WIT CAPITAL GROUP INC, S-4, 1999-12-16

WIT CAPITAL GROUP INC
S-4, 1999-12-16
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1999

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933
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WIT CAPITAL GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

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DELAWARE 6211 13-3900397
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification Number)
incorporation or organization) Classification Code Number)
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826 BROADWAY
NEW YORK, NEW YORK 10003
(212) 253-4400

(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

ROBERT H. LESSIN
RONALD READMOND
CO-CHIEF EXECUTIVE OFFICERS
WIT CAPITAL GROUP, INC.
826 BROADWAY
NEW YORK, NEW YORK 10003
(212) 253-4400

((Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
--------------------------

COPIES TO:

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RICHARD T. PRINS, ESQ. LLOYD H. FELLER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP ROBERT C. MENDELSON, ESQ.
919 THIRD AVENUE CO-GENERAL COUNSEL
NEW YORK, NEW YORK 10022 WIT CAPITAL GROUP, INC.
(212) 735-3000 826 BROADWAY
NEW YORK, NEW YORK 10003
(212) 253-4400
</TABLE>

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APPROXIMATE DATE OF UOMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this registration
statement, which relates to the issuance of common stock, par value $.01 per
share, of Wit Capital Group, Inc. in the merger of W/S Merger Corp., a wholly
owned subsidiary of Wit Capital, with and into SoundView Technology
Group, Inc., pursuant to the Agreement and Plan of Merger, dated as of
October 31, 1999, among Wit Capital, W/S Merger Corp. and SoundView.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
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CALCULATION OF REGISTRATION FEE

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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
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Common Stock, par value $.01 per share, to
be issued in the Merger................... 13,131,234(1) N.A. $223,624,915(2) $59,100
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(1) Based upon the maximum number of shares of the Registrant's common stock
expected to be issued in connection with the merger, calculated as the
product of (a) 2,515,562, the aggregate number of shares of SoundView
Technology Group, Inc. ("SoundView") common stock outstanding on
November 30,1999 and (b) an exchange ratio of 5.220 shares of the
Registrant's common stock for each share of SoundView common stock.

(2) Estimated solely for the purpose of calculating the registration fee
required by Section 6(b) of the Securities Act of 1933, as amended, and
calculated pursuant to Rule 457(f) under the Securities Act. Pursuant to
Rule 457(f)(2) under the Securities Act, the proposed maximum aggregate
offering price of the Registrant's common stock was calculated as:
(a) $17.03, the book value per share of SoundView common stock on
November 30, 1999, multiplied by (b) the maximum number of shares of
Registrant's common stock expected to be issued in connection with the
merger.
--------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO
SECTION 8(A), MAY DETERMINE.

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The information in this document is not complete and may be changed. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. We may not sell these securities until that
registration statement is effective. This document is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted. The Securities and Exchange
Commission and the state securities regulators have not approved or disapproved
the shares of Wit Capital common stock to be issued in the merger or determined
if this document is accurate or complete. Any representation to the contrary is
a criminal offense.
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[LOGO OF WIT CAPITAL GROUP, INC. APPEARS HERE]

[Date]

Dear Stockholder:

We are holding a special meeting of stockholders of Wit Capital Group, Inc.
on [Date] at which you will be asked to consider and vote upon our proposed
acquisition of SoundView Technology Group, Inc. We are enclosing a proxy
statement/prospectus to provide you with information you should know about this
transaction.

SoundView is a Connecticut-based investment banking firm focused exclusively
on technology. Wit Capital will acquire the outstanding shares of SoundView in
exchange for approximately $[320] million, consisting of newly-issued Wit
Capital common stock, options replacing SoundView options and up to $30 million
in cash. The exchange ratio in the merger is subject to adjustment for changes
in the market price of Wit Capital's stock from $17.56 up to $18.56 or down to
$15.56 and is not adjustable for changes beyond these levels. Accordingly, the
final value of the transaction could be either greater or less than $[320]
million. A limited cash election feature allows each stockholder to receive a
cash payment in lieu of common stock subject to an overall limitation, including
any stockholders exercising dissenter's rights, of $30 million. The board of
directors of each company and the stockholders of SoundView have approved the
transaction, which is expected to close in January or February 2000. Completion
is contingent on Wit Capital stockholder approval, regulatory approval and other
customary closing conditions. If the volume weighted average price of Wit
Capital's stock over a five day period falls below $10, the transaction may be
cancelled by SoundView. Conversely, if the volume weighted average price of Wit
Capital's stock over a five day period rises above $25, the transaction may be
cancelled by Wit Capital.

Instead of receiving Wit Capital common stock and/or cash upon completion of
the merger, holders of SoundView common stock have the right to dissent from the
merger and have the fair value of their SoundView common stock appraised by a
court and paid to them in cash. These appraisal rights are granted to the
holders of SoundView common stock by Delaware law.

The board of directors of Wit Capital has unanimously approved the terms of
the merger agreement and the merger and unanimously reaffirms its recommendation
that you vote FOR approval of the merger agreement. Please consider matters
under the "Risk Factors" caption beginning on page [ ] of the proxy statement
/prospectus.

Enclosed you will find a proxy card for the Wit Capital special meeting.
Please complete, sign and date the enclosed proxy card and return it in the
accompanying prepaid envelope to ensure that your shares will be represented at
the special meeting.

If you would like an additional copy of the proxy statement/prospectus, you
may contact our investor relations department at 1-800-966-0676. A copy of this
document is also available on Wit Capital's Web site at:
http://www.[ ].com.

Thank you for your continued support.

RONALD READMOND
President and Co-Chief Executive Officer
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The information in this document is not complete and may be changed. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. We may not sell these securities until that
registration statement is effective. This document is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted. The Securities and Exchange
Commission and the state securities regulators have not approved or disapproved
the shares of Wit Capital common stock to be issued in the merger or determined
if this document is accurate or complete. Any representation to the contrary is
a criminal offense.
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER , 1999

[Logo of Wit Capital Group, Inc. appears here]

Notice of Special Meeting of Stockholders
to Be Held , 1999

We will hold a special meeting of stockholders of Wit Capital Group, Inc. at
10:30 a.m., New York City time, on January , 2000, at [ ] for the following
purposes:

1. To consider and vote upon a proposal to adopt the Agreement and Plan of
Merger, dated as of October 31, 1999, among Wit Capital Group, Inc., W/S
Merger Corp. and SoundView Technology Group, Inc., and on any other
matters which may properly come before the meeting or which are incident
to the conduct of the meeting. In the merger, SoundView will merge with
W/S Merger Corp. and become a wholly owned subsidiary of Wit Capital and
all outstanding shares and options to purchase shares of SoundView common
stock will be converted into the right to receive a number of shares of
Wit Capital common stock based on an exchange ratio that will be
calculated shortly before the merger. A vote in favor of approval of the
Agreement and Plan of Merger will result in Wit Capital's adoption of
SoundView's stock option plan, although no additional options to purchase
shares will be granted under that plan.

2. To amend the Wit Capital Group, Inc. 1999 Stock Incentive Plan to
(a) increase the shares reserved for issuance upon exercise of options
granted under the Stock Incentive Plan from 17,500,000 to 27,350,000 and
(b) to limit the maximum number of options and other awards which may be
granted to an employee in any fiscal year to ensure compliance with
Section 162(m) under the Internal Revenue Code.

Stockholders of record at the close of business on , 1999 are
entitled to vote their shares at the special meeting and any adjournments or
postponements of it. Each share of Wit Capital common stock will entitle the
record holder to one vote on each matter put to a vote at the special meeting.

For more information about the merger, please review the proxy
statement/prospectus and the merger agreement attached as Appendix A. A copy of
this document is also available on Wit Capital's Web site which can be found at:
HTTP://[ ].COM.

Your vote is very important. Please either vote electronically or complete,
sign and date the enclosed proxy card and return it promptly in the enclosed
return envelope, whether or not you plan to attend the meeting. The accompanying
envelope requires no postage if mailed in the United States. If you do not
specify your vote on your submission, your shares will be voted FOR the adoption
of the merger agreement. If you fail to submit a proxy or fail to vote
electronically or if you do so but check the "abstain" box, your inaction will
not count as a vote for or against the adoption of the merger agreement. You may
revoke your proxy or electronic vote and vote in person if you decide to attend
the special meeting and hold your shares in your own name.

By order of the Board of Directors,

ROBERT C. MENDELSON
Secretary
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TABLE OF CONTENTS

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PAGE
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QUESTIONS AND ANSWERS ABOUT THE MERGER...................... v

SUMMARY OF PROXY STATEMENT/PROSPECTUS....................... 1
Wit Capital Group, Inc. .................................. 1
SoundView Technology Group, Inc. ......................... 1
The Special Meeting of Wit Capital Stockholders........... 2
The Merger................................................ 3
Opinion of Wit Capital's Financial Advisor................ 4
Accounting Treatment...................................... 4
Applicable Waiting Periods and Regulatory Approvals....... 4
Trading of Wit Capital Common Stock to be Issued in the
Merger.................................................. 4
Restrictions on Sale of Shares By Affiliates of Wit
Capital and SoundView................................... 5
Operations Following the Merger........................... 5
Dividend Policy........................................... 5
Interests of Named Experts and Counsel in the Merger...... 5
Material Federal Income Tax Considerations................ 5
The Merger Agreement and Related Agreements............... 6
Voting Agreement.......................................... 9
Employment Agreements..................................... 10
Non-disclosure and Assignment of Inventions Agreement..... 10
Put Termination Agreements................................ 10
The Amendments to Wit Capital's Stock Incentive Plan...... 10
Trademarks................................................ 10

MARKET PRICE INFORMATION.................................... 11
Wit Capital Market Price Data............................. 11
SoundView Market Price Data............................... 11
Recent Closing Prices..................................... 11

RISK FACTORS................................................ 12
Risks Related to the Merger............................... 12
Risks Related to Wit Capital, SoundView or the Combined
Company................................................. 14
Risks Related to Online Commerce and the Internet......... 22

FORWARD-LOOKING STATEMENTS.................................. 23

THE SPECIAL MEETING OF WIT CAPITAL STOCKHOLDERS............. 24

THE MERGER.................................................. 27
Background of the Merger.................................. 27
Reasons for the Merger.................................... 28
Recommendation of Wit Capital's Board of Directors........ 32
Opinion of Wit Capital's Financial Advisor................ 32
Accounting Treatment...................................... 37
Applicable Waiting Periods and Regulatory Approvals....... 37
Trading of Wit Capital Common Stock to be Issued in the
Merger.................................................. 37
Restrictions on Sale of Shares By Affiliates of Wit
Capital and SoundView................................... 37
Operations Following the Merger........................... 38
Dividend Policy........................................... 38
Interests of Named Experts and Counsel in the Merger...... 38
</TABLE>

i
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PAGE
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APPRAISAL RIGHTS............................................ 39

MATERIAL FEDERAL INCOME TAX CONSIDERATIONS.................. 39

THE MERGER AGREEMENT AND RELATED AGREEMENTS................. 41
Merger Agreement.......................................... 41
Voting Agreement.......................................... 47
Employment Agreements..................................... 48
Non-disclosure and Assignment of Inventions Agreement..... 49
Put Termination Agreements................................ 49

SUMMARY HISTORICAL FINANCIAL DATA OF WIT CAPITAL............ 50

SUMMARY HISTORICAL FINANCIAL DATA OF SOUNDVIEW.............. 51

SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA......... 52

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF WIT CAPITAL.................. 55
Overview.................................................. 55
Revenues.................................................. 55
Expenses.................................................. 56
Liquidity and Capital Resources........................... 58
Update on Digital Trading Facility........................ 59
Year 2000................................................. 59

PROPOSAL TO AMEND WIT CAPITAL'S 1999 STOCK INCENTIVE PLAN... 62

WIT CAPITAL'S BUSINESS...................................... 64
Investment Banking........................................ 64
Public Underwriting....................................... 65
Strategic Advisory Services............................... 66
Private Equity............................................ 66
Investment Research....................................... 66
Investment by Goldman Sachs............................... 67
Brokerage................................................. 67
Venture Capital Fund Group................................ 68
Digital Trading Facility.................................. 69
International Opportunities............................... 70
Information Technology.................................... 71
Marketing................................................. 71
Competition............................................... 71
Regulation................................................ 72
Employees................................................. 73
Properties................................................ 74
Legal Matters............................................. 74

MANAGEMENT OF WIT CAPITAL................................... 75
Executive Officers and Key Employees...................... 75
Directors................................................. 77
Committees of the Board................................... 78
Special Advisory Board.................................... 79
Compensation of Directors and Special Advisory Board
Members................................................. 79
Compensation Committee Interlocks and Insider
Participation........................................... 79
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Executive Compensation.................................... 80
Stock Options............................................. 81
Employment Agreements..................................... 82
Management Benefit Plans.................................. 85
Stock Incentive Plan.................................... 85
Annual Bonus Plans...................................... 86
Long-Term Incentive Plan................................ 86
Deferred Compensation Plan.............................. 87
401(k) Plan............................................. 87

CERTAIN TRANSACTIONS........................................ 88
Loans to Officers......................................... 88
Stock Issuances to Executive Officers, Directors and Our
Largest Stockholders.................................... 88
Agreement with Stockholders............................... 89
Venture Capital Fund Management........................... 90
Spring Street............................................. 90

STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS OF
WIT CAPITAL............................................... 91

DESCRIPTION OF WIT CAPITAL STOCK............................ 93
Transfer Agent and Registrar.............................. 93
General................................................... 93
Common Stock.............................................. 93
Class B Common Stock...................................... 93
Preferred Stock........................................... 93
Registration Rights....................................... 94
Stockholder Rights Plan................................... 94

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF SOUNDVIEW.................... 98
Overview.................................................. 98
Revenues.................................................. 98
Expenses.................................................. 99
Liquidity and Capital Resources........................... 101
Risk Management........................................... 101
Year 2000................................................. 103

SOUNDVIEW'S BUSINESS........................................ 104
Research.................................................. 104
Investment Banking........................................ 105
Brokerage................................................. 105
International............................................. 106
Competition............................................... 106
Regulation................................................ 106
Employees................................................. 107
Properties................................................ 107
Legal Matters............................................. 107

MANAGEMENT OF SOUNDVIEW..................................... 109
Executive Officers and Key Employees...................... 109
Directors................................................. 110
Executive Compensation.................................... 110
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iii
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PAGE
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Stock Options............................................. 111
Management Benefit Plans.................................. 112
401(k) and Profit Sharing Plan.......................... 112
Stock Option Plan....................................... 112
Operating Bonus Plan.................................... 112
Tax and Financial Planning Program...................... 113
Stock Issuances to Executive Officers, Directors and Our
Largest Stockholders................................... 113

CERTAIN TRANSACTIONS........................................ 113
Loans to Officers......................................... 113

STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS OF
SOUNDVIEW................................................. 114

DESCRIPTION OF SOUNDVIEW STOCK.............................. 115
General................................................... 115
Common Stock.............................................. 115

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION............................................... 116

COMPARISON OF RIGHTS OF WIT CAPITAL STOCKHOLDERS AND
SOUNDVIEW STOCKHOLDERS.................................... 121
Capitalization............................................ 121
Voting Rights............................................. 121
Number, Election, Vacancy and Removal of Directors........ 121
Amendments to Certificates of Incorporation............... 122
Amendments to By-laws..................................... 122
Stockholder Action........................................ 123
Notice of Stockholder Actions............................. 123
Special Stockholder Meetings.............................. 123
Limitation On Directors' Liabilities...................... 124
Dividends................................................. 125
Conversion................................................ 125
Delaware Anti-Takeover Law................................ 125

LEGAL OPINIONS.............................................. 126

EXPERTS..................................................... 126

WHERE YOU CAN FIND MORE INFORMATION......................... 126

WIT CAPITAL GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS................ 127

SOUNDVIEW TECHNOLOGY GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS................ 128

PART II--INFORMATION NOT REQUIRED IN THE PROXY
STATEMENT/PROSPECTUS...................................... II-1

SIGNATURES.................................................. II-5

POWER OF ATTORNEY........................................... II-5

EXHIBIT INDEX............................................... II-7

APPENDIX I--MERGER AGREEMENT

APPENDIX II--WIT CAPITAL GROUP, INC. 1999 STOCK INCENTIVE
PLAN

APPENDIX III--OPINION OF GOLDMAN, SACHS & CO.
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iv
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QUESTIONS AND ANSWERS ABOUT THE MERGER

Q: What will SoundView stockholders receive in the merger?

A: SoundView stockholders will receive between 4.367 and 5.220 shares of Wit
Capital common stock for each share of SoundView common stock they own. The
exact number of Wit Capital shares to be received depends on the price of
Wit Capital stock during a defined measurement period prior to the effective
date of the merger. Electing stockholders will receive up to $81.2387 in
cash for every SoundView share instead of receiving a portion of the Wit
Capital shares.

Q: When do you expect to complete the merger?

A: We are working to complete the merger in the first quarter of 2000. Because
the merger is subject to various conditions, however, we cannot predict the
exact timing.

Q: Should Wit Capital stockholders send in their stock certificates?

A: No. Wit Capital stockholders will continue to own their shares of Wit Capital
common stock after the merger and should continue to hold their stock
certificates.

Q: How do I vote?

A: Mail your signed proxy card in the enclosed return envelope or grant your
proxy by telephone or the Internet as soon as possible so that your shares
may be represented at the special meeting of stockholders. You may also
attend the meeting in person instead of submitting a proxy if you hold your
shares directly in your name. If your shares are held in "street name" by
your broker, your broker will vote your shares only if you provide
instructions 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 mailing my proxy?

A: Yes. You may change your vote by delivering a signed notice of revocation or
a later-dated, signed proxy card to the corporate secretary of Wit Capital
before the stockholder meeting, or by attending the stockholder meeting and
voting in person if you hold your shares in your own name.

Q: Are there risks I should consider in deciding whether to vote for the merger?

A: Yes. We have set out under the heading "Risk Factors" beginning on page [ ]
of this proxy statement/ prospectus a number of risk factors that you should
consider.

Q: Who can I call with questions?

A: If you have any questions about the merger or if you need additional copies
of this proxy statement/prospectus or the enclosed proxy, you should
contact:

Wit Capital Stockholder Contact:
Georgeson Shareholder Communications Inc.
17 State Street, 10th Floor
New York, NY 10004
Telephone: 1-800-223-2064 (investor toll-free number)
1-212-440-9800 (banks and brokers call collect)

v
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SUMMARY OF PROXY STATEMENT/PROSPECTUS

THE FOLLOWING SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROXY
STATEMENT/PROSPECTUS AND MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS
IMPORTANT TO YOU. YOU SHOULD CAREFULLY READ THE ENTIRE PROXY STATEMENT/
PROSPECTUS, INCLUDING THE APPENDICES, AND OTHER DOCUMENTS WE REFER YOU TO FOR A
MORE COMPLETE UNDERSTANDING OF THE MERGER. WHEN WE REFER TO "WIT CAPITAL" OR
"WE", "US" OR "OUR" IN THIS PROXY STATEMENT/PROSPECTUS, WE MEAN WIT CAPITAL
GROUP, INC. AND ITS SUBSIDIARIES.

WIT CAPITAL GROUP, INC.

Wit Capital is an Internet investment banking and brokerage firm that uses
electronic mail and the Internet to offer and sell shares in public offerings to
individuals. Wit Capital produces and electronically disseminates without charge
through the Internet proprietary, institutional-quality research. It also
advises corporate clients in connection with significant transactions like
mergers and acquisitions and assists them with the development of Internet
strategies and businesses and in raising funds from private sources. In
addition, it has established a private equity fund and intends to establish
additional private equity funds for venture capital investing in Internet
companies by high net worth individuals. Wit Capital's investment banking
activities focus on companies that principally use the Internet to conduct their
businesses and, more generally, on issuers seeking to market their stock
offerings to online individual investors. It also focuses on other rapidly
growing sectors of the economy that are related to or dependent on Internet
technology. In 1998, Wit Capital's investment banking revenue and brokerage
revenue represented 74% and 14% of its total revenues, respectively. For the
nine months ended September 30, 1999, its investment banking revenue and its
brokerage revenue represented 72% and 15% of its total revenues, respectively.
As Wit Capital's business develops and its client and customer bases grow, these
percentages may change, and, accordingly, they may not be indicative of its
future results.

Wit Capital is a Delaware corporation. Its executive offices are located at
826 Broadway, Seventh Floor, New York, New York 10003. Its telephone number is
(212) 253-4400. Its Web site is http://www.witcapital.com. Other than the
electronic version of this proxy statement/prospectus that is available on the
Wit Capital Web site (HTTP://WWW.[ ].COM) none of the information on Wit
Capital's Web site is part of this prospectus. Wit Capital's regulated
activities are carried out through its wholly owned subsidiary, Wit Capital
Corporation, which is a broker-dealer licensed with the Securities and Exchange
Commission and a member of the National Association of Securities Dealers.

SOUNDVIEW TECHNOLOGY GROUP, INC.

SoundView is a Connecticut-based broker-dealer and investment banking firm
focused exclusively on technology. This singular focus has allowed SoundView to
provide in-depth investment research which enables SoundView to provide
investment banking and institutional brokerage services. SoundView's investment
banking business is comprised primarily of the underwriting of public offerings
of equity securities and providing financial advisory services in connection
with transactions such as mergers and acquisitions, divestitures and valuations.
SoundView's brokerage operations provide a variety of sales and trading services
to institutional investors. It leverages its technology expertise through a
sales force which has a comprehensive understanding of the complex and diverse
technologies involved in technology-focused investing. In 1998, SoundView's
institutional brokerage and investment banking revenues made up 77% and 12% of
total revenue, respectively. In the nine months ended September 30, 1999,
institutional brokerage and investment banking revenues made up 59% and 31% of
total revenue respectively. These percentages may not be indicative of future
results.

SoundView is a Delaware corporation. Its executive offices are located at 22
Gatehouse Road, Stamford, Connecticut 06902. Its telephone number is
(203) 462-7200. Its Web site is HTTP://WWW.SOUNDVIEW.COM.

1
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THE SPECIAL MEETING OF WIT CAPITAL STOCKHOLDERS (SEE PAGE )

DATE, TIME AND PLACE (SEE PAGE )

The special meeting will be held on January [ ], 2000 at [time], New York
City time, at [place], New York, New York.

MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING (SEE PAGE )

At the special meeting and any adjournment or postponement of the special
meeting, Wit Capital stockholders will be asked:

- to consider and vote upon the adoption of the Agreement and Plan of
Merger, dated as of October 31, 1999, among Wit Capital, W/S Merger Corp.
and SoundView;

- to authorize an amendment to the Wit Capital Stock Incentive Plan to
increase the number of shares of Wit Capital common stock reserved for
issuance under the Stock Incentive Plan by an additional 9,850,000 shares;

- to authorize an amendment to the Stock Incentive Plan to limit the maximum
number of options and other awards that may be granted to an employee in
any fiscal year to ensure compliance with Section 162(m) under the
Internal Revenue Code; and

- to transact such other business as may properly come before the special
meeting.

RECORD DATE (SEE PAGE )

Wit Capital's board has fixed the close of business on [date that is between
20-60 days before the date of the special meeting] as the record date for
determination of Wit Capital stockholders entitled to notice of and to vote at
the special meeting.

VOTING AND REVOCATION OF PROXIES (SEE PAGE )

Wit Capital stockholders should complete, date and sign the accompanying
proxy and promptly return it in the accompanying envelope or otherwise mail it
to Wit Capital. If voting by telephone or the Internet, please follow the
instructions set forth on the enclosed proxy card. Brokers holding shares in
"street name" may vote the shares only if the stockholder provides instructions
on how to vote. Brokers will provide a stockholder with directions on how to
instruct the broker to vote the shares. All properly executed proxies that Wit
Capital receives prior to the vote at the special meeting, and that are not
revoked, will be voted in accordance with the instructions indicated on the
proxies or, if no direction is indicated, to approve (1) the merger agreement
and (2) both amendments to the Stock Incentive Plan. Wit Capital's board does
not currently intend to bring any other business before the special meeting and
no matters may be brought before the special meeting by any person other than
the board. If other business properly comes before the special meeting, the
proxies will vote in accordance with their own judgment.

A stockholder may revoke its proxy at any time prior to use by delivering to
the corporate secretary of Wit Capital a signed notice of revocation or a
later-dated, signed proxy, or by attending the special meeting and voting in
person. Attendance at the special meeting does not in itself constitute the
revocation of a proxy.

VOTES REQUIRED (SEE PAGE )

Approval of the merger agreement requires the affirmative vote of the
holders of a majority of the shares of Wit Capital common stock entitled to vote
and present or represented by proxy at the special meeting of Wit Capital
stockholders. Approval of the amendments to the Stock Incentive Plan requires
the affirmative vote of the holders of a majority of the shares of Wit Capital
common stock entitled to vote and

2
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present or represented by proxy at the special meeting. Neither the approval of
the merger agreement nor approval of the amendments to the Stock Incentive Plan
is conditional on approval of the other proposal. The approval of one amendment
to the Stock Incentive Plan is not conditional upon approval of the other
amendment. A vote in favor of approval of the merger agreement will result in
Wit Capital's adoption of SoundView's stock option plan, although no additional
options to purchase shares will be granted under that plan.

QUORUM, ABSTENTIONS AND BROKER NON-VOTES (SEE PAGE )

A quorum is present at the special meeting if the holders of a majority of
the shares of Wit Capital common stock issued and outstanding and entitled to
vote at the special meeting on the record date are represented at the special
meeting either in person or by proxy. Abstentions and broker "non-votes" each
will be included in the calculation of the number of shares present and voting
at the meeting for the purpose of determining the presence of a quorum. Wit
Capital stockholders are urged to return the enclosed proxy card marked to
indicate their vote, or if voting by telephone or the Internet, to follow the
instructions set forth on the enclosed proxy card. Abstentions and broker
non-votes will not be included in vote totals and will have no effect on the
outcome of the votes on the approval of the merger agreement and the amendments
to the Stock Incentive Plan.

SOLICITATION OF PROXIES AND EXPENSES (SEE PAGE )

Wit Capital has retained the services of Georgeson Shareholder
Communications Inc. to assist in the solicitation of proxies from its
stockholders. In addition to solicitation by mail, the directors, officers and
employees of Wit Capital may solicit proxies from its stockholders by telephone,
facsimile, other electronic means or in person. Brokerage houses, nominees,
fiduciaries and other custodians will be requested to forward soliciting
materials to beneficial owners and will be reimbursed for their reasonable
expenses incurred in sending proxy materials to beneficial owners.

BOARD RECOMMENDATIONS (SEE PAGE )

The Wit Capital board of directors has determined that the merger agreement
and the merger are advisable and fair to, and in the best interests of, Wit
Capital and its stockholders. Accordingly, the board has unanimously approved
the merger agreement and the issuance of shares of Wit Capital common stock in
connection with the merger and unanimously recommends that stockholders vote FOR
approval of the merger agreement. The board has also unanimously approved the
amendments to the Stock Incentive Plan and unanimously recommends that
stockholders vote FOR approval of each of the proposed amendments to the Stock
Incentive Plan. A vote in favor of approval of the merger agreement will result
in Wit Capital's adoption of SoundView's stock option plan, although no
additional options to purchase shares will be granted under that plan.

THE MERGER (SEE PAGE )

GENERAL

Under the terms of the merger agreement, Wit Capital will acquire by merger
100 percent of the outstanding shares of SoundView in exchange for approximately
$[320] million, consisting of newly-issued common stock, options replacing
SoundView options and up to $30 million in cash. The exchange ratio in the
merger is subject to adjustment for changes in the market price of Wit Capital's
stock from $17.56 up to $18.56 or down to $15.56 and is not adjustable for
changes beyond these levels. Accordingly, the final value of the transaction
could be either greater or less than $[320]million.

The boards of directors and managements of Wit Capital and SoundView have
each determined that, compared to continuing their operations on a stand-alone
basis, the merged company would have better potential to improve long-term
operating and financial results and would have an enhanced competitive

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position. The combined company will be able to offer its investment banking
services to a broader variety of issuers and it should be able to receive
increased share allotments in underwritten offerings in which it participates.
The combined company will provide brokerage services through the Internet to its
individual investor customers and through more traditional channels to its
institutional investor customers. The combined company expects to greatly
benefit from its combined focus on Internet and technology research. Both
companies believe that the breadth and depth of their expertise and experience
will enable us to achieve our goal of becoming the leading online investment
banking firm.

OPINION OF WIT CAPITAL'S FINANCIAL ADVISOR (SEE PAGE )

In deciding to approve the merger, Wit Capital's board of directors and
management considered, among various other factors described under the section
entitled "Reasons for the Merger," an opinion from Wit Capital's financial
advisor.

Goldman, Sachs & Co. has delivered its written opinion, dated October 31,
1999, to the board of directors of Wit Capital that, as of that date, the stock
consideration and the cash consideration, in the aggregate, to be exchanged
pursuant to the merger agreement was fair from a financial point of view to Wit
Capital. The opinion of Goldman Sachs does not constitute a recommendation as to
how any holder of Wit Capital common stock should vote with respect to the
merger.

THE FULL TEXT OF THE WRITTEN OPINION OF GOLDMAN SACHS IS ATTACHED TO THIS
PROXY STATEMENT/PROSPECTUS AS APPENDIX III. HOLDERS OF WIT CAPITAL COMMON STOCK
ARE ENCOURAGED TO, AND SHOULD, READ THE OPINION IN ITS ENTIRETY.

ACCOUNTING TREATMENT (SEE PAGE )

The merger will be accounted for under the "purchase" method of accounting
in accordance with generally accepted accounting principles. This means that,
for accounting and financial reporting purposes, the assets and liabilities of
SoundView will be recorded at their fair value, and any excess of Wit Capital's
purchase price over the fair value of SoundView's tangible net assets will be
recorded as intangible assets, including goodwill.

APPLICABLE WAITING PERIODS AND REGULATORY APPROVALS (SEE PAGE )

The merger is subject to U.S. antitrust laws. We have made the required
filings with the Department of Justice and the Federal Trade Commission, which
terminated the statutory antitrust review period on November 24, 1999. The rules
of the National Association of Securities Dealers, Inc., or the NASD, to which
SoundView and Wit Capital's primary subsidiary are each subject, require advance
notice of the merger to the NASD. Although prior approval by the NASD is not
mandatory, it is customary not to complete a merger subject to these rules until
the NASD has indicated its approval. SoundView and Wit Capital have provided the
required notice. Neither Wit Capital nor SoundView is aware of any other
material governmental or regulatory approval required for completion of the
merger, other than compliance with the applicable merger procedures of the
Delaware General Corporation Law.

TRADING OF WIT CAPITAL COMMON STOCK TO BE ISSUED IN THE MERGER (SEE PAGE )

The inclusion in Nasdaq trading of the shares of Wit Capital common stock to
be issued in the merger is a condition to the completion of the merger.

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RESTRICTIONS ON SALE OF SHARES BY AFFILIATES OF WIT CAPITAL AND SOUNDVIEW (SEE
PAGE )

OPERATIONS FOLLOWING THE MERGER (SEE PAGE )

DIVIDEND POLICY (SEE PAGE )

Neither Wit Capital nor SoundView has ever paid dividends to its
stockholders and Wit Capital does not expect to pay dividends for the
foreseeable future.

INTERESTS OF NAMED EXPERTS AND COUNSEL IN THE MERGER (SEE PAGE )

Goldman Sachs has acted as Wit Capital's financial advisor in connection
with the merger. It has rendered a written opinion that as of October 31, 1999,
based upon and subject to the various considerations set forth in the opinion,
the exchange ratio was fair to Wit Capital from a financial point of view. The
Goldman Sachs Group, Inc., an affiliate of Goldman Sachs, owns 16% of Wit
Capital's common equity and warrants to purchase additional shares. In addition,
the Goldman Sachs affiliate has a right of first refusal should Wit Capital sell
5% or more of its fully-diluted common equity to a specified competitor of the
Goldman Sachs affiliate. The Goldman Sachs affiliate also has registration
rights with respect to the Wit Capital shares it owns.

Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to Wit Capital in
connection with the merger, is rendering an opinion as to the validity of the
shares of common stock Wit Capital is issuing in the merger. Joseph H. Flom is a
member of Wit Capital's special advisory board and is also a partner of Skadden,
Arps, Slate, Meagher & Flom LLP. In return for his service on Wit Capital's
special advisory board, Wit Capital has granted Mr. Flom options to purchase Wit
Capital's common stock.

MATERIAL FEDERAL INCOME TAX CONSIDERATIONS (SEE PAGE )

The merger is expected to qualify as a tax-free reorganization within the
meaning of the Internal Revenue Code. If the merger qualifies as a tax-free
reorganization, a holder of SoundView common stock will not recognize any gain
or loss solely upon the holder's receipt of Wit Capital common stock in exchange
for the holder's SoundView common stock in the merger, except to the extent the
holder of SoundView common stock receives cash in lieu of a fractional share of
Wit Capital common stock. It is a condition to completion of the merger that Wit
Capital and SoundView will receive a legal opinion to this effect.

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THE MERGER AGREEMENT AND RELATED AGREEMENTS (SEE PAGE )

EXCHANGE RATIO (SEE PAGE )

The merger agreement provides that each stockholder of SoundView will
receive for each share a number of shares of Wit Capital's stock based upon a
floating exchange ratio subject to a collar. The floating exchange ratio is
intended to provide stockholders of SoundView with shares of Wit Capital's stock
valued at $81.2387, based on the average trading price during the measurement
period, so long as the average trading price of Wit Capital's stock remains at
or between $15.5625 and $18.5625. If the Wit Capital stock price is above
$18.5625 during the measurement period, the exchange ratio will be fixed at
4.376 and the value of the Wit Capital shares receivable for each SoundView
share will exceed $81.2387. If the Wit Capital stock price during the
measurement period is below $15.5625, on the other hand, the exchange ratio will
be fixed at 5.220 and the value of the Wit Capital shares receivable for each
SoundView share will be less than $81.2387.

CASH ELECTION (SEE PAGE )

A limited cash election feature allows each stockholder of SoundView to
receive a cash payment in lieu of Wit Capital's stock, subject to an overall
limitation, including any stockholders exercising dissenter rights, of
$30 million.

CASH IN LIEU OF FRACTIONAL SHARES (SEE PAGE )

No fractional shares of Wit Capital common stock will be issued in the
merger. In lieu of any fractional shares, each stockholder of SoundView who
would otherwise be entitled to a fraction of a share of Wit Capital's stock
pursuant to the merger will be paid an amount in cash (without interest)
determined by multiplying the average trading price of Wit Capital's stock
during the measurement period (but not more than $18.5625 or less than $15.5625)
by the fraction of a share of Wit Capital's stock to which such stockholder
would otherwise be entitled.

SOUNDVIEW STOCK OPTIONS (SEE PAGE )

The terms and provisions of SoundView's Stock Option Plan will generally
continue in full force and effect and will govern each option outstanding under
SoundView's Stock Option Plan immediately prior to the time the merger is
effective. At the time the merger is effective, each option then outstanding
will be automatically converted into an option to purchase shares of Wit
Capital's stock at the exchange ratio. The exercise price per share will be
appropriately adjusted. In addition, the vesting schedule for SoundView options
outstanding and not yet vested at the time the merger is effective will, except
to the extent forfeited under SoundView's Stock Option Plan, vest quarterly over
a three year period following the effective time of the merger. However, all of
such options held by an employee will vest immediately upon the occurrence of:

(1) the termination of the employee's employment by Wit Capital or its
subsidiaries without cause;

(2) the acquisition or creation by Wit Capital of an additional business
which replaces SoundView's institutional brokerage business as Wit
Capital's primary institutional brokerage business;

(3) the acquisition or creation by Wit Capital of an additional business
which replaces SoundView's investment banking technology group or
research technology group as Wit Capital's primary investment
banking technology group or research technology group; or

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(4) the completion by Wit Capital of a merger or consolidation or the
completion of a tender offer or exchange offer for, or purchase of,
shares of Wit Capital stock resulting in:

(A) the stockholders of Wit Capital prior to such transaction holding
less than 50% of the voting power of all classes of either Wit
Capital stock or the stock of the other company, as the case may
be, or

(B) the members of Wit Capital's board of directors prior to such
transaction representing less than 50% of the board of directors
of either Wit Capital or the other company, as the case may be.

RETENTION POOL (SEE PAGE )

At the effective time of the merger, Wit Capital will issue to designated
SoundView employees an aggregate number of shares of Wit Capital common stock
equal to the product of (a) the quotient resulting from dividing $25 million by
$81.2387 times (b) the exchange ratio. Half of the retention shares allocated to
an employee will vest when that employee has been continuously employed by Wit
Capital and its subsidiaries for the first thirty months after the merger. The
remaining half of the retention shares allocated to an employee will vest when
that employee has been continuously employed by Wit Capital and its subsidiaries
for the first forty-two months after the merger. The only exceptions to the
continuous employment requirement will be termination by Wit Capital without
cause and, for five of SoundView's senior executives, death or disability.
Retention shares that do not vest due to termination of employment will be
forfeited.

THE EXCHANGE AGENT (SEE PAGE )

American Stock Transfer & Trust Company will act as the exchange agent in
connection with the merger.

EXCHANGE OF SOUNDVIEW STOCK CERTIFICATES FOR WIT CAPITAL STOCK CERTIFICATES
(SEE PAGE )

Upon surrender of the SoundView stock certificates, the exchange agent will
issue to each holder 3 certificates with the following characteristics:

(1) the first certificate will represent 34.84% of the shares of Wit
Capital common stock receivable in the conversion, which shares will
have no transfer restriction except as provided under the Securities
Act;

(2) the second certificate will represent 32.58% of the shares of Wit
Capital common stock receivable in the conversion, which shares will
have a one-year transfer restriction from the effective time of the
merger; and

(3) the third certificate will represent 32.58% of the shares of Wit
Capital common stock receivable in the conversion, which shares will
have a two-year transfer restriction from the effective time of the
merger.

REPRESENTATIONS AND WARRANTIES (SEE PAGE )

Wit Capital and SoundView each made a number of representations and
warranties in the merger agreement about their authority to enter into the
merger agreement and to consummate the other transactions contemplated by the
merger agreement and about aspects of their business, financial condition,
structure and other facts pertinent to the merger.

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WIT CAPITAL'S AND SOUNDVIEW'S CONDUCT OF THEIR RESPECTIVE BUSINESSES BEFORE
COMPLETION OF THE MERGER
(SEE PAGE )

SoundView and Wit Capital have agreed that, until the completion of the
merger or unless the other party consents in writing, SoundView and Wit Capital
and their respective subsidiaries will conduct their businesses in the ordinary
course of business and consistent with past practices and will use commercially
reasonable efforts:

- to preserve their business organizations intact;

- to keep available the services of their current officers and employees;

- to preserve their relationships with persons or entities with which they
have business relations; and

- to complete the merger and related transactions.

Wit Capital has also agreed:

- to use its reasonable best efforts to properly call and hold a special
meeting of Wit Capital stockholders to approve the merger and to solicit
from its stockholders proxies in favor of approval of the merger
agreement; and

- to prepare and file with the SEC, as promptly as practicable, a
registration statement on Form S-4 with respect to shares of Wit Capital
common stock to be issued in the merger.

NO SOLICITATION OF COMPETING TRANSACTION (SEE PAGE )

Until the merger is completed or the merger agreement is terminated,
SoundView has agreed not to directly or indirectly solicit, encourage,
participate, or initiate discussions or negotiations with or disclose any
information to any persons concerning any "acquisition proposal". SoundView must
immediately notify Wit Capital of the existence and details of any acquisition
proposal. SoundView's board may not withdraw or modify, or propose to withdraw
or modify, its approval of the merger or the merger agreement in a manner
adverse to Wit Capital, or approve or recommend, propose to approve or
recommend, or enter into any agreement with respect to any acquisition proposal.

CONDITIONS TO COMPLETION OF THE MERGER (SEE PAGE )

Wit Capital's and SoundView's respective obligations to complete the merger
and the related transactions are subject to approval of the merger agreement by
Wit Capital's stockholders, as well as the prior satisfaction or waiver (if
permitted by applicable law) of conditions pertaining to the following matters:

- each party's representations and warranties and performance of all
obligations under the merger agreement;

- obtaining stockholder approvals;

- no order, writ, injunction or decree prohibiting or preventing completion
of the merger;

- effectiveness of the registration statement relating to the issuance of
shares of Wit Capital common stock in connection with the merger;

- all necessary governmental filings, consents and any antitrust law waiting
period;

- opinions as to corporate matters of each of the parties;

- opinions as to tax matters; and

- employment agreements.

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Wit Capital's obligations to complete the merger and the other transactions
contemplated by the merger agreement are subject to the satisfaction or waiver
of additional conditions pertaining to the following matters:

- each affiliate of SoundView's compliance with Rule 145 under the
Securities Act;

- third party consents, authorizations and approvals; and

- the sum of SoundView shares to which dissenters' rights have been properly
asserted under Delaware law and SoundView shares subject to options as to
which the holders have not surrendered certain selling rights not
exceeding 10% of the sum of issued and outstanding shares immediately
prior to the effective time of the merger.

TERMINATION OF THE MERGER AGREEMENT (SEE PAGE )

The merger agreement may be terminated under certain circumstances at any
time by either party before the completion of the merger:

- by both parties' mutual written consent;

- by either party if it has become reasonably certain that any of the
conditions to completion of the merger would not be satisfied on or prior
to May 31, 2000 and will not be waived;

- by the non-breaching party if there has been a breach of any of the
representations and warranties in the merger agreement by one of the
parties which would entitle the other party to choose not to complete the
merger if the breach could not be cured before May 31, 2000;

- by the non-breaching party if there has been a material breach of any of
the covenants or agreements in the merger agreement by one of the parties
if the breach has not been cured within 20 business days after receipt of
notice by the breaching party; or

- by either party if the completion of the merger has not occurred by
May 31, 2000.

If the volume weighted average price of Wit Capital's common stock over a
five day period falls below $10, the merger agreement may be terminated by
SoundView. Conversely, if the volume weighted average price of Wit Capital's
common stock over a five day period rises above $25, the merger agreement may be
terminated by Wit Capital.

If one of the parties is in material breach of its obligations or
representations and warranties, that party does not have the right to terminate
the merger agreement. The merger agreement will become null and void upon
termination.

EXTENSION, WAIVER AND AMENDMENT OF THE MERGER AGREEMENT (SEE PAGE )

Wit Capital and SoundView may amend the merger agreement without any
requirement that the stockholders of either party approve the amendment, unless
the amendment has the effect of materially decreasing the consideration into
which SoundView common stock will be converted. Both SoundView and Wit Capital
may waive in writing the performance by the other party of representations,
warranties, covenants or other understandings under the merger agreement and the
satisfaction of any conditions to its obligations to close the transactions.

RELATED AGREEMENTS

VOTING AGREEMENT (SEE PAGE )

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meeting of SoundView stockholders, to vote all of their shares of SoundView's
stock in favor of the merger with Wit Capital and against any other proposal or
offer to buy all or a substantial part of the business or properties of
SoundView. They also agreed to vote against any action, proposal or agreement
that would delay, impede, frustrate, prevent or nullify the merger agreement or
the satisfaction of the conditions precedent to the merger agreement. Under the
terms of the voting agreement, those SoundView stockholders also granted to Wit
Capital an irrevocable proxy enabling the named proxies or their substitutes, at
any meeting of SoundView stockholders, to vote their shares of SoundView's stock
in the discretion of the proxies on all matters relating to the voting
agreement.

EMPLOYMENT AGREEMENTS (SEE PAGE )

Not later than the effective time of the merger, Wit Capital will enter into
employment agreements with some of SoundView's employees. Employment agreements
will have periods ranging from 30 to 42 months after the effective time of the
merger unless Wit Capital terminates the agreement or the employee resigns
earlier. If the employee's employment is terminated before the end of the
employment period by Wit Capital without "cause" or by the employee for "good
reason," Wit Capital will pay the employee a specified severance payment. If the
employment is terminated for cause prior to the end of the employment period, or
if the employee dies or becomes totally disabled, then Wit Capital will pay the
employee all unpaid base salary and guaranteed bonus earned through the date of
termination of employment.

NON-DISCLOSURE AND ASSIGNMENT OF INVENTIONS AGREEMENT (SEE PAGE )

Each employee who enters into an employment agreement with Wit Capital must
also enter into a non-disclosure and assignment of inventions agreement relating
to (1) restrictions on disclosures of confidential information belonging to Wit
Capital and (2) any inventions, software programs, data or other developments
created or discovered during the employment term.

PUT TERMINATION AGREEMENTS (SEE PAGE )

Each employee who enters into an employment agreement with Wit Capital must
also enter into a put termination agreement with SoundView. These arrangements
provide for amendment of (1) the vesting schedule of unvested options, (2) the
terms of acceleration of unvested options and (3) the legends on stock
certificates issued to each employee upon exercise of their options and stock
appreciation rights. These agreements also terminate a prior stock purchase and
transfer restriction agreement between each employee and SoundView that would
otherwise permit the employee to put and SoundView to call the employee's stock
at specified prices if the employee's employment is terminated. These agreements
are effective at the closing of the merger.

THE AMENDMENTS TO WIT CAPITAL'S STOCK INCENTIVE PLAN (SEE PAGE )

Wit Capital's stockholders are being asked to approve two amendments to Wit
Capital's 1999 Stock Incentive Plan. The first amendment to the Stock Incentive
Plan would increase the number of shares of Wit Capital common stock reserved
for issuance under the plan by an additional 9,850,000 shares. The share
increase will ensure that a sufficient reserve of common stock remains available
under the Stock Incentive Plan. The second amendment to the Stock Incentive Plan
would limit the maximum number of options and other awards which may be granted
to an employee of Wit Capital in any fiscal year to 1 million shares of Wit
Capital common stock. The purpose of the amendment is to ensure that any options
and other awards granted under the Stock Incentive Plan after its amendment
increasing the number of shares available for issuance under the plan will
qualify as "performance-based compensation" under Section 162(m) of the Internal
Revenue Code.

TRADEMARKS

This proxy statement/prospectus contains registered service marks,
trademarks and trade names of Wit Capital, including the Wit Capital name. This
proxy statement/prospectus contains registered service marks, trademarks and
trade names of SoundView, including the SoundView name.

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MARKET PRICE INFORMATION

WIT CAPITAL MARKET PRICE DATA

Wit Capital's common stock has traded on the Nasdaq National Market under
the symbol "WITC" since June 4, 1999. The following table sets forth the range
of high and low sales prices reported on the Nasdaq National Market for Wit
Capital common stock for the periods indicated.

<TABLE>
<CAPTION>
FISCAL YEAR 1999: HIGH LOW
- ----------------- -------- --------
<S> <C> <C>
Second quarter (beginning June 4, 1999)..................... $38.00 $ 9.00
Third quarter............................................... 37.50 15.50
Fourth quarter (through November 29, 1999).................. 24.75 15.50
</TABLE>

SOUNDVIEW MARKET PRICE DATA

SoundView's common stock is not traded in any securities market.

RECENT CLOSING PRICES

On October 29, 1999, the last trading day before announcement of the
proposed merger, the closing price per share of Wit Capital common stock on the
Nasdaq National Market was $17.56. On October 25, 1999, five business days
before announcement of the proposed merger, the closing price per share of Wit
Capital common stock on the Nasdaq National Market was $16.31. On [ ],
2000, the latest practicable trading day before the printing of this proxy
statement/prospectus, the closing price per share of Wit Capital common stock on
the Nasdaq National Market was $[ ].

Because the market price of Wit Capital common stock is subject to
fluctuation, the market value of the shares of Wit Capital common stock that
holders of SoundView common stock will receive in the merger may increase or
decrease prior to and following the merger. We urge stockholders to obtain
current market quotations for Wit Capital common stock. No assurance can be
given as to the future prices or markets for Wit Capital common stock.

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RISK FACTORS

In addition to the other information included in this proxy
statement/prospectus, you should carefully consider the following risk factors
in determining how to vote. These matters should be considered in conjunction
with the other information included in this proxy statement/prospectus.

RISKS RELATED TO THE MERGER

WE MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE THE BUSINESS OF SOUNDVIEW AND
ACHIEVE THE BENEFITS EXPECTED TO RESULT FROM THE MERGER.

The merger will present challenges to management, including the integration
of our operations, technologies and personnel with those of SoundView, and
special risks, including possible unanticipated liabilities, unanticipated costs
and diversion of management attention. We cannot assure you that we will
successfully integrate or profitably manage SoundView's business.

The successful execution of these post-merger matters will involve
considerable risk and may not be successful. Wit Capital is an online investment
banking and brokerage firm that sells shares in public offerings to individual
investors through the Internet. SoundView is a major bracket investment banking
firm, with a focus on technology sectors, that offers investment banking
services primarily to institutional investors through traditional channels of
business. Furthermore, SoundView's principal offices are located in Stamford,
Connecticut, while Wit Capital's principal offices are located in New York, New
York. There are currently no plans to relocate either of these principal
offices. In order for the merger to be successful, we must successfully
integrate SoundView's operations and personnel with Wit Capital's operations and
personnel. The failure of Wit Capital to complete the integration successfully
could result in the loss of key personnel and customers.

In general, we cannot offer any assurances that we can successfully
integrate or realize the anticipated benefits of the merger. Our failure to do
so could have a material adverse effect on the combined company's business,
financial condition and operating results or could result in loss of key
personnel. In addition, the attention and effort devoted to the integration of
the two companies will significantly divert management's attention from other
important issues, and could seriously harm the combined company.

IF WE FAIL TO SUCCESSFULLY CROSS-MARKET OUR SERVICES, WE WILL NOT INCREASE OR
MAINTAIN OUR CUSTOMER BASE OR OUR REVENUES.

We initially intend to offer our respective investment banking, research and
other financial services to each other's customers. We cannot assure you that
either our customers or those of SoundView will have any interest in the other
company's services. The failure of these cross-marketing efforts would diminish
the benefits to be realized by this merger.

THE MERGER COULD ADVERSELY AFFECT COMBINED FINANCIAL RESULTS.

If the benefits of the merger do not exceed the costs associated with the
merger, including any dilution to Wit Capital's stockholders resulting from the
issuance of shares in connection with the merger, Wit Capital's financial
results, including earnings per share, could be adversely affected.
Specifically, Wit Capital expects to incur direct transaction costs of
approximately $7 million in connection with the merger.

THE MARKET PRICE OF WIT CAPITAL COMMON STOCK MAY DECLINE AS A RESULT OF THE
MERGER.

The market price of Wit Capital common stock may decline as a result of the
merger if:

- the integration of Wit Capital and SoundView is unsuccessful;

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- Wit Capital does not achieve the perceived benefits of the merger as
rapidly or to the extent anticipated by financial or industry analysts; or

- the effect of the merger on Wit Capital's financial results is not
consistent with the expectations of financial or industry analysts.

THE LOSS OF OUR PROFESSIONALS COULD ADVERSELY AFFECT OUR BUSINESSES AND RESULTS
OF OPERATIONS.

Wit Capital's and SoundView's businesses are relationship intensive, and our
success depends on identifying, hiring, training and retaining talented
professionals. If a significant number of our current employees or any of our
senior managers or key business managers leave, we may be unable to maintain
anticipated levels of business. Moreover, current and prospective Wit Capital
and SoundView employees may experience uncertainty about their future roles with
the combined company until Wit Capital's strategies with regard to SoundView are
announced or executed. Any uncertainty may adversely affect Wit Capital's and
SoundView's ability to attract and retain key management, sales, marketing and
technical personnel. We have entered into employment agreements with some of our
senior managers, but these key personnel may still leave us. Even if we retain
our current employees, our management must continually recruit talented
professionals in order for our business to grow. We compete intensely with our
competitors for qualified personnel. If we cannot attract, motivate and retain
qualified professionals, our business and results of operations could suffer
material harm.

UNCERTAINTIES ASSOCIATED WITH THE MERGER MAY CAUSE SOUNDVIEW TO LOSE CUSTOMERS.

SoundView customers may, in response to the announcement of the merger,
delay or defer decisions concerning SoundView. Any delay or deferral in those
decisions by SoundView customers could have a material adverse effect on
SoundView's business and on the business of the combined company. For example,
SoundView and the combined company could experience a decrease in expected
revenue as a consequence of the uncertainties associated with the merger.

FAILURE TO COMPLETE THE MERGER COULD NEGATIVELY AFFECT OUR STOCK PRICE AND
FUTURE BUSINESS AND OPERATIONS.

If the merger is not completed for any reason, we may be subject to a number
of material risks, including the following:

- the price of our common stock may decline to the extent that the current
market price of our common stock reflects a market assumption that the
merger will be completed, and

- even if the merger is not completed, we must pay all legal and accounting
costs related to the merger and a fee for Goldman Sachs's financial
advisory services.

Further, if the merger is terminated and our board of directors determines
to seek another merger or business combination, there can be no assurance that
we will be able to find a suitable partner for an equivalent or more attractive
price than the price to be paid in the merger. If our failure to complete the
merger causes any or all of these or other potential consequence to occur, the
result would adversely affect our business.

THE FAIRNESS OPINION OBTAINED BY US WILL NOT REFLECT CHANGES IN THE RELATIVE
VALUES OF THE COMPANIES SINCE THE MERGER AGREEMENT WAS SIGNED.

We do not intend to obtain an updated fairness opinion of Goldman Sachs.
Changes in the operations and prospects of us or SoundView, general market and
economic conditions and other factors which are beyond the control of us or
SoundView, on which the opinion of Goldman Sachs is based, may have altered the
relative values of the companies. Therefore, the opinion of Goldman Sachs does
not address the fairness of the merger consideration at the time the merger will
be completed.

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RISKS RELATED TO WIT CAPITAL, SOUNDVIEW OR THE COMBINED COMPANY

INABILITY TO EXPAND OUR INTERNET BUSINESS COULD ADVERSELY AFFECT OUR BUSINESS.

Our prospects are subject to the risks, expenses and uncertainties
encountered by companies in the rapidly evolving markets for Internet products
and services. These risks include the failure to continue to develop our name
recognition and reputation, the rejection of our services by Internet users or
vendors, our inability to maintain and increase the usage of our online
services, increased competition from other investment banking firms and our
inability to attract, retain and motivate highly qualified employees. We may not
be successful in addressing these risks, and our business and financial
condition could suffer.

WE HAVE INCURRED LOSSES SINCE OUR INCEPTION AND EXPECT TO INCUR LOSSES AT LEAST
THROUGH DECEMBER 31, 2000.

As of September 30, 1999, Wit Capital had cumulative losses of
$26.3 million. Wit Capital has not achieved profitability on a quarterly or
annual basis to date. Although our revenue has grown in recent periods, there
can be no assurance that our revenues will continue at their current level or
increase in the future. We anticipate that we will continue to incur net losses
at least through December 31, 2000. We expect to continue to increase our
operating expenses significantly, expand our investment banking staff and our
sales and marketing operations and continue to develop and extend our online
services. If such expenses precede or are not followed by increased revenues,
our business, results of operations and financial condition could be materially
and adversely affected.

Our limited operating history and the uncertain nature of the markets we
address make it difficult or impossible to predict future results of operations.
Therefore, our recent revenue growth should not be an indicator of the rate of
revenue growth, if any, we can expect in the future.

WE MUST RECEIVE INCREASED SHARE ALLOTMENTS IN UNDERWRITTEN OFFERINGS OR OUR
INVESTMENT BANKING BUSINESS MAY BE SERIOUSLY AFFECTED BY LIMITED REVENUES FROM
PUBLIC UNDERWRITING ACTIVITIES.

During 1999, Wit Capital has begun to receive larger management fees and
allocations of the shares in the offerings in which we are participating and
have experienced a general increase in the number of offerings in which we
participate. An inability to continue to secure equivalent or increased portions
of underwriting and management fees and selling concessions may force us to
rethink our strategy of seeking to be a co-manager only and require us to seek
to be a lead underwriter, which may be more difficult to achieve and would
result in our having significant additional responsibilities. These
responsibilities include forming and managing underwriting syndicates, leading
underwriters' due diligence examination of the issuers, taking the lead
underwriter's role in the preparation of prospectuses and other offering
materials and developing and coordinating the marketing efforts for the
securities. While we have been assembling an experienced group of investment
bankers and syndicate managers and the addition of SoundView will accelerate our
efforts in this segment of our business, the ability to coordinate these efforts
and effectively sell an issuer's securities will be critical to our ability to
develop and maintain a reputation as a leading investment banking firm.

WE MUST RECEIVE INCREASED SHARE ALLOTMENTS IN UNDERWRITTEN OFFERINGS AND IMPROVE
OUR COMMUNICATIONS CAPACITY AND INFRASTRUCTURE OR OUR INVESTMENT BANKING
BUSINESS MAY BE SERIOUSLY AFFECTED BY CUSTOMER DISSATISFACTION.

We generally do not receive in any offering an allotment of shares for sale
that will satisfy our customers' demand. We experience customer dissatisfaction
due to our inability to sell to our customers the number of shares they want to
purchase. We have also experienced customer dissatisfaction due to our
communications system's occasional inability to manage the level of our customer
inquiries and to intermittent failures which have temporarily disrupted our
Web-site brokerage services.

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WE MAY INCUR LOSSES AND LIABILITIES IN THE COURSE OF BUSINESS WHICH COULD PROVE
COSTLY TO DEFEND OR RESOLVE.

Participation in underwritings involves significant economic risks. An
underwriter may incur losses if it is unable to resell the securities it is
committed to purchase or if it is forced to liquidate its commitment at less
than the price at which it purchased the securities from the issuer. In
addition, the trend toward larger commitments on the part of managing
underwriters means that, from time to time, an underwriter may retain
significant position concentrations in individual securities.

Underwriters also face significant legal risks, and the volume and amount of
damages claimed in lawsuits against financial intermediaries are increasing.
These risks include potential liability under federal and state securities and
other laws for allegedly false or misleading statements made in connection with
securities offerings and other transactions. We also face the possibility that
customers or counterparties will claim that we improperly failed to apprize them
of applicable risks or that they were not authorized or permitted under
applicable corporate or regulatory requirements to enter into transactions with
us and that their obligations to us are not enforceable.

These risks often may be difficult to assess or quantify and their existence
and magnitude often remain unknown for substantial periods of time. We may incur
significant legal expenses in defending against litigation. We expect to be
active in the underwriting of initial public offerings and follow-on offerings
of the securities of emerging and mid-size growth companies, which often involve
a high degree of risk and volatility. Substantial legal liability or a
regulatory action against us could have a material adverse financial effect on
us.

OUR RELATIONSHIP WITH GOLDMAN SACHS MAY MAKE IT MORE DIFFICULT FOR US TO DEVELOP
OR MAINTAIN STRATEGIC RELATIONSHIPS WITH OTHER INVESTMENT BANKING FIRMS.

Since our inception, we have consistently tried to develop constructive
working relationships with a number of traditional investment banking firms. In
certain cases, these relationships have enabled us to obtain assignments in
public offerings that we might not otherwise have obtained. The Goldman Sachs
investment may make it more difficult for us to develop or maintain
relationships with firms that compete with Goldman Sachs and, as a result, may
make it more difficult for us to obtain assignments in public offerings lead
managed by competitors of Goldman Sachs. In addition, under the terms of our
agreement with Goldman Sachs, if we intend to offer equity securities
representing more than 5% of our shares on a fully diluted basis to any of a
number of designated competitors of Goldman Sachs, Goldman Sachs will have a
first right to purchase all the offered shares on the same terms as offered to
the competitor.

OUR AGREEMENT WITH GOLDMAN SACHS IS NOT EXCLUSIVE AND DOES NOT PROHIBIT GOLDMAN
SACHS FROM COMPETING DIRECTLY OR INDIRECTLY WITH US.

Although Goldman Sachs has invested in us, it is not prohibited from
assisting any other broker-dealer involved in online investment banking. Goldman
Sachs is not precluded from competing directly against us. Moreover, Goldman
Sachs will have an observer attend meetings of our board of directors and will
have access to our confidential information. Finally, Goldman Sachs is not
required to reserve for us any particular number of shares--or even to include
us--in any public offerings that they lead manage. We cannot predict how our
relationship with Goldman Sachs will develop or whether we will receive
significant benefits from our association with them.

THE FAILURE OF OUR BROKERAGE CUSTOMERS TO MEET THEIR MARGIN REQUIREMENTS MAY
CAUSE US TO INCUR SIGNIFICANT LIABILITIES.

Our brokerage business, by its nature, is subject to risks related to
defaults by our customers in paying for securities they have agreed to purchase
and deliver securities they have agreed to sell. U.S. Clearing, a division of
Fleet Securities, Inc., provides clearing services to our brokerage business,
including the

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confirmation, receipt, execution, settlement and delivery functions involved in
securities transactions, as well as the safekeeping of customers' securities and
assets and certain customer record keeping, data processing and reporting
functions. U.S. Clearing makes margin loans to our customers to purchase
securities with funds they borrow from U.S. Clearing. We must indemnify U.S.
Clearing for, among other things, any loss or expense incurred due to defaults
by our customers in failing to repay margin loans or to maintain adequate
collateral for those loans. We are subject to risks inherent in extending
credit, especially during periods of rapidly declining markets and we are
particularly at risk because many of our customers purchase Internet stocks, the
trading prices of which are highly volatile, leading potentially to higher risk
of customer defaults.

WE HAVE REACHED A DETERMINATION THAT WE WILL NOT OPERATE OUR PLANNED DIGITAL
TRADING FACILITY IN THE AFTER-HOURS MARKET, AND ALTHOUGH WE ARE ACTIVELY
EXPLORING A NUMBER OF ALTERNATIVES FOR USING OR SELLING THE ASSETS WE HAVE
DEVELOPED, WE CAN PROVIDE NO ASSURANCE THAT WE WILL NOT HAVE TO WRITE-OFF SOME
OR ALL OF THE PREVIOUSLY CAPITALIZED COSTS ASSOCIATED WITH THE DEVELOPMENT OF
THE DIGITAL TRADING FACILITY.

We have completed our evaluation of whether to continue to spend and prepare
for the roll out of our digital trading facility. We have decided that in light
of the rapidly changing environment for after-hours trading and alternative
trading systems and our need to complete the merger with SoundView, we should
stay focused on our core businesses. Accordingly, we are not going to operate
our digital trading facility. We continue to explore how best to maximize the
value of our investment in developing the digital trading facility assets,
including a sale of the trading system that we have developed, a joint venture
with a third party operator, redeployment of the assets for use in other areas
of our businesses or licensing of our digital trading technology to third
parties. In light of our determination not to proceed, and the status of our
discussions with third parties, we are unable to project whether we will need to
write-down previously capitalized costs. As of November 30, 1999, we estimate
our total committed costs related to the digital trading facility to be
approximately $8 million.

WE MAY NOT BE ABLE TO REALIZE OUR GOAL OF DEVELOPING ADDITIONAL VENTURE CAPITAL
FUNDS SIMILAR TO THE FUND WE HAVE RAISED, OR WE MAY NOT BE ABLE TO DEVELOP
ADDITIONAL TYPES OF FUNDS.

We have recently developed an Internet-related private equity fund primarily
for venture capital investing by high net worth individuals. We intend to offer
additional venture capital funds focused on similar investment strategies and
additional types of funds including a larger fund targeting both individual and
institutional investors. We cannot assure you that we will be able to develop
similar, Internet-related private equity funds or additional types of funds. We
cannot assure you as to how much money we can raise to develop additional funds,
nor can we assure you that institutional investors in the future will be
interested in investing money in our funds. Finally, venture capital investing
in Internet-related companies has become extremely popular and widespread. We
cannot assure you that this trend will continue, or that the substantial risks
facing venture capital investing in Internet-related companies will be
accompanied by significant returns on investment. All of these factors may
adversely impact our venture capital fund business and our business results as a
whole. See "Wit Capital's Business--Venture Capital Fund Group."

OUR INTERNATIONAL INVESTMENTS MAY NOT PROVE TO BE SUCCESSFUL.

We would like to emerge as a global brand known internationally for online
capital raising and Internet investment banking. We have recently entered into
ventures to create online investment banking and brokerage enterprises in Europe
and Japan. In order to succeed, these ventures will have to overcome hurdles
presented by regulatory regimes unlike those in the United States, the dominance
of large securities firms and lack of acceptance of online capital raising and
e-commerce in general. We can make no assurance that these international
ventures and any other we may enter into will be successful or that

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they will assist in establishing the Wit Capital brand as a global brand. See
"Wit Capital's Business--International Opportunities."

WE MAY NOT BE ABLE TO KEEP UP IN A COST-EFFECTIVE WAY WITH RAPID TECHNOLOGICAL
CHANGE.

The online financial services industry is characterized by rapid
technological change, changes in customer requirements, frequent new service and
product introductions and enhancements and evolving industry standards. Our
future success will depend, in part, on our ability to develop technologies and
enhance our existing services and products. We must also develop new services
and products that address the increasingly sophisticated and varied needs of our
customers and prospective customers. We must respond to technological advances
and evolving industry standards and practices on a timely and cost-effective
basis. The development and enhancement of services and products entails
significant technical and financial risks. We may not (1) effectively use new
technologies, (2) adapt services and products to evolving industry standards or
(3) develop, introduce and market service and product enhancements or new
services and products. In addition, we may experience difficulties that could
delay or prevent the successful development, introduction or marketing of these
services and products, and our new service and product enhancements may not
achieve market acceptance. If we encounter these problems, our business,
financial condition and operating results will be materially adversely affected.

PERIODS OF DECLINING SECURITIES PRICES, INACTIVITY OR UNCERTAINTY IN THE PUBLIC
OR PRIVATE EQUITY MARKETS MAY ADVERSELY AFFECT OUR REVENUES.

Our revenues are likely to be lower during periods of declining securities
prices or securities market inactivity in the sectors on which we focus. Wit
Capital's business and SoundView's business are particularly dependent on the
public and private equity markets for companies in the Internet and technology
industries. The public markets have historically experienced significant
volatility not only in the number and size of share offerings, but also in the
secondary market trading volume and prices of newly issued securities. For
example, the markets for offerings by companies in the Internet industry and
some technology sectors have recently experienced significant activity and
volatility. This recent activity may not sustain its current levels. Activity in
the private equity markets frequently reflects the trends in the public markets.
As a result, our revenues from private capital raising activity may also be
adversely affected during periods of declining prices or inactivity in the
public markets. In addition, we may lose customers who have incurred losses by
investing in highly volatile securities of Internet-related companies and some
technology companies.

The growth in our revenues will depend largely on a significant increase in
the number and size of underwritten transactions by companies in our targeted
industries and by the related increase in secondary market trading for these
companies. Underwriting activity in these industries can decline for a number of
reasons. Such activity may also decrease during periods of market uncertainty
occasioned by concerns over inflation, rising interest rates and related issues.
Disappointments in quarterly performance relative to analysts' expectations or
changes in long-term prospects for an industry can also adversely affect capital
raising activities to a significant degree.

WE MAY NOT BE ABLE TO DEVELOP AND MAINTAIN MARKETING RELATIONSHIPS WITH OTHER
INTERNET COMPANIES, WHICH MAY ADVERSELY AFFECT OUR BUSINESS GROWTH.

Our strategy for expanding brand recognition and exposure depends to some
extent on our relationship with other Internet companies. We plan to enter into
marketing agreements with these companies that will permit us to [advertise] our
products and services on their Web pages. We plan to reach a larger and broader
potential customer base by disseminating our own investment research. If we
cannot secure or maintain these marketing agreements on favorable terms, our
prospects could be harmed. Additionally, other online brokers which advertise on
popular Web sites may object to and attempt to undermine our

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marketing agreements or relationships. If successful, the efforts of competing
brokers could materially and adversely affect our growth.

SOUNDVIEW MAY NOT BE ABLE TO DEVELOP AND MAINTAIN RELATIONSHIPS WITH OTHER
TECHNOLOGY COMPANIES, WHICH MAY ADVERSELY AFFECT SOUNDVIEW'S BUSINESS GROWTH.

One of SoundView's strategies for expanding brand recognition and exposure
depends to some extent on its relationship with technology companies. SoundView
obtains investment banking mandates, in part, due to its expertise in the
technology industry and the word-of-mouth exposure that this expertise brings.
If SoundView cannot increase its exposure to other technology companies, its
prospects could be harmed. Additionally, other investment banking firms which
focus on the technology industry may attempt to undermine these relationships.
If successful, the efforts of competing investment banking firms could
materially and adversely affect SoundView's growth.

WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, WHICH MAY CAUSE
US TO INCUR SIGNIFICANT COSTS.

Our business is dependent on proprietary technology and other intellectual
property rights. We rely primarily on copyright, trade secret and trademark law
to protect our technology. We currently have no patents. These concepts and
technologies may not be patentable. In addition, effective trademark protection
may not be available for our trademarks. Notwithstanding the precautions we have
taken, a third party may copy or otherwise obtain and use our software or other
proprietary information without authorization or may develop similar software
independently. Policing unauthorized use of our technology is difficult,
particularly because the global nature of the Internet makes it difficult to
control the ultimate destination or security of software or other data
transmitted. The laws of other countries may afford us little or no effective
protection of our intellectual property. The steps we have taken may not prevent
misappropriation of our technology or the agreements entered into for that
purpose may not be enforceable. In addition, litigation may be necessary in the
future to enforce our intellectual property rights, to protect our trade
secrets, to determine the validity and scope of the proprietary rights of others
or to defend against claims of infringement or invalidity. Such litigation could
result in substantial costs and diversions of resources, either of which could
have a material adverse effect on our business, financial condition and
operating results.

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OUR SUCCESS IS DEPENDENT ON OUR KEY PERSONNEL WHOM WE MAY NOT BE ABLE TO RETAIN,
AND WE MAY NOT BE ABLE TO HIRE ENOUGH ADDITIONAL QUALIFIED PERSONNEL TO MEET OUR
GROWING NEEDS.

Our business requires the employment of highly skilled personnel. The
recruitment and retention of experienced investment banking professionals and
proficient technologists are particularly important to our performance and
success. We do not have "key person" life insurance policies on any of our
officers or associates. The loss of the services of any of our key personnel or
the inability to recruit and retain experienced investment banking professionals
and proficient technologists in the future could have a material adverse effect
on our business, financial condition and operating results. Our chairman and
co-chief executive officer was hospitalized for approximately eight weeks with a
stroke in 1994. We expect further growth in the number of our personnel,
particularly if markets remain favorable to investment banking transactions.
Competition for such personnel is intense. Our continued ability to compete
effectively in our business depends on our ability to attract and retain the
quality personnel our operations and development require. See "Risk
Factors--Risks Related to the Merger--The loss of our professionals could
adversely affect our business and results of operations."

WE MAY HAVE DIFFICULTY EFFECTIVELY MANAGING OUR GROWTH.

We expect our business to develop rapidly. Our current senior management has
limited experience managing a rapidly growing enterprise and may not be able to
effectively manage our growth.

THE INTENSIFYING COMPETITION WE FACE FROM BOTH ESTABLISHED AND RECENTLY FORMED
ENTITIES MAY ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY.

We encounter intense competition in all aspects of our business, and we
expect this competition to increase. Our principal competitors in connection
with our investment banking activities are traditional investment banking firms,
some of which offer their underwritten securities through the Internet. We also
face competition from recently formed online investment banking initiatives,
such as E*Offering, or W. R. Hambrecht & Co. In addition, a group comprised of
Charles Schwab, Ameritrade and TD Waterhouse, along with three venture capital
firms, has announced its intention to form an online investment banking firm. In
the context of online distributions of public offerings, we are facing growing
competition from brokerage firms such as Charles Schwab, Fidelity Brokerage
Services and E*Trade, among others, which offer equity securities through the
Internet. In our online brokerage business, we encounter direct competition from
discount brokerage firms and online brokerage firms, and from full-service
brokerage firms. Most of these investment banking and brokerage firms have been
established for longer and are far better capitalized and staffed than we are,
and have much larger, established customer bases than we do. See "Wit Capital's
Business--Competition" and "SoundView's Business--Competition."

OPERATIONAL RISKS MAY DISRUPT OUR BUSINESS OR LIMIT OUR GROWTH.

Our business is highly dependent on information processing and
telecommunications systems. We face operational risks arising from mistakes made
in the confirmation or settlement of transactions or from transactions not being
properly booked, evaluated or accounted for. Our business is highly dependent on
our ability, and the ability of our clearing firm, to process, on a daily basis,
a large and growing number of transactions across numerous and diverse markets.
Consequently, our clearing firm and we rely heavily on our respective financial,
accounting, telecommunications and other data processing systems. If any of
these systems do not operate properly or are unavailable due to problems with
our physical infrastructure, we could suffer financial loss, a disruption of our
business, liability to clients, regulatory intervention or reputational damage.
In addition, the rapidly increasing level of telephone and e-mail customer
inquiries has at times strained the capacity of our telecommunications system
and our customer service staff. On occasion we have also experienced temporary
disruptions in our Web site service. As a result, our customers have sometimes
been unable to contact us in a timely manner. The inability of our systems to
accommodate an increasing volume of transactions and customer inquiries could
also constrain our ability

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to expand our businesses. We are currently upgrading and expanding the
capabilities of our data and telecommunications systems and other operating
technology. We expect that in the future we will need to continue to upgrade and
expand our systems infrastructure. We intend to expand our telecommunications
system capacity in order to better ensure customer satisfaction.

IF WE FAIL TO COMPLY WITH APPLICABLE LAWS AND REGULATIONS, WE MAY FACE PENALTIES
OR OTHER SANCTIONS THAT MAY BE DETRIMENTAL TO OUR BUSINESS.

When enacted, the Securities Act of 1933, which governs the offer and sale
of securities, and the Securities Exchange Act of 1934, which governs, among
other things, the operation of the securities markets and broker-dealers, did
not contemplate the conduct of a securities business through the Internet.
Uncertainty regarding the application of these laws and other regulations to our
business may adversely affect the viability and profitability of our business.
If we fail to comply with an applicable law or regulation, government regulators
and self regulatory organizations may institute administrative or judicial
proceedings against us that could result in censure, fine, civil penalties
(including treble damages in the case of insider trading violations), the
issuance of cease-and-desist orders, the loss of our status as a broker-dealer,
the suspension or disqualification of our officers or employees or other adverse
consequences. The imposition of any material penalties or orders on us could
have a material adverse effect on our business, operating results and financial
condition.

AFTER THE MERGER, WE WILL ENGAGE IN MARKET-MAKING ACTIVITIES WHICH WILL SUBJECT
US TO INCREASED RISKS WHICH COULD BE HARMFUL TO OUR BUSINESS.

SoundView currently makes markets in a substantial number of technology
stocks. After the merger, we will likely increase our combined market-making
activities. Market-making requires commitment of capital and may result in more
volatile earnings or losses. If we begin to make markets in more volatile
Internet-related securities, we may not be able to manage the risks involved
with market-making volatility. Increased volatility in market-marking will cause
an increase in expenses to ensure proper functioning of this type of
market-making, including the addition of more market-makers. In addition,
pending regulations will require securities to trade in decimals instead of
fractions. Once these regulations are implemented, they may result in a further
decrease in spreads between bid and ask prices, which could make the execution
of trades and market making less profitable. If there is any further decline in
the spreads that market makers receive in trading equity securities, our
business, financial condition and operating results may be materially adversely
affected.

OUR REVENUES MAY DECLINE DUE TO CHANGES IN MARKET STRUCTURE WHICH MAY
SIGNIFICANTLY ALTER OUR PRESENT ACTIVITIES AS A BROKER FOR LISTED SECURITIES.

The securities industry is experiencing a period of intense changes. In this
transforming environment, the role brokers will play in transactions for listed
securities is unpredictable. Important factors include the elimination of a rule
that currently prohibits dealers from making markets in some listed securities
in their own trading rooms, the growth of electronic communications networks
which conduct trading of some securities away from the major exchanges and the
potential for a move toward a central limit order book to consolidate and
provide protection for orders in Nasdaq and listed securities. These factors may
also lead to a growth in the trading between institutional investors in
transactions in which brokers no longer participate. If these developments lead
to a general decrease in the need for brokers in securities trading, our
brokerage business will be adversely affected.

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WE MAY NOT BE ABLE TO SECURE FINANCING IF WE NEED IT IN THE FUTURE.

We may require financing in the future to support more rapid expansion,
develop new or enhanced services and products, respond to competitive pressures,
acquire complementary businesses or technologies or respond to unanticipated
requirements. We can give no assurance that additional financing will be
available when needed on favorable terms, if at all.

EMPLOYEE MISCONDUCT COULD HARM US AND IS DIFFICULT TO DETECT AND DETER.

There have been a number of highly publicized cases involving fraud or other
misconduct by employees in the financial services industry in recent years, and
we run the risk that employee misconduct could occur. Misconduct by employees
could include binding us to transactions that exceed authorized limits or
present unacceptable risks, or hiding from us unauthorized or unsuccessful
activities. In either case, this type of conduct could result in unknown and
undamaged risks or losses. Employee misconduct could also involve the improper
use of confidential information, which could result in regulatory sanctions and
serious reputational harm. It is not always possible to deter employee
misconduct, and the precautions we take to prevent and detect this activity may
not be effective in all cases.

DESPITE OUR EFFORTS, OUR SYSTEMS AS WELL AS THOSE OF OTHERS MAY PROVE NOT TO BE
YEAR 2000 COMPLIANT, WHICH COULD SIGNIFICANTLY DISRUPT OUR BUSINESS.

We may realize exposure and risk if the systems on which we are dependent to
conduct our operations are not Year 2000 compliant. Because we are largely
dependent on our ability to conduct our operations through the Internet, any
significant disruption of this computer infrastructure caused by the Year 2000
problem could significantly interfere with our business operations. Our
potential areas of exposure include products purchased from third parties,
computers, software, telephone systems and other equipment used internally. If
our present efforts to address Year 2000 compliance issues are not successful,
or if vendors with whom we conduct business do not successfully address such
issues, our business, operating results and financial position could be
materially and adversely affected.

WE DO NOT ANTICIPATE PAYING DIVIDENDS.

We do not anticipate paying cash dividends on our common stock in the
foreseeable future.

ANTI-TAKEOVER PROVISIONS AND OUR RIGHT TO ISSUE PREFERRED STOCK COULD MAKE A
THIRD-PARTY ACQUISITION OF US DIFFICULT.

Certain provisions of the Delaware General Corporation Law may delay,
discourage or prevent a change in control. These provisions may discourage bids
for our common stock at a premium over the market price and may adversely affect
the market price and the voting and other rights of the holders of our common
stock. In addition, our governing documents provide for a staggered board and
authorize the issuance of up to 30 million shares of preferred stock. Such
preferred stock, which will be issuable without stockholder approval, could
grant its holders rights and powers that would tend to discourage changes in
control.

THE FUTURE SALE OF SHARES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK
PRICE.

If our stockholders sell substantial amounts of our common stock, including
shares issuable upon the exercise of outstanding options and warrants in the
public market, the market price of our common stock could fall. These sales also
might make it more difficult for us to sell equity securities in the future at a
time and price that we deem appropriate. Persons who may be deemed to be
affiliates of either Wit Capital or SoundView (assuming completion of the
merger) include individuals or entities that control, are controlled by or are
under common control of either Wit Capital or SoundView and may include some of

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the officers, directors or principal stockholders of Wit Capital or SoundView.
Affiliates may not sell their shares of Wit Capital common stock acquired in
connection with the merger except pursuant to:

- an effective registration statement under the Securities Act covering the
resale of those shares; or

- an applicable exemption under the Securities Act.

In connection with the merger, each stockholder of SoundView that could be
deemed an affiliate of Wit Capital must execute and deliver to Wit Capital a
letter stating that it will comply with the requirements of Rule 145 under the
Securities Act if and when that person sells shares of Wit Capital common stock.
Wit Capital's registration statement on Form S-4, of which this proxy
statement/prospectus forms a part, does not cover the resale of shares of Wit
Capital common stock to be received by affiliates in the merger.

RISKS RELATED TO ONLINE COMMERCE AND THE INTERNET

OUR LONG-TERM SUCCESS DEPENDS ON THE DEVELOPMENT OF THE INTERNET AS A COMMERCIAL
MARKETPLACE, WHICH IS UNCERTAIN.

The markets for investment banking and brokerage services through the
Internet are at an early stage of development and are rapidly evolving. Because
the markets for our online services are new and evolving, it is difficult to
predict the future growth (if any) and the future size of these markets. We
cannot assure you that the markets for our online services will continue to
develop or become sustainable. A substantial number of our clients have been
Internet related companies. Sales of many of our services and products will
depend upon the acceptance of the Internet as a widely used medium for commerce
and communication. A number of factors could prevent such acceptance, including
the following:

- Electronic commerce is at an early stage and buyers may be unwilling to
shift their purchasing from traditional vendors to online vendors;

- The necessary network infrastructure for substantial growth in usage of
the Internet may not be adequately developed;

- Increased government regulation or taxation may adversely affect the
viability of electronic commerce;

- Insufficient availability of telecommunication services or changes in
telecommunication services could result in slower response times or
increased costs; and

- Adverse publicity and consumer concern about the security of electronic
commerce transactions could discourage its acceptance and growth.

Conducting investment banking operations through the Internet involves a new
approach to the securities business. We may have to undertake intensive
marketing and sales efforts to educate prospective clients on the uses and
benefits of our services and products in order to generate demand. For example,
corporate issuers may be reluctant to accept our online underwriting
capabilities.

QUESTIONS RELATED TO THE SECURITY OF OUR SYSTEMS AND OUR ABILITY TO TRANSMIT
CONFIDENTIAL INFORMATION OVER THE INTERNET MAY ADVERSELY IMPACT OUR BUSINESS.

