 per share which warrants
expire on various dates commencing in 1999 and ending June 13, 2001.

(9) The shares of Artra common stock beneficially owned by Mr. Celano consist
of 3,700 shares held directly by him, 12,500 shares issuable under an
option which expires May 28, 2008 at an exercise price of $3.125 per share
and 2,500 shares issuable under an option which expires February 1, 2009 at
an exercise price of $5.375 per share.

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<PAGE> 37

(10) Mr. Conant holds 150,000 shares of Artra common stock directly and 20,000
shares in his individual retirement account. Mr. Conant's wife holds 9,000
shares of Artra common stock. The shares of Artra common stock beneficially
owned by Mr. Conant also include 12,500 shares issuable under an option
which expires May 28, 2008 at an exercise price of $3.125 per share, 2,500
shares issuable under an option which expires February 1, 2009 at an
exercise price of $5.375 per share and warrants to acquire 130,000 shares
of Artra common stock at prices of $3.9375 to $5.875 per share which
warrants expire on various dates in 2001 and 2002.

(11) The shares of Artra common stock beneficially owned by Mr. Johnson consist
of 2,873 shares held directly by him, 12,500 shares issuable under an
option which expires May 28, 2008 at an exercise price of $3.125 per share
and 2,500 shares issuable under an option which expires February 1, 2009 at
an exercise price of $5.375 per share.

(12) The shares of Artra common stock beneficially owned by Mr. Santacrose
consist of 10,000 shares owned by him directly, 10,000 shares issuable
under an option which expires January 6, 2009 at an exercise price of $4.75
per share, 2,500 shares issuable under an option which expires February 1,
2009 at an exercise price of $5.375 per share and 200,000 issuable under an
option which expires June 28, 2009 at an exercise price of $10 per share.

(13) The shares of Artra common stock beneficially owned by Mr. Tull consist of
22,643 shares held directly by him, 10,000 shares issuable under an option
which expires January 6, 2009 at an exercise price of $4.75 per share and
2,500 shares issuable under an option which expires February 1, 2009 at an
exercise price of $5.375 per share.

(14) Excludes executive officers listed under "Directors."

(15) The shares of Artra common stock beneficially owned by Mr. Hamm consist of
50 shares held directly by him, 93 shares held by him and his wife jointly,
1,639 shares held in his 401(k) plan, 2,767 shares held in his individual
retirement account, 25,000 shares issuable under an option which expires
December 19, 2000 at an exercise price of $3.65 per share, 1,000 shares
issuable under an option which expires September 19, 2001 at an exercise
price of $3.65 per share, 13,200 shares issuable under an option which
expires January 8, 2003 at an exercise price of $3.75 per share, 101,250
shares issuable under an option which expires October 4, 2006 at an
exercise price of $5.25 per share and 35,000 shares issuable under an
option which expires January 6, 2009 at an exercise price of $4.75 per
share.

(16) The shares of Artra common stock beneficially owned by Mr. Gruber consist
of 20,190 shares held directly by him, 943 shares held in his 401(k) plan,
1,221 shares held in his individual retirement account, 8,000 shares
issuable under an option which expires December 19, 2000 at an exercise
price of $3.65 per share, 1,000 shares issuable under an option which
expires September 19, 2001 at an exercise price of $3.65 per share, 12,000
shares issuable under an option which expires January 8, 2003 at an
exercise price of $3.75 per share, 97,750 shares issuable under an option
which expires October 4, 2006 at an exercise price of $5.25 per share and
11,250 shares issuable under an option which expires January 6, 2009 at an
exercise price of $4.75 per share.

(17) The shares of Artra common stock beneficially owned by Mr. Doering consist
of 1,693 shares held in his 401(k) plan, 22,500 shares issuable under an
option which expires December 19, 2000 at an exercise price of $3.65 per
share, 31,000 shares issuable under an option which expires January 8, 2003
at an exercise price of $3.75 per share and 57,500 shares issuable under an
option which expires October 4, 2006 at an exercise price of $5.25 per
share and 35,000 shares issuable under an option which expires January 6,
2009 at an exercise price of $4.75 per share.

(18) The shares of Artra common stock held by this group include an aggregate of
1,777,099 shares that these persons have the right to purchase under
currently exercisable stock options.

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<PAGE> 38

THE ARTRA ANNUAL MEETING

TIME, DATE AND PLACE; PURPOSE OF THE ARTRA ANNUAL MEETING

The Artra annual meeting will be held at 10:30 a.m., prevailing time, on
September 22, 1999, at the Sheraton North Shore Hotel, 933 Skokie Boulevard,
Northbrook, Illinois for the following purposes:

(1) To consider and vote upon a proposal to approve and adopt the
merger and the merger agreement dated as of February 23, 1999, as amended,
among Artra, Entrade, WorldWide and a subsidiary of Entrade. Appendix A to
this Proxy Statement/Prospectus contains a copy of the merger agreement.

Under the terms of the merger agreement:

- The Entrade merger subsidiary will merge with and into Artra, and
Artra will become a wholly owned subsidiary of Entrade;

- each share of Artra common stock that is issued and outstanding at the
closing of the merger will be converted into one share of Entrade
common stock;

- each share of Artra preferred stock that is issued and outstanding at
the closing time of the merger, other than shares held by shareholders
who perfect their statutory dissenters' rights, will be converted into
329 shares of Entrade common stock, with cash to be paid instead of
the issuance of any fractional share of Entrade common stock;

- each outstanding stock option plan and stock option of Artra will be
assumed by Entrade, without changing the terms and conditions of the
stock options, and Entrade will substitute shares of Entrade common
stock for the shares of Artra common stock purchasable under each
assumed stock option;

- each outstanding warrant to purchase Artra common stock will be
assumed by Entrade, without changing the terms and conditions of the
warrants, and Entrade will substitute shares of Entrade common stock
for the shares of Artra common stock purchasable under each assumed
warrant; and

- the outstanding shares of common stock of Merger Sub currently held by
Entrade will be canceled.

As a result, after the closing of the merger and the other
transactions contemplated by the merger agreement:

- Artra will be a wholly owned subsidiary of Entrade; and

- the current holders of Artra common stock and Artra preferred stock
will become holders of Entrade common stock.

(2) To elect nine directors to serve until the 2000 annual meeting of
Shareholders and until their successors are elected;

(3) To ratify the appointment of PricewaterhouseCoopers LLP as Artra's
independent auditors for 1999; and

(4) To transact any other business that may properly come before the
Artra annual meeting and any adjournment, postponement or continuation
thereof.

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<PAGE> 39

RECORD DATE; VOTE REQUIRED

The Board of Directors has fixed the close of business on June 25, 1999 as
the record date for the determination of shareholders entitled to notice of and
to vote at the annual meeting. On the record date, 8,880,223 shares of Artra
common stock and 1,849.34 shares of Artra Series A preferred stock were
outstanding. Artra shareholders will have one vote for each share of Artra
common stock and Artra preferred stock.

Approval and adoption of the merger agreement and the merger will require
the affirmative vote of a majority of the votes cast in person or by proxy by
the holders of Artra common stock and the affirmative vote of a majority of the
votes cast in person or by proxy by the holders of Artra preferred stock, voting
as separate classes at the annual meeting, provided a quorum of each class is
present. Abstentions and broker non-votes will not be deemed votes cast on the
proposal and will have no effect on the outcome of the vote.

REVOCABILITY OF PROXIES

An Artra shareholder who submits a proxy may revoke the proxy at any time
prior to the Artra annual meeting, in one of three ways. First, Artra
shareholders can send a written notice to the Secretary of Artra, 500 Central
Avenue, Northfield, Illinois 60093, stating that they are revoking their proxy.
Second, the Artra shareholder can complete and submit a new proxy card. If a
shareholder chooses either of these two methods, the shareholder must submit a
notice of revocation or a new proxy card to the Secretary of Artra. Third, the
Artra shareholder can attend the Artra annual meeting and vote in person. Merely
attending the Artra annual meeting will not revoke the proxy. If an Artra
shareholder has instructed a broker to vote the shares, the shareholder must
follow directions received from the shareholder's broker to change the vote.

ARTRA PREFERRED STOCK DISSENTERS' RIGHTS

Holders of Artra preferred stock have the right to dissent from the merger
and to obtain payment for their shares by following the procedures prescribed in
Sections 1571 to 1580 of the Pennsylvania Business Corporation Law of 1988, a
copy of which is attached as Appendix B to this Proxy Statement/Prospectus.

Under these provisions, holders of Artra preferred stock have the right to
dissent from the merger, and to obtain payment of the "fair value," as defined
in the statute, of their Artra preferred stock if the merger is consummated.
Subject to the procedures described in this section and the Pennsylvania
Business Corporation Law, the board of directors of Artra will determine
initially the fair value of the Artra preferred stock. The term "fair value"
means the value of Artra preferred stock immediately before completion of the
merger, taking into account all relevant factors, but excluding any appreciation
or depreciation in anticipation of the merger.

THE FOLLOWING SUMMARY OF THE STEPS TO BE TAKEN IF THE RIGHT TO DISSENT IS
TO BE EXERCISED IS QUALIFIED IN ITS ENTIRETY BY THE FULL TEXT OF SECTION 1930
AND SUBCHAPTER D OF CHAPTER 15 OF THE PENNSYLVANIA BUSINESS CORPORATION LAW,
WHICH ARE ATTACHED AS APPENDIX B TO THIS PROXY STATEMENT/PROSPECTUS. EACH STEP
MUST BE TAKEN IN THE INDICATED ORDER AND IN STRICT COMPLIANCE WITH THE
APPLICABLE PROVISIONS OF THE STATUTE IN ORDER TO PERFECT DISSENTERS' RIGHTS. THE
FAILURE OF ANY SHAREHOLDER TO COMPLY WITH THE AFORESAID STEPS WILL RESULT IN THE
SHAREHOLDER RECEIVING THE CONSIDERATION CONTEMPLATED BY THE MERGER AGREEMENT.
ANY HOLDER OF ARTRA PREFERRED STOCK WHO CONTEMPLATES EXERCISING THE RIGHT TO
DISSENT IS URGED TO READ CAREFULLY THE PROVISIONS OF SECTION 1930 AND SUBCHAPTER
D OF CHAPTER 15 OF THE PENNSYLVANIA BUSINESS CORPORATION LAW.

A dissenting holder of Artra preferred stock must send any written notice
or demand that is required in connection with the exercise of dissenters'
rights, whether before or after the Effective Date, to the Secretary of Artra,
500 Central Avenue, Northfield, Illinois 60093.

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<PAGE> 40

A holder of Artra preferred stock who wishes to dissent:

- must file with Artra prior to the vote of shareholders on the merger at
the Artra annual meeting a written notice of intention to demand that he
be paid the fair value for his shares of Artra preferred stock if the
merger is effected;

- must effect no change in the beneficial ownership of his Artra preferred
stock from the date of the holder's filing through the effective time of
the merger; and

- must refrain from voting his Artra preferred stock to approve the merger.

Neither a proxy nor a vote against approval of the merger will constitute
the necessary written notice of intention to dissent. A beneficial owner of
Artra preferred stock whose shares are held of record in "street name" by a
brokerage firm or other nominee must obtain the written consent of that record
holder to the beneficial owner's exercise of dissenters' rights and must submit
that consent to Artra no later than the time of the filing of his notice of
intention to dissent.

If the merger is approved by the required vote of Artra's shareholders at
the Artra annual meeting, Artra will mail a notice to all dissenters who gave
due notice of intention to demand payment and who refrained from voting in favor
of the merger. The notice will state where and when a demand for payment must be
sent and certificates for Artra preferred stock must be deposited in order to
obtain payment, and will include a form for demanding payment and a copy of
Subchapter D of Chapter 15 of the Pennsylvania Business Corporation Law. The
time set for receipt of the demand for payment and deposit of stock certificates
will not be less than 30 days from the date of mailing of the notice.

A holder of Artra preferred stock who fails to timely demand payment or
fails to timely deposit stock certificates, as required by Artra's notice, will
not have any right to receive payment of the fair value of his Artra preferred
stock.

Promptly after completion of the merger, or upon timely receipt of demand
for payment if the merger already has been completed, Entrade will either remit
to dissenters who have made demand and have deposited their stock certificates
the amount that Entrade, as successor to Artra, estimates to be the fair value
of the Artra preferred stock or give written notice that no remittance is being
made. The factors that the board of directors could consider in deciding not to
remit payment at that time include the board's perception at that time of the
likelihood that the payments will be accepted by the shareholders without
objection. The remittance or notice will be accompanied by:

- a closing balance sheet and an income statement of Artra for a fiscal
year ending not more than 16 months before the date of remittance,
together with the latest available interim financial statements;

- a statement of Entrade's estimate of the fair value of the Artra
preferred stock; and

- notice of the right of the dissenter to demand payment or supplemental
payment under the Pennsylvania Business Corporation Law accompanied by a
copy of Subchapter D of Chapter 15 of the Pennsylvania Business
Corporation Law.

If Entrade does not remit the estimated fair value for shares with respect
to which demand for payment has been made and stock certificates have been
deposited, then Entrade will return any certificates that have been deposited.
Returned certificates, and any certificates subsequently issued in exchange,
will be marked to record the fact that demand for payment has been made.
Transferees of shares so marked shall not acquire any rights in Artra or Entrade
other than those rights held by the original dissenter after that dissenter
demanded payment of fair value.

If a dissenter believes that the amount stated or remitted by Entrade is
less than the fair value of the Artra preferred stock, he may send Entrade his
own estimate of the fair value of the Artra preferred stock, which shall be
treated as a demand for payment of the amount of the deficiency. If Entrade
remits
33
<PAGE> 41

payment of its estimated value of a dissenter's Artra preferred stock and the
dissenter does not file his own estimate within 30 days after the mailing by
Entrade of its remittance, the dissenter will be entitled to no more than the
amount remitted to him by Entrade.

Within 60 days after the latest to occur of:

- completion of the merger,

- timely receipt by Artra or Entrade of any demands for payment, or

- timely receipt by Artra or Entrade of any estimates by dissenters of fair
value,

if any demands for payment remain unsettled, Artra or Entrade, whichever one
receives the demand, may file in the Court of Common Pleas of Philadelphia
County an application requesting that the court determine the fair value of the
Artra preferred stock. In that case, all dissenters, wherever residing, whose
demands have not been settled shall be made parties to the proceeding as in an
action against their shares, and a copy of the application shall be served on
each dissenter whose demands have not been settled.

If Artra or Entrade were to fail to file the described application, then
any dissenter, on behalf of all dissenters and who have not settled, may file an
application in the name of Artra or Entrade, as successor, at any time within
the 30-day period after the expiration of the 60-day period and request that the
fair value be determined by the court. The fair value determined by the court
may, but need not, equal the dissenters' estimates of fair value. If no
dissenter files an application of this type, then each dissenter entitled to do
so shall be paid Artra's or Entrade's estimate of the fair value of the Artra
preferred stock and no more, and may bring an action to recover any amount not
previously remitted, plus interest at a rate the court finds fair and equitable.

Artra and/or Entrade intend to negotiate in good faith with any dissenting
shareholder. If after negotiation, a claim cannot be settled, then Artra and/or
Entrade, as successor, intends to file an application requesting that the fair
value of the Artra preferred stock be determined by the court.

The holders of Artra common stock do not have dissenters' rights with
respect to the merger.

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<PAGE> 42

THE MERGER

BACKGROUND OF THE MERGER

On November 20, 1998, Artra completed the sale of the business assets of
Bagcraft in which Artra received, after paying Bagcraft obligations, net cash
proceeds of approximately $28.0 million. Artra thereupon began actively
investigating new business opportunities, including strategic alliances and
business combinations.

Artra's investigation for new business opportunities was conducted by
management, primarily Peter Harvey and John Hamm. These persons reviewed
numerous business plans submitted to them through contacts initiated by existing
shareholders, management of Artra and other transaction advisers. Artra did not
use an investment banker or similar financial adviser in the investigation
process.

On December 1, 1998, an acquaintance of Peter Harvey, Jeffrey Newman,
contacted Peter Harvey regarding an Internet concept that was potentially
available for purchase. During the first two weeks of December 1998, members of
management of Artra had preliminary discussions with Robert Kohn, a principal of
WorldWide, and Warren Rothstein, a now current stockholder of WorldWide,
regarding a description of entrade.com, asseTrade.com and utiliparts.com, for
which Mr. Kohn had assisted in the development of technology while associated
with PECO Energy. Mr. Kohn explained that PECO Energy had decided in mid-1998 to
sell the intellectual property assets of entrade.com to Global Trade Group and
WorldWide. He also described the ownership of asseTrade.com by Positive Asset
Remarketing, Inc., WorldWide and a joint venture formed by Henry Butcher USA,
Inc. and Michael Fox International, Inc.

Initial discussions regarding a proposed structure for a possible
acquisition of entrade.com, a portion of asseTrade.com and other assets between
Peter Harvey and Robert Kohn commenced on December 13, 1998 and continued on
almost a daily basis thereafter. At a meeting on December 18, 1998, in
Philadelphia, Artra management and advisers and WorldWide management met to
discuss specific terms of the proposed transaction. Artra, together with legal
counsel, commenced due diligence and continued with a series of discussions with
management of WorldWide concerning the terms of the proposed transaction.

On January 6, 1999, the board of directors of Artra held a meeting at which
Robert Kohn made a presentation regarding the proposed businesses to be acquired
and the proposed terms of the transaction. Artra's board of directors determined
to continue discussions with WorldWide.

Discussions resumed between the parties during the ensuing month regarding
the price and structure of the transaction and the employment by Artra of
Messrs. Kohn, Kafka, Lerman and Quinn, including the granting of options by
Artra to those persons, and the funding by Artra of the entrade.com business.

On February 15, 1999, the board of directors of Artra held a meeting at
which various merger terms and documents were discussed and reviewed in detail.
Following the discussions, the Artra board of directors determined that the
proposed merger was in the best interests of Artra and its shareholders and
approved the form of merger agreement, subject to approval by the Artra
shareholders, and authorized the officers of the corporation to finalize the
structure and terms of the merger agreement and the related agreements. On
February 19, 1999 and February 23, 1999, the merger agreement and related
documents were finalized and executed by the parties. A press release announcing
the execution of the merger agreement was issued on February 23, 1999. The
parties amended the merger agreement on April 30, 1999 to clarify matters
relating to WorldWide. The parties further amended the merger agreement on
August 9, 1999 to provide for the repayment as a condition to closing of up to
$500,000 advanced to Entrade by WorldWide and the repayment of an additional
$250,000 advanced to Entrade by Artra in the event the merger agreement
terminates due to the acceptance of an alternative proposal by WorldWide.

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<PAGE> 43

MANAGEMENT OF ENTRADE AFTER THE MERGER

Upon the closing of the merger, the management of Entrade will be as
follow:

- The board of directors of Entrade will consist of the current directors
of Artra, and Robert Kohn will be added as a director; and

- Artra's senior management will hold positions with Entrade similar to
their current positions with Artra;

- Robert Kohn will resign as Chairman and Chief Executive Officer of
Entrade and WorldWide and become the chief executive officer of the
entrade.com subsidiary.

For information about the current directors and executive officers of
Artra, see "Management of Artra." For information about the current management
of Entrade, see "Management of Entrade."

ARTRA REASONS FOR THE MERGER

- The need to find a new operating business for Artra after the sale of
Artra's Bagcraft subsidiary's business in November 1998.

- The desire to acquire a company that would satisfy New York Stock
Exchange listing requirements and preserve Artra's or its successor's
listing.

- The desire for Artra to be at the forefront of the fast-paced trend of
conducting business operations over the Internet and to find a
business-to-business, e-commerce, Internet business.

- The potential to conduct Internet business with top Fortune 1000
companies that are clients of Butcher and Fox, respectively.

Management of Artra had received information regarding other acquisition
candidates, of which approximately six other businesses were considered possible
candidates. For the reasons listed above, however, Artra's management considered
the entrade.com business and the 25% voting stock interest in asseTrade.com as
the preferred alternative.

MERGER CONSIDERATION

Artra Common Stock and Artra Preferred Stock

At the time of the merger and without any action on the part of the
shareholders:

- Holders of Artra common stock will receive one share of Entrade common
stock for each share of Artra common stock, and each outstanding
certificate representing shares of Artra common stock shall represent an
equivalent number of shares of Entrade common stock;

- Each share of Artra common stock held as treasury stock will be canceled;
and

- Holders of Artra preferred stock will receive 329 shares of Entrade
common stock for each share of Artra preferred stock, and each
outstanding certificate representing shares of Artra preferred stock
shall represent 329 shares of Entrade common stock for each share of
Artra preferred stock, except shares held by shareholders who perfect
their statutory dissenters rights.

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<PAGE> 44

Options and Other Rights to Purchase Artra Common Stock

At the time of the merger, Entrade will assume all rights and obligations
of Artra under Artra's stock option plans as in effect at that time and will
continue those plans in accordance with their terms. Entrade will assume each
outstanding option, warrant or right to purchase shares of Artra common stock in
a manner that it is converted into an option, warrant or right to purchase
shares of Entrade common stock on the same terms and conditions. To the extent
that any Artra stock option constituted an "incentive stock option," within the
meaning of Section 422 of the Internal Revenue Code, immediately prior to the
merger, the stock option will continue to qualify as an incentive stock option
to the maximum extent permitted by Section 422 of the Internal Revenue Code.

Fractional Shares

Entrade will not issue fractional shares of the Entrade common stock with
the merger. In lieu of the issuance of any fractional shares of Entrade
preferred stock, Entrade will issue a check for cash equal to the fraction of a
share multiplied by the closing price of Entrade common stock on the New York
Stock Exchange, or other applicable exchange as provided in the merger
agreement, on the first trading day for Entrade common stock after the merger.

Determination of the Exchange Ratios

In determining the one-to-one exchange ratio, the Artra board of directors
considered the merger transaction as though it would first be creating a
mirror-image holding company that would then acquire the Entrade business and
assets. Under this analysis, holders of Artra common stock would receive the
number of shares of the common stock of the new holding company equal to the
number of shares of Artra common stock held by them, and the holding company
would then issue shares of holding company common stock to WorldWide and Energy
Trading Company based upon the value of the business and assets of Entrade to be
acquired by the holding company at the time the parties entered into the merger
agreement.

The value of the business and assets of Entrade to be acquired was
determined by arms-length negotiations among the parties to the merger
agreement. These included a series of discussions between Robert Kohn and Peter
Harvey during December 1998 and January 1999 and considerations by the Artra
board of directors during February 1999. See "Background of the Merger."

The Artra board of directors recognized the difficulty of valuing a
business with no operating history and that there is no conventional manner in
which to value a new Internet company. It considered, however, the anticipated
value of the Entrade business on an ongoing basis based upon the experience of
the members of Entrade's management team, the potential for revenue growth of
utiliparts.com and entrade.com's business-to-business e-commerce Internet
solutions and business model and the factors stated under "Artra Reasons for the
Merger."

Based upon these considerations, the Artra board of directors determined
that Entrade's assets and business had a relative value of approximately 20% of
Artra's value as a separate entity. Therefore, based upon these relative values,
the board determined that the issuance to WorldWide and Energy Trading Company
of an aggregate of 2,000,000 shares of the holding company would be appropriate.
In making this determination, the Artra board of directors also considered that
the relative dilution of approximately 17% to Artra's existing shareholders
provided by this structure would not result in a change of control. Furthermore,
the issuance of shares rather than cash would enable the application of Artra's
cash resources to the working capital development of the Entrade business rather
than as cash compensation to the sellers.

Therefore, the Artra board of directors, based on its collective business
judgment and experience, determined that the ratio was fair to Artra
shareholders.

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The Artra board of directors determined the exchange rate of 329 shares of
Entrade common stock for each share of Artra preferred stock as follows: the
Artra board of directors had approved a proposed issuance of 1,500,000 shares of
Artra common stock for all shares of Artra preferred stock and all outstanding
shares of preferred stock issued by Artra's subsidiaries on January 6, 1999. The
exchange ratio was based upon a formula using the total principal and
accumulated dividends on those shares of preferred stock and the then market
price per share of Artra common stock. The Artra board of directors determined
to fix this exchange ratio at that time notwithstanding any future accumulations
of dividends on the preferred shares after February 28, 1999.

THE MERGER CLOSING DATE

The merger will become effective upon the filing of the Articles of Merger
with the Secretary of the Commonwealth of Pennsylvania or a later date that is
specified in the Articles of Merger. The filing of the Articles of Merger will
occur as soon as practicable on or after the satisfaction or waiver of the
conditions to the merger specified in the merger agreement, unless another date
is agreed to in writing by the parties. Subject to the limitations included in
the merger agreement, the merger agreement may be terminated by either Artra or
WorldWide if, among other reasons, the merger has not closed by on or before
September 30, 1999. See "The Merger Agreement and Related Agreements --
Conditions to the Merger" and "-- Termination of the Merger Agreement."

Exchange of Certificates

As soon as practicable after the merger closing date, each holder of an
outstanding certificate representing shares of Artra common stock and Artra
preferred stock will, upon surrender to the exchange agent of that certificate
and acceptance of the certificate by the exchange agent, be entitled to receive
a certificate representing shares of Entrade common stock, as outlined above.

The exchange agent will accept those certificates when duly executed and
completed in accordance with the instructions on the election form, together
with any other documents that the exchange agent may reasonably require. After
the merger closing date, there will be no further transfer on the records of
Artra or its transfer agent of certificates representing shares of Artra common
stock and Artra preferred stock that have been converted under the merger
agreement into shares of Entrade common stock.

If these certificates are presented to Artra for transfer, they will be
canceled against delivery of certificates for Entrade common stock. Until
surrendered as contemplated by the merger agreement, each certificate for shares
of Artra common stock and Artra preferred stock at any time after the merger
closing date will represent only the right to receive, upon the holder's
surrender, shares of Entrade common stock contemplated by the merger agreement.
No interest will be paid or will accrue on any cash payable in lieu of any
fractional shares of retained Artra preferred stock.

Payments of Any Dividends or Other Distributions on Entrade Common Stock

No dividends or other distributions with respect to retained certificates
representing shares of Artra common stock or Artra preferred stock with a record
date after the merger closing date will be paid to the holder of any
unsurrendered certificate for shares of Artra common stock or Artra preferred
stock with respect to the shares of Entrade common stock represented by those
certificates. Also, no cash payment in lieu of fractional shares will be paid to
any holder until the surrender of the holder's certificate in accordance with
the merger agreement.

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<PAGE> 46

Subject to the effect of applicable laws, following surrender of any of
these certificates, the holder of the certificate representing whole shares of
Entrade common stock issued in connection with shares of Entrade common stock
will be paid, without interest:

- at the time of the holder's surrender or as promptly as practicable, the
amount of any cash payable instead of a fractional share of Entrade
common stock to which that holder is entitled under the terms of the
merger agreement; and

- at the time of the holder's surrender or as promptly as practicable or at
the appropriate payment date, the proportionate amount of dividends or
other distributions, if any, with a record date after the merger closing
date but prior to the date of the holder's surrender and a payment date
prior to or subsequent to the holder's surrender payable with respect to
the holder's whole shares of Entrade common stock.

FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of the material federal income tax consequences
applicable to holders of Artra common stock and Artra preferred stock. This
summary is based upon the provisions of the Internal Revenue Code of 1986,
applicable Treasury Regulations thereunder, judicial decisions and current
administrative rulings.

No rulings have been or will be requested from the Internal Revenue Service
with respect to any of the matters discussed in this section. Future
legislation, regulations, administrative rulings or court decisions could
adversely affect the accuracy of the statements contained in this section.

Treatment of Holders of Artra Common Stock and Artra Preferred Stock

The following discussion does not address all aspects of federal income
taxation that may be important to particular taxpayers in light of their
personal investment circumstances or to taxpayers subject to special treatment
under the federal income tax laws, including life insurance companies, foreign
persons, tax-exempt entities, and holders who acquired their Artra common stock
or Artra preferred stock upon the exercise of employee stock options or
otherwise as compensation, and does not address any aspect of state, local or
foreign taxation. This summary also assumes that the Artra common stock and
Artra preferred stock will be held as capital assets at the merger closing date.

Exchange of Artra common stock and Artra preferred stock for Entrade common
stock

Artra has received an opinion from Duane, Morris & Heckscher LLP that the
merger, which is occurring in connection with the asset transfers to Entrade by
WorldWide and Energy Trading Company, will be treated for federal income tax
purposes as a transfer of property to Entrade by the holders of Artra common
stock and Artra preferred stock governed by Section 351 of the Code. As a
transfer of property under Section 351, a holder of Artra common stock who
exchanges Artra common stock solely for Entrade common stock in the merger will
not recognize gain or loss upon the exchange. The tax basis of the Entrade
common stock received by the holder will be equal to the tax basis of the Artra
common stock exchanged for the Entrade common stock, and the holding period of
the Entrade common stock will include the holding period of the Artra common
stock exchanged for the Entrade common stock.

A holder of Artra preferred stock who exchanges Artra preferred stock for
Entrade common stock in the merger will not recognize gain or loss upon the
exchange. The tax basis of the Entrade common stock received by the holder will
be equal to the tax basis of the Artra preferred stock exchanged for Entrade
common stock and the holding period of the Entrade common stock will include the
holding period of the Artra preferred stock exchanged for Entrade common stock.
A holder of Artra preferred stock who receives cash in lieu of fractional shares
of Entrade common stock should be treated as having received those fractional
shares in the merger and then as having exchanged those fractional shares for
cash in a

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<PAGE> 47

redemption of Entrade common stock. Any gain or loss attributable to fractional
shares should be capital gain or loss. The amount of that gain or loss should be
equal to the difference between the ratable portion of the tax basis of the
Artra preferred stock surrendered in the merger that is allocated to those
fractional shares and the cash received in lieu thereof. Any resulting capital
gain or loss will constitute long-term capital gain or loss if the Artra
preferred stock has been held by the holder for more than one year at the merger
closing date.

An opinion of counsel represents counsel's best judgment and is not binding
on the Internal Revenue Service or the courts. Accordingly, neither Entrade nor
Artra can assure you that the Internal Revenue Service will agree with counsel's
conclusions, that the Internal Revenue Service will not challenge the tax
treatment of the merger or that such challenge, if made, will not be successful.

Reporting Requirements

Each holder of Artra common stock and Artra preferred stock that receives
Entrade common stock in the merger will be required to retain records and file
with the holder's federal income tax return a statement setting forth facts
relating to the transaction identified in the instructions to the return.

THIS FEDERAL INCOME TAX DISCUSSION MAY NOT APPLY TO ALL HOLDERS OF ARTRA
COMMON STOCK OR ARTRA PREFERRED STOCK. WE URGE YOU TO CONSULT YOUR OWN TAX
ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE MERGER.

ACCOUNTING TREATMENT

Entrade and Artra will account for the merger using the purchase method of
accounting.

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INTERESTS OF CERTAIN PERSONS IN THE MERGER AND RELATED MATTERS

INTERESTS OF ARTRA OFFICERS AND DIRECTORS

Current officers and directors of Artra will receive options and warrants
to purchase shares of Entrade common stock upon the closing of the merger in
exchange for options and warrants to purchase shares of Artra common stock
currently held by them.

Also, Artra officers and directors currently hold an aggregate of
approximately 3.8% of the outstanding shares of Artra preferred stock, which
will be converted in the merger to 329 shares of Entrade common stock for each
share of Artra preferred stock held. Therefore, directors and executive officers
of Artra will receive an aggregate of approximately 23,363 shares of Entrade
common stock in the merger for outstanding shares of Artra Series A preferred
stock. Also, trusts whose beneficiaries include adult children of John Harvey,
which holds approximately 50.4% of the outstanding shares of Artra preferred
stock, will receive an aggregate of approximately 306,644 shares of Entrade
common stock for outstanding shares of Artra preferred stock. See "Information
Regarding Beneficial Ownership of Principal Artra Shareholders and Management."

INTERESTS OF ENTRADE OFFICERS AND DIRECTOR

On February 23, 1999, Artra entered into Employment Agreements with Robert
D. Kohn, Benjamin R. Kafka, Gary Lerman and Mark L.M. Quinn, providing for the
employment of those individuals for three-year terms, which Entrade will assume
after the merger. Each of these persons is currently an officer of entrade.com.
See "The Merger Agreements and Related Agreements -- Employment Agreements" and
"Management of Entrade."

In connection with these employment agreements, these persons received
nonqualified stock options for the purchase of an aggregate of 1,600,000 shares
of Artra common stock, which will be assumed by Entrade upon the closing of the
merger. See "Description of Entrade Capital Stock -- Outstanding Stock Options
To Be Assumed by Entrade -- The 1999 Non-Qualified Stock Option Plan."

<TABLE>
<CAPTION>
NAME OF OPTION HOLDER NUMBER OF SHARES EXERCISE PRICE
- --------------------- ---------------- --------------
<S> <C> <C>
Robert D. Kohn 1,000,000 $2.75
Benjamin R. Kafka 200,000 $2.75
Gary Lerman 200,000 $2.75
Mark L.M. Quinn 200,000 $2.75
</TABLE>

WorldWide currently holds 90% of the outstanding shares of Entrade common
stock. Upon the closing of the Merger, WorldWide will own approximately 15.5% of
the outstanding Entrade common stock. For a description of the transactions
between WorldWide and Entrade, see the discussion under "Information About
Entrade Inc. and entrade.com -- Entrade's Acquisition of the entrade.com Assets
and 25% of the Voting Common Stock of asseTrade.com."

Robert D. Kohn, Benjamin R. Kafka, Gary Lerman and Mark L.M. Quinn also own
shares of common stock of WorldWide. For a description of these relationships,
see "Entrade Related Party Transactions."

AGREEMENT WITH BROKER

Under a letter agreement between Artra and Jeffrey Newman, Artra agreed to
pay Mr. Newman a "finder's fee" as compensation for his services in brokering
the transactions contemplated by the merger. Upon completion of the merger, Mr.
Newman will receive, at his election, either a cash payment of $275,000, or
100,000 shares of Entrade common stock. If Mr. Newman elects to receive stock,
the

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<PAGE> 49

issuance of the 100,000 shares will dilute all shareholders of Entrade. Mr.
Newman has notified Artra that he has elected to receive shares of Entrade
common stock.

THE MERGER AGREEMENT AND RELATED AGREEMENTS

The following is a brief summary of the material provisions of the merger
agreement and the amendments to the merger agreement dated April 30, 1999 and
August 9, 1999. We have attached copies of the merger agreement and the
amendment as Appendix A to this Proxy Statement/Prospectus, and we incorporate
them into this Proxy Statement/Prospectus by reference. This summary is
qualified in its entirety by reference to the full and complete text of the
merger agreement.

THE MERGER

The merger agreement provides that the Entrade merger subsidiary formed for
purposes of the merger will be merged with and into Artra. As a result of the
merger, Artra will become a wholly owned subsidiary of Entrade. The merger will
become effective upon the filing of the Articles of Merger relating to the
merger with the Secretary of the Commonwealth of Pennsylvania or a later time
and date as Artra, Entrade and WorldWide may agree.

THE MERGER CONSIDERATION

See "The Merger -- Merger Consideration" on page 36.

REPRESENTATIONS AND WARRANTIES

The merger agreement contains customary representations and warranties by
Artra as to, among other things:

- due organization and good standing;

- corporate authority to enter into the merger agreement and related
agreements;

- authorized capital stock;

- ownership of subsidiaries;

- the lack of investments or interests as described in the merger
agreement;

- compliance with charters, bylaws and the law;

- the filing of documents with the Commission as described in the merger
agreement;

- the accuracy of financial statements;

- title to properties;

- the absence of undisclosed liabilities as described in the merger
agreement;

- material contracts;

- material litigation;

- the absence of material changes or events;

- tax matters;

- employee benefit plans;

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<PAGE> 50

- the absence of material labor disputes;

- insurance coverage; and

- broker agreements.

The merger agreement contains representations and warranties by WorldWide,
Entrade and the Entrade subsidiary as to, among other things:

- due organization and good standing;

- corporate authority to enter into the merger agreement and related
agreements;

- authorized capital stock;

- ownership of subsidiaries;

- the lack of investments or interests as described in the merger
agreement;

- financial condition;

- title to properties;

- the absence of undisclosed liabilities as described in the merger
agreement;

- material contracts;

- intangible assets;

- compliance with charters, bylaws, and the law;

- the absence of material litigation;

- tax matters;

- employee benefit plans;

- material contracts;

- the absence of material changes or events;

- the absence of material labor disputes;

- insurance coverage; and

- broker agreements.

COVENANTS

Conduct of Business Pending the Merger

The merger agreement contains customary covenants relating to the merger.
WorldWide has agreed that, prior to the closing of the merger, WorldWide,
Entrade and its subsidiaries will conduct their operations in the ordinary
course of business. Specifically, WorldWide has agreed, among other things:

- to use its reasonable efforts to preserve its assets, business
organization and goodwill and to cause Entrade and each of its
subsidiaries to do the same;

- not to amend the Articles of Incorporation or Bylaws of Entrade or any of
its subsidiaries;

- to promptly notify Artra of any material breach of any representation or
warranty contained in the merger agreement;
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<PAGE> 51

- to promptly deliver to Artra true and correct copies of all monthly
financial statements of WorldWide, Entrade and each of its subsidiaries;

- not to permit Entrade or any of its subsidiaries to issue any shares of
capital stock, effect any stock split or otherwise change its
capitalization, or grant any option or other right to acquire shares of
its capital stock;

- not to permit Entrade or any of its subsidiaries to grant any bonuses or
other forms of cash incentives to any officer, director or key employee,
except as consistent with past practice;

- not to permit Entrade to increase compensation under any employment
agreement with any present or future officers, directors or employees or
enter into or amend in any material respect any compensation-related
agreement or benefit plan;

- not to permit Entrade or any of its subsidiaries to declare, set aside or
pay any dividend or make any other distribution or payment with respect
to any shares of Entrade's capital stock or other ownership interests;

- not to permit Entrade or any of its subsidiaries to dispose of any assets
except in the ordinary course of business;

- not to incur or permit Entrade or any of its subsidiaries to incur any
material amount of indebtedness or make any loans to or investments in
any other person except for indebtedness under the loan agreement with
Artra;

- not to permit Entrade or any of its subsidiaries to mortgage or otherwise
encumber any of their properties or assets;

- not to make any change to its accounting practices; and

- not to permit Entrade or any of its subsidiaries to enter into any joint
venture, production or marketing arrangements without consulting Artra.

Artra has agreed that, prior to the effective time of the merger, it will,
among other things:

- not issue any shares of its capital stock or effect any stock split other
than under an Artra stock option plan or except through the exercise of
outstanding options or warrants;

- promptly notify Entrade of any breach of any representation or warranty
in the merger agreement; and

- promptly deliver to WorldWide true and correct copies of any report,
statement or schedule filed with the Commission subsequent to the date of
the merger agreement.

Alternative Proposals

Under the merger agreement, WorldWide and Entrade each agreed that, prior
to the closing of the merger:

- neither it nor any of its subsidiaries may initiate or solicit any
inquiries for an alternative proposal to the merger with Artra regarding
Entrade, its subsidiaries or their assets or otherwise facilitate any
effort to make or implement any alternative proposal; and

- it will notify Artra immediately if it receives any alternative
proposals.

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<PAGE> 52

Meeting of Shareholders

The merger agreement provides that Artra will take all necessary action, in
accordance with applicable law and its articles of incorporation and bylaws, to
promptly convene a meeting of shareholders. The board of directors of Artra has
agreed to recommend approval of the merger and to take all lawful action to
solicit approval by shareholders.

Indemnification and Insurance

The merger agreement provides that WorldWide, Entrade and the Entrade
merger subsidiary will indemnify Artra for breaches of covenants, agreements and
certifications made by or on behalf any of them.

Artra will indemnify WorldWide, Entrade and the Entrade subsidiary for
breaches of covenants, agreements and certifications made by or on behalf of
Artra.

Filings, Other Actions; Inspection of Records

The merger agreement provides for cooperation among the parties with
respect to governmental approvals, inspection of records and publicity.

Listing Application

The merger agreement provides that Entrade will promptly prepare and submit
to the New York Stock Exchange a listing application covering the shares of
Entrade common stock issuable in the merger, and will use reasonable efforts to
obtain, prior to the merger, approval for the listing of Entrade common stock,
subject to official notice of issuance.

If the shares of Entrade common stock issuable in the merger are not
approved for listing on the New York Stock Exchange prior to the merger, Artra
has agreed to file an application with the National Association of Securities
Dealers, Inc. to list the shares of Entrade common stock on the Nasdaq National
Market System and will use all reasonable efforts to obtain approval for the
Nasdaq listing of Entrade common stock.

Expenses

The merger agreement provides that, whether or not the merger is
consummated, all costs and expenses incurred in connection with the merger
agreement and the transactions described in the merger agreement will be paid by
the party incurring the expenses except as expressly provided in the merger
agreement and except that Artra will pay for the filing fee in connection with
the filing of the Form S-4 registration statement with the Commission and the
expenses incurred in connection with printing and mailing this Proxy
Statement/Prospectus.

Takeover Statute

The merger agreement states that Entrade will act to eliminate or minimize
the effects of any anti-takeover statute or regulation that becomes applicable
to the merger.

entrade.com Financing

Artra has agreed to commit to provide Entrade after the merger with
guaranteed financing for the working capital needs of entrade.com in an amount
equal to at least $4,000,000, with credit for the $1,200,000 in working capital
contributions to entrade.com funded by the loans from Artra made under the terms
of the loan agreement and for the additional $250,000 advanced to Entrade by
Artra.
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<PAGE> 53

Lock-Up Provisions

WorldWide has agreed that until the first anniversary of the effective time
of the merger it will not directly or indirectly transfer or agree to transfer
in any manner any shares of Entrade common stock or engage in any hedging or
other transactions with respect to its Entrade common stock that may have a
material impact on the market price of its Entrade common stock or that is
designed to result in a disposition of its Entrade common stock. WorldWide may
make bona fide pledges of its Entrade common stock to an institutional lender or
nationally recognized brokerage house, and make a one-time pro rata distribution
of up to 25% of its Entrade common stock to the shareholders of WorldWide.

CONDITIONS TO THE MERGER

Before closing the merger Artra, WorldWide, Entrade and the Entrade merger
subsidiary must satisfy the following conditions:

- the Artra shareholders approve the merger agreement and the transactions
described in the merger agreement;

- no court issues an order or injunction that prohibits the closing of the
transactions described in the merger agreement;

- the Form S-4 registration statement becomes effective, the Commission has
not issued or threatened to issue a stop order suspending the
effectiveness of the Form S-4 and the parties obtain all necessary
approvals under state securities laws relating to the issuance or trading
of Entrade common stock to be issued to the Artra shareholders in the
merger;

- the parties obtain all other required governmental approvals;

- the New York Stock Exchange approves for listing the Entrade common stock
to be issued to the Artra shareholders in connection with the merger, or,
if this listing has not been approved, Entrade applies for listing on the
Nasdaq National Market System;

- Artra assigns to Entrade the employment agreements between Artra and
Robert D. Kohn, Benjamin Kafka, Mark Quinn and Gary Lerman; and

- the board of directors of Entrade has been elected in accordance with the
merger agreement, and the Articles of Incorporation and Bylaws of Entrade
have been amended to cause them to be in compliance with any applicable
provision or requirement of the Pennsylvania Business Corporation Law,
the New York Stock Exchange and the Nasdaq National Market System, if
applicable.

The obligation of Artra to close the merger is conditioned on the
fulfillment of the following:

- each of WorldWide, Entrade and the Entrade subsidiary performs their
agreements contained in the merger agreement, and their representations
and warranties contained in the merger agreement and in any document
delivered in connection with the merger agreement are true and correct as
of that time;

- no change occurs in the financial condition, business or operations of
Entrade or any of its subsidiaries that would have a material adverse
effect;

- Artra and Entrade receive written affirmations from Global Trade Group,
Ltd. and all of its shareholders that their representations, warranties,
covenants and indemnifications set forth in the Acquisition Agreement
dated January 29, 1999 between Global Trading Group, its shareholders and
WorldWide inure to the benefit of and are enforceable by Artra and
Entrade as if originally given to Artra and Entrade;

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<PAGE> 54

- Artra and Entrade receive written affirmations from Positive Asset
Remarketing, Inc. and all of its shareholders that their representations,
warranties, covenants and indemnifications set forth in the Acquisition
Agreement dated January 29, 1999 between Positive Asset Remarketing, its
shareholders and WorldWide inure to the benefit of and are enforceable by
Artra and Entrade as if originally given to Artra and Entrade;

- Entrade causes asseTrade.com to be converted into a Delaware limited
liability company; and

- the non-competition agreement between Entrade and Robert D. Kohn is in
effect without modification or default.

The obligations of WorldWide and Entrade to consummate the merger are
conditioned on the fulfillment of the following:

- Artra performs its agreements contained in the merger agreement and the
loan agreement up to the closing of the merger, and the representations
and warranties of Artra contained in the merger agreement and in any
document delivered in connection with the merger agreement are true and
correct as of that time;

- there is no change in the financial condition, business or operations of
Artra and its subsidiaries, taken as a whole, that would have a material
adverse effect; and

- the note representing the principal amount of up to $500,000 issued by
Entrade to WorldWide is paid in full.

TERMINATION OF THE MERGER AGREEMENT

The parties may mutually agree to terminate the merger agreement prior to
the closing of the merger, before or after the approval of the merger agreement
by the shareholders of Artra.

Either the Artra board of directors or the WorldWide board of directors may
terminate the merger agreement, if:

- the merger is not closed by September 30, 1999;

- the Artra shareholders do not approve the merger agreement and the
merger; or

- a United States or any state governmental authority issues an order
prohibiting the transactions of the merger agreement, if the party
seeking to terminate has used all reasonable efforts to remove the
prohibition.

Under Section 6.3 of the merger agreement, the WorldWide board of directors
may terminate the merger agreement, if:

- in the exercise of its good faith judgment as to fiduciary duties to its
shareholders imposed by law, the board of directors of WorldWide
determines that the termination is required, including by reason of an
alternative proposal being made and WorldWide has notified Artra of the
proposal in a timely manner;

- Artra breaches any representation or warranty contained in the merger
agreement that would have a material adverse effect on Artra;

- Artra breaches any material covenant or agreement in the merger
agreement, which breach is not curable or, if curable, is not cured
within 30 days after WorldWide gives written notice of the breach; or

- the board of directors of Artra withdraws or modifies in a manner
materially adverse to WorldWide its approval or recommendation of the
merger agreement or the merger.
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<PAGE> 55

Under Section 6.4 of the merger agreement, the Artra board of directors may
terminate the merger agreement before or after the approval by the shareholders
of Artra, if:

- the board of directors of WorldWide withdraws or modifies in a manner
materially adverse to Artra its approval or recommendation of the merger
agreement or the merger;

- WorldWide or Entrade breaches any representation or warranty contained in
the merger agreement that would have a material adverse effect on
Entrade; or

- WorldWide or Entrade breaches any material covenant or agreement set
forth in the merger agreement, which breach is not curable or, if
curable, is not cured within 30 days after Artra gives written notice of
the breach.

EFFECT OF TERMINATION AND TERMINATION FEES

In the event that the merger agreement is terminated and the merger is
abandoned, all obligations of the parties will terminate, except the obligations
of the parties under the merger agreement relating to expenses and except for
the general interpretation provisions of the merger agreement.

If the merger agreement terminates solely because the Artra shareholders
have not approved the merger agreement and the merger, all obligations of
WorldWide and Entrade to repay the amounts loaned to either or both of them by
Artra under the loan agreement and an additional $250,000 advanced to Entrade by
Artra will terminate and the loans made by Artra to WorldWide and to Entrade
under the loan agreement will be forgiven as a "break-up" fee to WorldWide and
Entrade equal to the aggregate amount of the loan as defined in the loan
agreement and the $250,000 advance.

If the merger agreement terminates as described in Section 6.3 or 6.4 of
the merger agreement, nothing will prejudice the ability of the non-breaching
party from seeking damages from any other party for any willful breach of the
merger agreement, including without limitation, reasonable attorneys' fees and
the right to pursue any remedy at law or in equity. Also, if WorldWide
terminates the merger agreement by reason of accepting an alternative proposal,
WorldWide and Entrade will be obligated to pay to Artra the amounts loaned under
the loan agreement and the additional $250,000 advanced to Entrade by Artra.

RELATED AGREEMENTS

Concurrently with the execution of the merger agreement, Entrade acquired
intellectual property necessary for the conduct of entrade.com's e-commerce
business and 25% of the shares of the voting common stock of asseTrade.com from
WorldWide in exchange for 1,800,000 shares of Entrade common stock, $800,000 in
cash and a note for $500,000, payable upon the closing of the merger or the
earlier termination of the merger agreement. The agreement would remain in
effect after any termination of the merger agreement.

On February 16, 1999, Entrade agreed with Energy Trading Company, a wholly
owned subsidiary of PECO Energy, to issue to Energy Trading Company 200,000
shares of Entrade common stock, and to pay Energy Trading Company $100,000 in
cash upon closing of the merger, in exchange for retained rights Energy Trading
Company held in entrade.com's e-commerce business. In the event of termination
of the merger, Energy Trading Company will receive additional shares of Entrade
common stock so that it would obtain a 33.33% interest in Entrade instead of the
$100,000 cash payment.

Entrade also agreed with both WorldWide and Energy Trading Company that it
would provide a minimum of $4,000,000 in funding for entrade.com. Under separate
loan agreements, Artra agreed to loan Entrade up to $2,000,000 to fund the
$800,000 cash payment to WorldWide and to provide funding for entrade.com until
the closing of the merger or the earlier termination of the merger agreement.
The loan agreements include a security agreement and a pledge agreement, under
which the $2,000,000 in loans are

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<PAGE> 56

secured by a first lien security interest in all of Entrade's assets and a
pledge of the shares of asseTrade.com owned by Entrade.

Under the merger agreement, Artra agreed to guaranty $4,000,000 funding for
entrade.com if the merger is closed. The total consideration for the purchased
assets, therefore, will be 2,000,000 shares of Entrade common stock and an
aggregate of $5,400,000 in cash, notes and committed funding. See "-- Effect of
Termination and Termination Fees" for the effect of termination of the merger
agreement on these agreements.

In August 1999, WorldWide agreed to loan to Entrade up to $500,000 to fund
Entrade's operations from the date of the loan to the closing date under the
merger agreement. This amount will be repaid to WorldWide as a condition to
closing the merger.

EMPLOYMENT AGREEMENTS

Concurrently with the execution of the merger agreement, Artra entered into
employment agreements with Robert D. Kohn, Benjamin R. Kafka, Gary Lerman and
Mark L.M. Quinn providing for the employment of those individuals for three-year
terms. For information regarding relationships of these persons with WorldWide
and other entities related to Entrade, see "Entrade Related Party Transactions."

Robert D. Kohn Employment Agreement

Basic Terms

Robert D. Kohn has an employment agreement with Artra for a term that
commenced February 23, 1999 and ends February 17, 2002. The employment agreement
provides for:

- an annual salary of not less than $165,000, which is currently being
advanced by Entrade and which may be increased from time to time by the
board of directors of Artra; and

- an option to purchase 1,000,000 shares of Artra common stock at an
exercise price of $2.75 per share.

Confidentiality and Non-Competition Provisions

Mr. Kohn has agreed to keep proprietary and confidential information secret
and confidential and not to use any confidential information for his own benefit
or to the detriment of Artra without Artra's prior written consent, regardless
of whether the information was discovered or developed by Mr. Kohn.

Mr. Kohn also agreed during the term of the employment agreement and for an
additional period of one year after termination or expiration, unless terminated
because of a change in business purpose, that neither he nor any corporation or
entity in which he may be interested will at anytime engage in any competitive
business or solicit, hire or contract for services or employ any of the
executives of Artra. If Mr. Kohn violates the non-competition provision of the
employment agreement, the one-year restrictive period will be extended for the
duration of the violation.

Payment in the Event of Death or Disability

In the event of Mr. Kohn's death during the term of the employment
agreement, Mr. Kohn's estate is entitled to receive any earned but unpaid
portion of Mr. Kohn's base salary for the period up to Mr. Kohn's death and any
accrued benefits under any Artra executive benefit plan which benefits will be
paid in accordance with the terms of those plans. In the event of Mr. Kohn's
total disability during the term of the employment agreement for a period of 180
consecutive days or for any 180 days within a period of 360 consecutive days,
Artra has the right to terminate Mr. Kohn's employment upon 30 days written
notice. In that event, upon expiration of the 30 days written notice, Mr. Kohn
is entitled to receive

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any earned but unpaid portion of his base salary for the period up to the date
of termination and any accrued benefits under any Artra executive benefit plan
which benefits will be paid in accordance with the terms of those plans.

Termination Provisions

In the event Mr. Kohn is terminated for cause, Mr. Kohn is entitled to
receive any earned but unpaid portion of his base salary for the period up to
the date of termination and any accrued benefits under any Artra executive
benefit plan which benefits will be paid in accordance with the terms of those
plans.

Artra may terminate Mr. Kohn's employment any time after September 30, 1999
but prior to December 31, 1999 if the merger has not been consummated by
September 30, 1999 and Artra determines that it otherwise has not made
substantial progress toward accomplishing the merger by September 30, 1999. In
the event of Mr. Kohn's termination for this reason, Mr. Kohn is entitled to
receive any earned but unpaid portion of his base salary for the period up to
the date of termination and any accrued benefits under any Artra executive
benefit plan, which benefits will be paid in accordance with the terms of those
plans.

Artra may terminate Mr. Kohn at any time upon ten business days' prior
written notice for any reason other than those specified in the employment
agreement. If Artra terminates the employment of Mr. Kohn for any reason other
than those specified in the employment agreement, Mr. Kohn is entitled to
receive:

- any earned but unpaid portion of his base salary for the period up to the
date of termination;

- a severance payment equal to the lesser of (a) an amount equal to Mr.
Kohn's base salary for a period of 24 months or (b) an amount equal to
Mr. Kohn's base salary for the balance of the term of the employment
agreement, if any, provided that the severance payment will in no event
be less than an amount equal to Mr. Kohn's base salary for a period of
six months; and

- any accrued benefits under any Artra executive benefit plan, which
benefits will be paid in accordance with the terms of those plans.

Benjamin Kafka

Benjamin Kafka has an employment agreement with Artra for a term that
commenced February 23, 1999 and ends February 17, 2002. The employment agreement
provides for:

- an annual base salary of $125,000, which is currently being advanced by
Entrade and which may be increased from time to time by the board of
directors of Artra; and

- an option to purchase 200,000 shares of Artra common stock at an exercise
price of $2.75 per share.

Gary Lerman

Gary Lerman has an employment agreement with Artra for a term that
commenced February 23, 1999 and ends February 17, 2002. The employment agreement
provides for:

- an annual salary of not less than $125,000, which is currently being
advanced by Entrade and which may be increased from time to time by the
board of directors of Artra; and

- an option to purchase 200,000 shares of Artra common stock at an exercise
price of $2.75 per share.

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Mark L.M. Quinn

Mark L.M. Quinn has an employment agreement with Artra for a term that
commenced February 23, 1999 and ends February 17, 2002. The employment agreement
provides for:

- an annual salary of not less than $125,000, which is currently being
advanced by Entrade and which may be increased from time to time by the
board of directors of Artra; and

- an option to purchase 200,000 shares of Artra common stock at an exercise
price of $2.75 per share.

The employment agreements of Messrs. Kafka, Lerman and Quinn contain
substantially similar terms relating to confidentiality, death and termination
of those summarized above under the description of Mr. Kohn's employment
agreement with Artra. In the event of termination of the merger agreement, the
employment agreements provide that Artra could terminate the employment
agreements on ten days' notice on or before December 31, 1999.

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COMPARISON OF SHAREHOLDER RIGHTS

Artra and Entrade are both Pennsylvania corporations and, therefore,
Pennsylvania law governs the rights of shareholders of both corporations.
Differences between the Articles of Incorporation and Bylaws of Entrade and the
Amended and Restated Articles of Incorporation and Bylaws of Artra, however,
will result in various changes in the rights of shareholders of Artra as
shareholders of Entrade.

The following is a summary of the material differences between the rights
of shareholders of Artra under the Amended and Restated Articles of
Incorporation and Bylaws of Artra and the rights of shareholders of Entrade
under the Articles of Incorporation and Bylaws of Entrade. This summary does not
purport to be a complete description of the provisions discussed and is
qualified in its entirety by the Pennsylvania Business Corporation Law, the
Amended and Restated Articles of Incorporation and Bylaws of Artra and the
Articles of Incorporation and Bylaws of Entrade, to which the shareholders of
Artra are referred.

<TABLE>
<CAPTION>
ARTRA ENTRADE
----- -------
<S> <C> <C>
CUMULATIVE VOTING Shareholders of Artra may cumulate Shareholders of Entrade do not
their votes for the election of have the right to cumulate their
directors. Cumulative Voting votes for the election of
enables minority shareholders to directors. Therefore, the holders
elect a representative to the of more than one-half of the
Artra board of director. outstanding shares of Entrade
common stock will be able to elect
all the directors of Entrade then
standing for election and holders
of the remaining shares will not
be able to elect any director.

VOTING BY BALLOT Artra shareholders of Artra must Unless a shareholder of Entrade
elect directors by written ballot. demands before the voting begins,
shareholders of Entrade need not
elect directors by written ballot.

DIRECTORS The Bylaws of Artra provide that The Bylaws of Entrade provide that
the number of directors of Artra the number of directors of Entrade
shall be at least six but no more shall be determined by the Entrade
than nine, with the exact number Board of Directors from time to
to be determined by a majority of time.
the directors of Artra in office.
The number of directors of Artra
is currently fixed at nine.

PREFERENCES Holders of Artra preferred stock The rights, preferences and
have redemption rights and are privileges of holders of Entrade
entitled to preferences over common stock will be subject to
holders of Artra common stock as the rights of the holders of any
to the payment of dividends and series of Entrade preferred stock
the payment upon the dissolution, that Entrade may issue in the
liquidation or winding up of future. The Entrade board of
Artra. The Artra board of directors has the authority to
directors has the authority to issue preferred stock without
issue additional shares of seeking shareholder approval.
preferred stock without seeking
shareholder approval.
</TABLE>

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DESCRIPTION OF ENTRADE CAPITAL STOCK

GENERAL

The summary of the terms of the stock of Entrade set forth below does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Articles of Incorporation and Bylaws of Entrade and the
provisions of Pennsylvania law.

AUTHORIZED CAPITAL STOCK

The total number of shares of all classes of stock that Entrade has
authority to issue is 44,000,000 shares, of which 40,000,000 are shares of
common stock, without par value, and 4,000,000 are shares of preferred stock,
$1,000 par value per share. At February 23, 1999, 2,000,000 shares of common
stock were issued and outstanding and no shares of preferred stock were
outstanding.

The additional shares of authorized stock available for issuance by Entrade
might be issued at times and under circumstances that would have a dilutive
effect on earnings per share and on the equity ownership of the holders of
Entrade common stock. The ability of the Entrade board of directors to issue
additional shares of stock could enhance the Entrade board of directors' ability
to negotiate on behalf of the shareholders in a takeover situation and also
could be used by the Entrade board of directors to make a change in control more
difficult, thereby denying shareholders the potential to sell their shares at a
premium and entrenching current management.

COMMON STOCK

Holders of Entrade common stock are entitled to one vote per share on all
matters voted on generally by the shareholders, including the election of
directors, and, except as otherwise required by law or except as provided with
respect to any series of Entrade preferred stock, the holders of shares of
Entrade common stock possess all voting power. The Articles of Incorporation of
Entrade provide that the shareholders of Entrade do not have the right to
cumulate their votes for the election of directors. Thus, the holders of more
than one-half of the outstanding shares of Entrade common stock will be able to
elect all the directors of Entrade then standing for election and holders of the
remaining shares will not be able to elect any director.

Subject to any preferential rights of any series of Entrade preferred
stock, holders of shares of Entrade common stock are entitled to receive
dividends on these shares out of assets legally available for distribution when,
as and if authorized and declared by the Entrade board of directors and to share
ratably in the assets of Entrade legally available for distribution to its
shareholders in the event of its liquidation, dissolution or winding up.

Holders of Entrade common stock have no preemptive or subscription rights
and there are no conversion rights or redemption or sinking fund provisions with
respect to those shares. The rights, preferences and privileges of holders of
Entrade common stock will be subject to the rights of the holders of any series
of Entrade preferred stock that Entrade may issue in the future.

PREFERRED STOCK

The Entrade board of directors is authorized to issue the 4,000,000
authorized shares of Entrade preferred stock from time to time in one or more
series. The Entrade board of directors, without further approval of the holders
of Entrade common stock, is authorized to fix the dividend rights and terms,
conversion rights, voting rights, redemption rights and terms, liquidation
preferences, sinking funds and any other rights, preferences, privileges and
restrictions applicable to each authorized series of Entrade preferred stock.
The Entrade board of directors could authorize the issuance of shares of Entrade
preferred stock with terms and conditions which could discourage a takeover or
other transaction that holders of
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some or a majority of shares of Entrade common stock might believe to be in
their best interests or in which those holders might receive a premium for their
shares of stock over the then market price of those shares. As of the date
hereof, no shares of Entrade preferred stock are outstanding and the Entrade
board of directors has no present intention to issue any shares of Entrade
preferred stock after the Effective Time.

TRANSFER AGENT

After the merger, the initial transfer agent and registrar for the Entrade
common stock will be ChaseMellon Shareholder Services, LLC.

ANTI-TAKEOVER PROVISIONS

Charter Anti-Takeover Provisions

The Articles of Incorporation of Entrade provide that in the event that the
holders of the stock of Entrade outstanding and entitled to vote at a meeting
with respect to a particular matter are entitled to vote on:

- a proposal that Entrade enter into a merger or consolidation with any
person, or that Entrade sell, lease or exchange substantially all of its
assets and property to any person, and the person and his or its
affiliates, singly or in the aggregate, own or control, directly or
indirectly, five percent or more of the voting stock of Entrade; or

- a proposal to reclassify securities, recapitalize or any other
transaction, except redemptions permitted by the terms of the security to
be redeemed or repurchased by Entrade of its securities for cancellation
or for its treasury, designed to decrease the number of holders of the
voting stock of Entrade remaining after any person has acquired five
percent of the voting stock of Entrade,

the affirmative vote of the holders of shares of the voting stock of Entrade
representing at least 80% of the votes entitled to be cast at a meeting of the
shareholders is required for the approval of the proposal; provided, however,
that these requirements do not apply to any described merger, consolidation or
sale of assets and property:

- that has been approved by a resolution duly adopted by a majority of the
Entrade directors in office, although less than a quorum, and the
affirmative vote of the holders of shares of voting stock of Entrade
representing at least a majority of the votes entitled to be cast at a
meeting of shareholders called for that purpose; or

- between Entrade and another corporation, 50% or more of the voting stock
of which is owned by Entrade, if Entrade is the survivor or purchaser.

Any amendment to this anti-takeover provision requires either:

- the affirmative vote of the holders of shares of the voting stock of
Entrade representing at least 80% of the votes entitled to be cast at a
meeting of the shareholders; or

- the affirmative vote of at least 80% of the Entrade directors in office,
although less than a quorum, and the affirmative vote of the holders of
shares of the voting stock of Entrade representing at least a majority of
the votes entitled to be cast at the meeting of shareholders.

The Articles of Incorporation of Entrade also contain a provision that
shareholders do not have cumulative voting rights with respect to election of
directors.

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Bylaw Anti-Takeover Provisions

Entrade's Bylaws require any shareholder who desires to nominate a
candidate for election as a director to provide background information in
writing concerning the proposed nominee not later than 120 days before the first
anniversary of the date of the preceding annual meeting of shareholders.

Anti-Takeover Provisions under Pennsylvania Law

Pennsylvania has also enacted laws that may be considered "anti-takeover"
in effect. One provision permits directors, in considering the best interests of
Entrade, to consider the effects of any action upon its employees, suppliers,
customers, shareholders and creditors and the communities in which Entrade
maintains facilities. The effect of this provision is to put the considerations
of these constituencies on parity with one another, with the result that no one
group, including shareholders, is required to be the dominant or controlling
concern of directors in determining what is in the best interests of Entrade.
This provision applies to all Pennsylvania corporations.

Other provisions under Pennsylvania law that may be considered
anti-takeover in effect include the authorization for the adoption of
shareholder rights or "poison pill" plans and the prohibition of shareholders'
calling a special meeting of shareholders, taking action by less than unanimous
written consent or proposing an amendment to the Articles of Incorporation of
Entrade.

Entrade is subject to additional anti-takeover provisions under
Pennsylvania law. A summary of these anti-takeover provisions is as follows:

BUSINESS COMBINATIONS. This provision prohibits any person or group that
acquires at least 20% of the voting power of a corporation from effecting a
business combination with the corporation, including a merger, an asset sale and
recapitalizations described in the statute, for a period of up to five years
from the date the person acquired that voting power. The corporation's board of
directors may opt out of this provision on a case-by-case basis by approving a
particular business combination prior to the date the person or group acquires
20% of the voting power.

CONTROL-SHARE ACQUISITIONS. This provision prevents a person or group that
crosses the stock ownership thresholds of 20%, 33 1/3% or 50% for the first time
from voting shares beneficially owned by the person unless voting power is
restored to those shares by a vote of all shareholders and a vote of
disinterested shareholders at a shareholders meeting. Also, any business
combinations occurring after the restoration of voting power will require the
acquiring person to pay severance compensation to Pennsylvania employees of the
corporation whose employment is terminated, other than for willful misconduct
connected with the work of the employee, within 90 days before or 24 months
after the restoration of voting power.

DISGORGEMENT. This provision requires any person or group that acquires
20% or more of the voting power of a corporation to disgorge to the corporation
all profits realized from the sale of equity securities of the corporation
within 18 months after acquiring this control status if the person or group
purchased equity securities of the corporation within 24 months prior to, or 18
months after, the acquisition of control status.

The Articles of Incorporation of Entrade provide that other anti-takeover
provisions under Pennsylvania law are not applicable to Entrade.

LIMITATION OF LIABILITY

As permitted by the provisions for indemnification of directors and
officers under Pennsylvania law, which applies to Entrade, Entrade's Bylaws
provide for indemnification of directors and officers for all expense, liability
and loss, including without limitation attorneys' fees, judgments, fines, taxes,
penalties and amounts paid in settlement, reasonably incurred or suffered by the
officer or director in any

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threatened, pending or completed action, suit or proceeding, including without
limitation an action, suit or proceeding by or in the right of Entrade, whether
civil, criminal, administrative, investigative or through arbitration, unless
the act or failure to act giving rise to the claim for indemnification is
determined by a court to have constituted willful misconduct or recklessness.

The right to indemnification provided in Entrade's Bylaws includes the
right to have the expenses incurred by an officer or director in defending any
proceeding paid by Entrade in advance of the final disposition of the proceeding
to the fullest extent permitted by Pennsylvania law; provided that, if
Pennsylvania law continues so to require, the payment of the expenses incurred
by the officer or director in advance of the final disposition of a proceeding
may be made only upon delivery to Entrade of an undertaking, by or on behalf of
the officer or director, to repay all amounts so advanced without interest if it
is ultimately determined that the officer or director is not entitled to be
indemnified under Entrade's Bylaws or otherwise. Indemnification under these
provisions continues as to a person who has ceased to be a director or officer
of Entrade and inures to the benefit of his or her heirs, executors and
administrators.

Entrade's Bylaws also avail directors of the Pennsylvania law limiting
directors' liability for monetary damages for any action taken or any failure to
take any action to those cases where they have breached their fiduciary duty
under Pennsylvania law and the breach constitutes self-dealing, willful
misconduct or recklessness. This limitation of liability does not apply to the
responsibilities or liabilities of a director under any criminal statute or to
the liabilities of a director for payment of taxes under local, Pennsylvania or
federal law.

OUTSTANDING STOCK OPTIONS TO BE ASSUMED BY ENTRADE

The 1985 and 1996 Option Plans

Artra's Restated 1985 Stock Option Plan and Artra's 1996 Stock Option Plan
provide for the grant of options to purchase Artra common stock that are
intended to qualify as incentive stock options under Section 422 of the Internal
Revenue Code and non-qualified options to key employees and non-employee
directors of Artra, its subsidiaries and affiliated entities.

As of June 30, 1999, Artra had outstanding options to purchase an aggregate
of 342,603 shares of Artra common stock granted to Artra's employees under the
1985 Plan, which are intended to qualify as incentive stock options, at exercise
prices of $3.65 and $3.75. All of the options granted under the 1985 Plan are
fully vested and expire on either December 19, 2000, September 19, 2001 or
January 8, 2003. The 1985 Plan will remain in effect until all options granted
under the 1985 Plan have been satisfied by the issuance of shares or the
expiration of the outstanding options, but no new Options may be granted under
the 1985 Plan.

As of June 30, 1999, Artra had outstanding options to purchase an aggregate
of 936,000 shares of Artra common stock granted to Artra's employees under
Artra's 1996 Plan, which are intended to qualify as incentive stock options at
exercise prices of $5.25 and $4.75. All of the options granted under the 1996
Plan are fully vested and expire on either October 4, 2006 or January 6, 2009.

The 1996 Disinterested Directors Stock Option Plan

As of April 30, 1999, Artra had outstanding nonqualified options to
purchase an aggregate of 100,000 shares of Artra common stock granted to Artra's
directors under Artra's 1996 Disinterested Directors Plan at an exercise price
of $3.125. All of the options granted under the 1996 Disinterested Directors
Plan are fully vested and expire on either May 28, 2008 or January 6, 2009.

The 1999 Non-Qualified Stock Option Plan

As of February 23, 1999, Artra granted options to purchase an aggregate of
1,600,000 shares of Artra common stock to Robert D. Kohn, Benjamin R. Kafka,
Gary L. Lerman and Mark L.M. Quinn under
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<PAGE> 64

Artra's 1999 Plan at an exercise price of $2.75 per share. The options become
exercisable in three equal installments commencing December 1, 1999, February
18, 2000 and February 18, 2001. The options will expire on the earlier to occur
of:

(1) February 23, 2009;

(2) the date of the employee's termination of employment for cause;

(3) the expiration of three months from the date of the employee's
termination other than for cause or voluntary resignation unless the
termination results from the employee's retirement, death or disability; or

(4) the expiration of one year from the date of the employee's
termination by reason of his retirement, death or disability.

Options Issued in June 1999 to Mark Santacrose

On June 28, 1999, the Artra board of directors granted to Mark Santacrose
an option to purchase 200,000 shares of Artra common stock at an exercise price
of $10.00 per share and 100,000 shares of Artra common stock at an exercise
price of $12.875 per share. The Artra board of directors granted these options
in connection with Mr. Santacrose's new employment with Artra as President and
Chief Executive Officer. See "Artra Executive Compensation -- Mark F. Santacrose
Employment Agreement."

OUTSTANDING WARRANTS TO BE ASSUMED BY ENTRADE

As of June 30, 1999, Artra had outstanding warrants to purchase an
aggregate of 1,091,402 shares of Artra common stock. All of the warrants granted
are fully vested and will be assumed by Entrade upon the closing of the Merger.

Artra granted miscellaneous warrants to purchase an aggregate of 2,734,284
shares of Artra common stock between March 31, 1992 and October 21, 1998. Artra
issued these warrants as additional compensation to lenders for short-term
loans. As of June 30, 1999, miscellaneous warrants to purchase an aggregate of
807,420 shares of Artra common stock were outstanding with expiration dates
ranging from September 29, 1999 to October 26, 2003 and per share exercise
prices ranging from $3.00 to $8.00.

The remaining warrants to purchase an aggregate of 283,982 shares of Artra
common stock, granted from 1997 to 1998 in connection with the issuance of
promissory notes, have expiration dates ranging form August 13, 1999 to January
14, 2000 and exercise prices ranging from $3.00 to $3.75 per share. The holders
of these warrants have the option to sell their unexercised purchase rights
under the warrants to Artra during specified periods for purchase prices ranging
from $1.50 to $3.00.

The holders of the warrants have registration rights as set forth in the
warrants. The warrants do not confer upon the holders thereof any voting or
other rights of a shareholder of Artra. Upon notice to the holders of the
warrants, Artra has the right to reduce the exercise price and extend the
expiration date of the warrants. Appropriate adjustment to the outstanding
warrants and to the number and kind of shares subject to the warrants are
provided for in the event of a stock split, reverse stock split, stock dividend,
combination or reclassification and other described corporate transactions
involving Artra, including a merger or a sale of substantially all of the assets
of Artra.

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INFORMATION ABOUT ENTRADE INC. AND ENTRADE.COM

GENERAL

Entrade, a Pennsylvania corporation, was incorporated February 1999.
Entrade intends to operate as an Internet business-to-business electronic
commerce, or "e-commerce," service provider. entrade.com licenses and provides
business-to-business e-commerce software and related services to clients to
facilitate the purchase and sale of clients' products and services including,
inventory, equipment and other assets. It has also created and manages
industry-specific websites for marketing, sales and procurement of products and
services.

Upon the closing of the merger, Entrade will be the holding company of
Artra and entrade.com, which Entrade will hold as separate subsidiary entities,
and 25% of the voting common stock of asseTrade.com. The following discussion
sets forth a business description of the operations of entrade.com.

ENTRADE'S ACQUISITION OF THE ENTRADE.COM ASSETS AND 25% OF THE VOTING COMMON
STOCK OF ASSETRADE.COM

In February 1999, Entrade acquired from WorldWide all of the assets of the
former BarterOne LLC and a 25% voting stock interest in asseTrade.com, Inc.
WorldWide had acquired all of the membership interests in BarterOne LLC in
January and February of 1999, under separate agreements with Global Trade Group,
Ltd., an asset recovery and re-marketing specialist, and Energy Trading Company,
a subsidiary of PECO Energy. Following those acquisitions, BarterOne LLC was
dissolved and WorldWide took direct title to its assets.

BarterOne had been formed in December 1996 by Energy Trading Company and
Global Trade Group, Ltd., to develop software and related products and services
that would enable users, primarily in the electric and gas utility industry, to
effect barter transactions via an e-commerce system. Energy Trading Company
provided the initial capital and executive support necessary for the development
of the software, while Global Trade Group, Ltd. provided software development,
business development, marketing and field support services. The result was the
development of the ORBIT System software.

Contemporaneously with the development of the ORBIT System through
BarterOne, an affiliate of Global Trade Group, Ltd., Positive Asset Remarketing,
Inc., forged an alliance with a joint venture entity, Butcher Fox LLC, formed by
Butcher and Fox to provide entrade.com's on-line technologies and business model
to the Butcher and Fox industrial clients. In October 1998, these parties formed
asseTrade.com, which was initially owned 50% by Positive Asset Remarketing, Inc.
and 50% by Butcher Fox LLC. In January 1999, WorldWide acquired 25% of the
voting common stock of asseTrade.com from Positive Asset Remarketing, Inc. at
the same time it acquired BarterOne LLC, and then transferred those shares to
Entrade in February 1999. asseTrade.com holds a perpetual license from
entrade.com to the ORBIT System and an on-line auction technology. Each of
Butcher and Fox has agreed to conduct all of its on-line auction sales through
asseTrade.com.

OVERVIEW

Companies that will have the greatest success in business in the future are
those companies that can best utilize information technology to garner access to
information about their identified marketplace. Large industrial corporations
are constantly seeking cost and operating efficiencies to remain competitive.

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Traditional channels of communication for those purposes have included mail,
telephone and fax and, to a lesser extent, more complex and costly methods,
including Electronic Data Interchange (EDI), which consists of a computer
network for exchanging information among a defined group of persons or
companies.

The development of Internet and e-commerce applications provides additional
cost and operating efficiencies for a company's asset and inventory management,
operations and marketing, sales and distribution functions. By providing easy
access to a global network, Entrade expects the Internet to assist businesses in
lowering the cost of creating new marketing channels and buying and selling
products and services. Also, small and medium-sized businesses can more readily
participate in all levels of e-commerce.

ENTRADE.COM'S SOLUTION

entrade.com has a two-prong business strategy:

- To use its proprietary e-commerce software to create commission fee
income through the purchase and sale of products and services in specific
markets; and

- To license and service its proprietary e-commerce software for the
purchase and sale of products and services and internal management of
inventories to industrial, wholesale and retail companies.

entrade.com has initially targeted the nation's electric utility industry
as well as large manufacturing concerns to provide inventory management and
plant and equipment sale and purchase programs, including business-to-business
auctions. These assets include plant, equipment and machinery, surplus parts,
excess capacities and excess/surplus production inventories.

ENTRADE.COM'S SERVICES

entrade.com's current portfolio of services include:

- MANAGEMENT WITHIN AN INDUSTRY'S SUPPLY TRAIN for vendors, distributors
and manufacturers to automate purchasing requisitions and order
fulfillment;

- CUSTOM INTRANET APPLICATIONS for companies to manage, track and
distribute inventories among multi-locations within a company;

- REQUEST-FOR-PROPOSAL MANAGEMENT for purchasing agents to consolidate and
negotiate purchasing contracts;

- INTERNET AUCTIONS for clients to list and dispose of inventory and
assets;

- CATALOG LISTINGS for individual companies to advertise and sell current
product lines via the Internet;

- CONSULTATION AND DESIGN of client-specific business software for
e-commerce;

- DIRECT MARKETING TOOLS to support licensees and/or strategic partners in
advertising products and services; and

- ADVERTISING USING BANNERS ON WEBPAGES for companies to promote products
and services on entrade.com's company-owned websites.

In combination with its proprietary technology and commercial operations,
entrade.com provides industrial, commercial and service corporations with the
tools necessary to use e-commerce.

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Entrade.com's technology and the marketing of the technology, have been
focused on:

- plant and equipment disposition;

- remarketing and sale of corporate assets;

- just-in-time product requisitions and order fulfillment;

- automated open bidding procedures for request-for-proposal management;

- catalog sales;

- organized on-line auctions; and

- redistribution and exchange of products and services of specific
inventory groups.

entrade.com believes that its e-commerce software applications may result
in:

- improved asset and inventory management efficiency;

- global internal networking and external marketing of available products,
supplies and services; and

- a faster transaction process due to 24 hour per day/7 days per week
communications capability within a website.

The ORBIT System

The ORBIT System technology provides transaction services for the rapidly
emerging business-to-business e-commerce marketplace. The ORBIT System allows
vendors to customize and promote products and services to current and potential
customers.

The ORBIT System technology allows third party software tools to be easily
added to provide for additional functions.

The ORBIT System facilitates the cataloging, transfer, trading, selling,
auction, purchase or tracking of products, inventories and corporate assets in a
secure, 24-hour, Internet environment. Flexible pricing modules allow open bid,
bulk pricing and variable discounting features. A comprehensive range of
administrative, financial, commercial and support features are included, which
can stand on their own or be integrated into existing databases.

The ORBIT System offers the following commercial features:

- competitive open bid negotiations;

- user-friendly transaction processing and administration;

- cataloging and pricing formats for individual items;

- comprehensive search and query options;

- inventory reconciliation functions;

- automated request for proposal (RFP) and request for quote (RFQ) modules;

- credit and accounting options;

- comprehensive inventory database maintenance;

- real-time payment options;

- customer statement and reporting modules; and
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- multiple fee and billing formats.

The following list describes the administrative features of the ORBIT
System:

- full point-of-sale transaction and account reconciliation;

- billing and order processing;

- internal credit approval system;

- general ledger postings;

- historic accounting functions;

- tracking/shipping/forwarding functions;

- report generation;

- customized database for historical evaluations;

- self-administered add, delete and edit;

- virtual storefront identity and customized branding;

- real-time inventory adjustment;

- comprehensive help section and tutorials;

- customized pictorial catalog;

- easy administrator access and data management;

- direct "link" capabilities to other corporate-defined web sites;

- extensive "search" capabilities;

- comprehensive e-mail and communication; and

- e-mail and pager notification.

The ORBIT System also offers the following operating features:

- compatibility with existing database systems; and

- security and encryption.

The MARS System

The MARS System is an Internet based e-commerce application that offers two
distinct forms of Internet auction processes: A business-to-business mode and a
business-to-consumer mode. The MARS System can function independently from the
ORBIT System as an auction system or can be used in conjunction with the ORBIT
System.

The MARS System contains multiple fee functionality including:

- monthly flat rate system usage;

- transaction flat fee per vendor or buyer;

- tiered percentage transaction fee per vendor or buyer; or

- any combination of these usages.
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The MARS System enables product information to be supplemented with links
to other Internet sites for the direct access to visual or supportive marketing
material. Users will be able to update product information as needed, except for
information relating to auctions that are in process. entrade.com intends to
market the MARS System as a service offered rather than as licensed software.
entrade.com, however, is not currently using or making available the MARS System
to utiliparts.com.

New entrade.com software system

entrade.com has completed the development of a new e-commerce software
system. This new system operates independently of the ORBIT and MARS Systems.
This new system provides a specific feature for managing and negotiating bids
between corporate buyers and sellers for the purchase and sale of products and
services on the Internet including:

- inventory;

- machinery and equipment; and

- corporate services, including telecommunications, insurance and media
commodity products such as oil, gas, coal, food and raw materials

entrade.com has completed its testing of this system and intends to launch
this new software system in the second half of 1999. entrade.com intends to
license the new system to corporate customers and utilize the new system
internally on entrade.com's websites.

INITIAL APPLICATIONS OF ENTRADE.COM'S SYSTEMS AND TECHNOLOGIES

entrade.com is commencing the marketing and use of its systems and
technologies through two affiliated websites: utiliparts.com and asseTrade.com.
Currently, the utiliparts.com website is owned and operated by entrade.com.
entrade.com built the asseTrade.com website and licensed its software for use on
the asseTrade.com website. asseTrade.com is a strategic alliance in which
Entrade owns a 25% voting interest.

utiliparts.com

utiliparts.com is an operating unit of entrade.com. Through the website
address, www.utiliparts.com, it provides an e-commerce format for the
cataloging, listing, sale and purchase of electric generation, electric
transmission and general utility parts and equipment. Participating utilities
and utility equipment brokers can negotiate and transact sales and purchases
directly on this website.

Regulation in the electric power industry has fostered indifferent surplus
inventory practices due to flexible cost-based rate structures. These practices
have resulted in large surplus utility inventories throughout the United States.
As the pace of deregulation accelerates, utilities that do not address these
inefficiencies operate at a significant disadvantage in a deregulated
competitive environment. Many utilities are seeking to create effective asset
recovery and asset inventory programs early in the deregulation cycle to assure
their competitive advantage.

utiliparts.com's purpose is to develop and utilize its e-commerce software
to provide asset recovery and internal inventory management services for the
utility industry. utiliparts.com's software programs provide inventory
management and asset remarketing cost efficiencies for utilities. In addition to
services provided through the utiliparts.com website, entrade.com will provide
related services in asset evaluation, asset cataloging and the off-line sale or
auction of surplus equipment.

The majority of utiliparts.com's available listings originate from
overstocked, unused inventories held by utilities in the United States.
utiliparts.com will also make available refurbished, serviceable, repairable
parts and parts available from foreign utilities. Utility companies can
participate as both buyer and seller.

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Most items listed on utiliparts.com will be classified as "new," but the
assignment and/or transfer of original manufacturer warranties will be
negotiated by the buyers and sellers on a case-by-case basis.

utiliparts.com's initial commercial marketing focus is three-fold:

- marketing its proprietary software and related services for use as an
internal inventory management system for individual clients within the
electric utility industry;

- establishing and managing an e-commerce website utilizing entrade.com's
proprietary software; and

- providing auction services for individual utility clients for the sale of
surplus plant and equipment directly through utiliparts.com and/or
entrade.com's affiliated company, asseTrade.com.

The products and services available to utility companies through the
utiliparts.com unit includes:

SERVICES PROVIDED THROUGH WWW.UTILIPARTS.COM WEBSITE: Utility clients can
list parts and equipment on this website for sale based on direct negotiation
between buyers and sellers, which include utilities, other industrial and
manufacturing companies and brokers. In direct negotiations managed by
utiliparts.com, a specific client can sell directly its assets to an identified
buyer or buyers. This negotiation can be on-line or off-line. The entrade.com
software provides for an open bid process, which supports continuous real-time
negotiations directly between the buyer and seller. In the open bid process, a
client can list assets for sale on-line without specifying a listed price in
order to take advantage of current market conditions for those assets. The
seller may accept or reject any bids received.

LICENSING OF CUSTOMIZED ENTRADE.COM E-COMMERCE SOFTWARE FOR USE WITH
CORPORATE INTRANET INVENTORY AND ASSET MANAGEMENT SYSTEMS: utiliparts.com's
software provides a secure central organized database for each client's
inventories in a Internet environment. This allows for preassigned internal
corporate procurement, inventory management and asset recovery teams, regardless
of location or time, to track the value of assets in the purchase, sale or
transfer of items internally amongst their own global corporate divisions or
operating facilities. These systems provide greater inventory management
efficiencies through the internal redeployment of non-productive parts and
equipment in an instantaneous environment through which any client-designated
employee can participate in either a primary or support capacity. The
entrade.com software automatically documents transactions through the issuance
of order confirmations and also incorporates activity management report
features. A client's management team can also effectively identify obsolete or
non-performing parts and equipment that can then be assigned to
www.utiliparts.com for listing, sale or auction to the industry website.

INVESTMENT RECOVERY VIA AUCTION: Clients seeking to accelerate the sale of
excess surplus inventories can arrange for on-line auctions through
utiliparts.com. Those clients can either participate in general utiliparts.com
auctions or auctions under a private arrangement. In a general auction, bidding
would occur on equipment and products of multiple sellers, and sales would be
made as the bidding process closes for the items. In an auction under private
arrangement, the bidding and sale process would involve one or a small number of
sellers and only that seller's or sellers' equipment and assets would be sold at
that time. Offline asset evaluation and disposition services are also available
through utiliparts.com and other entrade.com's strategic partnerships including
asseTrade.com.

AFTER-MARKET PROCUREMENT SERVICES: utiliparts.com is prepared to manage
and implement parts and equipment searches for and on behalf of participating
utilities offline. Additionally, utiliparts.com will seek to provide on-line
procurement services for and on behalf of international utilities seeking to
capitalize on the significant excess surplus of inventories currently held by
North American electric utility groups.

OFF-LINE CONSULTING: utiliparts.com has engaged as consultants former
senior utility-industry specialists to provide plant and equipment evaluation
and operational, control and cataloging services on an as needed project basis.
This group, working on a commission basis, will also be marketing utiliparts.com
services through its existing network of contacts.

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PROSPECTIVE SERVICES TO ORIGINAL EQUIPMENT MANUFACTURERS: entrade.com
believes that original equipment manufacturers will be able to use the services
provided through the utiliparts.com website. For example, these manufacturers
can list and sell equipment through the website and can buy back parts and
equipment previously sold for remarketing to other customers or redeployment
under management contracts they may have with utility companies.

Key Features and Operating Strategies of utiliparts.com

utiliparts.com believes that participating utilities can achieve both
transactions for larger volumes of equipment and higher rates of return as
compared to traditional asset disposition methods. Management believes that
these benefits derive from more cost efficient global access to potential buyers
and sellers provided by the Internet and from utiliparts.com's real-time
transaction format, which accelerates and facilitates the sales process.

entrade.com with utiliparts.com is attempting to create buyer markets among
North American electric utilities as well as private, government and joint
venture electric generation groups operating in foreign countries. entrade.com
believes that foreign utilities represent a key buying group for the sale and
redistribution of the large excess parts and equipment inventories that exist in
North America as a consequence of years of industry regulation and associated
practices. Our open bid and transaction software technology also allows
entrade.com to represent and coordinate organized procurement programs for these
international utilities in a real-time on-line environment.

In developing the technology for implementation in a single industry
application. entrade.com has strategically considered the following:

PURCHASE AND SALES OF INVENTORIES: utiliparts.com does not currently
intend to take an ownership position of any material listed on the system.
utiliparts.com does not intend to become involved in the pricing of any of the
listed inventories, but is available off-line through its consulting services to
assess and appraise utilities assets. In order to keep a high level of integrity
and neutrality, entrade.com will strive to be an impartial administrator. All
purchases and sales on the website will occur in real time and at market-driven
prices directly between the buyer and seller through the open bid technology
process available through the entrade.com software.

PRICING OF INVENTORIES: Unless client's specifically request services
related to parts and equipment valuation, available through utiliparts.com
consulting services, evaluations and pricing of all items listed and available
for sale on utiliparts.com will be at the seller's discretion with final pricing
subject to direct negotiation between sellers and buyers.

REVENUE GENERATION: utiliparts.com's principal compensation is based on
transaction fees. utiliparts.com does not currently plan to charge utilities a
monthly or annual membership, subscription or access fee. All sellers of
inventories will automatically be registered as buyers. utiliparts.com will also
seek to identify and manage organized buyer programs for international electric
utilities seeking to capitalize on the excess inventories which exist in North
America.

SHIPMENT OF INVENTORIES: Transactions performed between buyers and sellers
on the entrade.com software is instantly recorded within the product catalog
database, and order confirmation documentation is immediately made available to
both buyer and seller. The item purchased is immediately deleted from the
utiliparts.com catalog of available items. A multiple set of freight forwarding
options is included within the entrade.com software capabilities. These features
enable utiliparts.com to act as a just-in-time procurement system for utilities
in need of immediate or rapid deliveries.

Other Features:

- utilizing entrade.com's e-commerce software, utiliparts.com provides for
multiple payment options, including: cash, purchase credit, purchase
order, credit card and/or any combination of same;
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- prospective buyers are also able to broadcast specific procurement
requirements that are not listed on the site, thereby instantaneously
accessing sellers actively participating on the system; and

- if a utility needs to use one of its own listed parts or pieces of
equipment, it can easily arrange for the specific listing to be deleted
from the respective database.

OTHER FEATURES THAT SUPPORT ENTRADE.COM'S SOFTWARE LICENSING
BUSINESS: entrade.com's software can also analyze and create reports on pricing
and the movement of inventories listed on the system. Information on product
availability, purchasing and shipping activities can be collected, analyzed and
disseminated as research reports to interested parties. Corporate clients
utilizing these features can track internal transfer and procurement activities
among global divisions and disseminate the information to their own defined
internal groups. Operating groups, inventory and procurement groups, financial
support groups and any other group can be promptly incorporated into the
information flow of any ongoing internal transactions.

Current Status and Implementation of utiliparts.com

utiliparts.com currently lists on its website over 27,000 line items with
an original market value in excess of $50 million. This initial inventory of
listed equipment is comprised of inventories from two North American utilities
and a trade-related broker. This represents the current listing products
available for sale through utiliparts.com. Several programs are in place to:

- continue development of listing agreements. utiliparts.com is targeting
its initial marketing and sales focus towards North American utilities;

- actively market licensing agreements to select utilities to use
entrade.com's software as an internal inventory management system; and

- stimulate and develop potential buyer interest from overseas energy
generation markets.

entrade.com is providing office space in the Philadelphia and Boston areas
to base the utiliparts.com operations. entrade.com coordinates its
utiliparts.com efforts through a sales and marketing group which operates out of
both locations. As of May 1999, entrade.com has organized a group of retired
utility experts, who collectively bring practical know-how and many years of
hands-on utility experience. These individuals are retired from a major electric
utility and currently function as commissioned independent operators. This group
will be responsible for contacting their long-time associates and counterparts
at the identified North American utilities to sell listed parts and equipment,
arrange listings of new parts and equipment and to arrange appointments for the
sales manager and other involved senior management. This group will also be
responsible for the appraisal of any and all equipment and parts inventories
that are included in entrade.com's on-line listings, which are accepted for
remarketing, and handle the cataloguing of all inventories.

asseTrade.com

Entrade holds 25% of the voting common stock of asseTrade.com, a strategic
alliance formed with Butcher and Fox. asseTrade.com has the right to utilize the
ORBIT System and the MARS System.

asseTrade.com provides business-to-business on-line services that
facilitate the remarketing of industrial machinery, equipment and parts. These
services enhance the current operation of asset recovery teams and procurement
groups of industrial companies. The software is customized for real-time on-line
sales and internal transfers of plant, equipment and inventory.

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asseTrade.com is initially focused on the client base of Butcher and Fox as
well as other Fortune 500/ Global 2000 companies that have similarly specific
needs, including, for example:

- valuation of corporate/investment assets;

- electronic on-line registration and listing of corporate/investment
assets; and

- development of corporate Intranet programs for the re-distribution of a
company's assets on an internal global basis.

MARKETING AND STRATEGIC ALLIANCES

entrade.com has developed a business model which includes identifying
strategic partners with their established customer base to form vertical portal
websites and to develop its own vertical portal websites. Under this business
model, entrade.com will generate commissions based upon transaction and license
fees for its software.

To this end, entrade.com, through its internal management team, has
developed and established utiliparts.com in the utility industry and allied with
Butcher and Fox to form asseTrade.com in a broader, general industrial
marketplace. entrade.com, through its internal management team, intends to
continue developing this business model by identifying leading companies within
specific industries.

entrade.com plans to implement its marketing plans through the resources
and personnel of our strategic alliance partners. asseTrade.com is one example
of this business model.

entrade.com, through its own employees, has also begun developing sales and
marketing programs that will promote the capabilities of its software and other
business practices that are not related to the on-line management and sale of
corporate investment assets. entrade.com has identified the following key
services to direct this software:

- catalog sales;

- centralized procurement services; and

- just-in-time supply chain management.

TRANSACTION FEES AND LICENSE FEES

The fees charged by entrade.com will vary depending upon the service that
it offers and performs. The following table provides a general description of
the fees, which entrade.com constantly evaluates and which are subject to
negotiation and change:

General transaction fee: 5-15% of the gross transaction value.

Internal (Intranet) transfer
fee: 5% of the value of the asset negotiated between
entrade.com and the owner of assets, based on
an evaluation of fair market value performed by
utiliparts.com personnel.

Internet sales fee: 10% of the gross transaction value.

Auction fee: 15% of the gross transaction value; in
addition, entrade.com may charge a 10-15%
premium to the buyer in the auction.

License fees for software are subject to negotiation. entrade.com
contemplates that it could charge $75,000 to $500,000 for the non-exclusive
license of its software, depending on whether the source code is part of the
license.

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entrade.com also proposes to charge fees for other services it may provide
to a client, including consulting, web-site hosting, development services and
customization services, which would be based upon a percentage of the license
and per hour rates.

PROPRIETARY RIGHTS

entrade.com holds a federal trademark registration and common law rights in
the ORBIT System mark for use on its software. entrade.com also holds common law
rights in the marks "utiliparts.com" and "entrade.com" for use in connection
with e-commerce services. entrade.com is seeking federal registration of those
marks as service marks. entrade.com does not own any patents or patent
applications.

COMPETITION

entrade.com believes that it currently competes favorably with existing
competitors because of the functionality of its e-commerce software and support
services and its business model. entrade.com differentiates from its current
market competitors through the expertise of its strategic partners and internal
management.

Currently, there are various companies who are licensing transaction
software. Internet companies utilize the software in websites. To date, most of
these Internet companies have focused on consumers. There are many new
business-to-business Internet companies, many of which have begun in 1999 to
create websites. In investigating these new websites, entrade.com believes that
most of these companies do not have the experience of management within the
industries their websites seek to penetrate. Many of these Internet companies
base their competitive strength on their technology. entrade.com, however,
believes that its strength is based on the experience within the targeted
industry of its internal management or its strategic alliance partners.

A few groups provide asset recovery for the utility industry. Most notably,
the National Materials Logistic Group, a membership of nuclear generation
facilities, contracts to provide parts and equipment, listing available assets
for sale by and on behalf of member utilities through a listing service called
RAPID. entrade.com believes it competes favorably with that service because,
unlike that service, entrade.com's service provides transaction functionality
and the complimentary service of auction capabilities. Additionally, that group
specializes in nuclear generation equipment rather than the broad spectrum of
energy generation assets.

Other companies operate similar Internet websites that currently list
utility generation parts and equipment for sale and auction. To entrade.com's
knowledge, these companies do not have the business skills, business
methodologies or industry related expertise which entrade.com provides through
its internal operations.

See "Risk Factors -- We may not be able to compete effectively with other
providers of e-commerce services."

EMPLOYEES

As of August 1, 1999, entrade.com had 22 full-time employees within the
following departments: management, sales and marketing and technical services.
Technical services consist of creative services, customer support services,
software engineering, network services and product development.

entrade.com employs seven individuals in managerial positions, two in sales
and marketing and 13 as technical staff members. Given the size of entrade.com
and the nature of its business, however, the above employees perform multiple
functions that overlap these categories. entrade.com also utilizes a team of
retired utility executives and engineers as a commissioned based independent
sales force currently for utiliparts.com.

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entrade.com considers its relationships with its employees to be good. None
of its employees are covered by collective bargaining agreements.

LEGAL PROCEEDINGS

Entrade commenced operations in February 1999. Entrade is not a party to
any material legal proceedings.

ENTRADE PLAN OF OPERATIONS

Entrade commenced operations in February 1999. Therefore, Entrade cannot
report on its results of operations for any prior period. The following is a
description of Entrade's proposed plan of operation for approximately the next
12 months. No assurance can be given that Entrade will be successful in
implementing this proposed plan of operation. See "Risk Factors" commencing on
page 8.

Concurrently with the execution of the merger agreement, Entrade acquired
software and other assets necessary for the conduct of entrade.com's e-commerce
business and 25% of the shares of voting common stock of asseTrade.com from
WorldWide, in exchange for 1,800,000 shares of Entrade common stock, $800,000 in
cash and a note for $500,000, payable upon the closing of the merger or the
earlier termination of the merger agreement. On February 16, 1999, Entrade
agreed with Energy Trading Company to issue to Energy Trading Company 200,000
shares of Entrade common stock, and to pay Energy Trading Company $100,000 in
cash upon closing of the merger, in exchange for retained rights Energy Trading
Company held in the assets acquired by Entrade. Entrade also agreed with both
WorldWide and Energy Trading Company that it would provide a minimum of
$4,000,000 in funding for entrade.com, which is also an obligation of Artra
under the merger agreement. Therefore, the total consideration for the assets
acquired by Entrade will be 2,000,000 shares of Entrade common stock and an
aggregate of $5,400,000 in cash, notes and committed funding.

Under separate loan agreements, Artra agreed to loan Entrade up to
$2,000,000 to fund the $800,000 cash payment to WorldWide and to provide funding
for entrade.com until the closing of the merger or the earlier termination of
the merger agreement.

entrade.com does not expect that it will be required to raise additional
funds during the next twelve months in excess of the $4,000,000 committed by
Artra. entrade.com believes that it will have sufficient working capital to
complete the planned technology development cycle as well as fund day-to-day
operations. Our estimated budget for expenses during the next 12 months is:

<TABLE>
<S> <C>
- - Overhead (including field offices)........................ $ 700,000
- - Subcontractor expenses.................................... 600,000
- - Labor and benefits........................................ 1,850,000
- - Capital expenditures...................................... 300,000
- - Software development...................................... 400,000
- - Undesignated funds........................................ 150,000
----------
Total.................................................. $4,000,000
==========
</TABLE>

entrade.com has made capital purchases including desk-top computers,
laptops, servers, printers, fax machines and related equipment to support its
operations to date. It is expected that entrade.com will add other equipment
only if a significant number of additional employees are hired. entrade.com's
budget provides for a full administration, billing and accounting to be
performed by WorldWide. These services will ultimately be offered to strategic
alliance and joint venture business units under fixed monthly maintenance and
support contracts.

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In addition to its Mount Laurel, New Jersey, headquarters, entrade.com has
opened or plans to open five field offices to manage and oversee marketing and
sales operations. These locations are Philadelphia, Boston, Chicago, New York
and Waterloo, Ontario, with all capital, labor and variable costs included in
the overhead expense category above. Its Chicago office will be Entrade's
headquarters. entrade.com has allocated one senior manager to each of the four
field offices on a full time basis. entrade.com may contract additional sales
representatives on a commission basis as needed.

Management believes that entrade.com can implement its current business
plan through its current employees and subcontractors. As entrade.com develops
additional websites and forms other strategic alliances, it intends to hire five
additional technical employees, one additional project manager and two
additional marketing professionals for each formed strategic alliance and newly
developed operating business unit. The above table reflects the proposed
increase in personnel.

MANAGEMENT OF ENTRADE

ROBERT D. KOHN, age 49, currently serves as the chairman and chief
executive officer of Entrade. Mr. Kohn has entered into an employment agreement
with Artra, which Entrade will assume after the merger. Upon the closing of the
merger, Mr. Kohn will resign his positions with Entrade and will serve as the
chief executive officer of Entrade's subsidiary, entrade.com.

- Mr. Kohn has been chairman, president and chief executive officer of
WorldWide, an Internet business-to-business company, since its inception
in September of 1997. Mr. Kohn will resign all of his positions with
WorldWide upon the closing of the merger.

- Mr. Kohn, served as president and chief operating officer of Global Trade
Group at PECO Energy from February 1996 to March 1, 1999, and as a former
strategic planner of Business Development for Marketing & Sales.

- Prior to his service at PECO, Mr. Kohn held various executive positions
in emerging growth public companies and specialized in mergers and
acquisitions, strategic alliances, strategic planning and financial
public relations. From 1993 to 1996, Mr. Kohn served as president of
Equity Resources International, Inc., a financial services company.

- From 1989 until it was sold in 1993, Mr. Kohn served as chairman, chief
executive officer and in other executive capacities of Global
Entertainment and made various acquisitions, alliances and licensing
arrangements.

- From 1983 to 1987, Mr. Kohn was one of four founders of ORFA Corporation
of America, a Nasdaq National Market company involved in the waste
recycling technology industry, and held positions including president,
chief operating officer and chief financial officer. Mr. Kohn is a
certified public accountant.

GARY LERMAN, age 48, has served as president and chief operating officer of
entrade.com since February 1999. Mr. Lerman has entered into an employment
agreement with Artra, which Entrade will assume after the merger. After the
merger, Mr. Lerman will become a full-time employee of entrade.com.

- Mr. Lerman is a former strategic planner for PECO Energy Company. He was
employed with PECO Energy from 1997 until his transition to entrade.com
in 1999.

- From 1995 to 1997, Mr. Lerman served as a consultant for several other
global groups including the Uranium Exchange, a provider of procurement
services to the electric utility industry.

- From 1994 to 1996, Mr. Lerman served as vice president for international
business and as a consultant with ARAMARK, an institutional food service
business.

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- Mr. Lerman has over twenty years of direct commodity and trading
experience in over 40 countries throughout Europe, Asia and Latin
America. His emerging market experiences have focused on trade, global
procurement, barter/countertrade, marketing, sales and strategic
alliances with or on behalf of global industrial multi-national
corporations. Mr. Lerman has held executive positions with global
commodity groups and Chiquita Brands International.

BENJAMIN R. KAFKA, age 45, has served as vice president of Entrade and
executive vice president and director of business development for entrade.com.
Mr. Kafka has entered into an employment agreement with Artra, which Entrade
will assume after the merger. After the merger, Mr. Kafka will become a full-
time employee of entrade.com.