The need to securely transmit confidential information over the Internet has
been a significant barrier to electronic commerce and communications. We are
potentially vulnerable to attempts by unauthorized computer users to penetrate
our network security. If successful, those individuals could misappropriate
proprietary information or cause interruptions in our online services. We may be
required to expend significant capital and resources to protect against the
threat of such security breaches or to alleviate problems. In addition to
security breaches, inadvertent transmission of computer viruses could expose us
to the risk of disruption of our business, loss and possible liability.
Continued concerns over the security of

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Internet transactions and the privacy of its users may also inhibit the growth
of the Internet generally as a means of conducting commercial transactions.

FAILURE OF OUR ENCRYPTION TECHNOLOGY COULD COMPROMISE THE CONFIDENTIALITY OF OUR
CUSTOMER TRANSACTIONS AND ADVERSELY AFFECT OUR BUSINESS.

We rely upon encryption and authentication technology, including public key
cryptography technology licensed from third parties, to provide the security and
authentication necessary to effect secure transmission of confidential
information over the Internet. Advances in computer capabilities, new
discoveries in the field of cryptography or other developments could result in a
compromise or breach of the procedures we use to protect customer transaction
data. If any such compromise of our security occurs, our business, financial
condition and operating results could be materially adversely affected.

FORWARD-LOOKING STATEMENTS

We have included in this proxy statement/prospectus statements which may
constitute forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are not historical facts but instead represent only
our beliefs regarding future events, many of which, by their nature, are
inherently uncertain and outside of our, or our management's, control. It is
possible that our actual results may differ, possibly materially, from the
anticipated results indicated in these forward-looking statements. Important
factors that could cause actual results to differ from those in our specific
forward-looking statements include:

- a decline in general economic conditions or the United States securities
markets;

- the inability to secure share allotments in underwritten offerings in
which we participate sufficiently to satisfy our customers' demand and
generate revenue;

- the inability to ensure sufficient revenue to cover our costs and create
profits;

- increased risks due to market-making and institutional sales and trading
activities after the merger;

- the factors discussed on page [ ] under the heading "Update on Digital
Trading Facility";

- problems brought about by the Year 2000 issue; and

- increasing competitive pressures.

For additional information regarding these and other important factors that
could cause actual results to differ from those in our forward-looking
statements, your should read the section in this proxy statement/prospectus
entitled "Risk Factors."

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THE SPECIAL MEETING OF WIT CAPITAL STOCKHOLDERS

GENERAL

We are furnishing this proxy statement/prospectus to holders of Wit Capital
common stock in connection with the solicitation of proxies by the Wit Capital
board of directors for use at the special meeting of stockholders of Wit Capital
to be held on January [ ], 2000, and any adjournment or postponement thereof.

This proxy statement/prospectus is first being furnished to Wit Capital
stockholders on or about January [ ], 2000.

DATE, TIME AND PLACE

The special meeting will be held on January [ ], 2000 at [time], New York
City time, at [place], New York, New York.

MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING

At the special meeting and any adjournment or postponement of the special
meeting, Wit Capital stockholders will be asked:

- to consider and vote upon the adoption of the Agreement and Plan of
Merger, dated as of October 31, 1999, among Wit Capital, W/S Merger Corp.
and SoundView;

- to transact such other business as may properly come before the special
meeting.

RECORD DATE

VOTING AND REVOCATION OF PROXIES

We request that Wit Capital stockholders complete, date and sign the
accompanying proxy and promptly return it in the accompanying envelope or
otherwise mail it to Wit Capital. If voting by telephone or the Internet, please
follow the instructions set forth on the enclosed proxy card. Brokers holding
shares in "street name" may vote the shares only if the stockholder provides
instructions on how to vote. Brokers will provide a stockholder with directions
on how to instruct the broker to vote the shares. All properly executed proxies
that Wit Capital receives prior to the vote at the special meeting, and that are
not revoked, will be voted in accordance with the instructions indicated on the
proxies or, if no direction is indicated, to approve (1) the merger agreement
and (2) the amendments to the Stock Incentive Plan. Wit Capital's board does not
currently intend to bring any other business before the special meeting and no
matters may be brought before the special meeting by any person other than the
board. If other business properly comes before the special meeting, the proxies
will vote in accordance with their own judgment. We recommend that stockholders
vote by proxy even if they are planning to attend the special meeting.
Stockholders may change their proxy votes at the special meeting.

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<PAGE>
A stockholder may revoke its proxy at any time prior to use

- by delivering to the corporate secretary of Wit Capital a signed notice of
revocation or a later-dated, signed proxy; or

- by attending the special meeting and voting in person.

Attendance at the special meeting does not in itself constitute the
revocation of a proxy.

VOTES REQUIRED

As of the close of business on [record date], there were [ ] shares of Wit
Capital common stock outstanding and entitled to vote at the special meeting.
Approval of the merger agreement requires the affirmative vote of the holders of
a majority of the shares of Wit Capital common stock entitled to vote and
present or represented by proxy at the special meeting of Wit Capital
stockholders. Approval of the amendments to the Stock Incentive Plan requires
the affirmative vote of the holders of a majority of the shares of Wit Capital
common stock entitled to vote and present or represented by proxy at the special
meeting. Stockholders have one vote per share of Wit Capital common stock owned
on the record date. Neither the approval of the merger agreement nor approval of
the amendment to the Stock Incentive Plan is conditional on approval of the
other proposal. Shares of Wit Capital Class B common stock are not entitled to
vote at the special meeting.

As of [record date], directors and executive officers of Wit Capital and
their affiliates beneficially owned an aggregate of [ ] shares of Wit Capital
common stock (exclusive of any shares issuable upon the exercise of options not
exercisable within 60 days of the record date) or approximately [ ]% of the
shares of Wit Capital common stock outstanding on such date. The directors and
executive officers of Wit Capital have indicated their intention to vote their
shares of Wit Capital common stock in favor of approval of the merger agreement.
As of [record date], no directors and executive officers of SoundView owned
shares of Wit Capital common stock.

QUORUM, ABSTENTIONS AND BROKER NON-VOTES

A quorum of stockholders is necessary to hold a valid meeting. A quorum is
present at the special meeting if the holders of a majority of the shares of Wit
Capital common stock issued and outstanding and entitled to vote at the special
meeting on the record date are represented at the special meeting either in
person or by proxy. Abstentions and broker "non-votes" each will be included in
the calculation of the number of shares present and voting at the meeting for
the purpose of determining the presence of a quorum. A broker non-vote occurs
when a broker is not permitted to vote on a proposed action because the
beneficial owner of the shares held by the broker has not given the broker
specific instructions on how to vote those shares. Accordingly, Wit Capital
stockholders are urged to return the enclosed proxy card marked to indicate
their vote, or if voting by telephone or the Internet, to follow the
instructions set forth on the enclosed proxy card. Abstentions and broker
non-votes will not be included in vote totals and will have no effect on the
outcome of the votes on the approval of the merger agreement and the amendment
to the Stock Incentive Plan.

SOLICITATION OF PROXIES AND EXPENSES

Wit Capital has retained the services of Georgeson Shareholder
Communications Inc. to assist in the solicitation of proxies from its
stockholders. The fees to be paid to that firm for these services are not
expected to exceed $6,500 plus reasonable out-of-pocket expenses. Wit Capital
will also pay for all printing and filing costs and expenses incurred in
connection with the registration statement and this proxy statement/prospectus.

In addition to solicitation by mail, the directors, officers and employees
of Wit Capital may solicit proxies from its stockholders by telephone,
facsimile, other electronic means or in person. Brokerage

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<PAGE>
houses, nominees, fiduciaries and other custodians will be requested to forward
soliciting materials to beneficial owners and will be reimbursed for their
reasonable expenses incurred in sending proxy materials to beneficial owners.

BOARD RECOMMENDATIONS

The matters to be considered at the special meeting are of great importance
to Wit Capital stockholders. Accordingly, Wit Capital stockholders are urged to
read and carefully consider the information presented in this proxy
statement/prospectus, and to complete, date, sign and promptly return the
enclosed proxy in the enclosed postage-paid envelope or vote appropriately by
telephone or the Internet.

Wit Capital stockholders should not send any stock certificates with their
proxy cards.

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<PAGE>
THE MERGER

This section of the proxy statement/prospectus describes material aspects of
the proposed merger, including the merger agreement. While we believe that the
description covers the material terms of the merger and the related agreements,
this summary may not contain all of the information that is important to Wit
Capital stockholders. Stockholders should read the entire merger agreement and
the other documents we refer to carefully and in their entirety for a more
complete understanding of the merger.

The following discussion of the background of the merger and the parties'
reasons for the merger and the potential benefits that could result from the
merger contains forward-looking statements that involve risks and uncertainties.
Readers are cautioned not to place undue reliance on these forward-looking
statements. The actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including those
set forth under "Risk Factors."

BACKGROUND OF THE MERGER

During July and early August 1999, senior executives of Wit Capital and
SoundView held several exploratory discussions regarding potential strategic
relationships between the two companies, beginning on July 12 with a meeting of
senior executives of Wit Capital and SoundView. Later in August and on several
occasions in September, Wit Capital and its financial advisor, Goldman Sachs,
had further discussions with senior management of SoundView focusing on the
possibility of a business combination. Late in September, general terms were
discussed and each company conducted preliminary business due diligence
regarding the other's business. In addition, Wit Capital briefed the members of
its board of directors who encouraged management to pursue discussions regarding
a possible business combination.

On October 5, 1999, representatives of Wit Capital delivered to
representatives of SoundView a draft term sheet outlining principal terms for a
proposed merger and the two companies and their advisors revised these terms
over the next several days.

On October 14, 1999, Wit Capital's board of directors held a meeting at
which members of Wit Capital's senior management as well as representatives of
the Goldman Sachs team participated. At the meeting, Wit Capital management
reviewed the status of negotiations and presented its views. Goldman Sachs
responded to questions raised by members of Wit Capital's board of directors
regarding the proposed transaction. Following these presentations, the board
engaged in full discussion of the terms of the proposed transaction and its
advisability. No action was taken by the board at this meeting, other than
directing management to continue negotiating a transaction and to report back to
the board at a special meeting to be called at the discretion of management.

On October 16, 1999, SoundView's senior executives met to review events
surrounding the potential merger with Wit Capital. Russell Crabs and Curt
Snyder, the senior executives who had primarily been involved in discussions
with Wit Capital, explained the nature and extent of the discussions they had
been conducting with Wit Capital's management team. Mr. Crabs outlined the
contemplated structure of the potential merger, explaining that it would likely
be a tax-free, stock-for-stock merger with a limited cash election feature. The
SoundView executives then discussed the potential merger's strategic and
business benefits for SoundView and its stockholders. These discussions included
possible terms of the proposed merger, as well as matters related to operations
and plans on a post-merger basis. At the conclusion of the meeting, each
SoundView executive in attendance expressed the view that it was in the best
long-term interest of SoundView and its stockholders for management to continue
pursuit of a potential merger with Wit Capital. On the same day, SoundView
agreed to terminate any discussions with third parties regarding a sale of its
business.

On October 19, 1999, Wit Capital's board held a special telephonic meeting
for purposes of discussing the proposed merger. Senior members of Wit Capital
management summarized the proposed terms and updated the board on the status of
negotiations and open issues. Goldman Sachs presented its analysis of

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<PAGE>
the proposed merger and orally informed the board of its opinion, which would
subsequently be confirmed in writing, that the proposed exchange ratio was fair
from a financial point of view to Wit Capital. Following these presentations,
the board engaged in discussion of the terms of the proposed transaction and its
advisability. At the conclusion of the meeting, Wit Capital's board of directors
voted unanimously to approve the merger and the terms of the merger agreement,
and authorized management to proceed with final negotiations within specified
parameters and with execution of definitive merger documents.

From October 18 to October 29, 1999, Wit Capital and SoundView, together
with their respective legal, financial and accounting advisors, negotiated the
terms of the definitive merger agreement and other documentation in connection
with the merger. On October 31, 1999, Wit Capital and SoundView executed and
delivered the merger agreement and the related agreements. Wit Capital and
SoundView announced the merger on the morning of November 1, 1999.

REASONS FOR THE MERGER

JOINT REASONS FOR THE MERGER. The boards of directors and managements of
Wit Capital and SoundView have each determined that, compared to continuing
their operations on a stand-alone basis, the merged company would have better
potential to improve long-term operating and financial results and would have an
enhanced competitive position. Wit Capital is a leading Internet investment
banking and brokerage firm that uses electronic mail and the Internet to offer
and sell shares in public offerings to individual investors. Wit Capital has the
competitive strengths of publicity and exposure from being the first Internet
investment banking firm. It has relationships with numerous corporate issuers,
venture capitalists and others in the financial services sector and has
developed an expertise in working with Internet and other companies to develop
Internet strategies and businesses. SoundView is an established investment
banking firm that focuses exclusively on the technology sector. It focuses on
advising and providing research on companies in the software, components,
communications and systems sectors, making markets in and distributing shares in
underwritten public offerings to institutional investors. The combined company
will be able to offer its investment banking services to a broader variety of
issuers and it should be able to receive increased share allotments in
underwritten offerings in which it participates. Finally, the combined company
will provide brokerage services through the Internet to its individual investor
customers and through more traditional channels to its institutional investor
customers. The combined company expects to greatly benefit from its combined
focus on Internet and technology research. Both companies believe that the
breadth and depth of their expertise and experience will enable us to achieve
our goal of becoming the leading online investment banking firm.

Wit Capital's board of directors and SoundView's management have identified
a number of additional potential benefits of the merger that they believe will
contribute to the success of the merged companies. These potential benefits
include the following:

- the combined company should be able to provide Internet and technology
issuers significantly increased capabilities in capital raising, share
distribution, research, strategic advisory, trading and online investor
access. The addition of SoundView's expertise in technology to Wit
Capital's Internet strengths provides the combined company with more
comprehensive coverage of Internet and technology sectors, making a more
compelling case for issuers to utilize Wit Capital;

- the combined company should be able to leverage its market position, brand
recognition and investment banking and distribution capabilities to
command an increasing proportion of fees and share allocations in public
offerings in which it participates;

- the combination should provide individual investors larger allocations in
an increased number of offerings across a broader range of Internet and
technology sectors;

- the combined company will be able to provide both its online brokerage
customers as well as its institutional customers greater quantity and
breadth in research coverage, since Wit Capital's

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<PAGE>
research product focused on Internet-related companies will be coupled
with SoundView's research product focused on technology companies. Prior
to the announcement of the merger, Wit Capital published research on 45
companies, while SoundView published research on 195 companies and the
combined company should publish research on over 230 companies;

- the combined company will have one of the largest investment banking and
research groups focusing exclusively on Internet and technology companies:
the combination will significantly expand the combined company's number of
investment banking and research professionals to over 100;

- the combined company will benefit from enhanced strategic advisory and
market making capabilities; and

- the combined experience, financial resources, size and breadth of services
offered by Wit Capital and SoundView are expected to allow the combined
company to respond more quickly and effectively to increased competition
and market demands in an industry experiencing rapid innovation and
change.

Wit Capital and SoundView have each identified separate, additional reasons
for the combination, which are discussed below. However, Wit Capital's board of
directors and SoundView's management each recognize that the potential benefits
of the merger may not be realized. See "Risk Factors."

WIT CAPITAL'S REASONS FOR THE MERGER. In reaching its decision to approve
the merger agreement and to recommend approval of the merger agreement by Wit
Capital stockholders, the Wit Capital board of directors consulted with its
management team and financial advisors and independently considered the basic
terms of the proposed merger agreement and the transactions contemplated by the
merger agreement.

The factors enumerated above and in the following paragraphs summarize the
factors the board of directors of Wit Capital has considered in reaching its
decision regarding the merger agreement and in preparing this proxy
statement/prospectus. Among these factors, the Wit Capital board of directors in
particular has considered the following:

- presentations from, and discussions with, senior management and
representatives of Goldman Sachs regarding business and financial due
diligence;

- current industry, economic and market conditions, including increased
competition;

- the importance of increasing the number of public offerings in which Wit
Capital participates as a managing underwriter, and the importance of
receiving larger share allocations in the public offerings in which Wit
Capital participates;

- the competitive importance of market position, size and adequacy of
financial resources;

- the relative advantages and disadvantages of a number of other strategic
alternatives, taking into account the risks and uncertainties associated
with such alternatives;

- the potential benefits of the merger to Wit Capital customers and
stockholders;

- the basic terms of the merger agreement;

- the opinion of Goldman Sachs that as of October 31, 1999, based upon and
subject to the various considerations set forth in the opinion, the
exchange ratio was fair to Wit Capital from a financial point of view;

- SoundView's highly complementary business profile, and the resulting
combination of Wit Capital's strengths in the Internet sector and online
distribution with SoundView's strengths in core technology sectors and
institutional sales and trading;

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<PAGE>
- the complementary characteristics of the respective business and
management philosophies and corporate cultures of SoundView and Wit
Capital;

- the benefits which should be realized by corporate issuers by Wit
Capital's increased distribution capabilities and broader expertise in
technology sectors; and

- the benefits to Wit Capital stockholders of holding shares in a larger and
financially stronger enterprise.

The Wit Capital board believes the combination will bring Wit Capital closer
to its goal of becoming the leading online investment banking firm.

In assessing the transaction, the Wit Capital board has also considered
several sources of information, including the following:

- historical information concerning the businesses, financial performance,
condition, operations and results of operations, technology, management
style, competitive position, trends and prospects of Wit Capital and
SoundView;

- information and advice by members of Wit Capital's board and management
and Wit Capital's financial advisors concerning the business, technology,
services, operations, properties, assets, financial condition, operating
results and prospects of Wit Capital, trends in Wit Capital's business and
financial results and capabilities of Wit Capital's management team; and

- the presentation of Goldman Sachs to the Wit Capital board of directors at
its meeting held on October 19, 1999, and other financial analyses
performed by Goldman Sachs.

The Wit Capital board has also identified and considered a number of
uncertainties and risks concerning the merger, including the following:

- the risk that the potential benefits sought in the merger might not be
fully realized, if at all;

- the risk that the combined company might experience slower growth relative
to the prior growth rate of the individual companies; and

- the other risks associated with the businesses of Wit Capital, SoundView
and the combined companies and the merger described in this proxy
statement/prospectus under "Risk Factors."

The Wit Capital board believes that certain of these risks are unlikely to
have a material impact on the combined company, and that, overall, the risks
associated with the merger are outweighed by the potential benefits of the
merger.

As a result of the foregoing considerations, Wit Capital's board believes
that the potential advantages of the merger outweigh the benefits of remaining a
stand-alone company. The Wit Capital board believes that the combined company
would have a far greater opportunity than Wit Capital alone to compete in its
industry.

In view of the variety of factors considered in connection with its
evaluation of the merger, the Wit Capital board has not found it practicable to
quantify or otherwise assign relative weights to the specific factors considered
in reaching its determination and has not done so. In addition, many of the
factors contain elements which may affect the fairness of the merger in both a
positive and negative way. Except as described above, the Wit Capital board, as
a whole, has not attempted to analyze each individual factor separately to
determine how it affected the fairness of the merger. Consequently, individual
members of the Wit Capital board may have given different weights to different
factors and may have viewed factors as affecting the determination of fairness
differently.

SOUNDVIEW'S REASONS FOR THE MERGER. In arriving at its decision to approve
the merger agreement, SoundView's board considered a number of factors,
including those set forth under "Joint Reasons for the

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<PAGE>
Merger." The joint reasons enumerated above and in the following paragraphs,
these matters summarize the factors SoundView's board and management have
considered in reaching their decisions regarding the merger agreement. In
particular, SoundView's management has considered the following:

- the strategic benefits expected from the merger and the anticipated effect
of the merger on long-term stockholder value, in light of the following:

- the business, financial condition, results of operations and prospects
of SoundView and Wit Capital;

- the current economic and industry environment;

- the risks and uncertainties of proceeding as a stand-alone company;

- the relative advantages and disadvantages of a number of other
strategic alternatives, taking into account the risks and
uncertainties associated with such alternatives;

- the importance to SoundView's business success of attaining greater
expertise and research coverage of Internet companies, accessing
online distribution capabilities to reach individual investors and
expanding its international customer base;

- the immediate access to Wit Capital's corporate and venture capital
relationships and individual investor customer base;

- the complementary characteristics of the respective business and
management philosophies and corporate cultures of SoundView and Wit
Capital;

- the potential benefits of the merger to SoundView customers and
stockholders;

- the fairness to SoundView of the terms and conditions of the merger
agreement which was the product of extensive arm's-length
negotiations; and

- the fact that the merger is expected to qualify as a tax free
reorganization.

In assessing the transaction, SoundView's management has also considered
several sources of information, including the following:

- historical information concerning the businesses, financial performance,
condition, operations and results of operation, technology and management
style, competitive position, trends and prospects of Wit Capital and
SoundView;

- SEC filings by Wit Capital;

- current and historical market prices, volatility and trading data for Wit
Capital;

- information and advice by members of SoundView's management concerning the
business, technology, services, operations, properties, assets, financial
condition, operating results and prospects of Wit Capital, trends in Wit
Capital's business and financial results and capabilities of Wit Capital's
management team; and

- reports from Freeman & Co. on SoundView's comparable valuation and the
suitability of potential acquirors, including Wit Capital.

SoundView's management has also identified and considered a number of
uncertainties and risks concerning the merger, including the following:

- the risk that the potential benefits sought in the merger might not be
fully realized, if at all;

- the risk of loss of current brand awareness before the combined company's
new brand gains market acceptance;

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- the risk that the combined company might experience slower growth relative
to the prior growth rate of the individual companies; and

- the other risks associated with the businesses of Wit Capital, SoundView
and the combined companies and the merger described in this proxy
statement/prospectus under "Risk Factors."

SoundView's management believes that certain of these risks are unlikely to
occur or unlikely to have a material impact on the combined company, and that,
overall, the risks associated with the merger are outweighed by the potential
benefits of the merger.

As a result of the foregoing considerations, SoundView's management believes
that the potential advantages of the merger outweigh the benefits of remaining a
stand-alone company. SoundView's management believes that the combined company
would have a far more enhanced competitive position than SoundView alone.

In view of the variety of factors considered in connection with its
evaluation of the merger, SoundView's management has not found it practicable to
quantify or otherwise assign relative weights to the specific factors considered
in reaching its determination and has not done so.

In addition, many of the factors contain elements which may affect the
fairness of the merger in both a positive and negative way. SoundView's
management and board, as a whole, have not attempted to analyze each individual
factor separately to determine how it affected the fairness of the merger.
Consequently, individual members of SoundView's management and board may have
given different weight to different factors and may have viewed the factors as
affecting the determination of fairness differently.

RECOMMENDATION OF WIT CAPITAL'S BOARD OF DIRECTORS

Wit Capital's board of directors has determined that the merger agreement
and the merger are advisable and fair to, and in the best interests of, Wit
Capital and its stockholders. Accordingly, the board has voted unanimously to
approve the merger agreement and the issuance of shares of Wit Capital common
stock in connection with the merger, and unanimously recommends that
stockholders vote for approval of the merger agreement at the special meeting of
stockholders. A vote in favor of approval of the merger agreement will result in
Wit Capital's adoption of SoundView's stock option plan, although no additional
options to purchase shares will be granted under that plan.

OPINION OF WIT CAPITAL'S FINANCIAL ADVISOR

Goldman Sachs has delivered its written opinion, dated October 31, 1999, to
the board of directors of Wit Capital that, as of that date, the stock
consideration and the cash consideration, in the aggregate, to be exchanged
pursuant to the merger agreement was fair from a financial point of view to Wit
Capital.

THE FULL TEXT OF THE WRITTEN OPINION OF GOLDMAN SACHS, DATED OCTOBER 31,
1999, WHICH SETS FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON
THE REVIEW UNDERTAKEN IN CONNECTION WITH THE OPINION, IS ATTACHED AS
APPENDIX III AND IS INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT/PROSPECTUS. YOU SHOULD READ THIS OPINION IN ITS ENTIRETY.

In connection with its opinion, Goldman Sachs reviewed, among other things,

- the merger agreement;

- the registration statement on Form S-1 relating to the initial public
offering of Wit Capital common stock, including the prospectus therein
dated June 4, 1999;

- the first quarterly report on Form 10-Q of Wit Capital for the period
ended June 30, 1999;

- audited historical financial statements of SoundView for the five years
ended December 31, 1998;

- interim reports and quarterly financial statements to stockholders of
SoundView;

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- internal financial analyses and forecasts for SoundView prepared by the
management of SoundView;

- various financial analyses and forecasts for SoundView and Wit Capital
prepared by the management of Wit Capital; and

- certain cost savings and operating synergies projected by the management
of Wit Capital to result from the merger.

Goldman Sachs also held discussions with members of the senior management of
SoundView and Wit Capital regarding the strategic rationale for, and the
potential benefits of, the merger and the past and current business operation,
financial condition and future prospects of their respective companies. In
addition, Goldman Sachs:

- compared financial and other information for SoundView and the financial
and stock market information for Wit Capital with similar information for
other companies the securities of which are publicly traded;

- reviewed the financial terms of recent business combinations in the
brokerage and Internet industries specifically and in other industries
generally; and

- performed other studies and analyses Goldman Sachs considered appropriate.

Goldman Sachs relied upon the accuracy and completeness of all of the
financial and other information reviewed by it and assumed the accuracy and
completeness for purposes of rendering its opinion. Goldman Sachs did not make
an independent evaluation or appraisal of the assets and liabilities of
SoundView or Wit Capital or any of their subsidiaries and was not furnished with
any evaluation or appraisal. The advisory services and opinion of Goldman Sachs
were provided for the information and assistance of the board of directors of
Wit Capital in connection with its consideration of the merger, and the opinion
does not constitute a recommendation as to how any holder of Wit Capital common
stock should vote with respect to the merger.

Wit Capital and SoundView did not impose any material limitations on Goldman
Sachs in performing its financial analyses and investigations.

The following is a summary of the material financial analyses used by
Goldman Sachs in connection with providing its opinion to Wit Capital's board of
directors on October 31, 1999. In providing its opinion, Goldman Sachs did not
assign any relative importance to any particular financial analysis.

THE FOLLOWING SUMMARIES OF FINANCIAL ANALYSES MAY INCLUDE INFORMATION
PRESENTED IN TABULAR FORMAT. YOU SHOULD READ THESE TABLES TOGETHER WITH THE TEXT
OF EACH SUMMARY.

CONTRIBUTION ANALYSIS. Goldman Sachs reviewed selected historical and
estimated future operating and financial information for Wit Capital, SoundView
and the combined company resulting from the merger based on Bear Stearns
research for Wit Capital and financial forecasts of SoundView's management.
Goldman Sachs also analyzed the relative income statement contribution of Wit
Capital and SoundView to the combined company, before taking into account any of
the possible benefits that may be realized following the merger, based upon
(1) actual results for the year 1998 and the last twelve months at
September 30, 1999; (2) estimated results for the years 1999 through 2001; and
(3) financial data and forecasts and assumptions provided to Goldman Sachs by
the respective managements of Wit Capital and SoundView. The results of these
analyses are summarized as follows:

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<TABLE>
<CAPTION>
WIT CAPITAL SOUNDVIEW
CONTRIBUTION TO CONTRIBUTION TO
COMBINED COMPANY COMBINED COMPANY
---------------- ----------------
<S> <C> <C> <C>
REPORTED
-----------
REVENUES
1998.......................................... 2% 98%
Last Twelve Months (9/30/1999)................ 18% 82%
1999 estimated................................ 19% 81%
2000 estimated................................ 29% 71%
2001 estimated................................ 38% 62%
ADJUSTED(A)
1999 estimated................................ 22% 78%
2000 estimated................................ 30% 70%
2001 estimated................................ 39% 61%
REPORTED
NET INCOME
1999 estimated................................ N.M. N.M.
2000 estimated................................ 2% 98%
2001 estimated................................ 11% 89%
ADJUSTED(A)
1999 estimated................................ N.M. N.M.
2000 estimated................................ 2% 98%
2001 estimated................................ 12% 88%
STOCKHOLDERS' EQUITY.......................... 79% 21%
</TABLE>

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

(a) Normalized to exclude one-time extraordinary items and non-operating
revenues.

PRO FORMA MERGER ANALYSIS. Goldman Sachs prepared pro forma analyses of the
financial impact of the merger to Wit Capital stockholders by using Bear Stearns
estimates for Wit Capital and management estimates for SoundView.

Goldman Sachs compared the 1999 earnings per share and 2000 and 2001
estimated earnings per share of Wit Capital common stock on a stand-alone basis
to the 1999 earnings per share and 1999, 2000 and 2001 estimated earnings per
share of the common stock of the combined company on a pro forma basis. In
performing this analysis, Goldman Sachs calculated the results by both excluding
and including Wit Capital and SoundView managements' estimates of the potential
benefits to be realized following the merger. Based upon those analyses, and
assuming an aggregate consideration of $319.4 million and a retention pool of
$25 million, and excluding the estimates of the potential benefits of the
merger, the merger would be highly accretive to stockholders of Wit Capital on a
revenue and earnings per share basis in 1999, 2000 and 2001. Based upon the
analysis including the estimates of the potential benefits of the merger, the
merger would be highly accretive on a revenue and earnings per share basis in
1999, 2000 and 2001.

TRANSACTION DYNAMICS ANALYSIS. Goldman Sachs performed a comparative
analysis of the implied multiples of Wit Capital's estimated current market
value to estimated revenues in 2000 and 2001 for Wit Capital (1) as a
stand-alone company; (2) as part of the combined company ignoring the estimated
potential benefits of the combination; and (3) as part of the combined company
reflecting the estimated potential benefits of the combination. Goldman Sachs
conducted this analysis first using Bear Stearns estimates of earnings for Wit
Capital and second using Wit Capital management's estimates of earnings for Wit
Capital.

Under the first scenario, using Bear Stearns estimates of earnings for Wit
Capital, the implied multiples of Wit Capital's estimated current market value
to estimated revenues in 2000 and 2001 (1) as a

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stand-alone company, were 24.4x and 13.4x, respectively; (2) as part of the
combined company, ignoring the estimated potential benefits of the combination,
were 8.9x and 6.3x, respectively; and (3) as part of the combined company,
reflecting the estimated potential benefits of the combination, were 7.8x and
5.3x, respectively.

Under the second scenario, using Wit Capital management's estimates of
earnings for Wit Capital, the implied multiples of Wit Capital's estimated
current market value to estimated revenues in 2000 and 2001 (1) as a stand-alone
company, were 22.8x and 12.7x, respectively; (2) as part of the combined
company, ignoring the estimated potential benefits of the combination, were 8.8x
and 6.2x, respectively; and (3) as part of the combined company, reflecting the
estimated potential benefits of the combination, were 7.7x and 5.2x,
respectively.

SELECTED TRANSACTION ANALYSIS. Goldman Sachs compared information for
selected mergers and acquisitions transactions in the financial institutions
industry for the years 1998 and 1999, and specifically, the acquisitions by:

- Chase Manhattan of Hambrecht & Quist; and

- Wells Fargo of Ragen Mackenzie Group.

Goldman Sachs compared:

- the net income multiples for the last twelve months at September 30, 1999
and for the years ending 1999 through 2000; and

- the multiples of book values.

The results of these analyses are summarized as follows (multiples include
consideration provided as part of employee retention pools):

<TABLE>
<CAPTION>
1999 M&A 1998 M&A
H&Q(A) RMG DEALS DEALS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
LTM Net Income Multiples................................. 19.1x 18.8x 18.8x 17.7x
1999 Net Income Multiples................................ 13.5x 15.5x 14.7x(b) 15.6x(b)
2000 Net Income Multiples................................ 16.5x 13.2x 16.2x(c) 17.2x(c)
Book Value (September 30, 1999).......................... 3.6x 2.1x 2.8x 3.7x
</TABLE>

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

(a) Wall Street research report; calendarized estimates dated July 21, 1999.

(b) Current year multiple.

The transaction value of $344 million, including the retention pool, was
within the ranges of multiples for LTM Net Income, 1999 Net Income and 2000 Net
Income. For example, SoundView's LTM Net Income of $19.2 million resulted in a
multiple of 17.9x for the transaction. The $344 million in aggregate
consideration, including the retention pool, represents a 9.4x multiple of
SoundView's September 30, 1999 book value, higher than the multiples for the
precedent transactions.

In performing these analyses, Goldman Sachs did not assign relative
importance or weights to the various sets of ratios and multiples.

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying Goldman Sachs' opinion. In arriving at its fairness determination,
Goldman Sachs considered the results of

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all the analyses it performed. No company or transaction used in the above
analyses as a comparison is directly comparable to Wit Capital or SoundView or
the proposed merger.

The analyses were prepared for purposes of providing an opinion to the Wit
Capital board of directors as to the fairness from a financial point of view to
Wit Capital of the stock consideration and cash consideration, in the aggregate.
The analyses do not purport to be appraisals or necessarily reflect the prices
at which businesses or securities actually may be sold. Analyses based upon
forecasts of future results are not necessarily indicative of actual future
results, which may be significantly more or less favorable than suggested by the
analyses. Because the analyses underlying the Goldman Sachs opinion are
inherently subject to uncertainty, being based upon numerous factors or events
beyond the control of the parties or their respective advisors, none of Wit
Capital, SoundView, Goldman Sachs or any other person assumes responsibility if
future results are materially different from those forecast.

As described above, Goldman Sachs' opinion to Wit Capital's board of
directors was one of many factors taken into consideration by Wit Capital's
board of directors in making its determination to approve the merger. The
foregoing is a summary of the material financial analyses used by Goldman Sachs
in connection with providing its opinion but it does not purport to be a
complete description of the analyses performed by Goldman Sachs.

Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. Goldman Sachs has acted
as Wit Capital's financial advisor in connection with, and has participated in
the negotiations leading to, the merger agreement.

An affiliate of Goldman Sachs, The Goldman Sachs Group, Inc., owns shares
representing approximately 16.0% of the outstanding capital stock of Wit
Capital, and warrants to purchase approximately 5,637,296 shares of Wit Capital
Class B common stock. The warrants may be exercised beginning in October 2000.
In connection with its investment in Wit Capital, The Goldman Sachs Group, Inc.
and Wit Capital are parties to an agreement that, among other things, gives The
Goldman Sachs Group, Inc. a right of first refusal to purchase additional shares
of common equity before Wit Capital sells 5% or more of those shares to
designated competitors of Goldman Sachs. In addition, The Goldman Sachs
Group, Inc. maintains registration rights and has agreed for a limited period of
time not to acquire more than 25% of Wit Capital's fully diluted common equity.
Goldman Sachs may provide investment banking services to Wit Capital in the
future.

Goldman Sachs provides a full range of financial advisory and securities
services and, in the course of its normal trading activities, may from time to
time effect transactions and hold securities, including derivative securities,
of Wit Capital or SoundView for its own account and for the accounts of
customers.

Under a letter agreement dated August 4, 1999, Wit Capital engaged Goldman
Sachs to act as its financial advisor in connection with the possible
acquisition by Wit Capital or any of its affiliates of all or a portion of the
stock or assets of SoundView. According to the terms of this letter agreement,
Wit Capital has agreed to pay Goldman Sachs a transaction fee based on the
outcome of the merger as follows:

- if at least 50% of the outstanding stock of SoundView, or at least 50% of
the assets (based on the book value thereof) of SoundView, is acquired in
one or more transactions, Goldman Sachs will receive a transaction fee of
$3 million; or

- if less than 50% of the outstanding common stock or assets (based on the
book value thereof) of SoundView is acquired, Goldman Sachs will be paid a
mutually acceptable transaction fee of not less than $1.5 million.

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<PAGE>
Wit Capital also has agreed to reimburse Goldman Sachs for their reasonable
out-of-pocket expenses, including attorneys' fees, and to indemnify Goldman
Sachs against various liabilities, including liabilities arising under the
federal securities laws.

ACCOUNTING TREATMENT

APPLICABLE WAITING PERIODS AND REGULATORY APPROVALS

The merger is subject to U.S. antitrust laws. We have made the required
filings with the Department of Justice and the Federal Trade Commission, which
terminated the statutory antitrust review period on November 24, 1999. Although
the termination of their antitrust review does not preclude the Department of
Justice and the Federal Trade Commission, or any state or private person, from
challenging the merger at a later time we do not expect any challenge for
antitrust reasons.

The rules of the National Association of Securities Dealers, Inc., or the
NASD, to which SoundView and Wit Capital's primary subsidiary are each subject,
require advance notice of the merger to the NASD. Although prior approval by the
NASD is not mandatory, it is customary not to complete a merger subject to these
rules until the NASD has indicated its approval. SoundView and Wit Capital have
provided the required notice.

Neither Wit Capital nor SoundView is aware of any other material
governmental or regulatory approval required for completion of the merger, other
than compliance with the applicable merger procedures of the Delaware General
Corporation Law.

TRADING OF WIT CAPITAL COMMON STOCK TO BE ISSUED IN THE MERGER

The inclusion in Nasdaq trading of the shares of Wit Capital common stock to
be issued in the merger is a condition to the completion of the merger.

RESTRICTIONS ON SALE OF SHARES BY AFFILIATES OF WIT CAPITAL AND SOUNDVIEW

This proxy statement/prospectus does not cover any resales of Wit Capital
common stock to be received by SoundView stockholders upon completion of the
merger and no person is authorized to make any use of this proxy
statement/prospectus in connection with any such resale.

The shares of Wit Capital common stock to be issued in the merger will be
registered under the Securities Act and will be freely transferable, except for
shares of Wit Capital common stock issued to any person who is deemed to be an
affiliate of either Wit Capital or SoundView at the time of the special meeting
of Wit Capital or at the time the stockholders of SoundView approved the merger.
Persons who may be deemed to be affiliates include individuals or entities that
control, are controlled by or are under common control of either Wit Capital or
SoundView and may include some of the officers, directors, or principal
stockholders of Wit Capital or SoundView. Affiliates may not sell their shares
of Wit Capital common stock acquired in connection with the merger except
pursuant to the volume and manner of sale limitations contained in Rule 144
under the Securities Act or pursuant to an effective registration statement.

The merger agreement requires each affiliate of SoundView who will become an
affiliate of Wit Capital after the completion of the merger to execute and
deliver to Wit Capital a letter stating that the

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affiliate will comply with Rule 145 under the Exchange Act with respect to the
sale of Wit Capital common stock received in the merger.

OPERATIONS FOLLOWING THE MERGER

Following the merger, SoundView will operate as a wholly owned subsidiary of
Wit Capital. Upon completion of the merger, it is anticipated that the members
of SoundView's board will be Ronald Readmond, Russell Crabs and Mark Loehr. Wit
Capital and SoundView have agreed that Russell Crabs will become a member of Wit
Capital's board of directors. The stockholders of SoundView will become
stockholders of Wit Capital, and their rights as stockholders will be governed
by Wit Capital's amended and restated certificate of incorporation, Wit
Capital's by-laws and the laws of the State of Delaware. SoundView's stock
option plan will be adopted by Wit Capital although no additional options to
purchase shares will be granted under the SoundView stock option plan. For a
description of the differences between the rights of Wit Capital and SoundView
stockholders, see "Comparison of Rights of Wit Capital Stockholders and
SoundView Stockholders."

DIVIDEND POLICY

Neither Wit Capital nor SoundView has ever paid dividends to its
stockholders and Wit Capital does not expect to pay dividends for the
foreseeable future.

INTERESTS OF NAMED EXPERTS AND COUNSEL IN THE MERGER

Goldman Sachs has acted as Wit Capital's financial advisor in connection
with the merger. In its role as such, it has rendered an opinion that as of
October 31, 1999, based upon and subject to the various considerations set forth
in the opinion, the exchange ratio was fair to Wit Capital from a financial
point of view. Goldman Sachs also owns an equity interest in Wit Capital. On
April 9, 1999, Wit Capital issued 11,666,667 shares of Series E preferred stock
(subsequently converted into an equal number of shares of Wit Capital's Class B
common stock) for a purchase price of $25 million. Goldman Sachs also received
5,637,295 warrants to purchase Series E preferred stock. The warrants are
exercisable for an equivalent number of shares of Class B common stock and may
be exercised beginning in October 2000 at a per share exercise price equal to
$5.57. In addition, Goldman Sachs has the right to receive up to an additional
153,247 warrants to purchase Class B common stock depending upon the resolution
of the dispute referred to in "Wit Capital's Business--Legal Matters."

The validity of the shares of common stock Wit Capital is issuing in the
merger is being passed upon by Skadden, Arps, Slate, Meagher & Flom LLP, the
same firm which has acted as Wit Capital's legal counsel in connection with the
merger. Joseph H. Flom is a member of Wit Capital's special advisory board and
is also a partner of Skadden, Arps, Slate, Meagher & Flom LLP. In return for his
service on Wit Capital's special advisory board, Wit Capital has granted
Mr. Flom options to purchase common stock. See "Management of Wit
Capital--Compensation of Directors and Special Advisory Board Members."

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APPRAISAL RIGHTS

SoundView is a Delaware corporation. Under Section 262 of the Delaware
General Corporation Law, SoundView stockholders have appraisal rights (sometimes
referred to as "dissenters' rights") in connection with the merger. Any
stockholder who is eligible to exercise appraisal rights and properly does so
will be paid in cash the "fair value" (exclusive of any element of value arising
from the accomplishment or expectation of the merger) for his or her shares of
SoundView common stock as determined by the Court of Chancery of the State of
Delaware. Each SoundView stockholder [has been] notified that he or she is
entitled to statutory appraisal rights. The period during which SoundView
stockholders could inform SoundView of their intention to exercise their
appraisal rights terminated on December [ ], 1999. Holders of [ ] shares of
SoundView stock have demanded appraisal of their shares.

MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

We have received the opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
our counsel in connection with the merger, that, subject to the assumptions,
exceptions, limitations and qualifications set forth in their opinion, the
material United States federal income tax considerations relevant to the
exchange of shares of SoundView common stock for Wit Capital common stock in the
merger that are generally applicable to holders of SoundView common stock are as
follows:

- The merger will constitute a reorganization within the meaning of the
Internal Revenue Code.

- A holder of SoundView common stock will not recognize any gain or loss
solely upon such holder's receipt of Wit Capital common stock in exchange
for such holder's SoundView common stock in the merger, except to the
extent the holder of SoundView common stock receives cash in lieu of a
fractional share of Wit Capital common stock.

- The aggregate tax basis of the Wit Capital common stock that a holder of
SoundView common stock receives in the merger will be the same as the
aggregate tax basis of the SoundView common stock surrendered by such
holder in exchange for Wit Capital common stock (reduced by any tax basis
attributable to any fractional share the holder is deemed to have disposed
of).

- The holding period of the Wit Capital common stock that each holder
receives in the merger will include the period for which the SoundView
common stock surrendered in exchange for Wit Capital common stock was
considered to be held, if the surrendered SoundView common stock is held
as a capital asset at the time of the merger.

- Cash payments that a holder of SoundView common stock receives in lieu of
a fractional share will be treated as if the fractional share of Wit
Capital common stock had been issued in the merger and then redeemed by
Wit Capital. A holder of SoundView common stock receiving cash will
recognize gain or loss upon payment measured by any difference between the
amount of cash received and the holder's basis in the fractional share.

The opinion of Skadden, Arps, Slate, Meagher & Flom LLP and this discussion
are based on currently existing provisions of the Internal Revenue Code,
existing and proposed treasury regulations thereunder and current administrative
rulings and court decisions, all of which are subject to change. Any change,
which may or may not be retroactive, could alter the tax consequences to
SoundView stockholders as described above.

SoundView stockholders should be aware that this discussion does not deal
with all federal income tax considerations that may be relevant to particular
SoundView stockholders in light of their individual circumstances, such as
stockholders who:

- are dealers in securities;

- are subject to the alternative minimum tax provisions of the Internal
Revenue Code;

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<PAGE>
- are foreign persons;

- do not hold their SoundView common stock as capital assets; or

- acquired their shares in connection with stock option or stock purchase
plans or in other compensatory transactions.

In addition, the following discussion does not address:

- the tax consequences of the merger under foreign, state or local tax laws,
or

- the tax consequences of the assumption by Wit Capital of SoundView stock
options or the tax consequences of the receipt of rights to acquire Wit
Capital common stock. ACCORDINGLY, SOUNDVIEW STOCKHOLDERS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM
OF THE MERGER, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL AND FOREIGN
TAX CONSEQUENCES.

Neither Wit Capital nor SoundView is requesting a ruling from the Internal
Revenue Service as to the tax consequences of the merger. The completion of the
merger is conditioned on Wit Capital's receiving an opinion from Skadden, Arps,
Slate, Meagher & Flom LLP and SoundView's receiving an opinion from Morrison &
Foerster LLP in each case dated on the date of the closing to the effect that
the merger will constitute a reorganization within the meaning of the Internal
Revenue Code and the tax consequences to the SoundView stockholders are as
described above. SoundView stockholders should be aware that the tax opinions do
not bind the IRS. The IRS may therefore successfully assert a contrary opinion.
The tax opinions will be subject to assumptions and qualifications, including,
but not limited to, the truth and accuracy of representations made by Wit
Capital and SoundView.

A successful IRS challenge to the reorganization status of the merger would
result in a SoundView stockholder recognizing taxable gain or loss with respect
to each share of SoundView common stock surrendered equal to the difference
between (A) each stockholder's basis in the shares and (B) the fair market
value, as of the effective time, of the Wit Capital common stock received in
exchange. In this event, a stockholder's aggregate basis in the Wit Capital
common stock received would equal its fair market value as of the closing date
of the merger, and the stockholder's holding period for Wit Capital common stock
would begin the day after the merger.

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THE MERGER AGREEMENT AND RELATED AGREEMENTS

THE FOLLOWING IS A BRIEF SUMMARY OF THE MATERIAL PROVISIONS OF THE MERGER
AGREEMENT, A COPY OF WHICH IS ATTACHED AS APPENDIX I TO THIS PROXY
STATEMENT/PROSPECTUS AND INCORPORATED HEREIN BY REFERENCE. WE URGE YOU TO READ
THE MERGER AGREEMENT IN ITS ENTIRETY FOR A MORE COMPLETE DESCRIPTION OF THE
MERGER. IN THE EVENT OF ANY DISCREPANCY BETWEEN THE TERMS OF THE MERGER
AGREEMENT OR OTHER AGREEMENTS AND THE FOLLOWING SUMMARY, THE MERGER AGREEMENT
WILL CONTROL.

MERGER AGREEMENT

W/S Merger Corp., a Delaware corporation and a wholly owned subsidiary of
Wit Capital, will merge with and into SoundView following the approval of the
merger agreement by Wit Capital stockholders, including the satisfaction or
waiver of other conditions to the merger.

SoundView will be the surviving corporation and become a wholly owned
subsidiary of Wit Capital following the merger.

EFFECTIVE TIME

At the closing of the merger, the parties will cause the merger to become
effective by filing a certificate of merger with the Secretary of State of the
State of Delaware. Wit Capital and SoundView are working toward completing the
merger as soon as possible and hope to complete the merger by early 2000.
Because the merger is subject to a number of conditions, however, we cannot
predict the exact timing.

DIRECTORS AND OFFICERS OF SOUNDVIEW AFTER THE MERGER

Unless otherwise agreed by Wit Capital and SoundView prior to the effective
time, (1) Russell Crabs will become a member of the board of directors of Wit
Capital and (2) Ronald Readmond, Mark Loehr and Russell Crabs will be the
directors of SoundView from and after the effective time of the merger until
their successors have been duly elected or appointed and qualified. The officers
of SoundView at the effective time will continue to be SoundView's officers
after the effective time of the merger until their successors have been duly
elected or appointed and qualified.

CONVERSION OF SOUNDVIEW SHARES IN THE MERGER

EXCHANGE RATIO. The merger agreement provides that each stockholder of
SoundView will receive for each share a number of shares of Wit Capital's stock
based upon a floating exchange ratio subject to a collar. The floating exchange
ratio is intended to provide stockholders of SoundView with shares of Wit
Capital's stock valued at $81.2387, based on the average trading price during
the measurement period, so long as the average trading price of Wit Capital's
stock remains at or between $15.5625 and $18.5625. If the Wit Capital stock
price is above $18.5625 during the measurement period, the exchange ratio will
be fixed at 4.376 and the value of the Wit Capital shares receivable for each
SoundView share will exceed $81.2387. If the Wit Capital stock price during the
measurement period is below $15.5625, on the other hand, the exchange ratio will
be fixed at 5.220 and the value of the Wit Capital shares receivable for each
SoundView share will be less than $81.2387.

CASH ELECTION. A limited cash election feature allows each stockholder of
SoundView to receive a cash payment in lieu of Wit Capital's stock, subject to
an overall limitation, including any stockholders exercising dissenter's rights,
of $30 million.

TERMINATION. If the volume weighted average price of Wit Capital's stock
over a five day period falls below $10, the merger may be cancelled by
SoundView. Conversely, if the volume weighted average price of Wit Capital's
stock over a five day period rises above $25, the merger may be cancelled by Wit
Capital.

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<PAGE>
DISSENTING SHARES. Stockholders of SoundView who properly assert appraisal
rights with respect to their shares of SoundView common stock under Section 262
of the Delaware General Corporation law will not be entitled to have their
shares of SoundView common stock converted and will not be entitled to receive
cash for their shares.

WIT CAPITAL SHARES. Shares of SoundView common stock owned by Wit Capital
or any of its subsidiaries immediately prior to the effective time will be
cancelled without any further payment.

SOUNDVIEW STOCK OPTIONS

At the effective time, each outstanding option to purchase shares of
SoundView common stock granted under SoundView's 1995 Stock Option Plan will be
converted into an option to purchase Wit Capital common stock. Each converted
SoundView stock option will continue to have the same terms, and be subject to
the same conditions, that were applicable to the option immediately prior to the
effective time. At the effective time of the merger, SoundView's 1995 Stock
Option Plan will be adopted by Wit Capital, although no additional options to
purchase shares will be granted under that plan.

Each SoundView stock option, when converted, will be able to purchase the
number of shares of SoundView common stock it could have purchased prior to the
merger multiplied by the exchange ratio according to which shares of SoundView
common stock are being converted into shares of Wit Capital common stock. The
exercise price for each converted stock option will also be appropriately
adjusted. The new exercise price will equal the per share exercise price of each
SoundView stock option immediately prior to the merger divided by the exchange
ratio and then rounded up to the nearest whole number.

In addition, the vesting schedule for SoundView options outstanding and not
yet vested at the effective time of the merger will, except to the extent
forfeited under SoundView's stock option plan, vest quarterly over a three year
period following the effective time of the merger, at the rate per quarter as
nearly as practical equal to one-twelfth of the unvested SoundView stock options
of the SoundView employee.

All of such options held by an employee will vest immediately upon the
occurrence of:

(1) the termination of the employee's employment by Wit Capital or its
subsidiaries without cause;

(2) the acquisition or creation by Wit Capital of an additional business
which replaces SoundView's institutional brokerage business as Wit
Capital's primary institutional brokerage business;

(4) the completion by Wit Capital of a merger or consolidation or the
completion of a tender offer or exchange offer for, or purchase of,
shares of Wit Capital Stock resulting in:

(a) the stockholders of Wit Capital prior to such transaction
representing less than 50% of the voting power of all classes of
either Wit Capital stock or the stock of the other company, as
the case may be, or

(b) the members of Wit Capital's board of directors prior to such
transaction representing less than 50% of the board of directors
of either Wit Capital or the other company, as the case may be.

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<PAGE>
With respect to any option to purchase Wit Capital common stock that is
vested at the effective time of the merger,

(1) upon exercise after the effective time but prior to the first
anniversary of the effective time, Wit Capital will issue to the
person exercising that option 3 certificates, each representing
approximately one-third of the shares of Wit Capital common stock
issuable upon such exercise, with the following characteristics:

(a) the first certificate will not have any transfer restriction
except as provided under the Securities Act;

(b) the second certificate will have a one-year transfer restriction
from the effective time of the merger; and

(2) upon exercise on or after the first anniversary of the effective
time but prior to the second anniversary, Wit Capital will issue to
the person exercising the option 2 certificates with the following
characteristics:

(a) the first certificate will represent approximately two-thirds of
the shares of Wit Capital common stock issuable upon such
exercise, with such shares to have no transfer restriction except
as provided under the Securities Act; and

(b) the second certificate will represent approximately one-third of
the shares of Wit Capital common stock issuable upon such
exercise, with such shares to have a transfer restriction until
the second anniversary of the effective time.

THE EXCHANGE AGENT

Promptly after the effective time, Wit Capital is required to deposit with
American Stock Transfer & Trust Company, the exchange agent, certificates
representing the shares of Wit Capital common stock to be exchanged for shares
of SoundView common stock and cash to pay for any dividends or distributions
that holders of SoundView common stock may be entitled to receive under the
merger agreement.

EXCHANGE OF SOUNDVIEW STOCK CERTIFICATES FOR WIT CAPITAL STOCK CERTIFICATES

Promptly after the effective time, the exchange agent will mail to SoundView
stockholders a letter of transmittal and instructions for surrendering their
SoundView stock certificates in exchange for Wit Capital stock certificates.

SoundView stockholders should not submit their stock certificates for
exchange until they have received the letter of transmittal and instructions
referred to above.

Upon surrender of the SoundView stock certificates, the exchange agent will
issue to each holder 3 certificates with the following characteristics:

(2) the second certificate will represent 32.58% of the shares of Wit
Capital common stock receivable in the conversion, which shares will
have a one-year transfer restriction; and

(3) the third certificate will represent 32.58% of the shares of Wit
Capital common stock receivable in the conversion, which shares will
have a two-year transfer restriction.

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FRACTIONAL SHARES

No fractional shares of Wit Capital common stock will be issued in
connection with the merger. Instead, SoundView stockholders will receive an
amount of cash, in lieu of a fraction of a share of Wit Capital common stock,
equal to the product of (1) the fraction and (2) the average trading price of
Wit Capital's common stock during the measurement period (but not more than
$18.5625 nor less than $15.5625).

RETENTION POOL

At the effective time of the merger, Wit Capital will issue to designated
SoundView employees an aggregate number of shares of Wit Capital common stock
equal to the product of (a) the quotient resulting from dividing $25 million by
$81.2387 and (b) the exchange ratio. Half of the retention shares allocated to
an employee will vest when that employee has been continuously employed by Wit
Capital and its subsidiaries for the first thirty months after the merger, and
the remaining half of the retention shares allocated to an employee will vest
when that employee has been continuously employed by Wit Capital and it
subsidiaries for the first forty-two months after the merger. The only
exceptions to the continuous employment requirement will be termination by Wit
Capital without cause and, for SoundView's top five executives, will accelerate
upon their death or disability. Retention shares that do not vest due to
termination of employment will be forfeited.

REPRESENTATIONS AND WARRANTIES

- corporate matters, such as organization and qualification, capitalization,
authority and necessary approvals;

- compliance with permits and applicable laws, rules and regulations of
governmental entities;

- financial statements;

- books and records;

- recent changes in business, finances, properties, assets, compensation
payments, dividend payments or accounting practices; and

- business matters, such as employee benefit plans, labor matters, material
contracts, taxes, insurance, litigation and intellectual property.

SOUNDVIEW'S CONDUCT OF BUSINESS BEFORE COMPLETION OF THE MERGER

SoundView has agreed that, until the completion of the merger or unless Wit
Capital consents in writing, SoundView and its subsidiaries will conduct their
businesses in the ordinary course of business and consistent with past practices
and will use commercially reasonable efforts:

- to preserve SoundView's business organization intact;

- to keep available the services of its current officers and employees; and

- to preserve its relationships with persons or entities with which it has
business relations.

SoundView has also agreed that, until the completion of the merger or unless
Wit Capital consents in writing, SoundView and its subsidiaries will conduct
their business in compliance with specific restrictions

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designed to ensure that SoundView's business and its practices do not change
significantly from the time the merger was negotiated.

WIT CAPITAL'S CONDUCT OF BUSINESS BEFORE COMPLETION OF THE MERGER

Wit Capital has agreed that, until the completion of the merger or unless
SoundView consents in writing, Wit Capital and its subsidiaries will conduct
their businesses in the ordinary course of business and consistent with past
practices and will use commercially reasonable efforts:

- to preserve Wit Capital's business organization intact;

- to keep available the services of its current officers and employees; and

- to preserve its relationships with persons or entities with which it has
business relations.

Wit Capital has also agreed that, until the completion of the merger or
unless SoundView consents in writing, Wit Capital and its subsidiaries will
conduct their business in compliance with specific restrictions designed to
ensure that it does not change its charter or significantly change certain
aspects of its business from the time the merger was negotiated.

Wit Capital has also agreed:

- to prepare and file with the SEC, as promptly as practicable, a
registration statement on Form S-4 with respect to shares of Wit Capital
common stock to be issued in the merger.

OTHER COVENANTS

Each of SoundView and Wit Capital has also agreed to use all commercially
reasonable efforts to complete the merger and related transactions.

The understandings in the merger agreement relating to the conduct of
SoundView's and Wit Capital's respective businesses are complicated and not
easily summarized. We urge stockholders to carefully read the article in the
merger agreement entitled "Covenants."

NO SOLICITATION OF COMPETING TRANSACTION

SoundView's board may not:

- withdraw or modify, or propose to withdraw or modify, its approval of the
merger or the merger agreement in a manner adverse to Wit Capital;

- approve or recommend, or propose to approve or recommend, any acquisition
proposal; or

- enter into any agreement with respect to an acquisition proposal.

CONDITIONS TO COMPLETION OF THE MERGER

Wit Capital's and SoundView's respective obligations to complete the merger
and the related transactions are subject to approval of the merger agreement by
Wit Capital's stockholders, as well as the

45
<PAGE>
prior satisfaction or waiver (if permitted by applicable law) of the following
conditions before completion of the merger:

- each party's representations and warranties must be true and correct in
all material respects when made and as of the completion of the merger,
and all obligations under the merger agreement must have been performed;

- appropriate stockholder approvals must have been obtained;

- no order, writ, injunction or decree prohibits or prevents completion of
the merger;

- the registration statement relating to the issuance of shares of Wit
Capital common stock in connection with the merger must be declared
effective by the SEC;

- all necessary governmental filings will have been made and consents
obtained, and any waiting period under the antitrust laws that applies to
the completion of the merger must have expired or been terminated; and

- opinions as to corporate matters pertaining to each of the parties must
have been rendered.

Wit Capital's obligations to complete the merger and the other transactions
contemplated by the merger agreement are subject to the satisfaction or waiver
of each of the following additional conditions before completion of the merger:

- each affiliate of SoundView who will become an affiliate of Wit Capital
upon completion of the merger will have delivered an executed letter to
Wit Capital stating that the affiliate will comply with Rule 145 under the
Securities Act;

- all third party consents, authorizations and approvals will have been
obtained, except for those that would not likely be materially adverse to
the business, assets, liabilities, financial condition or results of
operations of SoundView, taken as a whole;

- an opinion of Skadden, Arps, Slate, Meagher & Flom LLP will have been
rendered to the effect that the merger will constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, that
Wit Capital, SoundView and W/S Merger Corp. will be parties to the
reorganization and that no gain or loss will be recognized by SoundView
stockholders who convert their shares of SoundView common stock in the
merger;

- employment agreements between Wit Capital and specified SoundView
employees must be in effect; and

- the sum of SoundView shares to which dissenters' rights have been properly
asserted under Delaware law and SoundView's shares subject to options as
to which the holders have not surrendered certain selling rights will not
exceed 10% of the sum of issued and outstanding shares immediately prior
to the effective time.

SoundView's obligations to complete the merger and the other transactions
contemplated by the merger agreement are subject to the satisfaction or waiver
of each of the following additional conditions before completion of the merger:

- an opinion of Morrison & Foerster LLP will have been rendered to the
effect that the merger will constitute a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code, that Wit Capital,
SoundView and W/S Merger Corp. will be parties to the reorganization and
that no gain or loss will be recognized by SoundView stockholders who
convert their shares of SoundView common stock in the merger; and

- employment agreements have been executed and delivered and Wit Capital
must not have materially breached any of these employment agreements.

46
<PAGE>
TERMINATION OF THE MERGER AGREEMENT

The merger agreement may be terminated under certain circumstances at any
time by either party before the completion of the merger, as summarized below:

- the merger agreement may be terminated by our mutual written consent;

- the merger agreement may also be terminated by either of us if it has
become reasonably certain that any of the conditions to completion of the
merger would not be satisfied on or prior to May 31, 2000 and will not be
waived;

- if there has been a breach of any of the representations and warranties in
the merger agreement by one of the parties which would entitle the other
party to choose not to complete the merger, and if the breach could not be
cured before May 31, 2000, the non-breaching party may terminate the
merger agreement;

- if there has been a material breach of any of the covenants or agreements
in the merger agreement by one of the parties, the other party may
terminate the merger agreement if the breach has not been cured within 20
business days after receipt of notice by the breaching party; or

- if the completion of the merger has not occurred by May 31, 2000.

The merger agreement may be terminated by Wit Capital (1) if the volume
weighted average trading price of Wit Capital common stock as reported for the
primary trading session on Nasdaq on each of any 5 consecutive trading days
beginning after December 15, 1999 and prior to the effective time is greater
than $25, and (2) Wit Capital will have terminated the merger agreement within
10 days after the fifth consecutive trading day.

The merger agreement may be terminated by SoundView if (1) the volume
weighted average trading price of Wit Capital common stock as reported for the
primary trading session on Nasdaq on each of any 5 consecutive trading days
beginning after December 15, 1999 and prior to the effective time is less than
$10, and (2) SoundView will have terminated the merger agreement within 10 days
after the fifth consecutive trading day.

EXTENSION, WAIVER AND AMENDMENT OF THE MERGER AGREEMENT

RELATED AGREEMENTS

VOTING AGREEMENT

Concurrent with the execution of the merger agreement, stockholders of
SoundView representing over a majority of the voting power of SoundView's stock
entered into a voting agreement with Wit Capital. Under the terms of the voting
agreement, each of those stockholders of SoundView agreed, at any meeting of
SoundView stockholders, to vote all of their shares of SoundView's stock in
favor of the merger with Wit Capital and against any other proposal or offer to
buy all or a substantial part of the business or properties of SoundView. They
also agreed to vote against any action, proposal or agreement that would

47
<PAGE>
delay, impede, frustrate, prevent or nullify the merger agreement or the
satisfaction of the conditions precedent to the merger agreement. Under the
terms of the voting agreement, those SoundView stockholders also granted to Wit
Capital an irrevocable proxy enabling the named proxies or their substitutes, at
any meeting of SoundView stockholders, to vote their shares of SoundView's stock
in the discretion of the proxies on all matters relating to the voting
agreement.

EMPLOYMENT AGREEMENTS

Not later than the effective time of the merger, Wit Capital will enter into
employment agreements with some of SoundView's employees. Under the terms of the
proposed employment agreements, each employee agrees to remain with Wit Capital
for a period ranging from 30 to 42 months after the effective time of the merger
unless Wit Capital terminates the agreement or the employee resigns earlier.

If the employee's employment is terminated before the end of the employment
period by Wit Capital without "cause" or by the executive for "good reason," Wit
Capital will pay the employee a severance payment equaling the sum of the
aggregate amount of the employee's unpaid base salary then in effect through the
end of the employment period and the unpaid guaranteed bonus. If the employment
is terminated for cause prior to the end of the employment period, or if the
employee dies or becomes totally disabled, then Wit Capital will pay the
employee all unpaid base salary and guaranteed bonus earned through the date of
termination of employment.

"Cause" means the employee's (1) neglect, failure or refusal to timely
perform the duties of his employment (other than by reason of a physical or
mental illness or impairment), or his gross negligence in the performance of his
duties, (2) material breach of any agreements, covenants and representations
made in any employment agreement or other agreement with Wit Capital or any of
its subsidiaries, (3) violation of any law, rule, regulation or by-law of any
governmental authority (state, federal or foreign), any securities exchange or
association or other regulatory or self-regulatory body or agency applicable to
Wit Capital or any of its subsidiaries or any material general policy or
directive of Wit Capital or any of its subsidiaries applicable to the employee,
(4) conviction of, or plea of guilty or nolo contendere to, a crime involving
moral turpitude, dishonesty, fraud or unethical business conduct, or a felony,
(5) giving or accepting undisclosed material commissions or other payments in
cash or in kind in connection with the affairs of Wit Capital or any of its
subsidiaries or their clients, (6) failure to obtain or maintain any
registration, license or other authorization or approval that Wit Capital
reasonably believes is required in order for the employee to perform his duties,
or (7) habitual abuse of alcohol or drugs.

"Good reason" means (1) any failure by Wit Capital to pay or provide the
compensation and benefits under the agreement, (2) a change, without cause, in
the employee's responsibilities which represents a materially adverse change
from the employee's responsibilities as in effect at any time within the
preceding 6 months or a material reduction, without cause, in the employee's
corporate title in effect at any time within the preceding 6 months,
(3) requiring the employee to be based at any place outside a 50-mile radius
from the employee's previous job location or residence, except for reasonably
required travel on business, (4) Wit Capital acquires or creates an additional
business as a result of which SoundView's institutional brokerage business, its
investment banking technology group or its technology research group, as
developed and expanded within Wit Capital, is no longer Wit Capital's primary
institutional brokerage business or its primary investment banking technology
group, as the case may be, or (5) Wit Capital changes its compensation
methodology from the basic methodology utilized by SoundView before the merger
such that it no longer uses a combination of cash, stock and options in a merit
based compensation system rewarding individual performance within prevalent
industry standards, as determined by senior management and the board of
directors of Wit Capital.

48
<PAGE>
NON-DISCLOSURE AND ASSIGNMENT OF INVENTIONS AGREEMENT

Each employee who enters into an employment agreement with Wit Capital must
also enter into a non-disclosure and assignment of inventions agreement. Each
employee who is a party to this agreement will agree not to reveal any
confidential information belonging to Wit Capital, except as may be required in
the course of performing his or her duties as Wit Capital's employee. Each
employee who is a party to this agreement will also agree to assign to Wit
Capital any rights which he or she may have with respect to inventions, software
programs, data or other developments created or discovered during his or her
employment term.

PUT TERMINATION AGREEMENTS

49
<PAGE>
SUMMARY HISTORICAL FINANCIAL DATA OF WIT CAPITAL

The following summary historical financial data of Wit Capital for the
period from March 27, 1996 (inception) to December 31, 1996, and for the years
ended December 31, 1997 and 1998 have been derived from Wit Capital's
consolidated financial statements, which have been audited by Arthur Andersen
LLP, independent public accountants, and are included elsewhere in this proxy
statement/prospectus. The summary historical financial data for the nine months
ended September 30, 1998 and 1999 have been derived from Wit Capital's unaudited
consolidated financial statements. In our opinion, such unaudited data includes
all adjustments, consisting of only normal recurring adjustments, necessary for
a fair presentation of the information set forth therein. The results of
operations for the nine months ended September 30, 1999 are not necessarily
indicative of results to be expected for any future period. All per share and
weighted average share information has been adjusted to reflect the Wit Capital
7 for 10 reverse stock split effected June 2, 1999. The summary historical
consolidated financial data should be read in conjunction with the consolidated
financial statements and related notes thereto and with "Management's Discussion
and Analysis of Financial Condition and Results of Operations of Wit Capital,"
which are included elsewhere in this proxy statement/prospectus.

STATEMENT OF INCOME DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PERIOD FROM
MARCH 27, 1996
NINE MONTHS ENDED YEAR ENDED (INCEPTION) TO
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
---------------------- --------------------- --------------
1999 1998 1998 1997 1996
---------- --------- --------- --------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES:
Investment banking................................... $ 19,771 $ 1,094 $ 1,515 $ 43 $ --
Brokerage............................................ 4,146 149 295 10 --
Interest and other................................... 3,663 72 228 193 41
---------- --------- --------- --------- ---------
Total revenues..................................... 27,580 1,315 2,038 246 41

EXPENSES:
Compensation and benefits............................ 25,009 2,721 4,444 1,550 378
Professional services................................ 3,417 535 878 330 283
Brokerage and clearance.............................. 3,263 92 186 6 2
Data processing and communications................... 2,337 470 625 238 50
Other expenses....................................... 6,319 3,067 4,699 1,115 1,102
---------- --------- --------- --------- ---------
Total expenses..................................... 40,345 6,885 10,832 3,239 1,815

Loss before equity in net loss of subsidiaries....... (12,765) (5,570) (8,794) (2,993) (1,774)
Equity in net loss of subsidiaries................... (24) -- -- -- --
---------- --------- --------- --------- ---------
Net Loss........................................... $ (12,789) $ (5,570) $ (8,794) $ (2,993) $ (1,774)
========== ========= ========= ========= =========
NET LOSS PER SHARE:
Basic................................................ $ (0.40) $ (0.78) $ (1.23) $ (0.41) $ (0.33)
Diluted.............................................. (0.40) (0.78) (1.23) (0.41) (0.33)

WEIGHTED AVERAGE SHARES USED IN THE COMPUTATION OF
NET LOSS PER SHARE:
Basic................................................ 31,902,168 7,108,933 7,140,123 7,303,013 5,378,167
Diluted.............................................. 31,902,168 7,108,933 7,140,123 7,303,013 5,378,167
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- ------------------------------
1999 1998 1997 1996
------------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and Cash Equivalents................................... $ 9,377 $18,110 $1,111 $ 750
Total assets................................................ 149,035 22,296 5,837 2,655
Stockholders' Equity........................................ 139,063 20,608 4,859 1,480
</TABLE>

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<PAGE>
SUMMARY HISTORICAL FINANCIAL DATA OF SOUNDVIEW

The following summary historical financial data of SoundView for the years
ended December 31, 1994 through 1998 have been derived from SoundView's
consolidated financial statements, which have been audited by Ernst & Young LLP,
independent public accountants, and for the years ended December 31, 1998
through 1996 are included elsewhere in this proxy/statement prospectus. The
summary historical financial data for the nine months ended September 30, 1998
and 1999 have been derived from SoundView's unaudited consolidated financial
statements. In SoundView's opinion, such unaudited data includes all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation of the information set forth therein. The results of
operations for the nine months ended September 30, 1999 are not necessarily
indicative of results to be expected for any future period. The summary
historical consolidated financial data should be read in conjunction with the
consolidated financial statements and related notes thereto and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of SoundView," which are included elsewhere in this proxy
statement/prospectus.

STATEMENT OF INCOME DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
Brokerage..................................... $ 61,891 $ 45,822 $ 64,562 $ 48,773 $ 38,979 $ 32,056 $ 25,646
Investment banking............................ 32,053 8,332 10,259 9,944 11,683 11,809 1,951
Gains from firm investments................... 4,484 1,652 3,163 935 7,829 2,852 414
Asset management fees......................... 5,398 3,515 6,333 250 20,466 5,647 53
Interest...................................... 758 517 815 478 385 124 74
Gain (loss) on joint venture.................. 477 (440) (832) -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Total revenues.............................. 105,061 59,398 84,300 60,380 79,342 52,488 28,138

EXPENSES:
Compensation and benefits..................... 56,626 30,055 42,508 34,755 48,652 28,910 15,228
Brokerage and clearance....................... 10,393 6,964 9,434 8,037 7,035 5,952 3,874
Professional services......................... 3,791 3,495 4,239 3,345 2,850 1,969 1,903
Data processing and communications............ 2,846 2,931 3,691 3,251 2,818 2,139 811
Other operating expenses...................... 8,881 6,814 8,955 7,090 5,117 3,686 3,599
--------- --------- --------- --------- --------- --------- ---------
Total expenses.............................. 82,537 50,259 68,827 56,478 66,472 42,656 25,415
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes.................... 22,524 9,139 15,473 3,902 12,870 9,832 2,723
Income tax expense............................ 9,517 3,890 6,557 1,639 5,319 4,172 1,216
--------- --------- --------- --------- --------- --------- ---------
Net income.................................. 13,007 5,249 8,916 2,263 7,551 5,660 1,507
Minority interest............................. -- -- -- -- (1,664) (249) 9
--------- --------- --------- --------- --------- --------- ---------
Net income.................................. $ 13,007 $ 5,249 $ 8,916 $ 2,263 $ 5,887 $ 5,411 $ 1,516
========= ========= ========= ========= ========= ========= =========
NET INCOME PER SHARE
Basic....................................... $ 13.09 $ 5.59 $ 9.62 $ 2.41 $ 5.98 $ 5.25 $ 1.41
Diluted..................................... 5.24 2.44 4.15 1.10 3.01 3.49 1.17
WEIGHTED AVERAGE SHARES USED IN THE
COMPUTATION OF NET INCOME PER SHARE
Basic....................................... 993,655 938,650 926,526 940,055 985,009 1,030,325 1,072,286
Diluted..................................... 2,480,207 2,154,927 2,146,200 2,064,318 1,954,087 1,549,248 1,293,821
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------
SEPTEMBER 30, 1999 1998 1997 1996 1995 1994
------------------ -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................. $27,226 $10,236 $ 3,407 $ 3,736 $ 7,350 $ 818
Total assets.......................................... 93,998 48,568 35,844 52,440 27,668 10,932
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Stockholders' equity.................................. 38,247 23,713 17,216 15,102 9,413 4,308
</TABLE>

51
<PAGE>
SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The pro forma combined statements of operations data presented below for the
nine months ended September 30, 1999 and for the year ended December 31, 1998
assumes the merger occurred and was effective as of January 1, 1998. The pro
forma combined balance sheet data presented below assumes the merger occurred as
of the respective balance sheet date. You should not assume that Wit Capital and
SoundView would have achieved the unaudited pro forma combined results if they
had actually been combined during the periods shown.

The unaudited pro forma combined results are based on estimates and
assumptions, which are preliminary and have been made solely for purposes of
developing such pro forma information. The unaudited pro forma combined results
are not necessarily an indication of the results that would have been achieved
had such transactions been completed as of the dates indicated or that may be
achieved in the future.

The unaudited pro forma combined results should be read in conjunction with
the unaudited pro forma combined condensed financial information and the notes
thereto and the historical consolidated financial statements and notes thereto
included elsewhere in this proxy statement/prospectus, and other financial
information pertaining to Wit Capital and SoundView including "Management's
Discussion and Analysis of Financial Condition and Results of Operations of Wit
Capital," "Management's Discussion and Analysis of Financial Condition and
Results of Operations of SoundView" and "Risk Factors."

COMBINED STATEMENT OF INCOME DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ -----------------
<S> <C> <C>
REVENUES:
Brokerage.................................................. $ 66,037 $ 64,856
Investment banking......................................... 51,823 11,775
Gains from firm investments................................ 4,972 3,209
Asset management fees...................................... 5,398 6,333
Interest................................................... 3,934 997
Gain (loss) on joint venture............................... 476 (832)
---------- ----------
Total revenues........................................... $ 132,640 $ 86,338
EXPENSES:
Compensation and benefits.................................. $ 87,263 $ 54,456
Brokerage and clearance.................................... 13,656 9,620
Professional services...................................... 7,207 5,117
Data processing and communications......................... 5,183 4,316
Amortization of intangible assets.......................... 14,252 19,003
Other operating expenses................................... 15,200 13,654
---------- ----------
Total expenses........................................... 142,761 106,166
---------- ----------
Loss before income taxes................................... (10,121) (19,828)
Income tax benefit......................................... (290) (2,038)
---------- ----------
(9,831) (17,790)
Equity in net loss of subsidiaries......................... (24) --
---------- ----------
Net Loss................................................. $ (9,855) $ (17,790)
========== ==========
NET LOSS PER SHARE:
Basic.................................................... $ (0.23) $ (0.98)
Diluted.................................................. $ (0.23) $ (0.98)
WEIGHTED AVERAGE SHARES USED IN THE COMPUTATION OF NET LOSS
PER SHARE:
Basic.................................................... 42,911,516 18,149,471
Diluted.................................................. 42,911,516 18,149,471
</TABLE>

52
<PAGE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
------------------
(UNAUDITED)
<S> <C> <C>
COMBINED BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 29,603
Total assets................................................ 572,791
Stockholders' equity........................................ 475,291
</TABLE>

COMPARATIVE PER SHARE DATA

The following tables reflect (a) the historical net loss and book value per
share of Wit Capital common stock and the historical net income and book value
per share of SoundView common stock in comparison with the unaudited pro forma
net income and book value per share after giving effect to the proposed merger
of Wit Capital with SoundView and (b) the equivalent historical net loss and
book value per share attributable to 4.376 shares (assuming for purposes of
these calculations that the market price per share of Wit Capital common stock
is greater than $18.56, the maximum share price of the exchange ratio collar in
the merger agreement) of Wit Capital common stock that will be received for each
share of SoundView common stock in the merger. The information presented in the
following tables should be read in conjunction with the unaudited pro forma
condensed combined financial statements included in this proxy
statement/prospectus and the historical consolidated financial statements and
related notes of Wit Capital and SoundView which are included elsewhere in this
proxy statement/prospectus.

<TABLE>
<CAPTION>
PERIOD ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1999 1998 1998 1997 1996(5) 1995 1994
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
WIT CAPITAL HISTORICAL PER SHARE DATA:
Basic and Diluted Net Loss Per Share(2).............. $(0.40) $(0.78) $(1.23) $(0.41) $(0.33) $ -- $ --
Historical Book Value Per Share(1)................... 1.92 0.58 0.68 0.40 0.26 -- --
Historical Book Value Per Share--Diluted(3).......... 2.28 0.74 0.87 0.68 0.51 -- --
SOUNDVIEW HISTORICAL PER SHARE DATA:
Basic Net Income Per Share(2)........................ $13.09 $ 5.59 $ 9.62 $ 2.41 $ 5.98 $5.25 $1.41
Diluted Net Income Per Share(2)...................... 5.24 2.44 4.15 1.10 3.01 3.49 1.17
Historical Book Value Per Share(1)................... 39.34 23.37 27.39 18.66 16.06 9.85 4.38
Historical Book Value Per Share--Diluted(3).......... 14.39 9.93 11.00 8.38 7.49 5.45 3.49
</TABLE>

<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ -----------------
<S> <C> <C>
WIT CAPITAL AND SOUNDVIEW PRO FORMA COMBINED PER SHARE DATA:
Basic and Diluted Net Loss Per Wit Capital Share............ $(0.23) $(0.98)
Basic Net Income Per Equivalent SoundView Share(4).......... (1.01) (4.29)
Book Value Per Wit Capital Share............................ 5.61 8.37
Book Value Per Equivalent SoundView Share(4)................ 24.56 36.64
Book Value Per Wit Capital Share--Diluted(3)................ 5.10 6.51
Book Value Per Equivalent SoundView Share --Diluted(3)...... 22.32 28.48
</TABLE>

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

(1) The historical book value per share is computed by dividing stockholders'
equity by the number of shares of common stock outstanding and considering
the conversion of Wit Capital's Series A, B, C and D preferred stock into
Wit Capital Class C common stock and Wit Capital Series E preferred stock
into Wit Capital Class B common stock upon completion of Wit Capital's
initial public offering in June 1999. All shares of Wit Capital Class C
common stock were automatically converted into an equal number of shares of
Wit Capital common stock on December 7, 1999. The pro forma combined book
value per share is computed by dividing pro forma stockholders' equity by
the pro forma number of shares of Wit Capital common stock outstanding.

53
<PAGE>
(2) Basic net income (loss) per share is computed using the weighted average
number of shares of common stock outstanding during the period. Diluted net
income (loss) per share is computed using the weighted average number of
common and common share equivalents outstanding during the period. Common
equivalent shares consist of the incremental common shares issuable upon
conversion of the convertible preferred stock and shares issuable upon the
exercise of stock options and warrants. Because Wit Capital reported a net
loss in each of the periods above, common stock equivalents are not included
in the calculation of diluted net loss per share as they are anti-dilutive
and would result in a reduction of net loss per share.

(3) The historical book value per share--diluted assumes the exercise of all
outstanding options and warrants.

(4) The equivalent pro forma combined per share data for SoundView is calculated
by multiplying the pro forma combined share amounts by the assumed exchange
ratio of 4.376 shares of Wit Capital common stock for each share of
SoundView common stock.

(5) Period from March 27, 1996 (inception) through December 31, 1996 for Wit
Capital.

54
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF WIT CAPITAL

OVERVIEW

Wit Capital's wholly owned subsidiary, Wit Capital Corporation, was founded
in 1996 as the first online investment banking firm. During 1998, Wit Capital
Corporation was in an early stage of its operations and generated only minimal
revenues from its investment banking and brokerage activities. Accordingly, we
do not believe that the period to period comparisons of our operating results
below are necessarily meaningful and should not be relied upon as indicators of
future performance. All dollar figures located under the tables below for
September 30 and December 31 for each respective year are expressed in
thousands.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999

REVENUES

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- -------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Investment banking...................... $19,771 $1,094 $1,515 $43 $ --
</TABLE>

We participated in a total of 38 securities offerings during 1998, 1 as
co-manager and 37 as syndicate member. During 1998, total shares underwritten by
us were 2.1 million. We retained 490,000 shares of these underwritten shares for
sale to our customers in 1998.

We participated in a total of 94 securities offerings during the first nine
months of 1999, 45 as co-manager and 49 as syndicate member compared to the
first nine months of 1998 during which we participated in 28 offerings as
syndicate member. For the first nine months of 1999, total shares underwritten
by us were 14.8 million, compared to 1.3 million shares underwritten during the
first nine months of 1998. Of the shares underwritten above, during the first
nine months of 1999 we retained 15.5 million shares (including designated
shares) compared to 338,000 shares in the first nine months of 1998. These
figures do not include 2.28 million shares of our own stock distributed to
customers during our initial public offering in June 1999.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- -------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Brokerage................................... $4,146 $149 $295 $10 $ --
</TABLE>

We charge our customers a brokerage commission of $14.95 for market orders
and $19.95 for limit orders. The increase in this revenue resulted primarily
from an increase in the number of customer accounts opened and an increase in
the number of trades executed for our customers. The average daily number of
trades per day for 1998 was 46 and total accounts at December 31, 1998 numbered
10,900. The average daily number of trades executed for the nine month period
ended September 30, 1999 was 1,200, compared to 27 for the nine month period
ended September 30, 1998. As of September 30, 1999 total accounts numbered
85,100 compared to 7,820 total accounts as of September 30, 1998. As of
September 30, 1999, total active accounts numbered 52,885.