- Mr. Kafka served as a founder, and later as executive vice president and
a director, of Global Trade Group from 1979 to 1984 and from 1990 to 1999
and Positive Asset Remarketing from 1994 to 1999. During his years with
Global Trade Group and Positive Asset Remarketing, Mr. Kafka's experience
related to international trade matters, including representing domestic
companies for foreign product sales and forming strategic alliances and
joint ventures with global multi-national companies and government
authorities on a global basis.

- Mr. Kafka also has experience in strategic planning, product development
and project management while serving as manager of project marketing for
ORFA Corporation of America, a Nasdaq National Market company involved in
the waste recycling industry, from 1984 to 1990. Mr. Kafka is the former
executive vice president and managing director of Global Trade Group. Mr.
Kafka's experience includes corporate business development, negotiating
and marketing.

MARK L.M. QUINN, age 39, has served as executive vice president and chief
technology officer for entrade.com. Mr. Quinn has entered into an employment
agreement with Artra, which Entrade will assume after the merger. After the
merger, Mr. Quinn will become a full-time employee of entrade.com. For
approximately five years prior to February 1999, Mr. Quinn served as the
president and a director of Global Trade Group and Positive Asset Remarketing.

- Mr. Quinn has been the owner and executive manager of retail trade
companies and other service orientated entities and responsible for
financial operations, product development, manufacturing and the overall
senior management of the various companies.

- Mr. Quinn is the former President and a Director of Global Trade Group
Ltd. Mr. Quinn's experience includes being the primary developer of the
ORBIT System and developing customized trade based solutions for
companies such as IBM and PECO.

WILLIAM J. ARMSTRONG, age 67, has served as a key utility industry
consultant for entrade.com's utiliparts.com business unit since February 1999.
Mr. Armstrong has over 38 years of public utility experience, including 26 years
of nuclear power generation experience. Mr. Armstrong retired from Boston Edison
in 1993 and has worked since that time as a consultant, including with Global
Trade Group since 1996.

- Mr. Armstrong, a published author of articles specific to the nuclear
power industry, is the former chief operating engineer, project manager
and deputy nuclear plant manager of Boston Edison's Pilgrim Station in
Plymouth, Massachusetts. His activities included, but were not limited
to: developing and implementing training programs for licensed nuclear
operating supervisors, serving as project manager for major turbine
generator renovation programs and overseer of hydrogen water chemistry
programs and the establishment of various other corporate wide operating
policies.

- Mr. Armstrong is licensed by the Nuclear Regulatory Commission and the
Commonwealth of Massachusetts as a Senior Reactor Operator, First Class
Operating Engineer and a Nuclear Power Plant Senior Supervisory Engineer.

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EXECUTIVE COMPENSATION

Employment Agreements

Concurrently with the execution of the merger agreement, Artra entered into
employment agreements with Robert D. Kohn, Benjamin R. Kafka, Gary Lerman and
Mark L.M. Quinn providing for the employment of those individuals for three-year
terms. Entrade will assume each of these agreements upon the closing of the
merger. For a description of these employment agreements, see "The Merger
Agreement and Related Agreements -- Employment Agreements."

BENEFICIAL OWNERSHIP OF ENTRADE COMMON STOCK

Upon the closing of the merger, Entrade will become a publicly traded
holding company that owns Artra and its current subsidiaries, entrade.com and
25% of the voting common stock of asseTrade.com. WorldWide currently owns
1,800,000 shares, or 90% of the outstanding shares of Entrade common stock and
Energy Trading Company owns 200,000 shares, or 10%, of the outstanding shares of
Entrade common stock. Upon the closing of the merger, WorldWide will own
1,800,000 shares, or approximately 15.5%, of Entrade's outstanding common stock,
Energy Trading Company will own 200,000 shares, or approximately 1.7%, of
Entrade's outstanding common stock and the current shareholders of Artra will
own approximately 9,588,655 shares, or approximately 82.8%, of Entrade's
outstanding common stock. See "Summary -- Information About the Merger -- The
Proposed Merger."

ENTRADE RELATED PARTY TRANSACTIONS

At the time the parties entered into the merger agreement, Robert D. Kohn,
Benjamin R. Kafka, Gary Lerman and Mark L.M. Quinn each entered into an
employment agreement with Artra. Entrade will assume these agreements upon the
closing of the merger. See "The Merger Agreement and Related
Agreements -- Employment Agreements."

These persons also own shares of WorldWide, the current holder of 90% of
the outstanding shares of Entrade common stock. The following table shows their
current holdings as of July 20, 1999:

<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENTAGE
NAME OF HOLDER OF WORLDWIDE OWNERSHIP
- -------------- ------------ ----------
<S> <C> <C>
Robert D. Kohn(1)........................................... 4,810,000 16.5%
Benjamin R. Kafka(2)........................................ 1,625,167 4.2%
Gary Lerman(3).............................................. 494,000 1.9%
Mark L.M. Quinn(2).......................................... 1,504,167 3.5%
</TABLE>

- ---------------

(1) Mr. Kohn is currently chief executive officer, president and chairman of
WorldWide. He will resign these positions with WorldWide upon the closing of
the merger and become employed solely by entrade.com. These shares include
475,000 shares issued in 1999 in connection with the assignment to Energy
Trading Company in 1998 of his 4.5% ownership interest in BarterOne LLC and
other accrued, unpaid compensation and benefits relative to his employment
by PECO Energy, the parent company of Energy Trading Company.

(2) Benjamin Kafka and Mark L.M. Quinn are also officers, directors and
principal shareholders of Positive Asset Remarketing and Global Trade Group.
Under an agreement between Positive Asset Remarketing and WorldWide,
WorldWide issued 857,667 shares of WorldWide common stock to Mr. Kafka and
874,167 shares of WorldWide common stock to a trust of which Mr. Quinn is
trustee. Positive Asset Remarketing currently holds a 25% voting stock
interest in asseTrade.com.

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(3) Mr. Lerman will receive 475,000 shares of WorldWide common stock, which have
not yet been issued, in consideration for his assignment to PECO Energy of
his 4.5% ownership interest in BarterOne LLC that had been granted to him in
1998 in consideration for a reduction in salary and the relinquishment of
other benefits relative to his employment by PECO Energy.

For a description of the other transactions between WorldWide and Entrade,
see the discussion under "Information About Entrade Inc. and
entrade.com -- Entrade's Acquisition of the entrade.com Assets and 25% of the
Voting Common Stock of asseTrade.com."

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INFORMATION ABOUT ARTRA

GENERAL

Artra is a Pennsylvania corporation incorporated in 1933. Upon the closing
of the merger, Artra will be a wholly owned subsidiary of Entrade. In recent
periods through November 20, 1998, Artra operated in one industry segment as a
manufacturer of packaging products principally serving the food industry. The
packaging products business was conducted by Artra's wholly-owned subsidiary,
Bagcraft Corporation of America.

Effective August 26, 1998, Artra and its wholly-owned subsidiary BCA
Holdings, Inc., the parent of Bagcraft, agreed to sell the business assets of
Bagcraft. Additionally, the buyer agreed to assume liabilities directly related
to Bagcraft's operations. The transaction was completed on November 20, 1998 and
Artra received gross consideration of approximately $88.1 million in cash. A
substantial portion of the cash proceeds received were used to pay Bagcraft debt
obligations, including, but not limited to amounts owed under Bagcraft's credit
agreement. After paying the Bagcraft obligations noted above, Artra received net
cash proceeds of approximately $28.0 million from the sale of Bagcraft's assets.
Approximately $15.2 million of the cash received was used to pay Artra debt
obligations. See Note 8 to Artra's consolidated financial statements.

Artra does not intend to be considered an "investment company" as defined
by the Investment Company Act of 1940 and, accordingly, has actively
investigated new business opportunities, including the transactions under the
merger agreement.

At December 31, 1998, Artra held approximately 9% of the outstanding common
stock of Comforce Corporation, formerly The Lori Corporation. Prior to September
28, 1995, Comforce/Lori was a majority owned subsidiary of Artra operating as a
designer and distributor of popular-priced fashion costume jewelry and
accessories. In September 1995, Comforce discontinued its jewelry business and
later in 1995 entered the telecommunications and computer technical staffing and
consulting services business. Comforce subsequently expanded this business
through various acquisitions. After the issuance of the Comforce common shares,
plus the effects of other transactions, Artra's ownership interest in Comforce
common stock was reduced to approximately 25% at December 28, 1995. Accordingly,
the accounts of Comforce and its majority-owned subsidiaries were deconsolidated
from Artra's consolidated financial statements. See Note 5 to Artra's
consolidated financial statements for a further discussion of Artra's investment
in Comforce.

In April 1999, Artra entered into a letter of intent to purchase all of the
common stock of two companies that are in the business of conducting auctions of
a wide array of vehicles, personal property, real estate and equipment for
commercial and governmental clients under the name Nationwide Auction Systems.
The purchase price will consist of $10.8 million cash payable at the closing of
the transaction, 1,570,000 shares of Artra common stock and a $14.0 million
note, subject to adjustment, payable over a two-year period subsequent to the
closing of the transaction. The parties have extended the expiration date of the
letter of intent to August 12, 1999 and are negotiating to further extend the
expiration date. No assurance can be given that the parties will complete their
due diligence or enter into a definitive agreement. This proposed transaction
does not have any effect on the merger and probably will not occur, if at all,
until after the merger. Artra and Entrade believe that Entrade's on-line auction
system has application to the traditional auction business of Nationwide.

EMPLOYEES

At June 30, 1999, Artra employed approximately 12 persons. Artra considers
its relationships with its employees to be good.

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PROPERTIES

At December 31, 1998, the only property used by Artra was its headquarters
facility of approximately 7,000 sq. ft. in Northfield, Illinois. In December
1995 the building was purchased by a trust owned by John Harvey, Chairman of
Artra's board of directors. The lease for this property expired in December
1998, and Artra is currently renting its headquarters on a month-to-month basis.
Upon completion of the merger, Entrade will locate its corporate headquarters at
this location. The parties contemplate that Entrade will negotiate the terms of
a long-term lease agreement with a trust affiliated with John Harvey.

LEGAL PROCEEDINGS

Artra and its subsidiaries are the defendants in various business-related
litigation and environmental matters and product liability claims. At June 30,
1999, December 31, 1998 and December 31, 1997, Artra had accrued current
liabilities of $1,500,000, $1,500,000 and $1,800,000, respectively, for
potential business-related litigation and environmental liabilities. While these
litigation and environmental matters involve wide ranges of potential liability,
management does not believe the outcome of these matters will have a material
adverse effect on Artra's financial statements.

Business-Related Litigation

In November 1993, Artra filed suit in the Circuit Court of the Eighteenth
Judicial Circuit for the state of Illinois against Salomon Brothers, Inc.,
Salomon Brothers Holding Company, Inc., Charles K. Bobrinskoy, Michael J.
Zimmerman, D.P. Kelly & Associates, L.P., Donald P. Kelly, James F. Massey and
William Rifkind relating to the acquisition of Envirodyne Industries, Inc. in
1989 by Emerald Acquisition Corp. Effective December 31, 1997, the above parties
reached a settlement agreement and all pending litigation was dismissed. Artra
recognized a gain from the settlement agreement of $10,416,000, net of related
legal fees and other expenses.

Environmental Matters

The discontinued Bagcraft subsidiary's Chicago facility has been the
subject of allegations that it violated laws and regulations associated with the
Clean Air Act. The facility has numerous sources of air emissions of volatile
organic materials associated with its printing operations and is required to
maintain and comply with permits and emissions regulations with regard to each
of these emission sources.

EPA notices alleging environmental violations

In November 1995, the EPA issued a Notice of Violation against Bagcraft's
Chicago facility alleging numerous violations of the Clean Air Act and related
regulations. In May 1998 Bagcraft paid $170,000 to formally extinguish this
claim.

In April 1994, the EPA notified Artra that it was a potentially responsible
party for the disposal of hazardous substances, principally waste oil, at a
disposal site in Palmer, Massachusetts generated by a manufacturing facility
formerly operated by the Clearshield Plastics Division of Harvel Industries,
Inc., a majority owned subsidiary of Artra. In 1985, Harvel was merged into
Artra's Fill-Mor subsidiary. This site has been included on the EPA's National
Priorities List. In February 1983, Harvel sold the assets of Clearshield
Plastics Division to Envirodyne Industries, Inc. The alleged waste disposal
occurred in 1977 and 1978, at which time Harvel Industries, Inc. was a
majority-owned subsidiary of Artra. In May 1994, Envirodyne Industries, Inc. and
its Clearshield National, Inc. subsidiary sued Artra for indemnification in
connection with this proceeding. The cost of clean-up at the Palmer,
Massachusetts site has been estimated to be approximately $7 million according
to proofs of claim filed in the adversary proceeding. A committee formed by the
named potentially responsible parties has estimated the liability respecting the
activities of Clearshield Plastics Division to be $400,000. Artra has not made
any independent investigation of the amount of its potential liability and no
assurances can be given that it will not substantially exceed $400,000.

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On November 17, 1995, the EPA issued letters to Artra, NL Industries and
others alleging that they were potentially responsible parties with respect to
releases at the Dutch Boy facility in Chicago and demanding that they remediate
the site. NL Industries entered into a consent decree with the EPA in which it
agreed to remediate the site. Artra is presently unable to determine its
liability, if any, in connection with this case.

Lawsuits seeking recovery of environmental clean-up costs

In a case titled Sherwin-Williams Company v. Artra Group Incorporated,
filed in 1991 in the United States District Court for Maryland, Sherwin-Williams
Company brought suit against Artra and other former owners of a paint
manufacturing facility in Baltimore, Maryland for recovery of costs of
investigation and clean-up of hazardous substances which were stored, disposed
of or otherwise released at this manufacturing facility. This facility was owned
by Baltimore Paint and Chemical Company, formerly a subsidiary of Artra from
1969 to 1980. Sherwin-Williams Company's current projection of the cost of
clean-up is approximately $5 to $6 million. Artra has filed counterclaims
against Sherwin-Williams Company and cross claims against other former owners of
the property. Artra also is vigorously defending this action and has raised
numerous defenses. Currently, the case is in its early stages of discovery and
Artra cannot determine what, if any, its liability may be in this matter.

Artra was named as a defendant in United States v. Chevron Chemical Company
brought in the United States District Court for the Central District of
California respecting the Operating Industries, Inc. site in Monterey Park,
California. This site is included on the EPA's National Priorities List. Artra's
involvement stemmed from the alleged disposal of hazardous substances by The
Synkoloid Company subsidiary of Baltimore Paint and Chemical Company, which was
formerly owned by Artra. The Synkoloid Company manufactured spackling paste,
wall coatings and related products, some of which generated hazardous substances
as a by-product of the manufacturing process. Artra entered into a consent
decree with the EPA in which it agreed to pay $85,000 for one phase of the
clean-up costs for this site; however, Artra defaulted on its payment
obligation. Artra is presently unable to estimate the total potential liability
for clean-up costs at this site, which clean-up is expected to continue for a
number of years. The consent decree, even if it had been honored by Artra, was
not intended to release Artra from liability for costs associated with other
phases of the clean-up at this site. Artra is presently unable to determine
what, if any, additional liability it may incur in this matter.

Cases relating to environmental claims relating to the Dutch Boy Paints
business

Several cases have arisen from Artra's purchase of Dutch Boy Paints, which
owned a facility in Chicago that it purchased from NL Industries. In a case
titled City of Chicago v. NL Industries, Inc. and Artra, filed in the Circuit
Court of Cook County, Illinois, the City of Chicago brought a nuisance action
and alleged that Artra and NL Industries, Inc. had improperly stored, discarded
and disposed of hazardous substances at the Dutch Boy site, and that Artra had
conveyed the site to Goodwill Industries to avoid clean-up costs. The Company
has settled this claim with the City of Chicago for approximately $107,000.

Artra and NL Industries, Inc. have counter sued each other and have filed
third party actions against the subsequent owners of the property. Artra is
presently unable to determine its liability, if any, in connection with this
case. The parties were conducting discovery, but the case was stayed pending the
resolution of the EPA action described above.

In 1986, in a case titled People of the State of Illinois v. NL Industries,
Inc., Artra, et al., the Cook County State's attorney filed suit seeking
response costs in excess of $2,000,000 and treble punitive damages for costs
expended by the Illinois EPA in remediating contamination at the Dutch Boy site,
alleging that all former owners contributed to the contamination. In 1989, the
Circuit Court dismissed the action, holding that the state had failed to exhaust
its administrative procedures. The case was refiled but later dismissed by the
Circuit Court for lack of diligence. In 1992, this holding was reversed by the
Illinois Supreme Court. In 1996, the Illinois Appellate Court affirmed the
District Court's decision to dismiss the case based on lack of diligence on the
part of the State of Illinois. The State of Illinois has filed a Petition

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for Rehearing, which was granted. The Circuit Court denied the State of
Illinois' motion to reinstate, which was affirmed by the Appellate Court. The
State of Illinois filed a petition for time to appeal the Appellate Court's
decision, which was denied by the Illinois Supreme Court.

Product Liability Claims

Since 1983, Artra has been a party to product liability asbestos claims
relating to the manufacture of products by The Synkoloid Company, a former
operating subsidiary. Artra's product liability insurance has covered all of
these claims settled to date. Artra is not able to quantify the potential costs
of claims that remain outstanding or unasserted. Artra believes that for the
foreseeable future available coverage under the excess insurance polices will be
sufficient to cover outstanding and unasserted claims. For more information, see
"Risk Factors -- Artra's potential environmental liabilities and other potential
liabilities from other claims may result in future costs to Artra that are
difficult to estimate."

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

The following discussion supplements the information found in Artra's
financial statements and related notes.

RESULTS OF OPERATIONS

Artra changed significantly during the fourth quarter of fiscal year 1998.
It exited its one industry segment, the packaging products business, conducted
by its discontinued Bagcraft subsidiary, and is actively investigating new
business opportunities. Artra's consolidated financial statements for the years
ended December 31, 1997 and December 26, 1996 and for the three and six months
ended June 30, 1998 have been reclassified to report separately the results of
operations of the Bagcraft subsidiary in discontinued operations.

Three Months Ended June 30, 1999 vs. Three Months Ended June 30, 1998

Continuing Operations

Selling, general and administrative expenses from continuing operations
were $3,174,000 for the three months ended June 30, 1999 as compared to $530,000
for the three months ended June 30, 1998. Artra incurred a compensation charge
of $900,000 during the three months ended June 30, 1999 relating to stock
options granted in February 1999 to four individuals employed to manage Artra's
entry into the Internet business-to-business e-commerce and on-line auction
business. Artra also incurred a compensation charge of $575,000 during the three
months ended June 30, 1999 relating to stock options granted under the terms of
an employment agreement with Artra's newly appointed president and chief
executive officer. Selling, general and administrative expenses from continuing
operations included $867,000 of losses incurred by Entrade during the three
months ended June 30, 1999. The Entrade losses include business development
costs of $67,000, depreciation and amortization of $240,000, payroll and related
costs of $357,000 and other administrative costs of $203,000.

During the three months ended June 30, 1999, Artra had net interest income
of $121,000 as compared to net interest expense of $853,000 during the three
months ended June 30, 1998. Artra used cash proceeds received from the November
1998 sale of the assets of the discontinued Bagcraft subsidiary to pay off
approximately $15,200,000 of borrowings on various loan agreements. Artra has
invested approximately $10,000,000 as of June 30, 1999 of the remaining net
proceeds in interest bearing cash equivalents.

Artra was unable to recognize an income tax benefit in connection with its
1999 and 1998 pre-tax losses due to its tax loss carryforwards and the
uncertainty of future taxable income.

Discontinued Operations

During the three months ended June 30, 1998, Artra had earnings of $948,000
at the discontinued Bagcraft subsidiary. No income or loss relating to
discontinued operations was incurred during 1999.

Six Months Ended June 30, 1999 vs. Six Months Ended June 30, 1998

Continuing Operations

Selling, general and administrative expenses from continuing operations
were $4,528,000 for the six months ended June 30, 1999 as compared to $1,152,000
for the six months ended June 30, 1998. Artra incurred a compensation charge of
approximately $1,200,000 during the six months ended June 30, 1999 relating to
stock options granted in February 1999 to certain individuals employed to manage
Artra's entry into the Internet business-to-business e-commerce and on-line
auction business. Artra also incurred a

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compensation charge of $575,000 during the six months ended June 30, 1999
relating to stock options granted under terms of an employment agreement with
Artra's newly appointed president and chief executive officer. Selling general
and administrative expenses from continuing operations included $1,300,000 of
losses by Entrade during the six months ended June 30, 1999. The Entrade losses
include business development costs of $290,000, depreciation and amortization of
$310,000, payroll and related costs of $438,000 and other administrative costs
of $262,000.

During the six months ended June 30, 1999, Artra had net interest income of
$207,000 as compared to net interest expense of $1,987,000 during the six months
ended June 30, 1998. Artra used cash proceeds received from the November 1998
sale of the assets of the discontinued Bagcraft subsidiary to pay off
approximately $15,200,000 of borrowings on various loan agreements.

Artra was unable to recognize an income tax benefit in connection with its
1999 and 1998 pre-tax losses due to its tax loss carryforwards and the
uncertainty of future taxable income.

Discontinued Operations

During the six months ended June 30, 1998, Artra had earnings of $810,000
at the discontinued Bagcraft subsidiary. No income or loss relating to
discontinued operations was incurred during 1999.

Year Ended December 31, 1998 vs. Year Ended December 31, 1997

Continuing Operations

Selling, general and administrative expenses from continuing operations
were $2,660,000 for the year ended December 31, 1998 as compared to $5,708,000
for the year ended December 31, 1997. The 1998 decrease in selling, general and
administrative expenses was attributable to the 1997 net related party
compensation/expense reimbursement costs of $2,816,000. See the discussion of
Peter R. Harvey advances below.

Interest expense from continuing operations for the year ended December 31,
1998 decreased $2,786,000 as compared to the year ended December 31, 1997. The
1998 decrease is attributable to the fees and costs associated with Artra's 1997
private placement of $12,850,000 of Artra promissory notes.

During 1998, some of the officers, directors and/or key employees of Artra
exercised options to acquire 84,750 shares of Comforce common stock from Artra,
resulting in a realized gain of $320,000. These Comforce common shares had been
removed from Artra's portfolio of "Available-for-sale securities" in 1996. None
of these persons exercised options to purchase shares of Comforce common stock
from Artra during 1997. See discussion under "Investment in Comforce
Corporation" below for additional information about this transaction.

During the year ended December 31, 1997, Artra sold or otherwise disposed
of 302,203 shares of Comforce common stock resulting in a realized gain of
$2,531,000. Artra did not sell or otherwise dispose of any shares of Comforce
common stock during 1998.

Effective December 31, 1997, Artra settled litigation relating to the
acquisition of Envirodyne Industries, Inc. in 1989 by Emerald Acquisition Corp.
Artra recognized a gain from the settlement agreement of $10,416,000, net of
related legal fees and other expenses.

Discontinued Operations

Earnings from discontinued operations of $38,930,000 for the year ended
December 31, 1998 consisted of earnings from operations of $2,945,000 at the
discontinued Bagcraft subsidiary and a net gain on disposal of Bagcraft of
$35,585,000. The loss from discontinued operations of $293,000 for the year
ended December 31, 1997 consisted of an operating loss at the discontinued
Bagcraft subsidiary. Earnings

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from operations in 1998 are attributable to a significant reduction in interest
expense due to the February 1998 amendment and restatement of Bagcraft's Credit
Agreement, due to the November 1998 repayment of Bagcraft debt from the sale of
the Bagcraft assets, as well as decreased depreciation and amortization expense.

Year Ended December 31, 1997 vs. Year Ended December 26, 1996

Continuing Operations

Selling, general and administrative expenses from continuing operations
were $5,708,000 for the year ended December 31, 1997 as compared to $2,042,000
for the year ended December 26, 1996. The 1997 increase in selling, general and
administrative expenses was attributable to net related party
compensation/expense reimbursement costs of $2,816,000. See discussion of Peter
R. Harvey advances below.

Interest expense from continuing operations for the year ended December 31,
1997 increased $1,977,000 as compared to the year ended December 26, 1996. The
1997 increase is attributable to fees and costs associated with the private
placements of $12,850,000 of Artra promissory notes.

During the year ended December 31, 1997, Artra sold or otherwise disposed
of 302,203 shares of Comforce common stock resulting in a realized gain of
$2,531,000. During the year ended December 26, 1996, Artra sold or otherwise
disposed of 331,333 shares of Comforce common stock resulting in a realized gain
of $5,818,000.

Discontinued Operations

The loss from discontinued operations of $293,000 for the year ended
December 31, 1997 consisted of a loss from operations at the discontinued
Bagcraft subsidiary. Earnings from discontinued operations of $3,994,000 for the
year ended December 26, 1996 consisted of earnings from operations at the
discontinued Bagcraft subsidiary. The 1997 loss from discontinued operations was
attributable to decreased operating margins at the discontinued Bagcraft
subsidiary and additional interest charges and fees attributable to the December
1996 amendment and restatement of Bagcraft's Credit Agreement.

LIQUIDITY AND CAPITAL RESOURCES

Cash and Cash Equivalents and Working Capital

Artra's unrestricted cash and cash equivalents increased $5,762,000 to
$11,753,000 at December 31, 1998. Artra had consolidated working capital of
$6,813,000 at December 31, 1998 as compared to a consolidated working capital
deficiency of $435,000 at December 31, 1997. In November 1998, Artra received
cash proceeds of approximately $28,000,000 from the sale of the assets of the
discontinued Bagcraft subsidiary and used approximately $15,200,000 of these
proceeds to pay off borrowings due on its various loan agreements.

Artra's cash and cash equivalents decreased $1,258,000 during the six
months ended June 30, 1999. Cash flows used by operating activities of
$3,781,000 and cash flows used by investing activities of $1,883,000 exceeded
cash flows from financing activities of $4,406,000. Operating activities used
cash flows to fund Artra's net loss for the six months ended June 30, 1999 and
to pay approximately $1,864,000 of liabilities of the discontinued Bagcraft
subsidiary. Investing activities used cash flows of approximately $2,728,000 for
Artra's investment in and advances to Entrade. Financing activities provided
cash flows from the exercise of stock options and warrants. Artra's consolidated
working capital decreased by $2,088,000 to $4,725,000 at June 30, 1999 as
compared to consolidated working capital of $6,813,000 at

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December 31, 1998. Artra used working capital to pay off $1,864,000 of
liabilities of the discontinued Bagcraft subsidiary and for its investment in
and advances of $2,728,000 to Entrade.

Operating Plan

On February 23, 1999, Artra entered into a merger agreement with WorldWide
and Entrade, a 90% owned subsidiary of WorldWide. As a result of the merger
agreement, Artra will become a wholly owned subsidiary of Entrade, and the
shareholders of Artra will become shareholders of Entrade. Under the terms of
the merger agreement, Artra's shareholders will receive one share of Entrade
common stock in exchange for each share of Artra common stock. Additionally, the
Artra preferred stock shareholders will receive 329 shares of Entrade common
stock in exchange for each share of Artra preferred stock. All stock options and
warrants issued by Artra and outstanding on the closing date of the merger will
be converted into Entrade stock options and warrants.

On February 23, 1999, Entrade acquired software and intellectual property
and 25% of the shares of Class A Voting Common Stock of asseTrade.com from
WorldWide, in exchange for 1,800,000 shares of Entrade common stock, $800,000 in
cash and a note for $500,000, payable upon the closing of the merger or the
earlier termination of the merger agreement.

On February 16, 1999, Entrade had agreed with Energy Trading Company, a
wholly owned subsidiary of Peco Energy, to issue to Energy Trading Company
200,000 shares of Entrade common stock and to pay Energy Trading Company
$100,000 in exchange for retained rights Energy Trading Company held in the
purchased assets. Entrade also agreed with both WorldWide and Energy Trading
Company that it would provide a minimum of $4,000,000 in funding for
entrade.com.

Under separate loan agreements, Artra agreed to lend Entrade up to
$2,000,000 and advance an additional $250,000 to fund the $800,000 cash payment
to WorldWide and to provide funding for entrade.com until the closing of the
merger or the earlier termination of the merger agreement. Under the merger
agreement, Artra agreed to guaranty the $4,000,000 funding for entrade.com if
the merger closes.

Artra believes that it has adequate funds available to fund its obligations
under the merger agreement and to fund entrade.com's operations for the
remainder of 1999.

Capital Expenditures

Artra's corporate entity has no material commitments for capital
expenditures.

Artra does not intend to be considered an "investment company" as defined
by the Investment Company Act of 1940 and, accordingly, is actively
investigating new business opportunities, including the merger. In order to
finance new business opportunities, Artra could use sources such as its cash and
cash equivalents, its available-for-sale securities, borrowings from various
potential sources and issuances of Artra's equity securities.

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Status of Debt Agreements

Artra Corporate

At December 31, 1997, Artra's corporate entity had outstanding short-term
indebtedness of $15,451,000. In November and December 1998, Artra repaid all of
its then existing short-term indebtedness with net proceeds from the sale of the
assets of the discontinued Bagcraft subsidiary.

Promissory Notes

1998 Private Placement

In January 1998, Artra completed a private placement of $5,975,000 of 12%
promissory notes due January 14, 1999. As additional consideration, the
noteholders received warrants to purchase an aggregate of 119,500 shares of
Artra common stock at a price of $3.00 per share. The warrants expire January
14, 2000. The warrantholders have the right to put these warrants back to Artra
at any time during a six-month period commencing in January 1999 and ending in
July 1999, at a price of $1.50 per share. The cost of this obligation, $179,250
if all warrants are put back to Artra, was accrued in Artra's financial
statements as a charge to interest expense. The proceeds from the private
placement were used principally to pay down other debt obligations. These notes
were repaid in November 1998 with net proceeds from the sale of assets of the
discontinued Bagcraft subsidiary.

1997 Private Placements

In December 1997, Artra completed private placements of $5,375,000 of 12%
promissory notes due in December 1998. As additional consideration the
noteholders received warrants to purchase an aggregate of 107,500 shares of
Artra common stock at a price of $3.00 per share. The warrants expire in
November and December 1999. The warrantholders have the right to put these
warrants back to Artra at any time during a period commencing in December 1998
and ending in May 1999 at a price of $1.50 per share. The cost of this
obligation, $161,250 if all warrants are put back to Artra, was accrued in
Artra's financial statements as a charge to interest expense. These notes were
repaid in November 1998 with net proceeds from the sale of assets of the
discontinued Bagcraft subsidiary.

In July 1997, Artra completed private placements of $7,475,000 of 12%
promissory notes due in January 1998. As additional consideration, the
noteholders received warrants to purchase an aggregate of 199,311 shares of
Artra common stock at a price of $3.75 per share. The warrants expire in August
1999. The warrantholders have the right to put these warrants back to Artra at
any time during a period commencing in January 1998 and ending in August 1999 at
a price of $3.00 per share. The cost of this obligation, $598,000 if all
warrants are put back to Artra, was amortized in Artra's financial statements as
a charge to interest expense over the period July 1997, the date of the private
placement, through January 1998, the scheduled maturity date of the notes. The
proceeds from the July 1997 private placement were advanced to Peter R. Harvey.
See discussion and disposition of Mr. Harvey's advances in Note 16 to the
consolidated financial statements.

The July 1997 private placement notes were repaid and/or refinanced with
proceeds of the January 1998 private placement of 12% notes and with proceeds
from the litigation settlement discussed in Note 11 to the consolidated
financial statements.

Amounts Due to Related Parties

At December 26, 1996, Artra had outstanding borrowings of $500,000 from
Howard Conant, an outside director of Artra, evidenced by a short-term note
bearing interest at 10%. As additional compensation for the loan and a December
1996 extension, the director received five-year warrants to purchase an
aggregate of 50,000 shares of Artra common stock at prices ranging from $5.00 to
$5.875 per share. The proceeds of the loan were used for working capital.

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<PAGE> 89

In January 1997, Artra borrowed an additional $300,000 from Mr. Conant
evidenced by a short-term note, due December 23, 1997, bearing interest at 8%.
As additional compensation for the loan, the director received a warrant,
expiring in 2002, to purchase 25,000 shares of Artra common stock at a price of
$5.75 per share. Artra used the proceeds of this loan for working capital.

In March 1997, Artra borrowed an additional $1,000,000 from Mr. Conant
evidenced by a short-term note, due May 26, 1997, bearing interest at 12%. As
additional compensation, Mr. Conant received an option to purchase 25,000 shares
of Comforce common stock, owned by Artra's Fill-Mor subsidiary, at a price of
$4.00 per share. The proceeds from this loan were used in part to pay down Artra
debt obligations.

In April 1997, Artra borrowed $5,000,000 from Mr. Conant evidenced by a
note, due April 20, 1998, bearing interest at 10%. As additional compensation,
Mr. Conant received a warrant to purchase 333,333 shares of Artra common stock
at a price of $5.00 per share. Mr. Conant had the right to put this warrant back
to Artra at any time during the period April 21, 1998 to April 20, 2000, for a
total purchase price of $1,000,000, which put right was exercised in 1998 for
$1,000,000. The cost of this obligation was amortized in Artra's financial
statements as a charge to interest expense over the period April 21, 1997, the
date of the loan, through April 21, 1998, the date the warrantholder had the
right to put the warrant back to Artra. The proceeds from this loan were used to
repay $1,800,000 of prior borrowings from Mr. Conant and pay down other Artra
debt obligations.

In June 1997, Artra borrowed an additional $1,000,000 from Mr. Conant
evidenced by a note, due December 10, 1997, bearing interest at 12%. As
additional compensation, the director received a warrant to purchase 40,000
shares of Artra common stock at a price of $5.00 per share. The warrantholder
had the right to put this warrant back to Artra at any time during the period
December 10, 1997 to June 10, 1999, for a total purchase price of $80,000, which
put right was exercised in 1998 for $80,000. The cost of this obligation was
amortized in Artra's financial statements as a charge to interest expense over
the period June 10, 1997, the date of the loan, through December 10, 1997, the
date the warrantholder had the right to put the warrant back to Artra. The
proceeds from this loan were used to pay down Artra debt obligations.

In July 1997, borrowings from Mr. Conant were reduced to $3,000,000 with
proceeds advanced to Artra from a Bagcraft term loan. In December 1997,
borrowings from Mr. Conant were reduced to $2,000,000 with proceeds from other
short-term borrowings.

In April 1998, the $2,000,000 in outstanding borrowings from Mr. Conant was
extended by a demand note bearing interest at 10%. As additional compensation,
Mr. Conant received a warrant to purchase 50,000 shares of Artra common stock at
a price of $3.25 per share.

In August 1998, Artra borrowed an additional $500,000 from Mr. Conant
evidenced by a note, due December 20, 1998, bearing interest at 15%. As
additional compensation, the director received a warrant to purchase 20,000
shares of Artra common stock at a price of $3.94 per share. Artra used the
proceeds from the loan for working capital.

All borrowings from Mr. Conant were repaid with proceeds from the sale of
assets of the discontinued Bagcraft subsidiary.

The borrowings from Mr. Conant were collateralized by a secondary interest
in all of the common stock of BCA Holdings, Inc., the parent of Bagcraft.

Other

At December 31, 1997, Artra also had outstanding short-term borrowings from
other unrelated parties aggregating $601,000, with interest rates varying
between 10% and 12%.

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<PAGE> 90

In April 1998, Artra and its Fill-Mor subsidiary entered into a margin loan
agreement with a financial institution which provided for borrowings of
$1,000,000 with interest at 8.5%, which loan was repaid in November 1998 from
the proceeds of the Bagcraft asset sale. Borrowings under the loan agreement
were collateralized by 490,000 shares of Comforce common stock owned by Artra's
Fill-Mor subsidiary. The proceeds of the loan were used for working capital.

In October 1997, a lender agreed to accept 357,270 shares of Artra common
stock in payment of the principal amount of approximately $1,500,000 due on
demand notes held by the lender. In January 1998, the lender returned the
357,270 shares of Artra common stock to Artra for cash consideration of
approximately $1,500,000.

Advances to Peter R. Harvey

As discussed in Note 16 to Artra's consolidated financial statements, Artra
had total advances due from its president, Peter R. Harvey, of which $18,226,000
remained outstanding at December 31, 1997, before the offset of those advances
as discussed below. These advances provided for interest at varying rate from
10.5% to 12%. This receivable from Peter R. Harvey had been classified as a
reduction of common shareholders' equity. Peter R. Harvey had received only
nominal compensation for his services as an officer or director of Artra or any
of its subsidiaries for the period October 1990 through December 1997.
Additionally, Mr. Harvey had agreed not to accept any compensation for his
services as an officer or director of Artra or any of its subsidiaries until his
obligations to Artra, described above, were fully satisfied.

Commencing January 1, 1993 to January 31, 1998, interest on the advances to
Peter R. Harvey had been accrued and fully reserved. Mr. Harvey also had
provided Artra with collateral in support of his advances.

The reasons for these advances were as follows:

- Since December 31, 1986, Peter R. Harvey had guaranteed in excess of
$100,000,000 of Artra obligations to private and institutional lenders;

- Mr. Harvey also incurred significant expenses on behalf of Artra in
defending Artra against litigation; and

- Mr. Harvey had lent significant sums to Artra to retire outstanding
obligations of Artra and for working capital purposes.

In March 1998, Artra's board of directors ratified a proposal to settle Mr.
Harvey's advances as follows:

Effective December 31, 1997, Mr. Harvey's net advances from Artra were
reduced from $18,226,000 to $12,621,000. This reduction consisted of $2,789,000
of interest accrued and reserved for the period from 1993 to 1997 and an offset
of $2,816,000. This offset of Mr. Harvey's advances represented a combination of
compensation for prior year guarantees of Artra obligations to private and
institutional lenders, compensation in excess of the nominal amounts Mr. Harvey
received for the years 1995 to 1997 and reimbursement for expenses incurred to
defend Artra against litigation.

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<PAGE> 91

Effective January 31, 1998, Mr. Harvey's remaining advances totaling
$12,787,000 were paid with consideration consisting of shares of Artra preferred
stock and BCA Holdings, Inc. preferred stock held by Mr. Harvey, as set forth in
the following table:

<TABLE>
<CAPTION>
FACE VALUE
PLUS ACCRUED
SECURITY DIVIDENDS PER SHARE
- -------- ------------ ---------
<S> <C> <C>
ARTRA redeemable preferred stock, 1,734.28 shares........... $ 2,751,000 $1,586.25
BCA Holdings Series A preferred stock, 1,784.029 shares..... 2,234,000 1,252.22
BCA Holdings Series B preferred stock, 6,172 shares......... 7,802,000 1,264.10
-----------
$12,787,000
===========
</TABLE>

Redeemable Preferred Stock

Artra has outstanding redeemable Series A preferred stock with a carrying
value of $3,051,000 at June 30, 1999. Redeemable preferred stock issues of the
BCA Holdings, Inc. and Bagcraft subsidiaries are included in liabilities of
discontinued operations at June 30, 1999. Under the merger agreement, holders of
Artra Series A preferred stock will receive 329 shares of Entrade common stock
for each share of Artra Series A preferred stock.

Bagcraft

At December 31, 1997, the discontinued Bagcraft subsidiary had outstanding
borrowings under its credit agreement totaling $40,388,000. This credit
agreement, amended and restated February 27, 1998, provided for a revolving loan
agreement and three term loans. Amounts due under this credit agreement were
repaid with proceeds from the sale of assets of the discontinued Bagcraft
subsidiary.

In March 1994, Bagcraft and the City of Baxter Springs, Kansas completed a
$12,500,000 financing package associated with the construction of a new 265,000
sq. ft. production facility in Baxter Springs, Kansas. The financing package
funded by a combination of federal, state and local funds, consisted of loan
agreements payable by Bagcraft directly to the City of Baxter Springs. At
December 31, 1997, the outstanding borrowings under these loans totaled
$9,968,000. Obligations due under these loans were assumed by the buyer of the
assets of the discontinued Bagcraft subsidiary.

Investment in Comforce Corporation

Artra, along with its wholly owned Fill-Mor subsidiary, owns a significant
minority interest in Comforce, consisting of 1,525,500 shares, or approximately
9%, of the outstanding common stock of Comforce as of December 31, 1998 and June
30, 1999 with an aggregate value $8,200,000 as of December 31, 1998 and of
$4,577,000 as of June 30, 1999.

The Comforce shares constitute unregistered securities under the Securities
Act. As a result of Artra's former involvement in the operations and management
of Comforce, Artra was considered an "affiliate" of Comforce under the
Securities Act. Because of this status, the number of shares that Artra could
sell without registration under the Securities Act within any three-month period
was limited. For the reasons set forth below, Artra believes that an exemption
from registration under Rule 144(k) promulgated under the Securities Act is now
available to it. Therefore, the limitations under Rule 144 on the number of
restricted shares that Artra could sell within any three-month period without
registrations are no longer applicable to it.

The Commission might not agree with Artra's position. Notwithstanding this,
Artra does not believe that its ability to sell Comforce shares, or eventually
to realize on the value of its Comforce shares, will be affected in a material
adverse way, although it may not be able to sell its Comforce shares as quickly
as it

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<PAGE> 92

could if it were to use Rule 144(k). In any event, an attempt to sell a large
number of its Comforce shares over a limited period could be expected to result
in a reduction in the value of those shares.

In January 1996, Artra's Board of Directors approved the sale of 200,000 of
Artra's Comforce common shares to some of the officers, directors and key
employees of Artra for non-interest bearing notes totaling $400,000. The notes
are collateralized by the related Comforce common shares. Additionally, the
noteholders have the right to put their Comforce shares back to Artra in full
payment of the balance of their notes.

Based upon the preceding factors, Artra had concluded that, for reporting
purposes, it had effectively sold options to those officers, directors and key
employees to acquire 200,000 of Artra's Comforce common shares. Accordingly, in
January 1996, these 200,000 Comforce common shares were removed from Artra's
portfolio of "available-for-sale securities" and were classified in Artra's
condensed consolidated balance sheet as other receivables with an aggregate
value of $400,000, based upon the value of proceeds to be received upon future
exercise of the options.

The disposition of these 200,000 Comforce common shares resulted in a gain
that was deferred and will not be recognized in Artra's financial statements
until the options to purchase these 200,000 Comforce common shares are
exercised. Prior to the fourth quarter of 1997, no options to acquire any of the
200,000 Comforce common shares had been exercised. During the fourth quarter of
1997, options to acquire 59,500 of these Comforce common shares were exercised
resulting in a realized gain of $225,000. During 1998, options to acquire 84,750
of these Comforce common shares were exercised resulting in a realized gain of
$320,000.

At June 30, 1999 and December 31, 1998, options to acquire 55,750 Comforce
common shares remained unexercised and were classified in Artra's consolidated
balance sheet as other receivables with an aggregate value of $112,000, based
upon the value of proceeds to be received upon future exercise of the options.

During 1997, Artra sold 219,203 shares of Comforce common stock in the
market, with the net proceeds of approximately $1,700,000 used for working
capital. During 1997, a lender received 25,000 Comforce common shares held by
Artra as additional consideration for a short-term loan. The disposition of
these 244,703 shares Comforce common stock resulted in realized gains of
$2,306,000 during the year ended December 31, 1997, with cost determined by
average cost.

During 1996, Artra sold 193,000 shares Comforce common stock in the market,
with the net proceeds of approximately $3,700,000 used for working capital.
During 1996 several lenders received an aggregate of 105,000 shares Comforce
common stock held by Artra as additional consideration for short-term loans. In
October 1996, a lender exercised the conversion rights of a short-term loan and
received 33,333 shares of Comforce common stock in settlement of Artra's
obligation. The disposition of these 331,333 shares of Comforce common stock
resulted in realized gains of $5,818,000 during the year ended December 26,
1996, with cost determined by average cost.

Net Operating Loss Carryforwards

At December 31, 1998, Artra and its subsidiaries had federal income tax
loss carryforwards of approximately $10,000,000 expiring principally in the
years 2010 to 2012, available to be applied against future taxable income, if
any. In recent years, Artra issued shares of Artra common stock to repay various
debt obligations, as consideration for acquisitions, to fund working capital
obligations and as consideration for various other transactions. Section 382 of
the Internal Revenue Code limits a corporation's utilization of its federal
income tax loss carryforwards when changes in the ownership of a corporation's
common stock described in the Code occurs.

In the opinion of management, Artra is not currently subject to the
limitations regarding the utilization of its federal income tax loss
carryforwards. Should Artra continue to issue a significant number

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<PAGE> 93

of shares of Artra common stock, it could trigger a limitation that would
prevent it from utilizing a substantial portion of its federal income tax loss
carryforwards. The merger will not affect Artra's net operating loss carry
forwards.

Impact of Inflation and Changing Prices

Inflation has become a less significant factor in our economy and currently
is not a significant factor to Artra.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1998, Artra adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes
standards for reporting comprehensive income to present a measure of all changes
in equity that result from renegotiated transactions and other economic events
of the period other than transactions with owners in their capacity as owners.
Comprehensive income is defined as the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
nonowner sources and includes net income. Required changes are reported in the
consolidated statement of operations.

During 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information." In
February 1998, the FASB issued SFAS No. 132 "Employers' Disclosures about
Pensions and other Postretirement Benefits." SFAS No. 131 specifies revised
guidelines for determining an entity's operating segments and the type and level
of financial information to be disclosed. This standard requires that management
identify operating segments based on the way that management disaggregates the
entity for making internal operating decisions. SFAS No. 132 standardizes the
disclosure requirements for pension and other postretirement benefits.

As a result of the November 1998 sale of the assets of the discontinued
Bagcraft subsidiary, Artra exited its only industry segment, a manufacturer of
packaging products principally serving the food industry. Accordingly, the
guidelines of SFAS No. 131 "Disclosures About Segments of an Enterprise and
Related Information" are not applicable to Artra's financial statements as of
December 31, 1998. Artra typically does not offer the types of benefit programs
that fall under the guidelines of Statement of Financial Accounting Standards
No. 132 "Employers' Disclosures about Pensions and other Postretirement
Benefits."

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments and requires recognition of all
derivatives as assets or liabilities in the balance sheet and measurement of
those instruments at fair value. The statement is effective for fiscal years
beginning after June 15, 2000. Management has not determined what impact this
standard, when adopted, will have on Artra's financial statements.

YEAR 2000 COMPLIANCE

The Year 2000 issue refers to the inability of many computer programs and
systems to process accurately dates later than December 31, 1999. Unless these
programs are modified to handle the century change, they will likely interpret
the Year 2000 as the year 1900. The Artra corporate entity has limited data
processing requirements which are handled by personal computers running generic
software applications. We believe that our internal systems are Year 2000
compliant. If these systems are not Year 2000 compliant, they can be quickly
updated with new equipment without requiring us to incur significant costs. See
"Risk Factors" for a description of entrade.com Year 2000 compliance issues.

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ELECTION OF DIRECTORS OF ARTRA

Nine directors are to be elected at the Artra annual meeting for a term of
one year expiring in 2000 and until their successors are elected.

The Artra board of directors has nominated Edward A. Celano, Howard R.
Conant, Peter R. Harvey, John Harvey, Gerard M. Kenny, Robert L. Johnson,
Maynard K. Louis, John K. Tull and Mark F. Santacrose for election as directors
for terms of one year. Unless you indicate to the contrary, the persons named in
the accompanying proxy will vote for the election of these nominees. Under the
merger agreement, upon the closing of the merger, these directors and Robert D.
Kohn, as the initial designee of WorldWide, will become the directors of
Entrade. See "Information Regarding Directors" for a description of the business
experience of, and other information concerning these nominees.

Under the merger agreement, for as long as WorldWide's percentage ownership
of Entrade's common stock calculated on a fully diluted basis is at least 5%,
Entrade must use its best efforts to cause WorldWide's designee nominated by
WorldWide and mutually acceptable to WorldWide and Entrade's board of directors
to be elected to the Entrade board of directors.

If, for any reason, a nominee should be unable to serve as a director at
the time of the meeting, a contingency which is not expected to occur, the
persons designated as proxies may vote for the election of any other person not
named in this Proxy Statement/Prospectus as a nominee for election to the Artra
board of directors.

Cumulative voting rights exist with respect to election of directors, which
means that each shareholder has the right, in person or by proxy, to multiply
the number of votes which he or she is entitled by the number of directors to be
elected and to cast the whole number of his or her votes for one candidate or to
distribute them among two or more candidates. Holders of Artra common stock and
Artra preferred stock are entitled to one vote for each share held and will vote
together as one class in the election of directors.

The nine nominees for director receiving the highest number of votes cast
at the Artra annual meeting will be elected as directors. Shares held by brokers
or nominees and to which voting instructions have not been received from the
beneficial owner or person otherwise entitled to vote and as to which the broker
or nominee does not have discretionary voting power, i.e., broker non-votes,
will be treated as not present and not entitled to vote for nominees for
election as directors. Votes withheld and broker non-votes will have no effect
on the election of directors because they will not represent votes cast at the
Artra annual meeting for the purpose of electing directors.

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<PAGE> 95

MANAGEMENT OF ARTRA

DIRECTORS AND EXECUTIVE OFFICERS OF ARTRA

Information Regarding Directors

The following table lists the name and age of each nominee for directors of
Artra, each of whom is currently a director, his business experience, his
positions with Artra and other directorships held by him.

<TABLE>
<CAPTION>
NAME AGE POSITIONS AND EXPERIENCE
- ---- --- ------------------------
<S> <C> <C>
John Harvey(1) 68 Chairman of the Board of Directors and Director since
1968, and Chief Executive Officer of Artra from 1968 to
June 1999; Chairman of the Board of Directors, since 1985,
a Director from 1982 to December 1995 and the Chief
Executive Officer from 1990 to November 1995 of Comforce
Corporation (temporary professional employment, formerly
The Lori Corporation); a Director of Plastic Specialties
and Technologies, Inc. (textiles, hose and tubing);
Director of PureTec Corporation, the successor by merger
to Ozite, until March 1998, when PureTec was merged into
Teckni-Plex, Inc.
Peter R. Harvey(1) 64 Vice Chairman and Chairman of the Executive Committee
since June 1999; Director since 1968; President and Chief
Operating Officer from 1968 to June 1999; Director of
Comforce Corporation (temporary professional employment,
formerly The Lori Corporation) from 1985 to December 1995
and a vice president through January 1996; Director of
PureTec Corporation (textiles, hose and tubing), the
successor by merger to Ozite, until March of 1998, when
PureTec Corporation was merged into Teckni-Plex, Inc.
Mark F. Santacrose(3) 40 President and Chief Executive Officer since June 28, 1999
Director since 1997; President of Bagcraft Corporation of
America (n/k/a Golden Corp.), flexible packaging materials
for food products, since 1994 to November 20, 1998;
Executive Vice President of Bagcraft since 1993; following
the sale of substantially all of the assets of Bagcraft in
1998, President of Bagcraft Packaging LLC, a subsidiary of
Packaging Dynamics LLC from November 20, 1998 to June 18,
1999.
Gerard M. Kenny(2)(3) 46 Director since 1988; Executive Vice President and Director
since 1982 of Kenny Construction Company since 1982
(diversified heavy construction); General Partner of
Clinton Industries (investments), a limited partnership,
since 1972.
Edward A. Celano(1) 60 Director since 1996; Executive Vice President of the
Atlantic Bank of New York since May 1, 1996, Senior Vice
President of National Westminster, USA from 1984 through
April 1996, corporate finance.
Howard R. Conant(2)(3) 74 Director since 1996; Retired Chairman of the Board of
Interstate Steel Co., 1970 to 1990, and a consultant to
Interstate through 1992.
Maynard K. Louis(2)(3) 69 Director since 1996; Retired Chairman of the Board of Lord
Label, a printing company now known as Porter & Chadburn,
from 1965 to 1989, and Vice President of Porter & Chadburn
from 1989 to 1993; and director of Artra from 1993 through
1995.
</TABLE>

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<PAGE> 96

<TABLE>
<CAPTION>
NAME AGE POSITIONS AND EXPERIENCE
- ---- --- ------------------------
<S> <C> <C>
Robert L. Johnson(1) 62 Director since 1996; Chairman and Chief Executive Officer
of Johnson Bryce, Inc., flexible packaging materials for
food products since 1991; and previously, for many years,
a vice president of Sears Roebuck & Co. (retailing
company).
John K. Tull 73 Director since 1998; President of J.K. Tull Associates
LTD., a mergers and acquisitions firm, since 1986.
</TABLE>

- ---------------

(1) Member of the executive committee. Artra's executive committee has the
authority to take all action that can be taken by the full board of
director, consistent with Pennsylvania law, between meetings of the Artra
board of directors.