55
<PAGE>

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Interest........................................... $3,176 $72 $183 $54 $31
</TABLE>

We earn interest income from the investment of cash balances raised through
financing activities until the funds are used in our business. During 1998, our
average monthly cash balance was $4.1 million. During the first nine months of
1999, our average monthly cash balance was $78.3 million as compared to a
monthly average of $1.5 million for the first nine months of 1998.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Other.............................................. $ 487 $-- $45 $139 $10
</TABLE>

We earned other revenue in 1996 related to a consulting assignment. In 1997,
other revenue consisted of a one-time publishing royalty payment assigned to us
by Mr. Andy Klein. In 1998 and for the nine month period ended September 30,
1999, other revenue primarily consisted of gains on the mark to market and sale
of equity securities that we received as consideration for financial advisory
services.

EXPENSES

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Compensation and benefits.......................... $25,009 $2,721 $4,444 $1,550 $378
</TABLE>

Compensation and benefits expense consists of salaries, bonuses and other
benefits paid or provided to our employees. We had 9, 25 and 66 employees as of
December 31, 1996, 1997 and 1998 and 58 and 216 employees as of September 30,
1998 and 1999, respectively. Additionally, in February 1999, we entered into
employment contracts with several professionals that entitled them to a total of
$5.5 million in up-front payments. We recognized compensation expense of
$2.6 million related to those portions of the amounts paid for which no future
service by the employees was required. As we continue to hire more investment
banking and research professionals and participate in more transactions, we
expect our compensation expense to grow.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Professional services.............................. $3,417 $535 $878 $330 $283
</TABLE>

Professional services expense includes legal, consulting, accounting, and
recruiting fees which have increased as we continue to develop and make
improvements to our customer service and infrastructure, hire additional
personnel, develop the digital trading facility, and increase our brokerage and
investment banking operations.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Brokerage and clearance............................ $3,263 $92 $186 $6 $2
</TABLE>

Brokerage and clearing expense primarily consists of amounts paid to our
clearing agent for processing and clearing customers' trades. The increase in
brokerage and clearance expense reflects the increased volume and growth of our
brokerage operations.

56
<PAGE>

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Data processing and communications................. $2,337 $470 $625 $238 $50
</TABLE>

Data processing and communications expense includes costs related to market
data services, transaction processing and telephone and other communication
charges. These expenses have increased as a result of an increased number of
active customer accounts and an increased volume of transactions processed. We
expect these costs will continue to grow as transaction volume increases.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Technology development............................. $1,707 $607 $1,156 $511 $532
</TABLE>

Our technology development expense includes costs related to the
development, testing and support of our online brokerage systems and software.
The increases in these expenses resulted from continued enhancements to our
technology infrastructure and technological capabilities, the development of our
new Web site as well as costs associated with the digital trading facility. We
expect technology development expense to increase as operations continue to grow
and as we continue to invest in our infrastructure.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Depreciation and amortization...................... $ 864 $710 $897 $229 $9
</TABLE>

Depreciation and amortization consists primarily of depreciation and
amortization of property, equipment and leasehold improvements and amortization
of computer software. The increases in depreciation and amortization reflect the
increased investments we have made in our technology, equipment and facilities.
We expect these expenses to continue to grow as we continue to invest in
technology and infrastructure.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Occupancy.......................................... $603 $176 $237 $201 $42
</TABLE>

Occupancy expense includes costs related to leasing office space in New York
and San Francisco and the increase reflects our growth and need for expanded
office facilities. We opened our San Francisco office in 1998, and leased
additional space in New York in the third quarter of 1999. As we continue to
grow and expand our business, we expect occupancy expense to increase.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Marketing and business development................. $1,635 $845 $1,206 $641 $340
</TABLE>

During 1998 marketing expense related to developing our brand name
recognition and promoting our business. During 1999, we focused on acquiring
customers simply by offering access to initial public offerings. Marketing
expense in 1999 primarily relates to the development of the digital trading
facility, and we expect these expenses to increase as we continue to grow and
expand our business.

57
<PAGE>

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Other................................... $1,510 $729 $1,203 $(467) $179
</TABLE>

Other expenses include travel and entertainment, office supplies,
registrations and other administrative expenses that have all increased as we
continue to expand our business and operations. In 1997, other expenses include
a credit of $750,000 to reflect a repurchase of our common stock and a
corresponding reduction of other expenses. Other expenses in 1998 includes
write-downs of $782,000 related to media credits we had previously acquired but
which we decided not to use in view of a revised marketing strategy in 1998. In
1999, other expenses includes an increase in travel and entertainment expenses
related to expanding our business as well as $400,000 in primarily non-recurring
costs associated with our brokerage operations and past vendor and other
relationships.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have satisfied our cash requirements primarily through
private placements of common stock and convertible preferred stock. During
June 1999, we completed an initial public offering in which we issued 8,740,000
shares of common stock at $9.00 per share. We received approximately
$72.8 million in cash proceeds, net of underwriting discounts and offering
costs. We believe that our existing cash balances will be sufficient to meet
anticipated cash requirements for at least the next twelve months. We may,
nonetheless, seek additional financing to support our activities during the next
twelve months or thereafter. There can be no assurance, however, that additional
capital will be available on reasonable terms, if at all, when needed or
desired.

Net cash used in operating activities was $12.2 million for the nine months
ended September 30, 1999, compared to $4.6 million during the same period in the
preceding year. Cash used in operating activities for the nine months ended
September 30, 1999 was primarily from a net loss of $12.8 million, an increase
in operating assets of $8.7 million offset by a net increase in operating
liabilities of $8.3 million. Cash used in operating activities for the nine
months ended September 30, 1998 was primarily from a net loss of $5.6 million, a
net increase in operating assets of $993,000, and an increase in operating
liabilities of $458,000.

Net cash used in operating activities was $6.9 million for 1998 and
$3.9 million for 1997. Cash used in operating activities for 1998 resulted
primarily from a net loss of $8.8 million and a net increase in operating
liabilities of $711,000 and a net increase in operating assets of $1.2 million,
offset by depreciation and amortization of $897,000 and non-cash expenses of
$1.5 million. Cash used in operating activities in 1997 was primarily
attributable to a net loss of $3.0 million, plus non-cash expense reimbursement
of $750,000.

Cash used in investing activities was $127.6 million for the nine months
ended September 30, 1999, compared to $272,000 for the nine months ended
September 30, 1998. Cash used in investing activities for the nine months ended
September 30, 1999 was primarily for purchases of short-term investment
securities of $121 million, fixed asset purchases of $3.7 million and purchases
of computer software of $2.8 million. Cash used in investing activities for the
nine months ended September 30, 1998 resulted from purchases of fixed assets of
$208,000 and from purchases of computer software of $64,000.

Net cash used in investing activities for 1998 of $458,000 was primarily
attributable to purchases of fixed assets. Net cash used in investing activities
of $828,000 for 1997 was attributable to $240,000 used for the purchase of fixed
assets and $588,000 used in computer software development.

Cash provided by financing activities was $131.1 million for the nine months
ended September 30, 1999, compared to $9.2 million for the nine months ended
September 30, 1998. Cash provided by financing activities resulted primarily
from net proceeds of $72.8 million received from the initial public offering of
our common stock and from $24.9 million in net proceeds received from the
issuance of Series E preferred

58
<PAGE>
stock, now Class B common stock, and the grant of warrants to The Goldman Sachs
Group, Inc. and from $31.5 million received from issuances of our Series D
preferred stock, now common stock, to accredited investors. Cash provided by
financing activities for the nine months ended September 30, 1998, was primarily
from issuances of our Series A and Series B preferred stock, now common stock,
to accredited investors.

Net cash provided by financing activities was $24.3 million for 1998 and
primarily consisted of proceeds from the issuance of our Series A, B, C and D
preferred stock, now common stock. Net cash provided by financing activities was
$5.1 million for 1997 and primarily consisted of proceeds from the issuance of
our Series A preferred stock.

On October 26, 1999, we and enba plc announced the intention to combine our
efforts to establish a Pan-European investment banking firm to be known as Wit
Capital Europe. Start of operations is anticipated to occur in early 2000. We
and enba will jointly control Wit Capital Europe and will initially own
55 percent and 45 percent, respectively, of the equity of Wit Capital Europe. In
proportion to these equity stakes, we and enba have contributed an aggregate of
$10 million to the joint venture. We also entered into a subscription agreement
to acquire 189,748 shares of enba in exchange for 1,878,596 shares of our common
stock.

In connection with the proposed merger with SoundView, we may spend up to
$30 million in cash. A limited cash election feature in the merger agreement
allows each SoundView stockholder to receive a cash payment in lieu of our
common stock, subject to an overall limitation, including any stockholders
exercising dissenter's rights, of $30 million. In addition, we expect direct
transaction costs of $7 million in connection with the merger.

We continued to make significant improvements to our customer care services
during the third quarter of 1999 increasing the number of call center
representatives, improving response time to customer inquiries, and upgrading
its processing software and telecommunications equipment. We are currently
upgrading and expanding the capabilities of our systems infrastructure which at
times has been strained by rapid growth. We expect infrastructure expenditures
to continue as we improve and enhance our online brokerage systems, expand our
affinity programs, and continue development of our digital trading facility.

UPDATE ON DIGITAL TRADING FACILITY

YEAR 2000

The Year 2000 issue involves the potential for system processing and
failures of date-related data resulting from computer-controlled systems using
two digits rather than four to define the applicable year. For example, computer
programs that contain time-sensitive software may recognize a date using two
digits of "00" as the year 1900 rather than the year 2000. This could result in
system failure or

59
<PAGE>
miscalculations causing disruptions of our operations, including among other
things, a temporary inability to process transactions in connection with our
investment banking and brokerage activities.

Because we are dependent to a very substantial degree upon the proper
functioning of computer systems, the failure of any computer system to be Year
2000 compliant could have a materially adverse affect on us. Failure of this
kind could, for example, cause settlement of trades to fail, lead to incomplete
or inaccurate accounting, recording or processing of trades in securities,
result in generation of erroneous results or give rise to uncertainty about
exposure to trading risks and our need for liquidity. If not remedied, potential
risks include business interruption or shutdown, financial loss, regulatory
actions, reputational harm and legal liability.

We have formed a committee, the Y2K steering committee, to investigate and
resolve Year 2000 compliance issues. This committee's mandate is to guide and
coordinate the efforts of the various core business units which are working on
Year 2000 compliance and to manage the assessment, planning, testing and
implementation of Year 2000 compliant systems for the entire company. The Y2K
steering committee created a process for developing an inventory of all
information systems that we use. The inventory included all internal and
external systems that were mission critical. To determine whether a mission
critical system posed a potential problem, we:

- interviewed vendors;

- analyzed the system with testing software;

- interviewed programmers and developers; and

- reviewed program code.

During the planning stage of the project, we received additional investments
from stockholders which, among other things, permitted us to accelerate its
replacement strategy. Information systems originally in need of remediation for
Year 2000 compliance have been replaced as well as tested for Year 2000
compliance. These systems include:

- telephone switch and all related instruments;

- internal LAN and router environment;

- internal hosted Web site; and

- our servers.

We have completed the internal information technology and non-information
technology assessment, remediation and testing efforts and believe that our
internal software and hardware systems should function properly with respect to
dates in the year 2000 and thereafter. Costs to date related to Year 2000
assessment and remediation plans are approximately $175,000.

In addition, we depend upon the proper functioning of third-party computer
and non-information technology systems. These parties include depositories,
clearing agencies, clearing houses, commercial banks and other vendors. We have
contacted every material vendor with which we have important financial or
operational relationships to determine the extent to which they are vulnerable
to the Year 2000 issue. We assessed the responses to the Year 2000 questions
asked to these vendors. Each vendor has participated in and passed the Year 2000
compliance tests formulated by the Securities Industry Association. These
vendors have also provided us with written documentation that they are Year 2000
compliant and confirmed that they have passed the SIA sponsored industry test.
Since we do not require unique services from any of these vendors, we believe
the SIA testing indicates general Year 2000 compliance. In the event any of
these vendors prove not to be Year 2000 compliant, we believe that we could find
a replacement vendor which is Year 2000 compliant, although not without
significant expense or delay. However, based

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<PAGE>
on management's current information, we expect to incur no significant costs in
the future for Year 2000 problems.

Our contingency planning efforts focus on creating operating plans in the
case of internal system errors or failures or those of third party vendors which
provide critical services. In general, the contingency plan provides for the
employment of alternate service providers, communication means and manual
processes. Management's worst case scenario in connection with Year 2000 issues
is that there will be a failure on the part of one or more important vendors and
that we will experience difficulties in finding replacement vendors. If these
vendors are not Year 2000 compliant despite the results of their internal and
external testing, we, as well as many of their other clients, will face system
and processing failures until these issues can be resolved.

Disruption or suspension of activity in the world's financial markets is
also possible. In addition, uncertainty about the success of remediation efforts
generally may cause many market participants to reduce the level of their market
activities temporarily as they assess the effectiveness of these efforts during
a "phase-in" period beginning in late 1999 and early 2000. This turn could
result in a general reduction in trading and other market activities (and
reduced revenues) as well as reduced funding availability in late 1999 and early
2000. We cannot predict the impact that such reduction would have on our
business.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objectives of our investment activities are to preserve
principal while maximizing yield without significantly increasing risk. We
invest our excess cash in money market funds, short-term obligations issued by
the U.S. Government and its agencies and in high-quality corporate issuers. Our
investment portfolio is subject to market risk for changes in interest rates. We
have established investment guidelines that specify credit quality requirements
as well as diversification requirements by issuer and type of security. We do
not hold derivative financial instruments in our investment portfolio.

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<PAGE>
PROPOSAL TO AMEND WIT CAPITAL'S
1999 STOCK INCENTIVE PLAN

Wit Capital's stockholders are being asked to approve two amendments to Wit
Capital's 1999 Stock Incentive Plan. The board of directors of Wit Capital
adopted the amendments on December 13, 1999, subject to stockholder approval at
the special meeting of stockholders.

INCREASE OF SHARES RESERVED FOR ISSUANCE

The first amendment to the Stock Incentive Plan would increase the number of
shares of our common stock reserved for issuance under such plan by an
additional 9,850,000 shares. The share increase will ensure that a sufficient
reserve of common stock remains available under the Stock Incentive Plan. Our
board of directors believes that an increase in the number of shares of common
stock reserved for issuance under the Stock Incentive Plan is appropriate. The
purpose of the Stock Incentive Plan is to promote our long-term growth and
profitability by providing incentive to our employees to improve stockholder
value and contribute to our financial success. The ability to grant awards of
stock options based on our employees' performance will enable us to retain and
attract the best available people for positions of significant responsibility.
Option grants made to newly hired or continuing employees will be based on both
competitive market conditions and individual performance. For a description of
the Stock Incentive Plan, see "Management of Wit Capital--Management Benefit
Plans--Stock Incentive Plan."

Subject to stockholder approval, there are presently [ ]shares of common
stock reserved for issuance under the Stock Incentive Plan, representing [ ]%
of all of our issued and outstanding common stock. This share reserve consists
of (1) the [ ] shares of common stock initially reserved for issuance under the
Stock Incentive Plan (including the shares of common stock subject to the
outstanding options under the Stock Option Plan, the predecessor to the Stock
Incentive Plan, which have been transferred to the Stock Incentive Plan) plus
(2) the [ ] share increase which is the subject of this proposal. If the
stockholders vote to approve the merger agreement, SoundView's Stock Option Plan
will be adopted by Wit Capital, although no additional options to purchase
shares will be granted under SoundView's plan. There are currently outstanding
options to purchase 1,577,962 shares of SoundView common stock under SoundView's
stock option plan. If the merger agreement is approved by Wit Capital's
stockholders, these options will be converted to options to purchase Wit Capital
common stock at the exchange ratio. Thus, the SoundView options will become
options to purchase between 4.376 and 5.220 shares of Wit Capital common stock.

APPROVAL OF INTERNAL REVENUE CODE SECTION 162(M) LIMITATIONS

The second amendment to the Stock Incentive Plan would limit the maximum
number of options and other awards which may be granted to an employee of ours
in any fiscal year to 1 million shares of our common stock. The purpose of the
amendment is to ensure that any options and other awards granted under the Stock
Incentive Plan after its amendment increasing the number of shares available for
issuance under the plan will qualify as "performance-based compensation" under
Section 162(m) of the Internal Revenue Code.

Under Section 162(m), we may not deduct in any taxable year compensation in
excess of $1 million paid to our co-chief executive officers and to our four
other most highly compensated executive officers who are serving in such
capacity as of the last day of such taxable year. An exception to this rule
applies to compensation that is paid pursuant to a stock incentive plan or other
management benefit plan approved by our stockholders that specifies, among other
things, that the maximum number of shares with respect to options and other
awards granted under such a plan with an exercise price equal to the fair market
value of Wit Capital stock on the date of grant is deemed to be inherently
performance-based, since such awards provide value to employees only if the
stock price appreciates. While Section 162(m) under the Code generally became
effective in 1994, a special rule allows options and other awards granted under
the Stock

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<PAGE>
Incentive Plan to be treated as qualifying under Section 162(m) without having a
per-person share limit until approval of the amendment to the Stock Incentive
Plan to increase the number of shares reserved for issuance under the plan.

If stockholders do not approve the Section 162(m) amendment, any
compensation expense of Wit Capital associated with the options and other awards
granted under the Stock Incentive Plan in excess of the shares currently
available for issuance (together with all other non-performance-based
compensation) in excess of $1 million for any of our co-chief executive officers
or four other most highly compensated executive officers will not be deductible
under the Code.

VOTE REQUIRED

The affirmative vote of at least a majority of the shares of common stock
present in person or by proxy at the special meeting and entitled to vote is
required for approval of both amendments to the Stock Incentive Plan. Should the
required stockholder approval not be obtained, then the 9,850,000 share increase
to the share reserve under the Stock Incentive Plan will not be implemented, any
stock options granted under the Stock Incentive Plan on the basis of that
increase will immediately terminate without ever becoming exercisable for the
shares of common stock subject to those options and no additional options or
stock issuances will be made on the basis of such share increase. The Stock
Incentive Plan will, however, continue in effect, and option grants and direct
stock issuances may continue to be made under the Stock Incentive Plan until all
the shares of common stock available for issuance under the Stock Incentive Plan
have been issued pursuant to such option grants and direct stock issuances. The
approval of the proposal to amend the Stock Incentive Plan is not conditional on
the approval of the issuance of Wit Capital common stock in the merger.
Moreover, the approval of one proposed amendment to the Stock Incentive Plan is
not conditional on the approval of the other proposed amendment.

RECOMMENDATION OF WIT CAPITAL'S BOARD OF DIRECTORS

The board of directors of Wit Capital deems this proposal to be in the best
interests of Wit Capital and its stockholders and recommends a vote FOR approval
of both proposed amendments to the Stock Incentive Plan. Unless authority to do
so is withheld, the person(s) named in each proxy will vote the shares
represented thereby FOR the approval of both amendments to the Wit Capital
Group, Inc. 1999 Stock Incentive Plan.

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<PAGE>
WIT CAPITAL'S BUSINESS

Our business comprises Internet investment banking and online brokerage. We
established a private equity fund for venture capital investing in Internet
companies by high net worth individuals. In 1998, our investment banking revenue
and our brokerage revenue represented 74% and 14% of our total revenues,
respectively. For the nine months ended September 30, 1999, our investment
banking revenue and our brokerage revenue represented 72% and 15% of our total
revenues, respectively. As our business develops and our client and customer
bases grow, these percentages may change, and, accordingly, they may not be
indicative of our future results.

INVESTMENT BANKING

Our Internet investment banking services are divided into three revenue
generating categories: public underwriting, financial advisory services and
private equity. We also produce investment research which we believe will enable
us to win investment banking mandates, increase our underwriting share
allocations and provide beneficial information to our individual customers. In
the future, we may engage in proprietary trading to support our investment
banking activities.

Our investment banking activities focus on the Internet sector and, more
generally, on issuers seeking to market their stock offerings to online
investors. We also focus on other rapidly growing sectors of the economy that
are related to or dependent on Internet technology.

We believe the Internet will open the equity markets to individual investors
and thereby change the model of capital formation that exists today. In
particular, we believe that the Internet presents the opportunity to align the
interests of individual investors and corporate issuers by making public
offering materials and investment research available to individuals on a timely
basis and by providing individual investors the opportunity to purchase new
issue shares at the offering price. Traditionally, major underwriters have
presented public offerings primarily to select institutional purchasers who, as
a result, have played a dominant role in pricing new issues. Individual
investors, who account for approximately 43% of direct ownership of publicly
traded equity securities, have been largely excluded from these offerings. We
believe that a primary reason for this is the extensive human effort and cost
required to market equity offerings with printed prospectuses and to monitor and
confirm the interest of numerous individuals by person-to-person communication.
By marketing public offerings to individual investors electronically, we believe
underwriters and corporate issuers will be able to access efficiently the retail
market and will have at hand instantaneous information as to the level of retail
interest for their equity offerings. This information about individual investor
interest in public offerings should lead to more accurate pricing.

As the Internet rapidly becomes a critical medium for collecting and
exchanging information and conducting commerce for nearly all businesses, we
believe that corporate clients will gravitate towards those investment banking
firms that leverage their knowledge and expertise about the Internet. The speed
of this development is driven by the Internet's power to reduce costs related to
the sale and delivery of traditionally provided goods and services and by its
capacity to support new forms of business-to-business, business-to-consumer and
consumer-to-consumer relationships. It is also driven by the increasing
awareness of, and the relatively inexpensive access to, the Internet by
individuals. According to Jupiter Communications, the percentage of households
in the United States using the Internet grew from 9.7% in 1994 to 44% in 1999.

We have built a team of 58 investment banking and research professionals
with broad abilities to perform traditional investment banking functions such as
deal selection and origination, due diligence, valuation, deal structuring and
prospectus preparation. Our investment bankers, executive officers and investors
have strong relationships with corporate issuers, venture capitalists and other
influential persons and entities in the financial services sector. In addition,
our senior investment banking and research professionals have a strong history
of working with Internet companies and developing Internet strategies and
businesses. Our chairman and co-chief executive officer, Robert H. Lessin, was
previously a vice

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<PAGE>
chairman at Salomon Smith Barney and was head of investment banking at Smith
Barney prior to its merger with Salomon Brothers. Prior to that, he was vice
chairman of the investment banking operating committee at Morgan Stanley. Our
director of research, Jonathan Cohen, was previously Merrill Lynch's senior
Internet analyst and was named to Institutional Investor's "All American
Research Team" for the Internet sector in 1996, 1997 and 1998. Other senior
banking personnel also have significant business generating capabilities and
investment banking experience in the Internet sector.

PUBLIC UNDERWRITING

We have pioneered the business of online retail distribution of shares in
public offerings. As a result, we have benefited from publicity and word of
mouth exposure which we believe has established Wit Capital as a leading
provider of online investment banking services. Since commencing operations in
September 1997, we have participated in 166 public equity offerings, including
135 initial public offerings, lead managed by established investment banking
firms, including BancBoston Robertson Stephens, Bear Stearns, DB Alex. Brown,
Donaldson Lufkin & Jenrette, Goldman Sachs, Hambrecht & Quist, J.P. Morgan,
Lehman Brothers, Merrill Lynch, Morgan Stanley, Salomon Smith Barney and
Schroders.

During the first nine months of 1999, we participated in a total of 94
public offerings, consisting of 45 public offerings as a co-manager and 49
public offerings as a syndicate member. Through September 30, 1999, we
underwrote a total of 14.8 million shares and retained for sale to our customers
a total of 15.5 million shares, including designated shares, in these public
offerings during 1999. On average during this period, we underwrote 157,000
shares per offering in the public offerings in which we participated,
representing an average of 1.8% of the total shares underwritten in each
offering.

In every transaction, we accept underwriting risks and liabilities in the
same manner as do traditional investment banking firms, and we perform the
requisite services, such as assisting in deal structure, due diligence and
prospectus preparation. In contrast to the way securities are offered and sold
by traditional underwriters, however, we offer and sell shares to individual
investors on a modified first-come, first-served basis. By modified first-come,
first-served, we mean that we treat all conditional offers to purchase shares in
an initial public offering received before a specified time--typically
11:59 P.M. (ET) on the day we send e-mail notices of the offering--as if they
had been submitted at the same time. Thereafter, conditional offers are accepted
on a first-come, first-served basis, subject to some exceptions set forth in our
rules. If we have more demand for shares from the customers that are treated as
having submitted their offers at the same time than we have to distribute, we
use a random number generator to select those customers to receive an
allocation. While we reserve the right to set minimum and maximum limits for
allocations, we try to allocate the shares we retain for distribution in 100
share increments in order to achieve a broad distribution. For certain issuers,
we also facilitate special or affinity distributions to online investors having
some existing relationship with the issuer, such as their customers, suppliers
and employees.

We have developed an automated Web-based system to handle securities
offerings. This automated system includes basic brokerage functions through
which investors can view offering documents and enter orders to purchase
securities. The system assists our policy of discouraging "flipping" of
securities. Flipping generally refers to buying shares in an initial public
offering and selling them immediately for a profit. By tracking our customers'
holding and sale of underwritten securities they purchase from us, our system
assists our policy of discouraging our customers' selling of these securities
before 60 days have elapsed. Customers who flip lose priority for a period of
time to customers who have not flipped in our modified first-come, first-served
selling process. The system also includes a fully automated electronic order
book.

We offer issuers contemplating public offerings several capabilities:

- We provide broad dissemination of offerings to online individual
investors, which should result in more demand for shares once they are
publicly traded. For retail-oriented issuers, such broad

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dissemination should also result in increased customer awareness for the
issuer's products or services.

- We broaden the investor demand for the issuer's shares by providing a
timely and cost-effective way to access groups having an affinity
relationship with the issuer, such as customers, suppliers or employees.

- We are able to deliver and analyze data about the retail demand for a
proposed offering by collecting conditional offers from online individual
investors in our central electronic order book. This should enable issuers
to negotiate more appropriate prices for their shares as compared to
prices negotiated primarily on the basis of data about institutional
investor interest.

- We offer broad online dissemination to individuals of investment research,
which should result in more interest in and recognition of the issuer
among individual investors in the secondary market.

During 1998, the revenue we generated from underwriting activities was
limited since the we received none or negligible portions of management fees
paid to co-managing underwriters and underwriting sales credits reflected our
limited allocations of the shares being underwritten. During 1999, we have begun
to receive larger management fees and allocations of the shares in the offerings
in which we are participating and have experienced a general increase in the
number of offerings in which we participate. We have not received large enough
share allocations to satisfy our customers' demand. We believe that our ability
to create and broadly disseminate high quality investment research will be an
important factor in obtaining more significant share allocations and earning
full compensation as co-managers. After the merger, we will also have a
substantial market-making business which we expect will contribute to our
efforts to secure larger allocations in public offerings in what we participate.

We currently focus on originating public offerings of common stock. In the
future, we intend to explore opportunities to extend our investment banking
services to include preferred stock, convertible securities and other debt and
debt-related securities that we believe will appeal to individual investors.

STRATEGIC ADVISORY SERVICES

In addition to our capital raising services, we also advise corporate
clients in connection with developing Internet strategies and businesses and
with mergers and acquisitions. These activities complement our public and
private equity businesses and allow us to offer a mix of investment banking
services to our clients during the course of their development. Senior members
of our management have had advisory relationships with a number of corporations
that are now clients or potential clients.

PRIVATE EQUITY

We have a private equity group that assists private and public corporate
issuers, as well as investment funds, in raising private capital. The private
equity group is focused on raising equity capital from traditional institutional
and venture capital sources and strategic investors. In the future, we plan to
offer private equity to high net worth individual investors online.

INVESTMENT RESEARCH

Our research department provides investment research on the Internet
industry and Internet companies. To support our investment banking activities,
we have extended our research coverage into other fast growing sectors of the
economy that are related to or dependent on Internet technology, including media
and entertainment, software, telecommunications, education, and healthcare and
to issuers who are seeking access to the online investor base. Building our
research capability will require a substantial investment in qualified
personnel. However, we believe that investment research will enable us to win
investment banking mandates, increase our underwriting share allocations and
provide beneficial information to our individual investor customers.

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Jonathan Cohen, our director of research, is building a team of junior and
mid-level research analysts to work with him. Our research platform has the
advantage of using the interactive capabilities of the Internet while speaking
to individual investors in a manner more comprehensible as compared to
traditional investment research.

In contrast to established research practices--where high quality research
is closely held and shared only with a brokerage firm's favored clients--we
disseminate our research for free on our Web site to our customers. We do not
charge customers, brokerage firms or Web content or portal sites for our
research. We believe that this strategy helps us to build brand recognition,
without the cost of advertising or marketing.

INVESTMENT BY GOLDMAN SACHS

Goldman Sachs and we have agreed to work together to solicit investment
banking assignments when we both agree that such efforts will be mutually
commercially beneficial. In addition, Goldman Sachs has agreed to support our
participation in public offerings of equity securities when we both agree that
such participation will be similarly beneficial. Goldman Sachs also has agreed,
under certain circumstances, to support us as an investment banking firm to
handle sales of underwritten shares to groups having a preexisting, or affinity,
relationship with the issuer in connection with any public offering which they
lead manage.

We believe our relationship with Goldman Sachs will provide us important
strategic advantages for our investment banking business, including valuable
access to new prospective clients and to large and desirable public offerings
and other transactions and assignments. We further believe our relationship will
enhance our efforts to diversify and expand our investment banking capabilities
beyond our initial Internet focus. Additionally, we expect our relationship to
give us increased acceptance and stature in the investment banking community and
with corporate clients. Our relationship with Goldman Sachs may, however, make
it more difficult for us to develop or maintain relationships with other
investment banking firms. See "Risk Factors."

On April 9, 1999, we issued 11,666,667 shares of Series E preferred stock
(subsequently converted into an equal number of shares of our Class B common
stock) for a purchase price of $25 million. Goldman Sachs also received
5,637,295 warrants to purchase Series E preferred stock, now Class B common
stock. The warrants are exercisable for an equivalent number of shares of
Class B common stock and may be exercised beginning in October 2000 at a per
share exercise price equal to $5.57. In addition, Goldman Sachs has the right to
receive up to an additional 153,247 warrants to purchase Class B common stock
depending upon the resolution of the dispute referred to in "Wit Capital's
Business--Legal Matters."

BROKERAGE

We offer to our direct customers brokerage services such as stock and option
trading, access to more than 3,800 mutual funds, and record management as well
as cash management services and market information. These services are provided
through the Internet and touch-tone telephone access. Our ordinary commission
rates are $14.95 for market orders and $19.95 for limit orders. As part of
brokerage services, we provide news and other information services through
arrangements with third-party vendors, including CBS Marketwatch, Free Edgar,
IPO Central, Smartmoney.com, Stockpoint, Reuters and Red Herring.

The following table shows the growth in (1) the number of customers who have
opened accounts and have active accounts with us and (2) the daily average
number of secondary market trades these customers have executed through us.
Secondary market trades, which involve the buying and selling of publicly traded
securities, do not include shares purchased in public offerings.

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<PAGE>

<TABLE>
<CAPTION>
APPROXIMATE
NUMBER DAILY AVERAGE NUMBER
OF CUSTOMER APPROXIMATE NUMBER OF SECONDARY MARKET
ACCOUNTS OF ACTIVE CUSTOMER TRADES DURING
AT PERIOD END ACCOUNTS AT PERIOD END THREE-MONTH PERIOD
-------------- ---------------------- --------------------
<S> <C> <C> <C>
March 31, 1998......................... 3,100 (A) 12
June 30, 1998.......................... 5,300 (A) 25
September 30, 1998..................... 7,800 (A) 45
December 31, 1998...................... 10,800 2,900 106
March 31, 1999......................... 26,000 9,600 405
June 30, 1999.......................... 66,800 27,100 1,377
September 30, 1999..................... 85,100 52,900 1,833
</TABLE>

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

(A) Estimated to be less than 2,100 active customer accounts.

CUSTOMER SERVICE. We are making a substantial commitment to provide a high
quality of customer service through our call center. We continue to expand our
telephone system capacity and additional aspects of our infrastructure. We will
need to increase the number of customer care representatives in our call center
as our customers' activity increases. We have expanded the hours of operation of
our call center in order to better ensure the satisfaction of our customers. In
addition, we have made a substantial investment to ensure that our operations
are adequately structured and supervised to be in compliance with applicable
regulations. The rapidly increasing level of telephone and e-mail inquiries at
times has strained the capacity of our telecommunications system and our
customer service staff. In addition, on occasion we have experienced temporary
disruptions in our Web site service. As a result, our customers have sometimes
been unable to contact us in a timely manner.

CLEARING AND SETTLEMENT. U.S. Clearing, a division of Fleet Securities,
clears our customer transactions on a fully-disclosed basis. U.S. Clearing is a
registered broker-dealer that provides clearing services to other brokerage
firms. Its services for our customers include the confirmation, receipt,
execution, settlement and delivery functions involved in securities
transactions, as well as safekeeping of customers' securities and assets and
certain customer record keeping, data processing and reporting functions. We
continue to increase our trade processing capabilities to better facilitate the
clearing of trades we execute for our customers.

Under our agreement with U.S. Clearing, we pay clearing and execution fees
according to a schedule. In addition, the agreement requires U.S. Clearing to
share with us execution revenues and interest revenue earned in connection with
margin and stock borrowing balances kept by our customers and also provide us a
fee on balances maintained by these customers with selected money market funds.
We must indemnify U.S. Clearing for, among other things, any loss or expense due
to the failure of customers to: (1) pay for securities purchased by them,
(2) promptly deliver securities sold by them, (3) deposit sufficient collateral
to support their borrowing when requested by U.S. Clearing and (4) remit
excessive disbursements of funds or any other valid charges imposed by U.S.
Clearing.

VENTURE CAPITAL FUND GROUP

The Venture Capital Fund Group emphasizes investments in Internet businesses
and maintains a particular focus on e-commerce companies and providers of
software and services that enable the digital economy. Our venture capital fund
allows high net worth individual investors to pool their resources and gain
access to a quality of deal flow traditionally available to proprietary funds
backed by large institutions. We intend to raise capital for and manage a series
of Internet-related private equity funds primarily for venture capital investing
by high net worth individuals. We have recently hired the management team of
Dawntreader LLC, the management company of an early-stage Internet fund
established in 1998 by our co-chief executive officer, Robert H. Lessin, to lead
our Venture Capital Fund Group.

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Our Venture Capital Fund Group currently manages Arista Capital Partners
L.P., a $39.5 million Internet-related venture capital fund we closed in
August 1999. We intend to offer additional venture capital funds focused on
similar investment strategies and additional types of funds including a larger
fund targeting both individual and institutional investors. We derive revenue
from our Venture Capital Fund Group activity through management fees and sharing
in profits realized by the funds.

Our venture capital fund enables us to further take advantage of our
expertise in the Internet and e-commerce. The development of this venture
capital fund will create new investment opportunities for our high net worth
individual investor clients and will create a wider range of capital raising
opportunities for corporate issuers. The management of current and creation of
additional venture capital funds should foster long term partnerships with our
corporate clients while providing significant returns to the investors in our
funds.

INTERNATIONAL OPPORTUNITIES

Since the opportunity to reengineer the capital formation process is not
limited to the U.S. marketplace, we want to leverage our technology and
intellectual capital by creating international joint ventures. We would like to
emerge as a global brand representing preeminence in Internet investment banking
and brokerage activities. While we hope to develop a global network of Wit
Capital branded companies linked by license and contractual agreements, our
first two investments are in the developmental stage and we can provide no
assurance that either will be successful in developing their businesses.

WIT CAPITAL JAPAN. In July 1999, we entered into a joint venture agreement
with Trans Cosmos, Inc. and an investment agreement with Mitsubishi Corporation
to establish a Japanese Internet investment banking firm, known as Wit Capital
Japan Inc. Wit Capital Japan was incorporated in August, 1999 and is based in
Tokyo. Wit Capital Japan plans to commence operations by early 2000. Wit Capital
Japan recently closed a second round of financing from private investors,
bringing the aggregate amount of funds it has received since August, 1999 to
over US$40 million. A group of Japanese financial institutions and venture
capital investors joined Trans Cosmos and Mitsubishi Corporation in this latest
round of financing. Wit Capital Japan has hired Katsuya Takanashi to serve as
president and chief executive officer and to build a team of investment banking
professionals, research analysts and technical experts. Mr. Takanashi has over
30 years of investment banking experience, with the most recent 15 years being
spent at various executive and leadership positions within Nomura Securities.
Mr. Takanashi served as executive vice president of Nomura Asset Management and
has also been a member of the board of directors of Nomura Securities Co., Ltd.
Our role in the venture is to provide know-how to the management of Wit Capital
Japan. We own 30% of the outstanding equity in Wit Capital Japan, and we have an
option terminating in May 2000 to purchase an additional 10%.

Wit Capital Japan will extend to the Japanese markets our philosophy and
practice of opening the equity markets to individual investors. Using the
Internet, Wit Capital Japan will offer individual investors in Japan
opportunities to invest in public offerings and venture capital funds of
Japanese companies. In addition, Wit Capital Japan will provide access to
proprietary, institutional-quality investment research at no charge. It also
intends to provide financial advisory services to Japanese companies developing
Internet businesses, including U.S. companies seeking to create joint ventures
with companies in Japan. Wit Capital Japan will also offer online brokerage
services to individual investors in Japan. In addition, five of its investors
have agreed to participate in electronic underwriting syndicates in public
offerings in which Wit Capital Japan participates as a lead manager or
co-manager.

Although the Japanese government has recently suggested that there will be
support for efforts to develop new capital raising opportunities for Japanese
growth companies, Wit Capital Japan will face challenges presented by
traditional capital raising conventions and by the dominance of large Japanese
securities firms. Wit Capital Japan hopes to benefit from our experience and
relationships with the U.S. Internet community and our successful track record
in gaining regulatory and industry acceptance of

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online capital raising. Wit Capital Japan anticipates a significant increase in
the Japanese e-commerce market as Japanese consumers and investors gain
confidence in the Internet as a medium of commerce. See "Risk Factors--Our
international investments may not prove to be successful."

WIT CAPITAL EUROPE. In October 1999, we and enba plc, a European provider
of Internet-only financial services, announced the intention to combine our
efforts to establish a Pan-European investment banking firm, to be known as Wit
Capital Europe. Wit Capital Europe plans to commence operations in early 2000,
subject to obtaining the required regulatory approvals. We will initially own a
55% stake in Wit Capital Europe while enba will initially own a 45% stake. We
and enba have contributed, in proportion to our equity interests, an aggregate
of $10 million to the joint venture. We also entered into a subscription
agreement to acquire 189,748 shares of enba in exchange for 1,878,596 shares of
our common stock.

Wit Capital Europe will use the Internet to offer individual investors in
Europe the opportunities to invest in public offerings and venture capital funds
of European companies. It also intends to provide financial advisory services to
companies developing Internet businesses in Europe, including U.S. companies
seeking to create joint ventures with companies in Europe. Wit Capital Europe
will also provide online brokerage services to individual investors in Europe.
In addition, Wit Capital Europe will provide access to proprietary,
institutional-quality investment research at no charge. Wit Capital Europe
intends to work closely with enba to offer an integrated consumer banking and
brokerage service to individual investors throughout Europe, initially focusing
on the United Kingdom, France and Germany. The joint venture will thus be able
to take advantage of enba's developing technology platform designed to
facilitate the provision of online consumer banking and brokerage on a
Pan-European basis.

INFORMATION TECHNOLOGY

Technology is fundamental to our business strategy. We are committed to the
ongoing development, maintenance and use of technology throughout our
organization and across all business lines. Where possible, our preference is to
license or purchase software products and to build internally only what we
cannot cost effectively acquire or license. As a result, our systems include a
combination of licensed, purchased and internally developed products.

In addition, we have completed a general redesign of our Web site to improve
reliability, capacity and overall functionality, specifically with regard to the
public offering process, access to research and online brokerage services. In
connection with this redesign, we need to stabilize the performance of and
continually monitor and enhance our technology in order to meet our customer
expectations.

MARKETING

We have experienced growth in our customer base with limited marketing
expenditures. We acquire brokerage customers primarily by making available
public securities offerings to individuals on a modified first-come,
first-served basis. In addition, we acquire brokerage customers when we assist
issuers in marketing their stock offerings to their affinity groups. These
affinity marketing programs are particularly cost effective since they allow us
to reach a broad base of prospective customers at little to no cost as our
initial public offering alerts are distributed by electronic mail to lists
provided for free by the issuer. To purchase shares in any offering through us,
investors are required to open a brokerage account with us, which allows us to
offer subsequent transactions or other services to the investor.

We want to cost effectively build our brand equity by distributing public
offerings and investment research through our Web site and through other
distribution channels such as portals.

COMPETITION

The financial services industry is highly competitive and we expect
competition to intensify in the near future. We encounter direct competition
primarily from established investment banks, as well as from

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traditional and online brokerage firms. We compete with some of these firms on a
national basis and with others on a regional basis. Our competitors include
large and well established Wall Street firms as well as relatively new
securities firms, a growing number of which are rapidly developing firms that
are using technology to win business away from the more traditional firms.
General financial success within the securities industry and the increasing
popularity of the Internet will together attract additional competitors for us,
such as banks, software development companies, insurance companies and providers
of online financial and information services.

In recent years there has been a significant consolidation in the financial
services industry. Commercial banks and other financial institutions have
acquired or established broker-dealer affiliates and begun offering financial
services to individuals traditionally offered by securities firms. These firms
have the ability to offer a wide range of products, including lending, deposit
taking, insurance, brokerage, investment management and investment banking
services. This may enhance their competitive position by attracting and
retaining customers through the convenience of one-stop shopping. They also have
the ability to support investment banking and securities products with
commercial banking, insurance and other financial service revenue in an effort
to gain market share.

Many of our competitors have significantly greater financial, technical,
marketing and other resources than we do. Some of our competitors also offer a
wider range of products and services than we do and have greater name
recognition, more established reputations and more extensive client and customer
bases. These competitors may be able to respond more quickly to new or changing
opportunities, technologies and customer requirements due to superior systems
capabilities. They may also be better able to undertake more extensive
promotional activities, offer more attractive terms to customers, clients and
employees and adopt more aggressive pricing policies compared to our firm.

INVESTMENT BANKING. Our principal competitors in connection with our
investment banking business are traditional investment banking firms. These
investment banks may also seek to offer individual investors participation in
offerings through the Internet. We also face competition from online investment
banking initiatives, such as E*Offering and W.R. Hambrecht & Co. Recently,
Charles Schwab, Ameritrade, TD Waterhouse and three venture capital firms
announced their joint plan to form a new online investment bank aimed at
distributing shares in public offerings to individual investors. In the context
of online distribution of public offerings, we are facing growing competition
from brokerage firms such as Charles Schwab, Fidelity Brokerage Services and
E*Trade, among others, which offer equity securities through the Internet. In
addition, we expect that investment banking firms will create or acquire captive
online brokerage distribution, such as Morgan Stanley has accomplished through
its ownership of Discover Direct and Donaldson, Lufkin & Jenrette has
accomplished through the development of DLJdirect.

BROKERAGE. In our online brokerage business, we compete with discount
brokerage firms, which generally execute transactions for customers without
offering other services such as research, portfolio valuation and investment
recommendations. We compete directly with over one hundred discount brokerage
firms already operating on the Internet. Many of these firms execute
transactions for their customers through the Internet. The number of online
discount brokers will likely increase rapidly if the favorable treatment of
these firms by the equity markets continues. The principal competitive factors
in online discount brokerage include price, customer service, system
reliability, quality of trade execution, delivery platform capabilities, ease of
use, graphical user interface, range of products and services, innovation,
branding and reputation. In our brokerage business we also encounter competition
from established full-commission brokerage firms. Many of these brokerage firms
have also begun conducting business online.

PERSONNEL. Competition is also intense for the attraction and retention of
qualified employees in the securities industry. Our ability to compete
effectively in our businesses will depend on our ability to attract new
employees and retain and motivate our existing employees.

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REGULATION

REGULATION OF THE SECURITIES INDUSTRY AND BROKER-DEALERS. Our business is
subject to extensive regulation applicable to the securities industry in the
United States and elsewhere. As a matter of public policy, regulatory bodies in
the United States and rest of the world are charged with safeguarding the
integrity of the securities and other financial markets and with protecting the
interests of customers participating in those markets. In the United States, the
SEC is the federal agency responsible for the administration of the federal
securities laws. We are registered as a broker-dealer with the SEC and in all 50
states, the District of Columbia and Puerto Rico. We are also a member of the
NASD, a self regulatory body to which all broker-dealers belong. Certain
self-regulatory organizations, such as the NASD, adopt rules and examine
broker-dealers and require strict compliance with their rules and regulations.
The SEC, self-regulatory organizations and state securities commissions may
conduct administrative proceedings which can result in censure, fine, the
issuance of cease-and-desist orders or the suspension or expulsion of a
broker-dealer, its officers or employees. The SEC and self-regulatory
organization rules cover many aspects of a broker-dealer's business, including
capital structure and withdrawals, sales methods, trade practices among
broker-dealers, use and safekeeping of customers' funds and securities,
record-keeping, the financing of customers' purchases, broker- dealer and
employee registration and the conduct of directors, officers and employees.

EFFECT OF NET CAPITAL REQUIREMENTS. As a registered broker-dealer and
member of the NASD, we are subject to the Uniform Net Capital Rule under the
Exchange Act. The Uniform Net Capital Rule specifies the minimum level of net
capital a broker-dealer must maintain and also requires that at least a minimum
part of its assets be kept in relatively liquid form. As of September 30, 1999,
our broker-dealer subsidiary was required to maintain minimum net capital of
$410,679 and had total net capital of approximately $36,997,059, or $36,586,380
in excess of the minimum amount required.

The SEC and the NASD impose rules that require notification when net capital
falls below certain predefined criteria, dictate the ratio of debt to equity in
the regulatory capital composition of a broker-dealer and constrain the ability
of a broker-dealer to expand its business under certain circumstances.
Additionally, the Uniform Net Capital Rule and the NASD rules impose certain
requirements that may have the effect of prohibiting a broker-dealer from
distributing or withdrawing capital and requiring prior notice to the SEC and
the NASD for certain withdrawals of capital. Because our principal asset will be
the ownership of stock in our broker-dealer subsidiary, these rules governing
net capital and restrictions on withdrawals of funds could operate to prevent us
from meeting our financial obligations on a timely basis.

APPLICATION OF SECURITIES ACT AND EXCHANGE ACT TO INTERNET BUSINESS. The
Securities Act governs the offer and sale of securities. The Exchange Act
governs, among other things, the operation of the securities markets and
broker-dealers. When enacted, the Securities Act and the Exchange Act did not
contemplate the conduct of a securities business through the Internet. Although
the SEC, in releases and no-action letters, has provided guidance on various
issues related to the offer and sale of securities and the conduct of a
securities business through the Internet, the application of the laws to the
conduct of a securities business through the Internet continues to evolve.
Uncertainty regarding these issues may adversely affect the viability and
profitability of our business.

FOREIGN SECURITIES AUTHORITIES. We have entered into joint ventures to
establish a broker-dealer business in foreign countries. Any such business would
be subject to foreign law and the rules and regulations of foreign governmental
and regulatory authorities. This may include laws, rules and regulations
relating to any aspect of the securities business, including sales methods,
trade practices among broker-dealers, use and safekeeping of customers' funds
and securities, capital structure, record-keeping, the financing of customers'
purchases, broker-dealer and employee registration requirements and the conduct
of directors, officers and employees.

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CHANGES IN EXISTING LAWS AND RULES. Additional legislation or regulation,
changes in existing laws and rules or changes in the interpretation or
enforcement of existing laws and rules, either in the United States or
elsewhere, may directly affect our mode of operation and our profitability.

EMPLOYEES

We believe that one of our strengths is the quality and dedication of our
people and the shared sense of being part of a team. We strive to maintain a
work environment that fosters professionalism, excellence, diversity and
cooperation among our employees. We also believe that our employees should have
an equity stake in the firm. As of November 30, 1999, we had 240 employees.
After the merger, our employees will number [ ] and as a group will own
roughly [ ]% of the equity of the company on a fully diluted basis.

PROPERTIES

Our principal executive offices are located in New York City where we lease
20,000 square feet of loft space. The term of the lease expires in
November 2006. We lease 6,500 square feet of additional office space in New York
City. The term of that lease expires in September 2001. We also operate a
1,000-square foot office for our investment banking group in San Francisco. This
lease expires in May 2000.

LEGAL MATTERS

We are currently subject to claims and legal proceedings arising in the
normal course of our business. We do not believe that the resolution of such
legal proceedings should have a material adverse effect on us. Additionally, a
person formerly associated with us has asserted a right to purchase 560,000
shares of common stock at $1.43 per share. We believe the assertion is without
merit, and we intend to contest any lawsuit filed against us. These 560,000
shares of common stock were reported as forfeited stock options in 1998.

On June 28, 1999, certain of our customers filed a purported class action
lawsuit in the Superior Court of the State of Delaware in and for New Castle
County styled ARTHUR E. BENNING, SR., ET AL. V. WIT CAPITAL GROUP, INC. AND WIT
CAPITAL CORPORATION, C.A. No. 99C-06-170 HLA. The seven count complaint alleges
us with (1) breach of contract for alleged failure to comply with the
"anti-flipping policy" contained in the account agreement with our customers;
(2) breach of the implied covenant of good faith and fair dealing by allegedly
violating the anti-flipping policy and alleged failure to "maintain adequate
computer, communications, personnel, accounting, bookkeeping, and/or other
support systems and facilities"; (3) fraud by reason of the fact that we
allegedly violated our own anti-flipping policy and our alleged
first-come/first-served policy in connection with IPOs; (4) negligent
misrepresentation in our method of allocation of participation in IPOs;
(5) breach of fiduciary duty as a broker; (6) negligence in handling accounts;
and (7) violation of Delaware's Consumer Fraud Act. We intend to defend the
lawsuit vigorously. We do not believe that the lawsuit should have a material
adverse effect on us.

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MANAGEMENT OF WIT CAPITAL

The following table lists our executive officers as of November 30, 1999.
Our executive officers are Messrs. Lessin, Readmond, Klein, Siegel, Loehr,
Feller, Mendelson, Silver, DeWolf, Cohen, Lieberman and Lang and Ms. Schimel.

<TABLE>
<CAPTION>
NAME AGE TITLE
- ---- -------- -----
<S> <C> <C>
Robert H. Lessin..................... 44 Chairman and co-chief executive officer
Ronald Readmond...................... 56 Vice chairman, co-chief executive officer and
president
Andrew D. Klein...................... 39 Vice chairman, founder and chief strategist
Harry Silver......................... 44 Senior vice president and chief administrative
officer
M. Bernard Siegel.................... 44 Senior vice president and chief financial
officer
Mark Loehr........................... 43 Director of investment banking
Elizabeth Schimel.................... 40 Senior vice president and director of business
development
Everett F. Lang...................... 57 Senior vice president and director of brokerage
George M. Lieberman.................. 56 Senior vice president and chief information
officer
Daniel DeWolf........................ 42 Senior vice president and director of venture
capital fund group
Lloyd H. Feller...................... 57 Senior vice president and co-general counsel
Robert C. Mendelson.................. 48 Senior vice president and co-general counsel
Jonathan Cohen....................... 34 Director of research
</TABLE>

EXECUTIVE OFFICERS AND KEY EMPLOYEES

ROBERT H. LESSIN, chairman and co-chief executive officer, joined us in
April 1998. Before joining us, he was a vice chairman of Salomon Smith Barney
until April 1998, having previously been a vice chairman of Smith Barney from
1993 until the merger with Salomon Brothers in November 1997. He served as head
of investment banking at Smith Barney from June 1993 to January 1997. Prior to
joining Salomon Smith Barney, Mr. Lessin spent 16 years with Morgan Stanley in
the position of managing director and was responsible for the firm's financial
entrepreneurs, media and retailing groups. Mr. Lessin was also vice chairman of
Morgan Stanley's investment banking operating committee and chairman of their
strategic planning committee. He is a director of Marketwatch.com, iParty,
MaMaMedia and sixdegrees and a general partner of Dawntreader Fund I, a venture
capital fund. He has an MBA from Harvard Business School.

RONALD READMOND, vice chairman, co-chief executive officer and president,
joined us in May 1998 and has served as a director since 1997. Before joining
us, he had served as vice chairman of Charles Schwab where he was responsible
for operations, capital markets and trading, international and mutual funds as
well as strategic acquisitions and industry relations. Prior to that,
Mr. Readmond was a managing director at Alex. Brown & Sons. Mr. Readmond has
served as co-chairman of the U.S. Working Committee on Clearance and Settlement
of the Group of 30, as a member of the New York Stock Exchange operations
advisory committee and the nominating committee of the Options Clearing
Corporation. Mr. Readmond is the former chairman of the board of the National
Securities Clearing Corporation and for five years served as a director. In
addition, he served for two years as a director of NASD Market Services, Inc.
Mr. Readmond is currently a director of ProBusiness, chairman of International
Equity Partners and a director of The American Council for Capital Formation.

ANDREW D. KLEIN, vice chairman, founder and chief strategist, has been with
us since our inception in April 1996. Previously, in January 1993 Mr. Klein
founded microbrewery Spring Street Brewing Company, which two years later became
the first company to complete a public offering over the Internet and, in
March 1996, created the first ever Web-based trading mechanism allowing
investors to buy and sell Spring

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Street shares. Prior to starting Spring Street, Mr. Klein practiced corporate
and securities law at Cravath, Swaine & Moore for six years. He has a law degree
from Harvard Law School. In 1997 Mr. Klein was the subject of a civil order of
the Commonwealth of Massachusetts alleging that he and Spring Street used its
Web site to gather names of potential investors and then mailed an unregistered
private placement memorandum to these persons in violation of Massachusetts
securities laws. While neither admitting nor denying that the violations
occurred, Mr. Klein agreed to offer a refund to six investors and paid a fine of
$3,000.

HARRY SILVER, senior vice president and chief administrative officer, joined
us in August 1999. Mr. Silver previously served as the executive director of the
law firm of Cravath, Swaine & Moore where he was responsible for leading the
firm's administrative activities. Prior to that, Mr. Silver spent over ten years
at Goldman, Sachs & Co., where he was head of worldwide technology and
administrative support activities for the investment banking division and the
principal investment area. Mr. Silver is a CPA and has an MBA from Columbia
University.

M. BERNARD SIEGEL, senior vice president and chief financial officer, joined
us in October 1998. He has more than twenty years experience in the financial
services industry. He served as chief financial officer and director of risk
management of Waterhouse Investor Services from November 1993 to June 1998.
Prior to that, he was chief financial officer and chief operating officer of
Fleet Brokerage Securities. Mr. Siegel is a CPA who spent eight years with KPMG
LLP, last serving as a senior audit manager in the financial services division.

MARK LOEHR, director of investment banking, joined us in March 1999. He
spent a total of eight years with Smith Barney, from 1978 to 1983 and from 1994
to 1997, and two years with Salomon Smith Barney, from 1997 to 1999. He spent
eleven years with CS First Boston, from 1983 to 1994. While at Smith Barney and,
later, Salomon Smith Barney, he served as head of global equity sales and head
of equity capital markets. While at CS First Boston, Mr. Loehr served as co-head
of U.S. equity capital markets.

ELIZABETH SCHIMEL, senior vice president and director of business
development, joined us in August 1999. Prior to joining us and for the past five
years, Ms. Schimel worked for BMG Entertainment in several different positions.
Most recently, she served as vice president and general manager at GetMusic.com,
a joint venture between Bertlesmann A.G. and Universal Music Group, where she
was responsible for creating and rolling-out the company's online presence.
Prior to joining BMG, Ms. Schimel was director of electronic media development
and director of marketing for the electronic publishing division of Bantam
Doubleday Dell (now Random House), a division of Bertelsmann. Ms. Schimel also
worked in international finance and mergers and acquisitions for
PaineWebber Inc. and Banque Indosuez in New York and Hong Kong. Ms. Schimel has
an MBA in strategic management and finance from the Wharton School of the
University of Pennsylvania and an MA from the Lauder Institute of Management and
International Studies.

EVERETT F. LANG became president--digital trading facility in
February 1999. Since then, he has assumed the responsibilities of directing and
managing our online broker. Dr. Lang was previously chief executive of National
Discount Brokers where he introduced the concept of "Flat Fee" trading to
consumers. Prior to that, he was chairman and chief executive of BT Brokerage
Corporation, a New York Stock Exchange member firm which he helped to organize.
In 1995, Dr. Lang founded the Discount Brokerage Association which was
assimilated into the Securities Industry Association along with twenty-three
member firms. He currently serves as co-chairman of this entity. Dr. Lang has a
doctoral degree in organizational psychology from the University of Virginia.

GEORGE M. LIEBERMAN, senior vice president and chief information officer,
joined us in February 1999. He has more than 30 years of information technology
management and development experience across a broad spectrum of industries. He
was first vice president and director of technology strategy and planning for
Merrill Lynch & Co. from June 1991 to December 1998. He holds two
computer-related patents and was formerly on the Merrill Lynch technology
advisory board. Prior to joining Merrill Lynch, he was the

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chief information officer for Telerate Inc., the chief information officer for
Chargit Inc. and responsible for the development of major systems projects at
many financial industry companies including Citibank and ADP. He has advanced
degrees in Industrial Engineering and Operations Research from the School of
Engineering at New York University.

DANIEL DEWOLF, senior vice president and director of the venture capital
fund group, joined us in October 1999. Mr. DeWolf was previously a managing
director of the Dawntreader Fund I, L.P. Mr. DeWolf is also currently of counsel
to the law firm of Camhy Karlinsky & Stein LLP in New York, New York where he
has practiced corporate and securities law since 1994 and where he was a partner
from 1994 to 1998. Prior to 1994, Mr. DeWolf was general counsel of SMR
Energy, Inc., an independent oil and gas company. From 1982 to 1984 and 1986 to
1990, Mr. DeWolf was affiliated with the law firm of Shea & Gould in New York
City. From 1984 to 1986, Mr. DeWolf was an associate at the law firm of Pettit
and Martin in San Francisco, California. Mr. DeWolf has a law degree from the
University of Pennsylvania School of Law.

LLOYD H. FELLER, senior vice president and co-general counsel, joined us in
April 1999. Previously, he was a partner at Morgan, Lewis & Bockius LLP. Before
joining Morgan, Lewis & Bockius LLP in 1979, Mr. Feller served at the SEC as the
Associate Director of the Division of Market Regulation, in charge of the Office
of Market Structure and Trading Practices. Mr. Feller has a law degree from New
York University.

ROBERT C. MENDELSON, senior vice president and co-general counsel, joined us
in April 1999. Previously, he was a partner at Morgan, Lewis & Bockius LLP.
Mr. Mendelson was a member of the Legal Advisory Board of the NASD and formerly
chaired the Market Transaction Advisory Committee created by the SEC.
Mr. Mendelson has an MA from Brandeis University and a law degree from Boston
College.

JONATHAN COHEN joined us as director of research in 1999, and was previously
head of Merrill Lynch's Internet equity research effort. Mr. Cohen was named to
the 1996, 1997 and 1998 Institutional Investors "All American Research Team" for
the Internet sector. He has been named as one of the 25 Best U.S. analysts by
both Bloomberg and Financial World Magazine. Prior to joining Merrill Lynch in
1998, Mr. Cohen was a managing director and head of Internet and PC Software
research at UBS Securities from 1997 to 1998. Prior to UBS, Mr. Cohen was a
senior analyst and managing director at Smith Barney from 1993 to 1997, where
his coverage focused on information technology companies. Mr. Cohen has an MBA
from Columbia University.

DIRECTORS

Our board of directors currently consists of nine directors.
Messrs. Lessin, Readmond and Klein are described above as executive officers.
Our board of directors is divided into three classes of directors serving
staggered three-year terms: Class A directors, Class B directors and Class C
directors will serve until our annual meetings of stockholders held in 2000,
2001 and 2002, respectively. The following table lists our directors:

<TABLE>
<CAPTION>
NAME AGE CLASS
- ---- -------- --------
<S> <C> <C>
John H. N. Fisher........................................... 40 B
Edward H. Fleischman........................................ 67 C
Steven M. Gluckstern........................................ 48 C
Joseph R. Hardiman.......................................... 62 A
Andrew D. Klein............................................. 39 A
Robert H. Lessin............................................ 44 C
Gilbert C. Maurer........................................... 71 B
Adam Mizel.................................................. 29 A
Ronald Readmond............................................. 56 B
</TABLE>

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JOHN H.N. FISHER is a managing director of Draper Fisher Jurvetson, a
Redwood City, California venture capital firm providing start-up and early stage
financing. On behalf of Draper Fisher Jurvetson, Mr. Fisher serves on the boards
of Centraal, Convoy, Entegrity Solutions, Praxon, Selectica, Sonnet Financial,
Transactor Networks and Webline Communications. Previously, Mr. Fisher was a
venture capitalist at ABS Ventures. Prior to that, he was an investment banker
at Alex. Brown & Sons and an account executive in the capital markets group at
Bank of America. Mr. Fisher has an MBA from Harvard Business School.

EDWARD H. FLEISCHMAN has served as senior counsel to the London based
international law firm of Linklaters & Paines since 1994, where he specializes
in securities and financing law and related areas. Mr. Fleischman served as a
Commissioner of the Securities and Exchange Commission from 1986 to 1992.
Previously, he practiced law for 27 years at Beekman & Bogue in New York.
Mr. Fleischman has a law degree from Columbia University.

STEVEN M. GLUCKSTERN is a founding partner of Capital Z Partners, a manager
of alternative investment pools, including Capital Z Financial Services Fund II,
L.P., a $1.8 billion private equity fund. Mr. Gluckstern also currently serves
as non-executive Chairman of both Zurich Re, the global reinsurance network of
Zurich Financial Services, and of Zurich Centre Group/Centre Solutions.
Previously, he served as chief executive officer of both Zurich Re and Centre Re
from 1988 to 1998, and, prior to that, as general manager of reinsurance
operations of the Berkshire Hathaway Insurance Group. Mr. Gluckstern also serves
on the boards of Aames Financial Corporation, Zurich Payroll Solutions, United
Payors and United Providers Inc., Zurich Holding Co. of America, Channel Point
and Brodia.com. Mr. Gluckstern has an MBA from Stanford University.

JOSEPH R. HARDIMAN was president and chief executive officer of the National
Association of Securities Dealers, Inc. and its wholly owned subsidiary, the
Nasdaq Stock Market, Inc., from September 1987 through January 1997. Previously,
he was managing director, chief operating officer and a member of the board of
directors of Alex. Brown & Sons. Mr. Hardiman serves on the boards of The Flag
Investors Funds, The ISI Funds and The Nevis Fund.

GILBERT C. MAURER had been employed since 1973 by The Hearst Corporation,
one of the nation's largest private companies engaged in a broad range of
publishing, broadcasting, cable networking and diversified communications
activities. Most recently, he held the position of chief operating officer from
1990 until his retirement in 1998. Previously, Mr. Maurer served as president of
Hearst's magazines division for 14 years. Prior to joining Hearst, Mr. Maurer
worked for 19 years with Cowles Communications, Inc. Mr. Maurer is currently a
director of The Hearst Corporation.

ADAM MIZEL is also a founding partner of Capital Z Partners. Previously, he
was a managing director of Zurich Centre Investments, Inc., where he oversaw
U.S. private equity investing activities between April 1994 and July 1998.
Currently, Mr. Mizel serves as a director of Aames Financial Corporation,
Caliber Holdings, Inc., ZC Sterling Holdings and Channelpoint Inc.

COMMITTEES OF THE BOARD

The board of directors has established an audit committee, the members of
which are Edward H. Fleischman, Joseph R. Hardiman and Adam Mizel, all of whom
are non-employee directors, and a compensation committee, the members of which
are John H.N. Fisher, Steven M. Gluckstern, Gilbert C. Maurer and Ronald
Readmond. The Stock Incentive Plan is administered by a subcommittee of the
compensation committee consisting of John H.N. Fisher, Steven M. Gluckstern and
Gilbert C. Maurer.

The audit committee is responsible for recommending to the board of
directors the engagement of our independent auditors and reviewing with our
independent auditors the scope and results of the audits, our internal
accounting controls, audit practices and the professional services furnished by
our independent auditors.

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The compensation committee is responsible for reviewing and approving all
compensation arrangements for our officers, and is also responsible for
administering the Stock Incentive Plan.

SPECIAL ADVISORY BOARD

To complement our board of directors, we are also developing a special
advisory board consisting of accomplished professionals and entrepreneurs from
the fields of technology, new media, finance and law. The first members of this
advisory board are Joseph H. Flom and Edward J. Mathias. Members of our special
advisory board attend, but do not vote at, meetings of our board of directors.
They also provide our management with strategic advice and other assistance with
the planning and development of our business.

JOSEPH H. FLOM has been a partner in the law firm of Skadden, Arps, Slate,
Meagher & Flom LLP since 1954. Mr. Flom is currently a director of The Warnaco
Group, Inc. and the America-Israel Friendship League. Mr. Flom has been a
director of Wm. Wrigley Jr. Company and Revlon Group Incorporated. He is a
Trustee of the Petrie Stores Liquidating Trust and also a Trustee of Mount
Sinai-NYU Medical Center and Health System. Mr. Flom received his law degree
from Harvard Law School.

EDWARD J. MATHIAS has been, for more than five years, a Managing Director of
The Carlyle Group, a global investment firm that he helped to establish. Prior
to joining the Carlyle Group, Mr. Mathias worked for T. Rowe Price from 1971 to
1993 during which time he served on its board of directors and was also a member
of its management committee. Mr. Mathias is currently a director of Condor
Technology Solutions, Inc., U.S. Office Products, Inc., U.S.A. Floral
Products, Inc. and Musicmaker.com. He has an MBA from Harvard Business School.

COMPENSATION OF DIRECTORS AND SPECIAL ADVISORY BOARD MEMBERS

We do not currently pay directors cash compensation. However, we have
granted certain non-employee directors as well as the members of the advisory
board options to purchase common stock. The non-employee directors designated by
our venture capital investors do not receive any compensation from us. In
addition, Messrs. Flom and Mathias hold, respectively, 116,666 and 140,000
shares of our common stock.

The following non-employee members of our board of directors and of our
special advisory board have received the respective numbers of stock options
indicated below.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
NAME OPTIONS GRANTED EXERCISE PRICE EXPIRATION DATE
- ---- -------------------- -------------- ---------------
<S> <C> <C> <C>
Edward H. Fleischman............................ 35,000 $1.43 11/11/08
17,500 2.14 3/17/09
Joseph R. Hardiman.............................. 35,000 1.43 11/11/08
17,500 2.14 3/17/09
Gilbert C. Maurer............................... 35,000 1.43 11/11/08
17,500 2.14 3/17/09
Joseph Flom..................................... 35,000 1.43 11/11/08
Edward Mathias.................................. 35,000 1.43 11/11/08
</TABLE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of our executive officers:

(1) has served as a member of the compensation committee of another entity,
one of whose executive officers has served on our compensation
committee;

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<PAGE>
(2) has served as a director of another entity, one of whose executive
officers has served on our compensation committee; and

(3) has served as a member of the compensation committee of another entity,
one of whose executive officers has served as one of our directors.

EXECUTIVE COMPENSATION

The following table sets forth the salaries, and to the extent determinable,
the bonuses that we paid our co-chief executive officers and the other four most
highly compensated executive officers during 1999. We have also indicated, where
applicable, the compensation paid to these persons during 1998.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
-------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- --------------------------- -------- -------- ---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Lessin................. 1999 $187,501 $ [ ](1) -- -- --
Co-chief executive officer 1998 135,685 -- -- -- --

Ronald Readmond.................. 1999 229,167 [ ](1) -- -- $ 116,000(3)
Co-chief executive officer and 1998 146,000 -- -- 1,750,000 --
president

Jonathan Cohen................... 1999 205,609 [ ](2) -- 700,000 5,000,000(4)
Director of research 1998 -- -- -- -- --

Mark Loehr....................... 1999 158,602 [ ](2) -- -- --
Director of investment banking 1998 -- -- -- -- --

Everett F. Lang.................. 1999 158,333 [ ](1) -- 367,500 --
Senior vice president and 1998 -- -- -- -- --
director of brokerage

Robert C. Mendelson.............. 1999 150,923 [ ](1) -- 140,000 --
Senior vice president and co- 1998 -- -- -- -- --
general counsel
</TABLE>

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

(1) Participates in the Annual Bonus Plan for Executives. Mr. Readmond is
guaranteed to receive at least $250,000 under the Annual Bonus Plan for
Executives.

(2) Participates in the Annual Bonus Plan for the Investment Banking Group and
in the Annual Bonus Plan for Executives.

(3) Represents expense reimbursement in connection with commencement of his
employment.

(4) Represents compensation in connection with commencement of his employment.

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<PAGE>
STOCK OPTIONS

OPTION GRANTS. The following table sets forth information regarding stock
options granted under our stock option plans for the fiscal year ended
December 31, 1999 to the co-chief executive officers and the other four most
highly compensated executive officers. We have never granted stock appreciation
rights.

<TABLE>
<CAPTION>
OPTION GRANTS FOR THE YEAR ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
PERCENTAGE OF TOTAL AT ASSUMED ANNUAL
OPTIONS GRANTED TO RATES OF STOCK PRICE
EMPLOYEES (NET OF APPRECIATION FOR
NUMBER OF SECURITIES FORFEITURES) FOR EXERCISE OR OPTION TERMS(4)
UNDERLYING OPTIONS THE YEAR ENDED BASE PRICE EXPIRATION ---------------------------
GRANTED (1) DECEMBER 31, 1999 (2) ($/SHARE)(3) DATE 5% 10%
-------------------- ---------------------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Lessin..... -- -- -- -- -- --
Ronald Readmond...... -- -- -- -- -- --
Jonathan Cohen....... 700,000 -- 2.14 2/4/09 2,440,084 3,885,426
Mark Loehr........... -- -- -- -- -- --
Everett F. Lang...... 367,500 [ ] 2.14 2/12/09 1,281,044 2,039,849
Robert C. Mendelson.. 140,000 [ ] 2.14 3/22/09 488,017 777,085
</TABLE>

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

(1) Such options were granted pursuant to and in accordance with our Stock
Incentive Plan.

(2) Based on an aggregate of [ ] options granted (net of forfeitures) to
employees in the year ended December 31, 1999, including options granted to
the other four most highly compensated executive officers.

(3) The exercise price per share of each option was equal to the fair market
value of the common stock on the date of the grant as determined by the
board of directors. The board of directors determined fair market value of
the common stock on the date of the grant based upon the most recent price
paid by a third party for our preferred stock discounted to reflect the
preferred stock having a liquidation preference, the right to board
representation and a cumulative preferred dividend.

(4) Amounts represent hypothetical values that could be achieved for the
respective options if exercised at the end of the option term. These values
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date based on the market price of the underlying securities
on the date of the grant. These assumptions are not intended to forecast
future appreciation of our stock price. The potential realizable value
computation does not take into account federal or state income tax
consequences of option exercises or sales of appreciated stock.

OPTION VALUES. Messrs. Readmond, Lang and Lieberman accepted the
opportunity from us to exercise on April 30, 1999 all their existing stock
options, other than incentive stock options, whether or not vested, with funds
we loaned to them. The shares they purchased by exercising those of their
options which were not vested at the time can be repurchased by us at their
respective option exercise prices, unless they remain in our employ through the
respective periods when these options would originally have vested. They are
personally liable for all interest due on their loans and are similarly liable
for up to one-half of the principal amounts of their loans. Each loan is secured
by the shares purchased with the proceeds of that loan. Each loan becomes due
and payable on March 31, 2003 or earlier if the individual's employment is
terminated or he no longer owns the shares. The respective total number of
shares purchased by, and the amounts we loaned to, Messrs. Readmond, Lang and
Lieberman are set forth in the table below. The following table also sets forth
information concerning the value at December 31, 1999 of exercisable and
unexercisable options held by the co-chief executive officers and the other four
most highly compensated executive officers. The values of unexercised
in-the-money options represent the positive

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<PAGE>
spread between the respective exercise prices of outstanding stock options and
the price of the options at December 31, 1999.

AGGREGATED OPTION EXERCISES IN YEAR ENDED DECEMBER 31, 1999
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
FROM JANUARY 1, 1999
TO DECEMBER 31, 1999 OPTION VALUES AT DECEMBER 31, 1999
------------------------------------------------ ---------------------------------------------------
NUMBER OF SECURITIES
NUMBER OF UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEYOPTIONS
ACQUIRED VALUE LOAN --------------------------- ---------------------
ON EXERCISE RECEIVED AMOUNT EXERCISABLE UNEXERCISABLE EXERCISABLE
----------- --------------------- ---------- ----------- ------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Lessin......... -- -- -- -- -- --
Ronald Readmond.......... 1,561,000 -- $2,787,500 140,000 140,000 [ ]
Jonathan Cohen........... [ ] [ ] [ ] [ ] [ ] [ ]
Mark Loehr............... -- -- -- -- -- --
Everett F. Lang.......... 157,964 [ ] 338,281 46,667 162,969 [ ]
Robert C. Mendelson...... [ ] [ ] [ ] [ ] [ ] [ ]

OPTION VALUES AT DECEMBER 31, 1999
----------------------

VALUE OF UNEXERCISED
IN-THE-MONEYOPTIONS
----------------------
UNEXERCISABLE
----------------------
<S> <C>
Robert H. Lessin......... --
Ronald Readmond.......... $ [ ]
Jonathan Cohen........... [ ]
Mark Loehr............... --
Everett F. Lang.......... [ ]
Robert C. Mendelson...... [ ]
</TABLE>

EMPLOYMENT AGREEMENTS

ROBERT H. LESSIN. Mr. Lessin has an employment agreement with us to serve
as co-chief executive officer. The agreement is for a term of two years,
beginning January 1, 1999, with an automatic one-year extension, unless either
party elects not to extend the term of the agreement. During the term of this
agreement, Mr. Lessin will receive a minimum annual base salary of $250,000,
subject to increases based on annual reviews by the board. Mr. Lessin is
entitled to participate in our Annual Bonus Plan for Executives and Long-Term
Incentive Plan on the same terms as are applicable to senior executives
generally. Mr. Lessin is entitled to participation in our 401(k) Plan, Stock
Incentive Plan and such other employee benefits as provided to other senior
executives.

We have extended to Mr. Lessin an interest-bearing loan in the amount of
$5,750,000 with which he has purchased 4,025,000 shares of common stock at $1.43
per share. He is personally liable for all interest due on his loan and is
similarly liable for up to one-half of the principal amount of his loan. This
loan is secured by the shares purchased with the proceeds of this loan. In the
event Mr. Lessin ceases to be employed by us, we have the right to repurchase
his unvested shares at the lower of their fair market value or $1.43 per share.
These shares vest as follows: 1,341,667 shares on June 8, 1998 and the remainder
quarterly beginning July 1, 1998, at the rate of 223,612 per quarter until
April 1, 2001. Our right to repurchase the unvested shares terminates on
April 1, 2001. In addition, Mr. Lessin's loan becomes due and payable in the
event that his employment terminates or in the event that he no longer owns the
shares. Mr. Lessin also has "piggyback" and demand registration rights relating
to the shares.

In addition to the other compensation due under his employment agreement,
upon the twelve-month anniversary, the twenty-four month anniversary and the
thirty-month anniversary of our initial public offering, Mr. Lessin will be
entitled to cash payments of $2 million, $2 million and $1 million,
respectively. Upon a sale of Wit Capital, Mr. Lessin will be entitled to a
payment of up to $5 million less any payments he has received on any applicable
anniversary of an initial public offering. He will not, however, be entitled to
these payments if he violates his non-competition covenants and fails to cure
the violation within thirty days or if he is no longer employed by us for a
reason other than his termination for "cause," his disability or death or for
"good reason."

Mr. Lessin has agreed, during the term of his employment or until April 1,
2001 not to own, manage, operate, join, control or participate in the ownership,
management, operation or control of, or be connected as a director, officer,
employee, or lender with, or be compensated by an entity that is an NASD

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registered broker-dealer, or that provides financial advisory services or
engages in capital raising activities. Mr. Lessin has the right to engage in
financial advisory or capital raising activities only through an entity in which
he is an investor or director, so long as any fee payable in connection with
such activities is pursuant to an arrangement for which registration as a
broker-dealer is not required. He may participate in certain venture capital
activities so long as they do not violate the other terms of his employment
agreement. The restrictive covenants contained in his employment agreement will
not apply if Mr. Lessin is terminated other than for "cause" or quits for "good
reason."

Mr. Lessin is also a party to a non-disclosure and assignment of inventions
agreement. He has agreed not to reveal any confidential information belonging to
us, except as may be required in the course of performing his duties as our
employee. He has also agreed to assign to us any rights which he may have with
respect to inventions, software programs, data or other developments created or
discovered during his employment term.

RONALD READMOND. Mr. Readmond has an employment agreement with us to serve
as co-chief executive officer. The agreement is for a term of two years,
beginning January 1, 1999, with an automatic one-year extension, unless the
agreement has been previously terminated (which either party has the right to do
upon 90 days' notice). Under the agreement, Mr. Readmond is entitled to a
minimum annual base salary of $250,000, subject to increases based on annual
reviews by the board, and an annual guaranteed bonus of $250,000. If
Mr. Readmond's employment is terminated by us without "cause" or by him for
"good reason," he is entitled to a lump sum cash payment equal to the sum of the
amount of his base salary through the end of the three-year period of his
agreement, bonus amounts accrued through the date of termination and a portion
of his annual guaranteed bonus prorated through the date of termination. He is
also entitled to participate in our Annual Bonus Plan for Executives and
Long-Term Incentive Plan on the same terms as are applicable to senior
executives generally. Mr. Readmond is entitled to participation in our 401(k)
Plan, Stock Incentive Plan and such other employee benefits as are provided to
other senior executives.

We have extended to Mr. Readmond an interest-bearing loan in the amount of
$2,787,500 with which he has purchased 1,561,000 shares of common stock by
exercising all vested and non-vested options, other than incentive stock
options, previously held by him. The shares Mr. Readmond purchased by exercising
those options which were not vested at the time can be repurchased by us at
$1.43 per share, unless he remains employed by us through the period when these
options would originally have vested. He is personally liable for all interest
due on his loan and is similarly liable for up to one- half of the principal
amount of his loan. This loan is secured by the shares purchased with the
proceeds of this loan. Mr. Readmond's loan becomes due and payable March 31,
2003 or earlier in the event his employment terminates or in the event that he
no longer owns the shares.

Mr. Readmond is also a party to our Employee Non-Disclosure, Non-Competition
and Assignment of Inventions Agreement. Mr. Readmond has agreed not to reveal
any confidential information belonging to us, except as may be required in the
course of performing his duties as our employee. He has also agreed to assign to
us any rights which he may have with respect to inventions, software programs,
data or other developments created or discovered during his employment term.
Mr. Readmond agrees that while he is employed by us he will not compete with any
business we conduct and, for one year after his termination, he will not solicit
any of our employees, customers or suppliers.

JONATHAN COHEN. Mr. Cohen has an employment agreement with us for a term of
two years, beginning February 4, 1999. Under the agreement, Mr. Cohen is
entitled to a minimum annual base salary of $250,000 and a signing bonus of
$5,000,000 at the commencement of his employment. We have also granted
Mr. Cohen options to purchase 700,000 shares of our common stock at $1.43 per
share under our Stock Incentive Plan. If during the two year period following
commencement of his employment, and prior to a change in control of us, his
employment is terminated by us for "cause", death or disability or "good
reason", Mr. Cohen must pay us an amount equal to the product of $2.5 million
and a number determined

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by the days remaining under his two-year employment period. If he violates any
of the restrictive conditions described below, we will similarly be entitled to
payment from him. He is entitled to participate in our Investment Banking Bonus
Pool and Long-Term Incentive Plan on the same terms as are applicable to senior
executives generally. Mr. Cohen is entitled to participation in our 401(k) Plan,
Stock Incentive Plan and such other employee benefits as provided to other
senior executives.

Mr. Cohen has agreed, during the two-year period following commencement of
his employment, not to own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be connected as a director,
officer, employee, or lender with, or be compensated by, any entity that is an
NASD registered broker-dealer, but he will be permitted to have up to a 4.9%
interest in a publicly traded entity. During the two-year period following
commencement of his employment, Mr. Cohen may not employ or otherwise engage, or
offer to employ or otherwise engage, or solicit, entice or induce for himself or
any other entity, the services or employment of any person who is, or who has
been during the prior three months, an employee of ours, or an independent
contractor, consultant or agent devoting most of its time to us. Mr. Cohen may
not use or disclose, or authorize any use or disclosure, of any confidential
information, other than information that is publicly know or know to him prior
to his employment by us, information required to be disclosed in a legal
proceeding or information the disclosure of which is necessary to protect his
rights in any proceeding in which we are involved.

Mr. Cohen is also a party to our Employee Non-Disclosure, Non-Competition
and Assignment of Inventions Agreement. He has agreed not to reveal any
confidential information belonging to us, except as may be required in the
course of performing his duties as our employee. He has also agreed to assign to
us any rights which he may have with respect to inventions, software programs,
data or other developments created or discovered during his employment term.
Mr. Cohen agrees that while he is employed by us and for one year after his
termination, he will neither compete with any business we conduct nor solicit
any of our employees, customers or suppliers.