(2) Member of the audit committee. Artra's audit committee reviews audit reports
and management recommendations made by Artra's independent accountants.

(3) Member of the compensation committee. Artra's compensation committee has the
authority to review and recommend compensation plans, approve compensation
changes and grant options under and determine participants in Artra's plans.

John Harvey and Peter R. Harvey are brothers. Artra board of directors met
four times in 1998. None of the directors attended fewer than 75% of the
aggregate number of meetings of the Artra board of directors and the committees
on which he served, except Robert Johnson who attended 50% of the meetings held.

Comforce Corporation was a 64.3% owned subsidiary of Artra until December
1995. Artra now owns approximately 9% of Comforce Corporation. PureTec
International, Inc. and Plastics Specialities and Technologies, Inc. were
affiliates of Artra. Bagcraft was a wholly owned subsidiary of BCA Holdings,
Inc., a wholly owned subsidiary of Artra. In November 1998, substantially all of
the assets of Bagcraft were sold to Packaging Dynamics LLC, the parent entity of
Bagcraft Packaging LLC.

Information Regarding Executive Officers

Set forth below is information concerning the executive officers and other
key employees of Artra who were in office or employed as of the date of this
Proxy Statement/Prospectus.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
John Harvey 68 Chairman of the Board
Mark F. Santacrose 40 President and Chief Executive Officer
Peter R. Harvey 64 Vice Chairman and Chairman of the Executive Committee
John G. Hamm 60 Executive Vice President
Robert S. Gruber 64 Vice President -- Corporate Relations
James D. Doering 62 Vice President, Treasurer and Chief Financial Officer
John Conroy 54 Vice President -- Corporate Administration
Lawrence D. Levin 47 Controller
Edwin G. Rymek 68 Secretary
</TABLE>

John Harvey is the Chairman of Artra. See "Information Regarding Directors"
above for a description of Mr. Harvey's relevant business experience.

Mark F. Santacrose is the President and Chief Executive Officer of Artra.
See "Information Regarding Directors" above for a description of Mr.
Santacrose's relevant business experience.

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<PAGE> 97

Peter R. Harvey is the Vice Chairman of Artra and Chairman of the Executive
Committee of the Board of Directors of Artra. See "Information Regarding
Directors" above for a description of Mr. Harvey's relevant business experience.

John G. Hamm is the Executive Vice President of Artra. Mr. Hamm has served
as Executive Vice President since February 1988 and as the Vice
President -- Finance from 1975 to 1988 of Artra. Mr. Hamm has also served as
Vice President Finance from August 1990 to July 1995 and as a Director from 1984
until July 1995 of Ozite Corporation. Mr. Hamm has also served as a Director of
SoftNet Systems, Inc. from 1985 to February 1999 and a Director of Plastic
Specialties and Technologies, Inc. from 1985 to January, 1996.

Robert S. Gruber is the Vice President -- Corporate Relations of Artra. Mr.
Gruber has served as Vice President -- Corporate Relations of Artra since 1975
and as a consultant to The Lori Corporation from 1982 to 1995. Mr. Gruber has
also served as a consultant to Comforce Corporation during 1996.

James D. Doering is the Vice President, Treasurer and Chief Financial
Officer of Artra. Mr. Doering has served as Vice President since 1980, Treasurer
since 1987, Chief Financial Officer since February 1988 and Controller from 1980
to 1987. Mr. Doering has also served as Vice President and Chief Financial
Officer of Comforce Corporation from February 1988 to January 1996.

John Conroy is the Vice President -- Corporate Administration of Artra. Mr.
Conroy has served as Vice President -- Corporate Administration since March
1990. Prior thereto, he served as Vice President -- Corporate Administration of
Sargent-Welch Scientific Company from September 1988 to December 1989. Mr.
Conroy previously served in various risk management positions with Artra from
1978 to September 1988, most recently as Corporate Risk Director.

Lawrence D. Levin is the Controller of Artra. Mr. Levin has served as
Controller since 1987, Assistant Treasurer and Assistant Secretary since 1980
and Assistant Controller from 1980 to 1987. Mr. Levin has also served as
Controller of Comforce from December 1989 to January 1996 and as the Assistant
Chief Financial Officer of Comforce Corporation from May 1993 through January
1996.

Edwin G. Rymek is the Secretary of Artra. Mr. Rymek has served as Secretary
of Artra since 1987 and of Comforce Corporation from 1982 to 1995.

Officers are appointed by the Artra board of directors and its subsidiaries
and serve at the pleasure of each respective board. Except for the relationship
of Peter R. Harvey and John Harvey who are brothers, there are no family
relationships among the executive officers and directors, nor are there any
arrangements or understandings between any officer and another person under
which an officer or director was appointed to office.

SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires that officers and directors of
Artra, as well as persons who own more than 10% of a class of equity securities
of Artra, file reports of their ownership of those securities, as well as
monthly statements of changes in the person's ownership, with Artra and the
Commission. Based upon written representations received by Artra from its
officers and directors and reports filed with Artra during 1998, Artra believes
that these persons filed all reports required under Section 16(a) during 1998 on
a timely basis.

ARTRA EXECUTIVE COMPENSATION

DIRECTORS' COMPENSATION

Directors who are not employees of Artra are entitled to receive an annual
retainer of $10,000. Each outside director who sits on an established committee
of Artra is entitled to receive $250 per committee meeting attended and the
chairman of a committee is entitled to receive $500 for each meeting. Employees
of Artra who also serve as directors or committee members receive no additional
compensation
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<PAGE> 98

for the service. During the year ended December 31, 1998, Artra granted to each
of Artra's five outside directors stock options to purchase 12,500 shares of
Artra common stock at an exercise price of $3.125 per share. These options have
a term of 10 years from their date of grant.

In 1999, each of Artra's seven outside directors received options to
purchase 2,500 shares of Artra common stock at an exercise price of $5.375 per
share. Also, Mark Santacrose and John Tull each received an additional grant of
options to purchase 10,000 shares of Artra common stock at an exercise price of
$4.75 per share. These options have a term of 10 years from this date of grant.

EXECUTIVE OFFICER COMPENSATION

The following table shows all compensation paid by Artra and its
subsidiaries for the fiscal years ended December 31, 1998, December 31, 1997 and
December 26, 1996, to the Chief Executive Officer of Artra and each of its other
most highly compensated executive officers who were serving as executive
officers of Artra as of December 31, 1998, or who would have been included had
he been serving as an executive officer of Artra as of December 31, 1998, and
whose compensation exceeded $100,000 in 1998.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION(1) ------------
-------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(2) COMPENSATION($)
- --------------------------- ---- --------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
John Harvey............................ 1998 $157,404(3) -0- -0- -0- $ 4,750(4)
Chairman and Chief 1997 190,000 -0- -0- -0- -0-
Executive Officer 1996 137,811 -0- -0- 141,000 5,456
Peter R. Harvey........................ 1998 $252,000(5) -0- -0- -0- $ 5,000(4)
President and Chief 1997 17,000 -0- -0- -0- -0-
Operating Officer 1996 17,000 -0- -0- -0- -0-
James D. Doering....................... 1998 $147,000 $11,500(6) -0- -0- $ 5,000(4)
Vice President, Treasurer 1997 147,000 -0- -0- -0- 4,750
and Chief Financial Officer 1996 133,600 -0- -0- 57,500 6,000
John G. Hamm........................... 1998 $147,000 -0- -0- -0- $ 5,000
Executive Vice President 1997 147,000 -0- -0- -0- 4,750
1996 133,600 -0- -0- 101,250 6,000
Robert S. Gruber....................... 1998 $110,400 -0- -0- -0- -0-(4)
Vice President 1997 110,400 -0- -0- -0- $ 6,000
Corporation Relations 1996 92,000 -0- -0- 97,750 2,868
Mark F. Santacrose..................... 1998 $212,648 $250,000(7) $340,000(7) -0- $ 4,750(4)
President Bagcraft 1997 225,000 -0- 75,000 -0- 144,616
Corporation of America 1996 200,000 -0- 17,500 -0- 89,524
</TABLE>

- ---------------

(1) No additional annual compensation was paid, no restrictive stock awards or
stock appreciation rights were granted, and no long-term incentive plan
payouts were made to any of the officers listed in the table. Only
compensation earned in 1998 is considered in determining inclusion in this
table.

(2) All of the options shown in this column were granted under Artra's 1996
Stock Option Plan at an exercise price of $5.25 per share, being the closing
price of Artra common stock on the New York Stock Exchange on October 4,
1996, the date of grant. These options expire October 4, 2006.

(3) John Harvey requested that his compensation be reduced from $190,000 to
$157,404. For the 1999 fiscal year, his salary has been further reduced to
$120,000.

(4) These amounts include Artra's contributions to the 401(k) plan during 1998,
1997 and 1996.

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<PAGE> 99

(5) As of January 31, 1998, Peter R. Harvey settled all outstanding advances,
including accrued interest, made by Artra. Upon completion of this
settlement, the board of directors of Artra approved an annual salary of
$252,000 for Peter R. Harvey for 1998. See "Artra Certain Relationships and
Related Transactions."

(6) Mr. Doering received a bonus of $11,500 in 1998 representing compensation
relating to the liquidation of some of the assets of The Lori Corporation.

(7) Mr. Santacrose also participated in the Bagcraft Unfunded Deferred
Compensation Plan. The 1998 additional compensation amount includes
approximately $340,000 realized from his participation in this plan, which
terminated January 1, 1998. On January 1, 1998, in consideration of the
termination of the plan, Mr. Santacrose received a warrant to purchase
common stock of Bagcraft. The warrant provided for a receipt of 2% of the
issued and outstanding shares of Bagcraft common stock, not including the
effect of any and all other outstanding warrants. Mr. Santacrose received
approximately $340,000 upon the redemption of this warrant after the sale of
Bagcraft, which he received in 1999. All salary and bonus amounts paid to
Mr. Santacrose were approved by the board of directors of Artra and
Bagcraft.

Artra did not grant options to purchase Artra common stock to any of the
named executive officers during the year ended December 31, 1998.

The following table sets forth information concerning options to purchase
Artra common stock that Artra granted on January 6, 1999 and June 28, 1999 to
the executive officers of Artra who are listed in the Summary Compensation
Table:

OPTION GRANTS IN 1999

<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO APPRECIATION FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE EXPIRATION ----------------------------------
NAME GRANTED IN 1999 PRICE DATE 0% 5% 10%
- ---- ---------- ---------- -------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
John Harvey....................... 35,000 5.7% $ 4.75 1/06/09 -- $ 104,650 $ 265,650
Peter R. Harvey................... 150,000 24.5% $ 4.75 1/06/09 -- $ 448,500 $1,851,000
Mark F. Santacrose................ 200,000 16.3% $ 10.00 6/28/09 $575,000 $1,260,000 $3,186,000
Mark F. Santacrose................ 100,000 16.3% $12.875 6/28/09 -- $ 810,500 $2,052,500
James D. Doering.................. 35,000 5.7% $ 4.75 1/06/09 -- $ 104,650 $ 431,900
John G. Hamm...................... 35,000 5.7% $ 4.75 1/06/09 -- $ 104,650 $ 265,650
Robert S. Gruber.................. 11,250 1.8% $ 4.75 1/06/09 -- $ 33,638 $ 85,388
</TABLE>

For options granted to Mr. Santacrose see "Directors' Compensation" above.

The following table sets forth information concerning the aggregate number
and values of options held by the Chief Executive Officer and the other
executive officers of Artra listed in the Summary Compensation Table as of
December 31, 1998 which were granted to the listed officers in consideration of

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<PAGE> 100

their services as officers or directors of Artra. No other options held by the
Chief Executive Officer or any other executive officers of Artra listed in the
Summary Compensation Table were exercised in 1998.

AGGREGATED OPTION EXERCISES IN 1998 AND OPTION VALUES AS OF
DECEMBER 31, 1998

<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END AT FISCAL YEAR-END(2)
ACQUIRED ON VALUE --------------------------------- ---------------------------
NAME EXERCISE(#) REALIZED(1) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- -------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John Harvey.................... -0- -0- 221,000 -0- $42,600 -0-
James D. Doering............... -0- -0- 111,000 -0- 22,657 -0-
John G. Hamm................... -0- -0- 140,450 -0- 19,750 -0-
Robert S. Gruber............... -0- -0- 118,750 -0- 10,088 -0-
Mark F. Santacrose............. -0- -0- -0- -0- -0- -0-
</TABLE>

- ---------------

(1) See the notes under "Information Regarding Beneficial Ownership of Principal
Artra Shareholders and Management" for a description of the options and
their exercise prices granted to each of the executive officers listed in
this table.

(2) The listed options were issued at per share exercise prices of from $3.65
per share to $5.25 per share. The market price of Artra common stock as of
the close of trading on December 31, 1998 on the New York Stock Exchange was
$4.1875 per share.

MARK F. SANTACROSE EMPLOYMENT AGREEMENT

On June 28, 1999, the Artra board of directors entered into an agreement
with Mark F. Santacrose. Under the agreement, Mr. Santacrose agreed to become
the President and Chief Executive Officer of Artra. If the merger closes, Mr.
Santacrose will become the President and Chief Executive Officer of Entrade. The
following is a summary of the terms of the employment agreement.

TERM: The initial term is for three years. Commencing
June 28, 2001 and each anniversary after this date,
the term is automatically extended for one
additional year unless either party gives written
notice to the other within 90 days preceding the
anniversary date that he or it does not desire to
extend the term for the additional one-year period.

CASH COMPENSATION: Base salary of $250,000 per year, subject to
increase at the discretion of the Artra board of
directors.

STOCK OPTIONS: Option to purchase 200,000 shares of Artra common
stock at $10 per share, exercisable for ten years
commencing June 28, 1999.

Option to purchase 100,000 shares of Artra common
stock at $12.875 per share, exercisable commencing
June 28, 2000 until June 28, 2009.

In the event that the merger does not close by
January 1, 2000, Artra has agreed to reprice these
options to an exercise price equal to the average
closing price of Artra's common stock for 20 days
immediately following the earlier to occur of the
date of a public announcement of the termination or
December 31, 1999.

COMPENSATION REIMBURSEMENT: Artra has agreed to pay Mr. Santacrose a bonus of
$100,000 for 1999 to compensate him for forfeiture
of compensation to which he would have been
entitled from his previous employer.

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<PAGE> 101

TERMINATION: If Artra terminates his employment during the
initial term other than for cause or he terminates
the agreement during the initial term for good
reason, Mr. Santacrose is entitled to the payment
of his base salary through the later of the end of
the initial term or 18 months from the date of the
termination notice. If the termination occurs
during a renewal term, Artra will pay him a lump
sum equal to the sum of his base salary for a
period of 18 months at the effective date of
termination.

CHANGE OF CONTROL: In the event of a change of control of Artra, as
defined in the agreement, Mr. Santacrose would be
entitled to receive a lump-sum payment equal to his
base salary at its then current rate, for a period
of 35 months.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Authority to determine the compensation of executive officers is conferred
upon the Artra board of directors or, in the case of officers paid by Bagcraft
Corporation of America, by its board of directors. The salary of John Harvey was
paid by Bagcraft.

Peter Harvey reviewed and approved decisions concerning the cash
compensation of Artra's officers. The Artra Board of Directors reviewed and
approved the cash compensation of: John Harvey, the Chairman and Chief Executive
Officer; Peter R. Harvey, the President and Chief Operating Officer, James D.
Doering, Vice President, Treasurer and Chief Financial Officer; and Mark F.
Santacrose, President of Bagcraft. See "Artra Certain Relationships and Related
Transactions" for a description of various transactions and relationships
between Artra and each of these directors.

REPORT OF THE BOARD OF DIRECTORS OF ARTRA CONCERNING COMPENSATION

Peter Harvey reviewed and approved decisions relating to cash compensation
for John Harvey, the Chairman and Chief Executive Officer of Artra, Peter R.
Harvey, the President and Chief Operation Officers of Artra, James D. Doering,
the Vice President, Treasurer and Chief Financial Officer of Artra and Mark F.
Santacrose, President of Artra's Bagcraft subsidiary.

At the request of John Harvey, the board of directors approved a reduction
in annual salary from $190,000 to $157,404 for 1998 and a further reduction to
$120,000 for 1999. John Harvey had requested these salary reductions because he
had transferred more of the day-to-day management decisions to Peter Harvey. The
salary for 1998, as approved by Peter R. Harvey, was paid by Artra's Bagcraft
subsidiary.

Upon approval the settlement of outstanding advances made by Artra to Peter
R. Harvey over the previous several years, the board of directors established an
annual salary for Peter R. Harvey in 1998 of $252,000. In approving this salary,
the Artra board of directors considered that Peter R. Harvey had not been paid
more than a nominal salary amount during the several years that the advances
were outstanding. Once the advances were settled, the Artra board of directors
determined to set a salary consistent with his service as the Chief Operating
Officer of Artra.

Mr. Doering's bonus of $11,500 was paid in consideration of his efforts
relating to the liquidation of some of the assets of The Lori Corporation. Mr.
Santacrose's bonus of $250,000 was paid for his efforts relating to the sale of
Bagcraft in 1998. Artra has no established policy regarding the payments of
these bonuses. The Artra board of directors approved the bonus compensation
payments based upon the recommendation of Peter Harvey. Peter Harvey had
recommended these bonuses as incentives to successfully complete the identified
projects.

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<PAGE> 102

Artra does not have specific compensation policies applicable to its
officers, other than Artra compensates its officers according to performance
measured against job descriptions and the compensation levels for comparable
employment positions in the general employment marketplace.

Respectfully submitted,

John Harvey Maynard K. Louis
Peter R. Harvey Robert L. Johnson
Gerard M. Kenny Mark F. Santacrose
Edward A. Celano John K. Tull
Howard R. Conant

95
<PAGE> 103

COMPARISON OF TOTAL RETURN ON ARTRA
COMMON STOCK WITH CERTAIN INDICES

The following graph provides an indicator of cumulative shareholder return
on Artra common stock compared to the Dow Jones Equity Market Index and the Dow
Jones Industrial Sector Containers and Packaging Index. The comparison assumes
that with respect to the Artra common stock, the Equity Market Index and the
Container and Packaging Index, $100 was invested at the close of trading on
December 30, 1993 and all dividends were reinvested.

CUMULATIVE TOTAL RETURN

<TABLE>
<CAPTION>
CONTAINER AND PACKAGING
ARTRA EQUITY MARKET INDEX INDEX
----- ------------------- -----------------------
<S> <C> <C> <C>
'1993' 100.00 100.00 100.00
'1994' 78.85 100.71 100.72
'1995' 78.85 137.70 107.50
'1996' 94.23 172.90 136.77
'1997' 59.62 227.71 156.03
'1998' 64.42 292.94 136.19
</TABLE>

96
<PAGE> 104

ARTRA CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

JOHN HARVEY AND PETER R. HARVEY

The Harvey Family Trust is the owner of the real estate at 500 Central,
Northfield, Illinois, the corporate offices of Artra which was acquired by the
Trust in September 1996. Artra rents approximately 7,000 square feet of office
space and 1,000 square feet of warehouse space from the trust at an annual
rental of $126,000 under a lease expiring in January 1999, which has been
continued on a month-to-month basis. Artra may renew the lease for an additional
one-year period at an increased rent in the sum of $132,000. The building
contains approximately 29,500 total square feet. In the opinion of Artra's
management, the Artra rental obligation to the trust does not exceed the fair
market value for similar rentals. John Harvey is the grantor and beneficiary of
the trust. John Harvey and Peter R. Harvey are brothers.

In June 1996, Peter R. Harvey loaned Artra 100,000 shares of Artra common
stock, which had a then fair market value of $587,000. Artra principally issued
these shares to lenders as additional consideration for short-term loans. In
September 1996, after Artra's shareholders approved an increase in the number of
authorized common shares, Artra repaid this loan. At Peter R. Harvey's
direction, the 100,000 shares of Artra common stock were issued in blocks of
25,000 shares to the four daughters of John Harvey.

In March 1998, the Artra board of directors ratified a proposal to settle
Peter R. Harvey's previous advances from Artra in the amount of $15,437,000 as
follows:

(1) Effective December 31, 1997, Mr. Harvey's net advances from Artra
were reduced from $18,226,000 to $12,621,000. This reduction consisted of
$2,789,000 of interest accrued and reserved for the period from 1993 to
1997 and an offset of $2,816,000. This offset of Peter R. Harvey's advances
represented a combination of compensation for prior year guarantees of
Artra obligations to private and institutional lenders, compensation in
excess of the nominal amounts Peter R. Harvey received for the years from
1995 to 1997 and reimbursement for expenses incurred to defend Artra
against litigation.

(2) Effective January 31, 1998, Peter R. Harvey's remaining advances
totaling $12,787,000 were paid with consideration consisting of the
following Artra preferred stock and BCA Holdings, Inc. preferred stock held
by Peter R. Harvey:

<TABLE>
<CAPTION>
FACE VALUE PLUS
SECURITY ACCRUED DIVIDENDS
- -------- -----------------
<S> <C>
Artra Series A preferred stock, 1,734.28 shares............. $ 2,751,000
BCA Holdings Series A preferred stock, 1,784.029 shares..... 2,234,000
BCA Holdings Series B preferred stock, 6,172 shares......... 7,802,000
-----------
$12,787,000
===========
</TABLE>

For additional related-party transactions between Artra and Peter R.
Harvey, see Note 16 to the consolidated financial statements for the year ended
December 31, 1998.

On September 27, 1989, Artra received a proposal to purchase Bagcraft from
Sage Group, Inc., a privately-owned corporation. Effective March 3, 1990, a
wholly owned subsidiary of Artra indirectly acquired from Sage Group, Inc. 100%
of the issued and outstanding common shares of BCA Holdings, Inc., which in turn
owned 100% of the stock of Bagcraft. The total consideration consisted of
772,000 shares of Artra common stock and 3,750 shares of Artra preferred stock.

Upon the merger of Sage Group into Ozite on August 24, 1990, Ozite became
entitled to receive this consideration, which right Ozite assigned to its PST
subsidiary. Peter R. Harvey and John Harvey were the principal shareholders of
Sage Group and Ozite as of the times that the merger agreements were executed
and the mergers consummated. Ozite subsequently repurchased the 3,750 shares of
Artra
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<PAGE> 105

preferred stock in February 1992, of which 1,523 shares were subsequently
assigned to Peter R. Harvey in consideration of his discharge of indebtedness of
Ozite to him in April 1992. Peter R. Harvey pledged these 1,523 shares of Artra
preferred stock to Artra.

In November 1998, substantially all of the assets of Bagcraft were sold to
Packaging Dynamics LLC, the parent entity of Bagcraft Packaging LLC.

Peter R. Harvey and John Harvey were significant shareholders of PST's
parent, PureTec. Peter R. Harvey formerly was a Vice President and a director of
PST and a director of PureTec. John Harvey formerly was a director of PST and
PureTec.

GERALD M. KENNY

During 1986 and through August 10, 1988, Artra entered into a series of
short-term borrowing agreements with private investors. Each agreement granted
an investor a put option, principally due in one year, that required Artra to
repurchase any or all of the shares sold at a 15% to 20% premium during a
specified put period.

Kenny Construction Company entered into a put option agreement with Artra,
which has been extended from time to time, most recently on November 11, 1992.
At that time, Artra and Kenny Construction agreed to extend the put option
whereby Kenny Construction received the right to sell to Artra 23,004 shares of
Artra common stock at a put price of $56.76 plus an amount equal to 15% per
annum for each day from March 1, 1991 to the date of payment by Artra, which
option was scheduled to expire on December 31, 1997. Gerard M. Kenny, a director
of Artra, is the Executive Vice President and Chief Executive Officer and a
director of Kenny Construction Company and beneficially owns 16.66% of Kenny
Construction's capital stock.

On March 21, 1989, Artra borrowed $5,000,000 from its bank lender evidenced
by a promissory note. This note has been amended and extended from time to time.
The borrowings on this note were collateralized by, among other things, a
$2,500,000 guaranty by Kenny Construction. Kenny Construction received
compensation in the form of 833 shares of Artra common stock for each month that
its guaranty remained outstanding through March 31, 1994. Under this
arrangement, Kenny Construction received 49,980 shares of Artra common stock as
compensation for its guaranty.

On March 31, 1994, Artra entered into a series of agreements with its bank
lender and with Kenny Construction. Under the terms of these agreements, Kenny
Construction purchased a $2,500,000 participation in the $5,000,000 note payable
to Artra's bank lender. Kenny Construction's participation is evidenced by a
$2,500,000 Artra note bearing interest at the prime rate. As consideration for
its purchase of this participation, the bank lender released Kenny Construction
from its $2,500,000 loan guaranty. As additional consideration, Kenny
Construction received an option to put back to Artra the 49,980 shares of Artra
common stock received as compensation for its $2,500,000 Artra loan guaranty at
a price of $15.00 per share. The put option was subject to increase at the rate
of $2.25 per share per annum ($21.188 at December 26, 1996). The put option was
exercisable on the later of the date the Kenny Construction note is repaid or
the date Artra's obligations to its bank lender were fully paid. During the
first quarter of 1996, the $2,500,000 note and related accrued interest was paid
in full, principally with the proceeds from additional short-term borrowings.

In December 1997, Kenny Construction exercised all of its put options and
Artra repurchased 72,984 shares of Artra common stock for cash of $2,379,000.

EDWARD A. CELANO

In May 1996, Artra borrowed $100,000 from Edward A. Celano, then a private
investor, evidenced by an unsecured short-term note, due August 7, 1996, and
renewed to February 6, 1997, bearing interest at 10%. The proceeds of the loan
were used for working capital. At Artra's annual meeting of shareholders,
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<PAGE> 106

held August 29, 1996, Mr. Celano was elected to Artra's board of directors.
Effective January 17, 1997, Mr. Celano exercised his conversion rights and
received 18,182 shares of Artra common stock as payment of the principal balance
of his note.

HOWARD CONANT

In August 1996, Artra borrowed $500,000 from Howard Conant, then a private
investor, evidenced by an short-term note, due December 23, 1996, bearing
interest at 10%. The loan was collateralized by 125,000 shares of Comforce
common stock owned by Artra's Fill-Mor subsidiary. As additional compensation
for the loan, Mr. Conant received a warrant, expiring in 2001, to purchase
25,000 shares of Artra common stock at a price of $5.00 per share. The proceeds
of the loan were used for working capital. At Artra's annual meeting of
shareholders, held August 29, 1996, Mr. Conant was elected to Artra's board of
directors. In December 1996, the loan was extended until April 23, 1997 and Mr.
Conant received, as additional compensation, a warrant, expiring in 2001, to
purchase 25,000 shares of Artra common stock at a price of $5.875 per share.

In January 1997, Artra borrowed an additional $300,000 from Mr. Conant
evidenced by a short-term note, due December 23, 1997, bearing interest at 8%.
The loan was collateralized by 100,000 shares of Comforce common stock owned by
Artra's Fill-Mor subsidiary. As additional compensation for the loan, Mr. Conant
received a warrant, expiring in 2002, to purchase 25,000 shares of Artra common
stock at a price of $5.75 per share.

In March 1997, Artra borrowed an additional $1,000,000 from Mr. Conant
evidenced by a short-term note, due May 26, 1997, bearing interest at 12%. The
loan was collateralized by 585,000 shares of Comforce common stock owned by
Artra's Fill-Mor subsidiary. As additional compensation, Mr. Conant received an
option to purchase 25,000 shares of Comforce common stock owned by Artra's
Fill-Mor subsidiary at a price of $4.00 per share, with the right to put the
option back to Artra on or before May 30, 1997 for a total put price of $50,000.
In May 1997, Mr. Conant exercised his rights and put the Comforce option back to
Artra for $50,000. The proceeds from this loan were used in part to repay an
Artra/Fill-Mor $2,500,000 bank term loan.

In April 1997, Artra borrowed $5,000,000 from Mr. Conant evidenced by a
note, due April 20, 1998, bearing interest at 10%. As additional compensation,
Mr. Conant received a warrant to purchase 333,333 shares of Artra common stock
at a price of $5.00 per share. Mr. Conant had the right to put this warrant back
to Artra at any time during the period of April 21, 1998 to April 20, 2000, for
a total purchase price of $1,000,000. In May 1998, Mr. Conant sold the warrant
to an unrelated third party who put the warrant back to Artra for a total
purchase price of $1,000,000. The proceeds from this loan were used to repay Mr.
Conant's outstanding borrowings of $1,800,000 and to pay down other Artra debt
obligations.

In June 1997, Artra borrowed an additional $1,000,000 from Mr. Conant, due
December 10, 1997, bearing interest at 12%. As additional compensation, Mr.
Conant received a warrant to purchase 40,000 shares of Artra common stock at a
price of $5.00 per share. Mr. Conant had the right to put this warrant back to
Artra at any time during the period of December 10, 1997 to June 10, 1998, for a
total purchase price of $80,000, and Mr. Conant put the warrant back to Artra
for $80,000 in 1998. The proceeds from this loan were used to pay down other
Artra debt obligations. In July 1997, borrowings from Mr. Conant were reduced to
$3,000,000 with proceeds advanced to Artra from a Bagcraft term loan as
discussed above. In December 1997, borrowings from Mr. Conant were reduced to
$2,000,000 with proceeds from other short-term borrowings. The borrowings from
Mr. Conant were collateralized by 490,000 shares of Comforce common stock by
Artra's Fill-Mor subsidiary.

In August 1998 Artra borrowed an additional $500,000 from Mr. Conant, due
December 20, 1998, bearing interest at 15%. As additional compensation, the
lender received a warrant to purchase 20,000 shares of Artra common stock at a
price of $3.9375 per share. The proceeds from this loan were used to pay down
other Artra debt obligations.

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<PAGE> 107

In November 1998, all borrowings from Mr. Conant were repaid with proceeds
from the sale of the business assets of Bagcraft.

Neither Mr. Celano nor Mr. Conant became directors by virtue of any of the
provisions of these loan transactions. Each of them were invited by the Artra
board of directors to serve as directors because of the board's desire to add
two outside directors as suggested by the New York Stock Exchange.

ARTRA RATIFICATION OF APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP

The Artra board of directors appointed PricewaterhouseCoopers LLP,
independent certified public accountants, to audit the financial statements of
Artra and its wholly-owned subsidiaries for the fiscal year ending December 31,
1999. PricewaterhouseCoopers has served as principal auditors for Artra since
1962.

This appointment is being presented to shareholders for ratification. The
affirmative vote of the majority of the votes cast at the Artra annual meeting
of the holders of shares of Artra common stock and Artra preferred stock voting
together as a class is required to ratify the appointment.

A representative of PricewaterhouseCoopers LLP is expected to attend the
meeting and will be afforded an opportunity to make a statement if he desires to
do so. He is also expected to be available to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR OF
THIS PROPOSAL UNLESS A NO VOTE OR AN ABSTENTION IS SPECIFIED.

ARTRA ANNUAL REPORT

This Proxy Statement/Prospectus serves as the Annual Report of Artra for
the year ended December 31, 1998.

SHAREHOLDER PROPOSALS

Any shareholder may notify management of his intention to present a
proposal for action at the next annual meeting by delivery of a notice to be
reviewed by management not less than 120 calendar days in advance of the
solicitation date of Artra's next annual meeting or for action at any other
meeting at a reasonable time before solicitation is made, and any proposal
received by May 20, 2000 will be considered for action at the next annual
meeting. These notices should be submitted to Artra Group Incorporated, 500
Central Avenue, Northfield, Illinois 60093, Attention: Corporate Secretary.

If any shareholder who intends to present a proposal at the 2000 annual
meeting does not notify Artra or, after the closing of the merger, Entrade of
the proposal on or before July 6, 2000, then management proxies will use their
discretionary voting authority to vote on the proposal when the proposal is
raised at the 2000 annual meeting, even though there is no discussion of the
proposal in the related proxy statement.

GENERAL AND OTHER MATTERS

Management knows of no matters, other than those referred to in this Proxy
Statement, which will be presented to the annual meeting. However, if any other
matters properly come before the annual meeting or any adjournment, the persons
named in the accompanying proxy will vote it in accordance with their best
judgment on the matters.
100
<PAGE> 108

Artra will bear the expense of preparing, printing and mailing this proxy
material, as well as the cost of any required solicitation. In addition to the
solicitation of proxies by use of the mails, Artra may use regular employees,
without additional compensation, to request, by telephone or otherwise,
attendance or proxies previously solicited.

LEGAL MATTERS

The validity of Entrade common stock registered under this Proxy Statement/
Prospectus will be passed upon for Entrade by Duane, Morris & Heckscher LLP. The
federal income tax consequences of the merger to Artra shareholders will be
passed upon by Duane, Morris & Heckscher LLP.

EXPERTS

The financial statements of Artra as of December 31, 1998 and 1997 and for
each of the three fiscal years in the period ended December 31, 1998 included in
this Proxy Statement/Prospectus have been so included in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.

The financial statement of Entrade as of February 23, 1999 included in this
Proxy Statement/ Prospectus has been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

101
<PAGE> 109

[This page intentionally left blank.]
<PAGE> 110

INDEX TO FINANCIAL STATEMENTS

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets as of December 31, 1998 and
December 31, 1997......................................... F-3
Consolidated Statements of Operations for each of the three
fiscal years in the period ended December 31, 1998........ F-4
Consolidated Statements of Changes in Shareholders' Equity
(Deficit) for each of the three fiscal years in the period
ended December 31, 1998................................... F-5
Consolidated Statements of Cash Flows for each of the three
fiscal years in the period ended December 31, 1998........ F-7
Notes to Consolidated Financial Statements............ F-9 - F-28
Condensed Consolidated Balance Sheets as of June 30, 1999
and December 31, 1998 (Unaudited)......................... F-29
Condensed Consolidated Statements of Operations for periods
ended June 30, 1999 and June 30, 1998 (Unaudited)......... F-30
Condensed Consolidated Statement of Changes in
Shareholders's Equity (Deficit) for the periods ended June
30, 1999 and June 30, 1998 (Unaudited).................... F-31
Condensed Consolidated Statements of Cash flows for the
periods ended June 30, 1999 and June 30, 1998
(Unaudited)............................................... F-32
Notes to Condensed Consolidated Financial Statements.. F-33 -F-41

ENTRADE INC. AND SUBSIDIARY
Report of Independent Accountants........................... F-43
Consolidated Balance Sheet as of February 23, 1999.......... F-44
Notes to Consolidated Balance Sheet.................. F-45 - F-47
Consolidated Balance Sheet as of June 30, 1999
(unaudited)............................................... F-48
Consolidated Statement of Operations for the period February
23, 1999 (inception) to June 30, 1999 and the three-month
period ended June 30, 1999 (unaudited).................... F-49
Consolidated Statement of Cash Flows for the period February
23, 1999 (inception) to June 30, 1999 and the three-month
period ended June 30, 1999 (unaudited).................... F-50
Notes to Consolidated Financial Statements........... F-51 - F-53
</TABLE>

F-1
<PAGE> 111

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors
ARTRA GROUP Incorporated
Northfield, Illinois

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations and changes in shareholders'
equity and of cash flows present fairly, in all material respects, the financial
position of ARTRA GROUP Incorporated and its subsidiaries at December 31, 1998
and 1997, and the 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. 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 of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

In our report on the 1997 financial statements, dated March 26, 1998, we
expressed an opinion that indicated substantial doubt as to the ability of the
Company to continue as a going concern. This was the result of the Company
suffering recurring losses and experiencing difficulty in obtaining adequate
financing to replace its existing credit arrangements and satisfy liquidity
requirements. As described in Note 3, as a result of the disposition of the
business assets of Bagcraft Corporation of America, the Company has been able to
retire a significant portion of its obligations. Accordingly, our present
opinion on the 1997 financial statements as presented herein is different from
that expressed in our previous report.

PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
February 1, 1999

F-2
<PAGE> 112

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
(IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents...................................... $ 11,753 $ 5,991
Restricted cash and equivalents........................... 1,045 --
Receivables, less allowance for doubtful accounts of $275
in 1997................................................. 171 10,004
Inventories, less valuation allowance of $277 in 1997..... -- 15,749
Available-for-sale securities............................. 8,200 12,013
Other..................................................... 99 774
-------- --------
Total current assets.................................... 21,268 44,531
-------- --------
Property, plant and equipment
Land...................................................... -- 417
Buildings................................................. -- 12,742
Machinery and equipment................................... -- 35,657
Construction in progress.................................. -- 675
-------- --------
-- 49,491
Less accumulated depreciation and amortization.............. -- 24,397
-------- --------
-- 25,094
-------- --------
Other assets:
Excess of cost over net assets acquired, net of
accumulated amortization of $2,388 in 1997.............. -- 2,729
Other..................................................... -- 852
-------- --------
-- 3,581
-------- --------
$ 21,268 $ 73,206
======== ========
LIABILITIES
Current liabilities:
Notes payable, including amounts due to related parties of
$2,000 in 1997.......................................... $ -- $ 10,726
Current maturities of long-term debt...................... -- 4,462
Accounts payable.......................................... -- 5,841
Accrued expenses.......................................... 568 8,692
Income taxes.............................................. 1,854 324
Common stock put warrants................................. 1,705 2,966
Redeemable preferred stock................................ -- 11,955
Liabilities of discontinued operations.................... 10,328 --
-------- --------
Total current liabilities............................... 14,455 44,966
-------- --------
Long-term debt.............................................. -- 50,619
Other noncurrent liabilities................................ -- 4,675
Commitments and contingencies
Redeemable preferred stock.................................. 2,857 9,110
SHAREHOLDERS' EQUITY (DEFICIT)
Common stock, no par value; authorized 20,000,000 shares;
issued 8,302,110 shares in 1998 and 8,297,810 shares in
1997...................................................... 6,227 6,223
Additional paid-in capital.................................. 42,734 42,721
Unrealized appreciation of investments...................... 10,920 14,733
Receivable from related party, including accrued interest... -- (12,621)
Accumulated deficit......................................... (54,300) (87,113)
-------- --------
5,581 (36,057)
Less treasury stock, 437,882 shares in 1998 and 80,612
shares in 1997, at cost................................... 1,625 107
-------- --------
3,956 (36,164)
-------- --------
$ 21,268 $ 73,206
======== ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-3
<PAGE> 113

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------------------
1998 1997 1996
---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Net sales................................................... $ -- $ -- $ --
------- ------- -------
Costs and expenses:
Cost of goods sold, exclusive of depreciation and
amortization........................................... -- -- --
Selling, general and administrative....................... 2,660 5,708 2,042
Depreciation and amortization............................. -- 7 19
------- ------- -------
2,660 5,715 2,061
------- ------- -------
Operating loss.............................................. (2,660) (5,715) (2,061)
------- ------- -------
Other income (expense):
Interest expense.......................................... (3,392) (6,178) (4,201)
Realized gain on disposal of available-for-sale
securities............................................. 320 2,531 5,818
Litigation settlement, net................................ -- 10,416 --
Other income (expense), net............................... 25 12 (1)
------- ------- -------
(3,047) 6,781 1,616
------- ------- -------
Earnings (loss) from continuing operations before income
taxes..................................................... (5,707) 1,066 (445)
Provision for income taxes.................................. -- -- --
------- ------- -------
Earnings (loss) from continuing operations.................. (5,707) 1,066 (445)
Earnings (loss) from discontinued operations................ 38,930 (293) 3,994
------- ------- -------
Earnings before extraordinary credit........................ 33,223 773 3,549
Extraordinary credit, net discharge of indebtedness......... -- -- 9,424
------- ------- -------
Net earnings................................................ 33,223 773 12,973
Dividends applicable to redeemable preferred stock.......... (410) (693) (621)
Reduction of retained earnings applicable to redeemable
common stock.............................................. -- (400) (390)
------- ------- -------
Earnings (loss) applicable to common shares................. $32,813 $ (320) $11,962
======= ======= =======
Per share earnings (loss) applicable to common shares:
Basic
Continuing operations.................................. $ (0.78) $ -- $ (0.19)
Discontinued operations................................ 4.94 (0.04) 0.53
------- ------- -------
Earnings (loss) before extraordinary credit............ 4.16 (0.04) 0.34
Extraordinary credit................................... -- -- 1.25
------- ------- -------
Net earnings (loss).................................. $ 4.16 $ (0.04) $ 1.59
======= ======= =======
Weighted average number of shares of common stock
outstanding............................................ 7,891 7,970 7,525
======= ======= =======
Diluted
Continuing operations..................................... $ (0.78) $ -- $ (0.19)
Discontinued operations................................... 4.94 (0.04) 0.53
------- ------- -------
Earnings (loss) before extraordinary credit............... 4.16 (0.04) 0.34
Extraordinary credit...................................... -- -- 1.25
------- ------- -------
Net earnings (loss).................................. $ 4.16 $ (0.04) $ 1.59
======= ======= =======
Weighted average number of shares of common stock and common
stock equivalents outstanding............................. 7,891 7,970 7,525
======= ======= =======
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-4
<PAGE> 114

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
RECEIVABLE ACCUMULATED
COMMON STOCK ADDITIONAL FROM OTHER
------------------- PAID-IN RELATED COMPREHENSIVE ACCUMULATED
SHARES DOLLARS CAPITAL PARTY INCOME (DEFICIT)
--------- ------- ---------- ---------- ------------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 28, 1995..................... 7,102,979 $5,540 $38,526 $(4,318) $21,047 $(98,755)
Comprehensive income (loss):
Net earnings................................... -- -- -- -- -- 12,973
Net increase in unrealized appreciation of
investments.................................. -- -- -- -- 4,672 --
Comprehensive income.........................
Other changes in shareholders' equity:
Common stock issued to pay liabilities......... 125,012 94 362 -- -- --
Common stock issued as additional consideration
for short-term borrowings.................... 50,544 38 (398) -- -- --
Net increase in receivable from related party,
including accrued interest................... -- -- -- (2,150) -- --
Common stock loaned by related party........... -- -- -- 587 -- --
Repay common stock loaned by related party..... 100,000 75 512 (587) -- --
Exercise of stock options and warrants......... 61,000 46 213 -- -- --
Common stock received as consideration for
short-term note.............................. -- -- -- -- -- --
Reclassification of redeemable common stock.... 185,231 -- 996 -- -- --
Redeemable preferred stock dividends........... -- -- -- -- -- (621)
Redeemable common stock accretion.............. -- -- -- -- -- (390)
Other changes in shareholders' equity........
--------- ------ ------- ------- ------- --------
BALANCE AT DECEMBER 26, 1996..................... 7,624,766 5,793 40,211 (6,468) 25,719 (86,793)
Comprehensive income (loss):
Net earnings................................... -- -- -- -- -- 773
Net decrease in unrealized appreciation of
investments.................................. -- -- -- -- (10,986) --
Comprehensive loss...........................

<CAPTION>
TOTAL
TREASURY STOCK SHAREHOLDERS'
------------------ EQUITY
SHARES DOLLARS (DEFICIT)
-------- ------- -------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
BALANCE AT DECEMBER 28, 1995..................... 57,038 $ (805) $(38,765)
Comprehensive income (loss):
Net earnings................................... -- -- 12,973
Net increase in unrealized appreciation of
investments.................................. -- -- 4,672
--------
Comprehensive income......................... 17,645
--------
Other changes in shareholders' equity:
Common stock issued to pay liabilities......... (120,554) 818 1,274
Common stock issued as additional consideration
for short-term borrowings.................... (99,456) 1,021 661
Net increase in receivable from related party,
including accrued interest................... -- -- (2,150)
Common stock loaned by related party........... 100,000 (587) --
Repay common stock loaned by related party..... -- -- --
Exercise of stock options and warrants......... (16,900) 109 368
Common stock received as consideration for
short-term note.............................. 87,500 (608) (608)
Reclassification of redeemable common stock.... -- -- 996
Redeemable preferred stock dividends........... -- -- (621)
Redeemable common stock accretion.............. -- -- (390)
Other changes in shareholders' equity........ (470)
-------- ------- --------
BALANCE AT DECEMBER 26, 1996..................... 7,628 (52) (21,590)
Comprehensive income (loss):
Net earnings................................... -- -- 773
Net decrease in unrealized appreciation of
investments.................................. -- -- (10,986)
--------
Comprehensive loss........................... (10,213)
--------
</TABLE>

F-5
<PAGE> 115
<TABLE>
<CAPTION>
RECEIVABLE ACCUMULATED
COMMON STOCK ADDITIONAL FROM OTHER
------------------- PAID-IN RELATED COMPREHENSIVE ACCUMULATED
SHARES DOLLARS CAPITAL PARTY INCOME (DEFICIT)
--------- ------- ---------- ---------- ------------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Other changes in shareholders' equity:
Common stock issued to pay liabilities......... 444,717 333 1,606 -- -- --
Net increase in receivable from related party,
including accrued interest................... -- -- -- (6,153) -- --
Exercise of stock options and warrants......... 39,800 30 148 -- -- --
Redeemable common stock obligation paid by the
issuance of additional common shares......... 115,543 67 612 -- -- --
Exercise of redeemable common stock put
option....................................... 72,984 -- 55 -- -- --
Purchase of redeemable preferred stock......... -- -- 89 -- -- --
Redeemable preferred stock dividends........... -- -- -- -- -- (693)
Redeemable common stock accretion.............. -- -- -- -- -- (400)
Other changes in shareholders' equity........
--------- ------ ------- ------- ------- --------
BALANCE AT DECEMBER 31, 1997..................... 8,297,810 6,223 42,721 (12,621) 14,733 (87,113)
Comprehensive income (loss):
Net earnings................................... -- -- -- -- 33,223
Net decrease in unrealized appreciation of
investments.................................. -- -- -- -- (3,813) --
Comprehensive income.........................
Other changes in shareholders' equity:
Repurchase of common stock previously issued to
pay down short-term notes.................... -- -- -- -- -- --
Net decrease in receivable from related party,
including accrued interest................... -- -- -- 12,621 -- --
Exercise of stock options...................... 4,300 4 13 -- -- --
Redeemable preferred stock dividends........... -- -- -- -- -- (410)
Other changes in shareholders' equity........
--------- ------ ------- ------- ------- --------
BALANCE AT DECEMBER 31, 1998..................... 8,302,110 $6,227 $42,734 $ 0 $10,920 $(54,300)
========= ====== ======= ======= ======= ========

<CAPTION>
TOTAL
TREASURY STOCK SHAREHOLDERS'
------------------ EQUITY
SHARES DOLLARS (DEFICIT)
-------- ------- -------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Other changes in shareholders' equity:
Common stock issued to pay liabilities......... -- -- 1,939
Net increase in receivable from related party,
including accrued interest................... -- -- (6,153)
Exercise of stock options and warrants......... -- -- 178
Redeemable common stock obligation paid by the
issuance of additional common shares......... -- -- 679
Exercise of redeemable common stock put
option....................................... 72,984 (55) --
Purchase of redeemable preferred stock......... -- -- 89
Redeemable preferred stock dividends........... -- -- (693)
Redeemable common stock accretion.............. -- -- (400)
--------
Other changes in shareholders' equity........ (4,361)
-------- ------- --------
BALANCE AT DECEMBER 31, 1997..................... 80,612 (107) (36,164)
Comprehensive income (loss):
Net earnings................................... -- -- 33,223
Net decrease in unrealized appreciation of
investments.................................. -- -- (3,813)
--------
Comprehensive income......................... 29,410
--------
Other changes in shareholders' equity:
Repurchase of common stock previously issued to
pay down short-term notes.................... 357,270 (1,518) (1,518)
Net decrease in receivable from related party,
including accrued interest................... -- -- 12,621
Exercise of stock options...................... -- -- 17
Redeemable preferred stock dividends........... -- -- (410)
--------
Other changes in shareholders' equity........ 10,710
-------- ------- --------
BALANCE AT DECEMBER 31, 1998..................... 437,882 $(1,625) $ 3,956
======== ======= ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-6
<PAGE> 116

ARTRA GROUP INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FISCAL YEAR
-----------------------------------
1998 1997 1996
--------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings............................................ $ 33,223 $ 773 $ 12,973
Adjustments to reconcile net earnings to cash flows
from operating activities:
Depreciation of property, plant and equipment...... 2,446 4,059 3,622
Amortization of excess of cost over net assets
acquired......................................... 272 305 305
Decrease in receivable from related party.......... 400 2,816 --
Extraordinary gain from net discharge of
indebtedness..................................... -- -- (9,424)
Gain on disposal of discontinued operations........ (35,585) -- --
Amortization of other assets, principally financing
costs............................................ 1,121 4,754 548
Inventory valuation reserve........................ 21 172 191
Gain on sale of property, plant and equipment...... -- (70) 78
Gain on sale of idle machinery and equipment....... -- (932) --
Litigation settlement, net......................... -- (10,416) --
Gain on sale of COMFORCE common stock.............. (320) (2,531) (5,818)
Minority interest.................................. 509 1,109 526
Other, principally common stock issued as
compensation..................................... -- 454 220
Changes in assets and liabilities, net of effects of
businesses acquired and discontinued:
(Increase) decrease in receivables................. (35) (1,631) 2,630
(Increase) decrease in inventories................. (2,010) 132 1,476
(Increase) decrease in other current and noncurrent
assets........................................... (456) 517 (169)
Increase (decrease) in payables and accrued
expenses......................................... (8,771) 321 (5,980)
Decrease in other current and noncurrent
liabilities...................................... (1,745) (119) (4,497)
--------- --------- ---------
Net cash flows used by operating activities............. (10,930) (287) (3,319)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of COMFORCE common stock............. 170 1,821 3,717
Proceeds from sale of Bagcraft assets................... 89,000 -- --
Increase in restricted cash............................. (1,045) -- --
Net proceeds from litigation settlement................. -- 9,761 --
Proceeds from sale of property, plant and equipment..... 537 132
Additions to property, plant and equipment.............. (2,177) (3,066) (2,645)
(Increase) decrease in receivable from related party.... (8,969) (1,061)
Proceeds from collection of notes receivable............ -- -- 342
Decrease in restricted cash............................. -- -- 552
Acquistion of AB Specialty, net of deposit.............. -- (1,131) --
AB Specialty acquisition deposit........................ -- -- (1,183)
Proceeds from sale of idle machinery and equipment...... -- 932 --
--------- --------- ---------
Net cash flows from (used by) investing activities...... 85,948 (115) (146)
--------- --------- ---------
</TABLE>

F-7
<PAGE> 117

<TABLE>
<CAPTION>
FISCAL YEAR
-----------------------------------
1998 1997 1996
--------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in short-term debt.............. $ (15,451) $ (1,508) $ 286
Proceeds from long-term borrowings...................... 124,077 146,891 141,896
Reduction of long-term debt............................. (175,019) (133,781) (140,850)
Proceeds from exercise of stock options and warrants.... 17 178 369
Repurchase of common stock previously issued to pay down
short-term notes...................................... (1,518) -- --
Exercise of redeemable common stock put options......... -- (3,379) (510)
Redemption of detachable put warrants................... (1,440) (1,728) --
Purchase of redeemable preferred stock.................. -- (426) --
Other................................................... 78 (25) 98
--------- --------- ---------
Net cash flows from (used by) financing activities...... (69,256) 6,222 1,289
--------- --------- ---------
Increase (decrease) in cash and cash equivalents........ 5,762 5,820 (2,176)
Cash and equivalents, beginning of year................. 5,991 171 2,347
--------- --------- ---------
Cash and equivalents, end of year....................... $ 11,753 $ 5,991 $ 171
========= ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest.............................................. $ 6,087 $ 7,058 $ 5,320
Income taxes paid (refunded), net..................... 189 177 157
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
ARTRA/BCA redeemable preferred stock received as payment
of Peter Harvey advances.............................. $ 12,787 -- --
Issue common stock and redeemable common stock to pay
down current liabilities.............................. -- $ 1,939 $ 1,274
Issue common stock to pay redeemable common stock put
obligation............................................ -- 679 --
Issue common stock as additional consideration for
short-term borrowings................................. -- -- 661
COMFORCE common stock given to lenders as additional
consideration for short-term borrowings............... -- 169 1,511
BCA Holdings redeemable preferred stock issued in
exchange for Bagcraft redeemable preferred stock...... -- -- 8,135
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-8
<PAGE> 118

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

ARTRA Group Incorporated, (hereinafter "ARTRA" or the "Company"), is a
Pennsylvania corporation incorporated in 1933. Through November 20, 1998, ARTRA
operated in one industry segment as a manufacturer of packaging products
principally serving the food industry. The packaging products business was
conducted by the Company's wholly-owned subsidiary, Bagcraft Corporation of
America ("Bagcraft"), which business was sold on November 20, 1998. The Company
does not intend to be deemed an "Investment Company" as defined by the
Investment Company Act of 1940 and, accordingly, is actively investigating new
business opportunities.