MARK LOEHR. Mr. Loehr has an employment agreement with us for a term of
three years, beginning March 8, 1999, subject to the right of each party to
terminate the agreement upon 90 days' notice. Under the agreement, Mr. Loehr is
entitled to a minimum annual base salary of $250,000, subject to increases based
on annual reviews by the board. If his employment is terminated by us without
"cause," excluding a termination due to his death or disability, or by him for
"good reason," we will continue to pay him his base salary through the end of
the three-year period of his agreement and bonus amounts accrued through the
date of termination. He is also entitled to participate in our Investment
Banking Bonus Pool and Long-Term Incentive Plan on the same terms as are
applicable to senior executives generally. Mr. Loehr is entitled to
participation in our 401(k) Plan, Stock Incentive Plan and such other employee
benefits as provided to other senior executives.

We have extended to Mr. Loehr an interest-bearing loan in the amount of
$1,875,000 with which he has purchased 875,000 shares of common stock at $2.14
per share. He is personally liable for all interest due on his loan and is
similarly liable for one-half of the principal amounts of his loan. This loan is
secured by the shares purchased with the proceeds of this loan. In the event
Mr. Loehr violates his non-competition restrictions or ceases to be employed by
us (except for termination other than for "cause" or for "good reason"), we have
the right to repurchase his unvested shares at the lower of their fair market
value or $2.14 per share. If Mr. Loehr is terminated other than for "cause," for
death or disability or for "good reason," we will not have the right to purchase
these shares on these terms. These shares vest quarterly, beginning June 30,
1999, at the rate of 54,688 shares per quarter until March 31, 2003. Our right
to repurchase the unvested shares terminates on March 31, 2003. In addition,
Mr. Loehr's loan becomes due and payable in the event that his employment
terminates or in the event that he no longer owns the shares. Mr. Loehr also has
"piggyback" and demand registration rights relating to the shares.

Mr. Loehr is also a party to our Employee Non-Disclosure, Non-Competition
and Assignment of Inventions Agreement. He has agreed not to reveal any
confidential information belonging to us, except as

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may be required in the course of performing his duties as our employee. He has
also agreed to assign to us any rights which he may have with respect to
inventions, software programs, data or other developments created or discovered
during his employment term. Mr. Loehr agrees that while he is employed by us and
for one year after his termination, he will neither compete with any business we
conduct nor solicit any of our employees, customers or suppliers.

EVERETT F. LANG. [TO COME]

ROBERT C. MENDELSON. Mr. Mendelson has an employment agreement with us for
a term of three years, beginning April 15, 1999, subject to the right of each
party to terminate the agreement upon 90 days' notice. Under the agreement,
Mr. Mendelson is entitled to a minimum annual base salary of $240,000, subject
to increases based on annual reviews by the board, and an annual guaranteed
bonus of $480,000 for the first year of employment and $720,000 for each of the
second and third years of employment. If his employment is terminated by us
without "cause," excluding a termination due to his death or disability, or by
him for "good reason," we will pay him in one lump sum his base salary plus half
the amount he would have received as his guaranteed bonus through the end of the
three-year period of his agreement and bonus amounts accrued through the date of
termination. He is also entitled to participate in our Annual Bonus Pool for
Executives and Long-Term Incentive Plan on the same terms as are applicable to
senior executives generally. Mr. Mendelson is entitled to participation in our
401(k) Plan, Stock Incentive Plan and such other employee benefits as provided
to other senior executives.

We have extended to Mr. Mendelson an interest-bearing loan in the amount of
$975,000 with which he has purchased 455,000 shares of common stock at $2.14 per
share. He is personally liable for all interest due on his loan and is similarly
liable for one-half of the principal amounts of his loan. This loan is secured
by the shares purchased with the proceeds of this loan. In the event
Mr. Mendelson violates his non-competition restrictions or ceases to be employed
by us (except for termination other than for "cause" or for "good reason"), we
have the right to repurchase his unvested shares at the lower of their fair
market value or $2.14 per share. If Mr. Mendelson is terminated other than for
"cause," for death or disability or for "good reason," we will not have the
right to purchase these shares on these terms. These shares vest quarterly,
beginning June 30, 1999, at the rate of 28,438 shares per quarter until
March 31, 2003. Our right to repurchase the unvested shares terminates on
March 31, 2003. In addition, Mr. Mendelson's loan becomes due and payable in the
event that his employment terminates or in the event that he no longer owns the
shares. Mr. Mendelson also has "piggyback" and demand registration rights
relating to the shares.

Mr. Mendelson is also a party to our Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement. He has agreed not to
reveal any confidential information belonging to us, except as may be required
in the course of performing his duties as our employee. He has also agreed to
assign to us any rights which he may have with respect to inventions, software
programs, data or other developments created or discovered during his employment
term. Mr. Mendelson agrees that while he is employed by us and for one year
after his termination, he will neither compete with any business we conduct nor
solicit any of our employees, customers or suppliers.

MANAGEMENT BENEFIT PLANS

STOCK INCENTIVE PLAN

We have a Stock Incentive Plan which permits us to grant stock and
stock-based awards to our employees, officers, directors and consultants,
including stock options, stock appreciation rights, restricted and unrestricted
stock, phantom stock awards, performance awards, convertible debentures and
other stock and cash awards. The purpose of the plan is to promote our long-term
growth and profitability by providing our people with incentives to improve
stockholder value and contribute to our growth and financial success. The awards
also enable us to attract, retain and reward the best available people for
positions of substantial responsibility.

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Up to 17,500,000 shares of common stock may currently be issued under the
Stock Incentive Plan. If our stockholders approve the proposal to amend the
Stock Incentive Plan to increase the number of shares of common stock that may
be issued under the Stock Incentive Plan, up to 27,350,000 shares may be
issuable, representing [ ]% of all issued and outstanding shares of our common
stock. This limit includes shares issued with respect to awards granted before,
and awards that will be granted after, the amendment to the plan. The limit is
subject to adjustment to reflect any stock dividends, split-ups,
recapitalizations, mergers, consolidations, business combinations, exchanges of
shares and the like. If any award expires, becomes unexercisable, or is
forfeited or surrendered, or if any shares of our stock are surrendered to us as
payment or settlement in connection with any award, the shares subject to the
award and the surrendered shares will become available for issuance under the
plan. As of [ ], 1999, a total of [ ] current and former employees and
consultants hold options to purchase [ ] shares of our common stock,
of which the options are vested with respect to [ ] shares.

A committee appointed by the board of directors or the board of directors
itself will administer the plan. The administrator will have the authority to
take all actions necessary to carry out the purpose of the plan, including the
authority to select the participants, to determine the sizes and types of the
awards to grant, to establish the terms and conditions of the awards and to
modify outstanding awards.

ANNUAL BONUS PLANS

We adopted the Annual Bonus Plan for Executives. The plan will pay
performance-based bonuses to executive officers and key executives as incentive
for the participants to contribute to our growth and profitability. A committee
appointed by the board will administer the plan. Each year, the committee will
determine the amount of the bonus pool from which the bonuses will be paid. The
bonus pool will be determined based on a formula, as adopted at the committee's
discretion, which will taken into account one or more of the following measures
of our financial performance: (a) revenue growth; (b) earnings per share;
(c) pre-tax or after-tax net income; (d) pre-tax operating income; (e) net
revenues; (f) profits before taxes; (g) book value per share; (h) market price
per share and (i) earnings available to common stockholders. The committee will
determine the percentage of the bonus pool payable to each participant, subject
to adjustment based on achievement of individual, group or corporate performance
goals. We will pay the bonuses in cash, in stock or stock-based awards under the
Stock Incentive Plan or in any combination of methods. Subject to the terms of
the Deferred Compensation Plan, a participant may elect to defer payment of his
bonus and receive the payment under the Deferred Compensation Plan.

To foster the same motivation among our investment bankers and analysts (the
"Investment Banking Group") to contribute to our profitability, we also adopted
the Annual Bonus Plan for the Investment Banking Group. The bonuses under this
plan will be paid periodically from a bonus pool which will consist of 32% of
the revenue generated by the Investment Banking Group. A committee, as appointed
by the board to administer the plan, will annually in advance select the
participants and determine the formula for allocating the bonus pool among the
participants. The bonus of a participant may be increased or decreased by up to
20% based on the participant's performance or other factors as determined by the
committee. We will pay the bonuses in cash, in securities generated by the
Investment Banking Group, in stock or stock-based awards under the Stock
Incentive Plan or in any combination of those methods. Subject to the terms of
the Deferred Compensation Plan, a participant may elect to defer payment of his
bonus and receive the payment under the Deferred Compensation Plan. A portion of
the Annual Bonus Plan for the Investment Banking Group pool may be allocated to
the Annual Bonus Plan for Executives.

LONG-TERM INCENTIVE PLAN

To attract and retain employees who contribute to our continued growth,
development and financial success, we adopted the Long-Term Incentive Plan (the
"LTIP"). A committee appointed by the board will administer the LTIP and will
select those executives and key employees who are eligible to participate in the
LTIP. The LTIP provides for the payment of performance awards if certain
objective performance goals

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are met over a three-year performance period. Performance goals and
corresponding performance awards are set by the committee at the beginning of
the three-year period and are based on one or more of the following measures of
our financial performance: (1) net revenue or income; (2) stock price;
(3) return on equity; (4) earnings per share; (5) profits before taxes;
(6) operating income and (7) any other factors as determined by the
administrator. The administrator reserves the right to adjust the amount of a
performance award payable to any participant based on additional factors such as
individual performance and contributions to our success. Performance awards are
paid only to participants who are employed by us at the end of the three-year
performance period. Performance awards will be paid in cash, stock or a
combination thereof. Subject to the terms of the Deferred Compensation Plan, a
participant may elect to defer payment of a performance award and receive the
payment under the Deferred Compensation Plan. We have not yet implemented this
plan.

DEFERRED COMPENSATION PLAN

We adopted the Deferred Compensation Plan for the employees participating in
the three bonus plans (the Long-Term Incentive Plan, the Annual Bonus Plan for
Executives and the Annual Bonus Plan for the Investment Banking Group).
Participation in the Deferred Compensation Plan will be limited to those bonus
plan participants who would represent a "select group of management and highly
compensated employees" under applicable federal law governing employee benefit
plans. The plan permits the participants to make annual elections to defer all
or a portion of the bonuses they might earn under the bonus plans. The deferred
amounts will be credited to the participants' accounts, which will be maintained
for recordkeeping purposes and will not hold assets. The cash bonuses deferred
under the plan will be credited with gains and losses as if actually invested in
the investment alternatives selected by the participants from a menu available
under the plan. The bonuses in shares of our common stock that are deferred
under the plan will be credited with gains and losses based on the value of the
stock and any stock dividends. If there will be cash dividends and distributions
on the shares credited to the accounts, those amounts will be credited with
earnings at a fixed annual percentage rate. The participants' interest in their
accounts will be vested and non-forfeitable. Each account will be paid out at
the time and in the manner and form as selected by the participant from a menu
of alternatives available under the plan. We have not yet implemented this plan.

401(K) PLAN

We maintain a 401(k) retirement savings plan. All of our employees meeting
certain minimum eligibility requirements are eligible to participate in the
401(k) plan. Under the 401(k) plan, an employee may contribute up to 15% of his
or her pre-tax gross compensation. The contribution cannot exceed a statutorily
prescribed annual limit. The 401(k) plan permits us, but does not require us, to
make additional contributions to the 401(k) plan. All amounts contributed by the
employee participants in conformance with plan requirements and earnings on such
contributions are fully vested at all times. For the years ended December 31,
1997 and 1998 and for the period ended November 30, 1999, we did not contribute
to the 401(k) Plan.

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CERTAIN TRANSACTIONS

Except as described below, none of our directors, officers or principal
security holders has or has had a direct or indirect material interest in any
transaction to which we are or have been a party. We believe that the terms of
each of the transactions described below were no less favorable to us than could
have been obtained from unaffiliated third parties. In addition, we will not
enter into additional transactions or agreements with directors, officers,
principal security holders or other affiliated parties unless the terms thereof
are no less favorable to us than could be obtained from unaffiliated third
parties. In any event, we will not enter into any transaction with directors,
officers or principal security holders without the affirmative vote of a
majority of disinterested directors.

LOANS TO OFFICERS

Messrs. Lessin, Loehr and Mendelson were given loans by us to purchase
shares of common stock pursuant to their respective employment agreements as
described under "Management of Wit Capital--Employment Agreements." We also gave
Mr. Feller a loan to purchase shares of common stock pursuant to his employment
agreement for an amount and under terms identical to the loan given to
Mr. Mendelson. In addition, Messrs. Readmond, Lang and Lieberman accepted the
opportunity we offered them to exercise all their vested and non-vested stock
options on April 30, 1999, other than incentive stock options, with funds we
loaned to them. The shares they purchased by exercising those of their options
which were not vested at the time can be repurchased by us at their respective
option exercise prices, unless they remain in our employ through the respective
periods when these options would originally have vested. The individuals are
personally liable for all interest due on their loans and are similarly liable
for one-half of the principal amounts of their loans. Each loan is secured by
the shares purchased with the proceeds of that loan. Each loan becomes due and
payable on March 31, 2003 or earlier if the individual's employment is
terminated or he or she no longer owns the shares. The respective total number
of shares purchased and the amounts loaned are set forth in the table below.

<TABLE>
<CAPTION>
NUMBER OF SHARES
ACQUIRED ON EXERCISE LOAN AMOUNT
-------------------- -----------
<S> <C> <C>
Ronald Readmond............................................. 1,561,000 $2,787,500
Everett F. Lang............................................. 157,864 338,281
George M. Lieberman......................................... 93,333 200,000
</TABLE>

STOCK ISSUANCES TO EXECUTIVE OFFICERS, DIRECTORS AND OUR LARGEST STOCKHOLDERS

The following table sets forth issuances of our common stock to our
executive officers, directors and our largest stockholders. All purchases during
April 1999 by officers were pursuant to the exercise of their outstanding
options.

<TABLE>
<CAPTION>
PRICE SHARE
STOCKHOLDER PER SHARE AMOUNTS ISSUANCE DATE
- ----------------------------------- --------- ---------- -----------------------------------
<S> <C> <C> <C>
The Goldman Sachs Group, Inc. April 8, 1999
(1).............................. $ 2.14 11,666,667
Capital Z Partners(2).............. 2.14 11,666,667 February 23, 1999
Draper Fisher Jurvetson(3)......... 2.14 933,333 March 8, 1999
2.14 233,333 December 8, 1998
1.43 3,500,000 September 17, 1998
1.43 483,021 November 15, 1999
Andrew D. Klein.................... 0.01 5,600,000 April 4, 1996
Robert H. Lessin................... 2.14 91,000 December 8, 1998
1.43 35,000 April 13, 1998
1.43 4,025,000 August 3, 1998
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
PRICE SHARE
STOCKHOLDER PER SHARE AMOUNTS ISSUANCE DATE
- ----------------------------------- --------- ---------- -----------------------------------
<S> <C> <C> <C>
Ronald Readmond.................... 1.43 70,000 January 29, 1998
1.43 21,000 April 30, 1997
1.43 1,561,000 April 30, 1999
Edward H. Fleischman............... 2.14 23,333 December 8, 1998
Joseph R. Hardiman................. 1.43 35,000 December 9, 1997
Mark Loehr......................... 2.14 875,000 March 5, 1999
Lloyd H. Feller.................... 2.14 455,000 March 22, 1999
Robert C. Mendelson................ 2.14 455,000 March 22, 1999
M. Bernard Siegel.................. 1.43 35,000 April 5, 1999
Everett F. Lang.................... 2.14 157,864 April 30, 1999
George M. Lieberman................ 2.14 93,333 April 30, 1999
2.14 17,500 April 14, 1999
Harry Silver....................... 17.125 40,000 August 4, 1999
Elizabeth Schimel.................. 18.125 40,000 August 9, 1999
</TABLE>

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

(1) The Goldman Sachs Group, Inc. owns 11,666,667 shares of Class B common
stock. Goldman Sachs also owns warrants to purchase up to 5,637,295 shares
of Class B common stock. In addition, Goldman Sachs has the right to receive
warrants to purchase an additional 153,247 shares of Class B common stock in
certain circumstances. All warrants issued to Goldman Sachs become
exercisable in October 2000.

(2) Steven Gluckstern and Adam Mizel, two of our directors, are general partners
of Capital Z Partners.

(3) John H.N. Fisher, one of our directors, is a managing director of Draper
Fisher Jurvetson.

AGREEMENT WITH STOCKHOLDERS

Capital Z Partners, Draper Fisher Jurvetson, Goldman Sachs and
Messrs. Readmond and Lessin, are entitled to certain rights and subject to
certain obligations in connection with the ownership of these shares. The rights
and obligations are as follows:

- Capital Z Partners may not to attempt to acquire beneficial ownership of
greater than 25% of our common equity (calculated as if all outstanding
options and rights are exercised and the related shares are issued). This
restriction will terminate in June 2002 or earlier if any other person
acquires or intends to acquire at least 25% of our common equity
(calculated in a similar manner).

- Goldman Sachs and its affiliates may not acquire, with certain exceptions,
beneficial ownership of more than 25% of our common equity (calculated as
if all outstanding options and rights are exercised and the related shares
are issued). This restriction will terminate in June 2002 or earlier if
any other person acquires or intends to acquire at least 25% of our common
equity (calculated in a similar manner).

- If we intend to offer shares of our common equity, or other securities
convertible into our common equity, representing more than 5% of our
common equity (again calculated as if all outstanding options and rights
are exercised and the related common shares are issued) to any of a number
of designated competitors of Goldman Sachs, Goldman Sachs will have a
first right to buy all of the offered shares on the same terms as those
offered to the competitor. This right of first refusal will terminate in
April 2009 or earlier if Goldman Sachs and its affiliates cease to own at
least 10% of our common equity (calculated, again, in a similar manner).

- In any given year, Messrs. Lessin and Readmond cannot transfer more than
the sum of half of the total number of shares each is permitted to
transfer under Rule 144 under the Securities Act, plus a

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percentage of any share amount transferred by Capital Z Partners in that
year, plus any allowable transfer amount carried over from a previous year
without the consent of Capital Z Partners.

VENTURE CAPITAL FUND MANAGEMENT

In August 1999, we and Dawntreader LLC formed an alliance relating to the
development and management of new venture capital funds through a new jointly
owned entity, Wit/Dawntreader Advisors LLC. Wit Capital Private Equity Advisors
LLC, one of our wholly owned subsidiaries, owns a 50% equity interest in that
entity. Robert H. Lessin, our chairman and co-chief executive officer, holds an
interest in profits of Wit Capital Private Equity Advisors LLC. In
October 1999, the partners of Dawntreader LLC became employees of Wit Capital.

SPRING STREET

We are a party with Spring Street Brewing Company to a license and
reciprocal marketing agreement dated April 4, 1996. Pursuant to this agreement,
we issued to Spring Street 700,000 shares of common stock. At the time,
Mr. Klein was a director of Spring Street. In 1998, Spring Street transferred
all of its assets to Long Shore Brewing Company and its affiliate MMB Properties
LLC as part of a merger.

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<PAGE>
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
OF WIT CAPITAL

The following table sets forth certain information regarding the beneficial
ownership of our common equity as of December 15, 1999 by: (1) each person or
entity that we know beneficially owns 5% or more of our common equity; (2) our
co-chief executive officers and the other four most highly compensated executive
officers as of December 15, 1999; (3) each of our directors; and (4) all our
current directors and executive officers as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF COMMON
NUMBER OF SHARES EQUITY BENEFICIALLY
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OWNED
- ------------------------ --------------------- --------------------
<S> <C> <C>
Capital Z Financial Services Fund II, L.P.............. 11,666,667 16.0%
One Chase Manhattan Plaza, 44(th) Floor
New York, NY 10005

Jonathan Cohen(2)...................................... 175,000 *

Draper Fisher Jurvetson................................ 4,068,606 5.6
400 Seaport Court
Redwood City, CA 94063

John H.N. Fisher(3).................................... 62,236 *
400 Seaport Court Redwood City, CA 94063

Edward H. Fleischman(4)................................ 35,365 *

Steven Gluckstern(5)................................... -- --
One Chase Manhattan Plaza, 44(th) Floor
New York, NY 10005

The Goldman Sachs Group, Inc.(6)....................... 11,666,667 16.0
Joseph R. Hardiman(4).................................. 47,032 *
Andrew D. Klein(7)..................................... 4,357,325 6.0
Everett F. Lang(8)..................................... 204,532 *
Robert H. Lessin(9).................................... 4,641,000 6.4
Mark Loehr............................................. 875,000 1.2
Gilbert C. Maurer(4)................................... 12,032 *
Robert C. Mendelson(10)................................ 481,250 *

Adam Mizel(5).......................................... -- --
One Chase Manhattan Plaza, 44(th) Floor
New York, NY 10005

Ronald Readmond(11).................................... 1,792,000 2.5
All executive officers and directors as a group (15 13,401,786 18.3
persons)(12).........................................
</TABLE>

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

* Less than 1%.

(1) Beneficial ownership is determined in accordance with the rules of the SEC.
In general, a person who has voting power and/or investment power with
respect to securities is treated as a beneficial owner of those securities.
For purposes of this table, shares subject to options, warrants or rights
currently exercisable or exercisable within 60 days of [ ], 1999 are
considered as beneficially owned by the person holding such options,
warrants or rights. Unless indicated otherwise, we believe that the persons
named in this table have sole voting and investment power with respect to
the shares shown.

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<PAGE>
(2) Includes 175,000 shares issuable upon exercise of options exercisable within
60 days. Also has an additional 525,000 options exercisable after 60 days.

(3) Mr. Fisher is a managing director of Draper Fisher Jurvetson and therefore
may be deemed to beneficially own shares held by Draper Fisher Jurvetson.

(4) Includes 3,281 shares issuable upon exercise of options exercisable within
60 days. Also has an additional 40,648 options exercisable after 60 days.

(5) General partner of Capital Z Partners and therefore may be deemed to
beneficially own shares held by Capital Z Financial Services Fund II, L.P.

(6) Excludes warrants to purchase 5,637,295 shares of Class B common stock, none
of which is exercisable within 60 days. Also has the right to receive up to
an additional 153,247 similar warrants in certain circumstances. Class B
common stock is not entitled to vote for the election of directors, but will
be automatically converted into shares of common stock if transferred to a
non-affiliate of Goldman Sachs at any time.

(7) Does not include 21,013 shares owned by MMB Properties LLC of which
Mr. Klein is a director.

(8) Includes 46,667 shares issuable upon exercise of options exercisable within
60 days. Also has an additional 162,969 options exercisable after 60 days.

(9) In addition to his purchases from us, Mr. Lessin purchased shares from two
of our stockholders.

(10) Includes 8,750 shares issuable upon exercise of options exercisable within
60 days. Also has an additional 113,750 options exercisable after 60 days.

(11) Includes 17,500 shares issuable upon exercise of options exercisable within
60 days. Also has an additional 140,000 options exercisable after 60 days.

(12) If we include shares beneficially owned by Capital Z Financial Services
Fund II, L.P. and Draper Fisher Jurvetson, each of which has designated one
or more members of our board of directors, then the number of shares and
percentages would be 29,199,195 and 40.1%.

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DESCRIPTION OF WIT CAPITAL STOCK

TRANSFER AGENT AND REGISTRAR

American Stock Transfer & Trust Co. is the transfer agent and registrar for
our common stock.

GENERAL

Our authorized capital stock consists of 500,000,000 shares of common stock,
$.01 par value, 75,000,000 shares of Class B common stock, $.01 par value and
30,000,000 shares of preferred stock, $.001 par value. There are outstanding
[ ] shares of common stock and 11,666,667 shares of Class B common
stock (assuming no exercise of outstanding stock options and warrants). There
are outstanding options and warrants to purchase an aggregate of [ ]
shares of common stock and Class B common stock.

The following summary of the terms and provisions of our capital stock does
not purport to be complete. Reference should be made to our amended and restated
certificate of incorporation and our by-laws, and to applicable law, for the
complete description of the terms and provisions of our capital stock.

COMMON STOCK

The holders of common stock are entitled to one vote for each share on all
matters voted upon by stockholders, including the election of directors. The
holders of the common stock are entitled to such dividends as may be declared in
the discretion of the board of directors out of funds legally available
therefor, subject to the preferential dividend rights of any shares of preferred
stock. See "Dividend Policy." Upon liquidation, holders of common stock are
entitled to share ratably in the remaining assets upon liquidation after payment
or provision for all liabilities and any preferential liquidation rights of any
preferred stock. The holders of common stock have no preemptive rights to
purchase shares of our stock. Shares of common stock are not subject to any
redemption provisions, and shares of common stock are not convertible into any
other securities. All outstanding shares of common stock are fully paid and
nonassessable. The shares of our common stock we are issuing in the merger will
also be fully paid and nonassessable when we receive the appropriate number of
shares of SoundView common stock in exchange for shares of our common stock.

CLASS B COMMON STOCK

The holders of Class B common stock are generally not entitled to vote
except as required by law. The holders of the Class B common stock are entitled
to any dividends declared by our board of directors which are payable to holders
of common stock on the same terms and in the same form as those dividends paid
to holders of common stock. Upon liquidation, holders of Class B common stock
are entitled to share ratably in the remaining assets after payment or provision
for all liabilities and any preferential liquidation rights of any preferred
stock. The Class B common stock will be treated in an identical manner as the
common stock with respect to any reclassification, recapitalization, stock split
or similar transaction and in any merger, consolidation or share exchange. The
holders of Class B common stock have no preemptive rights to purchase shares of
our stock. If any person or entity other than Goldman Sachs or any of its
affiliates becomes the beneficial owner of shares of Class B common stock, these
shares will automatically convert into an equal number of shares of common
stock. Shares of Class B common stock are not subject to any redemption
provisions. All outstanding shares of Class B common stock are fully paid and
non-assessable.

PREFERRED STOCK

Our amended and restated certificate of incorporation provides for
30 million authorized shares of preferred stock, of which none is outstanding.
The existence of authorized but unissued preferred stock

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may enable the board of directors to render more difficult or to discourage an
attempt to obtain control of us by means of a merger, tender offer, proxy
contest or otherwise. For example, if in the due exercise of its fiduciary
obligations, the board of directors were to determine that a takeover proposal
is not in our best interests, the board of directors could cause shares of
preferred stock to be issued without stockholder approval in one or more private
offerings or other transactions that might dilute the voting or other rights of
the proposed acquiror or insurgent stockholder group. In this regard, the
amended and restated certificate of incorporation grants the board of directors
broad power to establish the rights and preferences of authorized and unissued
preferred stock. The issuance of shares of preferred stock pursuant to the board
of directors' authority described above could decrease the amount of earnings
and assets available for distribution to holders of shares of common stock and
adversely affect the rights and powers, including voting rights, of such holders
and may have the effect of delaying, deterring or preventing a change in control
of us. The board of directors currently does not intend to seek stockholder
approval prior to any issuance of preferred stock, unless otherwise required by
law.

REGISTRATION RIGHTS

Goldman Sachs, Capital Z Partners, Draper Fisher Jurvetson and certain other
stockholders, or their respective transferees, are entitled to certain
registration rights with respect to the registrable securities. These rights are
provided under the terms of the registrable securities and agreement between us
and the holders of these registrable securities. This agreement provides demand
registration rights under the Securities Act beginning in December 1999. These
stockholders may require that we file up to an aggregate of six registration
statements, subject to certain conditions. In addition, the holders are entitled
to require us to include their registrable securities in future registration
statements we file under the Securities Act, often referred to as "piggyback"
registration rights. The holders are also entitled to require us to register
their registrable securities on a registration statement on Form S-3 once we are
eligible to use a Form S-3 in connection with such registrations. However,
holders of these shares will be restricted from exercising such rights until
December 1999 and within six months after the filing of any subsequent
registration statement. Registration of shares of common stock pursuant to the
exercise of demand registration rights, piggyback registration rights or S-3
registration rights would result in such shares becoming freely tradable without
restriction under the Securities Act immediately upon the effectiveness of such
registration subject to any lock-up agreements we have with these stockholders.
We are required to bear substantially all registration and selling expenses in
connection with the above-described registrations, except for underwriting
discounts, income and transfer taxes (if any), selling expenses and the fees and
expenses of more than one counsel representing the holders of the registrable
securities. These registration rights are transferable in certain circumstances
and may be amended or waived only with our written consent and the consent of a
specified number of holders of the registrable securities.

STOCKHOLDER RIGHTS PLAN

Each share of our common stock includes one voting class right ("Voting
Class Right") and each share of Class B common stock includes one nonvoting
class right ("Class B Common Right"). The Voting Class Rights and the Class B
Common Rights are referred to collectively herein as the "Rights". Each Voting
Class Right entitles its registered holder to purchase from us a unit consisting
of one one-hundredth of a share (a "Fractional Share") of Class 1 Series A
Junior Participating Preferred Stock, par value $.001 per share, and each
Class B Common Right entitles the registered holder to purchase from us a unit
consisting of a Fractional Share of Class 2 Series A Junior Participating
Preferred Stock, par value $.001 per share (the Class 1 Series A Junior
Participating Preferred Stock and the Class 2 Series A Junior Participating
Preferred Stock collectively referred to as the "Preferred Shares"), at a
purchase price of $40.00 per Fractional Share, subject to adjustment (the
"Purchase Price").

Initially, the Voting Class Rights will be attached to all certificates
representing outstanding shares of common stock and the Class B Common Rights
will be attached to all certificates representing outstanding

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<PAGE>
shares of Class B common stock, and no separate certificates for the Rights
("Rights Certificates") will be distributed. The Voting Rights will separate
from the common stock and the Class B Common Rights will separate from the
Class B common stock and a "Distribution Date" will occur, with certain
exceptions, upon the earlier of (i) ten days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership of
15% or more of the outstanding shares of common stock (the date of the
announcement being the "Stock Acquisition Date"), or (ii) ten business days
following the commencement of a tender offer or exchange offer that would result
in a person's becoming an Acquiring Person.

However, as long as Capital Z Financial Services Fund II, L.P., together
with all of its affiliates and associates, does not become the beneficial owner
of 25% or more of all outstanding shares of common stock of all classes
(assuming the exercise of all outstanding options, rights and warrants to
acquire common stock), Capital Z, together with its affiliates and associates,
shall not be or become an Acquiring Person. Furthermore, as long as The Goldman
Sachs Group, Inc., together with all its affiliates and associates, does not
become the beneficial owner of 25% or more of all such outstanding shares of
common stock, Goldman Sachs, together with its affiliates and associates, shall
not be or become an Acquiring Person. In certain circumstances, the Distribution
Date may be delayed by the board of directors. Certain inadvertent acquisitions
will not result in a person's becoming an Acquiring Person if the person
promptly divests itself of sufficient common stock.

Until the Distribution Date, (a) the Voting Class Rights will be evidenced
by the common stock certificates and the Class B Common Rights will be evidenced
by the Class B common stock certificates and both will be transferred with and
only with such common stock certificates and such Class B common stock
certificates, as the case may be, (b) common stock certificates and Class B
common stock certificates will contain a notation incorporating the Rights
Agreement by reference and (c) the surrender for transfer of any certificate for
common stock will also constitute the transfer of the Rights associated with
either the common stock or the Class B common stock represented by such
certificate.

The Rights are not exercisable until the Distribution Date and will expire
at the close of business on September 30, 2009, unless earlier redeemed or
exchanged by us as described below.

As soon as practicable after the Distribution Date, Rights Certificates will
be mailed to holders of record of common stock and Class B common stock as of
the close of business on the Distribution Date and, from and after the
Distribution Date, the separate Rights Certificates alone will represent the
Rights. All shares of common stock and Class B common stock issued prior to the
Distribution Date will be issued with the appropriate Rights. Shares of common
stock and Class B common stock issued after the Distribution Date in connection
with certain employee benefit plans or upon conversion of certain securities
will be issued with appropriate Rights. Except as otherwise determined by the
board of directors, no other shares of common stock or Class B common stock
issued after the Distribution Date will be issued with Rights.

In the event (a "Flip-In Event") that a person becomes an Acquiring Person
(except pursuant to a tender or exchange offer for all outstanding shares of
common stock at a price and on terms that a majority of the independent
directors of our board of directors determines to be fair to and otherwise in
our best interests and the best interests of our stockholders (a "Permitted
Offer")), each holder of a Voting Class Right will thereafter have the right to
receive, upon exercise of such Right, a number of shares of common stock and
each holder of a Class B Common Right will thereafter have the right to receive,
upon exercise of such Right, a number of shares of Class B common stock (or, in
certain circumstances, cash, property or other securities) having a Current
Market Price (as defined in the Rights Agreement) equal to approximately two
times the exercise price of the Right. Notwithstanding the foregoing, following
the occurrence of any Triggering Event, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by or
transferred to an Acquiring Person (or by certain related parties) will be null
and void in the circumstances set forth in the Rights Agreement. However, Rights
are

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not exercisable following the occurrence of any Flip-In Event until such time as
the Rights are no longer redeemable by us as set forth below.

In the event (a "Flip-Over Event") that, at any time from and after the time
an Acquiring Person becomes such, (i) our company is acquired in a merger or
other business combination transaction (other than certain mergers that follow a
Permitted Offer), or (ii) 50% or more of our assets or earning power is sold or
transferred, each holder of a Right (except Rights that are voided as set forth
above) shall thereafter have the right to receive, upon exercise, a number of
shares of common stock of the acquiring company having a Current Market Price
equal to two times the exercise price of the Right. Flip-In Events and Flip-Over
Events are collectively referred to as "Triggering Events."

The number of outstanding Rights associated with a share of common stock or
Class B common stock, or the number of Fractional Shares of Preferred Shares
issuable upon exercise of a Right and the Purchase Price, are subject to
adjustment in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the common stock or Class B common stock occurring prior to
the Distribution Date. The Purchase Price payable, and the number of Fractional
Shares of Shares or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution in the
event of certain transactions affecting the Preferred Shares.

With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Preferred Shares that are not integral multiples
of a Fractional Share are required to be issued and, in lieu thereof, an
adjustment in cash may be made based on the market price of the Preferred Shares
on the last trading date prior to the date of exercise or certificates of scrip
or warrants may be issued entitling the holders thereof to receive a full share
in return for such scrip or warrants aggregating a full share. Pursuant to the
Rights Agreement, we reserve the right to require prior to the occurrence of a
Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Shares will be issued.

At any time until the date of the first public announcement of the
occurrence of a Flip-In Event, we may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, payable, at our option, in cash, shares of
common stock, in the case of holders of Voting Class Rights, or Class B common
stock, in the case of holders of Class B Common Rights, or such other
consideration as the board of directors may determine. Immediately upon the
effectiveness of the action of the board of directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $.01 redemption price. In the event that prior to the
Distribution Date, the Class B common stock is converted, in whole or in part,
into common stock, the Class B Common Rights attached to the shares of Class B
common stock will be converted to Voting Class Rights pursuant to a conversion
ratio equivalent to the conversion ratio used for converting the Class B common
stock to common stock. In the event that on or after the Distribution Date, all
outstanding shares of Class B common stock are converted into shares of common
stock, all Class B Common Rights then outstanding will be converted to Voting
Class Rights pursuant to a conversion ratio equivalent to the conversion ratio
used for converting the Class B common stock to common stock.

At any time after the occurrence of a Flip-In Event and prior to a person's
becoming the beneficial owner of 50% or more of the shares of common stock then
outstanding or the occurrence of a Flip-Over Event, we may exchange the Rights
(other than Rights owned by an Acquiring Person or an Affiliate or an associate
of an Acquiring Person, which will have become void), in whole or in part, at an
exchange ratio of one share of common stock, in the case of holders of Voting
Class Rights, or Class B common stock, in the case of holders of Class B Common
Rights, and/or other equity securities deemed to have the same value as one
share of common stock, per Voting Class Right, or one share of Class B common
stock, per Class B Common Right, subject to adjustment.

Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder, including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights should not

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be taxable to stockholders or to us, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for our common stock or Class B common stock (or other
consideration) or for the common stock of the acquiring company as set forth
above or are exchanged as provided in the preceding paragraph.

Other than the redemption price, any of the provisions of the Rights
Agreement may be amended by our board of directors as long as the Rights are
redeemable. Thereafter, the provisions of the Rights Agreement other than the
redemption price may be amended by the board of directors in order to cure any
ambiguity, defect or inconsistency, to make changes that do not materially
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to lengthen the time
period governing redemption shall be made at such time as the Rights are not
redeemable.

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<PAGE>
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF SOUNDVIEW

OVERVIEW

SoundView was originally incorporated in Connecticut in 1985 as Gartner
Securities Corporation, which changed its name to SoundView Financial
Group, Inc. in 1988. In 1993, the company reincorporated in Delaware and in 1998
changed its name to SoundView Technology Group, Inc. All dollar figures located
under the tables below for September 30 and December 31 for each respective year
are expressed in thousands.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999

REVENUES

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Brokerage...................... $61,891 $45,822 $64,562 $48,773 $38,979
</TABLE>

Revenues derived from brokerage operations are related to SoundView's
institutional equity business and consist of agency commissions for listed
securities and principal transaction revenue from Nasdaq market-making
activities. Revenue from these activities has increased each year as the result
of the expansion of the sales and trading staff, increased exchange volumes, an
increase in the number of companies under research coverage, and an increase in
the number of stocks for which SoundView makes a market.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Investment banking............. $32,053 $ 8,332 $10,259 $ 9,944 $11,683
</TABLE>

Investment banking revenues are primarily derived from the public offering
of equity securities and advisory services. SoundView also receives revenue from
its participation in underwriting syndicates for deals which it is not a
manager. For the nine months ended September 30, 1999 investment banking revenue
increased 285% over the comparable period which is primarily attributable to the
expansion of SoundView's investment banking and mergers and acquisitions
capabilities and favorable issuing conditions for technology companies. The
growth in revenues in 1998 from 1997 was negatively impacted by the volatility
in the financial markets stemming from the global financial crisis. The decrease
in revenue in 1997 was attributable to a reduction in equity issuance for
semiconductor companies from 1996 levels.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Asset management fees.......... $ 5,398 $ 3,515 $ 6,333 $ 250 $20,466
</TABLE>

In 1996, SoundView, through its subsidiary, SoundView Asset Management was a
general partner of Spinnaker Technology Fund, LP and had contracted to provide
the Spinnaker Technology Fund with management services for which it received a
1% management fee and a 20% allocation of the profits. In 1997, SoundView Asset
Management withdrew as general partner of the Spinnaker Technology Fund and sold
substantially all its fixed assets to Bowman Capital Management, LLC. This
contractually ended the reallocation of profits from limited partners and
accounts for the decrease of $20.2 million between 1997 and 1996. In connection
with this withdrawal, SoundView Asset Management converted its interest in the

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<PAGE>
Spinnaker Technology Fund to that of a special limited partner and under terms
of the conversion agreement was entitled to receive a percentage of certain fees
earned by Bowman Capital Management through December 31, 2002. The increase in
these revenues in 1998 and through September 30, 1999 was attributable to an
increase in these fees from improved investment returns from the Fund.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Gains from firm investments.... $ 4,484 $ 1,652 $ 3,163 $ 935 $ 7,829
</TABLE>

Investment income is derived from the investment of SoundView's cash in
certain investment partnerships and private equity of technology companies. The
increase of 171% for the nine months ended September 30, 1999, and the increase
of 238% in 1998 from 1997 are attributable to increased investment returns from
SoundView's investments in the Spinnaker Technology Fund and the WMS Cypress
Fund, LP. The decrease of $6.9 million in 1997 from 1996 was primarily the
result of lower returns for the cash invested in the Spinnaker Technology Fund.

Interest revenue is derived from cash balances maintained with SoundView's
clearing broker and from interest bearing accounts and cash equivalents at the
bank. These amounts have increased with the growth in SoundView's brokerage
revenues, which are collected at the clearing broker and withdrawn as needed for
SoundView's operations or investment.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Gain (loss) on joint venture... $ 477 $ (440) $ (832) $ -- $ --
</TABLE>

During 1998, SoundView entered into a joint venture to provide investment
management services to institutions and individuals. SoundView's investment is
accounted for under the equity method of accounting through its subsidiary,
SoundView Capital Management and as such SoundView's allocated portion of the
net loss on start-up amounted to $832,400 for that year. The increase in the
nine months ended September 30, 1999, is the result of incentive fees which have
been earned on increased profits of the funds under management which are to be
re-allocated to the joint venture.

EXPENSES

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Compensation and benefits...... $56,626 $30,055 $42,508 $34,755 $48,652
</TABLE>

Compensation consists of salaries, bonuses, commissions and benefits
SoundView pays or gives to its employees. The increase in compensation since
1997 reflects the increase in the number of its employees and the increase in
the revenue and operating profits of the firm. SoundView had 104, 129, 146, and
168 employees as of December 31, 1996, 1997, 1998, and September 30, 1999,
respectively. The decrease in compensation in 1997 from 1996 was attributable to
SoundView's withdrawal from the active management

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<PAGE>
of the Spinnaker Technology Fund and the transfer of the employees associated
with the management of the Spinnaker Technology Fund to Bowman Capital
Management.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Brokerage and
clearance...................... $10,393 $ 6,964 $ 9,434 $ 8,037 $ 7,035
</TABLE>

Brokerage and clearance expense primarily consists of fees paid to
independent floor brokers on the New York Stock Exchange for the execution of
SoundView customer agency business and of fees paid to SoundView's clearing
broker. The increases in brokerage and clearing charges reflect the growth in
the transactional volume of SoundView's brokerage operation.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Occupancy...................... $ 1,563 $ 1,457 $ 2,015 $ 1,547 $ 1,242
</TABLE>

Occupancy expense includes costs related to SoundView's leasing of office
space, furniture, and equipment in Stamford, San Francisco and New York. The
increases in occupancy expense reflect its growth and need for expanded office
facilities. In the nine months ended September 30, 1999, the increase in
occupancy of 7.3% was attributable to the lease of office space in Manhattan and
operating expense escalations, net of the sub-lease of a former office in Menlo
Park, California. The increase of 30.3% in 1998 was the result of additional
space leased in SoundView's San Francisco office and increased equipment and use
tax costs. The increase of 24.5% in 1997 was attributable to the lease of office
space in Menlo Park and additional space leased in Stamford.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Professional services.......... $ 3,791 $ 3,496 $ 4,239 $ 3,345 $ 2,850
</TABLE>

SoundView's professional service expense encompasses legal, accounting,
recruiting and fees paid to Gartner Group under the terms of a research sharing
agreement. The increase in professional fees for the nine months ended
September 30, 1999 was attributable to recruiting fees for the expansion of
SoundView's investment banking activities and an increase in accounting and tax
preparation fees. The increase of 26.7% in 1998 and 17.4% in 1997 was
attributable to an increase in fees paid to Gartner Group and increases in legal
fees.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Marketing and
business development........... $ 4,683 $ 2,997 $ 3,774 $ 2,976 $ 2,194
</TABLE>

Marketing and business development expense consists primarily of travel,
entertainment and costs associated with SoundView's various conferences,
particularly the Technology Outlook Conference held annually in Boca Raton. The
increases in these expenses are tied to the expansion of SoundView's brokerage
and investment banking businesses.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Data processing and
communications................. $ 2,846 $ 2,931 $ 3,691 $ 3,251 $ 2,818
</TABLE>

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<PAGE>
Data processing and communications expense reflects the cost of market data
services, telecommunications, and postage and mailing. The decrease in this
expense in the nine months ended September 30, 1999 is attributable to costs
savings in the long distance telecommunications including direct wires.
Increases in 1998 and 1997 relate to increased market data and
telecommunications costs primarily from the expansion of the sales and trading
area.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Depreciation and
amortization................... $ 1,115 $ 920 $ 1,287 $ 1,045 $ 655
</TABLE>

Depreciation and amortization consists of the depreciation of property and
equipment and amortization of leasehold improvements. Increases in each of the
years correspond to increases in the purchase and deployment of computer
hardware as well as increased amortization of the build-out of leased space in
San Francisco and Stamford.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Other operating expenses....... $ 1,519 $ 1,440 $ 1,880 $ 1,521 $ 1,025
</TABLE>

Other operating expenses include dues and subscriptions, research printing
costs, office supplies and other administrative expenses. The increases of 23.6%
in 1998 and 48.4% in 1997 were attributable to increased research printing and
office supply costs. Although up by 5.5% in the nine months ended September 30,
1999, other expenses are expected to be flat for the full year due to lower
research printing costs as compared to those in the fourth quarter of 1998.

LIQUIDITY AND CAPITAL RESOURCES

SoundView has historically satisfied its cash requirements through its
operating income. As of September 30, 1999, SoundView had $27.2 million in cash
and cash equivalents, and believes that this balance, together with cash from
operations, will be sufficient to meet anticipated cash requirements.

Net cash provided by operating activities was $21.8 million for the nine
months ended September 30, 1999 and $4.0 million for the nine months ended
September 30, 1998. Cash provided from operating activities was $14.0 for 1998.
Cash used in operating activities was $19.1 million in 1997 as the result of an
increase in the receivable from clearing broker and the payment of accrued
bonuses for 1996. Cash provided by operations of $11.1 million in 1996 related
to increases in accrued compensation.

Net cash of $5.5 million used in investing activities for the nine months
ended September 30, 1999 was for the purchase of computer equipment, leasehold
improvements in new facilities in San Francisco and investment in investment
partnerships. Net cash used in investing activities of $2.8 million for the nine
months ended September 30, 1998 was attributable to computer purchases and
losses from SoundView's asset management joint venture. Net cash provided by
investing activities of $18.9 million in 1997 was primarily attributable to the
partial distribution of SoundView's assets in the Spinnaker Technology Fund. Net
cash used in investing activities in 1996 of $14.5 million was primarily related
to investment in the Spinnaker Technology Fund.

Net cash provided by financing activities was $680,400 for the nine months
ended September 30, 1999 from net treasury stock issuances. Net cash used in
financing activities of $2.3 million for the nine months ended September 30,
1998 and $2.4 million for 1998 was related to net repurchases of treasury stock.

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<PAGE>
RISK MANAGEMENT

SoundView's primary risk exposures are market risk (particularly equity
price), credit risk and legal risk. Market risk refers to the risk that a change
in the level of equity prices, interest rates or other factors could result in
trading losses or negatively impact the market for equity issuance. Credit and
legal risk refers to the risk that a counterparty to a transaction might fail to
perform under its contractual commitment resulting in SoundView's incurring
losses. SoundView's risk management focuses on the trading of securities,
extension of credit to counterparties and investment banking activities, as well
as the monitoring of trading levels with institutional customers. SoundView
monitors these risks daily through a number of control procedures designed to
identify and evaluate the various risks to which they are exposed.

MARKET RISK

SoundView may act as a principal to facilitate customer-related transactions
in financial instruments which expose the firm to market risks. SoundView makes
markets in certain equity securities. As such, SoundView maintains securities
inventories to facilitate customer transactions. SoundView's management believes
its philosophy of monitoring market risk very closely and risk management result
in carefully managed market exposure and reduced earnings volatility. Managing
market risk exposures includes, limiting firm commitments by position level both
long and short for all securities traded and limiting the type of trades that
can occur in each inventory account.

SoundView manages daily risk exposure in its inventory accounts by requiring
various levels of management review of these accounts. The primary purpose of
risk management is to participate in the establishment of position limits, as
well as to monitor both the buy and sell activity in the firm's trading
accounts. Trading activities of SoundView result in the creation of inventory
positions. Position and exposure reports indicating both long and short position
are prepared, distributed and reviewed each day. These reports enable SoundView
to control inventory levels, monitor daily trading results by stock and trader,
as well as review inventory aging, pricing and concentration.

As of September 30, 1999, SoundView did not have material assets and
liabilities which are subject to market risk and, therefore, market risk is not
material.

CREDIT RISK

SoundView's exposure to credit risk arises from the possibility that a
counterparty to a transaction might fail to perform under its contractual
commitment, resulting in SoundView incurring losses. Credit risk related to
various financing activities is reduced by the industry practice of obtaining
and maintaining possession and control of collateral which is accomplished with
established arrangements with the clearing broker. SoundView actively manages
the credit exposure relating to its trading activities by monitoring the credit
worthiness of counterparties requesting additional collateral when deemed
necessary and limiting the amount and duration of exposure to individual
counterparties.

LEGAL RISK

Legal risk includes the risk on non-compliance with applicable legal and
regulatory requirements and the risk that a counterparty's performance
obligations will be unenforceable. SoundView is generally subject to extensive
regulation in the different jurisdictions in which it conducts business.
SoundView has established legal standards and procedures that are designed to
ensure compliance with all applicable statutory and regulatory requirements.
SoundView, principally through its compliance and finance departments, has also
established procedures that are designed to ensure that senior management's
policies relating to conduct, ethics and business practices are followed. In
connection with its business, SoundView has various procedures that address
issues such as regulatory capital requirements, trading and sales practices,
supervision, and record keeping. SoundView has also established certain
procedures to mitigate

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<PAGE>
the risk that a counterparty's performance obligations will be unenforceable,
including consideration of counterparty legal authority and capacity, adequacy
or legal documentation, the permissibility of a transaction under applicable law
and whether applicable bankruptcy or insolvency laws limit or alter contractual
remedies.

YEAR 2000

The Year 2000 issue involves the potential for system and processing
failures of date-related data resulting from computer-controlled systems using
two digits rather than four to define the applicable year. For example, computer
programs that contain time-sensitive software may recognize a date using two
digits of "00" as the year 1900 rather than the year 2000. This could result in
system failure or miscalculations causing disruptions of our operations,
including, among other things, a temporary inability to process transactions in
connection with brokerage activities our investment banking.

Because SoundView is dependent, to a very substantial degree, upon the
proper functioning of computer systems, the failure of any computer system to be
Year 2000 compliant could materially adversely affect it. Failure of this kind
could, for example, cause settlement of trades to fail, lead to incomplete or
inaccurate accounting, recording or processing of trades in securities, result
in generation of erroneous results or give rise to uncertainty about its
exposure to trading risks and its need for liquidity. If not remedied, potential
risks include business interruption or shutdown, financial loss, regulatory
actions, reputational harm and legal liability.

SoundView has completed its internal information technology and
non-information technology assessment, which included inventorying all hardware
and mission critical systems applications (SoundView has no internally developed
software applications). SoundView believes that its systems will function
properly with respect to dates in the year 2000 and thereafter. SoundView's
costs to date and anticipated expenditures related to its Year 2000 assessment
and remediation plans have been negligible.

In addition, SoundView depends upon the proper functioning of third-party
and non-information technology systems. These parties include depositories,
clearing agencies, clearing houses, commercial banks and other vendors.
SoundView has contacted every material vendor with whom it has important
financial or operational relationships to determine the extent to which they are
vulnerable to the Year 2000 issue. Each vendor has participated in and passed
the Year 2000 compliance tests formulated by the Securities Industry
Association. These vendors have also provided SoundView written documentation
that they are Year 2000 compliant and confirmed that they have passed SIA
sponsored industry test. Since SoundView does not require unique services from
any of these vendors, it believes the SIA testing indicates general Year 2000
compliance. In the event any of these vendors prove not to be Year 2000
compliant, SoundView believes that it could find a replacement vendor that is
Year 2000 compliant, although not without significant expense or delay. However,
based on management's current information, SoundView expects to incur no
significant costs in the future for Year 2000 problems.

SoundView's worst case scenario in connection with Year 2000 issues is that
there will be a failure on the part of one or more of its important vendors and
that it will experience difficulties in finding replacement vendors. If these
vendors are not Year 2000 compliant, despite their internal and external
testing, SoundView, as well as many of their other clients, will face system and
processing failures until these issues can be resolved. Disruption or suspension
of activity in the world's financial markets is also possible. In addition,
uncertainty about the success of remediation efforts generally may cause many
market participants to reduce the level of their market activities temporarily
as they assess the effectiveness of these efforts during a "phase-in" period
beginning in late 1999 and early 2000. This in turn could result in general
reduction in trading and other market activities (and lost revenues). SoundView
cannot predict the impact that such reduction would have on its business.

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<PAGE>
SOUNDVIEW'S BUSINESS

SoundView Technology Group, Inc. is a Connecticut-based investment banking
firm with an exclusive focus on the information technology sector. Its business
comprises investment banking services, including the underwriting of public
offerings and financial advisory. SoundView also provides research and conducts
institutionally focused sales and trading in the information technology sector.
Through two subsidiaries, SoundView Asset Management, Inc. and SoundView Capital
Management, Inc., SoundView provides investment and administrative services
related to asset management. SoundView is currently privately owned by its
employees, and "SoundView" is a registered trademark of SoundView Technology
Group, Inc.

RESEARCH

SoundView believes that the singular focus on the information technology
sector has been crucial to its success in meeting the needs of its clients for
investment and strategic advice. SoundView's research universe is segmented in a
manner which provides in-depth analysis of the specialty areas within each
technology segment. In addition to gaining an in-depth understanding of the
secular and cyclical trends within the particular industry sector, SoundView's
research professionals maintain close relationships with key industry
participants in each industry sector. These key participants include public and
private technology companies, venture capital and institutional investors,
technical experts and professional service providers. Through these
relationships, SoundView gains the opportunity to participate actively in the
capital raising and other corporate activity of these technology companies.
SoundView maintains a strategic partnership with the Gartner Group that provides
access to over 750 Gartner Group research analysts worldwide as well as unique
insight into end-user demand through the numerous surveys which are conducted at
conferences organized by the Gartner Group.

As of November 30, 1999, SoundView provides research coverage for 205
companies. SoundView's research universe is comprised of the technology industry
groups and segments set forth below.

<TABLE>
<CAPTION>
SOFTWARE COMPONENTS COMMUNICATIONS SYSTEMS
- --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C>
Internet semiconductors telecom/datacom/ design automation
infrastructure/ semiconductor capital software enterprise systems
service providers equipment photonics PC/peripherals
e-commerce software/ wireless services channels/contract
service/security wireless equipment manufacturing
enterprise software
enterprise
applications
</TABLE>

SoundView currently employs 30 research professionals. In order to achieve
the depth of coverage required to maintain a leading technology research
product, SoundView must often recruit specific industry and technical experience
and train the analysts in financial analysis disciplines. This specialization
enables SoundView's analysts to produce sophisticated research which is valued
by its institutional clients and also allows them to publish industry and
thematic pieces which sets them apart as experts in their respective fields.

Analysts work closely with our investment banking professionals to identify
those companies that will evolve as leaders in their industries. It is with
these companies that we develop long-term relationships helping to manage their
capital raising activities and offering strategic advice.

Each year SoundView holds its annual Technology Outlook Conference which has
become a leading venue for the top technology companies to present their
investment stories to hundreds of technology

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<PAGE>
focused institutional investors in their industries. In 1999, 99 public and
private companies made presentations to 320 of the senior investment
professionals at 253 institutions. In addition to its major conference,
SoundView sponsors industry specific conferences in the photonics, semiconductor
and software areas.

INVESTMENT BANKING

SoundView's investment banking services consist primarily of the
underwriting of public offerings of equity securities and financial advisory
services related primarily to mergers and acquisitions. SoundView's investment
banking activities focus on the technology sector. SoundView's core strength has
been leveraging its technology expertise, its exclusive focus on and sponsorship
of leading technology companies.

SoundView organizes its investment banking professionals into specialized
teams. SoundView currently employs 21 investment banking professionals, who
focus their activities along the same lines as the research professionals in
order to better develop expertise in the technology sectors SoundView
professionals service. This comprehensive industry understanding enhances the
ability of SoundView's investment banking professionals to offer the best advice
to corporate issuers. SoundView is committed to providing each corporate client
with experienced investment banking professionals, coupled with a team of
research and market-making professionals.

PUBLIC UNDERWRITING. SoundView is an underwriter of public offerings of
equity securities for technology companies. SoundView concentrates its public
underwriting efforts in technology industry sectors capitalizing on its relative
competitive advantage arising from its investment banking relationships,
research, trading and distribution capabilities in the technology industries. By
serving its clients' capital raising needs beyond their initial public offerings
of securities, SoundView is better able to maintain long-term relationships with
clients. SoundView also seeks to increase its base of publicly held clients by
serving as a lead manager or co-manager in follow-on offerings for technology
companies that SoundView views as having attractive investment characteristics,
whether or not SoundView participated as an underwriter in that company's
initial public offering. As of November 30, 1999, SoundView acted as a
co-managing underwriter in 20 initial public offerings. As of November 30, 1999,
SoundView also participated in 3 follow-on offerings as lead managing
underwriter and 15 follow-on offerings as co-managing underwriter.

In addition to participating in public offerings of securities as a lead
managing or co-managing underwriter, SoundView also participates in public
offerings as a member of an underwriting syndicate managed by other investment
banking firms. Invitation into an underwriting syndicate arises from an
investment banking firm's expertise in a specific investment sector and also
from building relationships with syndicate departments of other investment
banking firms. In 1999, SoundView participated as a member of an underwriting
syndicate in 96 public offerings.

FINANCIAL ADVISORY SERVICES. In addition to its capital raising services,
SoundView offers to corporate clients in the technology sector a broad range of
advisory services. SoundView has advised technology companies in mergers and
acquisitions, divestitures and valuation. In 1999, SoundView participated in an
advisory capacity in 6 completed transactions. SoundView has been successful in
leveraging its expertise in the technology sector to offer these financial
advisory services to its clients. These advisory services are an important part
of SoundView's strategy of developing long-term relationships with its corporate
finance clients.

BROKERAGE

Since its inception, SoundView has offered a variety of sales and trading
services to institutional investors. It leverages its expertise in technology
industries through a sales force with a comprehensive understanding of the
complex and diverse technologies at the heart of technology-focused investing.
As of November 30, 1999, SoundView employed 63 sales and trading professionals
operating out of its offices in Stamford and San Francisco.

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<PAGE>
SoundView also operates an extensive market-making operation. As of
November 30, 1999, it was a market-maker in 181 companies, characterized
primarily as technology companies. SoundView's market-makers are a trusted
source of liquidity to some of the world's largest institutional traders.

INTERNATIONAL

SoundView is currently developing its investment banking business assisting
non-U.S. companies in raising capital in the United States. It also provides
strategic advisory services to non-U.S. companies. While revenues from these
activities have grown in recent years, these revenues comprise less than 10% of
SoundView's underwriting revenues and less than 5% of the company's total
revenues.

SoundView provides brokerage services to international institutional
investors interested in U.S. information technology companies. These investors
are located primarily in Europe. While revenues from these activities have grown
significantly in 1999, they represent less than 10% of brokerage revenues and
less than 5% of the company's total revenues.

COMPETITION

The financial services industry is highly competitive, and is expected to
grow more competitive in the near future. SoundView faces direct competition
primarily from other established investment banking firms, as well as from
traditional and online brokerage firms. SoundView's competitors include large
Wall Street firms as well as relatively new securities firms.

Many of SoundView's competitors have significantly greater financial,
technical, marketing and other resources than it does. Some of these competitors
also offer a wider range of products and services than it does and have greater
name recognition, more established reputations and more extensive client and
customer bases. These competitors may be able to respond more quickly to new or
changing opportunities, technologies and customer requirements due to superior
systems capabilities. They may also be better able to undertake more extensive
promotional activities, offer more attractive terms to customers, clients and
employees and adopt more aggressive pricing policies compared to SoundView.

SoundView's principal competitors in connection with its investment banking
and brokerage businesses are larger investment banking firms. It also faces
competition from recently formed online investment banking initiatives that are
also focused on technology industries.

Competition is also intense for the attraction and retention of qualified
employees in the securities industry. SoundView's ability to compete effectively
in its businesses will depend on its ability to attract new employees and retain
and motivate its existing employees.

REGULATION

REGULATION OF THE SECURITIES INDUSTRY AND BROKER-DEALERS. SoundView's
business is subject to extensive regulation applicable to the securities
industry in the United States and elsewhere. As a matter of public policy,
regulatory bodies in the United States and rest of the world are charged with
safeguarding the integrity of the securities and other financial markets and
with protecting the interests of customers participating in those markets. In
the United States, the SEC is the federal agency responsible for the
administration of the federal securities laws. SoundView is a registered as a
broker-dealer with the SEC and in each state in which it does business.
SoundView is also a member of the NASD, a self regulatory body to which all
broker-dealers belong. Certain self-regulatory organizations, such as the NASD,
adopt rules and examine broker-dealers and require strict compliance with their
rules and regulations. The SEC, self-regulatory organizations and state
securities commissions may conduct administrative proceedings which can result
in censure, fine, the issuance of cease-and-desist orders or the suspension or
expulsion of a broker-dealer, its officers or employees. The SEC and
self-regulatory organization rules cover many aspects of a broker-dealer's
business, including capital structure and withdrawals, sales methods, trade

105
<PAGE>
practices among broker-dealers, use and safekeeping of customers' funds and
securities, record-keeping, the financing of customers' purchases, broker-dealer
and employee registration and the conduct of directors, officers and employees.

EFFECT OF NET CAPITAL REQUIREMENTS. As a registered broker-dealer and
member of the NASD, SoundView is subject to the Uniform Net Capital Rule under
the Exchange Act. The Uniform Net Capital Rule specifies the minimum level of
net capital a broker-dealer must maintain and also requires that at least a
minimum part of its assets be kept in relatively liquid form. As of
September 30, 1999, SoundView was required to maintain minimum net capital of
$412,500 and had total net capital of approximately $17,277,200, or $16,814,700
in excess of the minimum amount required.

The SEC and the NASD impose rules that require notification when net capital
falls below certain predefined criteria, dictate the ratio of debt to equity in
the regulatory capital composition of a broker-dealer and constrain the ability
of a broker-dealer to expand its business under certain circumstances.
Additionally, the Uniform Net Capital Rule and the NASD rules impose certain
requirements that may have the effect of prohibiting a broker-dealer from
distributing or withdrawing capital and requiring prior notice to the SEC and
the NASD for certain withdrawals of capital. These rules governing net capital
and restrictions on withdrawals of funds could operate to prevent us from
meeting our financial obligations on a timely basis.

CHANGES IN EXISTING LAWS AND RULES. Additional legislation or regulation,
changes in existing laws and rules or changes in the interpretation or
enforcement of existing laws and rules, either in the United States or
elsewhere, may directly affect SoundView's mode of operation and its
profitability.

EMPLOYEES

As of November 30, 1999, SoundView had 169 employees.

PROPERTIES

SoundView's principal executive offices are located in Stamford,
Connecticut, where it leases 24,000 square feet of office space. The term of the
lease expires in 2003. It also operates a 14,000 square foot office in San
Francisco, California, which lease expires in 2009. SoundView also leases office
suites in Menlo Park, California, and New York City.

LEGAL MATTERS

SoundView is currently subject to claims and legal proceedings arising in
the normal course of its business as an underwriter. SoundView does not believe
that the resolution of such legal proceedings should have a material adverse
effect on it.

In September of 1996, Arnold Owen, a former officer, director and employee
of SoundView and a former trustee of SoundView's 401K and Profit Sharing Plan,
filed a complaint in the United States District Court for the Southern District
of New York naming SoundView and the Profit Sharing Plan as defendants. The
action, among other things, challenged the valuation methodology applied by the
Profit Sharing Plan trustees to value SoundView stock held in the Profit Sharing
Plan and the amount offered by the Profit Sharing Plan trustees to repurchase
the SoundView stock held by the Profit Sharing Plan on Mr. Owen's behalf. On
July 28, 1999, judgment was rendered by the District Court in favor of SoundView
and the Profit Sharing Plan on all counts, dismissing on the merits all claims
asserted by Mr. Owen and awarding SoundView in excess of $226,000 in attorney's
fees, costs and disbursements from Mr. Owen. Subsequently, Mr. Owen filed an
appeal, which is currently expected to be heard by the United States Court of
Appeals for the Second Circuit during the first quarter of 2000. SoundView and
the Profit Sharing Plan are unable to express an opinion as to the outcome of
Mr. Owen's appeal but SoundView and the Plan currently have no reason to believe
that the lower court's decision will be reversed.

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<PAGE>
The United States Department of Labor has initiated an investigation with
regard to the Profit Sharing Plan focusing on, among other things, stock
valuation issues relating to SoundView stock held in the Profit Sharing Plan.
The Department of Labor has outlined five reasons why it believes the Profit
Sharing Plan and/or the Profit Sharing Plan trustees have violated ERISA.
SoundView and the Profit Sharing Plan have issued a preliminary response to the
Department of Labor and SoundView believes that the Department of Labor's
position is faulty and erroneous in many respects. SoundView intends to
vigorously contest any charges the Department of Labor may bring. However,
SoundView and the Profit Sharing Plan trustees are unable at this time to
express any opinion as to the likelihood of the Department of Labor becoming a
party to the Owen appeal, filing a formal administrative or judicial complaint,
or the outcome of any such action if initiated.

107
<PAGE>
MANAGEMENT OF SOUNDVIEW

The following table lists SoundView's executive officers as of November 30,
1999. SoundView's executive officers are Messrs. Crabs, Ambrose, Bristol,
Bugniazet, Snyder, and Walbert.

<TABLE>
<CAPTION>
NAME AGE TITLE
- ---- --- -----
<S> <C> <C>
Russell D. Crabs.......................... 42 President and chief executive officer
David J. Ambrose.......................... 39 Head of sales trading
Brian T. Bristol.......................... 48 Head of investment banking
Edward A. Bugniazet....................... 39 Head of trading
Chief operating officer, chief financial
Curtis L. Snyder.......................... 38 officer
William W. Walbert........................ 40 Head of sales
</TABLE>

EXECUTIVE OFFICERS AND KEY EMPLOYEES

RUSSELL D. CRABS, president and chief executive officer and director of
research, joined SoundView in 1987. He serves on the firm's board of directors
and operating committee. Mr. Crabs covers systems companies and design
automation for SoundView. Prior to joining SoundView, Mr. Crabs worked with the
Gartner Group in a number of research positions. Mr. Crabs has an MBA from the
Wharton School of the University of Pennsylvania.

DAVID J. AMBROSE, managing director and head of sales trading, joined
SoundView in 1989. Prior to joining SoundView, Mr. Ambrose was a sales trader at
Prescott, Ball & Turban and prior to that, Furman Selz, Mager, Dietz & Birney.

BRIAN T. BRISTOL, managing director and head of corporate finance, joined
SoundView in 1991. Prior to joining SoundView, Mr. Bristol was at Salomon
Brothers where he was a director and co-head of the Technology and
Aerospace/Defense Group in investment banking. Prior to that, Mr. Bristol was
vice president of the Technology Group at First Boston's investment banking
unit. Mr. Bristol has an MA and PhD from Princeton University and an MBA from
Columbia University.

EDWARD BUGNIAZET, managing director and head of trading, joined SoundView in
1989. Mr. Bugniazet was previously a sales trader for Labe Simpson & Company,
and has experience on both the New York and American Stock Exchanges.

JONATHAN MEYERS, managing director and member of the firm's board of
directors, joined SoundView in 1994. Mr. Meyers oversees SoundView's
semiconductor/electronics corporate finance effort. Prior to joining SoundView,
Mr. Meyers was the director of Technology Banking at PaineWebber and then opened
the West Coast office for Needham. He began his career in investment banking
with Loeb Rhoades, where, after several mergers, he eventually became head of
West Coast technology at Lehman Brothers. Mr. Meyers has an MBA from Harvard
University.

CURT SNYDER, chief operating officer and chief financial officer, joined
SoundView in 1997. Mr. Snyder oversees the firm's accounting and finance,
technology, compliance, administration and operations departments. Prior to
joining SoundView, Mr. Snyder was at Warburg Dillon Read where he was managing
director of equity management. He began his career as a CPA with Deloitte &
Touche, providing specialized accounting and consulting services to clients in
the securities industry. Mr. Snyder has an MS from New York University's Stern
School of Business.

WILLIAM WALBERT, managing director and head of sales, joined SoundView in
1987. Before joining SoundView, Mr. Walbert was a telecommunications analyst at
the Gartner Group. Prior to that, he did competitive analysis for AT&T's
semiconductor and network equipment divisions. Mr. Walbert has an MBA from
Lehigh University.

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DIRECTORS

SoundView's board of directors consists of four directors: Messrs. Crabs,
Ambrose, Meyers and Walbert all of whom are also executive officers or key
employees.

EXECUTIVE COMPENSATION

The following table sets forth the salaries, and to the extent determinable,
the bonuses that SoundView pays its chief executive officer and the four most
highly compensated executive officers during 1999.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- --------------------------- -------- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Russell D. Crabs.................. 1999 $200,000 [ ](1) $1,471,111(2) -- --
President and chief executive
officer
David J. Ambrose.................. 1999 200,000 [ ](1) 497,342(2) -- --
Head of sales and trading
Brian T. Bristol.................. 1999 200,000 [ ](1) 938,437(2) -- --
Head of investment banking
Edward A. Bugniazet............... 1999 200,000 [ ](1) 415,097(2) -- --
Head of trading
William W. Walbert................ 1999 200,000 [ ](1) 1,176,252(2) -- --
Head of sales
</TABLE>

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

(1) Amounts will be determined and paid in January 2000.

(2) Earnings as the result of the exercise of options in 1999.

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<PAGE>
STOCK OPTIONS

OPTION GRANTS. The following table sets forth information regarding stock
options granted under SoundView's stock option plans for the year ended
December 31, 1999 to the chief executive officer and the other four most highly
compensated executive officers.

<TABLE>
<CAPTION>
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1999
----------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
PERCENTAGE OF TOTAL VALUE AT ASSUMED
OPTIONS GRANTED TO ANNUAL
EMPLOYEES (NET OF RATES OF STOCK PRICE
FORFEITURES) APPRECIATION FOR
NUMBER OF SECURITIES IN THE YEAR EXERCISE OR OPTION TERMS(4)
UNDERLYING OPTIONS ENDED DECEMBER 31, BASE PRICE EXPIRATION ---------------------
GRANTED (1) 1999(2) ($/SHARE)(3) DATE 5% 10%
-------------------- ------------------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Russell D. Crabs........ -- -- -- -- -- --
David J. Ambrose........ -- -- -- -- -- --
Brian D. Bristol........ -- -- -- -- -- --
Edward A. Bugniazet..... 15,000 4% 11.00 1/29/09 $103,800 $262,967
William W. Walbert...... -- -- -- -- -- --
</TABLE>

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

(1) Such options were granted pursuant to and in accordance with the 1995 Stock
Option Plan.

(2) Based on an aggregate of 379,480 options granted (net of forfeitures) to
employees for the year ended December 31, 1999, including options granted to
the other four most highly compensated executive officers.

(3) The exercise price per share of each option was equal to the fair market
value of the common stock on the date of the grant as determined by the
board of directors.

OPTION VALUES. The values of unexercised in-the-money options represent the
positive spread between the respective exercise prices of outstanding stock
options and the value of Wit Capital shares to be received in exchange for
SoundView shares in the merger.

AGGREGATED OPTION EXERCISES IN YEAR
ENDED DECEMBER 31, 1999 AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
FROM JANUARY 1, 1999 TO
DECEMBER 31, 1999
-------------------------------------------------

NUMBER OF
SHARES
ACQUIRED VALUE LOAN
ON EXERCISE RECEIVED AMOUNT
----------- ---------------- ----------------
<S> <C> <C> <C>
Russell D. Crabs......... 228,590 [] []
David J. Ambrose......... 99,097 [] []
Brian D. Bristol......... 119,450 [] []
Edward A. Bugniazet...... 65,628 [] []
William W. Walbert....... 158,330 [] []

OPTION VALUES AT DECEMBER 31, 1999
------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
--------------------------- ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C>
Russell D. Crabs......... -- 127,583 -- []
David J. Ambrose......... -- 63,146 -- []
Brian D. Bristol......... -- 48,646 -- []
Edward A. Bugniazet...... -- 57,194 -- []
William W. Walbert....... -- 61,995 -- []
</TABLE>

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<PAGE>
MANAGEMENT BENEFIT PLANS

401(K) AND PROFIT SHARING PLAN

The SoundView 401(k) and Profit Sharing Plan was established in 1991 to
provide SoundView employees with deferred compensation as well as an opportunity
to defer their own compensation to accumulate retirement savings. The plan
allows for all employees who meet minimum eligibility requirements to
participate in the plan. Under the 401(k) plan, an employee may contribute up to
15% of his or her pre-tax gross compensation. This contribution cannot exceed a
statutorily prescribed annual limit. SoundView, in turn, makes matching
contributions up to 2% of the first $40,000 of compensation or $800. These
contributions vest immediately.

In addition, SoundView, at its discretion, may make a profit sharing
contribution to the plan. These contributions are allocated to eligible
employees based on their base compensation. These contributions vest at 20% per
year of employment and vest completely after five years of employment. In each
of 1996, 1997 and 1998, SoundView contributed 10% of eligible base compensation,
amounting to $522,424, $695,526, and $797,533, respectively.

STOCK OPTION PLAN

SoundView has established a Stock Option Plan which permits the president,
as authorized by the board of directors, to grant options, stock appreciation
rights or a combination of options and stock appreciation rights to key
employees. The options may be incentive stock options or nonqualified options.
Stock options generally vest equally over a five year period and vested options
are exercisable at any time during the ten years from the date of the option
grant. The purpose of the plan is to promote long-term growth and profitability
by providing key employees with incentives to remain with the company and to
contribute to its growth and financial success. The Stock Option Plan has
authorized the grant of options to purchase up to 5,000,000 shares of
SoundView's common stock. All options granted have ten year terms and become
fully exercisable at the end of five years of continued employment. As of
November 30, 1999, a total of 127 current employees hold options to purchase
1,577,962 shares of common stock, of which options are vested with respect to
10,809 shares. Assuming completion of the merger with Wit Capital, the SoundView
Stock Option Plan will be adopted by Wit Capital and no additional options to
purchase shares will be granted under the SoundView Stock Option Plan.

OPERATING BONUS PLAN

SoundView has historically paid performance-based bonuses to its employees
as incentives to contribute to the firm's profitability. The overall size of the
bonus pool and individual awards are determined by the president.

TAX AND FINANCIAL PLANNING PROGRAM

SoundView has historically afforded its managing directors annual tax
preparation and financial planning advisory services from the Ernst & Young
Financial Planning Group. The cost of these services is paid for by SoundView
including tax gross up payments to offset the resulting tax liabilities of this
benefit.

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<PAGE>
STOCK ISSUANCES TO EXECUTIVE OFFICERS, DIRECTORS AND OUR LARGEST STOCKHOLDERS

The following table sets forth issuances of SoundView's common stock to its
executive officers, directors and largest stockholders during 1999.

<TABLE>
<CAPTION>
PRICE SHARE
STOCKHOLDER PER SHARE AMOUNTS ISSUANCE DATE
- ----------- --------- -------- -------------
<S> <C> <C> <C>
David J. Ambrose............................................ $11.00 10,000 2/8/99
Edward A. Bugniazet......................................... $11.00 10,000 2/8/99
Russell D. Crabs............................................ $11.00 10,000 2/8/99
William A. Walbert.......................................... $11.00 10,000 2/8/99
</TABLE>

CERTAIN TRANSACTIONS

Except as described below, none of SoundView's directors, officers or
principal security holders has or has had a direct or indirect material interest
in any transaction to which SoundView is or has been a party. SoundView believes
that the terms of each of the transactions described below were no less
favorable to SoundView than could have been obtained from unaffiliated third
parties. In addition, SoundView will not enter into additional transactions or
agreements with directors, officers, principal security holders or other
affiliated parties unless the terms thereof are no less favorable to SoundView
than could be obtained from unaffiliated third parties. In any event, SoundView
will not enter into any transaction with directors, officers or principal
security holders without the affirmative vote of a majority of disinterested
directors.

LOANS TO OFFICERS

SoundView has extended loans to its employees to exercise vested options and
to pay withholding taxes associated with these exercises. The loans are secured
by the shares purchased with the proceeds of the loan. The principal and
accumulated interest is due and payable on January 31, 1999. Any amounts due to
employees under SoundView's Operating Bonus plan will be first applied to repay
or reduce their respective loan amounts. All executive officers and director
have accepted these loans. The respective total number of shares purchased and
the amounts loaned are set forth in the table below:

<TABLE>
<CAPTION>
NUMBER OF SHARES
OFFICER ACQUIRED ON EXERCISE LOAN AMOUNT
- ------- -------------------- -----------
<S> <C> <C>
Russell Crabs............................................... 213,840 $1,483,304
David J. Ambrose............................................ 89,097 621,502
Brian T. Bristol............................................ 119,450 874,206
Edward A. Bugniazet......................................... 65,628 448,708
Jonathan Meyers............................................. 145,313 1,011,397
Curtis L. Snyder............................................ 23,605 198,906
William W. Walbert.......................................... 150,830 1,009,984
</TABLE>

112
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
OF SOUNDVIEW

The following table sets forth certain information regarding the beneficial
ownership of SoundView's common stock as of November 30, 1999 by: (1) each
person or entity that SoundView knows beneficially owns 5% or more of
SoundView's common stock; (2) its president and chief executive officer and the
other four most highly compensated executive officers as of November 30, 1999;
and (3) all its current directors and executive officers as a group.

<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED PERCENTAGE OF COMMON
NAME OF BENEFICIAL OWNER PRIOR TO OFFERING(1) EQUITY BENEFICIALLY OWNED
- ------------------------ -------------------- -------------------------
<S> <C> <C>
David J. Ambrose(2)................................... 177,546 6.1%
Brian T. Bristol(3)................................... 243,075 8.4
Edward A. Bugniazet(4)................................ 137,993 4.8
Russell D. Crabs (5).................................. 401,053 13.9
Jonathan Meyers(6).................................... 182,570 6.3
Curtis L. Snyder (7).................................. 31,105 1.1
William W. Walbert(8)................................. 293,395 10.1
All executive officers and director as a group (7
people)............................................. 1,466,737 50.7
</TABLE>

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

(1) Beneficial ownership is determined in accordance with the rules of the SEC.
In general, a person who has voting power and/or investment power with
respect to securities is treated as a beneficial owner of those securities.
For purposes of this table, shares subject to options, warrants or rights
currently exercisable or exercisable within 60 days of October 15, 1999 are
considered as beneficially owned by the person holding such options,
warrants or rights. Unless indicated otherwise, SoundView believes that the
persons named in this table have sole voting and investment power with
respect to the shares shown.

(2) Includes 28,449 shares issuable upon exercise within 60 days. Also has an
additional 34,697 options exercisable after 60 days.

(3) Includes 28,625 shares issuable upon exercise within 60 days. Also has an
additional 20,049 options exercisable after 60 days.

(4) Includes 20,865 shares issuable upon exercise within 60 days. Also has an
additional 36,329 options exercisable after 60 days.

(5) Includes 44,713 shares issuable upon exercise within 60 days. Also has an
additional 82,800 options exercisable after 60 days.

(6) Includes 22,257 shares issuable upon exercise within 60 days. Also has an
additional 28,713 options exercisable after 60 days.

(7) Has an additional 35,408 options exercisable after 60 days.

(8) Includes 34,065 shares issuable upon exercise within 60 days. Also has an
additional 27,930 options exercisable after 60 days.

113
<PAGE>
DESCRIPTION OF SOUNDVIEW STOCK

GENERAL

SoundView's authorized capital stock consists of 6,000,000 shares of common
stock, $.01 par value. There are outstanding 2,515,562 shares of common stock
(assuming no exercise of outstanding stock options and warrants). There are also
outstanding options to purchase an aggregate of 1,577,962 shares of common
stock.

The following summary of the terms and provisions of SoundView's common
stock does not purport to be complete. Reference should be made to its
certificate of incorporation and its by-laws, and to applicable law, for the
complete description of the terms and provisions of SoundView's common stock.

COMMON STOCK

114
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information
presents (1) the financial position of Wit Capital as if the proposed merger of
Wit Capital with SoundView and the exchange of SoundView common stock for Wit
Capital common stock had been approved by Wit Capital's and SoundView's
stockholders and was effective as of September 30, 1999 and (2) the results of
operations for the nine months ended September 30, 1999 and the year ended
December 31, 1998 as if the merger was approved and effective on January 1,
1998. The unaudited pro forma condensed financial information should be read in
conjunction with the unaudited and audited historical financial statements of
Wit Capital and SoundView included elsewhere in this proxy
statement/prospectus..

The pro forma consolidated financial information has been prepared by our
management and is not necessarily indicative of the results that would have been
achieved had the above-described transactions occurred on the dates indicated or
that may be achieved in the future. The classification of certain expense and
liability items of Wit Capital has been changed in the accompanying pro forma
combined statements of financial condition and results of operations to reflect
the classifications expected to be used by the combined companies.

Wit Capital will account for the merger under the purchase method of
accounting. Accordingly, Wit Capital will establish a new basis for SoundView's
assets and liabilities based upon their fair values and the purchase price
including the costs of the merger. The purchase accounting adjustments made in
connection with the development of the pro forma combined financial statements
are preliminary and have been made solely for purposes of developing such pro
forma combined financial information. The pro forma adjustments do not reflect
any revenue synergies, operating efficiencies or cost savings that may be
achieved with respect to the combined company.

WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL CONDITION

AS OF SEPTEMBER 30, 1999

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
WIT CAPITAL SOUNDVIEW ADJUSTMENTS COMBINED
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents........... $ 9,376,811 $27,225,800 $ (7,000,000)(A) $ 29,602,611
Receivable from clearing broker..... 1,799,209 19,479,200 21,278,409
Investment banking fees
receivable........................ 3,568,225 10,155,700 13,723,925
Asset management fees receivable.... -- 2,792,200 2,792,200
Securities owned, at market value... 122,337,858 3,448,100 125,785,958
Furniture, equipment, and leasehold
improvements, net................. 3,871,007 4,247,600 8,118,607
Computer software, net.............. 4,077,798 -- 4,077,798
Investment in investment
partnerships...................... -- 18,870,200 18,870,200
Intangible assets................... -- -- 325,793,300 (B) 325,793,300
Deferred taxes receivable........... -- 6,656,300 10,965,000 (C) 17,621,300
Other assets........................ 4,003,830 1,122,900 5,126,730
------------ ----------- ------------ ------------
TOTAL ASSETS...................... $149,034,738 $93,998,000 $329,758,300 $572,791,038
============ =========== ============ ============
</TABLE>

115
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL CONDITION (CONTINUED)

AS OF SEPTEMBER 30, 1999

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
WIT CAPITAL SOUNDVIEW ADJUSTMENTS COMBINED
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Securities sold, but not yet
purchased, at market value........ $ -- $ 7,599,700 $ 7,599,700
Accounts payable and accrued
expenses.......................... 3,208,833 5,413,800 8,622,633
Payable to other brokers............ -- 2,292,500 2,292,500
Accrued compensation................ 6,256,685 34,972,500 41,229,185
Income taxes payable................ -- 5,472,200 5,472,200
Deferred taxes payable.............. -- -- 31,777,000 (D) 31,777,000
Other liabilities................... 506,363 -- 506,363
------------ ----------- ------------ ------------
$ 9,971,881 $55,750,700 $ 31,777,000 $ 97,499,581

STOCKHOLDERS' EQUITY:
Total stockholders' equity........ 139,062,857 38,247,300 297,981,300 (E) $475,291,457
------------ ----------- ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY............ $149,034,738 $93,998,000 $329,758,300 $572,791,038
============ =========== ============ ============
</TABLE>

See notes to pro forma condensed combined financial statements

116
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
WIT CAPITAL SOUNDVIEW ADJUSTMENTS COMBINED
------------ ----------- -------------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Brokerage........................ $ 4,145,912 $61,891,000 $ 66,036,912
Investment Banking............... 19,770,061 32,052,900 51,822,961
Gains from firm investments...... 487,461 4,484,200 4,971,661
Asset management fees............ -- 5,398,000 5,398,000
Interest and dividends........... 3,175,973 758,100 3,934,073
Gain (loss) on joint venture..... -- 476,600 476,600
------------ ----------- -------------- ------------
27,579,407 105,060,800 132,640,207

EXPENSES:
Compensation and benefits........ $ 25,008,981 $56,625,900 $ 5,627,708 (F) $ 87,262,589
Brokerage and clearance.......... 3,262,709 10,393,400 13,656,109
Occupancy........................ 603,109 1,563,500 2,166,609
Technology development........... 1,706,840 -- 1,706,840
Professional services............ 3,416,913 3,790,500 7,207,413
Marketing and business
development.................... 1,634,613 4,682,800 6,317,413
Data processing and
communications................. 2,336,750 2,846,200 5,182,950
Depreciation and amortization.... 864,020 1,115,300 1,979,320
Amortization of intangible
assets......................... -- -- 14,252,249 (G) 14,252,249
Other operating expenses......... 1,510,628 1,519,300 3,029,928
------------ ----------- -------------- ------------
40,344,563 82,536,900 19,879,957 142,761,420
------------ ----------- -------------- ------------
Income(loss) before income
taxes.......................... (12,765,156) 22,523,900 (19,879,957) (10,121,213)
Income tax expense (benefit)..... -- 9,516,900 (9,807,242)(H) (290,342)
------------ ----------- -------------- ------------
(12,765,156) 13,007,000 (10,072,715) (9,830,871)
Equity in net loss of
subsidiaries................... (24,348) -- -- (24,348)
------------ ----------- -------------- ------------
Net income(loss)............... $(12,789,504) $13,007,000 $ (10,072,715) $ (9,855,219)
============ =========== ============== ============
NET INCOME (LOSS) PER SHARE
Basic.......................... $ (0.40) $ 13.09 $ -- $ (0.23)
Diluted........................ $ (0.40) $ 5.24 $ -- $ (0.23)

WEIGHTED AVERAGE SHARES USED IN
THE COMPUTATION OF NET INCOME
(LOSS) PER SHARE
Basic.......................... 31,902,168 993,655 -- 42,911,516 (I)
Diluted........................ 31,902,168 2,480,207 -- 42,911,516 (I)
</TABLE>

See notes to pro forma condensed combined financial statements

117
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1998

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
WIT CAPITAL SOUNDVIEW ADJUSTMENTS COMBINED
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Brokerage.......................... $ 294,454 $64,562,100 $ 64,856,554
Investment banking................. 1,515,105 10,259,400 11,774,505
Gains from firm investments........ 45,370 3,163,400 3,208,770
Asset management fees.............. -- 6,332,900 6,332,900
Interest and dividends............. 182,880 814,400 997,280
Gain (loss) on joint venture....... -- (832,400) (832,400)
----------- ----------- ------------ ------------
2,037,809 84,299,800 86,337,609

EXPENSES:
Compensation and benefits.......... $ 4,444,271 $42,507,800 $ 7,503,611 $ 54,455,682
Brokerage and clearance............ 186,322 9,433,700 9,620,022
Occupancy.......................... 237,334 2,016,000 2,253,334
Technology development............. 1,155,959 -- 1,155,959
Professional services.............. 877,822 4,239,300 5,117,122
Marketing and business
development...................... 1,205,965 3,773,600 4,979,565
Data processing and
communications................... 625,231 3,690,800 4,316,031
Depreciation and amortization...... 896,652 1,286,500 2,183,152
Amortization of intangible
assets........................... -- -- 19,002,998 (G) 19,002,998
Other operating expenses........... 1,202,143 1,879,600 3,081,743
----------- ----------- ------------ ------------
10,831,699 68,827,300 26,506,609 106,165,608
----------- ----------- ------------ ------------
Income (loss) before income
taxes............................ (8,793,890) 15,472,500 (26,506,609) (19,827,999)
Income tax expense (benefit)....... -- 6,556,500 (8,594,883)(H) (2,038,383)
----------- ----------- ------------ ------------
(8,793,890) 8,916,000 (17,911,726) (17,789,616)
Equity in net loss of
subsidiaries..................... -- -- -- --
----------- ----------- ------------ ------------
Net income (loss).................. $(8,793,890) $ 8,916,000 $(17,911,726) $(17,789,616)
=========== =========== ============ ============
NET INCOME (LOSS) PER SHARE........
Basic............................ $ (1.23) $ 9.62 $ -- $ (0.98)
Diluted.......................... $ (1.23) $ 4.15 $ -- $ (0.98)
WEIGHTED AVERAGE SHARES USED IN THE
COMPUTATION OF NET INCOME (LOSS)
PER SHARE
Basic............................ 7,140,123 926,526 -- 18,149,471(I)
Diluted.......................... 7,140,123 2,146,200 -- 18,149,471(I)
</TABLE>

See notes to pro forma condensed combined financial statements

118
<PAGE>
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS:

(A) Represents estimated costs of approximately $7,000,000 that primarily
represent investment banking and professional fees to be incurred in
connection with the merger.

(B) The excess of purchase price is allocated to intangible assets with
corresponding respective lives as follows:

<TABLE>
<CAPTION>
INTANGIBLE ASSETS AMOUNT LIFE
- ----------------- ------ ----
<S> <C> <C>
Institutional customer relationships........................ $ 66,000,000 16 years
Noncompete agreements....................................... 4,200,000 4 years
Investment advisory contract................................ 3,700,000 3 years
Goodwill.................................................... 251,893,300 20 years
------------
$325,793,300
============
</TABLE>

The allocation of the purchase price and the determination of the useful
lives of the intangible assets was based on an independent appraisal as of a
preliminary date.

(C) Adjustment to the valuation allowance for deferred tax assets related to Wit
Capital's net operating loss carryforwards based upon the filing of
consolidated tax returns for the combined company.

(D) Adjustment to record deferred tax liabilities at an assumed rate of 43%
related to the excess of the purchase price allocated to intangibles, other
than goodwill.

(E) For purposes of determining consideration paid the stock election was
assumed. The measurement date for valuing the shares to be issued for
accounting purposes will be the last date the number of shares to be issued
becomes fixed without subsequent revision. For purposes of determining
consideration paid for the pro forma financial statements, 11,009,348 shares
of Wit Capital's common stock, and options to purchase 6,905,945 shares of
common stock, pursuant to the formula for the exchange ratio, were assumed
to be issued and granted at a market price of $18.98. The market price was
calculated using an average of the closing bid and asked price of the stock
for a period of 2 days before and after the measurement date of November 1,
1999, as November 1 was the last date the number of shares to be issued
changed during November.

(F) The adjustment for compensation and benefits reflects the period expense
related to the issuance of 1,346,802 shares of restricted common stock to
designated SoundView employees for the retention bonus pool, pursuant to the
formula for the exchange ratio, at an assumed price of $19.50, the closing
market price of Wit Capital's stock on November 30, 1999. Half of the shares
will vest 30 months after the merger and the remaining half will vest
42 months after the merger. Compensation expense will be recorded ratably
over the vesting period.

(G) Reflects the amortization of intangible assets and goodwill on a straight
line basis over the estimated useful lives.

(H) Reflects the combined federal and state and local taxes for the combined
company at an estimated tax rate of 43% and includes the deferred tax
benefit related to the amortization of the deferred tax liabilities
established in connection with the recording of intangible assets utilizing
the respective estimated life of the intangible asset.

(I) Because the combined company reported a net loss in each of the periods
above, the calculation of pro forma diluted earnings per share does not
include the restricted common stock issued to designated SoundView employees
related to the retention pool and options issued to SoundView employees to
replace existing SoundView options or any Wit Capital common stock
equivalents as they are anti-dilutive and would result in a reduction of net
loss per share.

119
<PAGE>
COMPARISON OF RIGHTS OF WIT CAPITAL STOCKHOLDERS
AND SOUNDVIEW STOCKHOLDERS

The rights of Wit Capital stockholders are currently governed by the
Delaware General Corporation Law (the "DGCL"), Wit Capital's amended and
restated certificate of incorporation and Wit Capital's by-laws. The rights of
SoundView stockholders are currently governed by the DGCL, SoundView's
certificate of incorporation and SoundView's by-laws. Upon completion of the
merger, the rights of SoundView stockholders who become stockholders of Wit
Capital in the merger will be governed by the DGCL, Wit Capital's amended and
restated certificate of incorporation and Wit Capital's by-laws.

The following description summarizes the material differences which may
affect the rights of stockholders of Wit Capital and SoundView but does not
purport to be a complete statement of all such differences or a complete
description of the specific provisions referred to in this summary. The
identification of specific differences is not intended to indicate that other
equally or more significant differences do not exist. Stockholders should read
carefully the relevant provisions of the DGCL, Wit Capital's amended and
restated certificate of incorporation, Wit Capital's by-laws, SoundView's
certificate of incorporation and SoundView's by-laws.

CAPITALIZATION

SOUNDVIEW. The total authorized shares of capital stock of SoundView
consist of 6,000,000 shares of common stock, $.01 par value per share. At the
close of business on October 31, 1999, there were 2,515,562 shares of SoundView
common stock issued and outstanding and 1,577,962 shares of SoundView common
stock subject to options to purchase SoundView common stock and reserved for
issuance upon exercise of such options. The SoundView board of directors does
not have any rights to issue preferred stock without an amendment to SoundView's
certificate of incorporation authorizing the board to do so.

WIT CAPITAL. Wit Capital's authorized capital stock and Wit Capital's board
of directors' right to issue preferred stock are described above under
"Description of Wit Capital's Stock."

VOTING RIGHTS

SOUNDVIEW. Each holder of SoundView common stock is entitled to one vote
for each share held of record. Elections of directors are determined by a
plurality of the votes cast by the stockholders entitled to vote at the
election. Cumulative voting is not permitted.

WIT CAPITAL. Each holder of Wit Capital common stock is entitled to one
vote for each share held of record. Elections of directors are determined by a
plurality of the votes cast by the stockholders entitled to vote at the
election. Cumulative voting is not permitted.

NUMBER, ELECTION, VACANCY AND REMOVAL OF DIRECTORS

SOUNDVIEW. SoundView's board of directors currently has 4 members.
SoundView's by-laws provide that the number of directors will not be less than
one with the number of directors to be determined from time to time by
resolution of SoundView's board of directors or stockholders.

SoundView's certificate of incorporation provides that a vacancy on the
SoundView board of directors, including vacancies resulting from enlargements of
the board of directors, may be filled only by a resolution of a majority of the
directors then in office, even though less than a quorum. A director elected to
fill a vacancy is elected to hold office until the next annual meeting of the
stockholders, subject to the election and qualification of his or her successor
and to his or her earlier death, registration or removal.

SoundView's by-laws provide that directors may be removed with or without
cause, by the affirmative vote of the holders of a majority of the shares of
capital stock then entitled to vote in the election of directors.

120
<PAGE>
WIT CAPITAL. Wit Capital's by-laws provide that the Wit Capital board of
directors will not be less than one director. The exact number of directors will
be fixed from time to time, within the limits specified in the amended and
restated certificate of incorporation or in the by-laws, by a by-law or
amendment thereof duly adopted by the vote of a majority of the shares entitled
to vote represented at a duly held meeting at which a quorum is present or by
the board of directors. The number is currently fixed at 9 and will be increased
to 10 in connection with the merger. Wit Capital's amended and restated
certificate of incorporation provides that the board of directors is divided
into three classes of directors, serving staggered three-year terms.

Wit Capital's amended and restated certificate of incorporation provides
that a vacancy on the Wit Capital board of directors or an increase in the
number of directors may be filled by a resolution of a majority of the directors
then in office, even though less than a quorum. A director elected to fill a
vacancy or newly created directorship will serve for the remainder of the full
term of the class of directors in which the new directorship was created or the
vacancy occurred and until such director's successor will have been duly elected
and qualified.

AMENDMENTS TO CERTIFICATES OF INCORPORATION

SOUNDVIEW. SoundView's certificate of incorporation requires the
affirmative vote of the holders of shares representing at least a majority of
the shares of capital stock issued and outstanding and entitled to vote.

WIT CAPITAL. Wit Capital's amended and restated certificate of
incorporation requires the affirmative vote of the holders of at least
two-thirds of the voting power of all outstanding shares of capital stock
entitled to vote generally for the election of directors to alter, amend, adopt
any provision inconsistent with the current provisions, or repeal:

- any provision relating to the number, classification, term of office,
meetings, removal and election of Wit Capital's board of directors; and

- any by-law.

Other amendments to Wit Capital's amended and restated certificate of
incorporation require the approval of a majority of the shares of capital stock
issued and outstanding and entitled to vote.

AMENDMENTS TO BY-LAWS

SOUNDVIEW. SoundView's by-laws provide that they may be altered, amended or
repealed and new by-laws may be adopted as follows:

- by the affirmative vote of the holders of a majority of the shares of
SoundView common stock issued and outstanding; or

- by the unanimous vote of the board of directors.

WIT CAPITAL. Wit Capital's amended and restated certificate of
incorporation and by-laws provide that Wit Capital's by-laws may be repealed,
altered or amended and new by-laws may be adopted as follows:

- at any annual or special meeting of stockholders, by the affirmative vote
of at least two-thirds of the voting power of all outstanding shares of
capital stock entitled to vote generally in the election of directors,
provided that in the case of a special meeting, that notice of repeal,
alteration, amendment or adoption was included in the notice of the
meeting; or

- by the affirmative vote of a majority of all the members of the board of
directors or at any annual, regular or special meeting, provided that in
the case of a special meeting, that notice of the repeal, alteration,
amendment or adoption was included in the notice of the meeting.

121
<PAGE>
STOCKHOLDER ACTION

SOUNDVIEW. SoundView's by-laws provide that stockholders may take any
action by written consent in lieu of a meeting.

WIT CAPITAL. Wit Capital's amended and restated certificate of
incorporation provides that stockholders may not take action by written consent
in lieu of a meeting.

NOTICE OF STOCKHOLDER ACTIONS

SOUNDVIEW. SoundView's certificate of incorporation and by-laws are silent
with respect to the required notice for stockholder actions.

WIT CAPITAL. Wit Capital's by-laws provide that a stockholder must give
advance written notice of nominations for election of directors and to properly
bring business before a meeting of stockholders.

Nominations for election to the board of directors of Wit Capital at an
annual meeting of stockholders, other than those made by or on behalf of the
board of directors, must be made by notice in writing delivered or mailed to the
secretary, and received not less than 90 days nor more than 120 days prior to
the anniversary of last year's annual meeting (or in the case of the annual
meeting of stockholders to be held in 2000, not fewer than 90 nor more than
120 days prior to May 1, 2000).

In the event that the date of an annual meeting is more than 30 days before
or more than 60 days after the date of the annual meeting in the preceding year,
notice by a stockholder to be timely must be given not earlier than the close of
business on the 120(th) day prior to the annual meeting and not later than the
close of business on the later of the 90(th) day prior to the annual meeting or
the 10(th) day following the day on which public announcement or disclosure of
the date of the meeting is first made by Wit Capital. The public announcement of
an adjournment of an annual meeting will not commence a new time period for the
giving of notice by a stockholder.

In the event that the number of directors to be elected to the board of
directors at an annual meeting of stockholders is increased by virtue of an
increase in the size of the board of directors and either all of the nominees
for director at the annual meting of stockholders or the size of the increased
board of directors is not publicly announced or disclosed by Wit Capital at
least 100 days prior to the first anniversary of the annual meeting in the
preceding year (or, in the case of the annual meeting of stockholders to be held
in 2000, at least 100 days prior to May 1, 2000), a notice given by a
stockholder will also be considered timely, but only with respect to nominees to
stand for election at the annual meeting as the result of any new positions
created by such increase, if it is delivered to the corporate secretary at Wit
Capital's principal executive offices not later than the close of business on
the 10(th) day following the first day on which all such nominees or the size of
the increased board of directors is publicly announced or disclosed.

For nominations by a stockholder to be properly brought before a special
meeting of stockholders called for the purpose of electing directors, the
stockholder must give timely notice in writing to the corporate secretary of Wit
Capital. To be timely, a stockholder's notice must be given to the corporate
secretary at Wit Capital's principal executive offices not later than the close
of business on the 90(th) day nor earlier than the close of business on the
120(th) day prior to such special meeting, or the 10(th) day following the day
on which the public announcement or disclosure is first made of the date of the
special meeting. The public announcement or disclosure of an adjournment of a
special meeting will not commence a new time period for the giving of notice by
a stockholder.

SPECIAL STOCKHOLDER MEETINGS

SOUNDVIEW. SoundView's by-laws provide that special meetings of SoundView's
stockholders may be called only by the chairman of the board of directors or by
the corporate secretary pursuant to written

122
<PAGE>
instructions of either the president or a majority of the board of directors.
Business transacted at any special meeting of stockholders shall be limited to
matters stated in the notice of meeting.

WIT CAPITAL. Wit Capital's by-laws provide that special meetings of Wit
Capital's stockholders may be called only by a chief executive officer or a
majority of the board of directors.

Only the persons who are nominated in accordance with the procedures set
forth in the by-laws are eligible to serve as directors and only such business
is conducted at a meeting of stockholders as has been brought before the meeting
in accordance with the by-laws.

LIMITATION ON DIRECTORS' LIABILITIES

Section 145 of the DGCL provides that a corporation's certificate of
incorporation may include a provision permitting indemnification of its
officers, directors or employees against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement in connection with legal
proceedings if the officer, director or employee acted in good faith and in a
manner he reasonably believed to be in or not opposed to our best interests,
and, with respect to any criminal act or proceeding, he had no reasonable cause
to believe his conduct was unlawful. Indemnification is not permitted as to any
matter as to which the person is adjudged to be liable unless, and only to the
extent that, the court in which such action or suit was brought upon application
that, despite the adjudication of liability, but in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper. Individuals who
successfully defend such an action are entitled to indemnification against
expenses reasonably incurred in connection therewith.

SOUNDVIEW. SoundView's certificate of incorporation limits, to the maximum
extent permitted under Delaware law, the personal liability of directors and
officers for monetary damages for breach of their fiduciary duties as directors
and officers, except in certain circumstances involving certain wrongful acts,
such as a breach of the director's duty of loyalty or acts of omission which
involve intentional misconduct or a knowing violation of law.

SoundView's by-laws require it to indemnify directors and officers against,
to the fullest extent permitted by law, liabilities which they may incur under
the circumstances described in the preceding paragraph.

WIT CAPITAL. Wit Capital's amended and restated certificate of
incorporation limits, to the maximum extent permitted by law, the personal
liability of directors and officers for monetary damages for breach of their
fiduciary duties as directors and officers, except in certain circumstances
involving certain wrongful acts, such as a breach of the director's duty of
loyalty or acts of omission which involve intentional misconduct or a knowing
violation of law.

Wit Capital's by-laws require it to indemnify directors and officers
against, to the fullest extent permitted by law, liabilities which they may
incur under the circumstances described in the preceding paragraph.

Wit Capital plans to maintain standard policies of insurance under which
coverage is provided (1) to directors and officers against loss arising from
claims made by reason of breach of duty or other wrongful act and (2) to it with
respect to payments which may be made by it to such officers and directors
pursuant to the above indemnification provision or otherwise as a matter of law.

In addition, Wit Capital has entered into indemnification agreements with
its directors and executive officers. Under these agreements, Wit Capital agrees
to indemnify each director and officer to the fullest extent permitted by law
for any acts performed, or for failures to act, on its behalf or on behalf of
another person or entity for which that director or officer is performing
services at its request. Wit Capital will not indemnify a director or officer
for any breach of loyalty to it or to its stockholders, or if the director or
officer does not act in good faith or for acts involving intentional misconduct,
or for acts or omissions

123
<PAGE>
falling under Section 174 of the DGCL, or for any transaction for which the
director or officer derives an improper benefit. Wit Capital agrees to indemnify
for expenses related to indemnifiable events, and to pay for these expenses in
advance. Its obligation to indemnify and to provide advances for expenses are
subject to the approval of a review process with a reviewer to be determined by
the board of directors. The rights of directors and officers will not exclude
any rights to indemnification otherwise available under law or under the amended
and restated certificate of incorporation.

DIVIDENDS

SOUNDVIEW. SoundView's certificate of incorporation is silent regarding
dividends on SoundView's common stock. SoundView's by-laws provide that
dividends may be declared and paid on SoundView common stock as determined by
the board of directors and subject to applicable law and SoundView's certificate
of incorporation.

WIT CAPITAL. The provisions of Wit Capital's amended and restated
certificate of incorporation regarding dividends are described under
"Description of Wit Capital Stock."

CONVERSION

SOUNDVIEW. Holders of SoundView common stock have no rights to convert
their shares into any other securities.

WIT CAPITAL. Holders of Wit Capital common stock have no rights to convert
their shares into any other securities. Shares of Wit Capital Class B common
stock will be automatically converted into an equal number of shares of Wit
Capital common stock if any person or entity other than Goldman Sachs or any of
its affiliates becomes the beneficial owner of such shares of Class B common
stock.

DELAWARE ANTI-TAKEOVER LAW

Both Wit Capital and SoundView are subject to Section 203 of the DGCL. In
general, Section 203 prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years following the date the person became an interested
stockholder, unless (with certain exceptions) the "business combination" or the
transaction in which the person became an "interested stockholder" is approved
in a prescribed manner. Generally, a "business combination" includes a merger,
asset or stock sale or other transaction resulting in a financial benefit to the
"interested stockholder." An "interested stockholder" is a person who, together
with affiliates and associates, owns 15% or more of a corporation's outstanding
voting stock, or was the owner of 15% or more of a corporation's outstanding
voting stock at any time within the prior three years, other than "interested
stockholders" prior to the time Wit Capital's common stock was quoted on Nasdaq.
The existence of this provision would be expected to have an anti-takeover
effect with respect to transactions not approved in advance by the board of
directors, including discouraging takeover attempts that might result in a
premium over the market price for the shares of common stock held by
stockholders. Because the respective boards of directors of Wit Capital and
SoundView approved the merger prior to the execution of the merger agreement,
the business combination that will result from the merger is not prohibited by
Section 203.

124
<PAGE>
LEGAL OPINIONS

The validity of the shares of Wit Capital common stock offered by this proxy
statement/prospectus and the federal income tax consequences in connection with
the merger will be passed upon by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York.

EXPERTS

Wit Capital has included in this proxy statement/prospectus its audited
financial statements as of December 31, 1998 and 1997 and for the years ended
December 31, 1998 and 1997 and for the period from March 27, 1996 (inception) to
December 31, 1997 along with the audit report of Arthur Andersen LLP on these
financial statements. Arthur Andersen LLP issued the report as independent
auditors and as experts in auditing and accounting.

The financial statements of SoundView Technology Group, Inc. included in
this proxy statement/ prospectus, which are referred to and made a part of this
prospectus and registration statement, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report appearing elsewhere herein,
and are included in reliance upon such report given on the authority of such
firm as experts in giving this report.

WHERE YOU CAN FIND MORE INFORMATION

Wit Capital files periodic reports, proxy statements and other information
with the Securities and Exchange Commission. It has filed with the Securities
and Exchange Commission a registration statement on Form S-4 with respect to the
common stock being issued in the merger. This proxy statement/ prospectus is a
part of that registration statement and constitutes a proxy statement and
prospectus of Wit Capital for use at its special meeting. This proxy
statement/prospectus does not contain all of the information set forth in the
registration statement and the exhibits and schedules thereto. For further
information with respect to Wit Capital or the shares of common stock being
issued in the merger, reference is made to the registration statement, including
the exhibits and schedules thereto. Statements contained in this proxy
statement/prospectus as to the contents of any contract or other document
referred to herein are not necessarily complete and, where such contract is an
exhibit to the registration statement, each such statement is qualified in all
respects by the provisions of such exhibit, to which such reference is hereby
made. You may read and copy any document Wit Capital files at the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and the Securities and Exchange
Commission's Regional Offices located at 500 West Madison Street, Suite 1400,
Chicago, IL 60661, and 7 World Trade Center, 13th Floor, New York, NY 10048. Wit
Capital's filings are also available to the public at the Web site maintained by
the Securities and Exchange Commission at http://www.sec.gov. Wit Capital's
filings may also be inspected at the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

In addition, an electronic version of this proxy statement/prospectus is
available on Wit Capital's Web site at http://www.witcapital.com/[ ]. Other
than the electronic version of this proxy statement/ prospectus that is
available on the Web site, none of the information on Wit Capital's Web site is
part of this proxy statement/prospectus.

125
<PAGE>
WIT CAPITAL GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Consolidated Statements of Financial Condition as of
September 30, 1999 (unaudited) and December 31, 1998...... F-1

Consolidated Statements of Operations for the three and nine
months ended September 30, 1999 (unaudited) and
September 30, 1998 (unaudited)............................ F-2

Consolidated Statements of Cash Flows for the nine months
ended September 30, 1999 (unaudited) and September 30,
1998 (unaudited).......................................... F-3

Notes to Consolidated Financial Statements.................. F-4

Report of Independent Public Accountants.................... F-8

Consolidated Statements of Financial Condition as of
December 31, 1998 and 1997................................ F-9

Consolidated Statements of Operations for the years ended
December 31, 1998 and 1997 and for the period from
March 27, 1996 (inception) to December 31, 1996........... F-10

Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1998 and 1997 and for
the period from March 27, 1996 (inception) to
December 31, 1996......................................... F-11

Consolidated Statements of Cash Flows for the years ended
December 31, 1998 and 1997 and for the period from
March 27, 1996 (inception) to December 31, 1996........... F-12

Notes to Consolidated Financial Statements.................. F-13

Schedule to Consolidated Financial Statements............... F-21

Note to Schedule to Consolidated Financial Statements....... F-25
</TABLE>

126
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Auditors.............................. F-26

Consolidated Statements of Financial
Condition--September 30, 1999 (unaudited),
December 31, 1998 and 1997................................ F-27

Consolidated Statements of Income--For the nine months ended
September 30, 1999 (unaudited) and 1998 (unaudited) and
the years ended December 31, 1998, 1997 and 1996.......... F-28

Consolidated Statements of Changes in Stockholders'
Equity--For the nine months ended September 30, 1999
(unaudited) and the years ended December 31, 1998, 1997
and 1996.................................................. F-29

Consolidated Statements of Cash Flows--For the nine months
ended September 30, 1999 (unaudited) and 1998 (unaudited)
and the years ended December 31, 1998, 1997 and 1996...... F-30

Notes to Consolidated Financial Statements.................. F-31
</TABLE>

127
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS................................... $ 9,376,811 $ 18,110,146
RECEIVABLE FROM CLEARING BROKER............................. 1,799,209 119,312
SECURITIES OWNED, at market or fair value................... 122,337,858 758,293
INVESTMENT BANKING FEES RECEIVABLE.......................... 3,568,225 512,952
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net of
accumulated depreciation and amortization of $723,363 and
$243,527 at September 30, 1999 and December 31, 1998,
respectively.............................................. 3,871,007 615,181
COMPUTER SOFTWARE, net of accumulated amortization of
$854,439 and $560,277 at September 30, 1999 and December
31, 1998, respectively.................................... 4,077,798 1,614,735
PREPAID EXPENSES............................................ 1,078,027 144,430
OTHER ASSETS................................................ 2,925,803 421,357
------------ ------------
Total assets.......................................... $149,034,738 $ 22,296,406
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses..................... $ 3,208,833 $ 399,827
Accrued compensation...................................... 6,256,685 632,636
Other liabilities......................................... 506,363 655,689
------------ ------------
Total liabilities..................................... 9,971,881 1,688,152
------------ ------------

STOCKHOLDERS' EQUITY:
Series A Preferred Stock, $.01 par value, 9,000,000 shares
authorized, 8,997,952 shares issued and outstanding at
December 31, 1998....................................... -- 89,980
Series B Preferred Stock, $.01 par value, 3,000,000 shares
authorized, 2,304,982 shares issued and outstanding at
December 31, 1998....................................... -- 23,050
Series C Preferred Stock, $.01 par value, 7,445,000 shares
authorized, 5,902,750 shares issued and outstanding at
December 31, 1998....................................... -- 59,028
Series D Preferred Stock, $.01 par value, 10,000,000
shares authorized, 9,933,334 shares issued and
outstanding at December 31, 1998........................ -- 99,333
Common Stock, $.01 par value, 60,000,000 shares
authorized, 11,264,600 shares issued and outstanding at
December 31, 1998....................................... -- 112,647
Common Stock, $.01 par value, 500,000,000 shares
authorized, 8,740,000 shares issued and outstanding at
September 30, 1999...................................... 87,400 --
Common Stock, Class B, $.01 par value, 75,000,000 shares
authorized, 11,666,667 shares issued and outstanding at
September 30, 1999...................................... 116,667 --
Common Stock, Class C, $.01 par value, 159,000,000 shares
authorized, 51,915,902 shares issued and outstanding at
September 30, 1999...................................... 519,159 --
Additional paid-in capital................................ 183,562,216 39,534,657
Notes receivable from stockholders........................ (15,333,070) (5,750,000)
Deferred compensation..................................... (3,539,570) --
Accumulated deficit....................................... (26,349,945) (13,560,441)
------------ ------------
Total stockholders' equity............................ 139,062,857 20,608,254
------------ ------------
Total liabilities and stockholders' equity............ $149,034,738 $ 22,296,406
============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-1
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------- --------------------------
<S> <C> <C> <C> <C>
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
30, 30, 30, 30,
1999 1998 1999 1998
----------- ----------- ------------ -----------
REVENUES:
Investment banking.................... $8,401,027 $ 879,340 $ 19,770,061 $ 1,093,538
Brokerage............................. 2,144,121 49,983 4,145,912 149,364
Interest.............................. 1,807,704 26,761 3,175,973 72,228
Other................................. 43,130 -- 487,461 --
----------- ----------- ------------ -----------
Total revenues.................. 12,395,982 956,084 27,579,407 1,315,130
----------- ----------- ------------ -----------
EXPENSES:
Compensation and benefits............. 9,862,396 1,481,838 25,008,981 2,720,923
Brokerage and clearance............... 1,698,484 36,921 3,262,709 92,240
Professional services................. 1,650,102 270,180 3,416,913 534,822
Data processing and communications.... 1,153,096 199,009 2,336,750 469,784
Technology development................ 844,957 323,991 1,706,840 607,345
Marketing and business development.... 577,527 239,545 1,634,613 844,597
Depreciation and amortization......... 364,967 282,305 864,020 709,794
Occupancy............................. 299,606 87,797 603,109 176,479
Other................................. 1,011,970 366,964 1,510,628 729,363
----------- ----------- ------------ -----------
Total expenses.................. 17,463,105 3,288,550 40,344,563 6,885,347
----------- ----------- ------------ -----------
Net loss before equity in net
loss of subsidiaries.......... (5,067,123) (2,332,466) (12,765,156) (5,570,217)
Equity in net loss of
subsidiaries.................. (24,348) -- (24,348) --
----------- ----------- ------------ -----------
Net loss........................ $(5,091,471) $(2,332,466) $(12,789,504) $(5,570,217)
=========== =========== ============ ===========
BASIC AND DILUTED NET LOSS PER SHARE:..... $ (.08) $ (.33) $ (.40) $ (.78)
WEIGHTED AVERAGE SHARES USED IN THE
COMPUTATION OF BASIC AND DILUTED NET
LOSS PER SHARE:......................... 63,345,889 7,159,595 31,902,168 7,108,933
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-2
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1999 1998
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(12,789,504) $(5,570,217)
Adjustments to reconcile net loss to net cash used in
operating activities--
Noncash expenses...................................... 106,772 838,833
Depreciation and amortization......................... 864,020 709,794
(Increase) decrease in operating assets--
Receivable from clearing broker......................... (1,679,897) (266,004)
Securities owned........................................ (537,155) (211,996)
Investment banking fees receivable...................... (3,055,273) (420,918)
Other assets............................................ (2,504,446) (291,081)
Prepaid expenses........................................ (933,597) 196,527
Increase (decrease) in operating liabilities--
Accounts payable and accrued expenses................... 2,809,006 (273,734)
Accrued compensation.................................... 5,624,049 167,545
Other liabilities....................................... (149,326) 564,615
------------ -----------
Net cash used in operating activities................. (12,245,351) (4,556,636)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments, net.................. (121,042,410) --
Computer software purchased............................... (2,847,225) (63,542)
Payments for purchases of furniture, equipment and
leasehold improvements.................................. (3,735,662) (208,233)
------------ -----------
Cash used in investing activities..................... (127,625,297) (271,775)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes receivable from stockholders........................ (615,833) --
Net proceeds from initial public offering of common
stock................................................... 72,782,731 --
Proceeds from issuance of common stock.................... 2,535,673 10,300
Net proceeds from issuance of preferred stock............. 56,434,742 9,145,165
------------ -----------
Net cash provided by financing activities............. 131,137,313 9,155,465
------------ -----------
Net increase (decrease) in cash and cash
equivalents......................................... (8,733,335) 4,327,054
CASH AND CASH EQUIVALENTS, beginning of period.............. 18,110,146 1,110,787
------------ -----------
CASH AND CASH EQUIVALENTS, end of period.................... $ 9,376,811 $ 5,437,841
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for--
Interest.............................................. $ 3,228 $ 5,743
Taxes................................................. 18,000 23,581
NON-CASH TRANSACTIONS:
Issuance of common stock for web site development......... $ -- $ 99,650
Issuance of common stock to stockholders for notes
receivable.............................................. 8,784,488 4,025,000
Issuance of common stock for consulting services.......... 40,613 --
Issuance of restricted stock to employees................. 105,310 --
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-3
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

Wit Capital Group, Inc. ("WCG" or the "Company") was incorporated on
March 27, 1996 and commenced operations in September 1997. The accompanying
unaudited consolidated financial statements include the accounts of WCG and its
wholly owned subsidiaries, Wit Capital Corporation ("WCC"), BidPlus Corporation
("BidPlus") and Wit Capital Private Equity Advisors LLC ("WCPEA"). All
significant intercompany balances and transactions have been eliminated in
consolidation. Certain balances have been reclassified to conform with current
period presentation.

In June 1999, the Company completed an initial public offering and issued
8,740,000 shares of its common stock at a price of $9.00 per share. The Company
received approximately $72.8 million in proceeds, net of underwriting discounts
and other offering costs. Simultaneously with the closing of the initial public
offering, each outstanding share of series A, B, C and D preferred stock was
converted into class C common stock. All outstanding shares of series E
preferred stock were converted into an equivalent number of shares of class B
common stock.

In July 1999, the Company entered into a joint venture agreement with Trans
Cosmos, Inc. and an investment agreement with Mitsubishi Corporation to
establish a Japanese Internet investment banking firm now known as Wit Capital
Japan Inc. ("Wit Capital Japan"). Wit Capital Japan was incorporated in
August 1999 and is based in Tokyo. Start of operations is anticipated to be
early 2000. As anticipated, in October 1999, Wit Capital Japan signed a second
round of financing which will reduce the Company's ownership in the joint
venture from 60 percent to approximately 30 percent, although the Company has an
option to purchase an additional 10 percent within six months of investors
funding the second round of financing. The Company accounts for its investment
in Wit Capital Japan under the equity method.

In August 1999, the Company created an alliance with Dawntreader LLC
("Dawntreader"), the investment advisor to an early stage internet fund
established in 1998 by the Company's Chairman and Co-Chief Executive Officer.
WCPEA holds a 50 percent interest in a newly created, jointly controlled entity,
Wit/Dawntreader Advisors LLC which serves as the investment advisor of Arista
Capital Partners, LP, a newly formed private equity fund. In October 1999, the
Company entered into agreements with the management team of Dawntreader for
these individuals to become employees of the Company.

These financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC") and, in the
opinion of management, reflect all adjustments necessary for a fair presentation
of the results for the periods presented in conformity with generally accepted
accounting principles. These financial statements should be read in conjunction
with the Company's audited financial statements included in the Company's
prospectus filed with the SEC on June 4, 1999. Results of the interim periods
are not necessarily indicative of results to be obtained for a full fiscal year.

F-4
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. NET LOSS PER SHARE

The following table sets forth the calculation of shares used in the
computation of basic and diluted net loss per share

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
1999 1998 1999 1998
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Shares used in computations:
Weighted average common shares used in
computation of basic net loss per share..... 63,345,889 7,159,595 31,902,168 7,108,933
Dilutive effect of common stock equivalents... -- -- -- --
---------- --------- ---------- ---------
Weighted average shares used in
computation of diluted net loss per
share................................... 63,345,889 7,159,595 31,902,168 7,108,933
========== ========= ========== =========
</TABLE>

Because the Company reported a net loss in each of the periods above, the
calculation of diluted earnings per share does not include convertible preferred
stock, options, warrants and common stock collateralizing the notes receivable
from stockholders, as they are anti-dilutive and would result in a reduction of
net loss per share. If the Company had reported net income, there would have
been an additional 21,911,174 and 7,718,642 shares for the quarters ended
September 30, 1999 and 1998, respectively, and an additional 14,739,989 and
6,681,244 shares for the nine months ended September 30, 1999 and 1998,
respectively included in the calculation of diluted earnings per share.

3. STOCK OPTION PLAN

WCG has adopted a stock incentive plan (the "Plan") that permits the
granting of stock options, restricted stock and other awards to employees,
directors and certain consultants of WCG. The exercise price of any share
covered by an option granted to a person owning more than 10% of the voting
power of all classes of stock of WCG cannot be less than 110% of the fair market
value on the day of the grant. The exercise price of any share covered by an
option granted to any person cannot be less than 85% of the fair value on the
day of the grant. Options expire five or ten years from the date of grant, with
the majority of the options expiring in the year 2008.

As permitted by Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," ("SFAS No. 123") WCG has accounted
for options granted to employees using the intrinsic value method prescribed by
Accounting Practice Bulletin ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees." WCG has granted options with exercise prices that are
equal to or greater than management's estimate of the fair value of such common
stock at the date of grant, and accordingly, the Company has recorded no related
compensation expense. For restricted stock issued with future service
requirements, compensation expense is recognized over the relevant vesting
period.

During the period from January 1, 1999 to September 30, 1999, the Company
granted options to purchase 7,184,151 shares to new employees at exercise prices
between $1.43 and $34.88 per share.

4. WARRANTS

The Company has 6,527,226 outstanding warrants as of September 30, 1999 with
a range of exercise prices between $1.43 and $5.57. These warrants are
exercisable for 889,931 shares of Class C Common Stock (prior to December 7,
1999, and New Common Stock thereafter) and 5,637,295 shares of Class B Common
Stock.

5. CONTINGENCIES

The Company is currently subject to claims and legal proceedings arising in
the normal course of its business. In the opinion of management, the resolution
of such legal proceedings should not have a material adverse effect on the
financial position, results of operations or liquidity of the Company.

F-5
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. CONTINGENCIES (CONTINUED)

A person formerly associated with the Company has asserted a right to
purchase 560,000 shares of common stock at $1.43 per share. In the opinion of
management, such assertion is without merit, and the Company intends to contest
any lawsuit filed against it. These 560,000 shares of common stock have been
reported as forfeited stock options in 1998.

6. CAPITAL REQUIREMENT

WCC is subject to the SEC's Uniform Net Capital Rule 15c3-1. WCC's net
capital, as defined, is required to be the greater of $100,000 or the minimum
net capital required based on aggregate indebtedness. As of September 30, 1999
and December 31, 1998, WCC's ratio of aggregate indebtedness to net capital was
.17 to 1 and .09 to 1 and its net capital was $36,997,059 and $8,446,190, which
was $36,586,380 and $8,346,190 in excess of the minimum net capital
requirements, respectively.

7. SUBSEQUENT EVENTS

On October 26, 1999, the Company and enba plc ("enba") announced their
intention to combine their efforts to establish a Pan-European investment
banking firm, to be known as Wit Capital Europe. Start of operations is
anticipated to occur in early 2000. The Company and enba will jointly control
Wit Capital Europe and will initially own 55 percent and 45 percent,
respectively of the equity of Wit Capital Europe. In proportion to their equity
stakes, the Company and enba contributed an aggregate of $10 million to the
joint venture. The Company also entered into a subscription agreement to acquire
189,748 shares of enba in exchange for 1,878,596 shares of the Company's common
stock.

On October 29, 1999 the Company entered into an agreement with SoundView
Technology Group, Inc. ("SoundView") to acquire by merger 100 percent of the
outstanding shares of SoundView, a Connecticut-based private broker-dealer and
investment banking firm focused exclusively on technology. Under the terms of
the agreement, WCG will acquire the outstanding shares of SoundView in exchange
for approximately $320 million consisting of newly issued common stock, options
replacing SoundView options and up to $30 million in cash. The exchange ratio in
the merger is subject to adjustment for changes in the market price of the
Company's stock from $17.56 up to $18.56 or down to $15.56 and is not adjustable
for changes beyond these levels. Accordingly, the final value of the transaction
could be either greater than or less than $320 million. A limited cash election
feature allows each shareholder to receive a cash payment in lieu of common
stock subject to an overall limitation, including any shareholders exercising
dissenter's rights, of $30 million. The Board of Directors of each company and
the shareholders of SoundView have approved the transaction, which is expected
to close in January or February 2000. Completion is contingent on Wit Capital
stockholder approval, regulatory approval and other customary closing
conditions.

F-6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
Wit Capital Group, Inc.:

We have audited the accompanying consolidated statements of financial
condition of Wit Capital Group, Inc. (a Delaware corporation) and subsidiaries
as of December 31, 1998 and 1997, and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for the years ended
December 31, 1998 and 1997 and for the period from March 27, 1996 (inception) to
December 31, 1996. These financial statements and the schedule referred to below
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Wit Capital Group, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for the years ended December 31, 1998 and 1997
and for the period from March 27, 1996 (inception) to December 31, 1996, in
conformity with generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index on page
127 is presented for the purpose of complying with the Securities and Exchange
Commission's rules and is not a part of the basic financial statements. Such
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

New York, New York
February 16, 1999 (except for the
matters discussed in note 8, for which
the date is March 9, 1999, and note 12
for which the dates are April 23,
1999, May 26, 1999 and June 2, 1999,
respectively)

F-7
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31, 1998 AND 1997

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1998 1997
------------ -----------
<S> <C> <C>
CASH AND CASH EQUIVALENTS................................... $ 18,110,146 $ 1,110,787

RECEIVABLE FROM CLEARING BROKER............................. 119,312 136,364

SECURITIES OWNED, at market or fair value................... 758,293 540,504

PREPAID EXPENSES............................................ 144,430 1,582,657

INVESTMENT BANKING FEES RECEIVABLE.......................... 512,952 --

FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net of
accumulated depreciation and amortization of $243,527 and
$98,757 at December 31, 1998 and 1997, respectively....... 615,181 335,044

COMPUTER SOFTWARE, net of accumulated amortization of
$560,277 and $127,050 at December 31, 1998 and 1997,
respectively.............................................. 1,614,735 2,026,420

OTHER ASSETS................................................ 421,357 104,870
------------ -----------

Total assets.......................................... $ 22,296,406 $ 5,836,646
============ ===========
</TABLE>

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<S> <C> <C>
LIABILITIES:
Accounts payable and accrued expenses..................... $ 399,827 $ 528,045
Accrued compensation...................................... 632,636 347,826
Other liabilities......................................... 655,689 101,500
------------ -----------
Total liabilities..................................... 1,688,152 977,371
------------ -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Series A Preferred Stock, $.01 par value, 9,000,000 shares
authorized; 8,997,952 and 7,720,002 shares issued and
outstanding at December 31, 1998 and 1997,
respectively............................................ 89,980 77,200
Series B Preferred Stock, $.01 par value, 3,000,000 shares
authorized; 2,304,982 shares issued and outstanding at
December 31, 1998....................................... 23,050 --
Series C Preferred Stock, $.01 par value, 7,445,000 shares
authorized; 5,902,750 shares issued and outstanding at
December 31, 1998....................................... 59,028 --
Series D Preferred Stock, $.01 par value, 10,000,000
shares authorized; 9,933,334 shares issued and
outstanding at December 31, 1998, respectively.......... 99,333 --
Common Stock, $.01 par value, 60,000,000 and 25,000,000
shares authorized; 11,264,600 and 7,056,095 shares
issued and outstanding at December 31, 1998 and 1997,
respectively............................................ 112,647 70,561
Additional paid-in capital................................ 39,534,657 9,786,065
Notes receivable from stockholders........................ (5,750,000) --
Series A Preferred Stock subscriptions receivable......... -- (308,000)
Accumulated deficit....................................... (13,560,441) (4,766,551)
------------ -----------
Total stockholders' equity............................ 20,608,254 4,859,275
------------ -----------
Total liabilities and stockholders' equity............ $ 22,296,406 $ 5,836,646
============ ===========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-8
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996
(INCEPTION) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES:
Investment banking................................... $ 1,515,105 $ 42,567 $ --
Brokerage............................................ 294,454 10,403 --
Interest............................................. 182,880 53,821 31,172
Other................................................ 45,370 138,750 10,000
----------- ----------- -----------
Total revenues................................... 2,037,809 245,541 41,172
----------- ----------- -----------
EXPENSES:
Compensation and benefits............................ 4,444,271 1,549,958 378,337
Professional services................................ 877,822 329,334 282,806
Technology development............................... 1,155,959 511,076 532,265
Data processing and communications................... 625,231 237,608 49,599
Brokerage and clearance.............................. 186,322 5,563 1,750
Depreciation and amortization........................ 896,652 229,209 9,438
Occupancy............................................ 237,334 200,673 41,889
Marketing and business development................... 1,205,965 641,334 339,741
Other................................................ 1,202,143 (466,633) 179,317
----------- ----------- -----------
Total expenses................................... 10,831,699 3,238,122 1,815,142
----------- ----------- -----------
Loss before income tax provision............... (8,793,890) (2,992,581) (1,773,970)
INCOME TAX PROVISION................................... -- -- --
----------- ----------- -----------
Net loss......................................... $(8,793,890) $(2,992,581) $(1,773,970)
=========== =========== ===========
NET LOSS PER SHARE:
Basic................................................ $ (1.23) $ (.41) $ (.33)
Diluted.............................................. (1.23) (.41) (.33)
WEIGHTED AVERAGE SHARES USED IN THE COMPUTATION OF NET
LOSS PER SHARE:
Basic.............................................. 7,140,123 7,303,013 5,378,167
Diluted............................................ 7,140,123 7,303,013 5,378,167
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-9
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 AND FOR THE PERIOD
FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
NOTES
ADDITIONAL RECEIVABLE
PREFERRED COMMON PAID-IN ACCUMULATED FROM SUBSCRIPTIONS
STOCK STOCK CAPITAL DEFICIT STOCKHOLDERS RECEIVABLE TOTAL
--------- -------- ----------- ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY,
MARCH 27, 1996....... $ -- $ -- $ -- $ -- $ -- $ -- $ --
Issuance of common
stock............ -- 79,311 3,174,563 -- -- -- 3,253,874
Issuance of Series
A Preferred
Stock............ 2,500 -- 497,500 -- -- -- 500,000
Repurchase and
retirement of
common stock..... -- (3,500) (496,500) -- -- -- (500,000)
Net loss........... -- -- -- (1,773,970) -- -- (1,773,970)
-------- -------- ----------- ------------ ----------- -------- -----------
STOCKHOLDERS' EQUITY,
DECEMBER 31, 1996.... 2,500 75,811 3,175,563 (1,773,970) -- -- 1,479,904
Issuance of Series
A Preferred
Stock............ 69,700 -- 6,860,252 -- -- (308,000) 6,621,952
Conversion of
common stock to
Series A
Preferred
Stock............ 5,000 (3,500) (1,500) -- -- -- --
Repurchase and
retirement of
common stock..... -- (1,750) (248,250) -- -- -- (250,000)
Net loss........... -- -- -- (2,992,581) -- -- (2,992,581)
-------- -------- ----------- ------------ ----------- -------- -----------
STOCKHOLDERS' EQUITY,
DECEMBER 31, 1997.... 77,200 70,561 9,786,065 (4,766,551) -- (308,000) 4,859,275
Issuance of common
stock............ -- 1,836 262,115 -- -- -- 263,951
Issuance of common
stock for note
receivable....... -- 40,250 5,709,750 -- (5,750,000) -- --
Issuance of Series
A Preferred
Stock............ 12,780 -- 1,286,600 -- -- 308,000 1,607,380
Issuance of Series
B Preferred
Stock............ 23,050 -- 2,251,932 -- -- -- 2,274,982
Issuance of Series
C Preferred
Stock............ 59,028 -- 5,782,184 -- -- -- 5,841,212
Issuance of Series
D Preferred
Stock............ 99,333 -- 14,456,011 -- -- -- 14,555,344
Net loss........... -- -- -- (8,793,890) -- -- (8,793,890)
-------- -------- ----------- ------------ ----------- -------- -----------
STOCKHOLDERS' EQUITY,
DECEMBER 31, 1998.... $271,391 $112,647 $39,534,657 $(13,560,441) $(5,750,000) $ -- $20,608,254
======== ======== =========== ============ =========== ======== ===========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-10
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 AND
FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(8,793,890) $(2,992,581) $(1,773,970)
Adjustments to reconcile net loss to net cash used in
operating activities-
Non-cash expenses....................................... 1,522,901 -- --
Non-cash expense reimbursement.......................... -- (750,000) --
Depreciation and amortization........................... 896,652 229,209 9,438
(Increase) decrease in operating assets--
Receivable from clearing broker......................... 17,052 (35,753) (100,611)
Securities owned........................................ (217,789) (540,504) --
Prepaid expenses........................................ (188,343) (132,659) --
Investment banking fees receivable...................... (512,952) -- --
Other assets............................................ (316,487) 45,848 (185,127)
Increase (decrease) in operating liabilities--
Accounts payable and accrued expenses................... (128,218) (134,381) 653,996
Accrued compensation.................................... 284,810 341,826 6,000
Other liabilities....................................... 554,189 86,000 15,500
----------- ----------- -----------
Net cash used in operating activities............... (6,882,075) (3,882,995) (1,374,774)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Computer software purchased............................... (21,542) (588,470) --
Payments for purchases of furniture, equipment and
leasehold improvements.................................. (436,243) (239,568) (194,233)
----------- ----------- -----------
Cash used in investing activities................... (457,785) (828,038) (194,233)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock.................... 60,301 -- 1,818,875
Proceeds from issuance of preferred stock................. 24,278,918 5,071,952 500,000
----------- ----------- -----------
Net cash provided by financing activities........... 24,339,219 5,071,952 2,318,875
----------- ----------- -----------
Net increase in cash and cash equivalents........... 16,999,359 360,919 749,868
CASH AND CASH EQUIVALENTS, beginning of period.............. 1,110,787 749,868 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period.................... $18,110,146 $ 1,110,787 $ 749,868
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for--
Interest................................................ $ 7,211 $ 4,362 $ --
Taxes................................................... 43,181 19,337 --
NON-CASH TRANSACTIONS:
Issuance of common and preferred stock for computer
software.............................................. $ -- $ 400,000 $ 1,125,000
Issuance of common stock for web site development....... 203,650 -- --
Issuance of common and preferred stock for advertising
credits............................................... -- 1,150,000 300,000
Series A Preferred Stock subscriptions receivable....... -- 308,000 --
Issuance of common stock to stockholders for notes
receivable............................................ 5,750,000 -- --
Repurchase of common stock.............................. -- 250,000 500,000
Conversion of common stock to preferred stock........... -- 5,000 --
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-11
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

1. ORGANIZATION AND BUSINESS

Wit Capital Group, Inc. ("WCG" or the "Company") was incorporated on
March 27, 1996 and commenced operations in September 1997. The consolidated
financial statements include the accounts of WCG and its wholly owned
subsidiaries, Wit Capital Corporation ("WCC") and BidPlus Corporation
("BidPlus"). Through September 1997, WCG also held a 55% investment in Brat
Incorporated ("Brat"), which was incorporated in December 1996.

The Company was formed as an investment banking and brokerage firm arranging
the offering and trading of securities through the Internet and the World Wide
Web. The Company provides retail investors access to stock offerings and
electronic brokerage facilities. The Company has developed an electronic
broker-dealer operated trading system for WCC. (Note 4).

During 1997 and 1996, the Company had yet to generate significant revenues
from sales of its services.

WCC has an agreement with U.S. Clearing (a division of Fleet
Securities, Inc.), pursuant to which U.S. Clearing clears securities
transactions, carries customers' accounts on a fully disclosed basis, and
performs record-keeping functions for WCC. Either party upon 90 days written
notice can cancel the agreement. The agreement states that WCC will assume
customer obligations should a customer of WCC default. U.S. Clearing controls
credit risk of customers by requiring maintenance of margin collateral in
compliance with various regulatory and internal guidelines.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The preparation of consolidated 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 at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Management does not believe
that actual results will differ materially from these estimates. Certain
balances have been reclassified to conform with current period presentation.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, WCC and BidPlus. Material intercompany
balances and transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include amounts that are readily convertible into
cash and highly liquid investments with a maturity of three months or less when
acquired.

SECURITIES OWNED

Securities transactions and the related expenses are recorded on a trade
date basis and are valued at market or fair value.

F-12
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

COMPUTER SOFTWARE

Costs capitalized related to the purchase of computer software are being
amortized over a period of three years.

FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Furniture, equipment and leasehold improvements are carried at cost less
accumulated depreciation and amortization. Depreciation and amortization are
recorded on a straight-line basis over the estimated useful lives of the assets,
ranging from two and three years for furniture and computer hardware,
respectively, to ten years for leasehold improvements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Substantially all assets and liabilities carried at historical cost or
contract value approximate fair value due to their relatively short-term nature.

REVENUE RECOGNITION

The Company derives revenues from commissions and other brokerage fees
related to customer transactions which are recorded on a settlement date basis
which is not materially different from trade date. The Company records
investment banking fees as earned. Investment banking retainer fees are
initially deferred and are recognized as income over the contracted period.

REPORTABLE OPERATING SEGMENT

The Company considers its present operations to be one reportable segment
for purposes of presenting financial information and for evaluating its
performance. The financial statement information presented in the accompanying
financial statements is consistent with the preparation of financial information
for the purpose of internal use.

3. SECURITIES OWNED

As of December 31, 1998 and 1997, securities owned consist of restricted
equity securities of $430,560 and $0; United States Treasury bills of $218,865
and $436,985; and certificates of deposit of $108,868 and $103,519,
respectively.

4. RELATED PARTY TRANSACTIONS

In 1996, WCG acquired from Global Trade, Inc. ("GTI") all outstanding shares
of BidPlus, the sole asset of which was a proprietary electronic brokerage and
trading system, in exchange for 525,000 shares of common stock. The software was
recorded at $1,125,000 representing management's estimate of the fair value of
the 525,000 shares of common stock at $2.14 per share. Effective December 31,
1996, the founder of GTI agreed to exchange 350,000 of the shares of the common
stock of WCG for a 45% equity interest in Brat, a newly formed subsidiary of
WCG. In consideration for the exchange, WCG agreed to contribute certain rights
to Brat to use the proprietary electronic brokerage and trading system software,
as well as

F-13
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

4. RELATED PARTY TRANSACTIONS (CONTINUED)

providing technology, general and administrative support on behalf of Brat. In
1997, GTI's founder sought greater control over the development of Brat and in
September 1997, exchanged the remaining 175,000 shares of WCG common stock and
the rights to the use of the software for all of WCG's shares of Brat. The
aforementioned exchange of the 525,000 shares of common stock of WCG has been
accounted for as a stock repurchase at $1.43 per share, which represents the
fair value of the common stock on the date of the exchange and corresponding
$750,000 reduction of other expenses related to the cost of services provided to
Brat.

5. INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
which requires the recognition of deferred tax liabilities and assets at tax
rates expected to be in effect when these balances reverse. Future tax benefits
attributable to temporary differences are recognized to the extent that
realization of such benefits is more likely than not.

WCG files consolidated Federal and combined New York State and New York City
income tax returns with WCC and BidPlus. The income tax provisions included in
the consolidated statements of operations are calculated based on state and
local minimum and alternative methods.

At December 31, 1998 and 1997, WCG had deferred tax assets of approximately
$5,200,000 and $2,300,000 which were generated by net operating losses of
approximately $13,000,000 and $5,300,000, respectively. The deferred tax assets
are fully offset by valuation allowances.

6. STOCKHOLDERS' EQUITY

COMMON STOCK

In 1996, the Company issued 210,000 shares of common stock at $1.43 per
share in exchange for $300,000 of media credits. These credits could be used to
offset future expenditures including, among other things, communications, travel
and advertising. The Company used $18,000 of these credits in 1997, and
accordingly, prepaid expenses include $282,000 of these credits as of
December 31, 1997. This remaining balance of $282,000 was expensed as unused by
the Company in 1998.

The Chairman and Co-Chief Executive Officer has been extended a partial
recourse, interest bearing loan in the amount of $5,750,000 with which 4,025,000
shares of common stock at $1.43 per share were purchased. Interest on the loan
is recourse, nonrefundable and payable annually on June 30. In the event this
employee ceases to be employed by the Company, the Company has the right to
repurchase two thirds of such shares at the lower of fair market value or $1.43
per share. Such repurchase rights terminate on April 1, 2001. In addition, the
loan may be prepaid at any time by the employee and accelerates in the event of
employment termination. The loan is collateralized by the Company's stock and
will be reflected as a note receivable in stockholders' equity until repaid.

F-14
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

6. STOCKHOLDERS' EQUITY (CONTINUED)

PREFERRED STOCK

As of December 31, 1998, the Company has authorized 30,000,000 shares of
preferred stock of which 29,445,000 shares have been designated to four series
as shown in the accompanying consolidated statements of financial condition. The
preferred stock has voting and dividend rights equal to the rights of common
stock and has liquidation preference. The holder of a share of the series of
preferred stock is entitled to convert such share into 0.7 shares of common
stock at any time. In addition, each share of preferred stock will automatically
convert into 0.7 shares of common stock in the event WCG completes an initial
public offering of shares of common stock in which the aggregate net proceeds
are at least $5 million for each Series A and B; $25 million for each Series C
and D and the per share price to the public is at least $4.29 per share for each
Series A and B and $6.43 per share for each Series C and D.

In 1997, WCG issued 500,000 shares of Series A Preferred Stock at $1.00 per
share in exchange for $500,000 of media credits. Prepaid expenses include
$500,000 of these credits as of December 31, 1997. The balance of $500,000 was
expensed as unused by the Company in 1998.

In 1997, WCG issued a total of 650,000 shares of Series A Preferred Stock at
$1.00 per share to three separate investors in exchange for advertising in print
and on-line media and access to and usage of on-line and print subscriber lists.
Related total cash consideration for such services was $100,000. Prepaid
expenses include $719,000 of these credits as of December 31, 1997. During 1997
and 1998, the Company used $31,000 and $719,000 of these advertising credits,
respectively, which was recorded as marketing expense on the accompanying
statement of operations.

In 1996, WCG entered into a service bureau, software development and
licensing agreement with Kingland Systems Corporation ("Kingland"). As part of
this agreement, WCG and Kingland negotiated an optional purchase license price
of $400,000 for the Kingland software. In April 1997, Kingland contributed the
license to WCG in exchange for 400,000 shares of Series A Preferred Stock valued
at $1.00 per share.

7. NET LOSS PER SHARE

The following table sets forth the calculation of shares used in the
computation of basic and diluted net loss per share:

<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31,
---------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Shares used in computations:
Weighted average common
shares used in computation of
basic net loss per share................................ 7,140,123 7,303,013 5,378,167
Dilutive effect of common stock
equivalents............................................. -- -- --
--------- --------- ---------
Weighted average shares
used in computation of
diluted net loss per share.......................... 7,140,123 7,303,013 5,378,167
========= ========= =========
</TABLE>

F-15
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

7. NET LOSS PER SHARE (CONTINUED)

Because the Company reported a net loss in each of the periods above, the
calculation of diluted earnings per share does not include convertible preferred
stock, options, warrants and common stock collateralizing the notes receivable
from stockholders, as they are anti-dilutive and would result in a reduction of
net loss per share. If the Company had reported net income, there would have
been an additional 8,189,535, 2,706,114 and 231,538 shares as of December 31,
1998, 1997 and 1996, respectively, included in the calculation of diluted
earnings per share.

8. EMPLOYEE BENEFIT PLANS AND OTHER COMPENSATION

HEALTH CARE

WCG provides certain health care benefits for its full-time employees by
contract with a health care insurer.

OTHER COMPENSATION

Subsequent to year end, the Company entered into employment contracts with
several employees which entitled the employees to a total of $5,450,000 in
upfront payments. The Company recognized compensation expense of $2,550,000
related to amounts paid for which no future service by the employee is required.
The Company recorded advances of $2,900,000 which are being expensed over the
two-year employment contract periods for amounts for which the employee is
required to provide service and is obligated to repay any unearned compensation
in the event of termination or resignation prior to completing the contract
term.

STOCK OPTION PLAN

WCG has adopted a stock option plan and restricted stock purchase plan (the
"Plan"). Under the Plan, key employees, directors and certain consultants of WCG
are eligible to receive grants of stock options intended to qualify as incentive
stock options (within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended), or which are nonqualified stock options. An aggregate of
9,100,000 shares were reserved for issuance under the Plan as of December 31,
1998. The exercise price of any share covered by an option granted to a person
owning more than 10% of the voting power of all classes of stock of WCG cannot
be less than 110% of the fair market value on the day of the grant. The exercise
price of any share covered by an option granted to any person cannot be less
than 85% of the fair value on the day of the grant. Options expire five or ten
years from the date of grant, with the majority of the options expiring in the
year 2008.

As permitted by Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," ("SFAS No. 123") WCG has accounted
for options granted to employees using the intrinsic value method prescribed by
Accounting Practice Bulletin ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees." WCG has granted options with exercise prices that are
equal to or greater than management's estimate of the fair value of such common
stock at the date of grant, and accordingly, the Company has recorded no related
compensation expense. This estimate is based upon share issuances to independent
third party investors. As required by SFAS No. 123, the Company has presented
pro forma

F-16
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

8. EMPLOYEE BENEFIT PLANS AND OTHER COMPENSATION (CONTINUED)

disclosures of net income and earnings per share as if the Company had adopted
the method of accounting prescribed by SFAS No. 123.

The following table summarizes the status of the Company's stock options as
of December 31, 1998 and 1997 and for the period from March 27, 1996 to
December 31, 1996 and the changes during these periods:

<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997 1996
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, beginning
of period.............................. 3,267,772 $1.66 1,509,197 $1.64 -- $ --
Granted.............................. 5,834,500 1.49 1,904,700 1.59 1,509,197 1.64
Exercised............................ 5,950 1.71 -- -- -- --
Forfeited............................ 941,500 1.56 146,125 3.54 -- --
Outstanding, end of period............... 8,154,822 1.47 3,267,772 1.66 1,509,197 1.64
Options exercisable, end of period....... 3,437,535 1.43 1,801,865 1.64 369,436 1.84
</TABLE>

The range of exercisable prices for the options outstanding and the options
exercisable is $.36-$3.57 and the weighted average is $1.47. The weighted
average contractual lives for outstanding and exercisable options are 8.89 and
8.03 years as of December 31, 1998.

The fair value of each option granted during 1998, 1997 and 1996 was
estimated on the date of the grant using the minimum value method prescribed by
SFAS No. 123, assuming a dividend yield of zero and a risk-free interest rate of
6%. If the Company had recorded compensation expense for its stock options
granted for the periods ended December 31, 1998, 1997 and 1996, in accordance
with SFAS No. 123, the Company's pro forma net loss and pro forma net loss per
share would be as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------------------------------------------
1998 1997 1996
------------------------- ------------------------- -------------------------
AS AS AS
REPORTED PRO FORMA REPORTED PRO FORMA REPORTED PRO FORMA
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net loss...................................... $(8,793,890) $(9,268,941) $(2,992,581) $(3,294,797) $(1,773,970) $(1,854,453)
Net loss per common share:
Basic....................................... $ (1.23) $ (1.30) $ (.41) $ (.45) $ (.33) $ (.34)
Diluted..................................... $ (1.23) $ (1.30) $ (.41) $ (.45) $ (.33) $ (.34)
</TABLE>

9. WARRANTS OUTSTANDING

The Company has 1,322,181 outstanding warrants as of December 31, 1998.
Warrants were issued to be convertible to either common or preferred shares of
WCG stock. The following table summarizes the

F-17
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

9. WARRANTS OUTSTANDING (CONTINUED)

status of the Company's warrants as of December 31, 1998 and 1997 and for the
period March 27, 1996 to December 31, 1996 and the changes during these periods:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------
1998 1997 1996
-------------------- ------------------- -------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, beginning
of period................................. 221,900 $1.84 148,400 $2.06 -- $ --
Granted..................................... 1,100,281 1.43 73,500 1.43 148,400 2.06
Exercised................................... -- -- -- -- -- --
Forfeited................................... -- -- -- -- -- --
Outstanding, end
of period................................. 1,322,181 1.50 221,900 1.84 148,400 2.06
Warrants exercisable, end of period......... 1,302,348 1.50 179,435 1.91 142,800 2.00
</TABLE>

10. COMMITMENTS AND CONTINGENCIES

WCG has a noncancelable operating lease covering office space that includes
scheduled rent increases every two years commencing November 1998 and an initial
free rent period. Additionally, the Company has a one-year noncancelable
operating lease for office space located in California, which expires in
May 1999. Rent expense for the years ended December 31, 1998 and 1997 and the
period ended December 31, 1996 is $137,454, $122,500 and $41,889, respectively.
Future lease commitments are as follows:

<TABLE>
<CAPTION>
MINIMUM LEASE
OBLIGATION
-------------
<S> <C>
Year ending December 31:
1999...................................................... $237,491
2000...................................................... 255,938
2001...................................................... 297,250
2002...................................................... 266,438
2003...................................................... 268,640
Thereafter................................................ 819,829
</TABLE>

The Company is currently subject to claims and legal proceedings arising in
the normal course of its business. In the opinion of management, based on
discussions with legal counsel, the resolution of such legal proceedings will
not have a material adverse effect on the financial position, results of
operations or liquidity of the Company.

Additionally, a person formerly associated with the Company has asserted a
right to purchase 560,000 shares of common stock at $1.43 per share. In the
opinion of management, such assertion is without merit,

F-18
<PAGE>
WIT CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

and the Company intends to contest any lawsuit filed against it. These 560,000
shares of common stock have been reported as forfeited stock options in 1998.

11. CAPITAL REQUIREMENTS

WCC is subject to the SEC's Uniform Net Capital Rule 15c3-1. WCC's net
capital, as defined, shall be required to be the greater of $100,000 or the
minimum net capital required based on aggregate indebtedness. As of
December 31, 1998, WCC's ratio of aggregate indebtedness to net capital was .09
to 1 and its net capital was $8,446,190 which was $8,346,190 in excess of the
minimum net capital requirement of $100,000.

12. SUBSEQUENT EVENTS

In April 1999, the Company authorized an additional 64,000,000 shares of
common stock, increasing the number of authorized common shares to 184,000,000
of which 159,000,000 represent shares of common stock and 25,000,000 represent
shares of Class B Common Stock. Additionally, the Company authorized an
additional 44,000,000 shares of preferred stock, increasing the number of
authorized preferred shares to 104,000,000 of which 11,666,667 were designated
to Series E Preferred Stock and 5,790,542 were reserved for issuance upon
exercise of warrants to purchase Series E Preferred Stock.

In April 1999, the Company issued 11,666,667 shares of Series E Preferred
Stock to a third party for $25,000,000. This third party also received warrants
to purchase 5,637,295 shares of Series E Preferred Stock.

On May 26, 1999, all outstanding common stock was converted into a newly
created Class C Common Stock.

On June 2, 1999, a 7 for 10 reverse stock split of Class C Common Stock and
Series E Preferred Stock was effected. Accordingly, all references in the
financial statements to the number of Common Stock and Series E Preferred shares
and rights and per share amounts have been retroactively restated to reflect
this reverse split. The conversion rate of Series A, B, C and D into Class C
Common Stock after giving effect to the reverse split is 1.43 to 1.

F-19
<PAGE>
WIT CAPITAL GROUP, INC.
(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS................................... $ 9,180,804 $ 549,640
PREPAID EXPENSES............................................ 95,671 1,582,657
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net of
accumulated depreciation and amortization of $240,747 and
$97,856 at December 31, 1998 and 1997, respectively....... 611,953 331,307
COMPUTER SOFTWARE, net of accumulated amortization of
$254,973 and $64,768 at December 31, 1998 and 1997,
respectively.............................................. 286,687 354,976
INVESTMENT IN SUBSIDIARIES.................................. 10,716,505 2,686,012
OTHER ASSETS................................................ 110,760 116,985
------------ -----------
Total assets........................................ $ 21,002,380 $ 5,621,577
============ ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Accounts payable and accrued expenses................... $ 295,590 $ 336,859
Accrued compensation.................................... 38,333 347,826
Other liabilities....................................... 60,203 77,617
------------ -----------
Total liabilities................................... 394,126 762,302
------------ -----------
COMMITMENTS
STOCKHOLDERS' EQUITY:
Series A Preferred Stock, $.01 par value, 9,000,000
shares authorized; 8,997,952 and 7,720,002 shares
issued and outstanding at December 31, 1998 and 1997,
respectively.......................................... 89,980 77,200
Series B Preferred Stock, $.01 par value, 3,000,000
shares authorized; 2,304,982 shares issued and
outstanding at December 31, 1998...................... 23,050 --
Series C Preferred Stock, $.01 par value, 7,445,000
shares authorized; 5,902,750 shares issued and
outstanding at December 31, 1998...................... 59,028 --
Series D Preferred Stock, $.01 par value, 10,000,000
shares authorized; 9,933,334 shares issued and
outstanding at December 31, 1998...................... 99,333 --
Common Stock, $.01 par value, 60,000,000 and 25,000,000
shares authorized; 11,264,600 and 7,056,095 shares
issued and outstanding at December 31, 1998 and 1997,
respectively.......................................... 112,647 70,561
Additional paid-in capital.............................. 39,534,657 9,786,065
Note receivable from stockholder........................ (5,750,000) --
Series A Preferred Stock subscriptions receivable....... -- (308,000)
Accumulated deficit..................................... (13,560,441) (4,766,551)
------------ -----------
Total stockholders' equity.......................... 20,608,254 4,859,275
------------ -----------
Total liabilities and stockholders' equity.......... $ 21,002,380 $ 5,621,577
============ ===========
</TABLE>

See Note to Condensed Financial Statements

F-20
<PAGE>
WIT CAPITAL GROUP, INC.
(PARENT COMPANY ONLY)

CONSDENSED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996
(INCEPTION) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES:
Consulting fees...................................... $ -- $ 22,500 $ --
Interest............................................. 77,117 21,372 20,568
Other................................................ -- 138,750 10,000
----------- ----------- -----------
Total revenues................................... 77,117 182,622 30,568
----------- ----------- -----------

EXPENSES:
Compensation and benefits............................ 3,969,604 1,549,958 376,897
Technology development............................... 922,036 385,095 534,311
Marketing and business development................... 1,057,744 631,792 339,741
Depreciation and amortization........................ 659,259 153,184 9,438
Data processing and communications................... 414,181 186,940 49,599
Professional services................................ 415,443 86,478 255,574
Occupancy............................................ 237,334 200,673 41,889
Other................................................ 1,078,301 (565,980) 170,389
----------- ----------- -----------
Total expenses................................... 8,753,902 2,628,140 1,777,838
----------- ----------- -----------
Loss before income tax provision and
equity in net loss of subsidiaries............. (8,676,785) (2,445,518) (1,747,270)
----------- ----------- -----------

INCOME TAX PROVISION................................... -- -- --
----------- ----------- -----------
Loss before equity in loss of subsidiaries....... (8,676,785) (2,445,518) (1,747,270)
----------- ----------- -----------
Equity in net loss of subsidiaries................... (117,105) (547,063) (26,700)
----------- ----------- -----------
Net loss......................................... $(8,793,890) $(2,992,581) $(1,773,970)
=========== =========== ===========
</TABLE>

See Note to Condensed Financial Statements

F-21
<PAGE>
WIT CAPITAL GROUP, INC.
(PARENT COMPANY ONLY)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 AND FOR THE PERIOD
FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
NOTE
ADDITIONAL RECEIVABLE
PREFERRED COMMON PAID-IN ACCUMULATED FROM SUBSCRIPTIONS
STOCK STOCK CAPITAL DEFICIT STOCKHOLDER RECEIVABLE TOTAL
--------- -------- ----------- ------------ ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY,
March 27, 1996.................. $ -- $ -- $ -- $ -- $ -- $ -- $ --

Issuance of common stock........ -- 79,311 3,174,563 -- -- -- 3,253,874
Issuance of Series A Preferred
Stock......................... 2,500 -- 497,500 -- -- -- 500,000
Repurchase and retirement of
common stock.................. -- (3,500) (496,500) -- -- -- (500,000)
Net loss........................ -- -- -- (1,773,970) -- -- (1,773,970)
-------- -------- ----------- ------------ ----------- --------- -----------
STOCKHOLDERS' EQUITY, December 31,
1996............................ 2,500 75,811 3,175,563 (1,773,970) -- -- 1,479,904

Issuance of Series A Preferred
Stock......................... 69,700 -- 6,860,252 -- -- (308,000) 6,621,952
Conversion of common stock to
Series A Preferred Stock...... 5,000 (3,500) (1,500) -- -- -- --
Repurchase and retirement of
common stock.................. -- (1,750) (248,250) -- -- -- (250,000)
Net loss........................ -- -- -- (2,992,581) -- -- (2,992,581)
-------- -------- ----------- ------------ ----------- --------- -----------

STOCKHOLDERS' EQUITY, December 31,
1997............................ 77,200 70,561 9,786,065 (4,766,551) -- (308,000) 4,859,275

Issuance of common stock........ -- 1,836 262,115 -- -- -- 263,951
Issuance of common stock for
note receivable............... -- 40,250 5,709,750 -- (5,750,000) -- --
Issuance of Series A Preferred
Stock......................... 12,780 -- 1,286,600 -- -- 308,000 1,607,380
Issuance of Series B Preferred
Stock......................... 23,050 -- 2,251,932 -- -- -- 2,274,982
Issuance of Series C Preferred
Stock......................... 59,028 -- 5,782,184 -- -- -- 5,841,212
Issuance of Series D Preferred
Stock......................... 99,333 -- 14,456,011 -- -- -- 14,555,344
Net loss........................ -- -- -- (8,793,890) -- -- (8,793,890)
-------- -------- ----------- ------------ ----------- --------- -----------
STOCKHOLDERS' EQUITY, December 31,
1998............................ $271,391 $112,647 $39,534,657 $(13,560,441) $(5,750,000) $ -- $20,608,254
======== ======== =========== ============ =========== ========= ===========
</TABLE>

See Note to Condensed Financial Statements

F-22
<PAGE>
WIT CAPITAL GROUP, INC.
(PARENT COMPANY ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................. $(8,793,890) $(2,992,581) $(1,773,970)
Adjustments to reconcile net loss to net cash used in
operating activities--
Equity in net losses of subsidiaries............. 117,105 547,063 26,700
Noncash expenses................................. 1,522,901 -- --
Noncash expense reimbursement.................... -- (750,000) --
Depreciation and amortization.................... 659,259 153,184 9,438
(Increase) decrease in operating assets--
Prepaid expenses................................... (139,584) (132,659) --
Other assets....................................... (101,275) 30,141 (137,126)
Increase (decrease) in operating liabilities--
Accounts payable and accrued expenses.............. (41,269) (418,209) 755,068
Accrued compensation............................... (309,493) 341,826 6,000
Other liabilities.................................. (17,414) 62,617 15,000
----------- ----------- -----------
Net cash used in operating activities.......... (7,103,660) (3,158,618) (1,098,890)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in subsidiaries.......................... (8,147,598) (1,434,775) (700,000)
Computer software purchased.......................... (21,917) (19,742) --
Payments for purchases of furniture, equipment and
leasehold improvements............................. (434,880) (234,929) (194,233)
----------- ----------- -----------
Cash used in investing activities.............. (8,604,395) (1,689,446) (894,233)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock............... 60,301 -- 1,818,875
Proceeds from issuance of preferred stock............ 24,278,918 5,071,952 500,000
----------- ----------- -----------
Net cash provided by financing activities...... 24,339,219 5,071,952 2,318,875
----------- ----------- -----------
Net increase in cash and cash equivalents...... 8,631,164 223,888 325,752
CASH AND CASH EQUIVALENTS, beginning of period......... 549,640 325,752 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period............... $ 9,180,804 $ 549,640 $ 325,752
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for--
Interest........................................... $ 7,211 $ 4,362 $ --
Taxes.............................................. 43,181 19,337 --
NON-CASH TRANSACTIONS:
Issuance of common stock for investments in
subsidiaries....................................... $ -- $ -- $ 1,125,000
Issuance of common stock for computer software....... -- 400,000 --
Issuance of common stock for web site development.... 203,650 -- --
Issuance of common and preferred stock for
advertising credits................................ -- 1,150,000 300,000
Series A Preferred Stock subscriptions receivable.... -- 308,000 --
Issuance of common stock to stockholder for note
receivable......................................... 5,750,000 -- --
Repurchase of common stock........................... -- 250,000 500,000
Conversion of common stock to preferred stock........ -- 5,000 --
</TABLE>

See Note to Condensed Financial Statements

F-23
<PAGE>
WIT CAPITAL GROUP, INC.
(PARENT COMPANY ONLY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD FROM MARCH 27, 1996 (INCEPTION) TO DECEMBER 31, 1996

1. NOTE TO CONDENSED FINANCIAL INFORMATION

The condensed financial information of Wit Capital Group, Inc. (parent
company only) should be read in conjunction with the consolidated financial
statements of Wit Capital Group, Inc. and Subsidiaries and the notes thereto
contained elsewhere in this prospectus.

Certain balances have been reclassified to conform with current period
presentation.

F-24
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors of

SoundView Technology Group, Inc.

We have audited the accompanying consolidated statements of financial
condition of SoundView Technology Group, Inc. (the "Company") as of
December 31, 1998 and 1997 and the related consolidated statements of income,
changes in stockholders' equity and cash flows for the years ended December 31,
1998, 1997 and 1996. 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.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of SoundView
Technology Group, Inc. at December 31, 1998 and 1997, and the consolidated
results of its operations and its cash flows for the years ended December 31,
1998, 1997 and 1996 in conformity with generally accepted accounting principles.