In 1997, the Company changed its fiscal year end to December 31. The
Company had operated on a 52/53 week fiscal year ending the last Thursday of
December.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its majority-owned subsidiaries. Intercompany accounts and transactions are
eliminated.

B. Cash Equivalents/Restricted Cash

Short-term investments with an initial maturity of less than ninety days
are considered cash equivalents. The fair value of cash and cash equivalents is
assumed to approximate the carrying value of these assets due to the short
duration of these assets.

At December 31, 1998, restricted cash represents amounts deposited in
escrow accounts to pay certain Bagcraft liabilities retained by ARTRA. These
accounts were established in accordance with provisions of the agreement to sell
the assets of the discontinued Bagcraft subsidiary discussed in Note 3.

C. Financial Instruments

The fair value of cash and cash equivalents is assumed to approximate the
carrying value of these assets due to the short duration of these assets. The
fair value of the Company's debt was estimated to be the carrying value of these
liabilities based upon borrowing rates currently available to the Company for
borrowings with similar terms.

D. Inventories

Inventories reflected in the Company's consolidated financial statements at
December 31, 1997 were stated at the lower of cost or market. Cost was
determined by the first-in, first-out (FIFO) method.

E. Property, Plant and Equipment

Property, plant and equipment reflected in the Company's consolidated
financial statements at December 31, 1997 were stated at cost. Expenditures for
maintenance and repairs were charged to operations as incurred and expenditures
for major renovations were capitalized. Depreciation was computed on the basis
of estimated useful lives principally by the straight-line method for financial
statement purposes and principally by accelerated methods for tax purposes.
Leasehold improvements were amortized over the shorter of the estimated useful
life of the asset or the period covered by the lease.

The costs of property retired or otherwise disposed of were applied against
the related accumulated depreciation to the extent thereof, and any profit or
loss on the disposition was recognized in earnings.

F-9
<PAGE> 119
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

F. Investments in Equity Securities

The Company's investment in COMFORCE Corporation ("COMFORCE", see Note 5)
common stock is classified in current assets as available-for-sale securities
and stated at fair value in accordance with the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain
Investments in Debt and Equity Securities". Unrealized holding gains and losses
are included in a separate component of shareholders' equity (deficit) until
realized. The investment in COMFORCE common stock, which represents a
significant portion of the Company's assets at December 31, 1998, is subject to
liquidity and market price risks.

G. Intangible Assets

The net assets of a purchased business were recorded at their fair value at
the date of acquisition. The excess of purchase price over the fair value of net
assets acquired (goodwill) was reflected as intangible assets and amortized on a
straight-line basis principally over 40 years.

Effective for the fiscal year ending December 26, 1996 the Company adopted
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of". The pronouncement requires that long-lived
assets and certain identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Impairment is
evaluated by comparing future cash flows (undiscounted and without interest
charges) expected to result from the use or sale of the asset and its eventual
disposition, to the carrying amount of the asset. The adoption of SFAS No. 121
did not have a material impact on the Company's financial statements.

H. Revenue Recognition

Sales to customers of the Company's discontinued Bagcraft subsidiary were
recorded at the time of shipment.

I. Income Taxes

Income taxes are accounted for as prescribed in SFAS No. 109 -- Accounting
for Income Taxes. Under the asset and liability method of Statement No. 109, the
Company recognizes the amount of income taxes payable. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities, and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years those temporary differences are expected to be recovered or
settled.

J. Use of Estimates In Preparation of Financial Statements

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

K. Stock-Based Compensation

Effective for the fiscal year ending December 26, 1996, the Company adopted
SFAS No. 123, "Accounting for Stock-Based Compensation". The pronouncement
encourages, but does not require, companies to recognize compensation expense
for grants of stock, stock options, and other equity
F-10
<PAGE> 120
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

instruments to employees based on new fair value accounting rules. The Company
did not adopt the new fair value accounting, but instead chose to comply with
the disclosure requirements of SFAS No. 123. Accordingly, the adoption of SFAS
No. 123 did not have a material impact on the Company's financial statements.

L. Earnings Per Share

The Company adopted SFAS No. 128, "Earnings Per Share" for the year ended
December 31, 1997. The pronouncement, which specifies the computation,
presentation, and disclosure requirements for earnings per share, did not have a
material impact on the Company's financial statements.

M. Recently Issued Accounting Pronouncements

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income". SFAS No. 130 establishes standards for reporting
comprehensive income to present a measure of all changes in equity that result
from renegotiated transactions and other economic events of the period other
than transactions with owners in their capacity as owners. Comprehensive income
is defined as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources and
includes net income. Required changes are reported in the consolidated statement
of operations.

During 1997 the Financial Accounting Standards Board ("FASB") issued SFAS
No. 131, "Disclosures About Segments of an Enterprise and Related Information".
In February 1998 the FASB issued SFAS No. 132 "Employers' Disclosures about
Pensions and other Postretirement Benefits. SFAS No. 131 specifies revised
guidelines for determining an entity's operating segments and the type and level
of financial information to be disclosed. This standard requires that management
identify operating segments based on the way that management disaggregates the
entity for making internal operating decisions. SFAS No. 132 standardizes the
disclosure requirements for pension and other postretirement benefits.

As a result of the November 1998 sale of the assets of the discontinued
Bagcraft subsidiary, the Company exited its only industry segment, a
manufacturer of packaging products principally serving the food industry.
Accordingly, the guidelines of SFAS No. 131 -- Disclosures About Segments of an
Enterprise and Related Information are not applicable to the Company's financial
statements as of December 31, 1998. The Company typically does not offer the
types of benefit programs that fall under the guidelines of Statement of
Financial Accounting Standards No. 132 -- Employers' Disclosures about Pensions
and other Postretirement Benefits.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments and requires recognition of all
derivatives as assets or liabilities in the balance sheet and measurement of
those instruments at fair value. The statement is effective for fiscal years
beginning after June 15, 1999. Management has not determined what impact this
standard, when adopted, will have on the Company's financial statements.

3. CHANGE OF BUSINESS

Bagcraft

Effective August 26, 1998, ARTRA and its wholly-owned subsidiary BCA
Holdings, Inc. ("BCA", the parent of Bagcraft), agreed to sell the business
assets of Bagcraft. Additionally, the buyer agreed to assume certain Bagcraft
liabilities. The transaction was completed on November 20, 1998 and ARTRA

F-11
<PAGE> 121
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

received gross consideration of approximately $88,100,000 in cash. The
disposition of the Bagcraft business resulted in a net gain of $35,985,000.

A substantial portion of the cash proceeds received from the Bagcraft
disposition was used to retire or otherwise settle certain Bagcraft debt
obligations, including, but not limited to Bagcraft's credit agreement as
discussed in Note 8. After the disposition of certain Bagcraft obligations noted
above, ARTRA received net proceeds of approximately $28,000,000 from the sale of
Bagcraft. Approximately $15,200,000 of these net proceeds was used to retire
ARTRA debt obligations. The Company plans to use the remainder of the proceeds
principally to acquire or participate in new business opportunities.

AB Specialty

Effective January 2, 1997, Bagcraft purchased the business assets, subject
to buyer's assumption of certain liabilities, of AB Specialty Holding Company,
Inc. ("AB") for consideration consisting of cash of approximately $2.3 million.
The purchased assets consisted principally of plant and equipment of
approximately $1.3 million and inventory of approximately $1.1 million. The
acquisition of AB, funded through borrowings under Bagcraft's Credit Agreement,
was accounted for by the purchase method and, accordingly, the assets and
liabilities of AB were included in the Company's financial statements at their
estimated fair market value at the date of acquisition. The business and related
assets of AB were part of the Bagcraft disposition.

The Company's consolidated financial statements have been reclassified to
report separately the results of operations of Bagcraft. The operating results
(in thousands) for fiscal years 1996 -- 1998 of the discontinued Bagcraft
subsidiary and net gain on disposal consist of:

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Net sales.................................................. $111,342 $125,027 $120,699
======== ======== ========
Earnings from operations before income taxes and minority $ 3,534 $ 797 $ 4,672
interest.................................................
(Provision) credit for income taxes........................ (80) 19 (152)
Minority interest.......................................... ( 509) (1,109) (526)
-------- -------- --------
Earnings (loss) from operations............................ 2,945 (293) 3,994
-------- -------- --------
Gain on sale of Bagcraft subsidiary........................ 37,505
Provision for income taxes................................. (1,520)
--------
Gain on disposal of business............................... 35,985
-------- -------- --------
Earnings (loss) from discontinued operations............... $ 38,930 $ (293) $ 3,994
======== ======== ========
Per share earnings (loss):
Earnings (loss) from operations.......................... $ .38 $ (.04) $ .53
Gain on disposal of business............................. 4.56 -- --
-------- -------- --------
Earnings(loss) from discontinued operations................ $ 4.94 $ (.04) $ .53
======== ======== ========
</TABLE>

Liabilities of discontinued operations at December 31, 1998 of $10,328,000
include BCA/Bagcraft redeemable preferred stock issues (see Note 9), contractual
obligations, environmental matters and other future estimated costs for various
discontinued operations. Additionally, liabilities of discontinued operations at
December 31, 1998 includes an adjustment to the sales price of the Bagcraft
business of approximately $900,000.

F-12
<PAGE> 122
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. INVENTORIES

Inventories of the discontinued Bagcraft at December 31, 1997 (in
thousands) consisted of:

<TABLE>
<S> <C>
Raw materials and supplies.................................. $ 5,901
Work in process............................................. 274
Finished goods.............................................. 9,574
-------
$15,749
=======
</TABLE>

5. INVESTMENT IN COMFORCE CORPORATION

At December 31, 1998 and 1997 ARTRA's investment in COMFORCE Corporation
("COMFORCE"), 1,525,500 shares, currently a common stock ownership interest of
approximately 9%, is classified in the Company's consolidated balance sheet in
current assets as "Available-for-sale securities." At December 31, 1998 the
gross unrealized gain relating to ARTRA's investment in COMFORCE, reflected as a
separate component of shareholders' equity, was $10,920,000. The investment in
COMFORCE common stock, which represents a significant portion of the Company's
assets at December 31, 1998, is subject to liquidity and market price risks.

In January 1996, the Company's Board of Directors approved the sale of
200,000 of ARTRA's COMFORCE common shares to certain officers, directors and key
employees of ARTRA for non-interest bearing notes totaling $400,000. The notes
are collateralized by the related COMFORCE common shares. Additionally, the
noteholders have the right to put their COMFORCE shares back to ARTRA in full
payment of the balance of their notes. Based upon the preceding factors, the
Company had concluded that, for reporting purposes, it had effectively sold
options to certain officers, directors and key employees to acquire 200,000 of
ARTRA's COMFORCE common shares. Accordingly, in January 1996 these 200,000
COMFORCE common shares were removed from the Company's portfolio of
"Available-for-sale securities" and were classified in the Company's condensed
consolidated balance sheet as other receivables with an aggregate value of
$400,000, based upon the value of proceeds to be received upon future exercise
of the options. The disposition of these 200,000 COMFORCE common shares resulted
in a gain that was deferred and will not be recognized in the Company's
financial statements until the options to purchase these 200,000 COMFORCE common
shares are exercised. During the fourth quarter of 1997, options to acquire
59,500 of these COMFORCE common shares were exercised resulting in a realized
gain of $225,000. During 1998, options to acquire 84,750 of these COMFORCE
common shares were exercised resulting in a realized gain of $320,000. At
December 31, 1998, options to acquire 55,750 COMFORCE common shares remained
unexercised and were classified in the Company's consolidated balance sheet as
other receivables with an aggregate value of $112,000, based upon the value of
proceeds to be received upon future exercise of the options.

During 1997 ARTRA sold 219,203 COMFORCE common shares in the market, with
the net proceeds of approximately $1,700,000 used for working capital. During
1997 a lender received 25,000 COMFORCE common shares held by the Company as
additional consideration for a short-term loan. The disposition of these 244,703
COMFORCE common shares resulted in realized gains of $2,306,000 during the year
ended December 31, 1997, with cost determined by average cost.

During 1996 ARTRA sold 193,000 COMFORCE common shares in the market, with
the net proceeds of approximately $3,700,000 used for working capital. During
1996 certain lenders received 105,000 COMFORCE common shares held by the Company
as additional consideration for short-term loans. In October 1996, a lender
exercised the conversion rights of a short-term loan and received 33,333
COMFORCE common shares in settlement of the Company's obligation. The
disposition of these 331,333

F-13
<PAGE> 123
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

COMFORCE common shares resulted in realized gains of $5,818,000 during the year
ended December 26, 1996, with cost determined by average cost.

6. EXTRAORDINARY GAIN

ARTRA Debt Restructuring

In February 1996, a bank agreed to discharge all amounts under its ARTRA
notes ($12,063,000 plus accrued interest and fees) and certain obligations of
ARTRA's president, Peter R. Harvey for consideration consisting of ARTRA's cash
payment of $5,050,000, Mr. Harvey's cash payment of $100,000 and Mr. Harvey's
$3,000,000 note payable to the bank (the "Harvey Note"). The bank assigned ARTRA
a $2,150,000 interest in the Harvey Note, subordinated to the bank's $850,000
interest in the Harvey Note. ARTRA then discharged $2,150,000 of Mr. Harvey's
prior advances in exchange for its $2,150,000 interest in Mr. Harvey's
$3,000,000 note payable to the bank. The amount of the $5,050,000 cash payment
to the bank applicable to Peter R. Harvey ($1,089,000) was charged to amounts
due from Peter R. Harvey. ARTRA recognized a gain on the discharge of this
indebtedness of $9,424,000 ($1.23 per share) in the first quarter of 1996. The
cash payment due the bank was funded principally with proceeds received from the
Bagcraft subsidiary in conjunction with the issuance of BCA (the parent of
Bagcraft) preferred stock along with proceeds received from a short-term loan
agreement with an unaffiliated company that was subsequently repaid. As
additional compensation for its loan and for participating in the above
discharge of indebtedness the unaffiliated company received 150,000 shares of
ARTRA common stock (with a then fair market value of $661,000 after a discount
for restricted marketability) and 25,000 shares of COMFORCE common stock held by
ARTRA (with a then fair market value of $200,000).

The extraordinary gain resulting from the discharge of bank debt is
calculated (in thousands) as follows. No income tax expense is reflected in the
Company's financial statements resulting from the extraordinary credit due to
the utilization of tax loss carryforwards, except for Federal alternative
minimum tax:

<TABLE>
<S> <C> <C>
Amounts due the bank:
ARTRA notes............................................... $12,063
Accrued interest and fees................................. 2,656
-------
14,719
Cash payment to the bank.................................... $ 5,050
Less amount applicable to Peter R. Harvey indebtedness...... (1,089)
-------
(3,961)
-------
Bank debt discharged........................................ 10,758
Less fair market value of ARTRA common stock issued as
consideration for a loan used in part to fund the
discharge of bank debt.................................... (661)
Less fair market value of COMFORCE common stock issued as
consideration for a loan used in part to fund the
discharge of bank debt.................................... (200)
Other fees and expenses..................................... (273)
-------
Extraordinary gain before income taxes...................... 9,624
Income tax provision........................................ (273)
-------
Net extraordinary gain................................. $ 9,424
=======
</TABLE>

F-14
<PAGE> 124
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. NOTES PAYABLE

Notes payable at December 31, 1997 (in thousands) consisted of:

<TABLE>
<S> <C>
ARTRA 12% promissory notes -- 1997 private placements....... $12,850
Amounts due to related parties, interest at 10%............. 2,000
Other, interest from 10% to 12%............................. 601
-------
15,451
Less ARTRA 12% promissory notes refinanced in January
1998...................................................... (4,725)
-------
$10,726
=======
</TABLE>

Promissory Notes

1998 Private Placement

In January 1998, ARTRA completed a private placement of $5,975,000 of 12%
promissory notes due January 14, 1999. As additional consideration the
noteholders received warrants to purchase an aggregate of 119,500 ARTRA common
shares at a price of $3.00 per share. The warrants expire January 14, 2000. The
warrantholders have the right to put these warrants back to ARTRA at any time
during a six-month period commencing in January 1999 and ending in July 1999, at
a price of $1.50 per share. The cost of this obligation ($179,250 if all
warrants are put back to the Company) was accrued in the Company's financial
statements as a charge to interest expense. The proceeds from the private
placement were used principally to pay down other debt obligations. These notes
were repaid in November 1998 with net proceeds from the sale of assets of the
discontinued Bagcraft subsidiary.

1997 Private Placements

In December 1997, ARTRA completed private placements of $5,375,000 of 12%
promissory notes due in December 1998. As additional consideration the
noteholders received warrants to purchase an aggregate of 107,500 ARTRA common
shares at a price of $3.00 per share. The warrants expire in November and
December 1999. The warrantholders have the right to put these warrants back to
ARTRA at any time during a period commencing in December 1998 and ending in May
1999, at a price of $1.50 per share. The cost of this obligation ($161,250 if
all warrants are put back to the Company) was accrued in the Company's financial
statements as a charge to interest expense. These notes were repaid in November
1998 with net proceeds from the sale of assets of the discontinued Bagcraft
subsidiary.

In July 1997, ARTRA completed private placements of $7,475,000 of 12%
promissory notes due in January 1998. As additional consideration the
noteholders received warrants to purchase an aggregate of 199,311 ARTRA common
shares at a price of $3.75 per share. The warrants expire in August 1999. The
warrantholders have the right to put these warrants back to ARTRA at any time
during a period commencing in January 1998 and ending in August 1999, at a price
of $3.00 per share. The cost of this obligation ($598,000 if all warrants are
put back to the Company) was amortized in the Company's financial statements as
a charge to interest expense over the period July 1997 (the date of the private
placement) through January 1998 (the scheduled maturity date of the notes). The
proceeds from the July 1997 private placement were advanced to Peter R. Harvey.
See discussion and disposition of Mr. Harvey's advances in Note 16.

F-15
<PAGE> 125
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Amounts Due To Related Parties

At December 26, 1996, ARTRA had outstanding borrowings of $500,000 from an
outside director of the Company evidenced by a short-term note bearing interest
at 10%. As additional compensation for the loan and a December 1996 extension,
the director received five year warrants to purchase an aggregate of 50,000
ARTRA common shares at a prices ranging from $5.00 to $5.875 per share. The
proceeds of the loan were used for working capital.

In January 1997, ARTRA borrowed an additional $300,000 from this director
evidenced by a short-term note, due December 23, 1997, bearing interest at 8%.
As additional compensation for the loan, the director received a warrant,
expiring in 2002, to purchase 25,000 ARTRA common shares at a price of $5.75 per
share.

In March 1997, ARTRA borrowed an additional $1,000,000 from this director
evidenced by a short-term note, due May 26, 1997, bearing interest at 12%. As
additional compensation, the lender received an option to purchase 25,000 shares
of COMFORCE common stock, owned by the Company's Fill-Mor subsidiary, at a price
of $4.00 per share. The proceeds from this loan were used in part to repay
certain ARTRA debt obligations.

In April 1997, ARTRA borrowed $5,000,000 from the above director evidenced
by a note, due April 20, 1998, bearing interest at 10%. The proceeds from this
loan were used to repay $1,800,000 of prior borrowings from this director and
pay down other ARTRA debt obligations. As additional compensation, the director
received a warrant to purchase 333,333 ARTRA common shares at a price of $5.00
per share. In May 1998, the director exercised the option and put the warrant
back to ARTRA for a total purchase price of $1,000,000. The cost of this
obligation was amortized in the Company's financial statements as a charge to
interest expense over the period April 1997 (the date of the loan) through April
1998 (the date the warrantholder first had the right to put the warrant back to
ARTRA).

In June 1997, ARTRA borrowed an additional $1,000,000 from the above
director evidenced by a note, due December 10, 1997, bearing interest at 12%. As
additional compensation, the director received a warrant to purchase 40,000
ARTRA common shares at a price of $5.00 per share. The warrantholder has the
right to put this warrant back to ARTRA at any time during the period December
10, 1997 to June 10, 1999, for a total purchase price of $80,000. The cost of
this obligation was amortized in the Company's financial statements as a charge
to interest expense over the period June 10, 1997 (the date of the loan) through
December 10, 1997 (the date the warrantholder has the right to put the warrant
back to ARTRA). The proceeds from this loan were used to pay down other ARTRA
debt obligations.

In July 1997, borrowings from this lender were reduced to $3,000,000 with
proceeds advanced to ARTRA from a Bagcraft term loan. In December 1997
borrowings from this lender were reduced to $2,000,000 with proceeds from other
short-term borrowings.

In April 1998, the $2,000,000 in outstanding borrowings from the above
director was extended by a demand note bearing interest at 10%. As additional
compensation, the director received a warrant to purchase 50,000 ARTRA common
shares at a price of $3.25 per share.

In August 1998, ARTRA borrowed an additional $500,000 from the above
director evidenced by a note, due December 20, 1998, bearing interest at 15%. As
additional compensation, the director received a warrant to purchase 20,000
ARTRA common shares at a price of $3.94 per share.

The borrowings from this director were collateralized by a secondary
interest in all of the common stock of BCA (the parent of Bagcraft).

In November 1998, the borrowings from this director were repaid with
proceeds received from the sale of the discontinued Bagcraft subsidiary.

F-16
<PAGE> 126
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Other

At December 31, 1997, ARTRA also had outstanding short-term borrowings from
other unrelated parties aggregating $601,000, with interest rates varying
between 10 % and 12%.

In April 1998 the Company and its Fill-Mor subsidiary entered into a margin
loan agreement with a financial institution which provided for borrowings of
$1,000,000, with interest at 8.5%. Borrowings under the loan agreement were
collateralized by 490,000 shares of COMFORCE common stock owned by the Company's
Fill-Mor subsidiary. The proceeds of the loan were used for working capital.
This loan was repaid in December 1998 with proceeds received from the sale of
the discontinued Bagcraft subsidiary.

In October 1997 a lender agreed to accept 357,270 ARTRA common shares in
payment of the principal amount of approximately $1,500,000 due on certain
demand notes. In January 1998 the lender returned the 357,270 ARTRA common
shares to the Company for cash consideration of approximately $1,500,000.

The weighted average interest rate on all short-term borrowings at December
31, 1997 was 11.5%.

8. LONG-TERM DEBT

Long-term debt at December 31, 1997 (in thousands) consisted of:

<TABLE>
<S> <C>
Bagcraft:
Credit Agreement:
Term Loan A, interest at the lender's index rate plus
.25%.................................................. $20,000
Term Loan B, interest at the lender's index rate plus
.75%.................................................. 5,000
Term Loan C, interest at the lender's index rate plus
1%.................................................... 7,500
Revolving credit loan, interest at the lender's index
rate.................................................. 9,313
Unamortized discount................................... (1,425)
City of Baxter Springs, Kansas loan agreements, interest
at varying rates....................................... 9,968
-------
50,356
ARTRA 12% promissory notes refinanced in January 1998....... 4,725
-------
55,081
Current scheduled maturities........................... (4,462)
-------
$50,619
=======
</TABLE>

Bagcraft

At December 31, 1997, the discontinued Bagcraft subsidiary had outstanding
borrowings under its credit agreement ("Credit Agreement") totaling $40,388,000.
The Credit Agreement, amended and restated February 27, 1998, provided for a
revolving loan agreement and three term loans. Amounts due under the Credit
Agreement were repaid with proceeds from the sale of assets of the discontinued
Bagcraft subsidiary.

In March 1994 Bagcraft and the City of Baxter Springs, Kansas completed a
$12,500,000 financing package associated with the construction of a new 265,000
sq. ft. production facility in Baxter Springs, Kansas. The financing package
funded by a combination of Federal, state and local funds, consisted of certain
loan agreements payable by Bagcraft directly to the City of Baxter Springs. At
December 31, 1997, the outstanding borrowings under these loans totaled
$9,968,000. Obligations due under these loans were assumed by the buyer of the
assets of the discontinued Bagcraft subsidiary.

F-17
<PAGE> 127
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Artra

As discussed in Note 7, $7,475,000 of ARTRA 12% promissory notes due in
January 1998 were repaid and /or refinanced principally with proceeds of a
January 1998 private placement of 12% notes payable in January 1999. Private
placement notes in the principal amount of $4,725,000 refinanced by the January
1998 private placement notes were classified as long-term debt at December 31,
1997.

9. REDEEMABLE PREFERRED STOCK

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Currently payable:
BCA Holdings preferred stock, Series B, $1.00 par value,
6% cumulative, including accumulated dividends;
redeemable on demand with a liquidation preference of
$1,000 per share; authorized 8,135 shares; issued
1,675.79 shares in 1998 and 7,847.79 shares in 1997.... $ * $ 9,831
Bagcraft redeemable preferred stock originally issued to a
related party, cumulative $.01 par value, 13.5%;
including accumulated dividends; redeemable on demand
with a liquidation preference equal to $100 per share;
issued 8,650 shares.................................... * 2,124
------- -------
$ -- $11,955
======= =======
Noncurrent:
ARTRA redeemable preferred stock, Series A, $1,000 par
value, 6% cumulative payment-in-kind, including
accumulated dividends, net of unamortized discount of
$239 in 1998 and $859 in 1997; redeemable March 1, 2000
at $1,000 per share plus accrued dividends; authorized
2,000,000 shares all series; issued 1,849.34 shares in
1998 and 3,583.62 shares in 1997....................... $ 2,857 $ 4,799
BCA Holdings preferred stock, Series A, $1.00 par value,
6% cumulative, including accumulated dividends;
liquidation preference of $1,000 per share; 10,000
shares authorized; issued 1,672.16 shares in 1998 and
3,456.18 shares in 1997................................ * 4,311
------- -------
$ 2,857 $ 9,110
======= =======
</TABLE>

- ---------------

* Included in liabilities of discontinued operations at December 31, 1998, see
discussion below.

In March 1990, ARTRA issued 3,750 shares of $1,000 par value junior
non-convertible payment-in-kind redeemable Series A Preferred Stock with an
estimated fair value of $1,012,000, net of unamortized discount of $2,738,000 as
partial consideration for the acquisition of the discontinued Bagcraft
subsidiary.

In August and September 1997 ARTRA repurchased 166.38 shares of ARTRA
Series A redeemable preferred stock with a carrying value of $209,000 for cash
of $120,000. The redeemable preferred stock purchase resulted in a gain of
$89,000, which was reflected in the Company's consolidated financial statements
as a credit to additional paid-in capital. The Series A Preferred Stock accrues
dividends at the rate of 6% per annum and is redeemable by ARTRA on March 1,
2000 at a price of $1,000 per share plus accrued dividends. Accumulated
dividends of $1,246,000 ($674 per share) and $2,074,000 ($579 per share) were
accrued at December 31, 1998 and December 31, 1997, respectively.

BCA Holdings/ Bagcraft

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

liquidation preference equal to $1,000 per share). At December 31, 1998,
liabilities of discontinued operations included 1,672.18 BCA Series A redeemable
preferred shares. Accumulated dividends were $514,000 ($307 per share) and
$854,000 ($247 per share) at December 31, 1998 and December 31, 1997,
respectively.

Effective February 15, 1996, BCA, Bagcraft and a former related party
entered into an agreement to exchange certain preferred stock between the
Companies. Per terms of the exchange agreement BCA issued 8,135 shares of BCA
Series B preferred stock (13.5% cumulative, redeemable preferred stock with a
liquidation preference equal to $1,000 per share) to the former related party in
exchange for 41,350 shares of Bagcraft redeemable preferred stock. At December
31, 1998, liabilities of discontinued operations included 1,675.79 BCA Series B
redeemable preferred shares. Accumulated dividends were $650,000 ($388 per
share) and $1,984,000 ($253 per share) at December 31, 1998 and December 31,
1997, respectively.

At December 31, 1998, liabilities of discontinued operations included 8,650
shares of Bagcraft 13.5% cumulative, redeemable preferred stock (liquidation
preference equal to $100 per share). Accumulated dividends were $1,315,000 ($152
per share) and ($145 per share) were accrued at December 31, 1998 and December
31, 1997, respectively.

As discussed in Note 16, effective January 31, 1998, Peter R. Harvey
exchanged certain ARTRA/ BCA preferred stock to retire advances from ARTRA
totaling $12,787,000.

10. STOCK OPTIONS AND WARRANTS

Stock Option Plans

In August, 1996, ARTRA's shareholders approved a stock option plan (the
"1996 Plan") for certain officers, key employees and others who render services
to the Company or its subsidiaries. The 1996 Plan reserves 2,000,000 shares of
the Company's common stock for the granting of options on or before August 29,
2006. Options granted under the Plan shall be in the form of incentive stock
options ("ISOs"), as defined under the Internal Revenue Code of 1986, as amended
(the "Code") or non-statutory options which do not qualify under the Code
("NSOs"), or both, at the discretion of the Company. The purchase price of
options granted under the 1996 Plan shall be not less than fair market value at
the date of grant for ISOs, not less than 110% of fair market value on the date
of grant for an ISO granted to a shareholder possessing 10% more of the voting
stock of the Company and the fair market value per share on the date of grant in
the case of NSOs. Effective October 4, 1996, the Company issued certain officers
and key employees of ARTRA options to purchase 532,750 shares of ARTRA common
stock at $5.25 per share, the fair market value on the date of grant. The
options vested immediately and expire ten years from the date of grant.

In August 1996, ARTRA's shareholders also approved a 1996 Disinterested
Directors Stock Option Plan (the "1996 Director Plan") for directors of the
Company who are not employees or officers. The 1996 Director Plan reserves
200,000 shares of the Company's common stock for the granting of NSOs on or
before August 29, 2006 at a price equal to fair market value per share on the
date of grant. In May 1998 the Company issued its outside directors options to
purchase an aggregate of 62,500 ARTRA common shares at $3.75 per share, the fair
market value on the date of grant. The options vested immediately and expire ten
years from the date of grant.

In July 1985, ARTRA's shareholders approved a stock option plan (the "1985
Plan") for certain officers and key employees of the Company and its
subsidiaries. The 1985 Plan, as amended, reserved 1,000,000 shares of the
Company's common stock and authorized the granting of options on or before
February 1, 1995. The purchase price of such options granted under the 1985 Plan
was not less than the

F-19
<PAGE> 129
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

market value at the date of grant for ISOs and not less than 110% of the market
value on the date of grant for an ISO granted to a shareholder possessing 10%
more of the voting stock of the Company.

Effective for the fiscal year ending December 26, 1996, the Company has
adopted the disclosure-only provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation". In 1998 and 1996 all stock options were granted at an
exercise price equal to fair market value at the date of grant and, accordingly,
no compensation expense has been recognized in connection with the Company's
stock option plans. Had compensation cost for the Company's stock option plan
been determined based on the fair value on the date of grant for awards in 1998
and 1996 consistent with the provisions of SFAS No. 123, the Company's earnings
applicable to common shares would have been reduced to the pro forma amounts
indicated below:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 26, 1996
------------------------ ------------------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- --------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Earnings (loss) applicable to common shares:
Continuing operations........................ $(6,117) $(6,216) $(1,456) $(2,906)
Discontinued operations...................... 38,930 38,930 3,994 3,994
------- ------- ------- -------
Earnings before extraordinary credit......... 32,813 32,714 2,538 1,088
Extraordinary credit......................... -- -- 9,424 9,424
------- ------- ------- -------
Net earnings.............................. $32,813 $32,714 $11,962 $10,512
======= ======= ======= =======
Earnings (loss) per share:
Basic
Continuing operations..................... $ (.78) $ (.79) $ (.19) $ (.39)
Discontinued operations................... 4.94 4.94 .53 .53
------- ------- ------- -------
Earnings before extraordinary credit...... 4.16 4.15 .34 .14
Extraordinary credit...................... -- -- 1.25 1.25
------- ------- ------- -------
Net earnings.............................. $ 4.16 $ 4.15 $ 1.59 $ 1.39
======= ======= ======= =======
Diluted
Continuing operations..................... $ (.78) $ (.79) $ (.19) $ (.39)
Discontinued operations................... 4.94 4.94 .53 .53
------- ------- ------- -------
Earnings before extraordinary credit...... 4.16 4.15 .34 .14
Extraordinary credit...................... -- -- 1.25 1.25
------- ------- ------- -------
Net earnings.............................. $ 4.16 $ 4.15 $ 1.59 $ 1.39
======= ======= ======= =======
</TABLE>

The fair value of stock options granted in 1998 and 1996 was estimated
using the Black-Scholes option pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>
1998 1996
---- ----
<S> <C> <C>
Expected life (years)....................................... 5 5
Interest rate............................................... 5.0% 6.5%
Volatility.................................................. 50.0% 50.0%
Dividend yield.............................................. -- --
</TABLE>

F-20
<PAGE> 130
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Information regarding all stock option plans for the three years in the
period ended December 31, 1998 is as follows:

<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Options outstanding at beginning of year............... 913,050 917,850 431,500
Options granted........................................ 62,500 -- 532,750
Options exercised...................................... (4,300) (4,800) (40,400)
Options canceled....................................... -- -- (6,000)
---------- ---------- ----------
Options outstanding at end of year..................... 971,250 913,050 917,850
========== ========== ==========
Options exercisable at end of year..................... 971,250 913,050 917,850
========== ========== ==========
Options available for grant at end of year............. 1,604,750 1,667,250 1,667,250
========== ========== ==========
Weighted average option prices:
Outstanding at beginning of year..................... $4.61 $4.61 $ 3.89
Options granted...................................... $3.125 -- $ 5.25
Options exercised.................................... $3.70 $3.70 $ 5.01
Options canceled..................................... -- -- $10.00
Outstanding at end of year........................... $4.52 $4.61 $ 4.61
Exercisable at end of year........................... $4.52 $4.61 $ 4.61
</TABLE>

Significant option groups outstanding at December 31, 1998 and related
weighted average price and remaining life information are as follows:

<TABLE>
<CAPTION>
OPTIONS OPTIONS EXERCISE REMAINING
GRANT DATE OUTSTANDING EXERCISABLE PRICE LIFE (YEARS)
- ---------- ----------- ----------- -------- ------------
<S> <C> <C> <C> <C>
05-27-98............................... 62,500 62,500 $3.125 9
10-04-96............................... 532,750 532,750 $ 5.25 7
01-08-93............................... 143,500 143,500 $ 3.75 4
06-22-92............................... 6,000 6,000 $ 5.25 3
09-19-91............................... 51,667 51,667 $ 3.65 2
12-19-90............................... 174,833 174,833 $ 3.65 1
</TABLE>

Effective January 6, 1999, the Company issued certain officers and key
employees of ARTRA options to purchase 413,250 shares of ARTRA common stock at
$4.75 per share, the fair market value on the date of grant. The options vested
immediately and expire ten years from the date of grant. Additionally, effective
January 6, 1999, the Company issued its outside directors options to purchase an
aggregate of 20,000 ARTRA common shares at $4.75 per share, the fair market
value on the date of grant, to certain outside directors. The options vested
immediately and expire ten years from the date of grant. These outside directors
were not board members at the time of the May 1998 disinterested director option
grants.

F-21
<PAGE> 131
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Warrants

Information regarding warrants to purchase shares of the Company's common
stock for the three years in the period ended December 31, 1998 is as follows:

<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Warrants outstanding at beginning of year.............. 2,592,350 1,711,032 1,148,549
Warrants granted....................................... 192,500 1,196,894 632,583
Warrants exercised..................................... -- (35,000) (37,500)
Warrants put back...................................... (500,000) (114,000) --
Warrants expired....................................... (214,850) (166,576) (32,600)
---------- ---------- ----------
Warrants outstanding at end of year.................... 2,070,000 2,592,350 1,711,032
========== ========== ==========
Exercise prices per share.............................. $3.00 $3.50 $3.50
to to to
$8.00 $8.00 $9.875
</TABLE>

The warrants, exercisable from the date of issue, expire at various dates
through 2003. These warrants were issued principally as additional compensation
for various short-terms loans. At December 31, 1998, warrantholders had the
right to put warrants to purchase 833,144 shares of ARTRA common stock back to
the Company for total consideration of $1,705,000. During 1998 warrants to
purchase 500,000 shares of ARTRA common stock at prices ranging from $3.75 per
share to $5.00 per share were put back to ARTRA for total consideration of
$1,440,000. During 1997 warrants to purchase 114,000 shares of ARTRA common
stock at prices ranging from $5.00 per share to $6.00 per share were put back to
ARTRA for total consideration of $228,000.

11. COMMITMENTS AND CONTINGENCIES

Rental expense from continuing operations was $138,000, $134,000 and
$134,000 in fiscal years 1998, 1997 and 1996, respectively. Effective December
1995, John Harvey, the Company's Chairman of the board of directors purchased
the building in which the Company leases office for its corporate headquarters.
The lease expired in December 1998 and has been extended on a month-to-month
basis. Rental expense for this lease was $126,000 annually for fiscal years
1998, 1997 and 1996.

The Company and its subsidiaries are the defendants in various
business-related litigation and environmental matters. Capital expenditures for
ongoing environmental compliance measures are recorded in the consolidated
balance sheets and related expenses are included in the normal operating
expenses of conducting business. The Company is involved with environmental
compliance and remediation activities at some of its former sites and at a
number of third-party sites. The Company accrues for certain environmental
remediation-related activities for which commitments or clean-up plans have been
developed or for which costs or minimum costs can be reasonably estimated. All
accrued amounts are recorded on an undiscounted basis. At December 31, 1998 and
December 31, 1997, the Company had accrued current liabilities of $1,500,000 and
$1,800,000, respectively, for potential business-related litigation and
environmental liabilities. While these litigation and environmental matters
involve wide ranges of potential liability, management does not believe the
outcome of these matters will have a material adverse effect on the Company's
financial statements.

The discontinued Bagcraft subsidiary's Chicago facility has been the
subject of allegations that it violated laws and regulations associated with the
Clean Air Act. The facility has numerous sources of air emissions of volatile
organic materials ("VOMs") associated with its printing operations and is
required to maintain and comply with permits and emissions regulations with
regard to each of these emission sources.

F-22
<PAGE> 132
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In November of 1995, the EPA issued a Notice of Violation ("NOV") against
Bagcraft's Chicago facility alleging numerous violations of the Clean Air Act
and related regulations. In May 1998 Bagcraft paid $170,000 to formally
extinguish this claim.

In April 1994, the EPA notified the Company that it was a potentially
responsible party for the disposal of hazardous substances (principally waste
oil) at a disposal site in Palmer, Massachusetts generated by a manufacturing
facility formerly operated by the Clearshield Plastics Division ("Clearshield")
of Harvel Industries, Inc. ("Harvel"), a majority owned subsidiary of ARTRA. In
1985, Harvel was merged into ARTRA's Fill-Mor subsidiary. This site has been
included on the EPA's National Priorities List. In February 1983, Harvel sold
the assets of Clearshield to Envirodyne. The alleged waste disposal occurred in
1977 and 1978, at which time Harvel was a majority-owned subsidiary of ARTRA. In
May 1994, Envirodyne and its Clearshield National, Inc. subsidiary sued ARTRA
for indemnification in connection with this proceeding. The cost of clean-up at
the Palmer, Massachusetts site has been estimated to be approximately $7 million
according to proofs of claim filed in the adversary proceeding. A committee
formed by the named potentially responsible parties has estimated the liability
respecting the activities of Clearshield to be $400,000. ARTRA has not made any
independent investigation of the amount of its potential liability and no
assurances can be given that it will not substantially exceed $400,000.

In a case titled Sherwin-Williams Company v. ARTRA GROUP Incorporated,
filed in 1991 in the United States District Court for Maryland, Sherwin-Williams
Company ("Sherwin-Williams") brought suit against ARTRA and other former owners
of a paint manufacturing facility in Baltimore, Maryland for recovery of costs
of investigation and clean-up of hazardous substances which were stored,
disposed of or otherwise released at this manufacturing facility. This facility
was owned by Baltimore Paint and Chemical Company, formerly a subsidiary of
ARTRA from 1969 to 1980. Sherwin-William's current projection of the cost of
clean-up is approximately $5 to $6 million. The Company has filed counterclaims
against Sherwin-Williams and cross claims against other former owners of the
property. The Company also is vigorously defending this action and has raised
numerous defenses. Currently, the case is in its early stages of discovery and
the Company cannot determine what, if any, its liability may be in this matter.

ARTRA was named as a defendant in United States v. Chevron Chemical Company
brought in the United States District Court for the Central District of
California respecting Operating Industries, Inc. site in Monterey Park,
California. This site is included on the EPA's National Priorities List. ARTRA's
involvement stemmed from the alleged disposal of hazardous substances by The
Synkoloid Company ("Synkoloid") subsidiary of Baltimore Paint and Chemical
Company, which was formerly owned by ARTRA. Synkoloid manufactured spackling
paste, wall coatings and related products, certain of which generated hazardous
substances as a by-product of the manufacturing process. ARTRA entered into a
consent decree with the EPA in which it agreed to pay $85,000 for one phase of
the clean-up costs for this site; however, ARTRA defaulted on its payment
obligation. ARTRA is presently unable to estimate the total potential liability
for clean-up costs at this site, which clean-up is expected to continue for a
number of years. The consent decree, even if it had been honored by ARTRA, was
not intended to release ARTRA from liability for costs associated with other
phases of the clean-up at this site. The Company is presently unable determine
what, if any, additional liability it may incur in this matter.

In recent years, the Company has been a party to certain product liability
claims relating to the former Synkoloid subsidiary. The Company's product
liability insurance has covered all such claims settled to date. As of December
31, 1998, the Company anticipates that its product liability insurance is
adequate to cover any additional pending claims.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Chicago brought a nuisance action and alleged that ARTRA (and NL Industries,
Inc.) had improperly stored, discarded and disposed of hazardous substances at
the Dutch Boy site, and that ARTRA had conveyed the site to Goodwill Industries
to avoid clean-up costs. At the time the suit was filed, the City of Chicago
claimed that it would cost $1,000,000 to remediate the site.

ARTRA and NL Industries, Inc. have counter sued each other and have filed
third party actions against the subsequent owners of the property. The Company
is presently unable to determine its liability, if any, in connection with this
case. The parties were conducting discovery but the case was stayed pending the
resolution of the EPA action described below.

In 1986, in a case titled People of the State of Illinois v. NL Industries,
Inc., ARTRA GROUP Incorporated, et al., the Cook County State's attorney filed
suit seeking response costs in excess of $2,000,000 and treble punitive damages
for costs expended by IEPA in remediating contamination at the Dutch Boy site,
alleging that all former owners contributed to the contamination. In 1989, the
Circuit Court dismissed the action, holding that the state had failed to exhaust
its administrative procedures. In 1992, this holding was reversed by the
Illinois Supreme Court. In 1996, the Illinois Appellate Court affirmed the
District Court's decision to dismiss the case based on lack of due diligence on
the part of the State of Illinois. The State of Illinois has filed a Petition
for Rehearing which was granted. The Company is presently unable to determine
ARTRA's liability, if any, in connection with this case.

On November 17, 1995, the EPA issued letters to ARTRA, NL Industries and
others alleging that they were potentially responsible parties with respect to
releases at the Dutch Boy facility in Chicago and demanding that they remediate
the site. NL Industries entered into a consent decree with EPA in which it
agreed to remediate the site. The Company is presently unable to determine its
liability, if any, in connection with this case.

12. INCOME TAXES

The provision (credit) for income taxes (in thousands) is included in the
statements of operations as follows:

<TABLE>
<CAPTION>
1998 1997 1996
------ ---- ----
<S> <C> <C> <C>
Continuing operations....................................... $ -- $ -- $ --
Extraordinary credit........................................ -- -- 200
Discontinued operations..................................... 1,600 (19) 152
------ ---- ----
$1,600 $(19) $352
====== ==== ====
</TABLE>

A summary of the provision (credit) for income taxes (in thousands) is as
follows:

<TABLE>
<CAPTION>
1998 1997 1996
------ ---- ----
<S> <C> <C> <C>
Current:
Federal................................................... $ 700 $ -- $200
State..................................................... 900 (19) 152
------ ---- ----
$1,600 $(19) $352
====== ==== ====
</TABLE>

Due to the utilization of tax loss carryforwards, no Federal income tax
expense is reflected in the Company's financial statements resulting from the
1998 earnings from discontinued operations or the 1996 extraordinary credit,
except for Federal alternative minimum tax. The 1996 extraordinary credit
represents a net gain from discharge of indebtedness.

F-24
<PAGE> 134
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In 1998, 1997 and 1996, the effective tax rates from operations, including
discontinued operations were 4.5%, (1.0)% and 2.5%, respectively, as compared to
the statutory Federal rate, which are reconciled (in thousands) as follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------- ------- -------
<S> <C> <C> <C>
Provision (credit) for income taxes using statutory
rate............................................... $ 12,013 $ 633 $ 4,709
State and local taxes, net of Federal benefit........ 900 (19) 152
Current year tax loss not utilized................... -- (1,680) --
Deferred finance fee................................. -- 919 127
Amortization of goodwill............................. -- 104 104
Previously unrecognized benefit from utilizing tax
loss carryforwards................................. (12,035) -- (4,767)
Alternative minimum tax.............................. 700 -- --
Other................................................ 22 24 27
-------- ------- -------
$ 1,600 $ (19) $ 352
======== ======= =======
</TABLE>

The types of temporary differences between the tax bases of assets and
liabilities and their financial reporting amounts that give rise to the deferred
tax liabilities and deferred tax assets at December 31, 1998 and December 31,
1997 and their approximate tax effects (in thousands) are as follows:

<TABLE>
<CAPTION>
1998 1997
------------------------ ------------------------
TEMPORARY TAX TEMPORARY TAX
DIFFERENCE DIFFERENCE DIFFERENCE DIFFERENCE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Investment in COMFORCE Corporation.............. $36,000 $ 14,000 $36,000 $ 14,000
Accrued personnel costs......................... -- -- 1,200 500
Restructuring reserve........................... -- -- 600 200
Environmental reserve........................... -- -- 300 100
Other........................................... 2,500 1,000 3,400 1,300
Capital loss carryforward....................... -- -- 3,500 1,400
Net operating loss.............................. 10,200 4,000 40,000 15,600
-------- --------
Total deferred tax assets.................. 19,000 33,100
-------- --------
Inventories..................................... -- -- (1,900) (700)
Accumulated depreciation........................ -- -- (5,100) (2,000)
Other........................................... (800) (300) (800) (300)
-------- --------
Total deferred tax liabilities............. (300) 3,000
-------- --------
Valuation allowance........................ (18,700) (30,100)
-------- --------
Net deferred tax asset..................... $ -- $ --
======== ========
</TABLE>

The Company has recorded a valuation allowance with respect to the future
tax benefits and the net operating loss reflected in deferred tax assets as a
result of the uncertainty of their ultimate realization.

At December 31, 1998, the Company and its subsidiaries had Federal income
tax loss carryforwards of approximately $10,000,000 expiring principally in
2010 -- 2012, available to be applied against future taxable income, if any. In
recent years, the Company has issued shares of its common stock to repay various
debt obligations, as consideration for acquisitions, to fund working capital
obligations and as consideration for various other transactions. Section 382 of
the Internal Revenue Code of 1986 limits a corporation's utilization of its
Federal income tax loss carryforwards when certain changes in the ownership of a
corporation's common stock occurs. In the opinion of management, the Company is
not currently
F-25
<PAGE> 135
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

subject to such limitations regarding the utilization of its Federal income tax
loss carryforwards. Should the Company continue to issue a significant number of
shares of its common stock, it could trigger a limitation that would prevent it
from utilizing a substantial portion of its Federal income tax loss
carryforwards.

13. EMPLOYEE BENEFIT PLANS

The Company maintains a defined contribution 401(k) plan covering
substantially all employees. Both employee and employer contributions are
generally determined as a percentage of the covered employee's annual
compensation. The total expense charged to operations relating to this plan
amounted to $45,000, $38,000 and $28,000 in 1998, 1997 and 1996, respectively.

The Company typically does not offer the types of benefit programs that
fall under the guidelines of Statement of Financial Accounting Standards No.
132 -- Employers' Disclosures about Pensions and Other Postretirement Benefits.

14. EARNINGS PER SHARE

The Company adopted SFAS No. 128, "Earnings per Share," for the year ended
December 31, 1998. Adoption of this pronouncement, which was applied to prior
periods presented, did not have a material impact on the Company's financial
statements.

Basic earnings (loss) per share is computed by dividing the income
available to common shareholders, net earnings (loss), less redeemable preferred
stock dividends and redeemable common stock accretion, by the weighted average
number of shares of common stock outstanding during each period.

Diluted earnings (loss) per share is computed by dividing the income
available to common shareholders, net earnings (loss), less redeemable preferred
stock dividends and redeemable common stock accretion, by the weighted average
number of shares of common stock and common stock equivalents (redeemable common
stock, stock options and warrants), unless anti-dilutive, during each period.