New York, New York
January 21, 1999
Except for Note 20, which is dated October 31, 1999

F-25
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- -------------------------
1999 1998 1997
------------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents............................. $27,225,800 $10,236,000 $ 3,406,600
Receivable from clearing broker....................... 19,479,200 15,499,200 16,504,700
Investment banking fees receivable.................... 10,155,700 1,689,200 1,454,400
Asset management fees receivable...................... 2,792,200 3,840,500 1,737,700
Securities owned, at market value..................... 3,448,100 962,400 970,900
Furniture, equipment, and leasehold improvements,
net................................................. 4,247,600 2,579,900 2,949,400
Investment in investment partnerships................. 18,870,200 11,971,000 5,541,600
Income taxes receivable............................... -- -- 466,800
Deferred taxes receivable............................. 6,656,300 1,116,300 1,896,100
Other assets.......................................... 1,122,900 673,700 916,200
----------- ----------- -----------
TOTAL ASSETS...................................... $93,998,000 $48,568,200 $35,844,400
=========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Securities sold, but not yet purchased, at market
value............................................... $ 7,599,700 $ 354,000 $ 1,107,700
Accounts payable and accrued expenses................. 5,413,800 2,731,700 2,205,800
Payable to other brokers.............................. 2,292,500 421,100 1,044,000
Accrued compensation.................................. 34,972,500 18,414,500 14,270,800
Income taxes payable.................................. 5,472,200 2,933,100 --
----------- ----------- -----------
55,750,700 24,854,400 18,628,300

STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; authorized--6,000,000
shares; issued--1,683,620 shares.................... 16,800 16,800 16,800
Additional paid-in capital............................ 1,986,300 1,100,700 1,100,700
Retained earnings..................................... 39,669,600 26,727,600 18,436,100
Treasury stock, at cost, 710,180, 811,130 and 746,930
shares at September 30, 1999 (unaudited), December
31, 1998 and 1997, respectively..................... (3,380,100) (3,945,300) (2,070,300)
Receivables from employees for shares issued.......... (45,300) (186,000) (267,200)
----------- ----------- -----------
Total stockholders' equity............................ 38,247,300 23,713,800 17,216,100
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $93,998,000 $48,568,200 $35,844,400
=========== =========== ===========
</TABLE>

See notes to consolidated financial statements

F-26
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED) AND 1998 (UNAUDITED)
AND FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------------- ---------------------------------------
1999 1998 1998 1997 1996
------------- ------------ ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES:
Brokerage....................... $ 61,891,000 $45,821,900 $64,562,100 $48,772,800 $38,979,100
Investment banking.............. 32,052,900 8,331,800 10,259,400 9,944,500 11,682,500
Gains from firm investments..... 4,484,200 1,652,500 3,163,400 934,700 7,829,000
Asset management fees........... 5,398,000 3,514,600 6,332,900 250,500 20,466,500
Interest........................ 758,100 516,800 814,400 477,900 385,300
Gain (loss) on joint venture.... 476,600 (439,600) (832,400) -- --
------------ ----------- ----------- ----------- -----------
105,060,800 59,398,000 84,299,800 60,380,400 79,342,400

EXPENSES:
Compensation and benefits....... 56,625,900 30,055,300 42,507,800 34,755,100 48,652,400
Brokerage and clearance......... 10,393,400 6,963,800 9,433,700 8,037,100 7,035,000
Occupancy....................... 1,563,500 1,456,900 2,016,000 1,547,000 1,242,300
Professional services........... 3,790,500 3,495,100 4,239,300 3,345,400 2,850,300
Marketing and business
development................... 4,682,800 2,996,700 3,773,600 2,976,200 2,193,500
Data processing and
communications................ 2,846,200 2,930,900 3,690,800 3,250,900 2,818,100
Depreciation and amortization... 1,115,300 920,000 1,286,500 1,045,100 655,100
Other operating expenses........ 1,519,300 1,440,500 1,879,600 1,521,100 1,025,400
------------ ----------- ----------- ----------- -----------
82,536,900 50,259,200 68,827,300 56,477,900 66,472,100
------------ ----------- ----------- ----------- -----------
Income before income taxes...... 22,523,900 9,138,800 15,472,500 3,902,500 12,870,300
Income tax expense.............. 9,516,900 3,890,100 6,556,500 1,639,000 5,319,300
------------ ----------- ----------- ----------- -----------
13,007,000 5,248,700 8,916,000 2,263,500 7,551,000
Minority interest............... -- -- -- -- (1,664,000)
------------ ----------- ----------- ----------- -----------
Net income................ $ 13,007,000 $ 5,248,700 $ 8,916,000 $ 2,263,500 $ 5,887,000
============ =========== =========== =========== ===========

Net Income Per Share
Basic....................... $ 13.09 $ 5.59 $ 9.62 $ 2.41 $ 5.98
Diluted..................... $ 5.24 $ 2.44 $ 4.15 $ 1.10 $ 3.01
Weighted Average Shares Used in
the Computation of Net Income
Per Share
Basic....................... 993,655 938,650 926,526 940,055 985,009
Diluted..................... 2,480,207 2,154,927 2,146,200 2,064,318 1,954,087
</TABLE>

See notes to consolidated financial statements

F-27
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED) AND
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
-------------------- ADDITIONAL ---------------------- RECEIVABLES TOTAL
DOLLAR PAID-IN RETAINED DOLLAR FROM STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT EMPLOYEES EQUITY
--------- -------- ---------- ----------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
January 1,
1996............... 1,683,620 $16,800 $1,100,700 $10,303,800 690,680 $(1,643,200) $(364,700) $ 9,413,400
Net income........... 5,887,000 5,887,000
Treasury stock
purchased.......... 53,000 (343,300) 27,700 (315,600)
Treasury stock
sold............... 18,100 (21,000) 99,100 117,200
--------- ------- ---------- ----------- -------- ----------- --------- -----------
Balance at
December 31,
1996............... 1,683,620 16,800 1,118,800 16,190,800 722,680 (1,887,400) (337,000) 15,102,000
Net income........... 2,263,500 2,263,500
Loan repayments...... 39,900 39,900
Treasury stock
purchased.......... 30,250 (228,100) 29,900 (198,200)
Treasury stock
sold............... (18,100) (18,200) (6,000) 45,200 8,900
--------- ------- ---------- ----------- -------- ----------- --------- -----------
Balance at
December 31,
1997............... 1,683,620 16,800 1,100,700 18,436,100 746,930 (2,070,300) (267,200) 17,216,100
Net income........... 8,916,000 8,916,000
Loan repayments...... 17,300 17,300
Treasury stock
purchased.......... 453,500 (4,114,100) 63,900 (4,050,200)
Treasury stock
sold............... (624,500) (389,300) 2,239,100 1,614,600
--------- ------- ---------- ----------- -------- ----------- --------- -----------
Balance at
December 31,
1998............... 1,683,620 16,800 1,100,700 26,727,600 811,130 (3,945,300) (186,000) 23,713,800
Net income........... 13,007,000 13,007,000
Loan repayments...... 140,700 140,700
Treasury stock
purchased.......... 121,380 (1,546,000) (1,546,000)
Treasury stock
sold............... 885,600 (65,000) (222,330) 2,111,200 2,931,800
--------- ------- ---------- ----------- -------- ----------- --------- -----------
Balance at
September 30,
1999
(unaudited)........ 1,683,620 $16,800 $1,986,300 $39,669,600 710,180 $(3,380,100) $ (45,300) $38,247,300
========= ======= ========== =========== ======== =========== ========= ===========
</TABLE>

See notes to consolidated financial statements

F-28
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED) AND 1998 (UNAUDITED)
AND FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------------- -----------------------------------------
1999 1998 1998 1997 1996
----------- ----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (before minority interest in
1996)........................................ $13,007,000 $5,248,700 $ 8,916,000 $ 2,263,500 $ 7,551,000
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization................ 1,115,300 920,000 1,286,500 1,045,100 655,100
Appreciation in investment in investment
partnerships............................... (4,135,600) (2,797,200) (3,163,400) (685,600) (7,462,500)
(Gain) loss on joint venture................. (476,600) 439,600 832,400 -- --
Effect of changes in operating assets and
liabilities:
Receivable from clearing broker............ (3,980,000) (4,322,900) 1,005,500 (12,140,600) 639,800
Investment banking fees receivable......... (8,466,500) 1,181,000 (234,800) 3,423,400 (1,630,200)
Asset management fees receivable........... 1,048,300 188,900 (2,102,800) 226,900 (1,740,900)
Securities owned and securities sold, but
not yet purchased........................ 4,760,000 (204,000) (736,600) 669,000 455,200
Income taxes receivable.................... 466,800 466,800 5,292,900 (5,759,700)
Deferred taxes receivable.................. (5,540,000) 1,281,200 779,800 (7,358,400) 5,393,300
Other assets............................... (28,400) (42,600) 8,900 (276,400) 395,500
Accounts payable and accrued expenses...... 2,682,100 2,603,600 525,900 (350,300) 1,196,200
Payable to other brokers................... 1,871,400 (274,400) (622,900) 836,600 50,200
Accrued compensation....................... 16,558,000 (1,729,700) 4,143,700 (12,054,500) 11,394,000
Income taxes payable....................... 3,385,200 1,072,000 2,933,100 -- --
----------- ----------- ----------- ------------ ------------
Total adjustments.............................. 8,793,200 (1,217,700) 5,122,100 (21,371,900) 3,586,000
----------- ----------- ----------- ------------ ------------
Net cash provided by (used in) operating
activities................................... 21,800,200 4,031,000 14,038,100 (19,108,400) 11,137,000
----------- ----------- ----------- ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture, equipment, and
leasehold improvements....................... (2,783,000) (554,200) (917,000) (1,923,200) (1,831,200)
Repurchase of minority interest................ -- -- -- (1,904,100) --
(Investment in) distribution from investment
partnerships................................. (2,763,600) (1,818,900) (3,266,000) 22,755,600 (12,296,300)
Liquidation (purchase) of other investments.... -- 340,000 345,000 -- (425,000)
Distributions from (investment in) joint
venture...................................... 55,800 (750,700) (952,400) -- --
----------- ----------- ----------- ------------ ------------
Net cash (used in) provided by investing
activities................................... (5,490,800) (2,783,800) (4,790,400) 18,928,300 (14,552,500)
----------- ----------- ----------- ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Loans repaid by employees...................... 140,700 81,200 81,200 69,800 27,700
Treasury stock sold............................ 2,085,700 1,219,900 1,614,600 8,900 117,200
Treasury stock purchased....................... (1,546,000) (3,559,600) (4,114,100) (228,100) (343,300)
----------- ----------- ----------- ------------ ------------
Net cash provided by (used in) financing
activities................................... 680,400 (2,258,500) (2,418,300) (149,400) (198,400)
----------- ----------- ----------- ------------ ------------
Net increase (decrease) in cash and cash
equivalents.................................. 16,989,800 (1,011,300) 6,829,400 (329,500) (3,613,900)
Cash and cash equivalents at beginning of
period....................................... 10,236,000 3,406,600 3,406,600 3,736,100 7,350,000
----------- ----------- ----------- ------------ ------------
Cash and cash equivalents at end of period..... $27,225,800 $2,395,300 $10,236,000 $ 3,406,600 $ 3,736,100
=========== =========== =========== ============ ============
SUPPLEMENTAL INFORMATION
Interest paid................................ $ -- $ -- $ -- $ 23,200 $ 11,400
Taxes paid................................... $10,083,900 $1,290,000 $ 2,325,000 $ 3,717,000 $ 5,519,000
</TABLE>

See notes to consolidated financial statements

F-29
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(UNAUDITED WITH RESPECT TO DATA AS OF SEPTEMBER 30, 1999 AND FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

SoundView Technology Group, Inc. (the "Company") (formerly known as
SoundView Financial Group, Inc.), a Delaware Corporation, is registered as a
broker-dealer with the Securities and Exchange Commission ("SEC"), National
Association of Securities Dealers, Inc., ("NASD") and with various states.

The Company acts as an introducing broker for its customers and is engaged
in the proprietary trading of securities as a market maker. The Company also
participates in various underwriting and syndicate transactions in which they
act as manager or otherwise underwrite a portion of an offering. All
transactions are cleared through and carried by a New York Stock Exchange, Inc.
member firm on a fully disclosed basis pursuant to a clearing agreement.
Accordingly, open customer transactions are not reflected in the accompanying
statements of financial condition. The Company is exposed to credit losses on
these open transactions in the event of nonperformance by its customers pursuant
to conditions of its clearing agreement with the clearing broker. This exposure
is reduced by the clearing broker's policy of obtaining and maintaining
collateral until open transactions are completed.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL INFORMATION

The audited annual consolidated financial statements and the unaudited
interim consolidated financial information as of September 30, 1999 and 1998 and
for the nine months ended September 30, 1999 and 1998 are presented in the
accompanying financial statements. The unaudited interim consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
fair presentation of the results of such periods have been included. Results of
the interim periods are not necessarily indicative of results to be obtained for
a full fiscal year.

SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries SoundView Asset Management, Inc. ("SAM") and
SoundView Capital Management, Inc. ("SCM"). All significant inter-company
balances and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Management believes that the estimates
utilized in preparing its consolidated financial statements are reasonable and
prudent; however, actual results could differ from estimates.

F-30
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents. Cash and cash
equivalents are comprised primarily of deposits with financial institutions.
Such deposits are generally in excess of the amounts covered by FDIC insurance.

FURNITURE, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS

Furniture, equipment, and leasehold improvements are stated at cost.
Depreciation of furniture and equipment is provided using the straight-line
method over the estimated useful lives of the related assets which range from
three to five years. Leasehold improvements are amortized on a straight-line
basis over the lesser of the life of the lease or the remaining useful life of
the improvements which ranges from three to ten years.

INVESTMENTS IN INVESTMENT PARTNERSHIPS AND JOINT VENTURES

The equity method of accounting, which approximates fair value, is used for
investments in limited partnerships and investments in joint ventures.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of amounts reported in the consolidated financial
statements have been determined by using available market information and
appropriate valuation methodologies. The carrying value for all assets and
liabilities which qualify as financial instruments approximates fair value.

REVENUE RECOGNITION

Proprietary securities transactions and related revenues and expenses are
recorded on a trade date basis. The related net gain or loss is included in
brokerage revenue in the consolidated statements of income.

Corporate finance revenue is generated as a result of the Company managing
and co-managing various underwritings and from advisory or other services
provided to clients. The components of this type of revenue are management fee
income, selling concessions and underwriting income. The Company also
participates in an underwriting as a syndicate participant and receives selling
concessions and underwriting income from these activities.

Fees from corporate finance activities are recognized when the offering is
complete and the income is reasonably determinable. Related costs and expenses
are deferred and recognized as expense at the time the fees are recognized.

EARNINGS PER SHARE

The Company computes earnings per share in accordance with Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share".
SFAS 128 replaces primary and fully diluted earnings per share with basic and
diluted earnings per share calculations. Basic earnings per share is computed by
dividing net income by weighted average shares outstanding. Diluted earnings per
share is

F-31
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

computed by dividing net income by weighted average shares outstanding including
the dilutive effects of stock options.

STOCK COMPENSATION

In 1997, the Company adopted Statement of Financial Accounting Standards
No. 123 ("SFAS 123"), "Accounting for stock-based compensation." As permitted
under this standard, the Company has elected to follow Accounting Principles
Board No. 25 ("APB 25"), "Accounting for Stock Issued to Employees" in
accounting for its stock options and other stock-based employee awards. The
Company derives a tax deduction measured by the excess of the fair value of the
option price at the date nonqualified options are exercised. The related tax
benefit is credited to additional paid in capital. This amounted to
approximately $846,000 for the nine months ended September 30, 1999 (unaudited).
Pro forma information regarding net income and earnings per share, as calculated
under the provision of SFAS 123, are disclosed in Note 11.

INCOME TAXES

The Company accounts for income taxes using liability method under the
Statement of Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting
for Income Taxes."

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133"), as amended, which is required to be adopted in years beginning
after June 15, 2000. Because of the Company's minimal use of derivatives,
management does not anticipate that the adoption SFAS 133 will have a
significant effect on earnings or the financial position of the Company.

RECLASSIFICATIONS

Certain prior year balances have been reclassified to conform with the
current year's presentation.

2. RECEIVABLE FROM CLEARING BROKER AND PAYABLE TO OTHER BROKERS

Receivable from clearing broker includes cash balances, deposits and net
amounts receivable or payable for securities transactions that have not yet
settled. The clearing broker maintains custody of the Company's proprietary
securities. Payable to other brokers represent payments due for execution
services rendered.

3. SECURITIES OWNED AND SECURITIES SOLD, BUT NOT YET PURCHASED

Securities owned and securities sold, but not yet purchased consist of
trading securities in corporate stocks, and are stated at quoted market values,
with resulting unrealized gains or losses included in the consolidated
statements of income. Securities sold, but not yet purchased represent
obligations of the Company to deliver securities at a future date. These
transactions result in off-balance sheet risk in an amount by which future
market values may exceed the amount reflected in the consolidated statements of
financial condition. The Company may, at its discretion, purchase the securities
at prevailing market prices at anytime.

F-32
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. FURNITURE, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS

Furniture, equipment, and leasehold improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
SEPTEMBER 30, 1999 1998 1997
------------------ ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Furniture and fixtures............... $1,323,600 $1,183,600 $1,058,900
Computer equipment................... 2,877,400 2,177,500 2,057,700
Telephone equipment.................. 1,498,500 958,800 1,249,700
Leasehold improvements............... 2,157,000 1,096,500 1,066,200
Accumulated depreciation and
amortization....................... (3,608,900) (2,836,500) (2,483,100)
---------- ---------- ----------
$4,247,600 $2,579,900 $2,949,400
========== ========== ==========
</TABLE>

5. INVESTMENTS IN INVESTMENT PARTNERSHIPS AND JOINT VENTURES

SPINNAKER TECHNOLOGY FUND, LP AND SAM

On March 12, 1997 SAM withdrew as a general partner of Spinnaker Technology
Fund, LP (the "Fund"), and sold substantially all of its fixed assets to Bowman
Capital Management, L.L.C. (formerly Bowman Associates, L.L.C.) ("Bowman"). At
that time, SAM converted its interest in the Fund into that of a special limited
partner and under terms of the conversion agreement is entitled to 12.5% of the
quarterly management fee (1% per annum of net assets as defined in the
partnership agreement) and 12.5% of the profit allocation (20% of profits net of
any loss carry forward) for the quarter ended March 31, 1997, 10% in the final
three calendar quarters of 1997 and 7% through December 31, 2002. In addition,
pursuant to the conversion agreement SAM also receives the same percentage of
management fee and profit allocation from two other entities in which Bowman is
the investment manager. Such management fees and profit allocations are included
as asset management fees in the consolidated statements of income for the nine
months ended September 30, 1999 (unaudited) and 1998 (unaudited) and for the
years ended December 31, 1998 and 1997. In connection with this transaction the
Company reacquired at book value the minority interest in SAM owned by the
Managing member of Bowman.

In 1996 SAM was the general partner of the Fund and had contracted to
provide the Fund with management services. In consideration for services
rendered to the Fund, SAM received a quarterly management fee equal to 1% per
annum of the net assets as defined in the partnership agreement and was
allocated 20% of the profits (net of any loss carry-forward) allowed to limited
partners who are not associated with the general partner. For the year ended
December 31, 1996 such profit allocation which amounted to $16,906,400 is
included in the asset management fees in the consolidated statements of income.
In addition, in 1996 SAM also provided asset management services to Bowman in
connection with Spinnaker Technology Offshore Fund Limited, and investment
company managed by Bowman. The asset management fees earned for the year ended
December 31, 1996 which amounted to $1,964,600 is reflected in the asset
management fees in the consolidated statements of income.

At September 30, 1999, (unaudited) December 31, 1998 and 1997, the Company
had an investment, as a limited partner, of approximately $11,600,000,
$8,600,000 and $5,500,000, respectively, in the Fund. For the nine months ended
September 30, 1999 (unaudited) and 1998 (unaudited) and for the years ended
December 31, 1998, 1997 and 1996, the Company's proportionate share of the
Fund's income ($3,016,900,

F-33
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. INVESTMENTS IN INVESTMENT PARTNERSHIPS AND JOINT VENTURES (CONTINUED)

$1,533,700, $2,760,500, $685,600 and $7,683,900, respectively) is reflected in
gains from firm investment in the consolidated statements of income. The
investment represents less than 5% of the equity of the Fund. The Fund has
portfolio investments, including restricted securities, which are valued at fair
value as determined by the general partner of the Fund. The summarized audited
financial information of the Fund is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1998 1997
-------------- ------------
<S> <C> <C>
Total assets................................... $1,161,788,054 $767,158,687
Total liabilities.............................. $ 588,899,337 $376,667,059
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1998 1997
------------ -----------
<S> <C> <C>
Net investment loss............................... $ (3,076,522) $(7,850,332)
Net realized and unrealized gain on investments... 197,890,737 51,439,396
------------ -----------
Net income........................................ $194,814,215 $43,589,064
============ ===========
</TABLE>

JOINT VENTURE AND INVESTMENTS IN CYPRESS FUNDS

During 1998, the Company entered into a joint venture to provide investment
management services to institutions and individuals by offering various private
investment partnerships/hedge funds and other institutional and retail
investment products. At September 30, 1999 (unaudited) and December 31, 1998,
the joint venture manages three investment funds (collectively the "Cypress
Funds") with approximately $47 million and $25 million, respectively, in net
assets under management. In consideration for the services provided, the joint
venture earns management and incentive fees from the Cypress Funds. Under the
terms of the joint venture agreement, the Company is obligated to invest up to
$1,400,000 in the joint venture to pay for operating costs during the first
12 months of operations. The profit or loss from the joint venture is allocated
in accordance with the operating agreement.

Net advances as of September 30, 1999 (unaudited) and December 31 1998, were
approximately $896,000 and $952,000, respectively, to the joint venture as
operating capital. The Company's allocated portion of the net income for the
nine months ended September 30, 1999 (unaudited) was $476,600 and net loss for
the nine months ended September 30, 1998 (unaudited) was $439,600. Net loss for
the year ended December 31, 1998 approximates $832,000, such income or loss is
included as gain/(loss) on joint venture in the consolidated statements of
income. At September 30, 1999 (unaudited) and December 31, 1998, the net
investment in the joint venture which amounted to approximately $540,000 and
$120,000, respectively, is included in other assets in the consolidated
statements of financial condition. In addition, the Company through SCM also has
investments in certain of the Cypress Funds as a general partner. As a general
partner, SCM is contingently liable for all partnership liabilities. However,
the Company's liability may be limited to SCM's total equity and advances to SCM
which amounted to approximately $4,500,000 at September 30, 1999 (unaudited) and
$3,200,000 at December 31, 1998.

F-34
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. NET CAPITAL REQUIREMENTS

As a registered broker-dealer, the Company is subject to the SEC's Uniform
Net Capital Rule 15c3-1 (the "Rule"). The Company has elected to use the
alternative method, permitted by the Rule. Under the alternative method the
Company is required to maintain minimum net capital, as defined, equal to the
greater of $250,000 or an amount determinable based on the market prices and
number of securities in which the Company acts as a market maker. Net capital
and aggregate minimum requirements change from day to day, but as of
September 30, 1999 (unaudited) and December 31, 1998 and 1997 the Company had
net capital of approximately $17,227,200, $9,646,000 and $3,873,900,
respectively, which was $16,814,700, $9,291,000 and $3,553,900, respectively, in
excess of the required minimum capital. The capital rules of the SEC and NASD
also provide that equity capital may not be withdrawn or cash dividends paid if
resulting net capital would be less than the minimum requirements.

7. RECEIVABLES FROM EMPLOYEES FOR SHARES ISSUED

Receivables from employees bear interest at the prime rate and are due at
various times through 2001. The promissory notes due from the sale of the
Company's common stock are collateralized by pledges of the shares sold and are
shown as a deduction from stockholders' equity.

8. REVOLVING SUBORDINATED LOAN AGREEMENT

During 1998, the Company entered into a revolving subordinated loan
agreement with it's clearing broker. The agreement provides for an aggregate
principal amount outstanding at any time not to exceed $5 million and contains a
one year renewal option, which is renewable each March 31. The interest rate on
the loan is prime plus 2.00% per annum or .15% of the amount loaned, whichever
is greater.

The agreement has been approved by NASD and as such, any amount utilized
under the agreement is available to the Company in computing net capital under
the SEC's uniform net capital rule. To the extent that any borrowings under the
agreement are required for the Company's continued compliance with the minimum
net capital requirements, they may not be repaid. To date, the Company did not
utilize any borrowings under the agreement.

9. EMPLOYEE BENEFITS

The Company sponsors the SoundView Technology Group 401(k) and Profit
Sharing Plan (the "Plan"). Total matching contributions and profit sharing
expenses for the nine months ended September 30, 1999 (unaudited) and 1998
(unaudited) and for the years ended December 31, 1998, 1997 and 1996 was
$849,900, $729,300, $961,600, $731,200 and $523,600, respectively, based on a
percentage of eligible compensation of participating employees. Under the 401(K)
provisions of the Plan, subject to certain limitations, substantially all
employees may elect to contribute to the Plan at least 1% but not more than 10%
of their annual compensation. The Company matches each employee's contribution
up to an amount representing 2% of the first $40,000 of the employee's base
compensation during the year. All matching contributions are vested after
one year or 1,000 service hours. Under the profit sharing provisions of the
Plan, the Company may make contributions each year at its discretion. The
Company's Profit sharing contributions vest over a five year period at a rate of
20% per year of qualifying service.

F-35
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. STOCKHOLDERS' EQUITY AND TREASURY STOCK TRANSACTIONS

During the nine months ended September 30, 1999 (unaudited), the Company
purchased as treasury stock 121,380 shares of common stock at prices ranging
from $12.48 to $12.74. During the nine months ended September 30, 1999
(unaudited), 222,330 shares of treasury stock were sold to various employees at
prices ranging from $11.00 to $12.74. During the years ended December 31, 1998,
1997 and 1996 the Company purchased as treasury stock 453,500, 30,250 and 53,000
shares, respectively, of common stock at prices from $5.54 to $10.23 per share.
During the years ended December 31, 1998, 1997 and 1996, 389,300, 6,000 and
21,000 shares of treasury stock, respectively, were sold to various employees at
prices ranging from $5.54 to $10.23 per share. All transactions in the Company's
common stocks were at amounts which approximate fair market value as determined
by the Board of Directors on the sale dates (see Note 7). Included in treasury
stock sold to employees on the consolidated statements of stockholders' equity
are treasury stock shares issued in conjunction with the exercise of the stock
options pursuant to the Company's stock option plan (see Note 11).

11. STOCK OPTION PLAN

In November 1985, the Board of Directors approved the adoption of the 1985
Stock Option Plan and such plan was amended in November 1995 by the shareholders
of the Company. Under the Plan, the Board of Directors may grant options, stock
appreciation rights ("SARs") or a combination of options and SARs to key
employees. The options may be incentive stock options within the meaning of
Section 422A of the Internal Revenue Code of 1986 or options that do not meet
the requirements of such Code section ("nonqualified options"). Stock options
have a ten year term and vest equally over a five year period. Vested options
are exercisable at any time during the ten years from the date of option grant.
The Company's Stock Option Plan has authorized the grant of options for up to
5,000,000 shares of the Company's common stock.

The SARs entitle the employee to receive shares of common stock of the
Company, cash or a combination of shares and cash (as approved by the Board of
Directors) for the excess, if any, of the fair market value of a share of common
stock on the date the SAR is exercised over the exercise price per share
specified in such SAR or its related option. No SARs have been granted by the
Company.

The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123 ("Statement 123"), "Accounting for Stock-Based Compensation,"
requires use of option valuation models that were not developed for use in
valuing employee stock options. Under APB 25, because the exercise price of the
Company's employee stock options equals the fair value of the underlying stock
on the date of grant, no compensation expense is recognized.

Pro forma information regarding net income and earnings per share is
required under the alternative approach of Statement 123, and has been
determined as if the Company had accounted for its employee stock options
granted subsequent to December 31, 1994 under the fair value method. The fair
value for these options was estimated at the date of grant using a minimum value
option pricing model using the following assumptions: a weighted-average
expected life of the option of nine years and weighted-average risk-free
interest rates as disclosed in the table below.

The minimum value option valuation model was developed for use in estimating
the fair value of nonpublic options. Option valuation models require the input
of highly subjective assumptions including the expected life of the option.
Because the Company's stock options may have characteristics significantly

F-36
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. STOCK OPTION PLAN (CONTINUED)

different from those of other company's options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the model results do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information is as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------------- ------------------------------
1999 1998 1998 1997 1996
----------- ----------- -------- -------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Income--As Reported....................... $13,007 $ 5,249 $8,916 $2,264 $7,551
Pro forma net income.......................... $12,361 $ 4,720 $8,234 $1,677 $5,596
Earnings Per Common Share:
Basic As reported........................ $ 13.09 $ 5.59 $ 9.62 $ 2.41 $ 5.98
Pro Forma........................... $ 12.44 $ 5.03 $ 8.89 $ 1.78 $ 5.68
Diluted As reported........................ $ 5.24 $ 2.44 $ 4.15 $ 1.10 $ 3.01
Pro Forma........................... $ 4.98 $ 2.19 $ 3.84 $ 0.81 $ 2.86
Risk free interest rates...................... 6.4% 4.7% 4.7% 5.92% 5.65%
</TABLE>

A summary of the Company's stock option activity, and related information is
as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------------------------- -------------------------------
1999 1998 1998 1997
-------------------- -------------------- -------------------- --------
(UNAUDITED) (UNAUDITED)
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
OPTIONS EXERCISE OPTIONS EXERCISE OPTIONS EXERCISE OPTIONS
(000'S) PRICE (000'S) PRICE (000'S) PRICE (000'S)
-------- --------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding--beginning of
period................... 2,778 $5.86 3,050 $5.22 3,050 $5.22 2,386
Granted.................... 406 11.48 422 8.65 447 8.71 977
Exercised.................. (39) 1.85 (308) 3.28 (364) 3.86 (6)
Forfeited.................. (26) 9.36 (253) 5.47 (355) 6.03 (307)
----- ----- ----- -----
Outstanding--end of
period................... 3,119 6.61 2,911 5.90 2,778 5.86 3,050
===== ===== ===== =====
Exercisable at end of
period................... 1,562 $4.86 1,141 $4.31 1,100 $4.20 930
Weighted-average fair value
of options granted during
the period............... $5.03 $2.99 $3.00

<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996
--------- --------------------

WEIGHTED- WEIGHTED-
AVERAGE AVERAGE
EXERCISE OPTIONS EXERCISE
PRICE (000'S) PRICE
--------- -------- ---------
<S> <C> <C> <C>
Outstanding--beginning of
period................... $4.04 1,805 $3.04
Granted.................... 7.85 913 5.85
Exercised.................. 1.50 (1) 3.59
Forfeited.................. 4.46 (331) 3.55
-----
Outstanding--end of
period................... 5.22 2,386 4.04
=====
Exercisable at end of
period................... $3.26 612 $2.45
Weighted-average fair value
of options granted during
the period............... $3.24 $2.33
</TABLE>

Exercise prices for options outstanding as of September 30, 1999 (unaudited)
and December 31, 1998 ranged from $1.54 to $13.50 and $1.55 to $9.74,
respectively. As of September 30, 1999 (unaudited) the weighted-average
remaining contractual life of those options is approximately 6.83 years.

There were 1,471,000, 1,850,500, 1,942,500 and 2,612,500 shares available
for grant as of September 30, 1999 (unaudited) and December 31, 1998, 1997 and
1996, respectively.

F-37
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. TRANSACTIONS WITH GARTNER GROUP, INC.

The Company was previously a wholly-owned subsidiary of Gartner Group, Inc.
("Gartner Group"). On October 31, 1985, Gartner Group spun off the Company by
distributing a dividend of all of its shares in the Company to the holders of
common stock of Gartner Group.

Gartner Group develops and markets research materials on the information
technology industry to various customer groups. After the spin-off, Gartner
Group agreed to continue sharing research and facilities with the Company under
agreements dated October 31, 1985 and amended on May 17, 1995 and further
amended on August 19, 1997. The research sharing agreement provides for the
sharing of research information and research staff between the Company and
Gartner Group and prohibits Gartner Group from directly or indirectly engaging
or participating in any business enterprise which is in competition with any of
the business activities of the Company conducted after the date of the spin-off,
except in certain areas specified in the agreement. Under the amended agreement,
the Company paid Gartner Group an annual fee of $6,000,000 in 1998 and
$4,000,000 in 1997 and received payments from Gartner Group of $3,000,000 in
1998 and $2,000,000 in 1997. In 1996, the Company paid approximately $1,520,900
under the terms of the prior agreement. In addition, under the agreement
SoundView will pay Gartner Group $7,000,000 and receive $4,000,000 in 1999. The
amended research sharing agreement has no stated term and may be terminated by
either party upon six years written notice.

In addition, the Company paid Gartner Group monthly fees for the use of
equipment and for the use of administrative or other personnel and services.
These fees, which totaled $986,500, $956,600, $1,175,800, $524,600 and $455,300
for the nine months ended September 30, 1999 (unaudited) and 1998 (unaudited)
and for the years ended December 31, 1998, 1997 and 1996, respectively, are
subject to periodic adjustment and were charged to the respective expense
categories.

13. INCOME TAXES

The components of income tax expense (benefit) are:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- ------------------------------------
1999 1998 1998 1997 1996
----------- ----------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Current:
Federal......................... $12,658,300 $2,265,000 $4,375,200 $5,912,300 $ 13,200
State........................... 2,398,600 434,900 1,401,500 1,941,800 (87,200)
----------- ---------- ---------- ---------- ----------
15,056,900 2,699,900 5,776,700 7,854,100 (74,000)
Deferred:
Federal......................... (4,656,500) 1,000,400 588,600 (4,604,400) 3,903,100
State........................... (883,500) 189,800 191,200 (1,610,700) 1,490,200
----------- ---------- ---------- ---------- ----------
$ 9,516,900 $3,890,100 $6,556,500 $1,639,000 $5,319,300
=========== ========== ========== ========== ==========
</TABLE>

F-38
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. INCOME TAXES (CONTINUED)

The effective income tax differs form the amount computed by applying the
Federal statutory income tax rate as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- ------------------------------------
1999 1998 1998 1997 1996
----------- ----------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Federal statutory income tax....... $7,883,400 $3,198,600 $5,415,400 $1,365,900 $4,376,900
State income taxes, net of federal
tax benefits..................... 984,800 406,100 1,035,300 215,200 926,000
Other, net......................... 648,700 285,400 105,800 57,900 16,400
---------- ---------- ---------- ---------- ----------
Effective income tax............... $9,516,900 $3,890,100 $6,556,500 $1,639,000 $5,319,300
========== ========== ========== ========== ==========
</TABLE>

The temporary differences which created deferred tax assets and liabilities
are included in deferred taxes receivable at September 30, 1999, (unaudited)
December 31, 1998 and 1997 as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
------------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Deferred tax assets:
Deferred compensation................................. $7,887,700 $3,072,800 $2,689,200
Other................................................. 567,000 303,600 297,000
---------- ---------- ----------
Total deferred tax assets........................... 8,454,700 3,376,400 2,986,200
Deferred tax liabilities:
Net unrealized appreciation on investments............ 1,798,400 2,260,100 1,090,100
---------- ---------- ----------
Total deferred tax liabilities...................... 1,798,400 2,260,100 1,090,100
---------- ---------- ----------
Net deferred taxes receivable........................... $6,656,300 $1,116,300 $1,896,100
========== ========== ==========
</TABLE>

14. LEASES

Office lease payments are charged to expense as incurred. For the nine
months ended September 30, 1999 (unaudited) and 1998 (unaudited), such expenses
included in the consolidated statements of income were $760,300 and $739,600,
respectively. For the years ended December 31, 1998, 1997 and 1996, such
expenses amounted to $987,300, $891,800 and $623,500, respectively.

F-39
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. LEASES (CONTINUED)

Future minimum payments under non-cancelable office lease agreements
consisted of the following:

<TABLE>
<CAPTION>
MINIMUM LEASE PAYMENTS
--------------------------------------
SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ -----------------
(UNAUDITED)
<S> <C> <C>
1999........................................ $ 788,100 $ 909,600
2000........................................ 1,535,400 925,100
2001........................................ 1,554,200 905,700
2002........................................ 1,489,100 644,100
2003........................................ 1,032,600 162,600
Thereafter.................................. 5,135,000 --
----------- -----------
$11,534,400 $ 3,547,100
=========== ===========
</TABLE>

The Company's lease on its primary office facility expires on March 31, 2003
and contains a five year renewal option. One other operating lease expires in
2009 Certain office leases are subject to escalation based upon increases in
specified operating expenses.

15. EARNINGS PER COMMON SHARE

The following table reconciles the numerators and the denominators of the
Company's basic and diluted per share calculations:

<TABLE>
<CAPTION>
WEIGHTED AVG. PER SHARE
NET INCOME SHARES AMOUNT
----------- ------------- ---------
<S> <C> <C> <C>
Nine months ended September 30, 1999 (unaudited):
Basic earnings per share................................ $13,007,000 993,655 $13.09
Options outstanding..................................... -- 1,486,552
----------- --------- ------
Diluted earnings per share.............................. $13,007,000 2,480,207 $ 5.24
=========== ========= ======
Nine months ended September 30, 1998 (unaudited):
Basic earnings per share................................ $ 5,248,700 938,650 $ 5.59
Options outstanding..................................... -- 1,216,277
----------- --------- ------
Diluted earnings per share.............................. $ 5,248,700 2,154,927 $ 2.44
=========== ========= ======
Year ended December 31, 1998:
Basic earnings per share................................ $ 8,916,000 926,526 $ 9.62
Options outstanding..................................... -- 1,219,674
----------- --------- ------
Diluted earnings per share.............................. $ 8,916,000 2,146,200 $ 4.15
=========== ========= ======
</TABLE>

F-40
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. EARNINGS PER COMMON SHARE (CONTINUED)

<TABLE>
<CAPTION>
WEIGHTED AVG. PER SHARE
NET INCOME SHARES AMOUNT
----------- ------------- ---------
<S> <C> <C> <C>
Year ended December 31, 1997:
Basic earnings per share................................ $ 2,263,500 940,055 $ 2.41
Options outstanding..................................... -- 1,124,263
----------- --------- ------
Diluted earnings per share.............................. $ 2,263,500 2,064,318 $ 1.10
=========== ========= ======
Year ended December 31, 1996:
Basic earnings per share................................ $ 5,887,000 985,009 $ 5.98
Options outstanding..................................... -- 969,078
----------- --------- ------
Diluted earnings per share.............................. $ 5,887,000 1,954,087 $ 3.01
=========== ========= ======
</TABLE>

16. CONSOLIDATED SUBSIDIARIES

The following is a summary of certain financial information of SAM and SCM,
the Company's wholly owned, consolidated subsidiaries.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998 1997 1996
------------- ----------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
SAM
Investment in Spinnaker Technology LP....... $9,575,000 $ 5,509,100 $3,525,400 $25,849,300
Fees receivable............................. 2,792,200 3,836,400 1,744,500 2,607,400
Total assets................................ 12,367,800 9,855,600 6,097,800 29,378,900
Stockholder's equity........................ 9,318,000 5,049,200 1,144,400 8,190,200

SCM
Investments in Cypress Funds................ 5,181,400 3,402,900 -- --
Total assets................................ 5,181,400 3,402,900 -- --
Stockholder's equity........................ 882,500 233,700 -- --
</TABLE>

17. SEGMENT INFORMATION

SFAS No. 131 "Disclosures About Segments of An Enterprise and Related
Information." Requires the Company to use the "management approach" in
disclosing segment information. The Company conducts its business predominantly
within one industry segment, institutional brokerage, which includes the
Company's investment banking, underwriting services and asset management, for
all periods presented. Management assesses the Company's performance and
measures the Company's income and assets on a single segment basis. The single
segment generated revenue predominantly from the United States for all periods
presented.

18. OFF-BALANCE SHEET CREDIT RISK AND CONCENTRATION OF CREDIT RISK

Certain market and credit risks are inherent in the Company's business,
primarily in facilitating customers' trading transactions in financial
instruments. In the normal course of business, the Company's customer activities
include execution and settlement of various customer security transactions with
the clearing broker. These activities may expose the Company and the clearing
broker (collectively referred to

F-41
<PAGE>
SOUNDVIEW TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. OFF-BALANCE SHEET CREDIT RISK AND CONCENTRATION OF CREDIT RISK (CONTINUED)

herein as "SoundView") to off balance sheet risk in the event the customer is
unable to fulfill its contractual obligation.

The Company's customers securities activities are transacted on either a
cash or margin basis. In margin transactions, the Company in conjunction with
the clearing broker, extends credit to the customer which is collateralized by
cash and/or securities in the customer's account. In connection with these
activities, SoundView executes customer transactions involving securities sold
but not yet purchased. SoundView seeks to control the risks associated with its
customer activities by requiring customers to maintain margin collateral in
compliance with various regulatory, exchange and internal guidelines. SoundView
monitors required margin levels daily and pursuant to such guidelines, requires
customers to deposit additional collateral or reduce positions when necessary.
Such transactions may expose SoundView to significant off-balance sheet risk in
the event the margin is not sufficient to fully cover losses which customers may
incur. In the event the customer fails to satisfy its obligations, SoundView may
be required to purchase or sell the collateral at prevailing market prices in
order to fulfill the customer's obligations.

In accordance with industry practice, customer securities transactions are
generally settled three business days after the trade date. SoundView is
therefore exposed to risk of loss on these transactions in the event of the
customer's or broker's inability to meet the terms of their contracts in which
case SoundView may have to purchase or sell financial instruments at prevailing
market prices. At September 30, 1999, December 31, 1998 and 1997 the Company
believes that the settlement of these transactions will not have a material
effect on the Company's consolidated statement of financial condition or results
of operations.

The Company is engaged in various securities trading and brokerage
activities servicing customers primarily located in the United States. The
Company's exposure to credit risk associated with the nonperformance of these
counterparties in fulfilling their contractual obligation pursuants to
securities transactions can be directly impacted by volatile trading markets
which may impair the counterparties' ability to satisfy their obligations to the
Company. The Company monitors credit risk on both an individual and group
counterparty basis.

19. CONTINGENCIES

The Company and its subsidiaries are subject to claims and legal proceedings
arising in the ordinary course of business. The Company believes that the
disposition of these claims and legal proceedings will not have a material
adverse effect on the consolidated financial position or the results of
operations of the Company.

20. SUBSEQUENT EVENTS (UNAUDITED)

On October 31, 1999, the Company signed a definitive agreement with Wit
Capital Group, Inc. ("Wit Capital"). Under the terms of the agreement, Wit
Capital will acquire the outstanding shares of the Company in exchange for
approximately $320 million, consisting of newly-issued Wit Capital Common Stock,
options replacing the Company's options and up to $30 million in cash. The
exchange ratio in the merger is subject to adjustment for changes in the market
price of Wit Capital's stock from $17.56 up to $18.56 or down to $15.56 and is
not adjustable for changes beyond those levels. The board of directors of Wit
Capital and the Company's stockholders have approved the transaction, which is
expected to close in January or February 2000. Completion is contingent on Wit
Capital stockholder approval, regulatory approval and other customary closing
conditions.

F-42
<PAGE>
APPENDIX I

AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WIT CAPITAL GROUP, INC.
W/S MERGER CORP.
AND
SOUNDVIEW TECHNOLOGY GROUP, INC.
DATED AS OF: OCTOBER 31, 1999
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING

1.1 The Merger.................................................. 1
1.2 Effective Time.............................................. 2
1.3 Effects of the Merger....................................... 3
1.4 Closing..................................................... 3

ARTICLE II
CERTIFICATE OF INCORPORATION AND
BYLAWS OF THE SURVIVING CORPORATION

2.1 Certificate of Incorporation................................ 3
2.2 The Bylaws.................................................. 3

ARTICLE III
DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION

3.1 Directors................................................... 3
3.2 Officers.................................................... 3

ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER

Share Consideration for the Merger; Conversion or
4.1 Cancellation of Shares in the Merger........................ 4
4.2 Exchange of Shares in the Merger............................ 7
4.3 Fractional Shares........................................... 8

ARTICLE V
ELECTION PROCEDURE; OTHER AGREEMENTS

5.1 Limitation on Election...................................... 9
5.2 Form of Election............................................ 9
5.3 Revocation of Election...................................... 9
5.4 Decision of Exchange Agent.................................. 9
5.5 Certain Employee Actions and Agreements..................... 10
5.6 Employment Agreements....................................... 10
5.7 Retention Pool.............................................. 10
5.8 Soundview Stock and Option Arrangements..................... 10

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SOUNDVIEW

6.1 Organization; Qualification................................. 11
6.2 Subsidiaries and Affiliates................................. 12
6.3 Capitalization.............................................. 12
6.4 Authorization; Validity of Agreement; SoundView Action...... 13
6.5 Board Approvals Regarding Transactions...................... 13
6.6 Vote Required............................................... 13
6.7 Consents and Approvals; No Violations....................... 14
6.8 Governmental Documents and Financial Statements............. 14
6.9 Compliance with Applicable Law.............................. 15
</TABLE>

I-i
<PAGE>

<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
6.10 Books and Records........................................... 16
6.11 Ineligible Persons.......................................... 16
6.12 No Undisclosed Liabilities.................................. 16
6.13 Interim Operations.......................................... 17
6.14 Absence of Certain Changes.................................. 17
6.15 Technology and Intellectual Property........................ 18
6.16 Legal Proceedings........................................... 19
6.17 Employee Benefit Plans...................................... 19
6.18 Tax Matters; Government Benefits............................ 21
6.19 Labor and Employment Matters................................ 22
6.20 Contracts and Commitments................................... 23
6.21 Insurance................................................... 23
6.22 Personnel................................................... 23
6.23 Insider Interests........................................... 23
6.24 Brokers or Finders.......................................... 24

ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PARENT

7.1 Organization; Qualification................................. 24
7.2 Subsidiaries and Affiliates................................. 24
7.3 Capitalization.............................................. 25
7.4 Authorization; Validity of Agreement; Parent Action......... 26
7.5 Board Approvals Regarding Transactions...................... 26
7.6 Vote Required............................................... 26
7.7 Consents and Approvals; No Violations....................... 26
7.8 Governmental Documents and Financial Statements............. 27
7.9 Compliance with Applicable Law.............................. 27
7.10 Books and Records........................................... 29
7.11 Ineligible Persons.......................................... 29
7.12 No Undisclosed Liabilities.................................. 29
7.13 Interim Operations.......................................... 30
7.14 Absence of Certain Changes.................................. 30
7.15 Technology and Intellectual Property........................ 31
7.16 Legal Proceedings........................................... 32
7.17 Employee Benefit Plans...................................... 32
7.18 Tax Matters; Government Benefits............................ 35
7.19 Labor and Employment Matters................................ 36
7.20 Contracts and Commitments................................... 37
7.21 Insurance................................................... 37
7.22 Insider Interests........................................... 37
7.23 Brokers or Finders.......................................... 37

ARTICLE VIII
COVENANTS

8.1 Interim Operations of SoundView............................. 37
8.2 Interim Operations of Parent................................ 40
8.3 Access; Confidentiality..................................... 42
8.4 Reasonable Best Efforts..................................... 42
Shareholders Meetings; Proxy Statement/Registration
8.5 Statement................................................... 43
8.6 No Solicitation of Competing Transaction.................... 44
</TABLE>

I-ii
<PAGE>

<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
8.7 Publicity................................................... 44
8.8 Notification of Certain Matters............................. 45
8.9 State Takeover Laws......................................... 45
8.10 Merger Sub Compliance....................................... 45
8.11 Expenses.................................................... 45
8.12 Appointment of Director..................................... 45
8.13 Tax-Free Reorganization..................................... 45

ARTICLE IX
CONDITIONS

9.1 Conditions to the Obligations of Parent and Merger Sub...... 46
9.2 Conditions to the Obligations of SoundView.................. 48

ARTICLE X
TERMINATION/SURVIVAL

10.1 Termination................................................. 50
10.2 Effect of Termination....................................... 52
No Survival of Representations and Warranties and
10.3 Covenants................................................... 52

ARTICLE XI
DEFINITIONS

11.1 Definitions................................................. 52

ARTICLE XII
MISCELLANEOUS

12.1 Disputes.................................................... 60
12.2 Amendments; Extension; Waiver............................... 60
12.3 Entire Agreement............................................ 60
12.4 Specific Performance; Injunctive Relief..................... 61
12.5 Interpretation.............................................. 61
12.6 Severability................................................ 61
12.7 Notices..................................................... 61
12.8 Binding Effect; Persons Benefitting; No Assignment.......... 63
12.9 Counterparts................................................ 63
12.10 Governing Law............................................... 63
12.11 Jurisdiction; Waiver of Jury Trial and Certain Damages...... 63
</TABLE>

I-iii
<PAGE>
AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated as
of October 31, 1999, among Wit Capital Group, Inc., a Delaware corporation
("Parent"), W/S Merger Corp., a Delaware corporation and a direct wholly owned
subsidiary of Parent ("Merger Sub"), and SoundView Technology Group, Inc., a
Delaware corporation ("SoundView").

RECITALS

WHEREAS, the Boards of Directors of Parent, Merger Sub and SoundView each
have determined that it is in the best interests of their respective
stockholders for Merger Sub to merge with and into SoundView upon the terms and
subject to the conditions of this Agreement;

WHEREAS, for federal income tax purposes, it is intended that the Merger (as
hereinafter defined in Section 1.1) shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"); and

WHEREAS, Parent, Merger Sub and SoundView desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger.

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, Parent,
Merger Sub and SoundView hereby agree as follows:

ARTICLE I

THE MERGER; EFFECTIVE TIME; CLOSING

1.1 THE MERGER. Subject to the terms and conditions of this Agreement and
the Delaware General Corporation Law (the "DGCL"), at the Effective Time (as
hereinafter defined), SoundView and Merger Sub shall consummate a merger (the
"Merger") in which (a) Merger Sub shall be merged with and into SoundView and
the separate corporate existence of Merger Sub shall thereupon cease, (b)
SoundView shall be the successor or surviving corporation in the Merger and
shall continue to be governed by the laws of the State of Delaware, and (c) the
separate corporate existence of SoundView with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
corporation surviving the Merger is sometimes hereinafter referred to as the
"Surviving Corporation." At the election of Parent, with prior notice and
consultation with SoundView, any direct wholly owned subsidiary of Parent may be
substituted for Merger Sub as a constituent corporation in the Merger. In such
event, the parties agree to execute an appropriate amendment to this Agreement
in order to reflect the foregoing. If at any time after December 15, 1999,
Parent is unable to satisfy the condition set forth in Section 9.1(i), Parent
shall be entitled to restructure the Merger so that at the Effective Time,
SoundView shall be merged with and into Merger Sub and the separate corporate
existence of SoundView shall thereupon cease, Merger Sub shall be the successor
or surviving corporation in the Merger and shall continue to be governed by the
laws of the State of Delaware, and the separate corporate existence of Merger
Sub with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger, except that the name of Merger Sub shall be
changed to SoundView Technology Group, Inc.; provided, however, that no such
election shall be effective if such restructuring would be materially adverse to
the stockholders of SoundView or if within 5 business days after the date such
election is communicated in writing to SoundView, Parent shall have received an
opinion of Morrison & Foerster LLP or other counsel reasonably acceptable to
Parent addressed to Parent to the effect set forth in Section 9.1(i) and such
Section 9.1(i) shall thereafter be amended so as to replace references to
"Skadden Arps Slate Meagher & Flom LLP" with "Morrison & Foerster LLP" or such
other counsel in all places where it appears therein. In the event the foregoing
election is effective, the parties hereto agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing. If at any time
after December 15, 1999, SoundView is unable to satisfy the condition set forth
in Section 9.2(h), SoundView shall be entitled to

I-1
<PAGE>
restructure the Merger so that at the Effective Time, SoundView shall be merged
with and into Merger Sub and the separate corporate existence of SoundView shall
thereupon cease, Merger Sub shall be the successor or surviving corporation in
the Merger and shall continue to be governed by the laws of the State of
Delaware, and the separate corporate existence of Merger Sub with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except that the name of Merger Sub shall be changed to "SoundView
Technology Group, Inc."; provided, however, that no such election shall be
effective if such restructuring would be materially adverse to the business,
operations or financial condition of SoundView or if within 5 business days
after the date such election is communicated in writing to Parent, SoundView
shall have received, an opinion of Skadden Arps Slate Meagher & Flom LLP or
other counsel reasonably acceptable to SoundView addressed to SoundView to the
effect set forth in Section 9.2(h) and such Section 9.2(h) shall thereafter be
amended so as to replace references to "Morrison & Foerster LLP" with "Skadden
Arps Slate Meagher & Flom LLP" or such other counsel in all places where it
appears therein. In the event the foregoing election is effective, the parties
hereto agree to execute an appropriate amendment to this Agreement in order to
reflect the foregoing.

1.2 EFFECTIVE TIME. Subject to the terms and conditions of this Agreement,
as soon as practicable after the satisfaction of the conditions set forth in
Article IX, Parent, Merger Sub and SoundView will cause an appropriate
Certificate of Merger (the "Certificate of Merger") to be executed and filed on
the date of the Closing (as hereinafter defined in Section 1.4) (or on such
other date as Parent and SoundView may agree) with the Secretary of State of the
State of Delaware in the manner provided in the DGCL. The Merger shall become
effective on the close of business on the date on which the Certificate of
Merger has been duly filed with the Secretary of State of the State of Delaware
or such other time as is agreed upon by the parties and specified in the
Certificate of Merger, and such time is hereinafter referred to as the
"Effective Time."

1.3 EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
Delaware law. Without limiting the generality of the foregoing, at the Effective
Time, all the properties, rights, privileges, powers and franchises of SoundView
and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of SoundView and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.

1.4 CLOSING. The closing of the Merger (the "Closing") shall take place
(a) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, New York, New York 10022, at 10:00 a.m. on the first business day
following the later of (i) the date on which the last of the conditions set
forth in Article IX hereof shall be fulfilled or waived in accordance with this
Agreement and (ii) January 7, 2000 or (b) at such other place, time and date as
Parent and SoundView may agree.

ARTICLE II

CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION

2.1 CERTIFICATE OF INCORPORATION. At the Effective Time and in accordance
with the DGCL, the Restated Certificate of Incorporation of Merger Sub shall be
the Certificate of Incorporation of the Surviving Corporation except that the
name of the corporation shall be "SoundView Technology Group, Inc., until
thereafter amended in accordance with applicable law.

2.2 THE BYLAWS. At the Effective Time and without any further action on
the part of SoundView, Merger Sub or the Surviving Corporation, the Bylaws of
Merger Sub shall be the Bylaws of the Surviving Corporation.

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ARTICLE III

DIRECTORS AND OFFICERS
OF THE SURVIVING CORPORATION

3.1 DIRECTORS. Ronald Readmond, Mark Loehr and Russell Crabs shall, from
and after the Effective Time, be the directors of the Surviving Corporation
until their successors have been duly elected or appointed and qualified.

3.2 OFFICERS. The officers of SoundView at the Effective Time shall, from
and after the Effective Time, be the officers of the Surviving Corporation until
their successors have been duly elected or appointed and qualified.

ARTICLE IV

MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF SHARES IN THE MERGER

4.1 SHARE CONSIDERATION FOR THE MERGER; CONVERSION OR CANCELLATION OF SHARES
IN THE MERGER. The manner of converting or canceling shares of SoundView and
Merger Sub in the Merger shall be as follows:

(a) NON-ELECTING SHARES. At the Effective Time, each share of common
stock, par value $0.01 per share, of SoundView ("SoundView Common Stock") issued
and outstanding immediately prior to the Effective Time (such shares of
SoundView Common Stock being referred to hereinafter as the "Shares"), other
than (i) Shares as to which an election to receive cash has been properly made
pursuant to Article V hereof and not revoked, relinquished or lost (such Shares
being referred to hereinafter as "Electing Shares"), (ii) Shares as to which
dissenters' rights have been properly asserted and not withdrawn or lost under
Section 262 of the DGCL (such Shares being referred to hereinafter as
"Dissenting Shares") and (iii) Shares owned by Parent, Merger Sub or any direct
or indirect wholly owned subsidiary of Parent (collectively, "Parent Companies")
or SoundView, shall, by virtue of the Merger and without any action on the part
of the holder thereof, cease to be outstanding, be canceled and retired and be
converted into (x) that number of shares of common stock, par value $.01 per
share, of Parent ("Parent Common Stock") together with the associated rights
(the "Parent Rights") to purchase shares of Series A Junior Participating
Preferred Stock of Parent issued pursuant to the Rights Agreement dated June 7,
1999 between Parent and American Stock Transfer Company as Rights Agent (the
"Parent Rights Agreement") (the shares of Parent Common Stock together with the
Parent Rights being referred to herein as the "Parent Shares"), rounded to the
nearest thousandth of a share (with "5" being rounded downward), equal to the
quotient (the "Exchange Ratio") derived by dividing $81.2387 by the average of
the mean between the closing bid and ask prices (as reported for the primary
trading session (currently ending at 4:00 p.m.) on the Nasdaq National Market
("NNM")) of Parent Shares during the period (the "Exchange Rate Period")
comprised of the seven consecutive trading days ending on the fifth trading day
prior to such date not more than twenty and not less than ten days prior to the
date then scheduled for the Closing as is determined in advance by resolution of
Parent's Board of Directors (the "Average Stock Price"); PROVIDED, HOWEVER, that
the Exchange Ratio shall not be greater than 5.220 or less than 4.376 and (y)
cash in lieu of fractional Parent Shares as contemplated by Section 4.3. Shares
other than Electing Shares, Dissenting Shares and Parent Companies Shares are
sometimes referred to herein as "Non-electing Shares").

(b) ELECTING SHARES. At the Effective Time, on the terms and subject to
the conditions hereinafter set forth in Article IX, each Electing Share shall,
by virtue of the Merger and the election made with respect thereto, cease to be
outstanding, be canceled and retired and be converted into cash in an amount
equal to $81.2387 without interest thereon at any time (the "Cash Value per
Share").

(c) DISSENTING SHARES. Dissenting Shares shall not be converted into or
represent a right to receive the consideration set forth in Section 4.1 but the
holder of such Shares shall be entitled only to such rights as are provided by
the DGCL, and Parent shall be solely responsible for the payment of any amounts
due

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in respect of such Dissenting Shares pursuant to the DGCL. If any holder of
Shares which theretofore were Dissenting Shares effectively withdraws or loses
(through failure to perfect or otherwise) such holder's right to appraisal under
Section 262 of the DGCL, then as of the occurrence of such withdrawal or loss
such holder's Share shall automatically be restored to the status of
Non-electing Shares.

(d) PARENT HOLDINGS. At the Effective Time, each Share issued and
outstanding and owned by Parent or any Parent Subsidiary immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, cease to be outstanding and be canceled and retired
without payment of any consideration therefor.

(e) MERGER SUB SHARES. At the Effective Time, each share of common stock
of Merger Sub issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of Merger Sub
or the holder thereof, cease to be outstanding, be canceled and retired and be
converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation.

(f) SOUNDVIEW STOCK OPTIONS. Except as set forth below, the terms and
provisions of the SoundView Stock Option Plan (as defined below) shall continue
in full force and effect and shall govern each option (or portion thereof, as
the case may be) outstanding immediately prior to the Effective Time under any
SoundView Stock Option Plan, whether vested, unvested, exercisable or
unexercisable (a "SoundView Stock Option"). At the Effective Time, each
SoundView Stock Option then outstanding shall be automatically converted,
without any further action, into an option to purchase Parent Shares. The number
of shares of SoundView Common Stock to be substituted for shall be equal to the
number of shares of Parent Common Stock together with the Parent Rights, rounded
down to the nearest whole number, which is equal to the number of shares of
SoundView Common Stock that were subject to such SoundView Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio, at an
exercise price equal to the per share exercise price of each such SoundView
Stock Option immediately prior to the Effective Time divided by the Exchange
Ratio. Notwithstanding any vesting schedule set forth in or pursuant to any
SoundView Stock Option Plan or SoundView Stock Option, any SoundView Stock
Options of any SoundView employee outstanding and not yet vested at the
Effective Time shall, except to the extent forfeited pursuant to the terms of
the applicable SoundView Stock Option Plan or SoundView Stock Option, vest on
each March 31, June 30, September 30 and December 31 commencing March 31, 2000
and ending December 31, 2002 at the rate as nearly as practical equal to
one-twelfth of such unvested SoundView Stock Options of such SoundView employee.
Such options for Parent Common Stock shall for purposes of this Agreement be
called "Parent Common Stock Options." All of the Parent Common Stock Options
held by an employee shall vest immediately upon the occurrence of (i) the
termination by Parent of such employee's employment by Parent and its
Subsidiaries without Cause; (ii) the acquisition or creation by Parent of an
additional business as a result of which SoundView's institutional brokerage
business, as developed and expanded within Parent, is no longer Parent's primary
institutional brokerage business; (iii) the acquisition or creation by Parent of
an additional business as a result of which SoundView's investment banking
technology group or research technology group, as developed and expanded within
Parent, is no longer Parent's primary investment banking technology group or
research technology group, respectively; or (iv) the completion by Parent of a
merger or consolidation or the completion by another Person of a tender offer or
exchange offer for, or purchase of, shares of capital stock of Parent as a
result of which both (A) the Persons who were the holders of all of the shares
of common stock of Parent immediately prior to completion of such merger,
consolidation, tender offer, purchase or exchange offer hold shares of capital
stock of Parent or a company of which Parent is then a Subsidiary representing
less than 50% of the voting power of all classes of capital stock of Parent or
such other company, as the case may be, and (B) the individuals constituting the
Board of Directors of Parent immediately prior to completion of such merger,
consolidation, tender offer, purchase or exchange offer constitute less than 50%
of the Board of Directors of Parent or such other company, as the case may be.
Notwithstanding any other provisions of the SoundView Stock Options and
SoundView Stock Option

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Plans to the contrary, with respect to any Parent Common Stock Option that was
vested prior to the Effective Time (x) upon exercise thereof after the Effective
Time and prior to the first anniversary of the Effective Time, Parent shall
issue to the Person exercising such option three certificates for the Parent
Shares issuable upon such exercise, each of which shall be for a number of
Parent Shares as nearly equal as practicable to one-third of such Parent Shares,
(A) the first of which shall contain no restrictive legend other than as may be
required by the Securities Act, (B) the second of which shall be subject to a
restrictive legend substantially in the form set forth in Exhibit A hereto
providing for a one-year restriction from the Effective Time on transfer and (C)
the third of which shall be subject to a restrictive legend substantially in the
form set forth in Exhibit B hereto providing for a two-year restriction from the
Effective Time on transfer or (y) upon exercise thereof on or after the first
anniversary of the Effective Time and prior to the second anniversary of the
Effective Time, Parent shall issue to the Person exercising such option two
certificates for the Parent Shares issuable upon such exercise, (A) one of which
shall be for a number of Parent Shares as nearly equal as practicable to
two-thirds of such Parent Shares and which shall contain no restrictive legend
other than as may be required by the Securities Act and (B) the other of which
shall be for the balance of such Parent Shares and which shall contain a
restrictive legend substantially in the form set forth in Exhibit A hereto
providing for a restriction on transfer through the second anniversary of the
Effective Time. Parent and SoundView shall take such actions as may be necessary
to amend their stock option plans and stock option agreements to reflect the
foregoing agreements for all periods on and after the Effective Time. For
purposes of this Agreement, the term "SoundView Stock Option Plan" means
SoundView's 1995 Stock Option Plan (the "SoundView Stock Option Plan"). Parent
shall use all reasonable efforts to cause to be reserved for issuance the number
of Parent Shares issuable upon exercise of the Parent Common Stock Options
referred to in this Section 4.1(f) and, as soon as reasonably practicable after
the Effective Time, Parent shall use all reasonable efforts to cause to be filed
a registration statement on Form S-8 (or any successor or other appropriate
form) under the Securities Act, or an amendment to an existing registration
statement of Form S-8, to register the Parent Shares issuable upon exercise of
the Parent Common Stock Options.

(g) CHANGES IN CAPITALIZATION. If between the date of this Agreement and
the Effective Time, the outstanding Parent Shares shall be changed into a
different number of shares or a different class by reason of any
reclassification, reorganization, consolidation, merger, recapitalization,
split-up, combination or exchange of shares or if a stock dividend thereon shall
be declared with a record date within said period, the number of Parent Shares
to be issued in the Merger shall be appropriately adjusted. Nothing in this
Section 4.1(g) shall be deemed to constitute a waiver by SoundView of the
provisions of Section 8.2 hereof.

4.2 EXCHANGE OF SHARES IN THE MERGER. The manner of making exchange of
Shares in the Merger shall be as follows:

(a) At the Effective Time, Parent shall make available to American Stock
Transfer Company or such other exchange agent as may be selected by Parent (the
"Exchange Agent") for the benefit of the holders of Shares, a sufficient number
of certificates representing the aggregate number of Parent Shares issuable
pursuant to Section 4.1 (the certificates representing such aggregate number of
Parent Shares being hereinafter referred to as the "Stock Merger Exchange
Fund"). The Exchange Agent shall, pursuant to irrevocable written instructions,
deliver the Parent Shares contemplated to be issued pursuant to Section 4.1 out
of the Stock Merger Exchange Fund. The Stock Merger Exchange Fund shall not be
used for any other purpose.

(b) Promptly after the Effective Time, the Exchange Agent shall mail to each
holder of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding Shares (the "Certificates") (i) a form of
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates for payment therefor. Upon surrender
of Certificates for cancellation to the Exchange Agent, together with such
letter of transmittal duly executed and any other required documents, the holder
of such Certificates shall be

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entitled to receive for the Shares represented by such Certificates the
consideration applicable to such Shares and the Certificates so surrendered
shall forthwith be canceled. Upon such surrender, the Exchange Agent shall issue
to each holder three certificates for the Parent Shares included in such
consideration, (A) the first of which shall be for a number of Parent Shares as
nearly equal as practicable to 34.84% of such Parent Shares and shall contain no
restrictive legend other than as may be required by the Securities Act, (B) the
second of which shall be for a number of Parent Shares as nearly equal as
practicable to 32.58% of such Parent Shares and shall be subject to a
restrictive legend substantially in the form set forth in Exhibit A hereto
providing for a one-year restriction on transfer and (C) the third of which
shall be for a number of Parent Shares as nearly equal as practicable to 32.58%
of such Parent Shares and shall be subject to a restrictive legend substantially
in the form set forth in Exhibit B hereto providing for a two-year restriction
on transfer. Until so surrendered, such Certificates shall represent solely the
right to receive the consideration applicable to such Share. No dividends or
other distributions that are declared after the Effective Time on Parent Shares
and payable to the holders of record thereof after the Effective Time will be
paid to Persons entitled by reason of the Merger to receive Parent Shares until
Certificates representing the right to receive such Parent Shares are
surrendered in appropriate form. Upon such surrender, there shall be paid to the
Person in whose name the Parent Shares are issued any dividends or other
distributions having a record date after the Effective Time and a payment date
prior to the time of such surrender. After such surrender there shall be paid to
the Person in whose name the Parent Shares are issued any dividends or other
distributions on such Parent Shares which shall have a record date after the
Effective Time and prior to such surrender and a payment date after such
surrender. In no event shall the Persons entitled to receive such dividends or
other distributions be entitled to receive interest on such dividends or other
distributions. If any certificate representing Parent Shares is to be issued or
cash payment in lieu of fractional share interests is to be made to a Person
other than the one in whose name the Certificate surrendered in exchange
therefor is registered, it shall be a condition of such exchange that the
Certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer and that the Person requesting such exchange shall pay to the
Exchange Agent any applicable transfer or other similar taxes, or shall
establish to the satisfaction of the Exchange Agent that any such tax has been
paid or is not applicable. Notwithstanding the foregoing, neither the Exchange
Agent nor any party hereto shall be liable to a holder of Shares for any Parent
Shares or dividends thereon, or, in accordance with Section 4.3, cash in lieu of
fractional Parent Shares, delivered to a public official when and if required by
applicable escheat law. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the Parent Shares held by it
from time to time hereunder, except that it shall receive and hold all dividends
or other distributions paid or distributed with respect to such Parent Shares
for the account of the Persons entitled thereto.

(c) Any portion of the Stock Merger Exchange Fund and the Fractional
Securities Fund (as hereinafter defined in Section 4.3) which remains unclaimed
by the former stockholders of SoundView for six months after the Effective Time
shall be delivered to Parent, upon demand of Parent, and any former stockholders
of SoundView shall thereafter look only to Parent for payment of their claim for
the consideration for the Shares, including any cash in lieu of fractional
Parent Shares.

4.3 FRACTIONAL SHARES. No fractional Parent Shares shall be issued in the
Merger. In lieu of any such fractional securities, each holder of Shares who
would otherwise be entitled to a fraction of a Parent Share upon surrender of
Certificates for exchange pursuant to this Article IV will be paid an amount in
cash (without interest) determined by multiplying (i) the Average Stock Price
(but not more than $18.5625 or less than $15.5625) by (ii) the fraction of a
Parent Share to which such holder would otherwise be entitled. Parent shall make
available to the Exchange Agent sufficient funds (herein referred to as the
"Fractional Securities Fund") as and when necessary to enable the Exchange Agent
to make the cash payments contemplated hereby. In no event shall interest be
paid or accrued on any such cash payments.

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ARTICLE V

ELECTION PROCEDURE; OTHER AGREEMENTS

5.1 LIMITATION ON ELECTION. No holder of Shares may elect to receive cash
with respect to a number of Shares in excess of the product of (a) the number of
Shares of which such holder is the holder of record at the Effective Time times
(b) a fraction the numerator of which is the excess of (i) the lesser of the
shareholders' equity of SoundView as of December 31, 1999 or $30 million, in
each case less any distributions in respect of the Shares declared or made after
December 31, 1999 and not reflected in such shareholders' equity over (ii) the
product of the sum of (A) the number of Dissenting Shares that are not Electing
Shares times the Cash Value per Share plus (B) the number of Old Agreement
Securities that are not Dissenting Shares or Electing Shares and the denominator
of which is the product of the number of Shares issued and outstanding plus the
number of Shares subject to unexercised SoundView Stock Options immediately
prior to the Effective Time times the Cash Value per Share.

5.2 FORM OF ELECTION. A form of election (the "Form of Election") shall be
mailed to holders of Shares of record as of ten days prior to the then-scheduled
Effective Date. Any such holder's election to receive cash pursuant to this
Article V shall have been properly made only if the Exchange Agent shall have
received at its designated office, by 5:00 p.m. New York time on the business
day preceding the fifth day prior to the Effective Date, a Form of Election
properly completed and accompanied by certificates for the shares to which such
Form of Election relates (or an appropriate guarantee of delivery guaranteeing
that the certificates for such shares will be delivered prior to the Effective
Time), as set forth in such Form of Election, duly endorsed in blank or
otherwise in form acceptable for transfer on the books of SoundView.

5.3 REVOCATION OF ELECTION. Any Form of Election may be revoked by the
person submitting such Form to the Exchange Agent only by written notice
received by the Exchange Agent prior to 5:00 p.m. New York time on the business
day before the third day prior to the Effective Date. At such time any cash
election by a holder of Dissenting Shares shall be deemed revoked. If a Form of
Election is so revoked, the certificate or certificates (or guarantee of
delivery, as appropriate) for the Shares to which such Form of Election relates
shall be promptly returned to the person submitting the same to the Exchange
Agent.

5.4 DECISION OF EXCHANGE AGENT. The Exchange Agent shall have discretion
to determine (a) whether or not elections to receive cash have been properly
made or revoked pursuant to this Article V with respect to any Shares and (b)
when elections and revocations were received by it. If the Exchange Agent
determines that any election to receive cash was not properly made with respect
to any Shares, such Shares shall be treated by the Exchange Agent as Shares
which were not Electing Shares at the Effective Time of the Merger, and such
Shares shall be exchanged in the Merger for Parent Shares pursuant to Section
4.1(a) hereof. The Exchange Agent may, with the mutual agreement of Parent and
SoundView, make such equitable changes in the procedures set forth in this
Article V for the implementation of the cash election provided for in this
Article V as shall be necessary or desirable to fully effect such elections.

5.5 CERTAIN EMPLOYEE ACTIONS AND AGREEMENTS. On the date hereof, each of
the holders of Shares named on Schedule 5.5 (a) has executed and delivered to
SoundView and Parent a written consent with respect to all of his or her Shares
approving the Merger and this Agreement in the form set forth as Exhibit C
hereto; (b) has executed and delivered to Parent a Voting Agreement (including
an irrevocable proxy) in the form set forth as Exhibit D hereto; and (c) has
executed and delivered to SoundView (and SoundView has executed and delivered to
Parent) an agreement implementing the provisions of Section 5.8 (each, a "Put
Termination Agreement") in the form set forth as Exhibit E. SoundView hereby
consents and agrees to the giving of each such consent and the entering into of
each such Voting Agreement and granting of each such irrevocable proxy.

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5.6 EMPLOYMENT AGREEMENTS. On or about the date hereof, each of the
individuals named on Schedule 5.6 has entered into an Employment Agreement with
Parent, the term of which shall commence at the Effective Time.

5.7 RETENTION POOL. At the Effective Time, Parent shall issue to the
employees of SoundView and the SoundView Subsidiaries named on a Schedule (the
"Retention Schedule") to be agreed upon by Parent and SoundView in writing prior
to the Effective Time an aggregate number of Parent Shares (the "Retention
Shares") equal to the product of (a) the quotient resulting from dividing $25
million by $81.2387 times (b) the Exchange Ratio. The Retention Shares shall be
allocated among the employees listed on the Retention Schedule in the amounts
set forth in the Retention Schedule for each such employee. Subject to
applicable income tax withholding requirements, 50% of the Retention Shares
allocated to an employee who is continuously employed by Parent and its
Subsidiaries (including SoundView and its Subsidiaries) from the Effective Time
through the end of the thirtieth month after and including the month in which
the Effective Time occurs shall, on the last day of such thirtieth month, be
vested in and released to such employee, and 50% of the Retention Shares
allocated to an employee who is continuously employed by Parent and its
Subsidiaries (including SoundView and its Subsidiaries) from the Effective Time
through the end of the forty-second month after and including the month in which
the Effective Time occurs shall, on the last day of such forty-second month, be
vested in and released to such employee. If the employment by Parent or any of
its Subsidiaries of an employee to whom any Retention Shares have been allocated
is terminated for any reason other than by Parent without Cause, all of the
Retention Shares allocated to such employee shall be forfeited by such employee
and shall become treasury stock. All of the Retention Shares allocated to an
employee shall vest in and be released to such employee immediately upon the
occurrence of any of Section 4.1(f)(i)-(iv) hereof.

5.8 SOUNDVIEW STOCK AND OPTION ARRANGEMENTS. SoundView will use its
reasonable best efforts to complete each of the following actions at the
earliest practicable date: (a) to amend, effective immediately prior to the
Effective Time, the bylaws of SoundView to delete Sections 7 and 8 of
Article VI thereof; (b) to amend, effective immediately prior to the Effective
Time, the SoundView Stock Option Plan to delete Article XVI thereof and to
implement the matters set forth in Section 4.1(f) hereof; (c) to amend,
effective immediately prior to the Effective Time, each SoundView Stock Option
outstanding at such time and each associated stock appreciation right to
implement the matters set forth in Section 4.1(f) hereof and to eliminate the
right of the holder of such option or right to invoke the rights, under
Article XVI of the SoundView Stock Option Plan or any similar rights under such
holder's SoundView Stock Option, of a holder of a SoundView Stock Option or
Parent Common Stock Option or associated stock appreciation right or of any
Shares or Parent Shares acquired upon exercise of such option; and (d) to
terminate, effective immediately prior to the Effective Time, each Stock
Purchase and Transfer Restriction Agreement with each stockholder of SoundView
who is a party to such an agreement. Any Shares and SoundView Stock Options as
to which the foregoing deletions, amendments and terminations are not effective
immediately prior to the Effective Time are hereinafter referred to as the "Old
Agreement Securities."

ARTICLE VI

REPRESENTATIONS AND
WARRANTIES OF SOUNDVIEW

Except as set forth in the Disclosure Schedule prepared and signed by
SoundView and delivered to Parent prior to the execution hereof (provided that
the listing of an item in one section of the Disclosure Schedule shall be deemed
to be a listing in another section of such Disclosure Schedule and apply to any
other representation and warranty of such party in this Agreement but only to
the extent that it is reasonably apparent from a reading of such disclosure
item), SoundView represents and warrants to Parent and Merger Sub that all of
the statements contained in this Article VI are true and correct as of the date
of this Agreement (or, if made as of a specified date, as of such date).

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6.1 ORGANIZATION; QUALIFICATION. SoundView (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (ii) has full corporate power and authority to carry on its business
as it is now being conducted and to own, lease or operate the properties and
assets it now owns, leases or operates; and (iii) is duly qualified or licensed
to do business as a foreign corporation in good standing in every jurisdiction
in which ownership of property or the conduct of its business requires such
licensing or qualification or, if SoundView is not so licensed or qualified in
any such jurisdiction, it can become so qualified in such jurisdiction without
any material adverse effect (including assessment of state taxes for prior
years) upon its business and properties. SoundView has heretofore delivered to
Parent complete and correct copies of the certificate of incorporation and
by-laws of SoundView, as presently in effect.

6.2 SUBSIDIARIES AND AFFILIATES. The Disclosure Schedule sets forth the
name, jurisdiction of incorporation and authorized and outstanding capital stock
of each SoundView Subsidiary and the jurisdictions in which each SoundView
Subsidiary is licensed or qualified to do business. SoundView does not own,
directly or indirectly, any capital stock or other equity securities of any
corporation or have any direct or indirect equity or ownership interest in any
business other than publicly traded securities constituting less than five
percent of the outstanding equity of the issuing entity. All the outstanding
capital stock of each SoundView Subsidiary is owned directly or indirectly by
SoundView free and clear of all liens, options or encumbrances of any kind and
all material claims or charges of any kind, and is validly issued, fully paid
and nonassessable, and there are no outstanding options, rights or agreements of
any kind relating to the issuance, sale or transfer of any capital stock or
other equity securities of any such SoundView Subsidiary to any person except
SoundView or another SoundView Subsidiary. Each SoundView Subsidiary (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation; (ii) has full corporate power and authority to
carry on its business as it is now being conducted and to own, lease or operate
the properties and assets it now owns, leases or operates; and (iii) is duly
qualified or licensed to do business as a foreign corporation in good standing
in every jurisdiction in which ownership of property or the conduct of its
business requires such licensing or qualification or, if a SoundView Subsidiary
is not so licensed or qualified in any such jurisdiction, it can become so
licensed or qualified in such jurisdiction without any material adverse effect
(including assessment of state taxes for prior years) upon its business and
properties. SoundView has heretofore delivered to Parent complete and correct
copies of the certificate of incorporation and by-laws of each SoundView
Subsidiary, as presently in effect.

6.3 CAPITALIZATION. (a) The authorized capital stock of SoundView consists
of 6,000,000 Shares. As of the date hereof, (i) 2,515,562 Shares are issued and
outstanding, (ii) no Shares are issued and held in the treasury of SoundView and
(iii) 1,577,962 Shares are reserved for issuance upon exercise of SoundView
Stock Options. All the outstanding shares of SoundView's capital stock are, and
all Shares which may be issued pursuant to the exercise of outstanding SoundView
Stock Options will be, when issued in accordance with the respective terms
thereof, duly authorized, validly issued, fully paid and nonassessable. There is
no Voting Debt of SoundView or any SoundView Subsidiary issued and outstanding.
Except as set forth above and except for the Transactions, as of the date
hereof, (i) there are no shares of capital stock of SoundView authorized, issued
or outstanding; (ii) there are no existing options, warrants, calls, pre-
emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any character, relating to the issued or unissued capital stock
of SoundView or any SoundView Subsidiary, obligating SoundView or any SoundView
Subsidiary to issue, transfer or sell or cause to be issued, transferred or sold
any shares of capital stock or Voting Debt of, or other equity interest in,
SoundView or any SoundView Subsidiary or securities convertible into or
exchangeable for such shares or equity interests, or obligating SoundView or any
SoundView Subsidiary to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment and
(iii) there are no outstanding contractual obligations of SoundView or any
SoundView Subsidiary to repurchase, redeem or otherwise acquire any Shares or
any of the capital stock of SoundView or any SoundView Subsidiary or to provide
funds to make any investment (in the form of a loan, capital contribution or
otherwise) in any SoundView Subsidiary or any other entity. The Disclosure
Schedule sets forth a complete schedule of each SoundView

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Stock Option outstanding as of the date hereof, including the name of the
optionee, number of shares, exercise price, date of grant and vesting schedule.

(b) There are no voting trusts or other agreements or understandings to
which SoundView or any SoundView Subsidiary is a party with respect to the
voting of the capital stock of SoundView or any of the SoundView Subsidiaries.

(c) No Indebtedness of SoundView or any SoundView Subsidiary contains any
restriction upon (i) the prepayment of any Indebtedness of SoundView or any
SoundView Subsidiary, (ii) the incurrence of Indebtedness by SoundView or any
SoundView Subsidiary or (iii) the ability of SoundView or any SoundView
Subsidiary to grant any lien on the properties or assets of SoundView or any
SoundView Subsidiary.

6.4 AUTHORIZATION; VALIDITY OF AGREEMENT; SOUNDVIEW ACTION. SoundView has
full corporate power and authority to execute and deliver this Agreement, and to
consummate the Transactions. The execution, delivery and performance by
SoundView of this Agreement and the consummation by it of the Transactions have
been duly authorized by the SoundView Board of Directors and by written consent
of holders of SoundView Common Stock representing a majority of the Shares and
no other corporate action on the part of SoundView is necessary to authorize the
execution and delivery by SoundView of this Agreement or the consummation by it
of the Transactions. This Agreement has been duly executed and delivered by
SoundView and, assuming due and valid authorization, execution and delivery
thereof by Parent and Merger Sub, this Agreement is a valid and binding
obligation of SoundView enforceable against SoundView in accordance with its
terms.

6.5 BOARD APPROVALS REGARDING TRANSACTIONS. SoundView's Board of
Directors, at a meeting duly called and held, has (i) unanimously determined
that each of this Agreement and the Merger are fair to and in the best interests
of the shareholders of SoundView and (ii) approved the Transactions, and none of
the aforesaid actions by SoundView's Board of Directors has been amended,
rescinded or modified. The action taken by SoundView's Board of Directors
constitutes approval of the Merger and the other Transactions by SoundView's
Board of Directors under the provisions of Section 203 of the DGCL such that
Section 203 of the DGCL does not apply to this Agreement or the other
Transactions. No other state takeover statute is applicable to the Merger or the
other Transactions.

6.6 VOTE REQUIRED. The affirmative written consent of the holders of a
majority of the outstanding Shares, which is the only vote or consent of the
holders of any class or series of SoundView's capital stock necessary to approve
the Merger, has been obtained and copies of such consents have been provided to
Parent. No action of the holders of any class or series of SoundView's capital
stock, acting in their capacity as stockholders, is necessary to approve any of
the Transactions other than the Merger.

6.7 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for the filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Advisers Act, the Exchange Act, the
Securities Act, the rules and regulations of the NASD, the HSR Act, state
securities or blue sky laws, and the DGCL, none of the execution, delivery or
performance of this Agreement by SoundView, the consummation by SoundView of the
Transactions or compliance by SoundView with any of the provisions hereof will
(i) conflict with or result in any breach of any provision of the certificate of
incorporation, the by-laws or similar organizational documents of SoundView or
any SoundView Subsidiary, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (iii) result in
a violation or breach of, or constitute (with or without due notice or the
passage of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any SoundView Agreement, or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to SoundView, any to
which SoundView or any SoundView Subsidiary is a party or by which any of the
assets of any of them is bound, any SoundView Subsidiary or any of their
properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv)
such violations, breaches or defaults which would not, individually or in the
aggregate, have a material adverse

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effect on SoundView and the SoundView Subsidiaries, taken as a whole. There are
no third party consents or approvals required to be obtained under any SoundView
Agreement prior to the consummation of the Transactions, except for such
consents and approvals the failure of which to be obtained would not,
individually or in the aggregate, have a material adverse effect on SoundView
and the SoundView Subsidiaries, taken as a whole.

6.8 GOVERNMENTAL DOCUMENTS AND FINANCIAL STATEMENTS. SoundView and each
SoundView Subsidiary has filed with the appropriate Governmental Entity, and has
heretofore made available to Parent, true and complete copies of, the
Governmental Documents of SoundView and each SoundView Subsidiary. As of their
respective dates or, if amended, as of the date of the last such amendment filed
prior to the date hereof, the Governmental Documents of SoundView and each
SoundView Subsidiary, including, without limitation, any financial statements or
schedules included therein (a) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading and (b) complied in all
material respects with the applicable requirements of Applicable Law. SoundView
has previously delivered to Parent copies of the audited balance sheets of
SoundView and the SoundView Subsidiaries as of December 31 for the fiscal years
1996, 1997 and 1998 and the related audited statements of income, changes in
shareholders' equity and cash flows for the fiscal years 1996, 1997 and 1998,
inclusive, together with the related notes thereto, accompanied by the audit
report of Ernst & Young LLP, independent public accountants with respect
thereto, and the unaudited balance sheets of each of them as of June 30, 1999
and the related unaudited statements of income, changes in shareholders' equity
and cash flows for the period then ended (collectively, the balance sheets and
the statements above being referred to as the "SoundView Financial Statements"
and the June 30, 1999 balance sheet as the "SoundView Balance Sheet"). The
audited balance sheets previously delivered to Parent (including the related
notes) fairly present in accordance with GAAP the financial position of
SoundView and the SoundView Subsidiaries as of the dates thereof, and the other
SoundView Financial Statements fairly present in accordance with GAAP (subject,
in the case of the unaudited statements, to recurring adjustments normal in
nature and amount and the addition of footnotes) the results of the operations,
cash flows and changes in shareholders' equity of SoundView and the SoundView
Subsidiaries for the respective fiscal periods therein set forth; and such
balance sheets and statements (including the related notes, where applicable)
have been prepared in accordance with GAAP consistently applied throughout the
periods involved except as noted therein.

6.9 COMPLIANCE WITH APPLICABLE LAW. (a) SoundView and each SoundView
Subsidiary is, if so required by the nature of its business or assets, duly
registered with the SEC as a broker-dealer or an investment adviser and the
Commodity Futures Trading Commission as a commodity pool operator or commodity
trading adviser.

(b) SoundView, each SoundView Subsidiary, each SoundView Pooled Product and
each employee of each of them holds, and has at all pertinent times held, all
material licenses, franchises, permits, qualifications and authorizations
(collectively, "SoundView Permits") necessary for the lawful ownership and use
of the respective properties and assets of SoundView, the SoundView Subsidiaries
and the SoundView Pooled Products and the conduct of their respective businesses
under and pursuant to every, and have complied with each, and are not in default
in any material respect under any, Applicable Law relating to any of them or any
of their respective assets, properties or operations, and SoundView does not
know of any violations of any of the above and has not received notice asserting
any such violation. To SoundView's knowledge, all such SoundView Permits are
valid and in good standing and are not subject to any proceeding for the
suspension, modification or revocation thereof.

(c) Except for normal examinations conducted by any Governmental Entity in
the regular course of the business of SoundView, the SoundView Subsidiaries and
the SoundView Pooled Products, no Governmental Entity has at any time initiated
or, to SoundView's knowledge, threatened any proceeding or investigation into
the business or operations of any of them or any of their officers, directors or
employees

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or (other than SoundView Pooled Products) equityholders in their capacity as
such. There is no unresolved violation, criticism, or exception by any
Governmental Entity with respect to any examination of SoundView, the SoundView
Subsidiaries or the SoundView Pooled Products.

(d) SoundView and each of the SoundView Subsidiaries has at all times since
December 31, 1994 or its date of formation, whichever is later, rendered
investment advisory services to investment advisory clients, including SoundView
Pooled Products, with whom such entity is or was a party to an investment
advisory agreement or similar arrangement in material compliance with all
applicable requirements as to portfolio composition and portfolio management
including, but not limited to, the terms of such investment advisory agreements,
written instructions from such investment advisory clients, the organizational
documents of such investment advisory clients that are SoundView Pooled
Products, prospectuses or other offering materials, board of director or trustee
directives and Applicable Law.

(e) Each of SoundView, the SoundView Subsidiaries and the SoundView Pooled
Products has timely filed all reports, registration statements and other
documents, together with any amendments required to be made with respect
thereto, that it was required to file with any Governmental Entity, in a form
which was accurate in all material respects and has paid all fees and
assessments due and payable in connection therewith.

(f) As of their respective dates, the Governmental Documents of SoundView,
the SoundView Subsidiaries and the SoundView Pooled Products complied in all
material respects with the requirements of the Securities Laws applicable to
such Governmental Documents. SoundView has previously delivered or made
available to the Parent a complete copy of each Governmental Document filed by
any of the foregoing entities or any of their employees since December 31, 1994
and prior to the date hereof and will deliver or by notice make available to the
Parent at the same time as the filing thereof a complete copy of each
Governmental Document filed after the date hereof and prior to the Closing Date
by or on behalf of any of them.

(g) Since inception, each SoundView Pooled Product has been excluded from
the definition of an investment company under the Investment Company Act by
virtue of Section 3(c)(1) or Section 3(c)(7) thereof.

6.10 BOOKS AND RECORDS. Each of SoundView, the SoundView Subsidiaries and
SoundView Pooled Products has at all times since formation maintained Records
which accurately reflect its transactions in reasonable detail, and have at all
times maintained accounting controls, policies and procedures reasonably
designed to provide that such transactions are executed in accordance with its
management's general or specific authorization, as applicable, and recorded in a
manner which permits the preparation of financial statements in accordance with
GAAP and applicable regulatory accounting requirements and other account and
financial data, and the documentation pertaining thereto is retained, protected
and duplicated in accordance with applicable regulatory requirements.

6.11 INELIGIBLE PERSONS. None of SoundView or any SoundView Subsidiary, or
any "associated person" (as defined in the Advisers Act or the Exchange Act) of
any thereof, is ineligible pursuant to Section 203 of the Advisers Act or
Section 15(b) of the Exchange Act to serve as a registered investment adviser or
broker-dealer or as an associated person of a registered investment adviser or
broker-dealer.

6.12 NO UNDISCLOSED LIABILITIES. Except for liabilities and obligations
(a) disclosed in the Financial Statements, (b) incurred in the ordinary course
of business and consistent with past practice since the Balance Sheet Date or
(c) incurred in accordance with the terms of this Agreement or with the prior
written consent of Parent, neither SoundView nor any SoundView Subsidiary has,
to the best of SoundView's knowledge, any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that have, or would be
reasonably likely to have, material adverse effect on SoundView and the
SoundView Subsidiaries, taken as a whole. The reserves reflected in the
Financial Statements are adequate, appropriate and reasonable and have been
calculated in a consistent manner.

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6.13 INTERIM OPERATIONS. Since the date of the SoundView Balance Sheet,
the business of SoundView and each SoundView Subsidiary has been conducted only
in the ordinary and usual course consistent with past practice. Since the date
of the SoundView Balance Sheet, there have not been any material adverse changes
in the financial condition, assets or results of operations of SoundView and the
SoundView Subsidiaries, taken as a whole. Since the Date of the SoundView
Balance Sheet such assets have not been affected in any way as a result of
flood, fire, explosion or other casualty (whether or not covered by insurance).
SoundView is not aware of any circumstances which may cause it or any of the
SoundView Subsidiaries to suffer any material adverse change in the business,
operations or prospects of SoundView and the SoundView Subsidiaries, taken as a
whole.

6.14 ABSENCE OF CERTAIN CHANGES. Since the date of the SoundView Balance
Sheet, except as contemplated by this Agreement, neither SoundView nor any
SoundView Subsidiary has:

(a) suffered any material adverse change in its working capital, financial
condition, assets, liabilities (absolute, accrued, contingent or otherwise),
reserves, business, operations or prospects;

(b) incurred any liabilities or obligations (absolute, accrued, contingent
or otherwise) except non-material items incurred in the ordinary course of
business and consistent with past practice, none of which exceeds $200,000
(counting obligations or liabilities arising from one transaction or a series of
similar transactions, and all periodic installments or payments under any lease
or other agreement providing for periodic installments or payments, as a single
obligation or liability), or increased, or experienced any change in any
assumptions underlying or methods of calculating, any bad debt, contingency or
other reserves;

(c) paid, discharged or satisfied any claim, liability or obligation
(whether absolute, accrued, contingent or otherwise) other than the payment,
discharge or satisfaction in the ordinary course of business and consistent with
past practice of liabilities and obligations reflected or reserved against in
the SoundView Balance Sheet or incurred in the ordinary course of business and
consistent with past practice since the date of the SoundView Balance Sheet;

(d) permitted or allowed any of its property or assets (real, personal or
mixed, tangible or intangible) to be subjected to any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind, other than in
the ordinary course of its business as a broker-dealer and except for liens for
current taxes not yet due;

(e) sold, transferred, or otherwise disposed of any of its properties or
assets (real, personal or mixed, tangible or intangible), except in the ordinary
course of business and consistent with past practice;

(f) disposed of or permitted to lapse any rights to the use of any
Intellectual Property, or disposed of or disclosed (except as necessary in the
conduct of its business) to any person other than representatives of Parent any
trade secret, formula, process, know-how or other Intellectual Property not
theretofore a matter of public knowledge;

(g) granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment) or any increase in the compensation
payable or to become payable to any officer or employee, except in the ordinary
course of business and consistent with past practice;

(h) declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of capital stock or other
securities of SoundView or any SoundView Subsidiary;

(i) made any change in any method of accounting or accounting practice; or

(j) agreed, whether in writing or otherwise, to take any action described in
this section.

6.15 TECHNOLOGY AND INTELLECTUAL PROPERTY.

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(a) The electronic data processing, information, record keeping,
communications, telecommunications, portfolio trading and computer systems and
Intellectual Property (including Software) which are used by SoundView and the
SoundView Subsidiaries in their businesses (collectively, the "Technology
Systems") are adequate for the operation of the business of SoundView and the
SoundView Subsidiaries as currently operated. SoundView owns or has the right to
use all components of the SoundView Technology Systems that are reasonably
necessary to the normal operations of the business of SoundView as currently
conducted by it. SoundView has good title to all SoundView Technology Systems
owned by it. There has not been any material malfunction with respect to any of
the SoundView Technology Systems since December 31, 1994 that has not been
remedied or replaced in all material respects, in each case without material
description to the businesses of SoundView and the SoundView Subsidiaries. The
completion of the Transactions will not materially alter or impair the right of
SoundView and the SoundView Subsidiaries to use each of the components of the
SoundView Technology Systems. No database included in the Intellectual Property
of SoundView and the SoundView Subsidiaries has been disclosed or authorized to
be disclosed to any third-party other than pursuant to a confidentiality or
non-disclosure agreement that reasonably protects SoundView's and the SoundView
Subsidiaries' interest in and to such database.

(b) The conduct of the business of SoundView and the SoundView Subsidiaries
does not infringe upon any intellectual property right owned or controlled by
any third-party. There are no claims, proceedings or actions pending or, to
SoundView's knowledge, threatened, and SoundView has not received any notice of
any claim or suit (i) alleging that SoundView's or any SoundView Subsidiary's
activities infringes upon or constitutes the unauthorized use of the proprietary
rights of any third-party or (ii) challenging the ownership, use, validity or
enforceability of any Intellectual Property owned or controlled by SoundView or
any SoundView Subsidiary, nor is there a valid basis for any such claim or suit.
No third-party is, to SoundView's knowledge, infringing upon any Intellectual
Property owned or controlled by SoundView or any SoundView Subsidiary, and no
such claims have been made by SoundView or any SoundView Subsidiary.

(c) SoundView's code, critical systems and other programs which are material
to the operation of SoundView's business are Year 2000 compliant. SoundView is
also actively working to ascertain Year 2000 compliance of counterparty banks,
brokers, administrators and clearing, settlement and other service providers and
SoundView has received assurances from each such Person that it has developed
strategies for addressing and resolving Year 2000 issues and that it expects to
be able to implement such strategies in advance of January 1, 2000.

6.16 LEGAL PROCEEDINGS. Neither SoundView, any SoundView Subsidiary or any
SoundView Pooled Product nor, to SoundView's knowledge, the directors, officers
or employees of SoundView or any SoundView Subsidiary is a party to any, and
there are no, legal, administrative, arbitral or other proceedings, claims,
actions or governmental or regulatory investigations of any nature pending or,
to SoundView's knowledge, threatened in writing against any of them or any of
their respective properties or assets relating to the business of SoundView or
any SoundView Subsidiary or any SoundView Pooled Product, or that challenges any
of the Transactions, and there is no injunction, order, judgment, decree, or
regulatory restriction imposed specifically upon any of them or any of their
respective properties, assets, directors, officers or employees relating to the
business of SoundView, any SoundView Subsidiary or any SoundView Pooled Product,
in each case, that would have a material adverse effect on SoundView's assets,
financial condition, business or operations if such proceeding, claim, action or
investigation is determined adversely to SoundView, any SoundView Subsidiary or
any SoundView Pooled Product business or properties.

6.17 EMPLOYEE BENEFIT PLANS.

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insurance and other "welfare" plan, fund or program (within the meaning of
Section 3(1) of ERISA); each profit-sharing, stock bonus or other "pension"
plan, fund or program (within the meaning of Section 3(2) of ERISA); each
employment, termination or severance agreement; and each other employee benefit
plan, fund, program, agreement or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to by SoundView or by
any ERISA Affiliate of SoundView, or to which SoundView or an ERISA Affiliate of
SoundView is party, whether written or oral, for the benefit of any director,
former director, employee or former employee of SoundView or any SoundView
Subsidiary. None of SoundView, any SoundView Subsidiary or any ERISA Affiliate
of SoundView has any commitment or formal plan, whether legally binding or not,
to create any additional employee benefit plan or modify or change any existing
Plan that would affect any employee or former employee of SoundView or any
SoundView Subsidiary.

(b) SoundView has heretofore delivered to Parent true and complete copies of
each Plan and any amendments thereto (or if a Plan is not a written Plan, a
description thereof), any related trust or other funding vehicle, any reports or
summaries required under ERISA or the Code and the most recent determination
letter received from the Internal Revenue Service with respect to each Plan
intended to qualify under Section 401 of the Code.

(d) Neither SoundView, any SoundView Subsidiary, any Plan or any trust
created thereunder, nor any trustee or administrator of any thereof, has engaged
in a transaction in connection with which SoundView, any SoundView Subsidiary,
any Plan, any such trust, or any trustee or administrator thereof, or any party
dealing with any Plan or any such trust could be subject to either a civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed
pursuant to Section 4975 or 4976 of the Code.

(e) Each Plan has been operated and administered in all material respects in
accordance with its terms and applicable law, including but not limited to ERISA
and the Code.

(f) Each Plan intended to be "qualified" within the meaning of Section
401(a) of the Code is so qualified, and the trusts maintained thereunder are
exempt from taxation under Section 501(a) of the Code. Each Plan intended to
satisfy the requirements of Section 501(c)(9) has satisfied such requirements.

(g) No Plan provides medical, surgical, hospitalization, death or similar
benefits (whether or not insured) for employees or former employees of SoundView
or any SoundView Subsidiary for periods extending beyond their retirement or
other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan," or (iii) benefits the full
cost of which is borne by the current or former employee (or his beneficiary).

(h) No amounts payable under the Plans will fail to be deductible for
federal income tax purposes by virtue of Section 280G of the Code.

(i) The consummation of the Transactions will not, either alone or in
combination with another event, (i) entitle any current or former employee or
officer of SoundView or any ERISA Affiliate of SoundView to severance pay,
unemployment compensation or any other payment, except as expressly provided in
this Agreement, or (ii) accelerate the time of payment or vesting, or increase
the amount of compensation due any such employee or officer.

(j) There are no pending, or, to the knowledge of SoundView, threatened or
anticipated claims by or on behalf of any Plan, by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).

6.18 TAX MATTERS; GOVERNMENT BENEFITS.

(a) SoundView and each of its Subsidiaries have duly filed all Tax Returns
that are required to be filed excluding only such Tax Returns as to which any
failure to file will not have a material adverse effect

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on SoundView and the SoundView Subsidiaries, taken as a whole, and have duly
paid or caused to be duly paid in full or made provision in accordance with GAAP
(or there has been paid or provision has been made on their behalf) for the
payment of all Taxes (as hereinafter defined) for all periods or portions
thereof ending through the date hereof. All such Tax Returns are correct and
complete in all material respects and accurately reflect all liability for Taxes
for the periods covered thereby. All Taxes owed and due by SoundView and all
SoundView Subsidiaries relating to operations on or prior to the Balance Sheet
Date (whether or not shown on any Tax Return) have been paid or have been
adequately reflected on the Financial Statements. Since the Balance Sheet Date,
SoundView has not incurred liability for any Taxes other than in the ordinary
course of business. Neither SoundView nor any SoundView Subsidiary has received
written notice of any claim made by an authority in a jurisdiction where neither
SoundView nor any SoundView Subsidiary file Tax Returns, that SoundView or any
such SoundView Subsidiary is or may be subject to taxation by that jurisdiction.

(b) The federal income Tax Returns of SoundView and the SoundView
Subsidiaries have been examined by the Internal Revenue Service (or the
applicable statutes of limitation for the assessment of federal income Taxes for
such periods have expired) for all periods through and including December 31,
1995, and no material deficiencies were asserted as a result of such
examinations that have not been resolved or fully paid. Neither SoundView nor
any SoundView Subsidiary has waived any statute of limitations in any
jurisdiction in respect of Taxes or Tax Returns or agreed to any extension of
time with respect to a Tax assessment or deficiency.

(c) No federal, state, local or foreign audits, examinations or other
administrative proceedings have been commenced or, to SoundView's knowledge, are
pending with regard to any Taxes or Tax Returns of SoundView or of any SoundView
Subsidiary. No written notification has been received by SoundView or by any
SoundView Subsidiary that such an audit, examination or other proceeding is
pending or threatened with respect to any Taxes due from or with respect to or
attributable to SoundView or any SoundView Subsidiary or any Tax Return filed by
or with respect to SoundView or any SoundView Subsidiary. To SoundView's
knowledge, there is no dispute or claim concerning any Tax liability of
SoundView, or any SoundView Subsidiary either claimed or raised by any taxing
authority in writing.

(d) Neither SoundView nor any of the SoundView Subsidiaries is a party to
any agreement, plan, contract or arrangement that could result, separately or in
the aggregate, in a payment of any "excess parachute payments" within the
meaning of Section 280G of the Code.

(e) Neither SoundView nor any of the SoundView Subsidiaries has filed a
consent pursuant to Section 341(f) of the Code (or any predecessor provision)
concerning collapsible corporations, or agreed to have Section 341(f)(2) of the
Code apply to any disposition of a "subsection (f) asset" (as such term is
defined in Section 341(f)(4) of the Code) owned by SoundView or any SoundView
Subsidiary.

(f) No taxing authority is asserting or threatening to assert a claim
against SoundView or any SoundView Subsidiary under or as a result of Section
482 of the Code or any similar provision of state, local or foreign law.

(g) Neither SoundView nor any of its Subsidiaries is a party to any tax
sharing, tax indemnity or other agreement or arrangement with any entity not
included in SoundView's Financial Statements which could result in a material
liability.

(h) None of SoundView or any SoundView Subsidiary has been a member of any
affiliated group within the meaning of Section 1504(a) of the Code, or any
similar affiliated or consolidated group for tax purposes under state, local or
foreign law (other than a group the common parent of which is SoundView), or has
any liability for Taxes of any person (other than SoundView and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 or any similar
provision of state, local or foreign law as a transferee or successor, by
contract or otherwise.

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6.19 LABOR AND EMPLOYMENT MATTERS. (a) Neither SoundView nor any SoundView
Subsidiary is delinquent in any material respect in payments to any of its
current or former officers, directors, employees, consultants, or agents for any
wages, salaries, commissions, bonuses, benefits, expenses or other compensation
for any services performed by them or amounts required to be reimbursed to them;
and in the event of termination of the employment of any employee of SoundView
or any SoundView Subsidiaries, neither SoundView nor any SoundView Subsidiary
will be liable to any such employee under any agreement in effect at the Closing
for so-called "severance pay," incentive pay, liquidated damages or any other
payments or benefits, including, without limitation, post-employment health
care, pension or insurance benefits.

(b) Since December 31, 1994 SoundView has not had any claim made against it
or any SoundView Subsidiary by any Person before any Governmental Entity in
respect of employment with SoundView for discrimination or harassment on account
of sex, race and other characteristic protected by law and there are no pending
or threatened proceedings in relation thereto.

6.20 CONTRACTS AND COMMITMENTS.

(a) Neither SoundView nor any SoundView Subsidiary has any agreements,
contracts, commitments or restrictions which are material to its business or
operations.

(b) Neither SoundView nor any SoundView Subsidiary is in default, nor is
there any known basis for any valid claim of default, under any contract made or
obligation owed by it which are material to its business or operations.

6.21 INSURANCE. SoundView maintains with reputable insurers the worker's
compensation, comprehensive property and casualty, liability, fidelity and other
insurance described on Schedule 6.21 hereto, which insurance is, in the
reasonable opinion of SoundView, sufficient for the operation of the businesses
operated by SoundView and the SoundView Subsidiaries.

6.22 PERSONNEL. The Disclosure Schedule sets forth a true and complete
list of: the names and current salaries of all directors and elected and
appointed officers of each of SoundView and SoundView Subsidiaries, the number
of Shares owned beneficially or of record, or both, by each such person and the
family relationships, if any, among such persons; and, in response to Section
6.17, all group insurance programs in effect for employees of each of SoundView
and SoundView Subsidiaries. SoundView has made available to Parent true and
accurate information relating to the wage rates for non-salaried and
non-executive salaried employees of each of SoundView and the SoundView
Subsidiaries and all labor union contracts.

6.23 INSIDER INTERESTS. No officer or director of SoundView or any
SoundView Subsidiary has any material interest in any property, real or
personal, tangible or intangible, including without limitation, office space,
fixtures, equipment, inventions, patents, trademarks or trade names, used in or
pertaining to the business of SoundView or any SoundView Subsidiary.

6.24 BROKERS OR FINDERS. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any brokers or finders
fee or any other commission or similar fee in connection with any of the
Transactions except for Freeman & Co.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF PARENT

Except as set forth in the Disclosure Schedule prepared and signed by Parent
and delivered to SoundView prior to the execution hereof (provided that the
listing of an item in one section of the Disclosure Schedule shall be deemed to
be a listing in another section of such Disclosure Schedule and apply to any
other representation and warranty of such party in this Agreement but only to
the extent that it is reasonably apparent from a reading of such disclosure
item), Parent represents and warrants to

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SoundView that all of the statements contained in this Article VII are true and
correct as of the date of this Agreement (or, if made as of a specified date, as
of such date).

7.1 ORGANIZATION; QUALIFICATION. Parent (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (ii) has full corporate power and authority to carry on its business
as it is now being conducted and to own, lease or operate the properties and
assets it now owns, leases or operates; and (iii) is duly qualified or licensed
to do business as a foreign corporation in good standing in every jurisdiction
in which ownership of property or the conduct of its business requires such
licensing or qualification or, if Parent is not so licensed or qualified in any
such jurisdiction, it can become so qualified in such jurisdiction without any
material adverse effect (including assessment of state taxes for prior years)
upon its business and properties. Parent has heretofore delivered to SoundView
complete and correct copies of the certificate of incorporation and by-laws of
Parent, as presently in effect.

7.2 SUBSIDIARIES AND AFFILIATES. Parent does not own, directly or
indirectly, any capital stock or other equity securities of any corporation or
have any direct or indirect equity or ownership interest in any business other
than publicly traded securities constituting less than five percent of the
outstanding equity of the issuing entity. All the outstanding capital stock of
each Parent Subsidiary is owned directly or indirectly by Parent free and clear
of all liens, options or encumbrances of any kind and all material claims or
charges of any kind, and is validly issued, fully paid and nonassessable, and
there are no outstanding options, rights or agreements of any kind relating to
the issuance, sale or transfer of any capital stock or other equity securities
of any such Parent Subsidiary to any person except Parent or another Parent
Subsidiary. Each Parent Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation;
(ii) has full corporate power and authority to carry on its business as it is
now being conducted and to own, lease or operate the properties and assets it
now owns, leases or operates; and (iii) is duly qualified or licensed to do
business as a foreign corporation in good standing in every jurisdiction in
which ownership of property or the conduct of its business requires such
licensing or qualification or, if a Parent Subsidiary is not so licensed or
qualified in any such jurisdiction, it can become so licensed or qualified in
such jurisdiction without any material adverse effect (including assessment of
state taxes for prior years) upon its business and properties. Parent has
heretofore delivered to SoundView complete and correct copies of the certificate
of incorporation and by-laws of each Parent Subsidiary, as presently in effect.

7.3 CAPITALIZATION. (a) The authorized capital stock of Parent consists of
500,000,000 Parent Shares, 75,000,000 shares of Class B Common Stock, par value.
$.01 per share ("Class B Shares"), 159,000,000 shares of Class C Common Stock,
par value $.01 per share ("Class C Shares") and 30,000,000 shares of preferred
stock, par value $.001 per share. As of the date hereof, (i) 8,740,000 Shares,
11,666,667 Class B Shares and 51,915,902 Class C Shares are issued and
outstanding, (ii) no Parent Shares, no Class B Shares and no Class C Shares are
issued and held in the treasury of Parent, (iii) 30,000,000 shares of preferred
stock are designated as Series A Junior Participating Preferred Stock, none of
which are issued and outstanding, and (iv) 13,147,298 Parent Shares are reserved
for issuance upon exercise of Parent Stock Options. Each of the Class C Shares
will automatically convert into one Parent Share on December 7, 1999. All the
outstanding shares of Parent's capital stock are, and all Parent Shares which
may be issued pursuant to the exercise of outstanding Parent Stock Options will
be, when issued in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and nonassessable. There is no Voting
Debt of Parent or any Parent Subsidiary issued and outstanding. Except as set
forth above and except for the Transactions, as of the date hereof, (i) there
are no shares of capital stock of Parent authorized, issued or outstanding; (ii)
there are no existing options, warrants, calls, pre-emptive rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of Parent or any
Parent Subsidiary, obligating Parent or any Parent Subsidiary to issue, transfer
or sell or cause to be issued, transferred or sold any shares of capital stock
or Voting Debt of, or other equity interest in, Parent or any Parent Subsidiary
or securities convertible into or exchangeable for such shares or equity
interests, or obligating Parent or any Parent Subsidiary to grant, extend or
enter into

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any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment and (iii) there are no outstanding contractual
obligations of Parent or any Parent Subsidiary to repurchase, redeem or
otherwise acquire any shares of the capital stock of Parent or any Parent
Subsidiary or to provide funds to make any investment (in the form of a loan,
capital contribution or otherwise) in any Parent Subsidiary or any other entity.
The Disclosure Schedule sets forth a complete schedule of each Parent Stock
Option outstanding as of the date hereof, including the name of the optionee,
number of shares, exercise price, date of grant and vesting schedule.

(b) There are no voting trusts or other agreements or understandings to
which Parent or any Parent Subsidiary is a party with respect to the voting of
the capital stock of Parent or any of the Parent Subsidiaries.

7.4 AUTHORIZATION; VALIDITY OF AGREEMENT; PARENT ACTION. Parent has full
corporate power and authority to execute and deliver this Agreement, and to
consummate the Transactions. The execution, delivery and performance by Parent
of this Agreement and the consummation by it of the Transactions have been duly
authorized by Parent Board of Directors and, except for obtaining the approval
of its shareholders as contemplated by Section 9.2(b), no other corporate action
on the part of Parent is necessary to authorize the execution and delivery by
Parent of this Agreement or the consummation by it of the Transactions. This
Agreement has been duly executed and delivered by Parent and, assuming due and
valid authorization, execution and delivery thereof by SoundView and Merger Sub,
this Agreement is a valid and binding obligation of Parent enforceable against
Parent in accordance with its terms.

7.5 BOARD APPROVALS REGARDING TRANSACTIONS. Parent's Board of Directors,
at a meeting duly called and held, has (i) unanimously determined that each of
this Agreement and the Merger are fair to and in the best interests of the
shareholders of Parent and (ii) approved the Transactions, and none of the
aforesaid actions by Parent's Board of Directors has been amended, rescinded or
modified. The action taken by Parent's Board of Directors constitutes approval
of the Merger and the other Transactions by Parent's Board of Directors under
the provisions of Section 203 of the DGCL such that Section 203 of the DGCL do
not apply to this Agreement or the other Transactions. No other state takeover
statute is applicable to the Merger or the other Transactions.

7.6 VOTE REQUIRED. Other than the possibility that the affirmative vote of
the holders of a majority of the Parent Shares and Class C shares voting thereon
will be required under the shareholder voting policy of the NASD, no action by
the holders of any class or series of Parent's capital stock is necessary to
approve the Merger. No vote of any class or series of Parent's capital stock is
necessary to approve any of the Transactions other than the Merger.

7.7 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for the filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Exchange Act, the Securities Act, the
rules and regulations of the NASD, the HSR Act, state securities or blue sky
laws, and the DGCL, none of the execution, delivery or performance of this
Agreement by Parent, the consummation by Parent of the Transactions or
compliance by Parent with any of the provisions hereof will (i) conflict with or
result in any breach of any provision of the certificate of incorporation, the
by-laws or similar organizational documents of Parent or any Parent Subsidiary,
(ii) require any filing with, or permit, authorization, consent or approval of,
any Governmental Entity, (iii) result in a violation or breach of, or constitute
(with or without due notice or the passage of time or both) a default (or give
rise to any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any Parent Agreement, or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any to which Parent or any Parent Subsidiary is a party or
by which any of the assets of any of them is bound, any Parent Subsidiary or any
of their properties or assets, excluding from the foregoing clauses (ii),
(iii) and (iv) such violations, breaches or defaults which would not,
individually or in the aggregate, have a material adverse effect on Parent and
the Parent Subsidiaries, taken as a whole. There are no third party consents or
approvals required to be obtained under any Parent Agreement prior

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to the consummation of the Transactions, except for such consents and approvals
the failure of which to be obtained would not, individually or in the aggregate,
have a material adverse effect on Parent and the Parent Subsidiaries, taken as a
whole.

7.8 GOVERNMENTAL DOCUMENTS AND FINANCIAL STATEMENTS. Parent and each
Parent Subsidiary has filed with the appropriate Governmental Entity, and has
heretofore made available to SoundView, true and complete copies of, the
Governmental Documents of Parent and each Parent Subsidiary. As of their
respective dates or, if amended, as of the date of the last such amendment filed
prior to the date hereof, the Governmental Documents of Parent and each Parent
Subsidiary, including, without limitation, any financial statements or schedules
included therein (a) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading and (b) complied in all material
respects with the applicable requirements of Applicable Law. The Financial
Statements have been prepared from, and are in accordance with, the books and
records of Parent and the Parent Subsidiaries, comply in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP applied on a consistent basis during the period involved (except as
may be stated in the notes thereto) and fairly present in accordance with GAAP
the consolidated financial position and the consolidated results of operations
and cash flows (and changes in financial position, if any) of Parent and its
consolidated Subsidiaries (subject, in the case of the unaudited statements, to
recurring adjustments normal in nature and amount and the addition of footnotes)
as of the times and for the periods referred to therein.

7.9 COMPLIANCE WITH APPLICABLE LAW. (a) Parent and each Parent Subsidiary
is, if so required by the nature of its business or assets, duly registered with
the SEC as a broker-dealer and to be duly registered with the SEC as an
investment adviser or with the Commodity Futures Trading Commission as a
commodity pool operator or commodity trading adviser.

(b) Parent, each Parent Subsidiary, each Parent Pooled Product and each
employee of each of them holds, and has at all pertinent times held, all
material licenses, franchises, permits, qualifications and authorizations
(collectively, "Parent Permits") necessary for the lawful ownership and use of
the respective properties and assets of Parent, the Parent Subsidiaries and the
Parent Pooled Products and the conduct of their respective businesses under and
pursuant to every, and have complied with each, and are not in default in any
material respect under any, Applicable Law relating to any of them or any of
their respective assets, properties or operations, and Parent does not know of
any violations of any of the above and has not received notice asserting any
such violation. To Parent's knowledge, all such Parent Permits are valid and in
good standing and are not subject to any proceeding for the suspension,
modification or revocation thereof.

(c) Except for normal examinations conducted by any Governmental Entity in
the regular course of the business of Parent, the Parent Subsidiaries and the
Parent Pooled Products, no Governmental Entity has at any time initiated or, to
Parent's knowledge, threatened any proceeding or investigation into the business
or operations of any of them or any of their officers, directors or employees or
(other than Parent Pooled Products) equityholders in their capacity as such.
There is no unresolved violation, criticism, or exception by any Governmental
Entity with respect to any examination of Parent, the Parent Subsidiaries or the
Parent Pooled Products.

(d) Parent and each of the Parent Subsidiaries has at all times since
December 31, 1996 or its date of formation, whichever is later, rendered
investment advisory services to investment advisory clients, including Parent
Pooled Products, with whom such entity is or was a party to an investment
advisory agreement or similar arrangement in material compliance with all
applicable requirements as to portfolio composition and portfolio management
including, but not limited to, the terms of such investment advisory agreements,
written instructions from such investment advisory clients, the organizational
documents of

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such investment advisory clients that are Parent Pooled Products, prospectuses
or other offering materials, board of director or trustee directives and
Applicable Law.

(e) Each of Parent, the Parent Subsidiaries and the Parent Pooled Products
has timely filed all reports, registration statements and other documents,
together with any amendments required to be made with respect thereto, that it
was required to file with any Governmental Entity, in a form which was accurate
in all material respects and has paid all fees and assessments due and payable
in connection therewith.

(f) As of their respective dates, the Governmental Documents of Parent, the
Parent Subsidiaries and the Parent Pooled Products complied in all material
respects with the requirements of the Securities Laws applicable to such
Governmental Documents. Parent has previously delivered or made available to the
SoundView a complete copy of each Governmental Document filed by any of the
foregoing entities or any of their employees since December 31, 1996 and prior
to the date hereof and will deliver or by notice make available to the SoundView
at the same time as the filing thereof a complete copy of each Governmental
Document filed after the date hereof and prior to the Closing Date by or on
behalf of any of them.

(g) Since inception, each Parent Pooled Product has been excluded from the
definition of an investment company under the Investment Company Act by virtue
of Section 3(c)(1) or Section 3(c)(7) thereof.

7.10 BOOKS AND RECORDS. Each of Parent, the Parent Subsidiaries and the
Parent Pooled Products has at all times since formation maintained Records which
accurately reflect all its material transactions in reasonable detail, and have
at all times maintained accounting controls, policies and procedures reasonably
designed to provide that such transactions are executed in accordance with its
management's general or specific authorization, as applicable, and recorded in a
manner which permits the preparation of financial statements in accordance with
GAAP and applicable regulatory accounting requirements and other account and
financial data, and the documentation pertaining thereto is retained, protected
and duplicated in accordance with applicable regulatory requirements.

7.11 INELIGIBLE PERSONS. None of Parent or any Parent Subsidiary, or any
"associated person" (as defined in the Advisers Act or the Exchange Act) of any
thereof, is ineligible pursuant to Section 203 of the Advisers Act or Section
15(b) of the Exchange Act to serve as a registered investment adviser or broker-
dealer or as an associated person of a registered investment adviser or
broker-dealer.

7.12 NO UNDISCLOSED LIABILITIES. Except for liabilities and obligations
(a) disclosed in the Financial Statements, (b) incurred in the ordinary course
of business and consistent with past practice since the Balance Sheet Date or
(c) incurred in accordance with the terms of this Agreement or with the prior
written consent of SoundView, neither Parent nor any Parent Subsidiary has, to
the best of Parent's knowledge, any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that have, or would be
reasonably likely to have, a material adverse effect on Parent and the Parent
Subsidiaries, taken as a whole. The reserves reflected in the Financial
Statements are adequate, appropriate and reasonable and have been calculated in
a consistent manner.

7.13 INTERIM OPERATIONS. Since the date of the Parent Balance Sheet, the
business of Parent and each Parent Subsidiary has been conducted only in the
ordinary and usual course consistent with past practice. Since the date of the
Parent Balance Sheet, there have not been any material adverse changes in the
financial condition, assets or results of operations of Parent and the Parent
Subsidiaries, taken as a whole. Since the Date of the Parent Balance Sheet such
assets have not been affected in any way as a result of flood, fire, explosion
or other casualty (whether or not covered by insurance). Parent is not aware of
any circumstances which may cause it or any of the Parent Subsidiaries to suffer
any material adverse change in the business, operations or prospects of Parent
and the Parent Subsidiaries taken as a whole.

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7.14 ABSENCE OF CERTAIN CHANGES. Since the date of the Parent Balance
Sheet, except as contemplated by this Agreement, neither Parent nor any Parent
Subsidiary has:

(a) suffered any material adverse change in its working capital, financial
condition, assets, liabilities (absolute, accrued, contingent or otherwise),
reserves, business, operations or prospects;

(b) incurred any liabilities or obligations (absolute, accrued, contingent
or otherwise) except non-material items incurred in the ordinary course of
business, none of which exceeds $200,000 (counting obligations or liabilities
arising from one transaction or a series of similar transactions, and all
periodic installments or payments under any lease or other agreement providing
for periodic installments or payments, as a single obligation or liability), or
increased, or experienced any change in any assumptions underlying or methods of
calculating, any bad debt, contingency or other reserves;

(c) paid, discharged or satisfied any claim, liability or obligation
(whether absolute, accrued, contingent or otherwise) other than the payment,
discharge or satisfaction in the ordinary course of business of liabilities and
obligations reflected or reserved against in the Parent Balance Sheet or
incurred in the ordinary course of business and consistent with past practice
since the date of the Parent Balance Sheet;

(d) sold, transferred, or otherwise disposed of any of its properties or
assets (real, personal or mixed, tangible or intangible), except in the ordinary
course of business;

(e) disposed of or permitted to lapse any rights to the use of any
Intellectual Property, or disposed of or disclosed (except as necessary in the
conduct of its business) to any person other than representatives of Parent any
trade secret, formula, process, know-how or other Intellectual Property not
theretofore a matter of public knowledge;

(f) granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment) or any increase in the compensation
payable or to become payable to any officer or employee, except in the ordinary
course of business;

(g) declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of capital stock or other
securities of Parent or any Parent Subsidiary;

(h) made any change in any method of accounting or accounting practice; or

(i) agreed, whether in writing or otherwise, to take any action described in
this section.

7.15 TECHNOLOGY AND INTELLECTUAL PROPERTY.

(a) The electronic data processing, information, record keeping,
communications, telecommunications, portfolio trading and computer systems and
Intellectual Property (including Software) which are used by Parent and the
Parent Subsidiaries in their businesses (collectively, the "Parent Technology
Systems") are adequate for the operation of the business of Parent and the
Parent Subsidiaries as currently operated. Parent owns or has the right to use
all components of the Parent Technology Systems that are reasonably necessary to
the normal operations of the business of Parent as currently conducted by it.
Parent has good title to all Parent Technology Systems owned by it. There has
not been any material malfunction with respect to any of the Parent Technology
Systems since December 31, 1996 that has not been remedied or replaced in all
material respects, in each case without material description to the businesses
of Parent and the Parent Subsidiaries. The completion of the Transactions will
not materially alter or impair the right of Parent and the Parent Subsidiaries
to use each of the components of the Parent Technology Systems. No database
included in the Intellectual Property of Parent and the Parent Subsidiaries has
been disclosed or authorized to be disclosed to any third-party other than
pursuant to a confidentiality or non-disclosure agreement that reasonably
protects Parent's and the Parent Subsidiaries' interest in and to such database.

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(b) The conduct of the business of Parent and the Parent Subsidiaries does
not infringe upon any intellectual property right owned or controlled by any
third-party. There are no claims, proceedings or actions pending or, to Parent's
knowledge, threatened, and Parent has not received any notice of any claim or
suit (i) alleging that Parent's or any Parent Subsidiary's activities infringes
upon or constitutes the unauthorized use of the proprietary rights of any
third-party or (ii) challenging the ownership, use, validity or enforceability
of any Intellectual Property owned or controlled by Parent or any Parent
Subsidiary, nor is there a valid basis for any such claim or suit. No
third-party is, to Parent's knowledge, infringing upon any Intellectual Property
owned or controlled by Parent or any Parent Subsidiary, and no such claims have
been made by Parent or any Parent Subsidiary.

(c) Parent has undertaken a review and assessment, consisting of the steps
and procedures set forth on Schedule 7.15(c), of code, critical systems and
other programs for Year 2000 compliance and has developed a methodology, as
described on Schedule 7.15(c), for testing code, systems and programs for
Year 2000 compliance. Parent has developed and is engaged in pursuing a
strategy, as described on Schedule 7.15(c), with the goal of addressing and
satisfactorily resolving all potential Year 2000 issues in advance of
January 1, 2000. Parent has no reason to believe that it will not be able to
implement such strategy in advance of January 1, 2000. Parent is also actively
working to ascertain Year 2000 compliance of counterparty banks, brokers,
administrators and clearing, settlement and other service providers and Parent
has received assurances from each such Person that it has developed strategies
for addressing and resolving Year 2000 issues and that it expects to be able to
implement such strategies in advance of January 1, 2000.

7.16 LEGAL PROCEEDINGS. Neither Parent, any Parent Subsidiary, any Pooled
Product, or the directors, officers or employees of Parent or any Parent
Subsidiary is a party to any, and there are no, legal, administrative, arbitral
or other proceedings, claims, actions or governmental or regulatory
investigations of any nature pending or, to Parent's knowledge, threatened in
writing against any of them or any of their respective properties or assets
relating to the business of Parent or any Parent Subsidiary or any Parent Pooled
Product, or that challenges any of the Transactions, and there is no injunction,
order, judgment, decree, or regulatory restriction imposed specifically upon any
of them or any of their respective properties, assets, directors, officers or
employees relating to the business of Parent, any Parent Subsidiary or any
Parent Pooled Product, in each case, that would have a material adverse effect
on Parent's assets, financial condition, business or operations if such
proceeding, claim, action or investigation, is determined adversely to Parent,
any Parent Subsidiary or any Parent Pooled Product.

7.17 EMPLOYEE BENEFIT PLANS.

(a) The Disclosure Schedule contains a true and complete list of each
deferred compensation and each incentive compensation, stock purchase, stock
option and other equity compensation plan, program, agreement or arrangement;
each severance or termination pay, medical, surgical, hospitalization, life
insurance and other "welfare" plan, fund or program (within the meaning of
Section 3(1) of ERISA); each profit-sharing, stock bonus or other "pension"
plan, fund or program (within the meaning of Section 3(2) of ERISA); each
employment, termination or severance agreement; and each other employee benefit
plan, fund, program, agreement or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to by Parent or by
any ERISA Affiliate of Parent, or to which Parent or an ERISA Affiliate of
Parent is party, whether written or oral, for the benefit of any director,
former director, employee or former employee of Parent or any Parent Subsidiary.
None of Parent, any Parent Subsidiary or any ERISA Affiliate of Parent has any
commitment or formal plan, whether legally binding or not, to create any
additional employee benefit plan or modify or change any existing Plan that
would affect any employee or former employee of Parent or any Parent Subsidiary.
The Disclosure Schedule indicates each Plan that is Title IV Plan.

(b) Parent has heretofore delivered to SoundView true and complete copies of
each Plan and any amendments thereto (or if a Plan is not a written Plan, a
description thereof), any related trust or other funding vehicle, any reports or
summaries required under ERISA or the Code and the most recent

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determination letter received from the Internal Revenue Service with respect to
each Plan intended to qualify under Section 401 of the Code (including but not
limited to the forms 5500 and related reports for the two most recently
completed plan years).

(c) No liability under Title IV or Section 302 of ERISA has been incurred by
Parent or any ERISA Affiliate of Parent that has not been satisfied in full, and
no condition exists that presents a material risk to Parent or any ERISA
Affiliate of Parent of incurring any such liability, other than liability for
premiums due the PBGC (which premiums have been paid when due). Insofar as the
representation made in this Section 3.16(c) applies to Sections 4064, 4069 or
4204 of Title IV of ERISA, it is made with respect to any employee benefit plan,
program, agreement or arrangement subject to Title IV of ERISA to which Parent
or any ERISA Affiliate of Parent made, or was required to make, contributions
during the five year period ending on the last day of the most recent plan year
ended prior to the Closing Date.

(d) The PBGC has not instituted proceedings to terminate any Title IV Plan
and no condition exists that presents a material risk that such proceedings will
be instituted.

(e) With respect to each Title IV Plan, the present value of accrued
benefits under such plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such plan's actuary
with respect to such plan did not exceed, as of its latest valuation date, then
current value of the assets of such plan allocable to such accrued benefits.

(f) No Title IV Plan or any trust established thereunder has incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Code), whether or not waived, as of the last day of the most
recent fiscal year of each Title IV Plan ended prior to the Closing Date. All
contributions required to be made with respect to any Plan on or prior to the
Closing Date have been timely made.

(g) No Title IV Plan is a "multi-employer pension plan," as defined in
Section 3(37) of ERISA, nor is any Title IV Plan a plan described in
Section 4063(a) of ERISA. Neither Parent nor any ERISA Affiliate of Parent has
made or suffered a "complete withdrawal" or a "partial withdrawal," as such
terms are respectively defined in Sections 4203 and 4205 of ERISA (or any
liability resulting therefrom has been satisfied in full).

(h) Neither Parent, any Parent Subsidiary, any Plan or any trust created
thereunder, nor any trustee or administrator of any thereof, has engaged in a
transaction in connection with which Parent, any Parent Subsidiary, any Plan,
any such trust, or any trustee or administrator thereof, or any party dealing
with any Plan or any such trust could be subject to either a civil penalty
assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 or 4976 of the Code.

(i) Each Plan has been operated and administered in all material respects in
accordance with its terms and applicable law, including but not limited to ERISA
and the Code.

(j) Each Plan intended to be "qualified" within the meaning of
Section 401(a) of the Code is so qualified, and the trusts maintained thereunder
are exempt from taxation under Section 501(a) of the Code. Each Plan intended to
satisfy the requirements of Section 501(c)(9) has satisfied such requirements.

(k) No Plan provides medical, surgical, hospitalization, death or similar
benefits (whether or not insured) for employees or former employees of Parent or
any Parent Subsidiary for periods extending beyond their retirement or other
termination of service, other than (i) coverage mandated by applicable law,
(ii) death benefits under any "pension plan," or (iii) benefits the full cost of
which is borne by the current or former employee (or his beneficiary).

(l) No amounts payable under the Plans will fail to be deductible for
federal income tax purposes by virtue of Section 280G of the Code.

(m) The consummation of the Transactions will not, either alone or in
combination with another event, (i) entitle any current or former employee or
officer of Parent or any ERISA Affiliate of Parent to

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severance pay, unemployment compensation or any other payment, except as
expressly provided in this Agreement, or (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or
officer.

(n) There are no pending or, to the knowledge of Parent, threatened or
anticipated claims by or on behalf of any Plan, by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).

7.18 TAX MATTERS; GOVERNMENT BENEFITS.

(a) Parent and each of its Subsidiaries have duly filed all Tax Returns that
are required to be filed excluding only such Tax Returns as to which any failure
to file will not have a material adverse effect on Parent and the Parent
Subsidiaries, taken as a whole, and have duly paid or caused to be duly paid in
full or made provision in accordance with GAAP (or there has been paid or
provision has been made on their behalf) for the payment of all Taxes (as
hereinafter defined) for all periods or portions thereof ending through the date
hereof. All such Tax Returns are correct and complete in all material respects
and accurately reflect all liability for Taxes for the periods covered thereby.
All Taxes owed and due by Parent and all Parent Subsidiaries relating to
operations on or prior to the Balance Sheet Date (whether or not shown on any
Tax Return) have been paid or have been adequately reflected on the Financial
Statements. Since the Balance Sheet Date, Parent has not incurred liability for
any Taxes other than in the ordinary course of business. Neither Parent nor any
Parent Subsidiary has received written notice of any claim made by an authority
in a jurisdiction where neither Parent nor any Parent Subsidiary file Tax
Returns, that Parent or any such Parent Subsidiary is or may be subject to
taxation by that jurisdiction.

(b) Neither Parent nor any Parent Subsidiary has waived any statute of
limitations in any jurisdiction in respect of Taxes or Tax Returns or agreed to
any extension of time with respect to a Tax assessment or deficiency.

(c) No federal, state, local or foreign audits, examinations or other
administrative proceedings have been commenced or, to Parent's knowledge, are
pending with regard to any Taxes or Tax Returns of Parent or of any Parent
Subsidiary. No written notification has been received by Parent or by any Parent
Subsidiary that such an audit, examination or other proceeding is pending or
threatened with respect to any Taxes due from or with respect to or attributable
to Parent or any Parent Subsidiary or any Tax Return filed by or with respect to
Parent or any Parent Subsidiary. To Parent's knowledge, there is no dispute or
claim concerning any Tax liability of Parent, or any Parent Subsidiary either
claimed or raised by any taxing authority in writing.

(d) Neither Parent nor any of the Parent Subsidiaries is a party to any
agreement, plan, contract or arrangement that could result, separately or in the
aggregate, in a payment of any "excess parachute payments" within the meaning of
Section 280G of the Code.

(e) Neither Parent nor any of the Parent Subsidiaries has filed a consent
pursuant to Section 341(f) of the Code (or any predecessor provision) concerning
collapsible corporations, or agreed to have Section 341(f)(2) of the Code apply
to any disposition of a "subsection (f) asset" (as such term is defined in
Section 341(f)(4) of the Code) owned by Parent or any Parent Subsidiary.

(f) No taxing authority is asserting or threatening to assert a claim
against Parent or any Parent Subsidiary under or as a result of Section 482 of
the Code or any similar provision of state, local or foreign law.

(g) Neither Parent nor any of its Subsidiaries is a party to any tax
sharing, tax indemnity or other agreement or arrangement with any entity not
included in Parent's consolidated financial statements most recently filed by
Parent with the SEC which could result in a material liability.

(h) None of Parent or any Parent Subsidiary has been a member of any
affiliated group within the meaning of Section 1504(a) of the Code, or any
similar affiliated or consolidated group for tax purposes under state, local or
foreign law (other than a group the common parent of which is Parent), or has
any

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liability for Taxes of any person (other than Parent and its Subsidiaries) under
Treasury Regulation Section 1.1502-6 or any similar provision of state, local or
foreign law as a transferee or successor, by contract or otherwise.

7.19 LABOR AND EMPLOYMENT MATTERS. (a) Neither Parent nor any Parent
Subsidiary is delinquent in any material respect in payments to any of its
current or former officers, directors, employees, consultants, or agents for any
wages, salaries, commissions, bonuses, benefits, expenses or other compensation
for any services performed by them or amounts required to be reimbursed to them;
and in the event of termination of the employment of any employee of Parent or
any Parent Subsidiaries, neither Parent nor any Parent Subsidiary will be liable
to any such employee under any agreement in effect at the Closing for so-called
"severance pay," incentive pay, liquidated damages or any other payments or
benefits, including, without limitation, post-employment health care, pension or
insurance benefits.

(b) Since December 31, 1996 Parent has not had any claim made against it or
any Parent Subsidiary by any Person before any Governmental Entity in respect of
employment with Parent for discrimination or harassment on account of sex, race
and other characteristic protected by law and there are no pending or threatened
proceedings in relation thereto.

7.20 CONTRACTS AND COMMITMENTS.

(a) Neither Parent nor any Parent Subsidiary has any agreements, contracts,
commitments or restrictions which are material to its business or operations.

(b) Neither Parent nor any Parent Subsidiary is in default, nor is there any
known basis for any valid claim of default, under any contract made or
obligation owed by it which are material to its business or operations.

7.21 INSURANCE. Parent maintains with reputable insurers the worker's
compensation, comprehensive property and casualty, liability, errors and
omissions, fidelity and other insurance described on Schedule 7.21 hereto, which
insurance is, in the reasonable opinion of Parent, sufficient for the operation
of the businesses operated by Parent and the Parent Subsidiaries.

7.22 INSIDER INTERESTS. No officer or director of Parent or any Parent
Subsidiary has any material interest in any property, real or personal, tangible
or intangible, including without limitation, office space, fixtures, equipment,
inventions, patents, trademarks or trade names, used in or pertaining to the
business of Parent or any Parent Subsidiary.

7.23 BROKERS OR FINDERS. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any brokers or finders
fee or any other commission or similar fee in connection with any of the
Transactions except for Goldman Sachs & Co.

ARTICLE VIII
COVENANTS

8.1 INTERIM OPERATIONS OF SOUNDVIEW. SoundView covenants and agrees that
prior to the Effective Date, except (i) as expressly contemplated by this
Agreement, (ii) as set forth in Section 8.1 of the Disclosure Schedule, or
(iii) as agreed in writing by Parent, after the date hereof:

(a) the business of SoundView and the SoundView Subsidiaries shall be
conducted only in the usual, regular and ordinary course and substantially in
the same manner as heretofore conducted, and each of SoundView and the SoundView
Subsidiaries shall use all commercially reasonable efforts to preserve its
business organization intact, keep available the services of its current
officers and employees and maintain its existing relations with Persons having
business dealings with it, to the end that the goodwill and ongoing business of
each of them shall be unimpaired at the Effective Time;

(b) neither SoundView nor any SoundView Subsidiary shall: (i) amend its
certificate of incorporation or by-laws or similar organizational documents,
(ii) issue, sell, transfer, pledge, dispose of or encumber any

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shares of any class or series of its capital stock or Voting Debt, or securities
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of any class or series of its
capital stock or any Voting Debt, other than Shares reserved for issuance on the
date hereof pursuant to the exercise of Company Options outstanding on the date
hereof, (iii) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to any shares of any class or
series of its capital stock; (iv) split, combine or reclassify any shares of any
class or series of its stock; or (v) redeem, purchase or otherwise acquire
directly or indirectly any shares of any class or series of its capital stock,
or any instrument or security which consists of or includes a right to acquire
such shares;

(c) neither SoundView nor any SoundView Subsidiary shall (i) incur or modify
any indebtedness or other liability, other than in the ordinary and usual course
of business and consistent with past practice; or (ii) modify, amend or
terminate any of its material contracts or waive, release or assign any material
rights or claims, except in the ordinary course of business and consistent with
past practice;

(d) neither SoundView nor any SoundView Subsidiary shall: (i) incur or
assume any long-term debt, or except in the ordinary course of business, incur
or assume any short-term indebtedness in amounts not consistent with past
practice; (ii) modify the terms of any indebtedness or other liability, other
than modifications of short term debt in the ordinary and usual course of
business and consistent with past practice; (iii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person, except in the ordinary
course of business and consistent with past practice; (iv) make any loans
(except for loans to facilitate exercises of SoundView Stock Options), advances
or capital contributions to, or investments in, any other person (other than to
or in wholly owned Subsidiaries of SoundView) except in the ordinary course of
business and consistent with past practice; or (v) enter into any material
commitment or transaction (including, but not limited to, any capital
expenditure or purchase, sale or lease of assets or real estate) except in the
ordinary course of business;

(e) neither SoundView nor any SoundView Subsidiary shall transfer, lease,
license, sell, mortgage, pledge, dispose of, or encumber any assets other than
in the ordinary course of business and consistent with past practice;

(f) neither SoundView nor any SoundView Subsidiary shall make any change in
the compensation payable or to become payable to any of its officers, directors,
employees, agents or consultants (other than normal increases or decreases
reflecting the performance of SoundView and the SoundView Subsidiaries and of
such Persons in the ordinary course of business consistent with past practice)
or to Persons providing management services, or enter into or amend any
employment, severance, consulting, termination or other agreement or employee
benefit plan (other than an amendment required to conform such plan to this
Agreement or to changes that have occurred or may hereafter be made in
Applicable Law) or make any loans to any of its officers, directors, employees,
Affiliates, agents or consultants or make any change in its existing borrowing
or lending arrangements for or on behalf of any of such Persons pursuant to an
employee benefit plan or otherwise (except for loans to facilitate exercises of
SoundView Stock Options);

(g) neither SoundView nor any SoundView Subsidiary shall pay or make any
accrual or arrangement for payment of any pension, retirement allowance or other
employee benefit pursuant to any existing plan, agreement or arrangement to any
officer, director, employee or Affiliate or pay or agree to pay or make any
accrual or arrangement for payment to any officers, directors, employees or
Affiliates of SoundView of any amount relating to unused vacation days, except
payments and accruals made in the ordinary course of business consistent with
past practice or as required by an existing Plan, as the same may be amended to
conform such Plan to this Agreement and to changes that have occurred or may
hereafter be made in applicable law; adopt or pay, grant, issue, accelerate or
accrue salary or other payments or benefits pursuant to any pension,
profit-sharing, bonus, extra compensation, incentive, deferred compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other

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employee benefit plan, agreement or arrangement, or any employment or consulting
agreement with or for the benefit of any director, officer, employee, agent or
consultant, whether past or present except as required by an existing Plan, as
the same may be amended to conform such Plan to this Agreement and to changes
that have occurred or may hereafter be made in applicable law; or amend in any
material respect any such existing plan, agreement or arrangement in a manner
inconsistent with the foregoing;

(h) neither SoundView nor any SoundView Subsidiary shall permit any
insurance policy naming it as a beneficiary or a loss payable payee to be
cancelled or terminated without notice to Parent, except policies providing
coverage for losses not in excess of $200,000;

(i) neither SoundView nor any SoundView Subsidiary shall enter into any
contract or transaction relating to the purchase of assets other than in the
ordinary course of business consistent with prior practices;

(j) neither SoundView nor any SoundView Subsidiary shall pay, repurchase,
discharge or satisfy any of its claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice, of claims, liabilities or obligations reflected
or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of SoundView and the SoundView Subsidiaries;

(k) neither SoundView nor SoundView's Subsidiary will adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of SoundView or any
SoundView Subsidiary (other than the Merger);

(l) neither SoundView nor any SoundView Subsidiary will (i) change any of
the accounting methods used by it unless required by GAAP or (ii) make any
material election relating to Taxes, change any material election relating to
Taxes already made, adopt any material accounting method relating to Taxes,
change any material accounting method relating to Taxes unless required by GAAP,
enter into any closing agreement relating to Taxes, settle any claim or
assessment relating to Taxes or consent to any claim or assessment relating to
Taxes or any waiver of the statute of limitations for any such claim or
assessment;

(m) neither SoundView nor any of SoundView Subsidiary will take, or agree to
commit to take, any action that would or is reasonably likely to result in any
of the conditions to the Merger set forth in Article IX not being satisfied, or
would make any representation or warranty of SoundView contained herein
materially inaccurate in any respect at, or as of any time prior to, the
Effective Time, or that would materially impair the ability of SoundView, Parent
or Merger Sub to consummate the Merger in accordance with the terms hereof or
materially delay such consummation; and

(n) neither SoundView nor any of SoundView Subsidiary will enter into an
agreement, contract, commitment or arrangement to do any of the foregoing, or to
authorize, recommend, propose or announce an intention to do any of the
foregoing.

8.2 INTERIM OPERATIONS OF PARENT. Parent covenants and agrees that prior
to the Effective Date, except (i) as expressly contemplated by this Agreement,
(ii) as set forth in Section 8.1 of the Disclosure Schedule, or (iii) as agreed
in writing by SoundView, after the date hereof:

(a) the business of Parent and the Parent Subsidiaries shall be conducted
only in the usual, regular and ordinary course and substantially in the same
manner as heretofore conducted, and each of Parent and the Parent Subsidiaries
shall use all commercially reasonable efforts to preserve its business
organization intact, keep available the services of its current officers and
employees and maintain its existing relations with Persons having business
dealings with it, to the end that the goodwill and ongoing business of each of
them shall be unimpaired at the Effective Time;

(b) neither Parent nor any Parent Subsidiary shall declare, set aside or pay
any dividend or other distribution payable in cash, stock or property with
respect to any shares of any class or series of its capital stock;

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(c) neither Parent nor any Parent Subsidiary shall (i) incur or modify any
indebtedness or other liability, other than in the ordinary and usual course of
business and consistent with past practice; or (ii) modify, amend or terminate
any of its material contracts or waive, release or assign any material rights or
claims, except in the ordinary course of business and consistent with past
practice;

(d) neither Parent nor any Parent Subsidiary shall pay, repurchase,
discharge or satisfy any of its claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice, of claims, liabilities or obligations reflected
or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of Parent and the Parent Subsidiaries;

(e) neither Parent nor any Parent Subsidiary will change any of the
accounting methods used by it unless required by GAAP;

(f) neither Parent nor any Parent Subsidiary will take, or agree to commit
to take, any action that would or is reasonably likely to result in any of the
conditions to the Merger set forth in Section 9.2 not being satisfied, or would
make any representation or warranty of Parent contained herein materially
inaccurate in any respect at, or as of any time prior to, the Effective Time, or
that would materially impair the ability of Parent, SoundView, Merger Sub to
consummate the Merger in accordance with the terms hereof or materially delay
such consummation; and

(g) neither Parent nor any Parent Subsidiary will enter into an agreement,
contract, commitment or arrangement to do any of the foregoing, or to authorize,
recommend, propose or announce an intention to do any of the foregoing.

8.3 ACCESS; CONFIDENTIALITY. Each of SoundView and Parent shall afford to
the officers, employees, accountants, counsel and other representatives of
Parent, full access to all properties, books, contracts, commitments and records
of itself and its subsidiaries and each of Parent and SoundView shall furnish
promptly to the other (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period pursuant
to the requirements of Securities Laws and (b) all other information concerning
its business, properties and personnel as the other may reasonably request.
Unless otherwise required by law, the party receiving such information will hold
any such information which is nonpublic in confidence in accordance with the
provisions of the Confidentiality Agreement to which such party is subject.

8.4 REASONABLE BEST EFFORTS.

(a) Prior to the Closing, upon the terms and subject to the conditions of
this Agreement, Parent, Merger Sub and SoundView agree to use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable (subject to any
applicable laws) to consummate and make effective the Merger and the other
Transactions as promptly as practicable including, but not limited to (i) the
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Merger and the other Transactions and the taking of such
actions as are necessary to obtain any requisite approvals, consents, orders,
exemptions or waivers by any third party or Governmental Entity including
notification by Parent to the NASD regarding the issuance of additional Parent
Shares in the Merger, and (ii) the satisfaction of the other parties' conditions
to Closing. In addition, no party hereto shall take any action after the date
hereof that would reasonably be expected to materially delay the obtaining of,
or result in not obtaining, any permission, approval or consent from any
Governmental Entity necessary to be obtained prior to Closing.

(b) Prior to the Closing, each party shall promptly consult with the other
parties hereto with respect to, provide any necessary information with respect
to, and provide the other parties (or their respective counsel) with copies of,
all filings made by such party with any Governmental Entity or any other
information supplied by such party to a Governmental Entity in connection with
this Agreement, the Merger and the other Transactions. Each party hereto shall
promptly inform the other of any communication from any Governmental Entity
regarding any of the Transactions. If any party hereto or Affiliate

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thereof receives a request for additional information or documentary material
from any such Governmental Entity with respect to any of the Transactions, then
such party shall endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other parties, an
appropriate response in compliance with such request. To the extent that
transfers, amendments or modifications of permits (including environmental
permits) are required as a result of the execution of this Agreement or
consummation of any of the Transactions, SoundView and Parent shall use its
reasonable best efforts to effect such transfers, amendments or modifications.
SoundView, Parent and Merger Sub shall make, subject to the condition that the
transactions contemplated herein actually occur, any undertakings (including
undertakings to make divestitures, provided, in any case, that such divestitures
need not themselves be effective or made until after the transactions
contemplated hereby actually occur) required in order to comply with the
antitrust requirements or laws of any governmental entity, including the HSR
Act, in connection with the transactions contemplated by this Agreement.

(c) SoundView and Parent shall file as soon as practicable notifications
under the HSR Act and respond as promptly as practicable to any inquiries
received from the Federal Trade Commission and the Antitrust Division of the
Department of Justice for additional information or documentation and respond as
promptly as practicable to all inquiries and requests received from any State
Attorney General or other Governmental Entity in connection with antitrust
matters. Concurrently with the filing of notifications under the HSR Act or as
soon thereafter as practicable, SoundView and Parent shall each request early
termination of the HSR Act waiting period.

(d) Notwithstanding the foregoing, nothing in this Agreement shall be deemed
to require SoundView, Parent or Merger Sub to commence any litigation against
any entity in order to facilitate the consummation of any of the Transactions or
to defend against any litigation brought by any Governmental Entity seeking to
prevent the consummation of any of the Transactions.

8.5 SHAREHOLDERS MEETING; PROXY STATEMENT/REGISTRATION STATEMENT. If
required by Applicable Law in order to consummate the Merger, Parent, acting
through its Board of Directors, shall, in accordance with Applicable Law: (a)
duly call, give notice of, convene and hold a special meeting of its
shareholders as promptly as practicable for the purpose of considering and
taking action upon the approval of the Merger and the adoption of this
Agreement; and (b) use its reasonable best efforts to solicit from holders of
Parent Shares proxies in favor of the Merger and the Merger Agreement and shall
take all other action necessary or, in the reasonable opinion of Parent,
advisable to secure any vote or consent of shareholders required under
Applicable Law.

(a) Unless registration of the Parent Shares under the Securities Act is not
required by Applicable Law in order to solicit the approval, consent or election
of stockholders of SoundView, Parent shall promptly prepare and file with the
SEC under the Act, a Registration Statement on Form S-4 or other appropriate
form (the "S-4 Registration Statement") with respect to the Parent Shares to be
issued in S-4 Registration Statement declared effective by the SEC as promptly
as practicable. SoundView shall furnish Parent with all information and shall
take such other action as may reasonably request in connection with the S-4
Registration Statement.

If, at any time prior to the Parent shareholders meeting, if any, or the
date by which SoundView shareholders are required to elect cash for a portion of
their Shares if they do not wish to receive solely Parent Shares, any event
should occur relating to or affecting SoundView or Parent, or their respective
officers or directors, which event should be described in an amendment or
supplement to the S-4 Registration Statement, the parties shall promptly
prepare, file and clear with the SEC and, if required by Applicable Law, mail to
the shareholders of SoundView and/or Parent such amendment or supplement.

8.6 NO SOLICITATION OF COMPETING TRANSACTION. (a) Neither SoundView nor
any SoundView Subsidiary or Affiliate of SoundView shall (and SoundView shall
instruct its officers, directors, employees, representatives and agents of
SoundView, each SoundView Subsidiary and each Affiliate of SoundView, including,
but not limited to, investment bankers, attorneys and accountants, not to, and
shall not permit

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any of them to), directly or indirectly, encourage, solicit, participate in or
initiate discussions or negotiations with, or provide any information to, any
Person or group (other than Parent, any of its Affiliates or representatives)
concerning any Acquisition Proposal, SoundView will immediately notify Parent of
the existence of any proposal, discussion, negotiation or inquiry received by
SoundView, and SoundView will immediately communicate to Parent the terms of any
proposal, discussion, negotiation or inquiry which it may receive (and will
immediately provide to Parent copies of any written materials received by
SoundView in connection with such proposal, discussion, negotiation or inquiry)
and the identity of the party making such proposal or inquiry or engaging in
such discussion or negotiation. SoundView will promptly provide to Parent any
non-public information concerning SoundView provided to any other party which
was not previously provided to Parent.

(b) SoundView's Board of Directors shall not (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Merger Sub, the
approval or recommendation by such Board of Directors of this Agreement or the
Merger, (ii) approve or recommend or propose to approve or recommend, any
Acquisition Proposal or (iii) enter into any agreement with respect to any
Acquisition Proposal.

8.7 PUBLICITY. The initial press release with respect to the execution of
this Agreement shall be a joint press release acceptable to Parent and
SoundView. Thereafter, until the Closing, or the date the Transactions are
terminated or abandoned pursuant to Article XII, neither SoundView, Parent nor
any of their respective Affiliates shall issue or cause the publication of any
press release or other announcement with respect to the Merger, this Agreement
or the other Transactions without prior consultation with the other party,
except as may be required by law or by any listing agreement with a national
securities exchange or trading market.

8.8 NOTIFICATION OF CERTAIN MATTERS. Each of SoundView and Parent shall
give prompt notice to the other, of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time and (ii) any material failure
of it to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 8.8 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.

8.9 STATE TAKEOVER LAWS. Notwithstanding any other provision in this
Agreement, in no event shall the Section 203 Approval be withdrawn, revoked or
modified by the Board of Directors of SoundView. If any state takeover statute
other than Section 203 of the DGCL becomes or is deemed to become applicable to
the Agreement, the acquisition of Shares pursuant to the Merger or the other
Transactions, SoundView shall take all action necessary to render such statute
inapplicable to all of the foregoing.

8.10 MERGER SUB COMPLIANCE. Parent shall cause Merger Sub to comply with
all of its obligations under or related to this Agreement.

8.11 EXPENSES. Except as provided elsewhere herein, SoundView shall bear
the direct and indirect expenses of SoundView and Parent shall bear the direct
and indirect expenses of Parent, incurred in connection with the negotiation and
preparation of this Agreement and the Related Agreements and the consummation of
the transactions contemplated hereby and thereby.

8.12 APPOINTMENT OF DIRECTOR. Effective upon the Effective Time, the Board
of Directors of Parent will appoint Russell Crabs as a member of the Parent
Board of Directors.

8.13 TAX-FREE REORGANIZATION. Neither SoundView nor Parent shall take any
action prior to or after the Effective Time which is likely to cause the Merger
to fail to qualify as a reorganization within the meaning of the Code.

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ARTICLE IX
CONDITIONS

9.1 CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB. The respective
obligations of Parent and Merger Sub to consummate the Merger are subject to the
fulfillment at or prior to the Effective Time of the following conditions, any
or all of which may be waived in whole or in part by Parent or Merger Sub, as
the case may be, to the extent permitted by Applicable Law.

(a) Certificate. The representations and warranties of SoundView set forth
in this Agreement shall be true and correct in material respects on and as of
the Effective Time with the same force and effect as though the same has been
made on and as of the Effective Time (except to the extent they relate to a
particular date), SoundView shall have performed in all material respects all of
its obligations under this Agreement theretofore to be performed, and Parent
shall have received at the Effective Time a certificate to that effect dated the
Effective Time and executed by the Chief Executive Officer of SoundView.

(b) Soundview Stockholder Approval. This agreement and the Merger shall have
been duly approved by the holders of a majority of the outstanding Shares in
accordance with Applicable Law and the Certificate of Incorporation and By-Laws
of SoundView.

(c) Injunction, Regulatory Action. There shall be in effect no preliminary
or permanent injunction or other order of a court or governmental or regulatory
agency of competent jurisdiction directing that the transactions contemplated
herein not be consummated.

(d) S-4 Registration Statement. Unless registration of the Parent Shares
under the Securities Act is not required by Applicable Law in order for holders
of Shares who receive Parent Shares in the Merger to dispose of such Parent
Shares as are not subject to restrictions on transfer by reason of this
Agreement, the S-4 Registration Statement shall have become effective and no
stop order suspending the effectiveness of the S-4 Registration Statement shall
have been issued and remain in effect and no proceedings for such purpose shall
have been initiated or threatened by the SEC and any amendment or supplement to
the S-4 Registration Statement required to be prepared, filed and cleared
pursuant to Section 8.5 above shall have been so prepared, filed and cleared. If
registration of the Parent Shares under the 1933 Act is not required by
Applicable Law for the foregoing purposes, Parent shall have received all state
securities laws or "blue sky" permits and authorizations necessary to issue
Parent Shares in exchange for the Shares in the Merger.

(e) Government Filings and Consents. Except for the filing of the
Certificate of Merger, all governmental filings required to be made prior to the
Effective Time by SoundView with, and all governmental consents required to be
obtained prior to the Effective Time by SoundView from any Governmental Entity
in connection with the execution and delivery of this Agreement by and the
consummation of the transactions contemplated hereby, shall have been made or
obtained, and any waiting periods or extensions thereof under HSR Act shall have
expired or been terminated.

(f) Rule 145. Each Affiliate of SoundView shall have executed and delivered
to Parent an Affiliate Letter, together with such other documents and
instruments as Parent may reasonably request related to compliance with the
Securities Act.

(g) Third-Party Consents. All required authorizations, consents and
approvals of any third party (other than those referred to in Section 9.1(e)
above), the failure of which (either individually or in the aggregate) to be
obtained would have a Material Adverse Effect on SoundView or the Surviving
Company (assuming the Merger had taken place), shall have been obtained.

(h) Opinions of Counsel for Soundview. Parent shall have received the
opinion of Morrison & Foerster LLP, special counsel to SoundView, addressed to
Parent and dated the Closing Date, as to the organization, qualification and
capitalization of SoundView; authorization, due execution, validity and
enforceability of the Merger Agreement, the Employment Agreements and the Put
Termination Agreements; and regulatory approvals, in form and substance
reasonably satisfactory to Parent.

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(i) Tax Opinion. Parent shall have received an opinion of Skadden, Arps,
Slate, Meagher & Flom LLP, dated on or about the date that is either two
business days prior to the date the Proxy Statement is first mailed to Parent
stockholders if a meeting of Parent stockholders is required, and the date of
the Closing, to the effect that (i) the Merger will be treated for Federal
income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code, (ii) each of Parent, Merger Sub and the Company will
be a party to the reorganization within the meaning of Section 368(b) of the
Code and (iii) no gain or loss will be recognized by a stockholder of SoundView
as a result of the conversion of the Shares into Parent Shares pursuant to the
terms of the Merger (except with respect to the cash received in lieu of
fractional share interests in Parent). In rendering such opinion, Skadden, Arps,
Slate, Meagher & Flom LLP will be entitled to rely upon, among other things,
representations contained in certificates of SoundView, Merger Sub and Parent in
such form as is reasonably satisfactory to such counsel.

(j) Certain Agreements. Employment Agreements in substantially the form
attached hereto as Exhibit G with each of the individuals named in such
Exhibit G and each of the other agreements set forth in such Exhibit G shall be
in full force and effect.

(k) Parent Stockholder Approval. If required by the shareholder voting
policy of the NASD, this Agreement shall have been duly approved by a majority
of the outstanding Parent Shares entitled to vote and voting thereon.

(l) Dissenting Shares. The sum of Dissenting Shares and Old Agreement
Securities immediately prior to the Effective Time shall not exceed 10% of the
sum of the issued and outstanding Shares immediately prior to the Effective
Time.

9.2 CONDITIONS TO THE OBLIGATIONS OF SOUNDVIEW. The obligation of
SoundView to consummate the Merger is subject to the fulfillment at or prior to
the Effective Time of the following conditions, any or all of which may be
waived in whole or in part by SoundView to the extent permitted by applicable
law.

(a) Certificate. The representations and warranties of Parent and Merger Sub
set forth in this Agreement shall be true and correct in all material respects
on and as of the Effective Time with the same force and effect as though the
same had been made on and as of the Effective Time (except to the extent they
relate to a particular date), Parent and Merger Sub shall have performed in all
material respects all of their respective obligations under this Agreement
theretofore to be performed, and SoundView shall have received at the Effective
Time a certificate to that effect dated the Effective Time and executed by the
President of Parent.

(b) Parent Stockholder Approval. If required by the shareholder voting
policy of the NASD, this Agreement shall have been duly approved by the holders
of a majority of the outstanding Parent Shares entitled to vote and voting
thereon.

(d) S-4 Registration Statement. Unless registration of the Parent Shares
under the 1933 Act is not required by Applicable Law in order for holders of
Shares who receive Parent Shares in the Merger to dispose of such Parent Shares
as are not subject to restricting on transfer by reason of this Agreement, the
S-4 Registration Statement shall have become effective and no stop order
suspending the effectiveness of the S-4 Registration Statement shall have been
issued and remain in effect and no proceedings for such purpose shall have been
initiated or threatened by the SEC and any amendment or supplement to the S-4
Registration Statement required to be prepared, filed and cleared pursuant to
Section 8.5 above shall have been so prepared, filed and cleared. If
registration of the Parent Shares under the 1933 Act is not required by
Applicable Law for the foregoing purposes, Parent shall have received all state
securities laws or "blue sky" permits and authorizations necessary to issue
Parent Shares in exchange for the Shares in the Merger.

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(e) Governmental Filings and Consents. Except for the filing of the
Certificate of Merger, all governmental filings required to be made prior to the
Effective Time by Parent and Merger Sub with, and all governmental consents
required to be obtained prior to the Effective Time by Parent and Merger Sub
from, governmental, regulatory and self-regulatory authorities in connection
with the execution and deliver of this Agreement by Parent and Merger Sub and
the consummation of the transactions contemplated hereby shall have been made or
obtained, and any waiting periods or extensions thereof under the HSR Act shall
have expired or been terminated.

(f) Third-Party Consents. All required authorizations, consents and
approvals of any third party (other than a governmental or regulatory
authority), the failure of which (either individually or in the aggregate) to be
obtained would have a Material Adverse Effect on Parent, shall have been
obtained.

(g) Opinions of Counsel for Parent. SoundView shall have received the
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to Parent,
addressed to SoundView and dated the Closing Date as to the organization,
qualification and capitalization of Parent; authorization, issuance and
nonassessability of the Parent Shares issuable in the Merger; authorization, due
execution, validity and enforceability of the Merger Agreement and the
Employment Agreements; and regulatory approvals, in form and substance
reasonably acceptable to SoundView.

(h) Tax Opinion. SoundView shall have received an opinion of Morrison &
Foerster LLP, dated the date of the Closing, to the effect that (i) the Merger
will be treated for federal income tax purposes as a reorganization with the
meaning of Section 368(a) of the Code, (i) each of Parent, Merger Sub and
SoundView will be a party to the reorganization within the meaning of
Section 368(b) of the Code, and (iii) no gain or loss will be recognized by a
stockholder of SoundView as a result of the conversion of the Shares into Parent
Shares pursuant to the terms of the Merger (except with respect to cash received
in lieu of fractional share interests in Parent). In rendering such opinion,
Morrison & Foerster LLP will be entitled to rely, among other things, upon
representations contained in certificates of SoundView, Parent and Merger Sub in
such form as is reasonably satisfactory to such counsel.

(i) Employment Agreements. Parent shall have executed and delivered each of
the Employment Agreements referred to in Exhibit G to the extent set forth
therein and shall not have breached in any material respect any such Employment
Agreement executed and delivered by the applicable employee.

ARTICLE X
TERMINATION/SURVIVAL

10.1 TERMINATION. (a) This Agreement may be terminated at any time prior
to the Closing as follows:

(i) by the mutual written consent of Parent and SoundView;

(ii) by Parent or SoundView if it has become reasonably certain that any
of the conditions to the other party's obligation to close the transactions
contemplated by this Agreement will not be satisfied on or prior to the date
set forth in Section 10.1(a)(vii) below and not waived;

(iii) by Parent, on the one hand, or by SoundView, on the other hand, if
there shall have been a breach of any of the representations and warranties
set forth in this Agreement on the part of the other, which breach would,
under Section 9.1(a) (in the case of a breach of representation or warranty
by SoundView) or Section 9.2(a) (in the case of a breach of representation
or warranty by Parent), entitle the party receiving such representations and
warranties not to consummate the transactions contemplated hereby and which
breach by its nature cannot be cured prior to the date set forth in
Section 10.1(a)(vii) below;

(iv) by SoundView on the one hand, or by Parent, on the other hand, if
there shall have been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of

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SoundView (in the case of termination by Parent) or on the part of Parent
(in the case of termination by SoundView), which breach shall not have been
cured within 20 Business Days following receipt by the breaching party of
written notice of such breach from the other;

(v) by SoundView if the volume weighted average trading price of the
Parent Shares as reported for the primary trading session (currently ending
at 4:00 p.m.) on the NNM on each of any five consecutive trading days, the
first of which occurs after December 15, 1999 (excluding December 31, 1999
and January 3, 2000) and the last of which occurs prior to the Effective
Time, is less than $10 and if SoundView shall have terminated this Agreement
in writing within ten days after the foregoing condition shall have first
been satisfied;

(vi) by Parent if the volume weighted average trading price of the
Parent Shares as reported for the primary trading session (currently ending
at 4;00 p.m.) on the NNM on each of any five consecutive trading days , the
first of which occurs after December 15, 1999 (excluding December 31, 1999
and January 3, 2000) and the last of which occurs prior to the Effective
Time, is greater than $25 and if Parent shall have terminated this Agreement
in writing within ten days after the foregoing condition shall have first
been satisfied; and

(vii) at the election of Parent or SoundView, if the Closing shall not
occur on or before May 31, 2000.