Earnings (loss) per share for each of the three fiscal years in the period
ended December 31, 1998 was computed as follows (in thousands, except per share
amounts):

F-26
<PAGE> 136
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 26, 1996
----------------- ----------------- -----------------
BASIC DILUTED BASIC DILUTED BASIC DILUTED
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS (LOSS):
Earnings (loss) from continuing
operations.......................... $(5,707) $(5,707) $ 1,066 $ 1,066 $ (445) $ (445)
Dividends applicable to redeemable
preferred stock..................... (410) (410) (693) (693) (621) (621)
Redeemable common stock accretion...... -- -- (400) (400) (390) (390)
------- ------- ------- ------- ------- -------
Loss from continuing operations
applicable to common shareholders... (6,117) (6,117) (27) (27) (1,456) (1,456)
Earnings (loss) from discontinued
operations.......................... 38,930 38,930 (293) (293) 3,994 3,994
------- ------- ------- ------- ------- -------
Earnings (loss) before extraordinary
credit.............................. 32,813 32,813 (320) (320) 2,538 2,538
Extraordinary credit................... -- -- -- -- 9,424 9,424
------- ------- ------- ------- ------- -------
Net earnings (loss).................... $32,813 $32,813 $ (320) $ (320) $11,962 $11,962
======= ======= ======= ======= ======= =======
PER SHARE AMOUNTS:
Loss from continuing operations
applicable to common shares......... $ (.78) $ (.78) $ -- $ -- $ (.19) $ (.19)
Earnings (loss) from discontinued
operations.......................... 4.94 4.94 (.04) (.04) .53 .53
------- ------- ------- ------- ------- -------
Earnings (loss) before extraordinary
credit.............................. 4.16 4.16 (.04) (.04) .34 .34
Extraordinary credit................... -- -- -- -- 1.25 1.25
------- ------- ------- ------- ------- -------
Net earnings (loss) applicable to
common shares....................... $ 4.16 $ 4.16 $ (.04) $ (.04) $ 1.59 $ 1.59
======= ======= ======= ======= ======= =======
</TABLE>

15. LITIGATION

In November, 1993, ARTRA filed suit in the Circuit Court of the Eighteenth
Judicial Circuit for the state of Illinois against Salomon Brothers, Inc.,
Salomon Brothers Holding Company, Inc., Charles K. Bobrinskoy, Michael J.
Zimmerman (collectively, "Salomon Defendants"), D.P. Kelly & Associates, L.P.,
("DPK"), Donald P. Kelly ("Kelly Defendants" along with DPK), James F. Massey
and William Rifkind relating to the acquisition of Envirodyne Industries, Inc.
in 1989 by Emerald Acquisition Corp.

Effective December 31, 1997, the above parties reached a settlement
agreement and all pending litigation was dismissed. ARTRA recognized a gain from
the settlement agreement of $10,416,000 ($1.31 per share), net of related legal
fees and other expenses.

The Company and its subsidiaries are the defendants in various other
business-related litigation and environmental matters (see Note 11). Management
does not believe the outcome of these matters will have a material adverse
effect on the Company's financial statements.

F-27
<PAGE> 137
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

16. RELATED PARTY TRANSACTIONS

At December 31, 1997, advances to Peter R. Harvey, ARTRA's president,
classified in the consolidated balance sheet as a reduction of common
shareholders' equity, (in thousands) consisted of:

<TABLE>
<S> <C>
Total advances, including accrued interest.................. $18,226
Less interest for the period January 1, 1993 to date,
accrued and fully reserved................................ (2,789)
-------
15,437
Less compensation/expense reimbursement..................... (2,816)
-------
Net advances........................................... $12,621
=======
</TABLE>

ARTRA had total advances due from its president, Peter R. Harvey, of which
$18,226,000, including accrued interest, remained outstanding at December 31,
1997. These advances provided for interest at varying rate from 10.5% to 12%.
This receivable from Peter R. Harvey had been classified as a reduction of
common shareholders' equity.

Commencing January 1, 1993 to date, interest on the advances to Peter R.
Harvey had been accrued and fully reserved.

In March 1998, ARTRA's Board of Directors ratified a proposal to settle Mr.
Harvey's advances as follows:

Effective December 31, 1997, Mr. Harvey's net advances from ARTRA were
offset by $2,816,000 ($5,605,000 net of interest accrued and reserved for
the period 1993 -- 1997) to $12,621,000. This offset of Mr. Harvey's
advances represented a combination of compensation for prior year
guarantees of ARTRA obligations to private and institutional lenders,
compensation in excess of the nominal amounts Mr. Harvey received for the
years 1995 -- 1997 and reimbursement for expenses incurred to defend ARTRA
against certain litigation.

Effective January 31, 1998, Mr. Harvey's remaining advances totaling
$12,787,000 were paid with consideration consisting of the following
ARTRA/BCA preferred stock held by Mr. Harvey:

<TABLE>
<CAPTION>
FACE VALUE PLUS
SECURITY ACCRUED DIVIDENDS
- -------- -----------------
<S> <C>
ARTRA redeemable preferred stock, 1,734.28 shares........... $ 2,751,000
BCA Holdings Series A preferred stock, 1,784.029 shares... 2,234,000
BCA Holdings Series B preferred stock, 6,172 shares....... 7,802,000
-----------
$12,787,000
===========
</TABLE>

For a discussion of certain other related party debt obligations see Note
7.

F-28
<PAGE> 138

ARTRA GROUP INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
(UNAUDITED)
JUNE 30, DECEMBER 31,
1999 1998
------------- --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents...................................... $ 10,495 $ 11,753
Restricted cash and equivalents........................... 111 1,045
Available-for-sale securities............................. 4,577 8,200
Other..................................................... 221 270
-------- --------
Total current assets................................... 15,404 21,268
Other assets:
Advances to Entrade Inc................................... 1,428 --
Other..................................................... 89 --
-------- --------
$ 16,921 $ 21,268
======== ========
LIABILITIES
Current liabilities:
Accrued expenses.......................................... $ 590 $ 568
Income taxes.............................................. 1,114 1,854
Common stock put warrants................................. 511 1,705
Liabilities of discontinued operations.................... 8,464 10,328
-------- --------
Total current liabilities.............................. 10,679 14,455
-------- --------
Commitments and contingencies
Redeemable preferred stock.................................. 3,051 2,857
SHAREHOLDERS' EQUITY
Common stock, no par value; authorized 20,000,000 shares;
issued 9,318,105 shares in 1999 and 8,302,110 shares in
1998...................................................... 6,989 6,227
Additional paid-in capital.................................. 53,047 42,734
Deferred stock compensation................................. (3,702) --
Unrealized appreciation of investments...................... 7,297 10,920
Accumulated deficit......................................... (58,815) (54,300)
-------- --------
4,816 5,581
Less treasury stock, 437,882 shares, at cost................ 1,625 1,625
-------- --------
3,191 3,956
-------- --------
$ 16,921 $ 21,268
======== ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-29
<PAGE> 139

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------ ------------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 1998* 1999 1998*
------------- -------------- ------------- --------------
(UNAUDITED IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales....................................... $ -- $ -- $ -- $ --
------- ------- ------- -------
Costs and expenses:
Cost of goods sold, exclusive of depreciation
and amortization............................ -- -- -- --
Selling, general and administrative........... 3,174 530 4,528 1,152
------- ------- ------- -------
3,174 530 4,528 1,152
------- ------- ------- -------
Operating loss.................................. (3,174) (530) (4,528) (1,152)
------- ------- ------- -------
Other income (expense):
Interest income (expense), net................ 121 (853) 207 (1,987)
Realized gain on disposal of
available-for-sale securities............... -- 267 -- 320
Other income (expense), net................... -- 2 -- (74)
------- ------- ------- -------
121 (584) 207 (1,741)
------- ------- ------- -------
Loss from continuing operations before income
taxes......................................... (3,053) (1,114) (4,321) (2,893)
Provision for income taxes...................... -- -- -- --
------- ------- ------- -------
Loss from continuing operations................. (3,053) (1,114) (4,321) (2,893)
Earnings from discontinued operations........... -- 948 -- 810
------- ------- ------- -------
Net loss........................................ (3,053) (166) (4,321) (2,083)
Dividends applicable to redeemable preferred
stock......................................... (130) (95) (194) (219)
------- ------- ------- -------
Loss applicable to common shares................ $(3,183) $ (261) $(4,515) $(2,302)
======= ======= ======= =======
Earnings (loss) per share applicable to common
shares:
Basic
Continuing operations....................... $ (0.37) $ (0.15) $ (0.54) $ (0.39)
Discontinued operations..................... -- 0.12 -- 0.10
------- ------- ------- -------
Net loss................................. $ (0.37) $ (0.03) $ (0.54) $ (0.29)
======= ======= ======= =======
Weighted average number of shares of common
stock outstanding............................. 8,655 7,864 8,331 7,914
======= ======= ======= =======
Diluted
Continuing operations....................... $ (0.37) $ (0.15) $ (0.54) $ (0.39)
Discontinued operations..................... -- 0.12 -- 0.10
------- ------- ------- -------
Net loss................................. $ (0.37) $ (0.03) $ (0.54) $ (0.29)
======= ======= ======= =======
Weighted average number of shares of common
stock and common stock equivalents
outstanding................................... 8,655 7,864 8,331 7,914
======= ======= ======= =======
</TABLE>

- ---------------

* As reclassified for discontinued operations.

The accompanying notes are an integral part of the condensed consolidated
financial statements.

F-30
<PAGE> 140

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL DEFERRED OTHER
------------------- PAID-IN STOCK COMPREHENSIVE
SHARES DOLLARS CAPITAL COMPENSATION INCOME
--------- ------- ---------- ------------ -------------
(UNAUDITED IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1998.............. 8,302,110 $6,227 $42,734 $10,920
Comprehensive income (loss):
Net loss................................ -- -- -- --
Net decrease in unrealized appreciation
of investments........................ -- -- -- (3,623)
Comprehensive income (loss)...........
Other changes in shareholders' equity:
Exercise of warrants to purchase common
stock................................. 978,598 734 3,520 --
Exercise of options to purchase common
stock................................. 37,397 28 124 --
Stock options issued and deferred
stock-based compensation.............. -- -- 4,900 (4,900) --
Compensation expense recognized......... -- -- -- 1,198 --
Outstanding stock options............... -- -- 575 -- --
Reverse put liability for warrants
exercised............................. -- -- 1,194 -- --
Redeemable preferred stock dividends.... -- -- -- --
Other changes in shareholders'
equity.............................
--------- ------ ------- ------- -------
BALANCE AT JUNE 30, 1999.................. 9,318,105 $6,989 $53,047 $(3,702) $ 7,297
========= ====== ======= ======= =======

TREASURY STOCK TOTAL
ACCUMULATED ----------------- SHAREHOLDERS'
(DEFICIT) SHARES DOLLARS EQUITY
----------- ------- ------- -------------
(UNAUDITED IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1998.............. $(54,300) 437,882 $(1,625) $ 3,956
-------
Comprehensive income (loss):
Net loss................................ (4,321) -- -- (4,321)
Net decrease in unrealized appreciation
of investments........................ -- -- -- (3,623)
-------
Comprehensive income (loss)........... (7,944)
-------
Other changes in shareholders' equity:
Exercise of warrants to purchase common
stock................................. -- -- -- 4,254
Exercise of options to purchase common
stock................................. -- -- -- 152
Stock options issued and deferred
stock-based compensation.............. -- -- -- --
Compensation expense recognized......... -- -- -- 1,198
Outstanding stock options............... -- -- -- 575
Reverse put liability for warrants
exercised............................. -- -- -- 1,194
Redeemable preferred stock dividends.... (194) -- -- (194)
-------
Other changes in shareholders'
equity............................. 7,179
-------- ------- ------- -------
BALANCE AT JUNE 30, 1999.................. $(58,815) 437,882 $(1,625) $ 3,191
======== ======= ======= =======
</TABLE>

The accompanying notes are an integral part of the condensed consolidated
financial statements.

F-31
<PAGE> 141

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------
JUNE 30, JUNE 30,
1999 1998
-------- --------
(UNAUDITED IN
THOUSANDS)
<S> <C> <C>
Net cash flows from (used by) operating activities.......... $(3,781) $ 701
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances to Entrade Inc..................................... (2,728) --
Decrease in restricted cash................................. 934 --
Additions to property, plant and equipment.................. -- (1,105)
Proceeds from sale of COMFORCE common stock................. -- 170
Other....................................................... (89) --
------- --------
Net cash flows used by investing activities................. (1,883) (935)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options and warrants........ 4,406 17
Net decrease in short-term debt............................. -- (379)
Proceeds from long-term borrowings.......................... -- 70,186
Reduction of long-term debt................................. -- (72,625)
Repurchase of common stock previously issued to pay down
short-term notes.......................................... -- (1,518)
Redemption of detachable put warrants....................... -- (1,410)
Other....................................................... -- (1)
------- --------
Net cash flows from (used by) financing activities.......... 4,406 (5,730)
------- --------
Decrease in cash and cash equivalents....................... (1,258) (5,964)
Cash and equivalents, beginning of period................... 11,753 5,991
------- --------
Cash and equivalents, end of period......................... $10,495 $ 27
======= ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
ARTRA/BCA redeemable preferred stock received as payment of
Peter Harvey advances..................................... -- 12,787
</TABLE>

The accompanying notes are an integral part of the condensed consolidated
financial statements.

F-32
<PAGE> 142

ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

As discussed in Note 2, on February 23, 1999, ARTRA entered into an
agreement with Entrade Inc. ("Entrade"), formerly NA Acquisition Corp., and
WorldWide Web NetworX Corporation ("WorldWide") providing for the merger of a
subsidiary of Entrade with ARTRA. Entrade, a 90% owned subsidiary of WorldWide,
owns all of the outstanding capital stock of entrade.com, Inc. ("entrade.com")
and 25% of the Class A Common Stock of asseTrade.com, Inc. ("asseTrade.com").

Consummation of the merger is subject to the approval of the shareholders
of ARTRA. The Company expects to complete the transaction during the third
quarter of 1999.

These condensed consolidated financial statements are presented in
accordance with the requirements of Form 10-Q and consequently do not include
all the disclosures required in the Company's annual report on Form 10-K.
Accordingly, the Company's annual report on Form 10-K for the fiscal year ended
December 31, 1998, as filed with the Securities and Exchange Commission, should
be read in conjunction with the accompanying consolidated financial statements.
The condensed consolidated balance sheet as of December 31, 1998 was derived
from the audited consolidated financial statements in the Company's annual
report on Form 10-K.

In the opinion of the Company, the accompanying condensed consolidated
financial statements reflect all normal recurring adjustments necessary to
present fairly the financial position as of June 30, 1999, and the results of
operations and changes in cash flows for the three month periods ended June 30,
1999 and June 30, 1998. Reported interim results of operations are based in part
on estimates that may be subject to year-end adjustments. In addition, these
quarterly results of operations are not necessarily indicative of those expected
for the year.

2. CHANGE OF BUSINESS

Entrade Inc.

On February 23, 1999, ARTRA entered into an Agreement and Plan of Merger
(the "Merger Agreement") with WorldWide, Entrade, a 90% owned subsidiary of
WorldWide, and WWWX Merger Subsidiary, Inc. ("Merger Sub"), a wholly owned
subsidiary of Entrade, pursuant to which Merger Sub will merge into the Company
(the "Merger"), with the Company being the surviving corporation. As a result of
the Merger, the Company will become a wholly owned subsidiary of Entrade, and
the shareholders of the Company will become shareholders of Entrade. Under the
terms of the Merger Agreement, the Company's shareholders will receive one share
of Entrade Common Stock in exchange for each share of the Company's Common
Stock. Additionally, holders of ARTRA Series A preferred stock will receive 329
shares of Entrade common stock for each share of ARTRA Series A preferred stock.
All stock options and warrants issued by the Company and outstanding on the
closing date of the Merger will be converted into Entrade stock options and
warrants.

Entrade owns all of the outstanding capital stock of entrade.com and 25% of
the Class A Common Stock of asseTrade.com.

F-33
<PAGE> 143
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

entrade.com is an Internet business-to-business electronic commerce
("e-commerce") company seeking to provide asset disposition solutions for the
utility and large industrial manufacturing sectors. asseTrade.com proposes to
develop and implement comprehensive asset/inventory recovery, disposal,
remarketing and management solutions for corporate clients through advanced
Internet electronic business applications, including on-line auctions.

In connection with the execution of the Merger Agreement, on February 23,
1999, Entrade acquired certain software and intellectual property and 25% of the
shares of Class A Voting Common Stock of asseTrade.com (collectively, the
"Purchased Assets") from WorldWide, in exchange for 1,800,000 shares of Entrade
common stock, $800,000 in cash and a note for $500,000, payable upon the
consummation of the Merger or the earlier termination of the Merger Agreement.
On February 16, 1999, Entrade had agreed with Energy Trading Company, a wholly
owned subsidiary of Peco Energy Company, to issue to Energy Trading Company
200,000 shares of Entrade common stock, and to pay Energy Trading Company
$100,000 in exchange for certain retained rights Energy Trading Company held in
the Purchased Assets. Entrade also agreed with both WorldWide and Energy Trading
Company that it would provide a minimum of $4,000,000 in funding for
entrade.com. Under separate loan agreements, ARTRA agreed to loan Entrade up to
$2,000,000 and advance an additional $250,000 to fund the $800,000 cash payment
to WorldWide and to provide funding for entrade.com until the consummation of
the Merger or the earlier termination of the Merger Agreement. Under the Merger
Agreement, the Company agreed to guaranty the $4,000,000 funding for entrade.com
if the Merger is consummated.

In August 1999, WorldWide agreed to loan Entrade up to $500,000 to fund
Entrade's operations for the period from the date of the loan to the closing
date under the Merger Agreement. This amount will be repaid to WorldWide as a
condition to closing the Merger.

Consummation of the Merger is subject to the approval of the shareholders
of ARTRA. The Company expects to complete the transaction during the third
quarter of 1999.

If the Merger Agreement terminates solely because the ARTRA shareholders
have not approved the Merger Agreement and the Merger, all obligations of
WorldWide and Entrade to repay the amounts loaned to either or both of them by
ARTRA under the loan agreement and an additional $250,000 advanced to Entrade by
ARTRA will terminate and the loans made by ARTRA to WorldWide and to Entrade
under the loan agreement will be forgiven as a "break-up" fee to WorldWide and
Entrade equal to the aggregate amount of the loan as defined in the loan
agreement and the additional $250,000 advance.

Bagcraft

Effective August 26, 1998, ARTRA and its wholly-owned BCA Holdings, Inc.
("BCA") subsidiary, the parent of Bagcraft, agreed to sell the business assets
of Bagcraft. Additionally, the buyer agreed to assume certain Bagcraft
liabilities. The disposition of the Bagcraft business resulted in a net gain of
$35,985,000.

F-34
<PAGE> 144
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company's 1998 consolidated financial statements have been reclassified
to report separately the results of operations of Bagcraft. The operating
results (in thousands) for the six months ended June 30, 1998 of the
discontinued Bagcraft subsidiary consist of:

<TABLE>
<S> <C>
Net sales................................................... $63,265
=======
Earnings from operations before income taxes and minority
interest.................................................. $ 1,154
Provision for income taxes.................................. (44)
Minority interest........................................... (300)
-------
Earnings from discontinued operations....................... $ 810
=======
Earnings per share from discontinued operations............. $ .10
=======
</TABLE>

Liabilities of discontinued operations at June 30, 1999 and December 31,
1998 of $8,464,000 and $10,328,000, respectively, include BCA/Bagcraft
redeemable preferred stock issues (see Note 4), contractual obligations,
environmental matters and other future estimated costs for various discontinued
operations.

3. INVESTMENT IN COMFORCE CORPORATION

At June 30, 1999 ARTRA's investment in COMFORCE Corporation ("COMFORCE"),
1,525,500 shares, currently a common stock ownership interest of approximately
9%, was classified in the Company's condensed consolidated balance sheet in
current assets as "Available-for-sale securities." At June 30, 1999 the gross
unrealized gain relating to ARTRA's investment in COMFORCE, reflected as a
separate component of shareholders' equity, was $7,297,000. The investment in
COMFORCE common stock, which represents a significant portion of the Company's
assets at June 30, 1999 and December 31, 1998, is subject to liquidity and
market price risks.

Based upon the preceding factors, the Company had concluded that, for
reporting purposes, it had effectively granted options to certain officers,
directors and key employees to acquire 200,000 of ARTRA's COMFORCE common
shares. Accordingly, in January 1996 these 200,000 COMFORCE common shares were
removed from the Company's portfolio of "Available-for-sale securities" and were
classified in the Company's condensed consolidated balance sheet as other
receivables with an aggregate value of $400,000, based upon the value of
proceeds to be received upon future exercise of the options. The disposition of
these 200,000 COMFORCE common shares resulted in a gain that was deferred and
will not be recognized in the Company's financial statements until the options
to purchase these 200,000 COMFORCE common shares are exercised.

During the three and six months ended June 30, 1998, options to acquire
70,750 and 84,750 of these COMFORCE common shares were exercised resulting in
realized gains of $267,000 and $320,000, respectively. At June 30, 1999, options
to acquire 55,750 COMFORCE common shares remained unexercised and were
classified in the Company's condensed consolidated balance sheet as other
current assets with an aggregate value of $112,000, based upon the value of
proceeds to be received upon future exercise of the options.

F-35
<PAGE> 145
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. REDEEMABLE PREFERRED STOCK

Artra

At June 30, 1999 and December 31, 1998, 1,849.34 shares of Series A
Preferred Stock were outstanding with carrying values of $3,051,000 and
$2,857,000, respectively, including accumulated dividends, net of unamortized
discount of $102,000 and $239,000, respectively. The Series A Preferred Stock
accrues dividends at the rate of 6% per annum and is redeemable by ARTRA on
March 1, 2000 at a price of $1,000 per share plus accrued dividends. Accumulated
dividends of $1,338,000 ($724 per share) and $1,246,000 ($674 per share) were
accrued at June 30, 1999 and December 31, 1998, respectively.

BCA Holdings/Bagcraft

During 1992 and 1993, in exchange for cash consideration of $3,675,000, a
former related party received 3,675 shares of BCA Series A preferred stock (6%
cumulative, redeemable preferred stock with a liquidation preference equal to
$1,000 per share). At June 30, 1999 and December 31, 1998, liabilities of
discontinued operations included 1,036.39 and 1,672.18 BCA Series A redeemable
preferred shares with accumulated dividends of $318,000 ($307 per share) and
$514,000 ($307 per share), respectively.

Effective February 15, 1996, BCA, Bagcraft and a former related party
entered into an agreement to exchange certain preferred stock between the
Companies. Per terms of the exchange agreement BCA issued 8,135 shares of BCA
Series B preferred stock (13.5% cumulative, redeemable preferred stock with a
liquidation preference equal to $1,000 per share) to the former related party in
exchange for 41,350 shares of Bagcraft redeemable preferred stock. At June 30,
1999 and December 31, 1998, liabilities of discontinued operations included
1,675.79 BCA Series B redeemable preferred shares with accumulated dividends of
$650,000 ($388 per share).

Both the BCA Series A preferred stock and the BCA Series B preferred stock
are redeemable at the option of the issuer for an amount equal to face value
plus accumulated dividends. The BCA Series B preferred stock was redeemable on
June 1, 1997.

At June 30, 1999 and December 31, 1998, liabilities of discontinued
operations included 8,650 shares of Bagcraft 13.5% cumulative, redeemable
preferred stock (liquidation preference equal to $100 per share). Accumulated
dividends of $1,315,000 were accrued at June 30, 1999 and December 31, 1998
($152 per share).

Proposed Exchange Under Merger Agreement

On February 23, 1999, ARTRA entered into a Merger Agreement with WorldWide
and Entrade (see Note 2). As a result of the Merger, the Company will become a
wholly owned subsidiary of Entrade, and the shareholders of the Company will
become shareholders of Entrade. Under the terms of the Merger Agreement, if
approved by the Company's shareholders, the holders of ARTRA Series A preferred
stock will receive 329 shares of Entrade Common Stock in exchange for each share
of their ARTRA Series A preferred stock.

The Merger Agreement as amended as of August 9, 1999, does not provide for
the issuance of shares of Entrade common stock in exchange for any outstanding
shares of BCA Series A preferred stock or BCA Series B preferred stock.

F-36
<PAGE> 146
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. INCOME TAXES

No income tax benefit was recognized in connection with the Company's 1998
and 1997 pre-tax losses due to the Company's tax loss carryforwards and the
uncertainty of future taxable income.

At December 31, 1998, the Company and its subsidiaries had Federal income
tax loss carryforwards of approximately $10,000,000 expiring principally in
2010-2012, available to be applied against future taxable income, if any. In
recent years, the Company has issued shares of its common stock to repay various
debt obligations, upon exercise of stock options and warrants, as consideration
for acquisitions, to fund working capital obligations and as consideration for
various other transactions. Section 382 of the Internal Revenue Code of 1986
limits a corporation's utilization of its Federal income tax loss carryforwards
when certain changes in the ownership of a corporation's common stock occurs. In
the opinion of management, the Company is not currently subject to such
limitations regarding the utilization of its Federal income tax loss
carryforwards. Should the Company continue to issue a significant number of
shares of its common stock, it could trigger a limitation on its ability to
utilize its Federal income tax loss carryforwards. The pending merger with
Entrade will not affect ARTRA's Federal income tax loss carryforwards.

6. EARNINGS PER SHARE

Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings
per Share". Basic earnings (loss) per share is computed by dividing the income
available to common shareholders, net earnings (loss), less redeemable preferred
stock dividends and redeemable common stock accretion, by the weighted average
number of shares of common stock outstanding during each period.

Diluted earnings (loss) per share is computed by dividing the income
available to common shareholders, net earnings (loss), less redeemable preferred
stock dividends and redeemable common stock accretion, by the weighted average
number of shares of common stock and common stock equivalents (stock options and
warrants), unless anti-dilutive, during each period.

Earnings (loss) per share for the three and six months ended June 30, 1999
and 1998 was computed as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
------------------- -------------------
BASIC DILUTED BASIC DILUTED
-------- -------- -------- --------
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING:
Weighted average shares outstanding.................... 8,655 8,655 7,864 7,864
Common stock equivalents (options/warrants)............ -- -- -- --
------- ------- ------- -------
8,655 8,655 7,864 7,864
======= ======= ======= =======
EARNINGS (LOSS):
Loss from continuing operations........................ $(3,053) $(3,053) $(1,114) $(1,114)
Dividends applicable to redeemable preferred stock..... (130) (130) (95) (95)
------- ------- ------- -------
Loss from continuing operations applicable to common
shareholders......................................... (3,183) (3,183) (1,209) (1,209)
Earnings from discontinued operations.................. -- -- 948 948
------- ------- ------- -------
Net loss............................................... $(3,183) $(3,183) $ (261) $ (261)
======= ======= ======= =======
</TABLE>

F-37
<PAGE> 147
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
------------------- -------------------
BASIC DILUTED BASIC DILUTED
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PER SHARE AMOUNTS:
Loss from continuing operations applicable to common
shares............................................... $ (.37) $ (.37) $ (.15) $ (.15)
Earnings from discontinued operations.................. -- -- .12 .12
------- ------- ------- -------
Net loss applicable to common shares................... $ (.37) $ (.37) $ (.03) $ (.03)
======= ======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
----------------- -----------------
BASIC DILUTED BASIC DILUTED
------- ------- ------- -------
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING:
Weighted average shares outstanding.................... 8,331 8,331 7,914 7,914
Common stock equivalents (options/warrants)............ -- -- -- --
------- ------- ------- -------
8,331 8,331 7,914 7,914
======= ======= ======= =======
EARNINGS (LOSS):
Loss from continuing operations........................ $(4,321) $(4,321) $(2,893) $(2,893)
Dividends applicable to redeemable preferred stock..... (194) (194) (219) (219)
------- ------- ------- -------
Loss from continuing operations applicable to common
shareholders......................................... (4,515) (4,515) (3,112) (3,112)
Earnings from discontinued operations.................. -- -- 810 810
------- ------- ------- -------
Net loss............................................... $(4,515) $(4,515) $(2,302) $(2,302)
======= ======= ======= =======
PER SHARE AMOUNTS:
Loss from continuing operations applicable to common
shares............................................... $ (.54) $ (.54) $ (.39) $ (.39)
Earnings from discontinued operations.................. -- -- .10 .10
------- ------- ------- -------
Net loss applicable to common shares................... $ (.54) $ (.54) $ (.29) $ (.29)
======= ======= ======= =======
</TABLE>

7. LITIGATION

The Company and its subsidiaries are the defendants in various
business-related litigation and environmental matters. At June 30, 1999 and
December 31, 1998, the Company had accrued current liabilities of $1,500,000 for
potential business-related litigation and environmental liabilities. While these
litigation and environmental matters involve wide ranges of potential liability,
management does not believe the outcome of these matters will have a material
adverse effect on the Company's financial statements.

The discontinued Bagcraft subsidiary's Chicago facility has been the
subject of allegations that it violated laws and regulations associated with the
Clean Air Act. The facility has numerous sources of air emissions of volatile
organic materials ("VOMs") associated with its printing operations and was
required to maintain and comply with permits and emissions regulations with
regard to each of these emission sources.

F-38
<PAGE> 148
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

F-39
<PAGE> 149
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

While ARTRA is currently negotiating a permanent agreement with these
carriers, there is no assurance that any permanent agreement will be reached or
that the carriers will continue to make payments on the same terms as under the
temporary agreement. If the terms of the new agreement are less favorable or the
temporary agreement expires without the execution of a new agreement, ARTRA
could become obligated to assume a percentage of the indemnity payments and
defense costs. ARTRA is not able to quantify the potential costs of claims that
remain outstanding or unasserted. If claims exceed the insurance coverage,
ARTRA's financial position could be materially and adversely affected and
ARTRA's ability to fund its operations would be impaired.

Several cases have arisen from ARTRA's purchase of Dutch Boy Paints which
owned a facility in Chicago which it purchased from NL Industries. In a case
titled City of Chicago v. NL Industries, Inc. and ARTRA GROUP Incorporated,
filed in the Circuit Court of Cook County, Illinois, the City of Chicago brought
a nuisance action and alleged that ARTRA (and NL Industries, Inc.) had
improperly stored, discarded and disposed of hazardous substances at the Dutch
Boy site, and that ARTRA had conveyed the site to Goodwill Industries to avoid
clean-up costs. At the time the suit was filed, the City of Chicago claimed that
it would cost $1,000,000 to remediate the site. The Company is currently
negotiating with the City of Chicago to settle this claim.

8. OTHER INFORMATION

On June 28, 1999, the Company's board of directors entered into a
three-year employment agreement with Mark F. Santacrose, under which, Mr.
Santacrose agreed to become the President and Chief Executive Officer of ARTRA.
In connection with such employment, Mr. Santacrose received an option to
purchase 200,000 shares of ARTRA common stock at an exercise price of $10.00 per
share (exercisable immediately) and 100,000 shares of ARTRA common stock at an
exercise price of $12.875 per share (exercisable commencing June 28, 2000). The
market value of ARTRA common stock on the date of grant of the options was
$12.875 per share. Accordingly, at June 30, 1999, ARTRA recognized compensation
expense of $575,000 related to these stock options.

On February 23, 1999, the Company entered into three-year employment
agreements with four individuals to manage the Company's entry into the Internet
business-to-business e-commerce and on-line auction business. In connection with
such employment, the three individuals received nonqualified stock options for
the purchase of 1,600,000 shares of the Company's Common Stock at an exercise
price of

F-40
<PAGE> 150
ARTRA GROUP INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$2.75 per share. The options vest in three equal installments over a period
ending February 18, 2001. During the six months ended June 30, 1999, the Company
recognized compensation expense of approximately $1,200,000 related to these
stock options.

ARTRA had fallen below the New York Stock Exchange's quantitative and other
continued listing criteria. These criteria included the New York Stock
Exchange's net tangible assets and average three-year net income requirements.
Also, after the sale of ARTRA's Bagcraft subsidiary, ARTRA has lacked an ongoing
operating business as required under the New York Stock Exchange's rules. At the
New York Stock Exchange's request, ARTRA has provided a definitive action plan
demonstrating ARTRA's ability to achieve compliance with the Exchange's listing
standards, including the succession of Entrade common stock to this listing
after the Merger. Based upon a review of that plan, the New York Stock Exchange
is continuing the listing of ARTRA common stock.

ARTRA and, after the Merger, Entrade will be subject to ongoing quarterly
monitoring for compliance with the plan. Failure to meet any of the quarterly
plan projections could result in the suspension from trading and subsequent
delisting of ARTRA common stock and, after the Merger, Entrade common stock.
ARTRA's plan is dependent upon the closing of the Merger during the third
quarter of 1999. If the Merger is not completed, ARTRA may not be able to
satisfy the listing requirements of the New York Stock Exchange, and ARTRA
common stock may be delisted from the New York Stock Exchange.

On April 19, 1999, ARTRA entered into a letter of intent to purchase all of
the issued and outstanding common stock of Public Liquidations Systems, Inc. and
Asset Liquidation Group, Inc., d/b/a as Nationwide Auction Systems Corp. The
purchase price shall consist of cash of $10,800,000 payable at closing,
1,570,000 shares of ARTRA common stock and a $14,000,000 note, subject to
adjustment, payable over a two year period subsequent to the closing of the
transaction. Consummation of the transaction is subject to certain conditions,
including performance of the buyer's and seller's due diligence and negotiation
of a definitive asset purchase agreement. The parties had extended the
expiration date of the letter of intent to August 12, 1999 and are negotiating
to further extend the expiration date. This potential acquisition is not as yet
deemed probable as no assurance can be given that the parties will complete
their due diligence or enter into a definitive agreement by that date.

F-41
<PAGE> 151

ENTRADE INC. AND SUBSIDIARY

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Report of Independent Accountants........................... F-43
Consolidated Balance Sheet as of February 23, 1999.......... F-44
Notes to Consolidated Balance Sheet..................... F-45 - F-47
Consolidated Balance Sheet as of June 30, 1999
(Unaudited)............................................... F-48
Consolidated Statement of Operations for the period February
23, 1999 (inception) to June 30, 1999 (Unaudited)......... F-49
Consolidated Statement of Cash Flows for the period February
23, 1999 (inception) to June 30, 1999 (Unaudited)......... F-50
Notes to Consolidated Financial Statements.............. F-51 - F-53
</TABLE>

F-42
<PAGE> 152

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
Entrade Inc.

In our opinion, the accompanying consolidated balance sheet presents
fairly, in all material respects, the financial position of Entrade Inc.
(formerly NA Acquisition Corp.) and subsidiary at February 23, 1999 (inception),
in conformity with generally accepted accounting principles. This financial
statement is the responsibility of the Company's management; our responsibility
is to express an opinion on this financial statement based on our audit. We
conducted our audit of this statement in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP

May 13, 1999

F-43
<PAGE> 153

ENTRADE INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET
AS OF FEBRUARY 23, 1999

<TABLE>
<S> <C>
ASSETS
Cash........................................................ $ 600,000
----------
Total current assets................................... 600,000
----------
Investment in asseTrade..................................... 3,500,000
Intangible asset............................................ 3,156,224
----------
Total assets........................................... $7,256,224
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable............................................ $ 100,000
Promissory note payable..................................... 500,000
Loan payable................................................ 1,400,000
----------
Total current liabilities.............................. 2,000,000
SHAREHOLDERS' EQUITY:
Preferred stock, $1,000 par value, 4,000,000 shares
authorized, no shares issued or outstanding............... --
Common stock, no par value, 40,000,000 shares authorized,
2,000,000 issued and outstanding.......................... 5,256,224
----------
Total liabilities and shareholders' equity............. $7,256,224
==========
</TABLE>

The accompanying notes are integral part of this balance sheet.

F-44
<PAGE> 154

ENTRADE INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED BALANCE SHEET

1. FORMATION OF THE COMPANY AND ACQUISITIONS

Entrade Inc., formerly NA Acquisition Corp., ("Entrade" or "the Company"),
a Pennsylvania corporation, was incorporated on February 23, 1999 as a 90% owned
subsidiary of WorldWide Web NetworX Corporation ("WWWX"). Entrade, through its
wholly owned subsidiary, entrade.com, Inc. ("entrade.com") operates as a
business-to-business internet electronic commerce ("e-commerce") service
provider.

Upon incorporation, Entrade acquired from WWWX all of the assets of
BarterOne LLC. In addition, the Company also acquired from WWWX a 25% interest
in asseTrade.com, Inc. ("asseTrade"), a company that intends to provide business
to business internet e-commerce services. WWWX had acquired all of the
membership interests in BarterOne LLC in January and February of 1999, under
separate agreements with Global Trade Group, Ltd. and Energy Trading Company, a
subsidiary of PECO Energy Corporation. Following those acquisitions, BarterOne
LLC was dissolved and WWWX took direct title to its assets.

BarterOne LLC had been formed in December 1996 by Energy Trading Company
and Global Trade Group, Ltd., to develop software and related products and
services that would enable users, primarily in the electric and gas utility
industry, to effect barter transactions via an e-commerce system. Energy Trading
Company provided the initial capital and executive support, while Global Trade
Group, Ltd. provided software development.

In October 1998, Positive Asset Remarketing, Inc. (an affiliate of Global
Trade Group) forged an alliance with a joint venture entity, Butcher Fox LLC,
formed by Henry Butcher USA, Inc. ("Butcher") and Michael Fox International,
Inc. ("Fox"), to provide BarterOne LLC's on-line technologies and business
methodologies to the Butcher and Fox industrial clients. In December 1998, these
parties formed asseTrade. Positive Asset Remarketing, Inc. transferred a 25%
voting interest in asseTrade to WWWX in January 1999.

Entrade purchased BarterOne LLC and the 25% interest in asseTrade
(collectively the "acquired assets") from WWWX in exchange for 2,000,000 shares
of Entrade common stock, of which 200,000 were received by Energy Trading
Company pursuant to a tri-party agreement between WWWX, Energy Trading Company
and Entrade, $800,000 in cash and a note for $500,000. As WWWX and Entrade are
under common control, Entrade recorded the value of the net assets and interest
acquired in these transactions at WWWX's carrying value. The amount of purchase
price paid to WWWX by Entrade in excess of WWWX's carrying value for the assets
of entrade and interest in asseTrade has been recorded by Entrade as a reduction
in common stock.

Proposed Merger

Entrade, WWWX, and WWWX Merger Subsidiary, Inc. a wholly owned subsidiary
of Entrade ("Merger Sub"), have entered into an agreement to merge ("the merger
agreement") the Merger Sub into ARTRA Group Incorporated, a publicly traded
Pennsylvania corporation ("ARTRA"). The agreement is subject to ARTRA
shareholder approval. Entrade and WWWX have provided for certain changes in
capital structure of Entrade if the merger is not consummated. The merger
agreement provides that all shares of ARTRA common stock shall be converted into
shares of Entrade common stock on a one for one basis and that ARTRA will
guarantee funding of at least $4,000,000 for the working capital needs of
Entrade. In addition, each share of the outstanding redeemable preferred stock
of ARTRA shall be exchanged for 329 shares of Entrade common stock. Concurrently
with the merger closing, Entrade is required to make a cash payment to Energy
Trading Company ("ETCO") in the amount of $100,000. If for any reason, the
merger is not consummated on or before September 30, 1999, then Entrade is
required to issue to ETCO sufficient additional shares of its common stock so
that ETCO will hold a 33 1/3% interest

F-45
<PAGE> 155
ENTRADE INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

in all of the issued and outstanding capital stock of Entrade. In such event,
WWWX and Entrade will amend the articles of incorporation and by-laws of Entrade
so that ETCO will have all of the same protections as a minority shareholder of
Entrade as were accorded to Global Trade Group, Ltd. under the terms of a prior
operating agreement for BarterOne LLC. Any dilution of ownership of Entrade
shall be on a pari passu basis.

Upon the completion of the proposed merger ARTRA will continue as the
surviving corporation. ARTRA will be a wholly owned subsidiary of Entrade.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

Cash and equivalents represent cash and short-term, highly liquid
investments with original maturities three months or less.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, entrade.com Intercompany transactions and
accounts have been eliminated in consolidation.

Use of Estimates

The financial statements are prepared in conformity with generally accepted
accounting principles and, accordingly, include amounts that are based on
management's best estimates and judgments. Actual results could differ from
these estimates.

Intangible Assets

Intangible assets represent principally intellectual property which will be
amortized over a period of five years on a straight line basis. The Company
reviews intangibles for impairment by comparing future cash flows (undiscounted
and without interest) expected to result from the use of the assets and their
eventual disposition, to the carrying amount of the assets.

Equity interest

The Company has a 25% interest in asseTrade.com. This investment has been
recorded based upon the fair value of the consideration paid for the investment
by WWWX. The Company periodically reviews the carrying value of this investment
for impairment. Upon commencement of operations of asseTrade, Entrade will
reflect 25% of asseTrade results on an equity basis.

3. LOAN AGREEMENT

F-46
<PAGE> 156
ENTRADE INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

is otherwise terminated and the merger abandoned. At February 23, 1999 the
balance due on the loan was $1,400,000.

4. PROMISSORY NOTE

As part of the purchase of the assets of entrade.com from WWWX, the Company
entered into a non-interest-bearing promissory note with WWWX in the amount of
$500,000. The principal amount of the note is payable on the earlier of the
closing date of the merger, as defined in the merger agreement, or the date on
which the merger agreement is otherwise terminated and the merger abandoned.

5. RELATED PARTY TRANSACTIONS

Certain shareholders of WWWX, the parent company of Entrade, and certain
officers of Entrade and entrade.com have, or have had, a direct or beneficial
ownership interest in BarterOne LLC, asseTrade, Global Trade Group Ltd, and
Positive Asset Remarketing, Inc. Certain officers of Entrade and entrade.com
have entered into employment agreements with ARTRA.

F-47
<PAGE> 157

ENTRADE INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1999

<TABLE>
<CAPTION>
(UNAUDITED
IN THOUSANDS)
-------------
<S> <C>
CURRENT ASSETS
Cash........................................................ $ 176
Other....................................................... 65
-------
Total current assets................................... 241
-------
Property, plant and equipment, net.......................... 304
Intangibles, net............................................ 3,510
Investment in asseTrade.com................................. 3,500
-------
TOTAL ASSETS........................................... $ 7,555
=======
CURRENT LIABILITIES
Accrued liabilities......................................... 12
Accounts payable, including amounts due related parties..... 383
Note payable................................................ 500
Due to ARTRA................................................ 2,100
-------
2,995
-------
SHAREHOLDERS' EQUITY
Preferred stock, $1,000 par value, 4,000,000 shares
authorized, no shares issued or outstanding............... --
Common stock, no par value, 40,000,000 shares authorized,
2,000,000 issued and outstanding.......................... 5,256
Additional paid-in capital.................................. 604
Accumulated loss from inception (February 23, 1999)......... (1,300)
-------
4,560
TOTAL LIABILITIES AND EQUITY........................... $ 7,555
=======
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-48
<PAGE> 158

ENTRADE INC. AND SUBSIDIARY

STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 23, 1999 (INCEPTION)
TO JUNE 30, 1999

<TABLE>
<CAPTION>
(UNAUDITED
IN THOUSANDS)
-------------
<S> <C>
Net sales................................................... $ 111
-------
COSTS AND EXPENSES:
Selling, general and administrative
Business development costs................................ 290
Payroll and related costs................................. 438
Other..................................................... 373
-------
1,101
Depreciation and amortization............................... 310
-------
Total costs and expenses............................... 1,411
-------
Loss from operations before income taxes.................... (1,300)
Provision for income taxes.................................. --
-------
Net loss.................................................... $(1,300)
=======
PER SHARE LOSS:
Basic..................................................... $ (0.65)
=======
Weighted average number of shares of common stock
outstanding............................................... 2,000
=======
Diluted
Basic.................................................. $ (0.65)
=======
Weighted average number of shares of common stock
outstanding............................................... 2,000
=======
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-49
<PAGE> 159

ENTRADE INC. AND SUBSIDIARY

STATEMENT OF CASH FLOWS
FOR THE PERIOD FEBRUARY 23, 1999 (INCEPTION) TO JUNE 30, 1999

<TABLE>
<CAPTION>
(UNAUDITED
IN THOUSANDS)
-------------
<S> <C>
Net cash flows used by operating activities................. $ (760)
-------
CASH FLOWS FROM INVESTING ACTIVITIES:
Assets purchased from WWWX.................................. (800)
Additions to property, plant and equipment.................. (364)
-------
Net cash flows used by investing activities................. (1,164)
-------
CASH FLOWS FROM FINANCING ACTIVITIES:
ARTRA loan and advances..................................... 2,100
-------
Net cash flows used by financing activities................. 2,100
-------
Increase in cash and cash equivalents....................... 176
Cash and equivalents, beginning of period................... --
-------
Cash and equivalents, end of period......................... $ 176
=======
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-50
<PAGE> 160

ENTRADE INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. FORMATION OF THE COMPANY AND ACQUISITIONS

Entrade Inc., formerly NA Acquisition Corp., ("Entrade" or "the Company"),
a Pennsylvania corporation, was incorporated in February of 1999 as a 90% owned
subsidiary of WorldWide Web NetworX Corporation ("WWWX"). Entrade, through its
wholly owned subsidiary, entrade.com, Inc. ("entrade.com") intends to operate as
a business-to-business internet electronic commerce ("e-commerce") service
provider. Entrade is currently a development stage company and expects to exit
its development stage during the second half of 1999.

Proposed Merger

F-51
<PAGE> 161
ENTRADE INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

required to make a cash payment to Energy Trading Company ("ETCO") in the amount
of $100,000. If for any reason, the merger is not consummated on or before
September 30, 1999, then Entrade is required to issue to ETCO sufficient
additional shares of its common stock so that ETCO will hold a 33 1/3% interest
in all of the issued and outstanding capital stock of Entrade. In such event,
WWWX and Entrade will amend the articles of incorporation and by-laws of Entrade
so that ETCO will have all of the same protections as a minority shareholder of
Entrade as were accorded to Global Trade Group, Ltd. under the terms of a prior
operating agreement for BarterOne LLC. Any dilution of ownership of Entrade
shall be on a pari passu basis.

Upon the completion of the proposed merger ARTRA will continue as the
surviving corporation. ARTRA will be a wholly owned subsidiary of Entrade.

2. LOAN AGREEMENT

In February 1999 the Company entered into a loan agreement with ARTRA under
which the Company may borrow up to a maximum of $2,000,000. The proceeds of the
loan are to be used for the following purposes: (a) $800,000 to fund the cash
purchase price for the assets acquired from WWWX and (b) the balance to fund the
working capital needs of entrade.com. The initial loan of $1,400,000 can be
increased by three additional $200,000 increments subject to certain conditions
related to timing of closing under the merger agreement. ARTRA subsequently
agreed to advance the Company an additional $250,000. Advances under the merger
agreement are collateralized by a perfected first priority lien and security
interest in all of the assets of the Company. The loan bears interest at the
applicable Federal rate, which accrues monthly and is added to the principal
balance. The entire outstanding principal balance of the loan is due and payable
in one lump sum on the date that is the earlier of the closing date, as defined
in the merger agreement, or the date on which the merger agreement is otherwise
terminated and the merger abandoned. If the merger agreement terminates solely
because the ARTRA shareholders have not approved the Merger Agreement and the
Merger, all obligations of WorldWide and Entrade to repay the amounts loaned to
either or both of them by ARTRA under the loan agreement and an additional
$250,000 advanced to Entrade by ARTRA will terminate and the loans made by ARTRA
to WorldWide and to Entrade under the loan agreement will be forgiven as a
"break-up" fee to WorldWide and Entrade equal to the aggregate amount of the
loan as defined in the loan agreement and the additional $250,000 advance. At
June 30, 1999 the balance due on the loan and the advance was $2,100,000.

In August 1999, WWWX agreed to loan the Company up to $500,000 to fund its
operations for the period from the date of the loan to the closing date under
the merger agreement. This amount will be repaid to Worldwide as a condition to
closing the merger.

3. PROMISSORY NOTE

4. RELATED PARTY TRANSACTIONS

F-52
<PAGE> 162
ENTRADE INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Certain officers of Entrade and entrade.com have entered into employment
agreements with ARTRA.

5. EARNINGS PER SHARE

The Company reports earnings (loss) per share under the guidelines of SFAS
No. 128, "Earnings per Share". Basic earnings (loss) per share is computed by
dividing net earnings (loss) by the weighted average number of shares of common
stock outstanding during the period.

Diluted earnings (loss) per share is computed by dividing net earnings
(loss) by the weighted average number of shares of common stock and common stock
equivalents, unless anti-dilutive, during the period. There were no common stock
equivalents outstanding during the period.

Earnings (loss) per share for the period February 23, 1999 (inception) to
June 30, 1999 was computed as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
BASIC DILUTED
------- -------
<S> <C> <C>
AVERAGE SHARES OUTSTANDING:
Weighted average shares outstanding....................... 2,000 2,000
Common stock equivalents.................................. -- --
------- -------
2,000 2,000
======= =======
EARNINGS (LOSS):
Net loss.................................................. $(1,300) $(1,300)
======= =======
PER SHARE AMOUNTS:
Net loss.................................................. $ (0.65) $ (0.65)
======= =======
</TABLE>

F-53
<PAGE> 163

[This page intentionally left blank.]
<PAGE> 164

APPENDIX
A

AGREEMENT AND PLAN OF MERGER

AMONG

ARTRA GROUP INCORPORATED,

WORLDWIDE WEB NETWORX CORPORATION,

NA ACQUISITION CORP.

AND

WWWX MERGER SUBSIDIARY, INC.

DATED AS OF FEBRUARY 23, 1999
<PAGE> 165

[This page intentionally left blank.]
<PAGE> 166

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1 -- THE MERGER........................................... A-1
1.1 The Merger.................................................. A-1
1.2 Effective Time.............................................. A-2
1.3 The Closing................................................. A-2
1.4 Directors................................................... A-2
1.5 Officers.................................................... A-2
1.6 Options and Other Rights to Purchase Artra Common Stock..... A-2
1.7 Dissenters Rights........................................... A-2
ARTICLE 2 -- REPRESENTATIONS AND WARRANTIES OF WWWX, THE
ACQUISITION CORP. AND THE MERGER SUB................. A-3
2.1 Existence; Good Standing; Corporate Authority............... A-3
2.2 Authorization, Validity and Effect of Agreements............ A-3
2.3 Capitalization.............................................. A-3
2.4 Subsidiaries................................................ A-4
2.5 Other Interests............................................. A-4
2.6 Financial Condition......................................... A-4
2.7 Title to Properties......................................... A-4
2.8 Absence of Undisclosed Liabilities.......................... A-5
2.9 Material Contracts.......................................... A-5
2.10 Intangible Assets........................................... A-5
2.11 No Conflict; Required Filings and Consents.................. A-6
2.12 Litigation.................................................. A-7
2.13 Taxes....................................................... A-7
2.14 Employee Benefit Plans...................................... A-7
2.15 Labor Matters............................................... A-7
2.16 Insurance................................................... A-8
2.17 No Brokers.................................................. A-8
ARTICLE 3 -- REPRESENTATIONS AND WARRANTIES OF ARTRA.............. A-8
3.1 Existence; Good Standing; Corporate Authority............... A-8
3.2 Authorization, Validity and Effect of Agreements............ A-8
3.3 Capitalization.............................................. A-8
3.4 Subsidiaries................................................ A-9
3.5 Other Interests............................................. A-9
3.6 No Conflict; Required Filings and Consents.................. A-9
3.7 SEC Documents............................................... A-10
3.8 Title to Properties......................................... A-10
3.9 Absence of Undisclosed Liabilities.......................... A-10
3.10 Material Contracts.......................................... A-10
3.11 Litigation.................................................. A-11
3.12 Absence of Certain Changes.................................. A-11
3.13 Taxes....................................................... A-11
3.14 Employee Benefit Plans...................................... A-11
3.15 Labor Matters............................................... A-12
3.16 Insurance................................................... A-12
3.17 No Brokers.................................................. A-12
</TABLE>

A-i
<PAGE> 167

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 4 -- COVENANTS............................................ A-12
4.1 Alternative Proposals....................................... A-12
4.2 Interim Operations.......................................... A-13
4.3 Meetings of Stockholders.................................... A-14
4.4 Filings, Other Action....................................... A-14
4.5 Inspection of Records....................................... A-14
4.6 Publicity................................................... A-14
4.7 Registration Statements..................................... A-15
4.8 Listing Application......................................... A-15
4.9 Further Action.............................................. A-16
4.10 Affiliate Letters........................................... A-16
4.11 Expenses.................................................... A-16
4.12 Takeover Statute............................................ A-16
4.13 Conveyance Taxes............................................ A-16
4.14 Entrade Funding............................................. A-16
4.15 Section 351 Qualification................................... A-16
4.16 "Lock-Up" Provisions........................................ A-16
ARTICLE 5 -- CONDITIONS........................................... A-17
5.1 Conditions to Each Party's Obligation to Effect the
Merger...................................................... A-17
5.2 Conditions to Obligation of WWWX, the Acquisition Corp. and
the Merger Sub to Effect the Merger......................... A-18
5.3 Conditions to Obligation of Artra to Effect the Merger...... A-18
ARTICLE 6 -- TERMINATION.......................................... A-19
6.1 Termination by Mutual Consent............................... A-19
6.2 Termination by Either Artra or WWWX......................... A-19
6.3 Termination by WWWX......................................... A-19
6.4 Termination by Artra........................................ A-19
6.5 Effect of Termination and Abandonment....................... A-20
6.6 Extension, Waiver........................................... A-20
ARTICLE 7 -- SURVIVAL OF REPRESENTATIONS AND WARRANTIES, A-20
INDEMNIFICATION......................................
7.1 Survival of Representations and Warranties.................. A-20
7.2 Indemnification............................................. A-20
7.3 Procedure for Claims........................................ A-21
7.4 Third Party Claims.......................................... A-21
ARTICLE 8 -- GENERAL PROVISIONS................................... A-21
8.1 Notices..................................................... A-21
8.2 Assignment; Binding Effect.................................. A-22
8.3 Entire Agreement............................................ A-22
8.4 Amendment................................................... A-22
8.5 Governing Law............................................... A-22
8.6 Counterparts................................................ A-22
8.7 Headings.................................................... A-22
8.8 Interpretation.............................................. A-22
8.9 Waivers..................................................... A-22
8.10 Incorporation............................................... A-22
8.11 Severability................................................ A-23
8.12 Enforcement of Agreement.................................... A-23
8.13 Subsidiaries................................................ A-23
</TABLE>

A-ii
<PAGE> 168

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of February 23,
1999 among Artra Group Incorporated ("Artra"), a Pennsylvania corporation;
WorldWide Web NetworX Corporation ("WWWX"), a Delaware corporation; NA
Acquisition Corp. (the "Acquisition Corp."), a Pennsylvania corporation and a
wholly owned subsidiary of WWWX; and WWWX Merger Subsidiary, Inc. (the "Merger
Sub"), a Pennsylvania corporation and a wholly owned subsidiary of the
Acquisition Corp.

RECITALS:

The Boards of Directors of Artra and WWWX have approved and deem it
advisable and in the best interests of their respective companies and
shareholders to consummate the merger (the "Merger") described in this
Agreement. Pursuant to the Merger, the Merger Sub will merge into Artra, which
will result in Artra becoming a wholly owned subsidiary of the Acquisition
Corp., and the outstanding shares of Common Stock and Preferred Stock of Artra
will be converted into shares of Common Stock of the Acquisition Corp. on a
share-for-share basis.

For federal income tax purposes, it is intended that the Merger qualify as
an exchange under the provisions of Section 351 of the United States Internal
Revenue Code of 1986, as amended (the "Code").

On February 23, 1999, the Acquisition Corp. acquired from WWWX all of the
assets formerly held by BarterOne, LLC ("BarterOne"), a Delaware limited
liability company acquired by WWWX and dissolved prior to the date hereof (the
"BarterOne Assets"), and 25% of the outstanding shares of Class A voting common
stock of AsseTrade.com, Inc. ("AsseTrade"), a Delaware corporation. Also on the
date hereof, the Acquisition Corp. is acquiring certain retained interests of
Energy Trading Company ("ETCO"), a Delaware corporation, arising out of the sale
of its membership interest in BarterOne to WWWX. Concurrently with the execution
and delivery of this Agreement, and in order to induce WWWX and the Acquisition
Corp. to enter into this Agreement, Artra is entering into a Loan Agreement (the
"Loan Agreement") with the Acquisition Corp. Pursuant to the Loan Agreement,
Artra will lend the Acquisition Corp. up to $2,000,000 to purchase the BarterOne
Assets and the AsseTrade interests, and to finance the working capital needs of
its business operations related to the BarterOne Assets (referred to herein as
"Entrade").

NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants and agreements set forth in this Agreement, the parties
hereto, intending to be legally bound, hereby agree as follows:

ARTICLE 1

THE MERGER

1.1 The Merger. Pursuant to the Plan of Merger in the form of Exhibit A
hereto (the "Plan of Merger"), at the Effective Time, the Merger Sub shall be
merged with and into Artra (the "Merger") in accordance with the applicable
provisions of the laws of the Commonwealth of Pennsylvania. Artra shall be the
surviving corporation in the Merger and shall continue its corporate existence
under the laws of the Commonwealth of Pennsylvania. As a result of the Merger,
Artra shall become a wholly owned subsidiary of the Acquisition Corp. At the
Effective Time: (a) each outstanding share of Common Stock, no par value, of
Artra ("Artra Common Stock") shall be converted into one share of Common Stock,
no par value, of the Acquisition Corp. ("Acquisition Corp. Common Stock"); (b)
each outstanding share of Series A Preferred Stock, $1,000 par value, of Artra
("Artra Preferred Stock") shall be converted into 329 shares of Acquisition
Corp. Common Stock; (c) each share of Artra Common Stock held as treasury stock
shall be canceled; and (d) each outstanding share of Common Stock, $.01 par
value, of the Merger Sub shall be canceled. Upon such conversion, all
outstanding shares of Artra Common Stock and Artra Preferred Stock shall be
canceled and cease to exist, each certificate theretofore representing any
shares of

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Artra Common Stock shall, without any action on the part of the holder thereof,
be deemed to represent an equivalent number of shares of Acquisition Corp.
Common Stock and each certificate theretofore representing any shares of Artra
Preferred Stock shall, without any action on the part of the holder thereof, be
deemed to represent 329 shares of Acquisition Corp. Common Stock for each share
of Artra Preferred Stock. No fractional shares of Acquisition Corp. Common Stock
and no scrip or certificates therefor will be issued in connection with the
Merger. Any former holder of Artra Common Stock or Artra Preferred Stock who
would otherwise be entitled to receive a fraction of a share of Acquisition
Corp. Common Stock shall receive, in lieu thereof, a check for cash in an amount
equal to such fraction of a share multiplied by the closing price of Acquisition
Corp. Common Stock on the New York Stock Exchange ("NYSE") (or other applicable
exchange as hereinafter provided) on the first day Acquisition Corp. Common
Stock is traded after the Effective Time (hereinafter defined).

1.2 Effective Time. The term "Effective Time" shall mean the time and date
which is (A) the date and time of the filing of the articles of merger relating
to the Merger with the Secretary of the Commonwealth of Pennsylvania (or such
other date and time as may be specified in such certificate as may be permitted
by law) or (B) such other time and date as Artra and WWWX may agree.

1.3 The Closing. Subject to the terms and conditions of this Agreement,
the closing of the transactions described in this Agreement (the "Closing")
shall take place (a) at the offices of Duane, Morris & Heckscher LLP, One
Liberty Place, 1650 Market Street, Philadelphia, Pennsylvania 19103-7396, at
10:00 a.m., local time, on the first business day following the day on which the
last to be fulfilled or waived of the conditions set forth in Article 5 shall be
fulfilled or waived in accordance herewith or (b) at such other time, date or
place as Artra and WWWX may agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."

1.4 Directors. The directors of Artra immediately prior to the Effective
Time shall resign as directors of Artra and shall become the directors of the
Acquisition Corp. as of the Effective Time and until their successors are duly
appointed or elected in accordance with applicable law. For as long as WWWX's
percentage ownership of Acquisition Corp. Common Stock calculated on a fully
diluted basis is at least 5%, Acquisition Corp. shall use its best efforts to
cause the designee nominated by WWWX and mutually acceptable to WWWX and the
Board of Directors of Acquisition Corp., who shall initially be Robert D. Kohn,
to be elected to the Board of Directors of Acquisition Corp.

1.5 Officers. The officers of Artra immediately prior to the Effective
Time shall resign as officers of Artra and shall become the officers of the
Acquisition Corp. as of the Effective Time and until their successors are duly
appointed in accordance with applicable law.

1.6 Options and Other Rights to Purchase Artra Common Stock. At the
Effective Time, each outstanding option, warrant or right to purchase shares of
Artra Common Stock (an "Artra Option") shall be assumed in such manner that it
is converted into an option, warrant or right to purchase shares of Acquisition
Corp. Common Stock (an "Acquisition Corp. Option"). Each such Acquisition Corp.
Option shall be exercisable upon the same terms and conditions as then are
applicable to such Artra Option. It is the intention of the parties that, to the
extent that any such Artra Option constituted an "incentive stock option"
(within the meaning of Section 422 of the Code) immediately prior to the
Effective Time, such option continue to qualify as an incentive stock option to
the maximum extent permitted by Section 422 of the Code, and that the assumption
of the Artra Options provided by this Section 1.6 satisfy the conditions of
Section 424(a) of the Code. At the Effective Time, the Acquisition Corp. shall
assume all rights and obligations of Artra under Artra's stock option plans as
in effect at the Effective Time and shall continue such plans in accordance with
their terms.

1.7 Dissenters Rights.

(a) The holders of shares of Artra Common Stock shall not be entitled to
appraisal rights under the Pennsylvania Business Corporation Law (the "PBCL").

(b) Notwithstanding anything in this Agreement to the contrary, any shares
of Artra Preferred Stock that are issued and outstanding as of the Effective
Time and that are held by a shareholder who has

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exercised and has not failed to perfect or effectively withdrawn or lost his
right (to the extent such right is available by law) to demand and to receive
the "fair value" of such shares (the "Dissenting Shares") under the PBCL shall
not be converted into shares of Acquisition Corp. Common Stock unless and until
the holder shall have failed to perfect, or shall have effectively withdrawn or
lost his right to dissent from the Merger under the PBCL and to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to and subject to the requirements of the PBCL. If any such
holder shall have so failed to perfect or have effectively withdrawn or lost
such right, each share of such holder's Artra Preferred Stock shall thereupon be
deemed to have been converted into and to have become, as of the Effective Time,
329 shares of Acquisition Corp. Common Stock. Artra shall give the Acquisition
Corp. (i) prompt notice of any notice or demand for appraisal or payment for
shares of Artra Preferred Stock received by Artra and (ii) the opportunity to
participate in and direct all negotiations and proceedings with respect to any
such demands or notices. Any payment required to be made to an Artra Preferred
Stockholder shall be an obligation of Artra.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF WWWX,
THE ACQUISITION CORP. AND THE MERGER SUB

Except as set forth in the disclosure letter delivered to Artra at or prior
to the execution hereof (the "Acquisition Corp. Disclosure Letter"), WWWX, the
Acquisition Corp. and the Merger Sub jointly and severally represent and warrant
to Artra as of the date of this Agreement as follows:

2.1 Existence; Good Standing; Corporate Authority. Each of WWWX, the
Acquisition Corp. and the Merger Sub, and each of their respective Subsidiaries,
is a corporation or limited liability company duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of WWWX, the Acquisition Corp. and the
Merger Sub, and each of their respective Subsidiaries, is duly licensed or
qualified to do business as a foreign corporation and is in good standing under
the laws of any other state of the United States in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except where the failure to be so qualified
or to be in good standing would not have a material adverse effect on the
business, results of operations or financial condition of the Acquisition Corp.
and its Subsidiaries (a "WWWX Material Adverse Effect"). Each of WWWX, the
Acquisition Corp. and the Merger Sub, and each of their respective Subsidiaries,
has all requisite corporate power and authority to own, operate and lease its
properties and carry on its business as now conducted. The copies of the
Articles or Certificates of Incorporation and Bylaws, Operating Agreements
and/or other applicable governing documents of WWWX, the Acquisition Corp., the
Merger Sub, and each of their respective Subsidiaries, previously made available
to Artra, are true and correct and have not been modified or amended except as
set forth therein.

2.2 Authorization, Validity and Effect of Agreements. Each of WWWX, the
Acquisition Corp. and the Merger Sub has the requisite corporate power and
authority to execute and deliver this Agreement and all agreements and documents
to be executed by it as described herein. Subject only to the approval of this
Agreement and the transactions described herein by the holders of WWWX voting
securities, the consummation by WWWX, the Acquisition Corp. and the Merger Sub
of the transactions described herein has been duly authorized by all requisite
corporate action. This Agreement constitutes, and all agreements and documents
described herein (when executed and delivered pursuant hereto for value
received) will constitute, the valid and binding obligations of WWWX, the
Acquisition Corp. and the Merger Sub enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.

2.3 Capitalization. The authorized capital stock of WWWX consists of
100,000,000 shares of Common Stock, $.001 par value, of which 11,035,186 shares
are issued and outstanding. The authorized capital stock of the Acquisition
Corp. consists of 40,000,000 shares of Acquisition Corp. Common Stock, no par
value, of which 2,000,000 shares are issued and outstanding, and 4,000,000
shares of Preferred

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Stock, $1,000 par value, of which no shares are outstanding. The authorized
capital stock of the Merger Sub consists of 1000 shares of Common Stock, of
which 100 shares are issued and outstanding. Neither the Acquisition Corp. nor
the Merger Sub has any outstanding bonds, debentures, notes or other obligations
the holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the shareholders of
the Acquisition Corp. or the Merger Sub on any matter. All issued and
outstanding shares of Acquisition Corp. Common Stock are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights, and are
owned of record and beneficially by WWWX. All issued and outstanding shares of
Common Stock of the Merger Sub are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights and are owned of record and
beneficially by the Acquisition Corp. Except as set forth in the Acquisition
Corp. Disclosure Letter, there are not at the date of this Agreement any
existing options, warrants, calls, subscriptions, convertible securities, or
other rights, agreements or commitments which obligate the Acquisition Corp. or
any of its Subsidiaries to issue, transfer or sell any shares of their
respective capital stock or membership interests.

2.4 Subsidiaries. Except as set forth in the Acquisition Corp. Disclosure
Letter, the Acquisition Corp. owns directly or indirectly all of the outstanding
shares of capital stock (or other ownership interests having by their terms
ordinary voting power to elect a majority of directors or others performing
similar functions with respect to such Acquisition Corp. Subsidiary) of each of
the Acquisition Corp.'s Subsidiaries, free and clear of all liens, pledges,
security interests, claims or other encumbrances other than liens imposed by
local law which are not material. Each of the outstanding shares of capital
stock or other equity interest of each of the Acquisition Corp.'s Subsidiaries
is duly authorized, validly issued, fully paid and nonassessable. The following
information for each Subsidiary of the Acquisition Corp. has been previously
provided to Artra: (i) its name and jurisdiction of incorporation or
organization; (ii) its authorized capital stock or total equity capital; and
(iii) the number of issued and outstanding shares of capital stock or total
equity capital.

2.5 Other Interests. Except for interests in the Acquisition Corp.
Subsidiaries, neither the Acquisition Corp. nor any Acquisition Corp. Subsidiary
owns directly or indirectly any interest or investment (whether equity or debt)
in any corporation, partnership, joint venture, business, trust or entity (other
than non-controlling investments in the ordinary course of business and
corporate partnering, development, cooperative marketing and similar
undertakings or arrangements entered into in the ordinary course of business).

2.6 Financial Condition. Set forth in the Acquisition Corp. Disclosure
Letter are true and complete lists of the assets and liabilities of the
Acquisition Corp. on the date hereof and as anticipated to exist at the
Effective Time of the Merger. The Entrade Business Plan and AsseTrade Business
Plan delivered to Artra together present fairly the financial condition, results
of operations, business, properties, assets, liabilities and future prospects of
the Acquisition Corp. and the Acquisition Corp. Subsidiaries as of the dates
thereof and for the periods indicated therein, there has been no material
adverse change in the financial condition or future prospects of the Acquisition
Corp. or the Acquisition Corp. Subsidiaries as reflected therein, and no fact is
known to WWWX or the Acquisition Corp. that materially adversely affects or in
the future may materially adversely affect the financial condition or future
prospects of the Acquisition Corp. or any Acquisition Corp. Subsidiary.

2.7 Title to Properties. Except as set forth in the Acquisition Corp.
Disclosure Letter, the Acquisition Corp. and each of the Acquisition Corp.
Subsidiaries owns outright, and has good and marketable title to, all of its
assets, including without limitation all computer software and related technical
information and other intellectual property rights necessary to conduct the
Entrade business, free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts or other encumbrances or conflicting
claims of any nature whatsoever. None of such assets are subject to restrictions
with respect to the transferability thereof and the Acquisition Corp.'s title
thereto will not be affected in any way by the transactions described in the
Agreement. WWWX has complete and unrestricted power and right to sell such
assets to the Acquisition Corp. Neither the Acquisition Corp. nor any of its
Subsidiaries owns any real property or any interest in real property.

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2.8 Absence of Undisclosed Liabilities. Neither the Acquisition Corp. nor
any Acquisition Corp. Subsidiary has any material liabilities, obligations or
guaranties accrued, absolute, contingent or otherwise, except as disclosed in
the Acquisition Corp. Disclosure Letter.

2.9 Material Contracts. The Acquisition Corp. Disclosure Letter contains a
true and correct list of each contract, agreement, commitment or obligation (a)
which involves or may involve the payment to or from the Acquisition Corp. or
any Acquisition Corp. Subsidiary of amounts in excess of $100,000 per year, (b)
any license, franchise or distribution agreement, which involves or may involve
payments to or from the Acquisition Corp. or any Acquisition Corp. Subsidiary in
excess of $100,000 per year, (c) any lease of tangible personal property, which
involves or may involve payments to or from the Acquisition Corp. or any
Acquisition Corp. Subsidiary in excess of $100,000 per year and (d) any contract
between the Acquisition Corp. or any of its Subsidiaries and any affiliate of
WWWX, the Acquisition Corp. or any of their Subsidiaries (collectively the
"Acquisition Corp. Material Contracts"). Each of the Acquisition Corp. Material
Contracts constitutes a valid and binding obligation of the parties thereto, is
in full force and effect and will continue in full force and effect following
the consummation of the transactions described herein and thereby, in each case
without breaching the terms thereof or resulting in the forfeiture or impairment
of any rights thereunder and without the consent, approval or act of, or the
making of any filing with, any other party (except as set forth in the
Acquisition Corp. Disclosure Letter). Neither the Acquisition Corp. nor any
Acquisition Corp. Subsidiary is in, or to the knowledge of WWWX or the
Acquisition Corp. alleged to be in, breach or default under, nor is there or is
there alleged to be any basis for termination of, any Acquisition Corp. Material
Contract and, to the knowledge of WWWX and the Acquisition Corp., no other party
to any Acquisition Corp. Material Contract has breached or defaulted thereunder,
and no event has occurred and no condition or state of facts exists which, with
the passage of time or the giving of notice or both, would constitute such a
default or breach by the Acquisition Corp., any Acquisition Corp. Subsidiary or,
to the knowledge of WWWX and the Acquisition Corp., by any such other party.
Neither the Acquisition Corp. nor any Acquisition Corp. Subsidiary is currently
renegotiating any Acquisition Corp. Material Contract or paying liquidated
damages in lieu of the performance thereunder.

2.10 Intangible Assets. The Acquisition Corp. Disclosure Letter sets forth
a list of (a) all patents, copyrights, trade names, trademarks, service marks
and names (registered or unregistered), and applications and registrations
therefor, (b) all research, development and commercially practiced processes,
trade secrets, know-how, inventions, and engineering and other technical
information, (c) all computer programs, software and data bases, (d) all
information, drawings, specifications, designs, plans, financial, marketing and
business data and plans, other proprietary, confidential or intellectual
information or property and all copies and embodiments thereof in whatever form
or medium and (e) all customer and membership lists owned by or licensed to the
Acquisition Corp. or any Acquisition Corp. Subsidiary (items (a) through (e) are
defined, collectively, as "Intangible Assets") as well as a list of all
registrations thereof and pending applications therefor. Each of the Intangible
Assets owned by the Acquisition Corp. or any Acquisition Corp. Subsidiary is
owned free and clear of any and all liens and encumbrances and, to the knowledge
of WWWX and the Acquisition Corp., no other Person or entity has any claim of
ownership with respect thereto. The Acquisition Corp. and each Acquisition Corp.
Subsidiary has adequate licenses or other valid rights to use all of the
Intangible Assets that it does not own and that are material to the conduct of
its business as currently proposed. To the knowledge of WWWX and the Acquisition
Corp., the use of the Intangible Assets by the Acquisition Corp. or any
Acquisition Corp. Subsidiary does not and will not conflict with, infringe upon,
violate or interfere with any intellectual property rights or claimed
intellectual property rights of any other Person or entity, nor, to the
knowledge of WWWX and the Acquisition Corp., is any other Person or entity
infringing upon, violating or interfering with any intellectual property rights
or claimed intellectual property rights of the Acquisition Corp. or any
Acquisition Corp. Subsidiary. Neither WWWX, the Acquisition Corp. nor any
Acquisition Corp. Subsidiary has received notice of any claim of infringement or
violation of any third party's copyrights, patents, trade secrets, trademarks or
other proprietary rights relating to the Intangible Assets nor, to the knowledge
of WWWX or the Acquisition Corp., is there any basis for any such claim of right
or interest in the Intangible Assets or otherwise adverse to the Acquisition
Corp.'s or any Acquisition Corp.

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Subsidiary's unqualified right to exclusively own and fully utilize any of the
Intangible Assets. To the knowledge of WWWX and the Acquisition Corp., there are
no pending or threatened suits, legal proceedings, claims or governmental
investigations against or with respect to any of the Intangible Assets or any
component thereof. Each of the Intangible Assets will perform in substantial
conformity with its specifications as identified in any and all documentation
provided to Artra. To the knowledge of WWWX and the Acquisition Corp., the
Intangible Assets do not and will not contain any "backdoor" or concealed access
or any "software locks" or any similar devices which, upon the occurrence of a
certain event, the passage of a certain amount of time, or the taking of any
action (or the failure to take any action) by or on behalf of any Person or
entity, will cause any of the Intangible Assets to be destroyed, erased, damaged
or otherwise made inoperable. To the knowledge of WWWX and the Acquisition
Corp., the Intangible Assets are and will be free from defects in operation or
otherwise relating to the year 2000, date data century recognition calculations
that accommodate same century and multi-century formulas and date values, and
century correct date data interface values, and will accurately process date and
time data (including but not limited to, calculation, comparing and sequencing)
from, into and between the twentieth and twenty-first centuries, and the years
1999 and 2000 and leap year calculation, and, to the knowledge of WWWX and the
Acquisition Corp., when used in combination with other information technology,
will accurately process date and time data if the other information technology
exchanges date and time data with it.

2.11 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement by WWWX, the Acquisition
Corp. and the Merger Sub do not, and the consummation by WWWX, the Acquisition
Corp. and the Merger Sub of the transactions described herein will not, (i)
conflict with or violate the certificate of incorporation or by-laws or
equivalent organizational documents of WWWX, the Acquisition Corp., the Merger
Sub or any of their Subsidiaries, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to WWWX, the Acquisition Corp.,
the Merger Sub or any of their Subsidiaries or by which any property or asset of
WWWX, the Acquisition Corp., the Merger Sub or any of their Subsidiaries is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, result in the loss of a material benefit under, or give to others any
right of purchase or sale, or any right of termination, amendment, acceleration,
increased payments or cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of WWWX, the Acquisition Corp., the
Merger Sub or any of their Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which WWWX, the Acquisition Corp., the Merger Sub or
any of their Subsidiaries is a party or by which WWWX, the Acquisition Corp.,
the Merger Sub or any of their Subsidiaries or any property or asset of WWWX,
the Acquisition Corp., the Merger Sub or any of their Subsidiaries is bound or
affected, , in each case except for any such defaults or violations that would
not, individually or in the aggregate, have a WWWX Material Adverse Effect.
WWWX, the Acquisition Corp., the Merger Sub and their Subsidiaries have obtained
all licenses, permits and other authorizations and have taken all actions
required by applicable law or governmental regulations in connection with their
business as now conducted, except where the failure to obtain any such item or
to take any such action would not have, individually or in the aggregate, a WWWX
Material Adverse Effect.

(b) The execution and delivery of this Agreement by WWWX, the Acquisition
Corp. and/or the Merger Sub do not, and the performance of this Agreement and
the consummation by WWWX, the Acquisition Corp. and/or the Merger Sub of the
transactions described herein will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign (each a "Governmental Entity"),
except for (i) applicable requirements, if any, of the Securities Act of 1933
(the "Securities Act"), the Exchange Act of 1934 (the "Exchange Act"), state
securities laws and state takeover laws, (ii) filing of appropriate merger
documentation as Pennsylvania law shall require, and (iii) applicable
requirements of the Code and state and local tax laws.

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2.12 Litigation. There are no actions, suits or proceedings pending
against WWWX, the Acquisition Corp., the Merger Sub or any of their Subsidiaries
or, to the knowledge of WWWX or the Acquisition Corp., threatened against WWWX,
the Acquisition Corp., the Merger Sub or any of their Subsidiaries, at law or in
equity, or before or by any federal or state commission, board, bureau, agency
or instrumentality, that are likely to have a WWWX Material Adverse Effect.

2.13 Taxes.

(a) Except as set forth in the Acquisition Corp. Disclosure Letter, each of
WWWX, the Acquisition Corp., the Merger Sub and each of their Subsidiaries has
filed all material tax returns and reports required to be filed by it, or
requests for extensions to file such returns or reports have been timely filed
and granted and have not expired, and all tax returns and reports are complete
and accurate in all respects, except to the extent that such failures to file,
have extensions granted that remain in effect, or be complete and accurate in
all respects, as applicable, individually or in the aggregate, would not have a
WWWX Material Adverse Effect. WWWX, the Acquisition Corp., the Merger Sub and
each of their Subsidiaries has paid (or WWWX or the Acquisition Corp. has paid
on its behalf) all taxes shown as due on such tax returns and reports, and no
deficiencies for any taxes have been proposed, asserted or assessed against
WWWX, the Acquisition Corp., the Merger Sub or any of their Subsidiaries that
are not adequately reserved for, except for inadequately reserved taxes and
inadequately reserved deficiencies that would not, individually or in the
aggregate, have a WWWX Material Adverse Effect. No requests for waivers of the
time to assess any taxes against WWWX, the Acquisition Corp., the Merger Sub or
any of their Subsidiaries have been granted or are pending.

(b) Neither WWWX, the Acquisition Corp., the Merger Sub or any of their
Subsidiaries has knowingly taken any action or has any knowledge of any fact or
circumstance that is reasonably likely to prevent the Merger from qualifying as
an exchange governed by Section 351 of the Code.

(c) As used in this Section 2.13, "taxes" shall include all federal, state,
local and foreign income, franchise, property, sales, use, excise and other
taxes, including obligations for withholding taxes from payments due or made to
any other Person or entity and any interest, penalties or additions to tax.

2.14 Employee Benefit Plans. Except as described in the Acquisition Corp.
Disclosure Letter: (i) all employee benefit plans or programs maintained for the
benefit of the current or former employees or directors of WWWX, the Acquisition
Corp., the Merger Sub or any of their Subsidiaries that are sponsored,
maintained or contributed to by WWWX, the Acquisition Corp., the Merger Sub or
any of their Subsidiaries (if any), or with respect to which WWWX, the
Acquisition Corp., the Merger Sub or any of their Subsidiaries has any
liability, including without limitation any such plan that is an "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), are in compliance with all applicable
requirements of law, including ERISA and the Code, and (ii) neither WWWX, the
Acquisition Corp., the Merger Sub nor any of their Subsidiaries has any
liabilities or obligations with respect to any such employee benefit plans or
programs, whether accrued, contingent or otherwise, nor to the knowledge of WWWX
or the Acquisition Corp. are any such liabilities or obligations expected to be
incurred. The execution of, and performance of the transactions described in,
this Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event under any benefit plan, policy,
arrangement or agreement or any trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee. The only severance agreements or
severance policies applicable to WWWX, the Acquisition Corp., the Merger Sub or
any of their Subsidiaries are the agreements and policies specifically referred
to in the Acquisition Corp. Disclosure Letter.

2.15 Labor Matters. There is no labor strike, labor dispute, work
slowdown, stoppage or lockout actually pending, or to the knowledge of WWWX or
the Acquisition Corp., threatened against or affecting WWWX, the Acquisition
Corp., the Merger Sub or any of their Subsidiaries. There is no unfair labor
practice or labor arbitration proceeding pending or, to the knowledge of WWWX or
the Acquisition Corp.,

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threatened against WWWX, the Acquisition Corp., the Merger Sub or any of their
Subsidiaries relating to their business.

2.16 Insurance. The Acquisition Corp. Disclosure Letter contains a
complete and accurate list and description of all policies of fire, liability,
product liability and other forms of insurance presently in effect insuring the
Acquired Corp., its Subsidiaries and their respective assets.

2.17 No Brokers. Neither WWWX, the Acquisition Corp. nor the Merger Sub
has entered into any contract, arrangement or understanding with any person or
firm which may result in the obligation of WWWX, the Acquisition Corp., Artra or
the Merger Sub to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions described herein. Neither
WWWX, the Acquisition Corp. nor the Merger Sub is aware of any claim for payment
of any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions described herein.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF ARTRA

Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to WWWX (the "Artra Disclosure Letter") or in the Artra Reports
(as defined below), Artra represents and warrants to WWWX, the Acquisition Corp.
and the Merger Sub as of the date of this Agreement as follows:

3.1 Existence; Good Standing; Corporate Authority. Artra is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Artra is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of any
other state of the United States in which the character of the properties owned
or leased by it or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or to be in
good standing would not have a material adverse effect on the business, results
of operations or financial condition of Artra and its Subsidiaries taken as a
whole (an "Artra Material Adverse Effect"). Artra has all requisite corporate
power and authority to own, operate and lease its properties and carry on its
business as now conducted. Each of the Subsidiaries of Artra is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own its properties and to carry on its
business as it is now being conducted, and is duly qualified to do business and
is in good standing in each jurisdiction in which the ownership of its property
or the conduct of its business requires such qualification, except for
jurisdictions in which such failure to be so qualified or to be in good standing
would not have an Artra Material Adverse Effect. The copies of the Articles of
Incorporation and Bylaws of Artra previously made available to WWWX are true and
correct, and have not been modified or amended except as set forth therein.

3.2 Authorization, Validity and Effect of Agreements. Artra has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents described herein. Subject only to the approval
of this Agreement and the transactions described herein by the holders of Artra
Common Stock, the consummation by Artra of the transactions described herein has
been duly authorized by all requisite corporate action. This Agreement
constitutes, and all agreements and documents described herein (when executed
and delivered pursuant hereto for value received) will constitute, the valid and
legally binding obligations of Artra, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.

3.3 Capitalization. The authorized capital stock of Artra consists of
20,000,000 shares of Artra Common Stock and 2,000,000 shares of Artra Preferred
Stock. As of February 17, 1999, there were 7,975,206 shares of Artra Common
Stock and 1,849.34 shares of Artra Preferred Stock issued and outstanding, plus
494,017 shares of Artra Common Stock held in Artra's treasury. Since such date,
no

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additional shares of capital stock of Artra have been issued, except pursuant to
Artra's 1995 stock option and 1996 disinterested director stock option plan (the
"Artra Option Stock Plans"). Except as set forth in the Artra Disclosure Letter,
Artra does not have any outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of Artra on any matter. All such issued and outstanding shares
of Artra Common Stock and Artra Preferred Stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights. Except as
described in this Agreement and as set forth in the Artra Disclosure Letter,
there are not at the date of this Agreement any existing options, warrants,
calls, subscriptions, convertible securities, or other rights, agreements or
commitments that obligate Artra or any of its Subsidiaries to issue, transfer or
sell any shares of capital stock of Artra or any of its Subsidiaries (other than
under the Artra Option Plans).

3.4 Subsidiaries. Except as set forth in the Artra Disclosure Letter,
Artra owns directly or indirectly each of the outstanding shares of capital
stock of each of its Subsidiaries (or other ownership interests having by their
terms ordinary voting power to elect a majority of directors or others
performing similar functions with respect to such Subsidiary). Each of the
outstanding shares of capital stock of each of such Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and is owned, directly
or indirectly, by Artra, free and clear of all liens, pledges, security
interests, claims or other encumbrances other than liens imposed by local law
which are not material. The following information for each such Subsidiary has
been previously made available to WWWX, if requested and if applicable: (i) its
name and jurisdiction of incorporation or organization; (ii) its authorized
capital stock or share capital; and (iii) the number of issued and outstanding
shares of capital stock or share capital.

3.5 Other Interests. Except as set forth in the Artra Disclosure Letter
and for interests in the Artra Subsidiaries, neither Artra nor any Artra
Subsidiary owns directly or indirectly any interest or investment (whether
equity or debt) in any corporation, partnership, joint venture, business, trust
or entity (other than (i) passive investments in securities in the ordinary
course of business and corporate partnering, development, cooperative marketing
and similar undertakings and arrangements entered into in the ordinary course of
business and (ii) other investments of less than $1,000,000).

3.6 No Conflict; Required Filings and Consents.

(a) Except as set forth in the Artra Disclosure Letter: the execution and
delivery of this Agreement by Artra does not, and the consummation by Artra of
the transactions described herein will not, (i) conflict with or violate its
articles of incorporation or by-laws, (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Artra or any Artra
Subsidiary or by which any property or asset of Artra or any Artra Subsidiary is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, result in the loss of a material benefit under, or give to others any
right of purchase or sale, or any right of termination, amendment, acceleration,
increased payments or cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of Artra or any Artra Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Artra or
any Artra Subsidiary is a party or by which Artra or any Artra Subsidiary or any
property or asset of Artra or any Artra Subsidiary is bound or affected, in each
case except for any such conflicts, defaults or violations that would not,
individually or in the aggregate, have an Artra Material Adverse Effect. Artra
and its Subsidiaries have obtained all licenses, permits and other
authorizations and have taken all actions required by applicable law or
governmental regulations in connection with their business as now conducted,
except where the failure to obtain any such item or to take any such action
would not have, individually or in the aggregate, an Artra Material Adverse
Effect.

(b) The execution and delivery of this Agreement by Artra do not, and the
performance of this Agreement and the consummation by Artra of the transactions
described herein will not require any consent, approval, authorization or permit
of, or filing with or notification to any Governmental Entity, except for (i)
applicable requirements, if any, of the Securities Act, the Exchange Act, state
securities

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laws and state takeover laws, and the NYSE, (ii) filing of appropriate merger
documentation as Pennsylvania law shall require, and (iii) applicable
requirements of the Code and state and local tax laws.

3.7 SEC Documents.

(a) Artra has filed all forms, reports and documents required to be filed
by it with the Securities and Exchange Commission (the "SEC") since December 31,
1996 (collectively, the "Artra Reports"). As of their respective dates, the
Artra Reports, and any such reports, forms and other documents filed by Artra
with the SEC after the date of this Agreement (i) complied, or will comply, as
to form in all material respects with the applicable requirements of the
Securities Act, the Exchange Act, and the rules and regulations thereunder and
(ii) did not, or will 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 made therein, in the light of the circumstances under which they
were made, not misleading. The representation in clause (ii) of the preceding
sentence shall not apply to any misstatement or omission in any Artra Report
filed prior to the date of this Agreement that was superseded by a subsequent
Artra Report filed prior to the date of this Agreement that specifically
corrected such misstatement or omission in the applicable Artra Report.

(b) Each of the consolidated balance sheets included in or incorporated by
reference into the Artra Reports (including the related notes and schedules)
fairly presents the consolidated financial position of Artra and its
Subsidiaries as of its date, and each of the consolidated statements of income,
retained earnings and cash flows included in or incorporated by reference into
the Artra Reports (including any related notes and schedules) fairly presents
the results of operations, retained earnings or cash flows, as the case may be,
of Artra and its Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments that would
not be material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein. Neither Artra nor any of its Subsidiaries has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on, or reserved
against in, a balance sheet of Artra or in the notes thereto, prepared in
accordance with generally accepted accounting principles consistently applied,
except for (i) liabilities and obligations that were reserved on or reflected in
(including the notes to), the consolidated balance sheet of Artra as of December
31, 1998, (ii) liabilities arising in the ordinary course of business since
December 31, 1998, and (iii) liabilities or obligations which would not,
individually or in the aggregate, have an Artra Material Adverse Effect.

3.8 Title to Properties. Except as set forth in the Artra Disclosure
Letter, Artra and each of the Artra Subsidiaries owns outright, and has good and
marketable title to, all of its assets, free and clear of all liens, pledges,
mortgages, security interests, conditional sales contracts or other encumbrances
or conflicting claims of any nature whatsoever. None of such assets are subject
to restrictions with respect to the transferability thereof and Artra's title
thereto will not be affected in any way by the transactions described in the
Agreement. Neither Artra nor any of its Subsidiaries owns any real property or
any interest in real property.

3.9 Absence of Undisclosed Liabilities. Neither Artra nor any Artra
Subsidiary has any liabilities, obligations or guaranties accrued, absolute,
contingent or otherwise, except as disclosed in the Artra Disclosure Letter or
the Artra Reports, none of which is material and adverse.

3.10 Material Contracts. The Artra Disclosure Letter contains a true and
correct list of each contract, agreement, commitment or obligation (a) which
involves or may involve the payment to or from Artra or any Artra Subsidiary of
amounts in excess of $100,000 per year, (b) any license, franchise or
distribution agreement, which involves or may involve payments to or from Artra
or any Artra Subsidiary in excess of $100,000 per year, (c) any lease of
tangible personal property, which involves or may involve payments to or from
Artra or any Artra Subsidiary in excess of $100,000 per year and (d) any
contract between Artra or any of its Subsidiaries and any affiliate of Artra or
any of the Artra Subsidiaries (collectively the "Artra Material Contracts").
Each of the Artra Material Contracts constitutes a valid and binding obligation
of the parties thereto, is in full force and effect and will continue in full
force and effect

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following the consummation of the transactions described herein and thereby, in
each case without breaching the terms thereof or resulting in the forfeiture or
impairment of any rights thereunder and without the consent, approval or act of,
or the making of any filing with, any other party (except as set forth in the
Artra Disclosure Letter). Neither Artra nor any Artra Subsidiary is in, or to
the knowledge of Artra alleged to be in, breach or default under, nor is there
or is there alleged to be any basis for termination of, any Artra Material
Contract and, to the knowledge of Artra, no other party to any Artra Material
Contract has breached or defaulted thereunder, and no event has occurred and no
condition or state of facts exists which, with the passage of time or the giving
of notice or both, would constitute such a default or breach by Artra, any Artra
Subsidiary or, to the knowledge of Artra, by any such other party. Neither Artra
nor any Artra Subsidiary is currently renegotiating any Artra Material Contract
or paying liquidated damages in lieu of the performance thereunder.

3.11 Litigation. Except as set forth in the Artra Disclosure Letter, there
are no actions, suits or proceedings pending against Artra or any Artra
Subsidiaries or, to the knowledge of Artra, threatened against Artra or the
Artra Subsidiaries, at law or in equity, or before or by any federal or state
commission, board, bureau, agency or instrumentality, that are reasonably likely
to have an Artra Material Adverse Effect.

3.12 Absence of Certain Changes. Except as specifically described in this
Agreement or set forth in the Artra Disclosure Letter, since December 31, 1998,
there has not been any: (i) Artra Material Adverse Effect; (ii) declaration,
setting aside or payment of any dividend or other distribution with respect to
Artra's capital stock (other than regular quarterly cash dividends including any
increase thereof consistent with past practice); (iii) material change in
Artra's financial condition, or (iv) material change in Artra's accounting
principles, practices or methods.

3.13 Taxes.

(a) Each of Artra and its Subsidiaries has filed all material tax returns
and reports required to be filed by it, or requests for extensions to file such
returns or reports have been timely filed and granted and have not expired, and
all tax returns and reports are complete and accurate in all respects, except to
the extent that such failures to file, have extensions granted that remain in
effect or be complete and accurate in all respects, as applicable, individually
or in the aggregate, would not have an Artra Material Adverse Effect. Artra and
each of the Artra Subsidiaries has paid (or Artra has paid on its behalf) all
taxes shown as due on such tax returns and reports. The most recent financial
statements contained in the Artra Reports reflect an adequate reserve for all
taxes payable by Artra and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements, and no
deficiencies for any taxes have been proposed, asserted or assessed against
Artra and its Subsidiaries that are not adequately reserved for, except for
inadequately reserved taxes and inadequately reserved deficiencies that would
not, individually or in the aggregate, have an Artra Material Adverse Effect. No
requests for waivers of the time to assess any taxes against Artra or any Artra
Subsidiary have been granted or are pending, except for requests with respect to
such taxes that have been adequately reserved for in the most recent financial
statements contained in the Artra Reports, or, to the extent not adequately
reserved, the assessment of which would not, individually or in the aggregate,
have an Artra Material Adverse Effect.

(b) As used in this Section 3.13, "taxes" shall include all federal, state,
local and foreign income, franchise, property, sales, use, excise and other
taxes, including obligations for withholding taxes from payments due or made to
any other Person or entity and any interest, penalties or additions to tax.

3.14 Employee Benefit Plans. Except as described in the Artra Disclosure
Letter: (i) all employee benefit plans or programs maintained for the benefit of
the current or former employees or directors of Artra or any of its Subsidiaries
that are sponsored, maintained or contributed to by Artra or any of its
Subsidiaries, or with respect to which Artra or any of its Subsidiaries has any
liability, including without limitation any such plan that is an "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), are in compliance with all applicable
requirements of law, including ERISA and the Code, and (ii) neither Artra nor
any of its Subsidiaries has any liabilities or obligations with respect to any
such employee benefit plans or programs, whether accrued, contingent or

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otherwise, nor to the knowledge of Artra are any such liabilities or obligations
expected to be incurred. The execution of, and performance of the transactions
described in this Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any benefit plan,
policy, arrangement or agreement or any trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any employee. The only severance agreements or
severance policies applicable to Artra or any of its Subsidiaries are the
agreements and policies specifically referred to in the Artra Disclosure Letter.

3.15 Labor Matters. There is no labor strike, labor dispute, work
slowdown, stoppage or lockout actually pending, or to the knowledge of Artra,
threatened against or affecting Artra or any of its Subsidiaries. There is no
unfair labor practice or labor arbitration proceeding pending or, to the
knowledge of Artra, threatened against Artra or any of its Subsidiaries relating
to their business.

3.16 Insurance. The Artra. Disclosure Letter contains a complete and
accurate list and description of all policies of fire, liability, product
liability and other forms of insurance presently in effect insuring Artra, its
Subsidiaries and their respective assets.

3.17 No Brokers. Artra has not entered into any contract, arrangement or
understanding with any person or firm that may result in the obligation of
Artra, the Acquisition Corp., WWWX or the Merger Sub to pay any finder's fee,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
described herein except as set forth in the Artra Disclosure Letter. Other than
the foregoing arrangements, Artra is not aware of any claim for payment of any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions described herein.

ARTICLE 4

COVENANTS

4.1 Alternative Proposals. Prior to the Effective Time, each of WWWX and
the Acquisition Corp. agrees (a) that neither it nor any of its Subsidiaries
shall, nor shall it or any of its Subsidiaries permit their respective officers,
directors, employees, agents and representatives (including, without limitation,
any investment banker, attorney or accountant retained by it or any of its
Subsidiaries) to, initiate, solicit or encourage, directly or indirectly, any
inquiries or the making or implementation of any proposal or offer (including,
without limitation, any proposal or offer to its shareholders) with respect to a
merger, acquisition, consolidation or similar transaction involving, and
purchase of (i) all or any significant portion of the assets of the Acquisition
Corp. or of any Subsidiary of the Acquisition Corp., (ii) any of the outstanding
shares of Acquisition Corp. Common Stock or Preferred Stock or (iii) any of the
outstanding shares of the capital stock or other equity interest of any
Subsidiary of the Acquisition Corp. (any such proposal or offer being
hereinafter referred to as an "Alternative Proposal") or engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Alternative Proposal
(excluding the Merger described in this Agreement), or otherwise facilitate any
effort or attempt to make or implement an Alternative Proposal; and (b) that it
will notify Artra immediately if any such inquiries or proposals are received
by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, it; provided, however,
that nothing contained in this Section 4.1 shall prohibit the Board of Directors
of WWWX from furnishing information to or entering into discussions or
negotiations with, any person or entity that makes an unsolicited bona fide
Alternative Proposal, if, and only to the extent that, (i) the Board of
Directors of WWWX, determines in good faith that such action is required for the
Board of Directors to comply with its fiduciary duties to shareholders imposed
by law, (ii) prior to furnishing such information to, or entering into
discussions or negotiations with, such person or entity, WWWX provides written
notice to Artra to the effect that it is furnishing information to, or entering
into discussions or negotiations with, such person or entity, and (iii) WWWX
keeps Artra informed of the status and all material information with respect to

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any such discussions or negotiations. Nothing in this Section 4.1 shall (x)
permit WWWX or Artra to terminate this Agreement (except as specifically
provided in Article 6 hereof), (y) permit WWWX or the Acquisition Corp. to enter
into any agreement with respect to an Alternative Proposal for as long as this
Agreement remains in effect (it being agreed that for as long as this Agreement
remains in effect, neither WWWX nor the Acquisition Corp. shall enter into any
agreement with any person that provides for, or in any way facilitates, an
Alternative Proposal (other than a confidentiality agreement in customary
form)), or (z) affect any other obligation of WWWX, the Acquisition Corp. or the
Merger Sub under this Agreement.

4.2 Interim Operations.

(a) Prior to the Effective Time, except as may be set forth in the
Acquisition Corp. Disclosure Letter or as described in any other provision of
this Agreement, unless Artra has consented in writing thereto, WWWX: (i) shall,
and shall cause the Acquisition Corp. and each of its Subsidiaries to conduct
their respective operations according to their usual, regular and ordinary
course; (ii) shall use its reasonable efforts, and shall cause the Acquisition
Corp. and each of its Subsidiaries to use its reasonable efforts, to preserve
intact their assets and business organizations and goodwill, keep available the
services of their respective officers and employees and maintain satisfactory
relationships with those persons having business relationships with them; (iii)
shall not amend the Articles of Incorporation or Bylaws or comparable governing
instruments of the Acquisition Corp. or any of its Subsidiaries; (iv) shall
promptly notify Artra of any material breach of any representation or warranty
contained herein or any WWWX Material Adverse Effect; (v) shall promptly deliver
to Artra true and correct copies of all monthly financial statements of WWWX,
the Acquisition Corp. and each of its Subsidiaries promptly after the end of
each month; (vi) shall not permit the Acquisition Corp. or any of its
Subsidiaries to (x) issue any shares of its capital stock, effect any stock
split or otherwise change its capitalization as it existed on the date hereof,
(y) grant, confer or award any option, warrant, conversion right or other right
to acquire any shares of its capital stock or grant, confer or award any bonuses
or other forms of cash incentives to any officer, director or key employee
except consistent with past practice or (z) increase any compensation under any
employment agreement with any of its present or future officers, directors or
employees, except for normal increases consistent with past practice, grant any
severance or termination pay to, or enter into any employment or severance
agreement with any officer or director or amend any such agreement in any
material respect, adopt any new employee benefit plan (including any stock
option, stock benefit or stock purchase plan) or amend any existing employee
benefit plan in any material respect; (vii) shall not permit the Acquisition
Corp. or any of its Subsidiaries, to (x) declare, set aside or pay any dividend
or make any other distribution or payment with respect to any shares of the
Acquisition Corp.'s capital stock or other ownership interests or (y) directly
or indirectly redeem, purchase or otherwise acquire any shares of its capital
stock or capital stock of any of its Subsidiaries, or make any commitment for
any such action; (viii) shall not permit the Acquisition Corp. or any of its
Subsidiaries to, sell, lease or otherwise dispose of any of its assets
(including capital stock of Subsidiaries) except in the ordinary course of
business, or to acquire any business or assets; (ix) shall not, and shall not
permit the Acquisition Corp. or any of its Subsidiaries to incur any material
amount of indebtedness for borrowed money or make any loans, advances or capital
contributions to, or investments in, any other person other than pursuant to the
Loan Agreement, or issue or sell any debt securities, other than borrowings
under existing lines of credit in the ordinary course of business; (x) shall not
permit the Acquisition Corp. or any of its Subsidiaries to, authorize or make
capital expenditures except as described in the Loan Agreement; (xi) shall not
permit the Acquisition Corp. or any of its Subsidiaries to mortgage or otherwise
encumber or subject to any lien any of their properties or assets except as
would not be reasonably likely to have an Acquisition Corp. Material Adverse
Effect; (xii) shall not, and shall not permit the Acquisition Corp. or any of
its Subsidiaries to, make any change to its accounting (including tax
accounting) methods, principles or practices, except as may be required by
generally accepted accounting principles and except, in the case of tax
accounting methods, principles or practices, in the ordinary course of business
of the Acquisition Corp. or any of its Subsidiaries; and (xiii) shall not permit
the Acquisition Corp. or any of its Subsidiaries to enter into any joint
venture, production or marketing arrangements without consulting with Artra
prior thereto.

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(b) Prior to the Effective Time, except as set forth in the Artra
Disclosure Letter or as described in this Agreement, unless WWWX has consented
in writing thereto, Artra: (i) shall not issue any shares of its capital stock
(other than pursuant to any Artra Stock Option Plans) or effect any stock split
of its capital stock; (ii) shall promptly notify the Acquisition Corp. of any
breach of any representation or warranty contained herein or any Artra Material
Adverse Effect; and (iii) shall promptly deliver to WWWX true and correct copies
of any report, statement or schedule filed with the SEC subsequent to the date
of this Agreement.

4.3 Meetings of Stockholders. Each of Artra, WWWX and the Acquisition
Corp. shall take all action necessary in accordance with applicable law and its
Articles or Certificate of Incorporation and Bylaws to convene a meeting of its
shareholders as promptly as practicable to consider and vote upon the approval
of this Agreement, the Plan of Merger and the Merger. The Board of Directors of
each of Artra, WWWX and the Acquisition Corp. shall recommend such approval, and
Artra, WWWX and the Acquisition Corp. shall each take all lawful action to
solicit such approval, including, without limitation, to the extent applicable
to each, timely mailing the Proxy Statement/Prospectus (as defined in Section
4.7); provided, however, that such recommendation or solicitation is subject to
any action (including any withdrawal or change of its recommendation) taken by,
or upon authority of, the Board of Directors of Artra, WWWX or the Acquisition
Corp., as the case may be, in the exercise of its good faith judgment as to its
fiduciary duties to its shareholders imposed by law. As used herein, the
"approval" of the WWWX shareholders shall mean the approval by at least a
majority in interest of all disinterested WWWX shareholders of record entitled
to vote at a duly convened meeting, unless a greater number is otherwise
required by law. "Disinterested WWWX shareholders" shall mean all shareholders
of record other than Robert D. Kohn and any person or entity directly or
indirectly, through one or more intermediaries, controlled by Robert D. Kohn,
and any entity under common control with any such entity controlled by Robert D.
Kohn.

4.4 Filings, Other Action. Subject to the terms and conditions herein
provided, Artra and WWWX shall: (a) use all reasonable efforts to cooperate with
one another in (i) determining which filings are required to be made prior to
the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
governmental or regulatory authorities of the United States, the several states
and foreign jurisdictions in connection with the execution and delivery of this
Agreement and the consummation of the transac-tions described herein and (ii)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (b) use all reasonable efforts to take, or cause
to be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions described in this Agreement. If, at any time after the Effective
Time, any further action is necessary or desirable to carry out the purpose of
this Agreement, the proper officers and directors of the Artra, WWWX and the
Acquisition Corp. shall take all such necessary action.

4.5 Inspection of Records. From the date hereof to the Effective Time,
each of Artra and WWWX shall: (i) allow all designated officers, attorneys,
accountants and other representatives of the other reasonable access at all
reasonable times to the offices, records and files, correspondence, audits and
properties, as well as to all information relating to commitments, contracts,
titles and financial position, or otherwise pertaining to the business and
affairs, of Artra and WWWX and their respective Subsidiaries, as the case may
be, (ii) furnish to the other, the other's counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and other
information as such persons may reasonably request and (iii) instruct their
respective employees, counsel and financial advisors to cooperate with the
investigation of the respective businesses of each.

4.6 Publicity. The initial press release relating to this Agreement shall
be a joint press release approved by both parties and thereafter Artra and WWWX
shall, subject to their respective legal obligations (including requirements of
stock exchanges and other similar regulatory bodies), consult with each other,
and use reasonable efforts to agree upon the text of any press release, before
issuing any such press release or otherwise making public statements with
respect to the transactions described herein and

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in making any filings with any federal or state governmental or regulatory
agency or with any national securities exchange with respect thereto.

4.7 Registration Statements. Artra and WWWX shall cooperate and promptly
prepare and the Acquisition Corp. shall file with the SEC as soon as practicable
a Registration Statement on Form S-4 (the "Form S-4") under the Securities Act,
with respect to the Acquisition Corp. Common Stock issuable in the Merger, which
shall also serve as the proxy statement with respect to the meeting of the
shareholders of Artra and WWWX in connection with the Merger (the "Proxy
Statement/Prospectus"). In addition, Artra and WWWX shall cooperate and promptly
prepare a Registration Statement or Form S-1 (the "Form S-1") under the
Securities Act, or such other form as may be permitted under applicable SEC
regulations, with respect to the reoffer and resale of shares of Acquisition
Corp. Common Stock presently held by WWWX and ETCO. The respective parties will
cause the Proxy Statement/ Prospectus, the Form S-4 and the Form S-1 to comply
as to form in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the rules and regulations thereunder. The
Acquisition Corp. shall use all reasonable efforts, and WWWX and Artra shall
cooperate with the Acquisition Corp., to have the Form S-4 and the Form S-1
declared effective by the SEC as promptly as practicable, to keep the Form S-4
and the Form S-1 effective as long as is necessary to consummate the Merger and
to keep the Form S-1 effective until the earlier of the date the shares are sold
or the date such shares may be sold pursuant to Rule 144 or similar provision
under the Securities Act. The Acquisition Corp. shall, as promptly as
practicable, provide copies of any written comments received from the SEC with
respect to the Form S-4 or the Form S-1 to Artra and WWWX and advise Artra and
WWWX of any verbal comments with respect to the Form S-4 or the Form S-1
received from the SEC. The Acquisition Corp. shall use its best efforts to
obtain, prior to the effective date of the Form S-4 or the Form S-1, all
necessary state securities law or "blue sky" permits or approvals required to
carry out the transactions described in this Agreement. The Acquisition Corp.
agrees that the Proxy Statement/ Prospectus and each amendment or supplement
thereto at the time of mailing thereof and at the time of the meetings of
shareholders of Artra and WWWX, or, in the case of the Form S-4 or the Form S-1
and each amendment or supplement thereto, at the time it is filed or becomes
effective, will not include 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 light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to state a
material fact was made by the Acquisition Corp. in reliance upon and in
conformity with written information concerning Artra furnished to the
Acquisition Corp. by Artra specifically for use in the Proxy
Statement/Prospectus or the Form S-1 or any amendment or supplement thereto.
Artra agrees that the written information concerning it provided by it for
inclusion in the Proxy Statement/Prospectus and each amendment or supplement
thereto, at the time of mailing thereof and at the time of the meeting of
shareholders of Artra, or, in the case of written information concerning Artra
provided by it for inclusion in the Form S-4 or the Form S-1 or any amendment or
supplement thereto, at the time it is filed or becomes effective, will not
include 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
light of the circumstances under which they were made, not misleading. No
amendment or supplement to the Proxy Statement/ Prospectus or the Form S-4 or
the Form S-1 will be made by the Acquisition Corp., WWWX or Artra without the
approval of the other parties. The Acquisition Corp. will advise Artra and WWWX
promptly of the times when the Form S-4 and the Form S-1 have become effective
or any supplement or amendment has been filed, the issuance of any stop order,
the suspension of the qualification of the Acquisition Corp. Common Stock
issuable in connection with the Merger for offering or sale in any jurisdiction,
or any request by the SEC for amendment of the Proxy Statement/Prospectus, the
Form S-4 or the Form S-1 or comments thereon and responses thereto or requests
by the SEC for additional information.

4.8 Listing Application. The Acquisition Corp. shall promptly prepare and
submit to the NYSE a listing application covering the shares of Acquisition
Corp. Common Stock issuable in the Merger, and shall use reasonable efforts to
obtain, prior to the Effective Time, approval for such listing of such Acquired
Corp. Common Stock, subject to official notice of issuance. If the shares of the
Acquisition

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Corp. Common Stock issuable in the Merger are not approved for listing on the
NYSE prior to the Effective Time, Artra shall prepare and file an application
with the National Association of Securities Dealers, Inc. to list the shares of
the Acquisition Corp. Common Stock on the National Association of Securities
Dealers Automated Quotation Service National Market System ("NASDAQ/NMS"), and
shall use all reasonable efforts to obtain, prior to the Effective Time,
approval for such listing of such Acquisition Corp. Common Stock on the
NASDAQ/NMS.

4.9 Further Action. Each party hereto shall, subject to the fulfillment at
or before the Effective Time of each of the conditions of performance set forth
herein or the waiver thereof, perform such further acts and execute such
documents as may be reasonably required to effect the Merger.

4.10 Affiliate Letters. At least 30 days prior to the Closing Date, Artra
shall deliver to the Acquisition Corp. a list of names and addresses of those
persons who were, in Artra's reasonable judgment, at the record date for its
shareholders' meeting to approve the Merger, "affiliates" (each such person, an
"Affiliate") of Artra within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act. Artra shall use all reasonable
efforts to deliver or cause to be delivered to the Acquisition Corp., prior to
the Closing Date, from each of the Affiliates of Artra identified in the
foregoing list, an Affiliate Letter in form and substance reasonably
satisfactory to the Acquisition Corp. The Acquisition Corp. shall be entitled to
place legends as specified in such Affiliate Letters on the certificates
evidencing any Acquisition Corp. Common Stock to be received by such Affiliates
pursuant to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for the Acquisition Corp. Common Stock,
consistent with the terms of such Affiliate Letters.

4.11 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
described herein shall be paid by the party incurring such expenses except as
expressly provided herein and except that (a) the filing fee in connection with
the filing of the Form S-4 or Proxy Statement/Prospectus with the SEC and (b)
the expenses incurred in connection with printing and mailing the Form S-4 and
the Proxy Statement/Prospectus, shall be borne by Artra.

4.12 Takeover Statute. If any "fair price", "moratorium", "control share
acquisition" or other form of antitakeover statute or regulation shall become
applicable to the transactions described herein, the Acquisition Corp. and the
members of the Board of Directors of the Acquisition Corp. shall grant such
approvals and take such actions as are reasonably necessary so that the
transactions described herein may be consummated as promptly as practicable on
the terms described herein and thereby and otherwise act to eliminate or
minimize the effects of such statute or regulation on the transactions described
herein and thereby.

4.13 Conveyance Taxes. Artra and WWWX shall cooperate in the preparation,
execution and filing of all returns, questionnaires, applications or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions described in this Agreement that are required
or permitted to be filed on or before the Effective Time.

4.14 Entrade Funding. From and after the Effective Time, Artra shall
commit to provide the Acquisition Corp. with guaranteed funding for the working
capital needs of Entrade, in an amount equal to at least $4,000,000, with credit
for all working capital contributions to Entrade funded by the loans from Artra
made pursuant to the terms of the Loan Agreement, as the same may be amended
from time to time.

4.15 Section 351 Qualification. None of the parties hereto nor any of
their respective Subsidiaries shall knowingly take any action that may
jeopardize the qualification of the Merger as an exchange governed by Section
351 of the Code.

4.16 "Lock-Up" Provisions. WWWX agrees that, except as set forth herein,
commencing on the date hereof and continuing until the first anniversary of the
Effective Time, it shall not: (a) directly or indirectly assign, transfer,
offer, sell, agree to sell, make any short sale, pledge, hypothecate or
otherwise

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dispose (collectively, a "Disposition") of any shares of Acquisition Corp.
Common Stock owned by WWWX on the date hereof ("WWWX Stock"), or (b) engage in
any hedging or other transactions with respect to its WWWX Stock that may have a
material impact on the market price of its WWWX Stock, or that is designed to
result in a Disposition of its WWWX Stock, even if such WWWX Stock would be
disposed of by someone other than WWWX, including, without limitation, any short
sale (whether or not against the box) or any purchase, sale, or grant of any
right (including, without limitation, any put or call option) with respect to
any of its WWWX Stock or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from its WWWX Stock. Notwithstanding the foregoing, from and
after the Effective Time, WWWX shall be entitled to (a) make bona fide pledges
of its WWWX Stock to an institutional lender or nationally recognized brokerage
house, and any such pledgee shall have the right to liquidate such shares in the
exercise of any remedies available to it under its loan arrangements with WWWX,
without regard to the restrictions set forth herein, and (b) make a one-time
distribution of up to 25% of its WWWX Stock to the shareholders of WWWX, pro
rata in accordance with their respective stock interests in WWWX as determined
by the WWWX Board of Directors.

ARTICLE 5

CONDITIONS

5.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:

(a) This Agreement and the transactions described herein shall have
been approved in the manner required by applicable law or by the applicable
regulations of any stock exchange or other regulatory body, as the case may
be, by the holders of the issued and outstanding shares of capital stock of
Artra and WWWX.

(b) None of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction that prohibits the
consummation of the transactions described in this Agreement. In the event
any such order or injunction shall have been issued, each party agrees to
use its reasonable efforts to have any such injunction lifted.

(c) The Form S-4 shall have become effective and shall be effective at
the Effective Time, and no stop order suspending effectiveness of the Form
S-4 shall have been issued, no action, suit, proceeding or investigation by
the SEC to suspend the effectiveness thereof shall have been initiated and
be continuing, or, to the knowledge of the Acquisition Corp, threatened,
and all necessary approvals under state securities laws relating to the
issuance or trading of the Acquisition Corp. Common Stock and Preferred
Stock to be issued to the Artra shareholders in connection with the Merger
shall have been received.

(d) All consents, authorizations, orders and approvals of (or filings
or registrations with) any governmental commission, board or other
regulatory 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 Merger and any other documents required to
be filed after the Effective Time and except where, in the opinion of Artra
or WWWX, as the case may be, 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, results of operations or
financial condition of Artra and the Acquisition Corp. (and their
respective Subsidiaries), taken as a whole, following the Effective Time.

(e) The Acquisition Corp. Common Stock to be issued to the Artra
shareholders in connection with the Merger shall have been approved for
listing on the NYSE, subject only to official notice of issuance, or if
such listing has not been approved, the Acquisition Corp. shall have
applied for and be diligently pursuing listing on the NASDAQ/NMS.

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(f) The Employment Agreements between Artra and Robert D. Kohn,
Benjamin Kafka, Mark Quinn and Gary Lerman shall have been assigned by
Artra to, and amended by, the Acquisition Corp.

(g) The Board of Directors of the Acquisition Corp. shall have been
elected in accordance with Section 1.4 hereof, and the Articles of
Incorporation and By-Laws of the Acquisition Corp. shall have been amended
to the extent required to cause them to be in compliance with any then
applicable provision or requirement of the PBCL or the NYSE (or, if
applicable, the NASDAQ/NMS).

5.2 Conditions to Obligation of WWWX, the Acquisition Corp. and the Merger
Sub to Effect the Merger. The obligation of WWWX and the Acquisition Corp. to
effect the Merger shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions:

(a) Artra shall have performed in all material respects its agreements
contained in this Agreement and the Loan Agreement required to be performed
on or prior to the Closing Date, the representations and warranties of
Artra contained in this Agreement and in any document delivered in
connection herewith shall be true and correct as of the Closing Date,
except (i) for changes specifically permitted by this Agreement and (ii)
that those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date, and WWWX and
the Acquisition Corp. shall have received a certificate of the President or
a Vice President of Artra, dated the Closing Date, certifying to such
effect.

(b) From the date of this Agreement through the Effective Time, there
shall not have occurred any change in the financial condition, business or
operations of Artra and its Subsidiaries, taken as a whole, that would have
or would be reasonably likely to have an Artra Material Adverse Effect.

5.3 Conditions to Obligation of Artra to Effect the Merger. The obligation
of Artra to effect the Merger shall be subject to the fulfillment at or prior to
the Closing Date of the following conditions:

(a) Each of WWWX, the Acquisition Corp. and the Merger Sub shall have
performed in all material respects its respective agreements contained in
this Agreement required to be performed on or prior to the Closing Date,
the representations and warranties of WWWX, the Acquisition Corp. and the
Merger Sub contained in this Agreement and in any document delivered in
connection herewith shall be true and correct as of the Closing Date,
except (i) for changes specifically permitted by this Agreement and (ii)
that those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date, and Artra
shall have received a certificate of the President or a Vice President of
WWWX, the Acquisition Corp. and the Merger Sub, dated the Closing Date,
certifying to such effect.

(b) From the date of this Agreement through the Effective Time, there
shall not have occurred any change in the financial condition, business or
operations of the Acquisition Corp. or any of its Subsidiaries that would
have or would be reasonably likely to have an Acquisition Corp. Material
Adverse Effect.

(c) Artra and the Acquisition Corp. shall have received written
affirmations from Global Trade Group, Ltd. ("GTG") and all of the
shareholders of GTG ("GTG Shareholders") that their representations,
warranties, covenants, and indemnifications set forth in the Acquisition
Agreement dated January 29, 1999 between GTG, the GTG Shareholders and
WWWX, shall inure to the benefit of and be enforceable by Artra and the
Acquisition Corp. as if originally given to Artra and the Acquisition Corp.

(d) Artra and the Acquisition Corp. shall have received written
affirmations from Positive Asset Remarketing, Inc. ("PAR") and all of the
shareholders of PAR ("PAR Shareholders") that their representations,
warranties, covenants, and indemnifications set forth in the Acquisition
Agreement dated January 29, 1999 between PAR, the PAR Shareholders and
WWWX, shall inure to the benefit of and be enforceable by Artra and the
Acquisition Corp. as if originally given to Artra and the Acquisition Corp.

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(e) The Acquisition Corp. shall have caused AsseTrade to be converted
into or recreated as a Delaware limited liability company, in accordance
with the terms and conditions of an operating agreement that are reasonably
satisfactory to Artra.

(f) That certain Non-Competition Agreement of even date herewith, by
and between the Acquisition Corp. and Robert D. Kohn, shall be in effect at
the time of the Closing, without modification or amendment, and there shall
have been no default thereunder.

ARTICLE 6

TERMINATION

6.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, before or
after the approval of this Agreement by the shareholders of Artra or WWWX, by
the mutual consent of Artra and WWWX.

6.2 Termination by Either Artra or WWWX. This Agreement may be terminated
and the Merger may be abandoned by action of the Board of Directors of Artra if
(a) the Merger shall not have been consummated by September 30, 1999, or (b) the
approval of either Artra's shareholders or WWWX's shareholders as required by
Section 4.3 shall not have been obtained at a meeting duly convened therefor or
at any adjournment thereof, or (c) a United States federal or state court of
competent jurisdiction or United States federal or state governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions described in this Agreement 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 (c) shall have used all reasonable efforts to remove
such injunction, order or decree; and provided, in the case of a termination
pursuant to clause (a) 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.

6.3 Termination by WWWX. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, before or after the
approval by the shareholders of WWWX referred to in Section 4.3, by action of
the Board of Directors of WWWX, if (a) in the exercise of its good faith
judgment as to fiduciary duties to its shareholders imposed by law, the Board of
Directors of WWWX determines that such termination is required, including by
reason of an Alternative Proposal being made; provided that WWWX shall notify
Artra promptly of WWWX's intention to terminate this Agreement or enter into a
definitive agreement with respect to any Alternative Proposal, but in no event
shall such notice be given less than 48 hours prior to the public announcement
of WWWX's termination of this Agreement, or (b) there has been a breach by Artra
of any representation or warranty contained in this Agreement that would have or
would be reasonably likely to have an Artra Material Adverse Effect, or (c)
there has been a material breach of any of the material covenants or agreements
set forth in this Agreement on the part of Artra, which breach is not curable
or, if curable, is not cured within 30 days after written notice of such breach
is given by WWWX to Artra, or (d) the Board of Directors of Artra shall have
withdrawn or modified in a manner materially adverse to WWWX its approval or
recommendation of this Agreement or the Merger.

6.4 Termination by Artra. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, before or after the
approval by the shareholders of Artra referred to in Section 4.3, by action of
the Board of Directors of Artra, if (a) the Board of Directors of WWWX shall
have withdrawn or modified in a manner materially adverse to Artra its approval
or recommendation of this Agreement or the Merger, or (b) there has been a
breach by WWWX or the Acquisition Corp. of any representation or warranty
contained in this Agreement that would have or would be reasonably likely to
have an Acquisition Corp. Material Adverse Effect, or (c) there has been a
material breach of any of the material covenants or agreements set forth in this
Agreement on the part of WWWX, the Acquisition

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Corp. or the Merger Sub, which breach is not curable or, if curable, is not
cured within 30 days after written notice of such breach is given by Artra to
WWWX.

6.5 Effect of Termination and Abandonment. In the event of termination of
this Agreement and the abandonment of the Merger pursuant to this Article 6, all
obligations of the parties hereto shall terminate, except the obligations of the
parties pursuant to Section 4.11 and except for the provisions of Sections 8.2,
8.3, 8.5, 8.7, 8.8, 8.11, 8.12 and 8.13. In the event of the termination of this
Agreement solely pursuant to clause (b) of Section 6.2 because the requisite
approval of Artra's shareholders shall not have been obtained, all obligations
of WWWX and the Acquisition Corp. to repay the amounts loaned to either or both
of them by Artra under the Loan Agreement shall terminate and the loans made by
Artra to WWWX and to the Acquisition Corp. under the Loan Agreement shall be
forgiven as a "break-up" fee to WWWX and the Acquisition Corp. equal to the
aggregate amount of the Loan as defined in the Loan Agreement. In the event of
the termination of this Agreement solely pursuant to clause (b) of Section 6.2
because the requisite approval of WWWX's shareholders shall not have been
obtained, WWWX and Acquisition Corp. shall be jointly and severally obligated to
pay Artra a "break-up" fee of $2,000,000, payable in cash on the date of such
termination, in addition to their obligation to repay the Loan in full. The
parties acknowledge and agree that the foregoing "break-up" fees represent
reasonable estimates of their respective costs and expenses incurred or to be
incurred in connection with the transactions described in this Agreement.
Moreover, in the event of termination of this Agreement pursuant to Section 6.3
or 6.4, nothing herein shall prejudice the ability of the non-breaching party
from seeking damages from any other party for any willful breach of this
Agreement, including without limitation, reasonable attorneys' fees and the
right to pursue any remedy at law or in equity.

6.6 Extension, Waiver. At any time prior to the Effective Time, any party
hereto, 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.

ARTICLE 7

SURVIVAL OF REPRESENTATIONS AND
WARRANTIES, INDEMNIFICATION

7.1 Survival of Representations and Warranties. All representations,
warranties, covenants, stipulations, certifications, indemnities and agreements
contained herein or in any document delivered pursuant hereto shall survive the
consummation of the transactions described in this Agreement.

7.2 Indemnification.

(a) WWWX, the Acquisition Corp. and the Merger Sub shall defend,
indemnify and hold Artra harmless from and against any and all claims,
liabilities, damages, losses, deficiencies and expenses, including
reasonable attorneys' fees and expenses and costs of suit (individually a
"Loss" and collectively "Losses") arising out of any and all inaccurate
representations and warranties and out of any and all breaches of
covenants, agreements and certifications made by or on behalf of WWWX, the
Acquisition Corp. and/or the Merger Sub in this Agreement or in any
document delivered by any of them hereunder, or arising out of or resulting
from any occurrence with respect to the Acquisition Corp. or any of its
Subsidiaries or assets prior to the Closing Date and not disclosed herein.

(b) Artra shall defend, indemnify and hold WWWX, the Acquisition Corp.
and the Merger Sub harmless from and against any and all Losses arising out
of any and all inaccurate representations and warranties and out of any and
all breaches of covenants and agreements and certifications made by or on
behalf of Artra in this Agreement or in any document delivered by Artra
hereunder, or arising out

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of or resulting from any occurrence with respect to Artra or any of its
Subsidiaries or assets prior to the Closing Date and not disclosed herein.

7.3 Procedure for Claims. A party seeking indemnification under this
Article 7 (an "Indemnified Party") shall give notice of the claim for losses and
a brief explanation of the basis thereof to the party alleged to be responsible
for indemnification hereunder (an "Indemnitor"). The Indemnitor shall promptly
pay the Indemnified Party any amount due under this Article 7. The Indemnified
Party may pursue whatever legal remedies may be available for recovery of the
losses claimed from any Indemnitor.

7.4 Third Party Claims. An Indemnified Party shall give any indemnitor
prompt notice of the institution by a third party of any actions, suits or other
administrative or judicial proceedings if the Indemnified Party would be
entitled to claim indemnification under this Article 7 in connection with any
such action, suit or other proceeding. After such notice, any Indemnitor may, or
if so requested by the Indemnified Party, any Indemnitor shall, participate in
any such action, suit or other proceeding or assume the defense thereof, with
counsel satisfactory to the Indemnified Party; provided, however, that the
Indemnified Party shall have the right to participate at its own expense in the
defense of any such action, suit or other proceeding; and provided, further,
that the Indemnitor shall not consent to the entry of any judgment or enter into
any settlement, except with the written consent of the Indemnified Party, that
(a) fails to include as an unconditional term thereof the giving by the claimant
or plaintiff to the Indemnified Party of a release from all liability in respect
of any such action, suit or other proceeding or (b) grants the claimant or
plaintiff any injunctive relief against the Indemnified Party. Any failure to
give prompt notice under this Section 7.4 shall not bar an Indemnified Party's
right to claim indemnification under this Article 7, except to the extent that
an Indemnified Party shall have been harmed by such failure.

ARTICLE 8

GENERAL PROVISIONS

8.1 Notices. Any notice required to be given hereunder shall be sufficient
if in writing, and sent by facsimile transmission and by courier service (with
proof of service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:

If to Artra:
Artra Group Incorporated
500 Central Avenue
Northfield, IL 60093
Attention: Peter R. Harvey, President and COO
(847) 441-6959
With copies to:
Duane, Morris & Heckscher LLP
One Liberty Place
Philadelphia, PA 19103-7396
Attention: Sheldon M. Bonovitz, Esquire
(215) 979-1020
If to WWWX, the Acquisition Corp. or the Merger Sub:
WorldWide Web NetworX Corporation
300 Atrium Way, Suite 202
Mt. Laurel, NJ 08054
Attention: Robert D. Kohn, President
(609) 627-6893

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With copies to:
Michelle Kramish Kain, Esquire
750 Southeast Third Avenue
Ft. Lauderdale, FL 33316-1153
(954) 768-0158

or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.

8.2 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (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
hereto and their respective successors and 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
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

8.3 Entire Agreement. This Agreement, the Plan of Merger, the Acquisition
Corp. Disclosure Letter, and the Artra Disclosure Letter 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 hereto unless made in writing and signed by all
parties hereto.

8.4 Amendment. This Agreement may be amended by the parties hereto, by
action taken by their respective Boards of Directors, at any time before or
after approval of matters presented in connection with the Merger by the
shareholders of Artra and WWWX, but after any such shareholder approval, no
amendment shall be made which by law requires the further approval of
shareholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.

8.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
its rules of conflict of laws.

8.6 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 hereto.

8.7 Headings. Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.

8.8 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 and partnerships and vice
versa.

8.9 Waivers. 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 hereto 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.

8.10 Incorporation. The Acquisition Corp. Disclosure Letter, the Artra
Disclosure Letter, and the Plan of Merger referred to herein are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.

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8.11 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.

8.12 Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was 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 located in the Commonwealth of
Pennsylvania, this being in addition to any other remedy to which they are
entitled at law or in equity.

8.13 Subsidiaries. As used in this Agreement, the word "Subsidiary" when
used with respect to any party means any corporation or other organization,
whether incorporated or unincorporated, of which such party directly or
indirectly owns or controls at least one-half of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization, or any organization of which such party is a
general partner or manager.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year first written
above.

ARTRA GROUP INCORPORATED

By: /s/ PETER R. HARVEY
------------------------------------
Title: President

WORLDWIDE WEB NETWORX
CORPORATION

By: /s/ ROBERT D. KOHN
------------------------------------
Title: President

NA ACQUISITION CORP.

By: /s/ ROBERT D. KOHN
------------------------------------
Title: President

WWWX MERGER SUBSIDIARY, INC.

By: /s/ ROBERT D. KOHN
------------------------------------
Title: President

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AMENDMENT TO AGREEMENT AND PLAN OF MERGER

THIS AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment") dated as
of April 30, 1999 is made by and among Artra Group Incorporated ("Artra"), a
Pennsylvania corporation; WorldWide Web NetworX Corporation ("WWWX"), a Delaware
corporation; NA Acquisition Corp. (the "Acquisition Corp."), a Pennsylvania
corporation and a wholly owned subsidiary of WWWX; and WWWX Merger Subsidiary,
Inc. (the "Merger Sub"), a Pennsylvania corporation and a wholly owned
subsidiary of the Acquisition Corp.

BACKGROUND

A. The parties to this Amendment entered into that certain Agreement and
Plan of Merger dated as of February 23, 1999 (the "Merger Agreement"), pursuant
to which Merger Sub will be merged with and into Artra, subject to the terms and
conditions thereof (the "Merger").

B. The Merger Agreement provides that each party's obligation to effect the
Merger is subject to, inter alia, the approval of the holders of the issued and
outstanding shares of capital stock of WWWX (the "WWWX Shareholders"), and
further provides that the Board of Directors of WWWX must take all necessary
action to convene a meeting of the WWWX Shareholders to consider and vote upon
approval of the Merger Agreement.

C. Following the execution and delivery of the Merger Agreement, Delaware
counsel for WWWX issued its written opinion to WWWX, that no vote or other
approval of the WWWX Shareholders is required under Delaware law in connection
with the Merger Agreement. The parties wish to amend the Merger Agreement to
delete any provisions therein requiring approval of the Merger or the Merger
Agreement by the WWWX Shareholders, and to make such other changes therein as
are consistent with such amendment. Capitalized terms used but not defined
herein shall have the meanings given to them in the Merger Agreement.

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:

1. Amendment. The Merger Agreement is hereby amended as follows:

(a) Section 4.3 of the Merger Agreement is amended to delete
therefrom all references to the convening of a meeting of the WWWX
Shareholders to consider and vote upon approval of the Merger Agreement,
and all references to actions of the Board of Directors of WWWX to
recommend and solicit such approval.

(b) Section 5.1(a) of the Merger Agreement is amended to delete
therefrom the reference to approval by the WWWX Shareholders as a
condition to the obligations of the parties to effect the Merger.

(c) Section 6.5 of the Merger Agreement is amended to provide that
the $2,000,000 "break-up" fee payable to Artra as set forth in Section
6.5 shall be payable to Artra only in the event that the representations
and warranties of WWWX, the Acquisition Corp. and the Merger Sub in the
first sentence of Section 2 of this Amendment should be determined by
WWWX or a court of competent jurisdiction to be untrue, and the Merger
Agreement is thereafter terminated solely because any required approval
of WWWX's shareholders shall not have been obtained.

(d) The Merger Agreement is further amended to make such additional
changes in the provisions thereof as are necessary to make them
consistent with the foregoing amendments.

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2. Representations and Warranties. WWWX, the Acquisition Corp. and
the Merger Sub jointly and severally represent and warrant to Artra that no
vote or other approval of the WWWX Shareholders is required under
applicable law, or under WWWX's certificate or articles of incorporation or
by-laws, in connection with the Merger Agreement.

In addition to the foregoing, each of the parties hereby represents
and warrants to the others as follows:

(a) It has the power to execute and deliver this Amendment and has
taken all necessary action to authorize the execution and delivery of
this Amendment and the performance of the Merger Agreement as amended
hereby;

(b) The execution and delivery of this Amendment and the
performance of the Merger Agreement as amended hereby will not violate
any provision of any applicable law or regulation or of any writ or
decree of any court or governmental instrumentality, or its certificate
or articles of incorporation, by-laws, or other similar organizational
documents.

3. Reaffirmation. Except as amended hereby, all of the terms,
covenants and conditions of the Merger Agreement are ratified, reaffirmed
and confirmed and shall continue in full force and effect as therein
written.

4. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.

5. Counterparts; Effectiveness. This Amendment may be executed in any
number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute one and the same agreement.
A facsimile of an executed copy of this Amendment shall have the same force
and effect as an original executed copy.

6. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws of the Commonwealth of Pennsylvania
without reference to conflict of law principles.

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IN WITNESS WHEREOF, the parties have executed this Amendment on the day and
year first above written.

ARTRA GROUP INCORPORATED

By: /s/ PETER R. HARVEY
------------------------------------
Title: President

WORLDWIDE WEB NETWORX CORPORATION

By: /s/ ROBERT D. KOHN
------------------------------------
Title: President

NA ACQUISITION CORP.

By: /s/ ROBERT D. KOHN
------------------------------------
Title: President

WWWX MERGER SUBSIDIARY, INC.

By: /s/ ROBERT D. KOHN
------------------------------------
Title: President

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CONSENT AND AMENDMENT TO AGREEMENT AND PLAN OF MERGER

THIS CONSENT AND AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this
"Amendment"), dated as of August 9, 1999, among ARTRA GROUP INCORPORATED, a
Pennsylvania corporation ("Artra"), WORLDWIDE WEB NETWORX CORPORATION, a
Delaware corporation ("WWWX"), ENTRADE INC., a Delaware corporation (formerly
known as NA Acquisition Corp.; the "Acquisition Corp."), and WWWX MERGER
SUBSIDIARY, INC., a Pennsylvania corporation ("Merger Sub").

BACKGROUND

The parties have entered that certain Agreement and Plan of Merger, dated
as of February 23, 1999, (as amended by an Amendment to Agreement and Plan of
Merger dated as of April 30, 1999; the "Merger Agreement"; capitalized terms
used but not defined herein have the respective meanings set forth in the Merger
Agreement).

Simultaneous with the execution of this Amendment, Acquisition Corp. is
making a promissory note in favor of WWWX in the face amount of $500,000, in
exchange for funding from WWWX to Acquisition Corp. during the period prior to
the Closing Date not to exceed $500,000, substantially in the form of Exhibit A
to this Amendment (the "Note").

In connection with the delivery of the Note, the parties wish to amend the
Merger Agreement as follows.

AGREEMENT

In consideration of the premises and agreements contained in this
Amendment, the parties to this Amendment agree as follows:

SECTION 1. Amendment to Merger Agreement. Effective as of the date of this
Amendment, Section 5.2 of the Merger Agreement is hereby amended by adding the
following subsection (c) immediately following subsection (b) thereof:

"(c) The Demand Promissory Note, dated August 9, 1999, made by Acquisition
Corp. in favor of WWWX in the face amount of $500,000 shall have been paid
in full and there shall be no amounts outstanding thereunder."

SECTION 2. Consent to Note. Artra hereby consents to making of the Note
and the loans evidenced by the Note.

SECTION 3. Additional Agreement. The parties hereto additionally agree
that (a) should WWWX terminate the Merger Agreement pursuant to Section 6.3(a)
of the Merger Agreement by reason of an Alternative Proposal being accepted, in
addition to their obligations to pay the Loan of $2,000,000 under the Loan
Agreement pursuant to Section 6.5 of the Merger Agreement, WWWX and Acquisition
Corp. shall be jointly and severally obligated to pay Artra the $250,000 of
additional funds that have been advanced to Acquisition Corp. by Artra that is
attributable to salaries of Robert D. Kohn, Benjamin Kafka, Mark Quinn, and Gary
Lerman (the "Salary Advances"); and (b) should the Merger Agreement terminate
pursuant to Section 6.2(b) of the Merger Agreement because the requisite
approval of Artra's shareholders was not obtained, WWWX and Acquisition Corp.
shall have no obligation to repay the Salary Advances.

SECTION 4. References to and Effect on the Merger Agreement. (a) Effective
as of the date of this Amendment, each reference in the Merger Agreement to
"this Agreement", "hereunder", "hereof",

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and "herein", or words of like import referring to in the Merger Agreement shall
mean and be a reference to the Merger Agreement as amended by this Amendment.

(b) Except as specifically amended in this Amendment, the Merger Agreement
shall remain in full force and effect and is hereby ratified and confirmed.

(c) The execution, delivery, and effectiveness of this Amendment is limited
as precisely as written and, except as expressly provided in this Amendment, may
not be deemed to (i) be a consent to any waiver or modification of any other
term or condition of the Merger Agreement or any of the instruments or documents
referred to in the Merger Agreement or (ii) prejudice any right or rights that
the parties to the Merger Agreement may now have or may have in the future under
or in connection with the Merger Agreement or any of the documents or
instruments referred to in the Merger Agreement.

SECTION 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA,
WITHOUT REGARD TO ITS RULES OF CONFLICTS OF LAWS.

SECTION 6. Counterparts. This Amendment may be executed in counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, each of the parties to this Amendment have executed
this Amendment as of the date first written above.

ARTRA GROUP INCORPORATED

By: /s/ JOHN G. HAMM
---------------------------------------
Name: John G. Hamm
Title: Executive Vice President

WORLDWIDE WEB NETWORX CORPORATION

By: /s/ MICHAEL E. NORTON
---------------------------------------
Name: Michael E. Norton
Title: Vice President and Chief
Financial Officer

ENTRADE INC.

By: /s/ BENJAMIN R. KAFKA
---------------------------------------
Name: Benjamin R. Kafka
Title: Vice President

WWWX MERGER SUBSIDIARY, INC.

By: /s/ BENJAMIN R. KAFKA
---------------------------------------
Name: Benjamin R. Kafka
Title: Vice President

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EXHIBIT A

DEMAND PROMISSORY NOTE

$500,000

August 9, 1999

FOR VALUE RECEIVED, the undersigned, Entrade Inc., a Pennsylvania
corporation (the "Borrower"), HEREBY PROMISES TO PAY ON DEMAND, but in no event
later than the Closing Date (as defined in that certain Agreement and Plan of
Merger, dated as of February 23, 1999, among Artra Group Incorporated, the
Lender, the Borrower, and WWWX Merger Subsidiary, Inc.) to the order of
WorldWide Web NetworX Corporation, a Delaware corporation (the "Lender") the
principal sum of $500,000 or, if less, the aggregate principal amount of all
advances made hereunder by the Lender to the Borrower outstanding at the time of
such demand or the Closing Date; together with interest (computed on the basis
of a year of 365 or 366 days, as the case may be, for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable) on the principal amount hereof from time to time
outstanding from the date hereof until such principal amount is paid in full,
payable on the final day when such principal amount becomes due and, with
respect to interest on the principal amount, payable on demand, at an interest
rate per annum in effect from time to time equal at all times to the higher of:

(a) the applicable Federal rate, which shall accrue monthly and be
added to the principal balance; and

(b) after the due date hereof, the lesser of (i) 12% or (ii) the
maximum rate of interest permissible under applicable laws.

The Borrower also agrees to pay on demand all costs and expenses, if any,
including reasonable counsel fees and expenses, in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Demand Promissory Note.

Both principal and interest hereunder are payable prior to 11:00 A.M. (New
York City time) on the day for payment thereof (whether upon demand or
otherwise) in lawful money of the United States of America to the Lender in same
day funds. Whenever any payment hereunder shall be stated to be due on a day
other than a day of the year on which banks are not required or authorized to
close in New York City (any such other day being a "Business Day"), such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest.

The Borrower hereby waives the requirements of demand, presentment,
protest, notice of protest and dishonor, and all other demands or notices of any
kind in connection with the delivery, acceptance, performance, default,
dishonor, or enforcement of this Demand Promissory Note. This Demand Promissory
Note is non-transferable.

This Demand Promissory Note shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

ENTRADE INC.

By: /s/ BENJAMIN R. KAFKA
---------------------------------------
Name: Benjamin R. Kafka
Title: Vice President

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APPENDIX B

DISSENTERS RIGHTS PROVISIONS OF THE
PENNSYLVANIA BUSINESS CORPORATION LAW

ss.1930. Dissenters rights.

(a) General rule. If any shareholder of a domestic business corporation
that is to be a party to a merger or consolidation pursuant to a plan of merger
or consolidation objects to the plan of merger or consolidation and complies
with the provisions of Subchapter D of Chapter 15 (relating to dissenters
rights), the shareholder shall be entitled to the rights and remedies of
dissenting shareholders therein provided, if any. See also section 1906(c)
(relating to dissenters rights upon special treatment).

(b) Plans adopted by directors only. Except as otherwise provided pursuant
to section 1571(c) (relating to grant of optional dissenters rights), Subchapter
D of Chapter 15 shall not apply to any of the shares of a corporation that is a
party to a merger or consolidation pursuant to section 1924(b)(1)(i) (relating
to adoption by board of directors).

(c) Cross references. See sections 1571(b) (relating to exceptions) and
1904 (relating to de facto transaction doctrine abolished).

SUBCHAPTER D

DISSENTERS RIGHTS

ss.1571. Application and effect of subchapter.

(a) General rule. Except as otherwise provided in subsection (b), any
shareholder of a business corporation shall have the right to dissent from, and
to obtain payment of the fair value of his shares in the event of, any corporate
action, or to otherwise obtain fair value for his shares, where this part
expressly provides that a shareholder shall have the rights and remedies
provided in this subchapter. See:

Section 1906(c) (relating to dissenters rights upon special treatment).

Section 1930 (relating to dissenters rights).

Section 1931(d) (relating to dissenters rights in share exchanges).

Section 1932(c) (relating to dissenters rights in asset transfers).

Section 1952(d) (relating to dissenters rights in division).

Section 1962(c) (relating to dissenters rights in conversion).

Section 2104(b) (relating to procedure).

Section 2324 (relating to corporation option where a restriction on
transfer of a security is held invalid).

Section 2325(b) (relating to minimum vote requirement).

Section 2704(c) (relating to dissenters rights upon election).

Section 2705(d) (relating to dissenters rights upon renewal of election).

Section 2907(a) (relating to proceedings to terminate breach of qualifying
conditions).

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Section 7104(b)(3) (relating to procedure).

(b) Exceptions.

(1) Except as otherwise provided in paragraph (2), the holders of the
shares of any class or series of shares that, at the record date fixed to
determine the shareholders entitled to notice of and to vote at the meeting at
which a plan specified in any of section 1930, 1931(d), 1932(c) or 1952(d) is to
be voted on, are either:

(i) listed on a national securities exchange; or

(ii) held of record by more than 2,000 shareholders;

shall not have the right to obtain payment of the fair value of any such shares
under this subchapter.

(2) Paragraph (1) shall not apply to and dissenters rights shall be
available without regard to the exception provided in that paragraph in the case
of:

(i) Shares converted by a plan if the shares are not converted solely
into shares of the acquiring, surviving, new or other corporation or solely
into such shares and money in lieu of fractional shares.

(ii) Shares of any preferred or special class unless the articles, the
plan or the terms of the transaction entitle all shareholders of the class
to vote thereon and require for the adoption of the plan or the
effectuation of the transaction the affirmative vote of a majority of the
votes cast by all shareholders of the class.

(iii) Shares entitled to dissenters rights under section 1906(c)
(relating to dissenters rights upon special treatment).

(3) The shareholders of a corporation that acquires by purchase, lease,
exchange or other disposition all or substantially all of the shares, property
or assets of another corporation by the issuance of shares, obligations or
otherwise, with or without assuming the liabilities of the other corporation and
with or without the intervention of another corporation or other person, shall
not be entitled to the rights and remedies of dissenting shareholders provided
in this subchapter regardless of the fact, if it be the case, that the
acquisition was accomplished by the issuance of voting shares of the corporation
to be outstanding immediately after the acquisition sufficient to elect a
majority or more of the directors of the corporation.

(c) Grant of optional dissenters rights. The bylaws or a resolution of the
board of directors may direct that all or a part of the shareholders shall have
dissenters rights in connection with any corporate action or other transaction
that would otherwise not entitle such shareholders to dissenters rights.

(d) Notice of dissenters rights. Unless otherwise provided by statute, if
a proposed corporate action that would give rise to dissenters rights under this
subpart is submitted to a vote at a meeting of shareholders, there shall be
included in or enclosed with the notice of meeting:

(1) A statement of the proposed action and a statement that the
shareholders have a right to dissent and obtain payment of the fair value
of their shares by complying with the terms of this subchapter; and

(2) A copy of this subchapter.

(e) Other statutes. The procedures of this subchapter shall also be
applicable to any transaction described in any statute other than this part that
makes reference to this subchapter for the purpose of granting dissenters
rights.

(f) Certain provisions of articles ineffective. This subchapter may not be
relaxed by any provision of the articles.

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(g) Cross references. See sections 1105 (relating to restriction on
equitable relief), 1904 (relating to de facto transaction doctrine abolished)
and 2512 (relating to dissenters rights procedure).

ss. 1572. Definitions.

The following words and phrases when used in this subchapter shall have the
meanings given to them in this section unless the context clearly indicates
otherwise:

"Corporation." The issuer of the shares held or owned by the
dissenter before the corporate action or the successor by merger,
consolidation, division, conversion or otherwise of that issuer. A plan of
division may designate which of the resulting corporations is the successor
corporation for the purposes of this subchapter. The successor corporation
in a division shall have sole responsibility for payments to dissenters and
other liabilities under this subchapter except as otherwise provided in the
plan of division.

"Dissenter." A shareholder or beneficial owner who is entitled to and does
assert dissenters rights under this subchapter and who has performed every act
required up to the time involved for the assertion of those rights.

"Fair value." The fair value of shares immediately before the effectuation
of the corporate action to which the dissenter objects, taking into account all
relevant factors, but excluding any appreciation or depreciation in anticipation
of the corporate action.

"Interest." Interest from the effective date of the corporate action until
the date of payment at such rate as is fair and equitable under all the
circumstances, taking into account all relevant factors, including the average
rate currently paid by the corporation on its principal bank loans.

ss. 1573. Record and beneficial holders and owners.

(a) Record holders of shares. A record holder of shares of a business
corporation may assert dissenters rights as to fewer than all of the shares
registered in his name only if he dissents with respect to all the shares of the
same class or series beneficially owned by any one person and discloses the name
and address of the person or persons on whose behalf he dissents. In that event,
his rights shall be determined as if the shares as to which he has dissented and
his other shares were registered in the names of different shareholders.

(b) Beneficial owners of shares. A beneficial owner of shares of a
business corporation who is not the record holder may assert dissenters rights
with respect to shares held on his behalf and shall be treated as a dissenting
shareholder under the terms of this subchapter if he submits to the corporation
not later than the time of the assertion of dissenters rights a written consent
of the record holder. A beneficial owner may not dissent with respect to some
but less than all shares of the same class or series owned by the owner, whether
or not the shares so owned by him are registered in his name.

ss. 1574. Notice of intention to dissent.

If the proposed corporate action is submitted to a vote at a meeting of
shareholders of a business corporation, any person who wishes to dissent and
obtain payment of the fair value of his shares must file with the corporation,
prior to the vote, a written notice of intention to demand that he be paid the
fair value for his shares if the proposed action is effectuated, must effect no
change in the beneficial ownership of his shares from the date of such filing
continuously through the effective date of the proposed action and must refrain
from voting his shares in approval of such action. A dissenter who fails in any
respect shall not acquire any right to payment of the fair value of his shares
under this subchapter. Neither a proxy nor a vote against the proposed corporate
action shall constitute the written notice required by this section.

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ss. 1575. Notice to demand payment.

(a) General rule. If the proposed corporate action is approved by the
required vote at a meeting of shareholders of a business corporation, the
corporation shall mail a further notice to all dissenters who gave due notice of
intention to demand payment of the fair value of their shares and who refrained
from voting in favor of the proposed action. If the proposed corporate action is
to be taken without a vote of shareholders, the corporation shall send to all
shareholders who are entitled to dissent and demand payment of the fair value of
their shares a notice of the adoption of the plan or other corporate action. In
either case, the notice shall:

(1) State where and when a demand for payment must be sent and
certificates for certificated shares must be deposited in order to obtain
payment.

(2) Inform holders of uncertificated shares to what extent transfer of
shares will be restricted from the time that demand for payment is
received.

(3) Supply a form for demanding payment that includes a request for
certification of the date on which the shareholder, or the person on whose
behalf the shareholder dissents, acquired beneficial ownership of the
shares.

(4) Be accompanied by a copy of this subchapter.

(b) Time for receipt of demand for payment. The time set for receipt of
the demand and deposit of certificated shares shall be not less than 30 days
from the mailing of the notice.

ss. 1576. Failure to comply with notice to demand payment, etc.

(a) Effect of failure of shareholder to act. A shareholder who fails to
timely demand payment, or fails (in the case of certificated shares) to timely
deposit certificates, as required by a notice pursuant to section 1575 (relating
to notice to demand payment) shall not have any right under this subchapter to
receive payment of the fair value of his shares.

(b) Restriction on uncertificated shares. If the shares are not
represented by certificates, the business corporation may restrict their
transfer from the time of receipt of demand for payment until effectuation of
the proposed corporate action or the release of restrictions under the terms of
section 1577(a) (relating to failure to effectuate corporate action).

(c) Rights retained by shareholder. The dissenter shall retain all other
rights of a shareholder until those rights are modified by effectuation of the
proposed corporate action.

ss. 1577. Release of restrictions or payment for shares.

(a) Failure to effectuate corporate action. Within 60 days after the date
set for demanding payment and depositing certificates, if the business
corporation has not effectuated the proposed corporate action, it shall return
any certificates that have been deposited and release uncertificated shares from
any transfer restrictions imposed by reason of the demand for payment.

(b) Renewal of notice to demand payment. When uncertificated shares have
been released from transfer restrictions and deposited certificates have been
returned, the corporation may at any later time send a new notice conforming to
the requirements of section 1575 (relating to notice to demand payment), with
like effect.

(c) Payment of fair value of shares. Promptly after effectuation of the
proposed corporate action, or upon timely receipt of demand for payment if the
corporate action has already been effectuated, the corporation shall either
remit to dissenters who have made demand and (if their shares are certificated)
have deposited their certificates the amount that the corporation estimates to
be the fair value of the

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shares, or give written notice that no remittance under this section will be
made. The remittance or notice shall be accompanied by:

(1) The closing balance sheet and statement of income of the issuer of
the shares held or owned by the dissenter for a fiscal year ending not more
than 16 months before the date of remittance or notice together with the
latest available interim financial statements.

(2) A statement of the corporation's estimate of the fair value of the
shares.

(3) A notice of the right of the dissenter to demand payment or
supplemental payment, as the case may be, accompanied by a copy of this
subchapter.

(d) Failure to make payment. If the corporation does not remit the amount
of its estimate of the fair value of the shares as provided by subsection (c),
it shall return any certificates that have been deposited and release
uncertificated shares from any transfer restrictions imposed by reason of the
demand for payment. The corporation may make a notation on any such certificate
or on the records of the corporation relating to any such uncertificated shares
that such demand has been made. If shares with respect to which notation has
been so made shall be transferred, each new certificate issued therefor or the
records relating to any transferred uncertificated shares shall bear a similar
notation, together with the name of the original dissenting holder or owner of
such shares. A transferee of such shares shall not acquire by such transfer any
rights in the corporation other than those that the original dissenter had after
making demand for payment of their fair value.

ss. 1578. Estimate by dissenter of fair value of shares.

(a) General rule. If the business corporation gives notice of its estimate
of the fair value of the shares, without remitting such amount, or remits
payment of its estimate of the fair value of a dissenter's shares as permitted
by section 1577(c) (relating to payment of fair value of shares) and the
dissenter believes that the amount stated or remitted is less than the fair
value of his shares, he may send to the corporation his own estimate of the fair
value of the shares, which shall be deemed a demand for payment of the amount or
the deficiency.

(b) Effect of failure to file estimate. Where the dissenter does not file
his own estimate under subsection (a) within 30 days after the mailing by the
corporation of its remittance or notice, the dissenter shall be entitled to no
more than the amount stated in the notice or remitted to him by the corporation.

ss. 1579. Valuation proceedings generally.

(a) General rule. Within 60 days after the latest of:

(1) effectuation of the proposed corporate action;

(2) timely receipt of any demands for payment under section 1575
(relating to notice to demand payment); or

(3) timely receipt of any estimates pursuant to section 1578 (relating
to estimate by dissenter of fair value of shares);

if any demands for payment remain unsettled, the business corporation may file
in court an application for relief requesting that the fair value of the shares
be determined by the court.

(b) Mandatory joinder of dissenters. All dissenters, wherever residing,
whose demands have not been settled shall be made parties to the proceeding as
in an action against their shares. A copy of the application shall be served on
each such dissenter. If a dissenter is a nonresident, the copy may be served on
him in the manner provided or prescribed by or pursuant to 42 Pa.C.S. Ch. 53
(relating to bases of jurisdiction and interstate and international procedure).

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(c) Jurisdiction of the court. The jurisdiction of the court shall be
plenary and exclusive. The court may appoint an appraiser to receive evidence
and recommend a decision on the issue of fair value. The appraiser shall have
such power and authority as may be specified in the order of appointment or in
any amendment thereof.

(d) Measure of recovery. Each dissenter who is made a party shall be
entitled to recover the amount by which the fair value of his shares is found to
exceed the amount, if any, previously remitted, plus interest.

(e) Effect of corporation's failure to file application. If the
corporation fails to file an application as provided in subsection (a), any
dissenter who made a demand and who has not already settled his claim against
the corporation may do so in the name of the corporation at any time within 30
days after the expiration of the 60-day period. If a dissenter does not file an
application within the 30-day period, each dissenter entitled to file an
application shall be paid the corporation's estimate of the fair value of the
shares and no more, and may bring an action to recover any amount not previously
remitted.

ss. 1580. Costs and expenses of valuation proceedings.

(a) General rule. The costs and expenses of any proceeding under section
1579 (relating to valuation proceedings generally), including the reasonable
compensation and expenses of the appraiser appointed by the court, shall be
determined by the court and assessed against the business corporation except
that any part of the costs and expenses may be apportioned and assessed as the
court deems appropriate against all or some of the dissenters who are parties
and whose action in demanding supplemental payment under section 1578 (relating
to estimate by dissenter of fair value of shares) the court finds to be
dilatory, obdurate, arbitrary, vexatious or in bad faith.

(b) Assessment of counsel fees and expert fees where lack of good faith
appears. Fees and expenses of counsel and of experts for the respective parties
may be assessed as the court deems appropriate against the corporation and in
favor of any or all dissenters if the corporation failed to comply substantially
with the requirements of this subchapter and may be assessed against either the
corporation or a dissenter, in favor of any other party, if the court finds that
the party against whom the fees and expenses are assessed acted in bad faith or
in a dilatory, obdurate, arbitrary or vexatious manner in respect to the rights
provided by this subchapter.

(c) Award of fees for benefits to other dissenters. If the court finds
that the services of counsel for any dissenter were of substantial benefit to
other dissenters similarly situated and should not be assessed against the
corporation, it may award to those counsel reasonable fees to be paid out of the
amounts awarded to the dissenters who were benefited.

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