Notwithstanding Section 10.1(a)(ii)-(vii) hereof, a party who is in material
breach of any of its obligations or representations and warranties hereunder
shall not have the right to terminate this Agreement pursuant to
Section 10.1(a)(ii)-(vii).

(b) The termination of this Agreement shall be effectuated by the delivery
by the party terminating this Agreement to the other party of a written notice
of such termination. If this Agreement so terminates, it shall become null and
void and have no further force or effect, except as provided in Section 10.2.

10.2 EFFECT OF TERMINATION. In the event of termination of this Agreement
as provided in Section 10.1, this Agreement (other than Section 8.3 and
Article XII) shall forthwith become void and have no effect except that,
notwithstanding anything to the contrary contained in this Agreement, no party
shall be relieved or released from any liabilities or damages arising out of its
breach of any provision of this Agreement. In the event of termination of this
Agreement, Parent and SoundView shall continue to honor the terms of the
Confidentiality Agreements, including the return of all confidential materials.

10.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND COVENANTS. The
respective representations and warranties SoundView and Parent contained herein
and in the certificates of SoundView and Parent to be delivered at the Closing
shall expire and be terminated and extinguished at the Effective Time.

ARTICLE XI
DEFINITIONS

11.1 DEFINITIONS. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context clearly requires otherwise:

"Acquisition Proposal" shall mean any proposal or offer to acquire all or a
substantial part of the business or properties of SoundView or any SoundView
Subsidiary or any capital stock of SoundView or any SoundView Subsidiary,
whether by merger, tender offer, exchange offer, sale of assets or similar
transactions involving SoundView or any Subsidiary, division or operating or
principal business unit of SoundView.

"Advisers Act" means the Investment Advisers Act of 1940, as amended, and
all rules and regulations of the SEC thereunder.

"Affiliate" shall have the meaning set forth in Rule 12b-2 of the Exchange
Act.

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"Affiliate Letter" shall mean a letter for use with respect to sales of
stock by Affiliates of SoundView who become Affiliates of Parent which is
executed and delivered by each Affiliate of SoundView and delivered to Parent
pursuant to Section 9.1(f) hereof and which complies as to form with the
requirements of SEC Rule 145.

"Agreement" or "this Agreement" shall mean this Agreement and Plan of
Merger, together with the Exhibits and Schedules hereto and the Disclosure
Schedule.

"Applicable Law" means any statute, law, ordinance, rule, public
administrative interpretation, regulation, order, writ, injunction, directive,
judgment, decree or other requirement of any Governmental Entity applicable to
Parent, any Parent Subsidiary, or any Parent Pooled Product, SoundView, any
SoundView Subsidiary or any SoundView Pooled Product, or any of their respective
properties, assets, officers, directors, partners, members, employees or agents.

"Balance Sheet Date" shall mean the date of the SoundView Balance Sheet or
the Parent Balance Sheet, as the contest may require.

"Cause" shall mean the relevant employee's (i) neglect, failure or refusal
to timely perform the duties of his employment (other than by reason of a
physical or mental illness or impairment), or his gross negligence in the
performance of his duties, (ii) material breach of any agreements, covenants and
representations made in any employment agreement or other agreement with Parent
or any of its Subsidiaries, (iii) violation of any law, rule, regulation or
by-law of any governmental authority (state, federal or foreign), any securities
exchange or association or other regulatory or self-regulatory body or agency
applicable to Parent or any of its Subsidiaries or any material general policy
or directive of Parent or any of its Subsidiaries applicable to such employee,
(iv) conviction of, or plea of guilty or nolo contendere to, a crime involving
moral turpitude, dishonesty, fraud or unethical business conduct, or a felony,
(v) giving or accepting undisclosed material commissions or other payments in
cash or in kind in connection with the affairs of Parent or any of its
Subsidiaries or their clients, (vi) failure to obtain or maintain any
registration, license or other authorization or approval that Parent reasonably
believes is required in order for the employee to perform his duties; or (vii)
habitual abuse of alcohol or drugs.

"Confidentiality Agreement" shall mean either the letter agreement dated
July 28, 1999 between SoundView and Parent or the letter agreement dated
July 28, 1999 between SoundView and Parent or both of them, as the context may
require.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"DGCL" shall mean the General Corporation Law of the State of Delaware, as
now or hereafter amended.

"Disclosure Schedule" shall mean the disclosure schedule of even date
herewith prepared and signed by SoundView or Parent, as the case may be, and
delivered to the other simultaneously with the execution hereof.

"Employment Agreement" means an employment agreement and non-disclosure,
non-competition and assignment of inventions agreement substantially in the form
of Exhibit G hereto with each of the individuals named on such Exhibit G.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with SoundView or Parent, as applicable, would be
deemed a "single employer" within the meaning of Section 4001(b) of ERISA.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

"GAAP" shall mean United States generally accepted accounting principles.

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"Governmental Documents" means all reports and registration statements
filed, or required to be filed, by law, by contract or otherwise, by an entity
pursuant to the authority of any Governmental Entity.

"Governmental Entity" shall mean any nation, state, territory, province,
county, city or other unit or subdivision thereof or any entity, authority,
agency, department, board, commission, instrumentality, court or other judicial
body authorized on behalf of any of the foregoing to exercise legislative,
judicial, regulatory or administrative functions of or pertaining to government
and, in the case of SoundView, any governmental or non-governmental
self-regulatory organization of which SoundView or any SoundView Subsidiary was
or is a member or to whose regulations any thereof was or is subject or, in the
case of Parent, any governmental or non-governmental self-regulatory
organization of which Parent or any Parent Subsidiary was or is a member or to
whose regulations any thereof was or is subject.

"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

"Intellectual Property" means all domestic and foreign copyrights, patents,
proprietary models, processes, formulas and databases, service marks, Software,
know-how, trade names, trademarks and trade secrets, and all registrations or
applications for registration of any of the foregoing.

"Investment Company Act" means the Investment Company Act of 1940, as
amended, and the rules and regulations of the SEC promulgated thereunder.

"Merger Sub" shall mean W/S Merger Corp, a Delaware corporation which is a
wholly owned Subsidiary of Parent.

"Merger Sub Common Stock" shall mean common stock, par value $.01 per share,
of Merger Sub.

"NASD" shall mean the National Association of Securities Dealers, Inc, NASD
Regulation, Inc. or The Nasdaq National Market, Inc., as the context may
require.

"Parent Agreement" shall mean any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which Parent
or any Parent Subsidiary is a party or by which any of them or any of their
properties or assets may be bound.

"Parent Balance Sheet" shall mean the most recent balance sheet of Parent
and its consolidated subsidiaries included in the Financial Statements.

"Parent Board of Directors" shall mean the board of directors of Parent.

"Parent Common Stock" shall mean shares of common stock par value $0.01 per
share, of Parent.

"Parent Financial Statements" shall mean the financial statements of Parent
included in the Governmental Documents.

"Parent Pooled Products" means each vehicle for collective investment (in
whatever form of organization, including in the form of a corporation, company,
limited liability company, partnership (limited or general), association, trust
or other entity and including each separate portfolio of any of the foregoing)
but only during the period with respect to which Parent or any Parent Subsidiary
has acted or acts as the sponsor, general partner, managing member, trustee,
investment manager, investment adviser (but excluding for all purposes other
than its investment advisory services any Parent Pooled Product as to which
Parent or such Parent Subsidiary has acted or acts solely in a subadvisory
capacity) or in a similar capacity.

"Parent Subsidiary" shall mean each Person which is a Subsidiary of Parent.

"Parent's knowledge" or "best knowledge of Parent" shall mean the knowledge
that the Chairman and Co-Chief Executive Officer, the Vice Chairman, Co-Chief
Executive Officer and President, the Vice Chairman, Founder and Chief
Strategist, the Senior Vice President and Chief Financial Officer, the Director
of Investment Banking or either of the Co-General Counsels have or would possess
after reasonable investigation and inquiry.

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"Person" shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.

"Plan" shall mean, with respect to SoundView, a plan, program, agreement,
arrangement or program required to be included in the Disclosure Schedule of
SoundView pursuant to Section 6.17(a) and with respect to Parent, a plan,
program, agreement, management or program required to be included in the
Disclosure Schedule of SoundView pursuant to Section 7.17(a).

"President's Letter" shall mean a letter from the Vice Chairman, Co-Chief
Executive Officer and President of Parent to the President and Chief Executive
Officer of SoundView dated the date hereof.

"Proxy Statement" shall mean the proxy statement to be filed by Parent with
the SEC if Parent is required by the shareholder voting policy of the NASD to
solicit approval of the Merger Agreement, together with all amendments and
supplements thereto and including the exhibits thereto.

"Records" means all records and original documents in the possession of
SoundView or any SoundView Subsidiary or Parent or any Parent Subsidiary, as the
case may be, which pertain to or have been or are utilized by SoundView or any
SoundView Subsidiary or Parent or any Parent Subsidiary, as the case may be, to
administer, reflect, monitor, evidence or record information respecting the
business or conduct of SoundView or any SoundView Subsidiary including, without
limitation, (1) all such records maintained on electronic or magnetic media, or
in an electronic database system, and (2) all such records as necessary to
comply with any Applicable Law, including, without limitation, any and all
records kept in accordance with, or documents filed pursuant to, any Securities
Laws.

"Related Agreements" shall mean the Employment Agreements, the President's
Letter, the Put Termination Agreement, the Voting Agreement and the
Confidentiality Agreements.

"Retained Employees" shall mean those persons who were employees of
SoundView or any SoundView Subsidiary immediately prior to the Effective Time.

"S-4 Registration Statement" shall mean the registration statement on Form
S-4 or other appropriate form of Parent contemplated by Article VIII of this
Agreement.

"SEC" shall mean the United States Securities and Exchange Commission.

"Section 203 Approval" shall mean the action taken by the SoundView Board of
Directors referred to in Section 6.5 causing Section 203 of the DGCL not to
apply to this Agreement or the other Transactions.

"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

"Securities Laws" means the Securities Act; the Exchange Act; the Investment
Company Act; the Advisers Act; the securities or "blue sky" laws of any state or
territory of the United States; the rules and regulations of the NASD; the
Commodity Exchange Act, as amended, and the published rules and regulations of
the Commodity Futures Trading Commission promulgated thereunder; and the
comparable laws, rules and regulations in effect in any other country.

"Software" means (i) any and all computer software programs, including all
source and object code, (ii) databases and compilations, including any and all
data and collections of data, whether machine readable or otherwise, (iii) all
descriptions, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing, (iv) all domain names and the content
contained on the respective Internet site(s), and (v) all documentation,
including user manuals and training materials, relating to any of the foregoing.

"SoundView Agreement" shall mean any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which
SoundView or any SoundView Subsidiary is a party or by which any of them or any
of their properties or assets may be bound.

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"SoundView Board of Directors" shall mean the board of directors of
SoundView.

"SoundView Financial Statements" shall have the meaning given in
Section 6.8.

"SoundView's knowledge" or "best knowledge of SoundView" shall mean the
knowledge that the President and Chief Executive Officer, Chief Financial
Officer or Controller of SoundView have or would possess after reasonable
investigation and inquiry.

"SoundView Pooled Products" means each vehicle for collective investment (in
whatever form of organization, including in the form of a corporation, company,
limited liability company, partnership (limited or general), association, trust
or other entity and including each separate portfolio of any of the foregoing)
but only during the period with respect to which SoundView or any SoundView
Subsidiary has acted or acts as the sponsor, general partner, managing member,
trustee, investment manager, investment adviser (but excluding for all purposes
other than its investment advisory services any SoundView Pooled Product as to
which SoundView or such SoundView Subsidiary has acted or acts solely in a
subadvisory capacity) or in a similar capacity.

"SoundView Subsidiary" shall mean each Person which is a Subsidiary of
SoundView.

"Subsidiary" shall mean, with respect to any party, any corporation or other
organization, whether incorporated or unincorporated, of which (a) at least a
majority 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 is
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries, or by such party and one or more of its Subsidiaries or
(b) such party or any other Subsidiary of such party is a general partner,
managing member or Person performing similar functions (excluding any such
partnership or other entity where such party or any Subsidiary of such party
does not have general primary decisional authority in such partnership or other
entity).

"Surviving Corporation" shall have the meaning given in Section 1.1.

"Tax" or "Taxes" shall mean all taxes, charges, fees, duties, levies,
penalties or other assessments imposed by any federal, state, local or foreign
governmental authority, including, but not limited to, income, gross receipts,
excise, property, sales, gain, use, license, custom duty, unemployment, capital
stock, transfer, franchise, payroll, withholding, social security, minimum
estimated, and other taxes, and shall include interest, penalties or additions
attributable thereto;

"Tax Return" shall mean any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

"Title IV Plan" shall mean a Plan that is subject to Section 302 or Title IV
of ERISA or Section 412 of the Code.

"Transactions" shall mean the transactions provided for or contemplated by
this Agreement and the Related Agreements.

"Voting Agreement" shall mean a voting agreement (including an irrevocable
proxy) in substantially the form attached hereto as Exhibit D by and among
Parent and the holders of Shares named on Schedule 5.5.

"Voting Debt" shall mean indebtedness having general voting rights and debt
convertible into securities having such rights.

11.2 ADDITIONAL DEFINITIONS. The following terms shall have the meaning
specified in the indicated section of this Agreement.

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<TABLE>
<CAPTION>
TERM SECTION
- ---- ---------------
<S> <C>
Agreement................................................... Preamble
Average Stock Price......................................... Section 4.1(a)
Certificates................................................ Section 4.2(b)
Cash Value per Share........................................ Section 4.1(b)
Closing..................................................... Section 1.4
Code........................................................ Recitals
Dissenting Shares........................................... Section 4.1(a)
DGCL........................................................ Section 1.1
Effective Time.............................................. Section 1.2
Electing Shares............................................. Section 4.1(a)
Exchange Agent.............................................. Section 4.2(a)
Exchange Rate Period........................................ Section 4.1(a)
Exchange Ratio.............................................. Section 4.1(a)
Form of Election............................................ Section 5.2
Fractional Securities Fund.................................. Section 4.3
Merger...................................................... Section 1.1
Merger Sub.................................................. Preamble
NNM......................................................... Section 4.1(a)
Non-Electing Shares......................................... Section 4.1(a)
Old Agreement Securities.................................... Section 5.8
Parent...................................................... Preamble
Parent Common Stock......................................... Section 4.1(a)
Parent Companies............................................ Section 4.1(a)
Parent Common Stock Options................................. Section 4.1(f)
Parent Permits.............................................. Section 7.9(b)
Parent Rights............................................... Section 4.1(a)
Parent Rights Agreement..................................... Section 4.1(a)
Parent Shares............................................... Section 4.1(a)
Parent Technology Systems................................... Section 7.15
Pub Agreement............................................... Section 8.5
Retention Shares............................................ Section 5.7
S-4 Registration Statement.................................. Section 8.5
Shares...................................................... Section 4.1(a)
SoundView................................................... Preamble
SoundView Balance Sheet..................................... Section 6.8
SoundView Common Stock...................................... Section 4.1(a)
SoundView Financial Statements.............................. Section 6.8
SoundView Stock Options..................................... Section 4.1(f)
SoundView Permits........................................... Section 6.9(b)
SoundView Stock Option Plan(s).............................. Section 4.1(f)
SoundView Technology Systems................................ Section 6.15
SoundView Merger Exchange Fund.............................. Section 4.2(a)
Surviving Corporation....................................... Section 1.1
</TABLE>

ARTICLE XII
MISCELLANEOUS

12.1 DISPUTES. Except for requests for injunctive relief, specific
performance or enforcement of the award of an arbitrator, all disputes arising
in connection with this Agreement shall be resolved by binding

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arbitration in accordance with the applicable rules of the American Arbitration
Association. The arbitration shall be held in the State of New York before a
single arbitrator selected in accordance with Section 12 of the American
Arbitration Association Commercial Arbitration Rules who shall have substantial
business experience in the investment banking industry, and shall otherwise be
conducted in accordance with such association's Commercial Arbitration Rules.
The award of such arbitrator shall be enforceable in any court having
jurisdiction over the parties to such arbitration.

12.2 AMENDMENTS; EXTENSION; WAIVER. Subject to compliance with Applicable
Law, this Agreement may be amended, altered or modified by written instrument
executed by each of the parties hereto without any requirement that the
stockholders of any party hereto approve any amendment that does not materially
decrease the consideration provided by this Agreement to such stockholders;
provided, however, that SoundView may waive in writing the performance by Parent
of any of its representations, warranties, covenants or other agreements and
that Parent may waive in writing the performance by SoundView of any of its
representations, warranties covenants or other agreements.

12.3 ENTIRE AGREEMENT. This Agreement (including Exhibits, Schedules,
certificates and lists referred to herein, and any documents executed by the
parties simultaneously herewith or pursuant hereto) and the Related Agreements
constitutes the entire understanding and agreement of the parties hereto, except
as provided herein, and supersedes all prior agreements and understandings,
written and oral, among the parties with respect to the subject matter hereof.

12.4 SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. Each party understands and
agrees that it will be irreparably damaged in the event this Agreement is not
specifically enforced. Each party, therefore, agrees that in the event of a
breach of any material provision of this Agreement, the aggrieved party may
elect to institute and prosecute proceedings in any court of competent
jurisdiction to enforce specific performance or to enjoin the continuing breach
of this Agreement. Such remedies shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy which a party may have.

12.5 INTERPRETATION. When a reference is made in this Agreement to a
Section, Exhibit, Annex or Schedule, such reference shall be to a Section of or
Exhibit, Annex or Schedule to this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms
and the singular form of nouns and pronouns shall include the plural and vice
versa. The phrases "the date of this Agreement," "the date hereof" and terms of
similar import, unless the context otherwise requires, shall be deemed to refer
to the date set forth in the first paragraph of this Agreement.

12.6 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.

12.7 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if (a) delivered in person, (b) transmitted by
telecopy (with confirmation), (c) mailed by certified or registered mail (return
receipt requested) or (d) delivered by an express courier (with confirmation) to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

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If to Parent:

Wit Capital Group, Inc.
826 Broadway
New York, New York 10003
Telecopy: (212) 253-4650
Attention: Ronald Readmond
Vice Chairman, Co-Chief Executive Officer and President

With copies to:

Wit Capital Group, Inc.
826 Broadway
New York, New York 10003
Telecopy: (212) 253-5289
Attention: Lloyd H. Feller
Senior Vice President and Co-General Counsel

and

Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attention: Richard T. Prins, Esq.

If to SoundView:

SoundView Technology Group, Inc.
22 Gatehouse Road
Stamford, Connecticut 06902
Telecopy: (203) 462-7244
Attention: Russell D. Crabs
President and Chief Executive Officer

With copies to:

SoundView Technology Group, Inc.
22 Gatehouse Road
Stamford, Connecticut 06902
Telecopy: (203) 462-7244
Attention: Curtis L. Synder
Managing Director, Chief Operating Officer and
Chief Financial Officer

and

Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Telecopy: (212) 468-7900
Attention: Lorraine Massaro, Esq.

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<PAGE>
12.8 BINDING EFFECT; PERSONS BENEFITTING; NO ASSIGNMENT. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and the
respective heirs, legal representatives, estates, executors, successors and
permitted assigns of the parties and such persons. Nothing in this Agreement is
intended or shall be construed to confer upon any entity or person other than
the parties hereto and their respective heirs, legal representatives, estates,
executors, successors and permitted assigns any right, remedy or claim under or
by reason of their Agreement or any part hereof. Without the prior written
consent of each of the other parties hereto, this Agreement and the rights
hereunder may not be assigned by any of the parties hereto.

12.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement, it being understood that
all of the parties need not sign the same counterpart.

12.10 GOVERNING LAW. THIS AGREEMENT, THE LEGAL RELATIONS BETWEEN THE
PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED BY
AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE
STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

12.11 JURISDICTION; WAIVER OF JURY TRIAL AND CERTAIN DAMAGES. Subject to
the arbitration requirements of Section 12.1 hereof, all actions arising under
or relating to this Agreement shall be brought exclusively in the Federal
District Court for Delaware, the Southern District of New York, the District of
Connecticut or in any Delaware New York or Connecticut State Court sitting in
such district and having subject matter jurisdiction over such matters, and each
of the parties hereto consents and agrees to personal jurisdiction, and waives
any objection as to the venue, of such courts for purposes of such action. The
parties to this Agreement agree to waive any right to a jury trial as to all
disputes and any right to seek punitive or consequential damages.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

<TABLE>
<CAPTION>
WIT CAPITAL GROUP, INC.
<S> <C> <C>
BY: /S/ MARK LOEHR
----------------------------------------
Name: Mark Loehr
Title: DIRECTOR OF INVESTMENT BANKING

SOUNDVIEW TECHNOLOGY GROUP, INC.

BY: /S/ RUSSELL CRABS
----------------------------------------
Name: Russell Crabs
Title: PRESIDENT

W/S MERGER CORP.

BY: /S/ MARK LOEHR
----------------------------------------
Name: Mark Loehr
Title: VICE PRESIDENT, TREASURER AND
SECRETARY
</TABLE>

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<PAGE>
APPENDIX II

WIT CAPITAL GROUP, INC.
STOCK INCENTIVE PLAN(1)
(INCLUDING AMENDMENTS MADE THROUGH OCTOBER 14, 1999)

1. RESTATEMENT, PURPOSE AND TYPES OF AWARDS

Wit Capital Group, Inc., a Delaware corporation (the "Corporation"),
maintained the Wit Capital Group, Inc. and Its Subsidiaries Stock Option and
Restricted Stock Purchase Plan (the "Prior Plan"). The Prior Plan is hereby
amended and restated, as set forth herein (the "Plan"), effective March 1, 1999,
subject to the approval of the shareholders of the Corporation within twelve
months of such effective date. Notwithstanding anything herein to the contrary,
nothing in this Plan shall adversely affect the rights or obligations, under any
Award granted under the Prior Plan, of any grantee or holder of the Award
without such person's approval.

The purpose of the Plan is to promote the long-term growth and profitability
of the Corporation by: (i) providing key people with incentives to improve
stockholder value and to contribute to the growth and financial success of the
Corporation; and (ii) enabling the Corporation to attract, retain and reward the
best-available persons.

The Plan permits the granting of stock options (including incentive stock
options qualifying under Code section 422 and nonqualified stock options), stock
appreciation rights, restricted or unrestricted stock awards, phantom stock,
performance and other awards, or any combination of the foregoing.

2. DEFINITIONS

Under this Plan, except where the context otherwise indicates, the following
definitions apply:

(a) "AFFILIATE" shall mean any entity, whether now or hereafter existing,
which controls, is controlled by, or is under common control with, the
Corporation (including, but not limited to, joint ventures, limited
liability companies, and partnerships). For this purpose, 'control' shall
mean ownership of 50% or more of the total combined voting power or value
of all classes of stock or interests of the entity.

(b) "AWARD" shall mean any stock option, stock appreciation right, stock
award, phantom stock award, or performance award.

(D) "CHANGE IN CONTROL" shall be deemed to have occurred if:

(i) the date of the acquisition by any "person" (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act), excluding the
Corporation or any of its subsidiaries or affiliates or any employee
benefit plan sponsored by any of the foregoing, of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of 25% or more
of either (x) the then outstanding shares of common stock of the
Corporation or (y) the then outstanding voting securities entitled to
vote generally in the election of directors; or

(ii) the date the individuals who constitute the Board as of the date of the
Corporation's initial public offering (the "Incumbent Board") cease for
any reason to constitute at least a majority of the members of the Board,
provided that any individual becoming a director subsequent to the

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

(1) Adjusted to reflect increase in authorized shares from 20,000,000 to
25,000,000 approved by shareholders on May 28, 1999 and 7 for 10 reverse
split on June 2, 1999.

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<PAGE>
2. DEFINITIONS (CONTINUED)

effective date of the initial public offering whose election, or
nomination for election by the Corporation's stockholders, was approved
by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than any individual whose nomination for election
to Board membership was not endorsed by the Corporations management prior
to, or at the time of, such individuals initial nomination for election)
shall be, for purposes of the Plan, considered as though such person were
a member of the Incumbent Board; or

(iii) the consummation of a merger, consolidation, recapitalization,
reorganization, sale or disposition of all or a substantial portion of
the Corporation's assets, a reverse stock split of outstanding voting
securities, the issuance of shares of stock of the Corporation in
connection with the acquisition of the stock or assets of another entity,
provided, however, that a Change in Control shall not occur under this
clause (iii) if consummation of the transaction would result in at least
51% of the total voting power represented by the voting securities of the
Corporation (or, if not the Corporation, the entity that succeeds to all
or substantially all of the Corporation's business) outstanding
immediately after such transaction being beneficially owned (within the
meaning of Rule 13d-3 promulgated pursuant to the Exchange Act) by at
least 75% of the holders of outstanding voting securities of the
Corporation immediately prior to the transaction, with the voting power
of each such continuing holder relative to other such continuing holders
not substantially altered in the transaction.

(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.

(f) "COMMON STOCK" shall mean shares of common stock of the Corporation,
$.01 par value.

(g) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

(h) "FAIR MARKET VALUE" of a share of the Corporation's Common Stock for any
purpose at particular date shall be determined by the Administrator using
such methods and procedures as it shall from time to time determine in
good faith; provided, however, that (i) if the shares of the Common Stock
are traded on a registered national securities exchange or through a
market operated by the Nasdaq Stock Market, Inc., (including the OTC
Bulletin Board), the last regular way sales price for the primary trading
session reported through any applicable consolidated or other transaction
reporting plan approved by the SEC pursuant to the Exchange Act or (ii)
if there was no such sale on a given day, the average of the closing bid
and asked prices reported through any applicable quotation reporting plan
approved by the SEC.

(i) "GRANT AGREEMENT" shall mean a written document memorializing the terms
and conditions of an Award granted pursuant to the Plan and shall
incorporate the terms of the Plan.

(j) "PARENT" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in
Code section 424(e), or any successor thereto.

(k) "SUBSIDIARY" AND "SUBSIDIARIES" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of
the definition of 'subsidiary corporation' provided in Section 424(f) of
the Code, or any successor thereto.

3. ADMINISTRATION

(a) ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board
or by such committee or committees as may be appointed by the Board from
time to time (the Board, committee or committees hereinafter referred to
as the 'Administrator').

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<PAGE>
3. ADMINISTRATION (CONTINUED)

(b) POWERS OF THE ADMINISTRATOR. The Administrator shall have all the powers
vested in it by the terms of the Plan, such powers to include authority,
in its sole and absolute discretion, to grant Awards under the Plan,
prescribe Grant Agreements evidencing such Awards and establish programs
for granting Awards.

The Administrator shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to: (i) determine the eligible persons to
whom, and the time or times at which Awards shall be granted; (ii) determine the
types of Awards to be granted; (iii) determine the number of shares to be
covered by or used for reference purposes for each Award; (iv) impose such
terms, limitations, restrictions and conditions upon any such Award as the
Administrator shall deem appropriate; (v) modify, amend, extend or renew
outstanding Awards, or accept the surrender of outstanding Awards and substitute
new Awards (provided however, that, except as provided in Section 7(d) of the
Plan, any modification that would materially adversely affect any outstanding
Award shall not be made without the consent of the holder); (vi) accelerate or
otherwise change the time in which an Award may be exercised or becomes payable
and to waive or accelerate the lapse, in whole or in part, of any restriction or
condition with respect to such Award, including, but not limited to, any
restriction or condition with respect to the vesting or exercisability of an
Award following termination of any grantee's employment or other relationship
with the Corporation; and (vii) establish objectives and conditions, if any, for
earning Awards and determining whether Awards will be paid after the end of a
performance period.

The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.

(c) NON-UNIFORM DETERMINATIONS. The Administrator's determinations under the
Plan (including without limitation, determinations of the persons to
receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the Grant Agreements evidencing such
Awards) need not be uniform and may be made by the Administrator
selectively among persons who receive, or are eligible to receive, Awards
under the Plan, whether or not such persons are similarly situated.

(d) LIMITED LIABILITY. To the maximum extent permitted by law, no member of
the Administrator shall be liable for any action taken or decision made
in good faith relating to the Plan or any Award thereunder.

(e) INDEMNIFICATION. To the maximum extent permitted by law and by the
Corporation's charter and by-laws, the members of the Administrator shall
be indemnified by the Corporation in respect of all their activities
under the Plan.

(f) EFFECT OF ADMINISTRATOR'S DECISION. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the
Plan pursuant to the powers vested in it hereunder shall be in the
Administrator's sole and absolute discretion and shall be conclusive and
binding on all parties concerned, including the Corporation, its
stockholders, any participants in the Plan and any other employee,
consultant, or director of the Corporation, and their respective
successors in interest.

4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS

Subject to adjustments as provided in Section 7(d), the shares of Common
Stock that may be issued with respect to Awards granted under the Plan
(including, for purposes of this Section 4, the Prior Plan)

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<PAGE>
4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS (CONTINUED)

shall not exceed an aggregate of 17,500,000 shares of Common Stock. The
Corporation shall reserve such number of shares for Awards under the Plan,
subject to adjustments as provided in Section 7(d). If any Award, or portion of
an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Corporation in connection with any Award (whether or not such surrendered shares
were acquired pursuant to any Award), the shares subject to such Award and the
surrendered shares shall thereafter be available for further Awards under the
Plan; provided, however, that any such shares that are surrendered to the
Corporation in connection with any Award or that are forfeited after issuance
shall not be available for purchase pursuant to incentive stock options intended
to qualify under Code section 422.

5. PARTICIPATION

Participation in the Plan shall be open to all employees, officers,
directors, and consultants of the Corporation, or of any Affiliate of the
Corporation, as may be selected by the Administrator from time to time.

6. AWARDS

The Administrator, in its sole discretion, establishes the terms of all
Awards granted under the Plan. Awards may be granted individually or in tandem
with other types of Awards. All Awards are subject to the terms and conditions
provided in the Grant Agreement.

(a) STOCK OPTIONS. The Administrator may from time to time grant to eligible
participants Awards of incentive stock options as that term is defined in
Code section 422 or nonqualified stock options; provided, however, that
Awards of incentive stock options shall be limited to employees of the
Corporation or of any Parent or Subsidiary of the Corporation. Options
intended to qualify as incentive stock options under Code section 422
must have an exercise price at least equal to Fair Market Value on the
date of grant, but nonqualified stock options may be granted with an
exercise price less than Fair Market Value. No stock option shall be an
incentive stock option unless so designated by the Administrator at the
time of grant or in the Grant Agreement evidencing such stock option.

(b) STOCK APPRECIATION RIGHTS. The Administrator may from time to time grant
to eligible participants Awards of Stock Appreciation Rights ('SAR'). An
SAR entitles the grantee to receive, subject to the provisions of the
Plan and the Grant Agreement, a payment having an aggregate value equal
to the product of (i) the excess of (A) the Fair Market Value on the
exercise date of one share of Common Stock over (B) the base price per
share specified in the Grant Agreement, times (ii) the number of shares
specified by the SAR, or portion thereof, which is exercised. Payment by
the Corporation of the amount receivable upon any exercise of an SAR may
be made by the delivery of Common Stock or cash, or any combination of
Common Stock and cash, as determined in the sole discretion of the
Administrator. If upon settlement of the exercise of an SAR a grantee is
to receive a portion of such payment in shares of Common Stock, the
number of shares shall be determined by dividing such portion by the Fair
Market Value of a share of Common Stock on the exercise date. No
fractional shares shall be used for such payment and the Administrator
shall determine whether cash shall be given in lieu of such fractional
shares or whether such fractional shares shall be eliminated.

(c) STOCK AWARDS. The Administrator may from time to time grant restricted
or unrestricted stock Awards to eligible participants in such amounts, on
such terms and conditions, and for such consideration, including no
consideration or such minimum consideration as may be required by

II-4
<PAGE>
6. AWARDS (CONTINUED)

law, as it shall determine. A stock Award may be paid in Common Stock, in
cash, or in a combination of Common Stock and cash, as determined in the
sole discretion of the Administrator.

(d) PHANTOM STOCK. The Administrator may from time to time grant Awards to
eligible participants denominated in stock-equivalent units ("phantom
stock") in such amounts and on such terms and conditions as it shall
determine. Phantom stock units granted to a participant shall be credited
to a bookkeeping reserve account solely for accounting purposes and shall
not require a segregation of any of the Corporation's assets. An Award of
phantom stock may be settled in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole
discretion of the Administrator. Except as otherwise provided in the
applicable Grant Agreement, the grantee shall not have the rights of a
stockholder with respect to any shares of Common Stock represented by a
phantom stock unit solely as a result of the grant of a phantom stock
unit to the grantee.

(e) PERFORMANCE AWARDS. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one
or more performance goals established by the Administrator. Performance
awards may be paid by the delivery of Common Stock or cash, or any
combination of Common Stock and cash, as determined in the sole
discretion of the Administrator. Performance goals established by the
Administrator may be based on the Corporation's or an Affiliate's
operating income or one or more other business criteria selected by the
Administrator that apply to an individual or group of individuals, a
business unit, or the Corporation or an Affiliate as a whole, over such
performance period as the Administrator may designate.

(f) OTHER AWARDS. The Administrator may, in its discretion, grant other
awards in such number, and upon such terms, and at any time and from time
to time, as shall be determined by the Administrator. Such awards may be
denominated in cash, in shares of Common Stock, in share-equivalent
units, in share appreciation units, in securities or debentures
convertible into Common Stock or in a combination of the foregoing and
may be paid in cash or in shares of Common Stock, all as determined by
the Administrator. Such awards may be issued alone or in tandem with
other awards as described above, may be granted based on or subject to
performance measures, and may relate to annual bonus or long-term
performance awards.

7. MISCELLANEOUS

(a) WITHHOLDING OF TAXES. Grantees and holders of Awards shall pay to the
Corporation or its Affiliate, or make provision satisfactory to the
Administrator for payment of, any taxes required to be withheld in
respect of Awards under the Plan no later than the date of the event
creating the tax liability. The Corporation or its Affiliate may, to the
extent permitted by law, deduct any such tax obligations from any payment
of any kind otherwise due to the grantee or holder of an Award. In the
event that payment to the Corporation or its Affiliate of such tax
obligations is made in shares of Common Stock, such shares shall be
valued at Fair Market Value on the applicable date for such purposes.

(b) LOANS. The Corporation or its Affiliate may make or guarantee loans to
grantees to assist grantees in exercising Awards and satisfying any
withholding tax obligations.

(c) TRANSFERABILITY. Except as otherwise determined by the Administrator,
and in any event in the case of an incentive stock option or a stock
appreciation right granted with respect to an incentive stock option, no
Award granted under the Plan shall be transferable by a grantee

II-5
<PAGE>
7. MISCELLANEOUS (CONTINUED)

otherwise than by will or the laws of descent and distribution. Unless
otherwise determined by the Administrator in accord with the provisions
of the immediately preceding sentence, an Award may be exercised during
the lifetime of the grantee, only by the grantee or, during the period
the grantee is under a legal disability, by the grantee's guardian or
legal representative.

(d) ADJUSTMENTS; BUSINESS COMBINATIONS. In the event of changes in the
Common Stock of the Corporation by reason of any stock dividend,
spin-off, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares and the like, the Administrator shall,
in its discretion, make appropriate adjustments to the maximum number and
kind of shares reserved for issuance or with respect to which Awards may
be granted under the Plan as provided in Section 4 of the Plan and to the
number, kind and price of shares covered by outstanding Awards, and
shall, in its discretion and without the consent of holders of Awards,
make any other adjustments in outstanding Awards, including but not
limited to reducing the number of shares subject to Awards or providing
or mandating alternative settlement methods such as settlement of the
Awards in cash or in shares of Common Stock or other securities of the
Corporation or of any other entity, or in any other matters which relate
to Awards as the Administrator shall, in its sole discretion, determine
to be necessary or appropriate.

Notwithstanding anything in the Plan to the contrary and without the consent
of holders of Awards, the Administrator, in its sole discretion, may make any
modifications to any Awards, including but not limited to cancellation,
forfeiture, surrender or other termination of the Awards in whole or in part
regardless of the vested status of the Award, in order to facilitate any
business combination that is authorized by the Board to comply with requirements
for treatment as a pooling of interests transaction for accounting purposes
under generally accepted accounting principles.

The Administrator is authorized to make, in its discretion and without the
consent of holders of Awards, adjustments in the terms and conditions of, and
the criteria included in, Awards in recognition of unusual or nonrecurring
events affecting the Corporation, or the financial statements of the Corporation
or any Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

(e) SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS. Awards may be
granted under the Plan from time to time in substitution for Awards held
by employees or directors of entities who become or are about to become
employees or directors of the Corporation or an Affiliate as the result
of a merger or consolidation of the employing entity with the Corporation
or an Affiliate, or the acquisition by the Corporation or an Affiliate of
the assets or stock of the employing entity. The terms and conditions of
any substitute Awards so granted may vary from the terms and conditions
set forth herein to the extent that the Administrator deems appropriate
at the time of grant to conform the substitute Awards to the provisions
of the awards for which they are substituted.

(f) ACCELERATION OF VESTING UPON A CHANGE IN CONTROL. Notwithstanding
anything contained herein to the contrary, all conditions and/or
restrictions relating to the continued performance of services and/or the
achievement of performance objectives with respect to the exercisability
or full enjoyment of an Award shall lapse immediately prior to a Change
in Control; PROVIDED, HOWEVER, that such lapse shall not occur if it is
intended that the transaction constituting such Change in Control be
accounted for as a pooling of interests under Accounting Principles Board
Opinion No. 16 (or any successor thereto), and operation of this Section
7(f) would otherwise violate Paragraph 47(c) thereof.(2)

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<PAGE>
7. MISCELLANEOUS (CONTINUED)

(g) TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN. The Board may
terminate, amend or modify the Plan or any portion thereof at any time.

(h) NON-GUARANTEE OF EMPLOYMENT OR SERVICE. Nothing in the Plan or in any
Grant Agreement thereunder shall confer any right on an individual to
continue in the service of the Corporation or shall interfere in any way
with the right of the Corporation to terminate such service at any time
with or without cause or notice.

(i) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Corporation and a grantee or any other
person. To the extent that any grantee or other person acquires a right
to receive payments from the Corporation pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of
the Corporation.

(j) GOVERNING LAW. The validity, construction and effect of the Plan, of
Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator
relating to the Plan or such Grant Agreements, and the rights of any and
all persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with applicable
federal laws and the laws of the State of New York without regard to its
conflict of laws principles.

(k) EFFECTIVE DATE; TERMINATION DATE. The Plan is effective as of March 1,
1999, the date on which the Plan, as an amendment and restatement of the
Prior Plan, was approved by the Board, subject to the approval of the
stockholders of the Corporation within twelve months of such effective
date. No Award shall be granted under the Plan after the close of
business March 1 2009. Subject to other applicable provisions of the
Plan, all Awards made under the Plan prior to such termination of the
Plan shall remain in effect until such Awards have been satisfied or
terminated in accordance with the Plan and the terms of such Awards.

Date Approved by the Stockholders: April 6, 1999

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

(2) Sections 7(f) and 2(d) were added by amendment on October 14, 1999.

II-7
<PAGE>
APPENDIX III

PERSONAL AND CONFIDENTIAL

October 31, 1999

Board of Directors
Wit Capital Group, Inc
826 Broadway
New York, New York 10003

Gentlemen:

You have requested our opinion as to the fairness from a financial point of
view to Wit Capital Group, Inc. (the "Company") of the Stock Consideration and
the Cash Consideration (as defined below), in the aggregate, to be exchanged for
each share of Common Stock, par value $0.01 per share (the "SoundView Shares"),
of SoundView Technology Group, Inc. ("SoundView") pursuant to the Agreement and
Plan of Merger, dated as of October 31, 1999, among the Company, W/S Merger
Corp., a wholly-owned subsidiary of the Company ("Merger Sub"), and SoundView
(the "Agreement"). Pursuant to the Agreement, Merger Sub will be merged with
SoundView (the "Merger") and each outstanding SoundView Share (i) not owned by
the Company, Merger Sub or their subsidiaries (ii) as to which dissenters rights
have been properly asserted and not withdrawn or lost will be converted into a
number of shares of Class A Common Stock of the Company, par value $0.01 per
share (the "Shares"), based upon the ratio derived from dividing $81.2387 by the
average of the per share closing prices on the Nasdaq National Market System as
more fully set forth in the Agreement, subject to a maximum of 5.220 Shares and
a minimum of 4.376 Shares (the "Stock Consideration"). Holders of SoundView
Shares may elect, subject to certain procedures and limitations contained in the
Agreement, to convert such SoundView Shares into the right to receive $81.2387
per SoundView Share in cash (the "Cash Consideration") but not to exceed
$30 million in cash in the aggregate.

Goldman, Sachs & Co. ("Goldman Sachs"), as part of its investment banking
business, is continually engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes. We have acted as the Company's financial advisor in connection
with, and having participated in certain of the negotiations leading to, the
Agreement. As you know, as of October 31, 1999, an affiliate of Goldman Sachs,
The Goldman Sachs Group, Inc., owns approximately 11,666,667 shares of the
Company's Class B Common Stock, par value $0.01 per share (the "Class B Common
Stock"), currently representing 16.1% of the outstanding capital stock of the
Company, and options to purchase approximately 5,637,296 shares of the Class B
Common Stock. The options may be exercised beginning in October 2000. In
connection with its investment in the Company, the Company and the Goldman Sachs
affiliate are parties to an agreement that, among other things, gives the
affiliate of Goldman Sachs a right of first refusal to purchase additional
shares of common equity before the Company sells 5.0% of the Company's fully
diluted common equity to certain designated competitors of Goldman Sachs.
Moreover, the Goldman Sachs affiliate has registration rights with respect to
the shares of Class B Common Stock owned by such affiliate and has agreed for a
limited period of time not to acquire more than 25% of the Company's fully
diluted common equity. Goldman Sachs may provide investment banking services to
the Company in the future.

In connection with this opinion, we have reviewed, among other things, the
Agreement; the Registration Statement on Form S-1 of the Company relating to the
initial public offering of the Company, including the Prospectus therein dated
June 4, 1999; the Quarterly Report on Form 10-Q of the Company for the quarter
ended June 30, 1999; audited historical financial statements of SoundView for
the five years ended December 31, 1998; certain other interim reports and
quarterly financial statements of SoundView;

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<PAGE>
certain internal financial analyses and forecasts for SoundView prepared by the
management of SoundView; certain internal financial analysis and forecasts for
SoundView and for the Company prepared by the management of the Company
(the "Forecasts"); and certain cost savings and operating synergies projected by
the management of the Company to result from the Merger (the "Synergies"). We
also have held discussions with members of the senior managements of the Company
and SoundView regarding the strategic rationale for, and the potential benefits
of, the Merger and the past and current business operations, financial condition
and future prospects of their respective companies. In addition, we have
compared certain financial and other information for SoundView and certain
financial and stock market information for the Company with similar information
for certain other companies the securities of which are publicly traded,
reviewed the financial terms of certain recent business combinations in the
brokerage and Internet industries specifically and in other industries generally
and performed such other studies and analyses as we considered appropriate.

We have relied upon the accuracy and completeness of all of the financial and
other information reviewed by us and have assumed such accuracy and completeness
for purposes of rendering this opinion. In that regard, we have assumed with
your consent that the Forecasts and Synergies have been reasonably prepared on a
basis reflecting the best currently available estimates and judgments of the
Company and that the Synergies will be realized in the amounts and time periods
contemplated thereby. In addition, we have not made an independent evaluation or
appraisal of the assets and liabilities of the Company or SoundView or any of
their subsidiaries and we have not been furnished with any such evaluation or
appraisal. Our advisory services and the opinion expressed herein are provided
for the information and assistance of the Board of Directors of the Company in
connection with its consideration of the Merger and such opinion does not
constitute a recommendation as to how any holder of Shares should vote with
respect to such transaction.

Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that as of the date hereof the Stock
Consideration and the Cash Consideration, in the aggregate, to be exchanged
pursuant to the Agreement is fair from a financial point of view to the Company.

Very truly yours,
/s/ GOLDMAN, SACHS & CO.
- -------------------------------------------------------

GOLDMAN, SACHS & CO.

III-2
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROXY STATEMENT/PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Our Amended and Restated Certificate of Incorporation limits, to the maximum
extent permitted under Delaware law, the personal liability of directors and
officers for monetary damages for breach of their fiduciary duties as directors
and officers, except in certain circumstances involving certain wrongful acts,
such as a breach of the director's duty of loyalty or acts of omission which
involve intentional misconduct or a knowing violation of law.

Section 145 of the DGCL permits us to indemnify officers, directors or
employees against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement in connection with legal proceedings if the officer,
director or employee acted in good faith and in a manner he reasonably believed
to be in or not opposed to our best interests, and, with respect to any criminal
act or proceeding, he had no reasonable cause to believe his conduct was
unlawful. Indemnification is not permitted as to any matter as to which the
person is adjudged to be liable unless, and only to the extent that, the court
in which such action or suit was brought upon application that, despite the
adjudication of liability, but in view of all the circumstances of the case, the
person is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper. Individuals who successfully defend such an action are
entitled to indemnification against expenses reasonably incurred in connection
therewith.

Our By-Laws require us to indemnify directors and officers against, to the
fullest extent permitted by law, liabilities which they may incur under the
circumstances described in the preceding paragraph.

We plan to maintain standard policies of insurance under which coverage is
provided (1) to our directors and officers against loss arising from claims made
by reason of breach of duty or other wrongful act and (2) to us with respect to
payments which may be made by us to such officers and directors pursuant to the
above indemnification provision or otherwise as a matter of law.

In addition, we have entered into indemnification agreements with our
directors and executive officers. Under these agreements, we agree to indemnify
each director and officer to the fullest extent permitted by law for any acts
performed, or for failures to act, on our behalf or on behalf of another person
or entity for which that director or officer is performing services at our
request. We will not indemnify a director or officer for any breach of loyalty
to us or to our stockholders, or if the director or officer does not act in good
faith or for acts involving intentional misconduct, or for acts or omissions
falling under Section 174 of the DGCL, or for any transaction for which the
director or officer derives an improper benefit. We agree to indemnify for
expenses related to indemnifiable events, and to pay for these expenses in
advance. Our obligation to indemnify and to provide advances for expenses are
subject to the approval of a review process with a reviewer to be determined by
the Board. The rights of directors and officers will not exclude any rights to
indemnification otherwise available under law or under the Amended and Restated
Certificate of Incorporation.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
2.1 Agreement and Plan of Merger by and among Wit Capital
Group, Inc., W/S Merger Corp. and SoundView Technology
Group, dated as of October 31, 1999 (attached as Appendix I
to the proxy statement/prospectus contained in this
registration statement).
</TABLE>

II-1
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation of Wit
Capital Group, Inc. (Incorporated by reference to
Exhibit 3.1 to the quarterly report of Wit Capital
Group, Inc. on Form 10-Q for the period ended June 30,
1999).

3.2 By-Laws of Wit Capital Group, Inc. (Incorporated by
reference to Exhibit 3.2 to the quarterly report of Wit
Capital Group, Inc. on Form 10-Q for the period ended
June 30, 1999).

4.1 Rights Agreement between Wit Capital Group, Inc. and
American Stock Transfer & Trust Company, as Rights Agent
(Incorporated by reference to Exhibit 4.1 to the quarterly
report of Wit Capital Group, Inc. on Form 10-Q for the
period ended June 30, 1999).

4.2 Voting Agreement, dated as of October 31, 1999, by and among
Wit Capital Group, Inc. and the Stockholders Named Therein.

5.1 Opinion of Skadden, Arps, Slate, Meagher and Flom LLP
regarding the legality of the securities being issued.*

8.1 Opinion of Skadden, Arps, Slate, Meagher and Flom LLP
regarding certain tax matters.*

10.1 Wit Capital Group, Inc. Stock Incentive Plan (attached as
Appendix II to the proxy statement/ prospectus contained in
this registration statement).

10.2 SoundView Technology Group, Inc. Stock Option Plan.

10.3 Annual Bonus Plan (Incorporated by reference to
Exhibit 10.2 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.4 Investment Banking Bonus Pool (Incorporated by reference to
Exhibit 10.3 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.5 Long-Term Incentive Plan (Incorporated by reference to
Exhibit 10.4 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.6 Deferred Compensation Plan (Incorporated by reference to
Exhibit 10.5 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.7 Employment Agreement between Wit Capital Group, Inc. and
Robert H. Lessin (Incorporated by reference to Exhibit 10.6
to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.8 Employment Agreement between Wit Capital Group, Inc. and
Ronald Readmond (Incorporated by reference to Exhibit 10.7
to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.9 Employment Agreement between Wit Capital Group, Inc. and
Andrew D. Klein (Incorporated by reference to Exhibit 10.8
to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.10 Employment Agreement between Wit Capital Group, Inc. and
Mark Loehr (Incorporated by reference to Exhibit 10.9 to the
Registration Statement on Form S-1 (File No. 333-74619) of
Wit Capital Group, Inc.).

10.11 Employment Agreement between Wit Capital Group, Inc. and
Jonathan Cohen.

10.12 Employment Agreement between Wit Capital Group, Inc. and
Everett F. Lang (Incorporated by reference to Exhibit 10.10
to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
10.13 Employment Agreement between Wit Capital Group, Inc. and
Robert C. Mendelson.

10.14 Form of Employment Agreement to be entered into between Wit
Capital Group, Inc. and certain employees of SoundView
Technology Group, Inc. concurrent with the completion of the
merger.

10.15 Second Amended and Restated Stockholders Agreement, dated
February 23, 1999, between Wit Capital Group, Inc. and
Stockholders Named Therein (Incorporated by reference to
Exhibit 10.11 to the Registration Statement on Form S-1
(File No. 333-74619) of Wit Capital Group, Inc.).

10.16 Third Amended and Restated Stockholders Agreement, dated
April 8, 1999, between Wit Capital Group, Inc. and
Stockholders Named Therein (Incorporated by reference to
Exhibit 10.13 to the Registration Statement on Form S-1
(File No. 333-74619) of Wit Capital Group, Inc.).

10.17 Third Amended and Restated Registration Rights Agreement,
dated April 8, 1999, between Wit Capital Group, Inc. and
Stockholders Named Therein (Incorporated by reference to
Exhibit 10.14 to the Registration Statement on Form S-1
(File No. 333-74619) of Wit Capital Group, Inc.).

10.18 Purchase Agreement, dated as of March 29, 1999, by and
between Wit Capital Group, Inc. and The Goldman Sachs Group,
L.P. (Incorporated by reference to Exhibit 10.15 to the
Registration Statement on Form S-1 (File No. 333-74619) of
Wit Capital Group, Inc.).

21.1 List of subsidiaries of Wit Capital Group, Inc.
(Incorporated by reference to Exhibit 21.1 to the
Registration Statement on Form S-1 (File No. 333-74619) of
Wit Capital Group, Inc.).

23.1 Consent of Arthur Andersen LLP with regard to the financial
statements of Wit Capital Group, Inc.

23.2 Consent of Ernst & Young LLP with regard to the financial
statements of SoundView Technology Group, Inc.

23.3 Form of Consent of Goldman, Sachs & Co.

23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibits 5.1 and 8.1).*

24.1 Powers of Attorney (included on signature page).

99.1 Opinion of Goldman, Sachs & Co. (attached as Appendix III to
the proxy statement/prospectus contained in this
registration statement).

99.2 Form of Proxy Card.
</TABLE>

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

* To be filed by amendment

ITEM 22. UNDERTAKINGS.

(1) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

(2) The undersigned registrant undertakes that every prospectus: (i) that is
filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the

II-3
<PAGE>
Securities Act and is used in connection with an offering of securities subject
to Rule 415, will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(3) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

(4) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions described in Item 20 or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, the State of
New York, on the 15th day of December, 1999.

<TABLE>
<S> <C> <C>
WIT CAPITAL GROUP, INC.

By: /s/ ROBERT H. LESSIN
-----------------------------------------
Name: Robert H. Lessin
Title: Chairman of the Board and Chief
Executive Officer
</TABLE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert H. Lessin and Ronald Readmond, and each of
them, with full power to act without the other, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this Registration Statement, any and all amendments thereto
(including post-effective amendments), any subsequent Registration Statements
pursuant to Rule 462 of the Securities Act of 1933, as amended, and any
amendments thereto and to file the same, with exhibits and schedules thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT H. LESSIN Co-Chief Executive Officer
------------------------------------------- and Director December 15, 1999
Robert H. Lessin

/s/ RONALD READMOND Co-Chief Executive Officer
------------------------------------------- and Director December 15, 1999
Ronald Readmond

/s/ ANDREW D. KLEIN Director
------------------------------------------- December 15, 1999
Andrew D. Klein

/s/ JOHN FISHER Director
------------------------------------------- December 15, 1999
John Fisher

/s/ EDWARD H. FLEISCHMAN Director
------------------------------------------- December 15, 1999
Edward H. Fleischman
</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ STEVEN M. GLUCKSTERN Director
------------------------------------------- December 15, 1999
Steven M. Gluckstern

/s/ JOSEPH R. HARDIMAN Director
------------------------------------------- December 15, 1999
Joseph R. Hardiman

/s/ GILBERT C. MAURER Director
------------------------------------------- December 15, 1999
Gilbert C. Maurer

/s/ ADAM MIZEL Director
------------------------------------------- December 15, 1999
Adam Mizel

/s/ M. BERNARD SIEGEL Chief Financial Officer
------------------------------------------- December 15, 1999
M. Bernard Siegel
</TABLE>

II-6
<PAGE>
EXHIBIT INDEX

3.1 Amended and Restated Certificate of Incorporation of Wit
Capital Group, Inc. (Incorporated by reference to
Exhibit 3.1 to the quarterly report of Wit Capital
Group, Inc. on Form 10-Q for the period ended June 30,
1999).

3.2 By-Laws of Wit Capital Group, Inc. (Incorporated by
reference to Exhibit 3.2 to the quarterly report of Wit
Capital Group, Inc. on Form 10-Q for the period ended
June 30, 1999).

4.2 Voting Agreement, dated as of October 31, 1999, by and among
Wit Capital Group, Inc. and the Stockholders Named Therein.

5.1 Opinion of Skadden, Arps, Slate, Meagher and Flom LLP
regarding the legality of the securities being issued.*

8.1 Opinion of Skadden, Arps, Slate, Meagher and Flom LLP
regarding certain tax matters.*

10.1 Wit Capital Group, Inc. Stock Incentive Plan (attached as
Appendix II to the proxy statement/ prospectus contained in
this registration statement).

10.2 SoundView Technology Group, Inc. Stock Option Plan.

10.3 Annual Bonus Plan (Incorporated by reference to
Exhibit 10.2 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.4 Investment Banking Bonus Pool (Incorporated by reference to
Exhibit 10.3 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.5 Long-Term Incentive Plan (Incorporated by reference to
Exhibit 10.4 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.6 Deferred Compensation Plan (Incorporated by reference to
Exhibit 10.5 to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.11 Employment Agreement between Wit Capital Group, Inc. and
Jonathan Cohen.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
10.12 Employment Agreement between Wit Capital Group, Inc. and
Everett F. Lang (Incorporated by reference to Exhibit 10.10
to the Registration Statement on Form S-1 (File
No. 333-74619) of Wit Capital Group, Inc.).

10.13 Employment Agreement between Wit Capital Group, Inc. and
Robert C. Mendelson.

10.14 Form of Employment Agreement to be entered into between Wit
Capital Group, Inc. and certain employees of SoundView
Technology Group, Inc. concurrent with the completion of the
merger.

10.18 Purchase Agreement, dated as of March 29, 1999, by and
between Wit Capital Group, Inc. and The Goldman Sachs
Group, L.P. (Incorporated by reference to Exhibit 10.15 to
the Registration Statement on Form S-1 (File No. 333-74619)
of Wit Capital Group, Inc.).

21.1 List of subsidiaries of Wit Capital Group, Inc.
(Incorporated by reference to Exhibit 21.1 to the
Registration Statement on Form S-1 (File No. 333-74619) of
Wit Capital Group, Inc.).

23.1 Consent of Arthur Andersen LLP with regard to the financial
statements of Wit Capital Group, Inc.

23.2 Consent of Ernst & Young LLP with regard to the financial
statements of SoundView Technology Group, Inc.

23.3 Form of Consent of Goldman, Sachs & Co.

23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibits 5.1 and 8.1).*

24.1 Powers of Attorney (included on signature page).

99.1 Opinion of Goldman, Sachs & Co. (attached as Appendix III to
the proxy statement/ prospectus contained in this
registration statement).

99.2 Form of Proxy Card.
</TABLE>

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

* To be filed by amendment

<PAGE>
Exhibit 4.2

VOTING AGREEMENT

VOTING AGREEMENT (this "Agreement"), dated as October 31, 1999
by and among WIT CAPITAL GROUP, INC., a corporation organized under the laws of
the State of Delaware ("Wit"), and each other person set forth on the signature
pages hereof (each individually a "Securityholder", and collectively, the
"Securityholders"). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Merger Agreement (as defined
below).

W I T N E S S E T H:

WHEREAS, concurrently with the execution and delivery of this
Agreement, an Agreement and Plan of Merger (the "Merger Agreement") is being
entered into by and among Wit, W/S Merger Corp., a corporation organized under
the laws of the State of Delaware ("Merger Sub"), and SoundView Technology
Group, Inc., a Delaware corporation ("SoundView"), pursuant to which Merger Sub
will be merged with and into SoundView and SoundView will become a wholly owned
subsidiary of Wit (the "Merger"); and

WHEREAS, as a condition to, and in consideration for Wit's
willingness to enter into the Merger Agreement and to consummate the
transactions contemplated thereby, Wit has required that the Securityholders
enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto, intending to be legally bound, hereby agree as follows:

1. DEFINITIONS. For purposes of this Agreement:

"Beneficially Own" or "Beneficial ownership" with respect to
any securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of
the same securities by the same holder, securities Beneficially Owned by a
Person shall include securities Beneficially Owned by all other Persons with
whom such Person would constitute a "group" within the meaning of Section
13(d)(3) of the Exchange Act.

<PAGE>

"Acquisition Proposal" shall mean any proposal or offer to
acquire all or a substantial part of the business or properties of SoundView or
any SoundView Subsidiary or capital stock of SoundView or any SoundView
Subsidiary (other than proposal or offer to acquire shares of capital stock of
SoundView from an existing Securityholder or a member of such Securityholder's
immediate family), whether by merger, tender offer, exchange offer, sale of
assets or similar transactions involving SoundView or any Subsidiary, division
or operating or principal business unit of SoundView.

2. AGREEMENTS

(a) VOTING AGREEMENT. Each Securityholder shall, at any
meeting of the Securityholders of SoundView, however such meeting is called and
regardless of whether such meeting is a special or annual meeting of the
Securityholders of SoundView, or in connection with any written consent of the
Securityholders of SoundView, vote all Shares of SoundView Common Stock directly
or indirectly Beneficially Owned by such Securityholder: (i) to approve the
Merger, the Merger Agreement and the transactions contemplated thereby and the
taking of any actions necessary or appropriate in furtherance thereof; and (ii)
against any Acquisition Proposal; (iii) and against any action, proposal or
agreement that would delay, impede, frustrate, prevent or nullify this Agreement
or the Merger Agreement, or result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement of SoundView
under the Merger Agreement or which would delay, impede, frustrate, prevent or
nullify the fulfillment of any of the conditions set forth in Article IX of the
Merger Agreement or result in any change in the composition of the SoundView
Board of Directors without the prior written consent of Wit.

(b) NO INCONSISTENT ARRANGEMENTS. Each Securityholder hereby
covenants and agrees that it shall not (i) transfer (which term shall include,
without limitation, any sale, gift, pledge or other disposition), or consent to
any transfer of, any or all of such Securityholder's Shares of SoundView Common
Stock, or any interest therein in a manner inconsistent with the continued
validity of this Agreement and the irrevocable proxy granted pursuant hereto,
(ii) enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all of such Shares of SoundView Common Stock
or any interest therein in a manner inconsistent with the continued validity of
this Agreement and the irrevocable proxy granted pursuant hereto, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to such
Shares of SoundView Common Stock, (iv) deposit

<PAGE>

such Shares of SoundView Common Stock into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares of SoundView Common Stock
or (v) take any other action that would in any way restrict, limit or interfere
with the performance of such Securityholders' obligations hereunder or the
transactions contemplated hereby or by the Merger Agreement.

(c) GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXIES. (i)
Each Securityholder hereby irrevocably grants to, and appoints, Mark Loehr and
Lloyd Feller, or either of them, in their respective capacities as officers of
Wit, and any individual who shall hereafter succeed to any such office of Wit,
and each of them individually, such Securityholder's proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of such
Securityholder, to vote or give written consent with respect to all of such
Securityholder's Shares of SoundView Common Stock (A) in favor of the Merger
Agreement and the transactions contemplated by the Merger Agreement, (B)
against any Acquisition Proposal, (C) in favor of the taking by SoundView of all
other actions necessary or appropriate to give effect to the intent of this
Section 2(c), (D) against any action, proposal or agreement that would have the
effect of delaying, impeding, frustrating, preventing or nullifying this
Agreement or the Merger Agreement, or result in a breach in any respect of any
covenant, agreement, representation or warranty or any other obligation or
agreement of SoundView under the Merger Agreement or which would delay, impede,
frustrate, prevent or nullify the fulfillment of any of the conditions set forth
in Article IX of the Merger Agreement or result in change in the composition of
the SoundView Board of Directors without the prior written consent of Wit.

(ii) Each Securityholder represents that any proxies
heretofore given in respect of such Securityholder's Shares of SoundView Common
Stock are not irrevocable, and that any such proxies are hereby revoked.

(iii) Each Securityholder understands and acknowledges that
Wit is entering into the Merger Agreement in reliance upon such Securityholder's
execution and delivery of this Agreement. Each Securityholder hereby affirms
that the irrevocable proxy set forth in this Section 2(c) is given in
connection with the execution of the Merger Agreement, and that such irrevocable
proxy is given to secure the performance of the duties of such Securityholder
under this Agreement. Each Securityholder hereby further affirms that the
irrevocable proxy granted hereby is coupled with an interest and may under no
circumstances be revoked. Each Securityholder hereby affirms that such
irrevocable proxy shall survive such

<PAGE>

Securityholder's death, incapacity or incompetence. Each Securityholder hereby
ratifies and confirms all that each such proxy may lawfully do or cause to be
done by virtue hereof. Such irrevocable proxy is executed and intended to be
irrevocable in accordance with the provisions of Section 212(e) of the Delaware
General Corporation law.

(d) NO SOLICITATION. Each Securityholder hereby agrees, in
such Securityholder's capacity as a stockholder of SoundView, that neither such
Securityholder nor any of such Securityholder's Affiliates shall (and such
Securityholder shall use such Securityholder's reasonable best efforts to
instruct its officers, directors and employees, if any, and its representatives
and agents not to, and to not permit any of them to), directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any Person (other than Wit, any of its Affiliates
or representatives) concerning any Acquisition Proposal.

(e) REASONABLE BEST EFFORTS. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Merger and the
transactions contemplated by this Agreement.

3. REPRESENTATIONS AND WARRANTIES OF THE SECURITYHOLDER. Each
Securityholder, severally and not jointly, hereby represents and warrants to Wit
as follows:

(a) OWNERSHIP OF SECURITIES. Such Securityholder is the record
and Beneficial Owner of the number of Shares of SoundView Common Stock set forth
opposite such Securityholder's name on the signature page of this Agreement (the
"Existing Securities"). On the date hereof, the Existing Securities (i)
constitute the percentage of the total number of Shares of SoundView Common
Stock issued and outstanding as of the date hereof as set forth on the signature
page of this Agreement and (ii) constitute all of the Shares of SoundView Common
Stock held of record or Beneficially Owned by such Securityholder. Each
Securityholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Section 2 hereof, sole power of disposition,
sole power of conversion, sole power (if any) to demand appraisal rights and
sole power to agree to all of the matters set forth in this Agreement, in each
case with respect to all of the Existing Securities with no limitations,
qualifications or restrictions on such rights, subject to applicable

4
<PAGE>

securities laws and the terms of this Agreement and the terms of the Stock
Purchase and Transfer Restriction Agreement.

(b) POWER; BINDING AGREEMENT. Such Securityholder has the
legal capacity, power and authority to enter into and perform all of such
Securityholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Securityholder will not violate any other
agreement to which such Securityholder is a party including; without limitation,
any voting agreement, proxy arrangement, pledge agreement, shareholders
agreement, transfer restriction agreement, sale agreement or voting trust. This
Agreement has been duly and validly executed and delivered by such
Securityholder and constitutes a valid and binding agreement of such
Securityholder, enforceable against such Securityholder in accordance with its
terms. There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which such Securityholder is a trustee whose consent is
required for the execution and delivery of this Agreement or the consummation by
such Securityholder of the transactions contemplated hereby.

4. STOP TRANSFER. Each Securityholder shall not request that
SoundView register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of his or her Existing Securities,
unless such transfer is made in compliance with this Agreement. In the event of
any dividend or distribution consisting of securities, or any change in the
capital structure of SoundView by reason of any non-cash dividend, split-up,
recapitalization, combination, exchange of securities or the like, the term
"Existing Securities" shall refer to and include the Existing Securities as well
as all such dividends and distributions of securities and any securities into
which or for which any or all of the Existing Securities may be changed or
exchanged.

5. TERMINATION. The covenants, agreements and proxy shall
terminate upon the earlier to occur of (i) the termination of the Merger
Agreement in accordance with Article X thereof or (ii) the consummations of the
transactions contemplated by the Merger Agreement.

6. MISCELLANEOUS.

(a) SPECIFIC PERFORMANCE. Each Securityholder recognizes and
agrees that if for any reason any of the provisions of this Agreement are not
performed by such Securityholder in accordance with their specific terms or are
otherwise breached, immediate and irreparable harm or injury would be caused to
Wit for

<PAGE>

which money damages would not be an adequate remedy. Accordingly, the
Securityholder agrees that, in addition to any other available remedies, Wit
shall be entitled to an injunction restraining any violation or threatened
violation of the provisions of this Agreement without the necessity of Wit
posting a bond or other form of security. In the event that any action should be
brought in equity to enforce the provisions of this Agreement, such
Securityholder will not allege, and the Securityholder hereby waives the
defense, that there is an adequate remedy at law.

(b) 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.
Without limiting the foregoing, with respect to any provision of this Agreement,
if it is determined by a court of competent jurisdiction to be excessive as to
duration or scope, it is the parties intention that such provision nevertheless
be enforced to the fullest extent which it may be enforced.

(c) ATTORNEYS' FEES. If any action at law or equity, including
an action for declaratory relief, is brought to enforce or interpret any
provision of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and expenses from the other party, which fees and
expenses shall be in addition to any other relief which may be awarded.

(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.

(f) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, among the parties or any of them with respect to the subject matter
hereof.

(g) CONSENT TO JURISDICTION, ETC. Each of the parties hereto
irrevocably and unconditionally submits to the non-exclusive jurisdiction of
the United States District Court for the Southern District of New York, The
District of Connecticut or in any Delaware, New York or Connecticut State Court
sitting in such

<PAGE>

district and having subject matter jurisdiction over such matters, and each of
the parties hereto consents and agrees to personal jurisdiction and waives any
objection as to the venue of such courts for purposes of such action. The
parties to this Agreement agree to waive any right to jury trial as to all
disputes and any right to seek punitive or consequential damages.

(h) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt by delivery in person, by facsimile
(which is confirmed), or by registered or certified mail (postage prepaid,
return receipt requested):

If to a Securityholder, to

SoundView Technology Group, Inc.
22 Gatehouse Road
SoundView, CT 06902
Telecopy: (203) 462-7244
Attention: President and Chief Executive Officer

With copies to:
SoundView Technology Group, Inc.
22 Gatehouse Road
Stamford, CT 06902
Telecopy: (203) 462-7244

and

Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Telecopy: (212) 468-7900
Attention: Lorraine Massaro, Esq.

<PAGE>

If to Wit, to:

Wit Capital Group, Inc.
826 Broadway
New York, New York 10003
Telecopy: (212) 253-2650
Attn: President and Co-Chief Executive Officer

With copies to:

Wit Capital Group, Inc.
826 Broadway
New York, New York 10003
Telecopy: (212) 253-5289
Attn: General Counsel

and

Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attn: Richard T. Prins, Esq.

or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.

(i) DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.

(j) ASSIGNMENT; BINDING AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and the respective
heirs, legal representatives, estates, executors, successors and permitted
assigns of the parties and such persons. Nothing in this Agreement is intended
or shall be construed to confer upon any entity or person other than the parties
hereto and their respective heirs, legal representatives, estates, executors,
successors and permitted assigns any right, remedy or claim under or by reason
of their Agreement or any part hereof. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall

<PAGE>

be assigned by any Securityholder without the prior written consent of Wit or by
Wit without the prior written consent of each Securityholder party hereto.

(k) AMENDMENT, MODIFICATION AND WAIVER. This Agreement may not
be amended, modified or waived except by an instrument or instruments in writing
signed and delivered on behalf of the party hereto against whom such amendment,
modification or waiver is sought to be entered.

(l) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands this 31st day of October, 1999.

WIT CAPITAL GROUP, INC

By:/s/Mark Loehr
--------------------
Name: Mark Loehr
Title: Director of Investment Banking

/s/David Ambrose
-----------------------
Name: David Ambrose

/s/Arnold Berman
-----------------------
Name: Arnold Berman

/s/Brian Bristol
-----------------------
Name: Brian Bristol

<PAGE>

/s/Edward Bugniazet
-----------------------
Name: Edward Bugniazet

/s/Russell Crabs
-----------------------
Name: Russell Crabs

/s/James Mendelson
-----------------------
Name: James Mendelson

/s/Jonathan Meyers
-----------------------
Name: Jonathan Meyers

/s/Cheryl Solinger
-----------------------
Name: Cheryl Solinger

/s/William Walbert
-----------------------
Name: William Walbert

<PAGE>

SOUNDVIEW FINANCIAL GROUP, INC.
1995 STOCK OPTION PLAN
Exhibit 10.2

I. PURPOSES

SoundView Financial Group, Inc. (the "Company") desires to afford certain of its
key employees and the key employees of any subsidiary corporation or parent
corporation of the Company now existing or hereafter formed or acquired who are
responsible for the continued growth of the Company an opportunity to acquire a
proprietary interest in the Company, and thus to create in such key employees an
increased interest in and a greater concern for the welfare of the Company.

The stock option ("Options") and stock appreciation rights ("Rights") offered
pursuant to this 1995 Stock Option Plan (the "Plan") are a matter of separate
inducement and are not in lieu of any salary or other compensation for the
services of any key employee.

The Company, by means of the Plan, seeks to retain the services of persons
now holding key positions and to secure the services of persons capable of
filling such positions.

The Options granted under the Plan are intended to be either incentive stock
options ("Incentive Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or options that do
not meet the requirements of Section 422 of the Code ("Nonqualified
Options"), but the Company makes no warranty as to the qualification of any
Option as an Incentive Option.

II. AMOUNT OF STOCK SUBJECT TO THE PLAN

The total number of shares of common stock, $.01 par value, of the Company
("Common Stock") which either may be purchased pursuant to the exercise of
Options granted under the Plan, and all prior stock option plans of the Company,
or acquired pursuant to the exercise of Rights granted under the Plan, and all
prior stock option plans of the Company, shall not exceed, in the aggregate,
five million (5,000,000) shares of the currently authorized Common Stock of the
Company (the "Shares"). The term "Shares" shall include any securities, cash or
other property into which Shares may be changed through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares, issuance of
rights to subscribe, or change in capital structure pursuant to Article XIII.
Shares which are subject to Rights and related Options shall be counted only
once in determining whether the maximum number of Shares which may be purchased
or acquired under the Plan has been exceeded.

Shares, which may be acquired under the Plan, may be either authorized but
unissued Shares, Shares of issued stock held in the Company's treasury, or both,
at the discretion of the Company. If and to the extent that Options or Rights
granted under the Plan expire or terminate without having been exercised, new
Options or Rights may be granted with respect to the Shares covered by such
expired or terminated Options or Rights, provided that the grant and the terms
of such new Options or Rights shall in all respects comply with the provisions
of the Plan.

<PAGE>

Except as provided in Article XXV, the Company may, from time to time during the
period beginning October 19, 1995 (the "Effective Date") and ending October 18,
2005 (the "Termination Date"), grant to certain key employees of the Company,
or of any subsidiary corporation or parent corporation of the Company now
existing or hereafter formed or acquired, Options, Rights or both Options and
Rights, under the terms hereinafter set forth.

Provisions of the Plan which pertain to Options or Rights granted to an employee
shall apply to Options, Rights or a combination thereof.

As used in the Plan, the terms "subsidiary corporation" and "parent corporation"
shall mean, respectively, a corporation coming within the definition of such
terms contained in Section 424(f) and 424(e) of the Code.

III. ADMINISTRATION

The board of directors of the Company (the "Board of Directors") may
designate an option committee (the "Committee"), which shall consist of no
fewer than three members of the Board of Directors, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 (or any successor
rule or regulation) promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to administer the Plan. A majority of the
members of the Committee shall constitute a quorum, and the act of a majority
of the members of the Committee shall be the act of the Committee. Any member
of the Committee may be removed at any time either with or without cause by
resolution adopted by the Board of Directors, and any vacancy on the
Committee may at any time be filled by resolution adopted by the Board of
Directors. A member of the Committee shall not be eligible to participate in
the Plan.

Any or all powers and functions of the Committee may at any time and from
time to time be exercised by the Board of Directors or an executive committee
thereof; provided, however, that, with respect to the participation in the
Plan by employees who are members of the Board of Directors or of the
executive committee, as the case may be, such powers and functions of the
Committee may be exercised by the Board of Directors or the executive
committee only if, at the time of such exercise, a majority of the members of
the Board of Directors and a majority of the directors acting in the
particular matter, or all the members of the executive committee, as the case
may be, are "disinterested persons" within the meaning of Rule 16b-3 (or any
successor rule or regulation) promulgated under the Exchange Act.

Subject to the express provisions of the Plan, the Board of Directors or the
Committee, as the case may be, shall have authority, in its discretion, to
determine the employees to whom Options or Rights shall be granted, the time
when such Options or Rights shall be granted to employees, the number of Shares
which shall be subject to each Option or Right, the

<PAGE>

purchase price of each Share which shall be subject to each Option or Right,
the period(s) during which such Options or Rights shall be exercisable (whether
in whole or in part), the extent of any restrictions as to substantial risk of
forfeiture and transferability to be imposed on Shares subject to Options, and
the other terms and provisions thereof. In determining the employees to whom
Options or Rights shall be granted and the number of Shares for which Options or
Rights shall be granted to each employee, the Board of Directors or the
Committee shall consider, among other things, the length of service, the amount
of earnings, and the responsibilities and duties of such employee; provided,
however, that no employee shall be granted Incentive Options in any calendar
year to purchase shares of stock in the Company or in any subsidiary corporation
or parent corporation of the Company in excess of the maximum allotment
prescribed in Article V.

Subject to the express provisions of the Plan, the Board of Directors or the
Committee, as the case may be, also shall have authority to construe the Plan
and Options and Rights granted thereunder, to amend the Plan and Options and
Rights granted thereunder, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the respective
Options (which need not be identical) and Rights (which need not be identical)
and to make all other determinations necessary or advisable for administering
the Plan. The Board of Directors or the Committee, as the case may be, also
shall have the authority to require, in its discretion, that the employee agree,
upon or promptly after the grant of an Option or Right, (i) not to sell or
otherwise dispose of Shares acquired pursuant to the exercise of an Option or
Right granted under the Plan except as permitted under the terms of the Option
or Right, and (ii) that in the event of termination of employment of such
employee, such employee will not, for a period to be fixed at the time of the
grant of the Option or Right, enter into any other employment, or participate
directly or indirectly in any other business or enterprise , which is
competitive with the business of the Company or any subsidiary corporation or
parent corporation of the Company, (including for this purpose a subsidiary or
parent corporation at any time from the date of grant through the termination of
the employee's employment), or enter into any employment in which such employee
will be called upon to utilize special knowledge and/or information obtained
through employment with the Company or any subsidiary corporation or parent
corporation thereof, all as may be set forth in the Option or Right.

The Board of Directors or the Committee, as the case may be, may employ such
legal counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion received from any
such counsel or agent. Expenses incurred by the Board of Directors or the
Committee in the engagement of such counsel, consultant or agent shall be
paid by the Company. No member or former member of the Committee or of the
Board of Directors shall be liable for any

<PAGE>

action or determination made in good faith with respect to the Plan or any
Option or Right granted hereunder.

The determination of the Board of Directors or the committee, as the case may
be, on matters referred to in this Article III shall be conclusive.

IV. ELIGIBILITY

Options and Rights may be granted only to key employees of the Company or of any
subsidiary corporation or parent corporation of the Company, except as
hereinafter provided, and shall not be granted to any officer or director who is
not also a key employee. Any person who shall have retired from the active
employment by the Company, although such person shall have entered into a
consulting contract with the Company, shall not be eligible to receive an Option
or a Right.

An Incentive Option shall not be granted to any person who, at the time such
Option is granted, owns stock of the Company or any subsidiary corporation or
parent corporation of the Company possessing more than ten (10%) percent of
the total combined voting power of all classes of stock of the Company or of
any subsidiary corporation or parent corporation of the Company, unless (i)
the exercise price per Share is not less than one hundred ten (110%) percent
of the fair market value per Share on the date such Option is granted, and
(ii) such Option by its terms is not exercisable after the expiration of five
(5) years from the date such Option is granted. In determining stock
ownership of an employee, the rules of Section 424(d) of the Code shall be
applied, and the Board of Directors or the Committee, as the case may be, may
rely on representations of fact made to it by the employee and believed by it
to be true.

V. MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS

To the extent that the aggregate fair market value of stock with respect to
which Incentive Options are exercisable for the first time by any employee
during any calendar year (under this Plan as well as all other plans, if any,
of the Company or any subsidiary corporation or parent corporation) exceeds
$100,000, such options shall be treated as Nonqualified Options. For the
purpose of this limitation, the fair market value of stock subject to an
Incentive Option shall be determined as of the time such Option is granted.

VI. OPTION PRICE AND PAYMENT

The price for each Share purchasable under any Nonqualified Option granted
hereunder shall be such amount as the Board 0f Directors or the Committee, as
the case may be, determines at the date of grant thereof.

The price for each Share purchasable under any Incentive Option granted
hereunder shall be such amount as the Board of Directors or the Committee, as
the case may be, shall,

<PAGE>

in its best judgment, determine on the basis of facts and circumstances to be
not less than one hundred (100%) percent of the fair market value per Share at
the date the Incentive Option is granted; provided, however, that, in the case
of an Incentive Option granted to a person who, at the time such Option is
granted, owns stock of the Company or any subsidiary corporation or parent
corporation of the Company possessing more than ten (10%) percent of the total
combined voting power of all classes of stock of the Company or of any
subsidiary corporation or parent corporation thereof, the purchase price for
each Share shall be such amount as the Board or Directors or the committee, as
the case may be, in its best judgment, shall determine to be not less than one
hundred and ten (110%) percent of the fair market value per Share at the date
the Option is granted.

If the Shares are listed on a national securities exchange in the United States
on the date any Option is granted, the fair market value per Share shall be
deemed to be the closing quotation at which such Shares are sold on such
national securities exchange on the date such Option is granted. If the Shares
are listed on a national securities exchange in the United States on such date
but the Shares are not traded on such date, or such national securities exchange
is not open for business on such date, the fair market value per Share shall be
determined as of the closest preceding date on which such exchange shall have
been open for business and the Shares were traded. If the Shares are listed on
more than one national securities exchange in the United States on the date any
such Option is granted, the Board of Directors or the Committee, as the case may
be, shall determine which national securities exchange shall be used for the
purpose of determining the fair market value per Share.

If at the date an Option is granted a public market exists for the Shares but
the Shares are not listed on a national securities exchange in the United
States, the fair market value per Share shall be deemed to be the mean between
the closing bid and asked quotations in the over-the-counter market for such
Shares in the United states on the date such Option is granted. If there are no
bid and asked quotations for such Shares on such date, the fair market value per
Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market in the United States for such Shares
on the closest date preceding the date such Option is granted for which such
quotations are available.

For purposes of this Plan, if there is no public market for the Shares the
determination of the fair market value of a Share shall be made by the Board of
Directors or the Committee, as the case may be, in their best judgment based
upon all facts and circumstances and shall be binding and conclusive.

Upon the exercise of an Option granted hereunder, the Company shall cause the
purchased Shares to be issued only when it Shall have received the full purchase
price for the Shares in cash; provided, however, that in lieu of cash, the
holder of an

<PAGE>

Option may, if and to the extent the terms of such Option so provide and to
the extent permitted by applicable law, exercise his or her Option, (a) in
whole or in part, by delivering to the Company common stock of the Company
(in proper form for transfer and accompanied by all requisite stock transfer
tax stamps or cash in lieu thereof) owned by such holder having a fair market
value equal to the cash exercise price applicable to that portion of the
Option being exercised by the delivery of such stock, the fair market value
of the stock so delivered to be determined as of the date immediately
preceding the date on which the Option is exercised, or as may be required in
order to comply with or to conform to the requirements of any applicable laws
or regulations, or (b) in part, by delivering to the Company an executed
promissory note on such terms and conditions as the Board of Directors or the
Committee, as the case may be, shall determine, at the time of such exercise,
in its sole discretion; provided, however, that (i) the principal amount of
such note shall not exceed ninety (90%) percent (or such lesser percentage as
would be permitted by applicable margin regulations) of the aggregate
purchase price of the Shares then being purchased pursuant to the exercise of
such Option, and (ii) payment for Shares with a promissory note, to the
extent provided herein, is permissible under applicable law.

VII. USE OF PROCEEDS

The cash proceeds of the sale of Shares subject to the Options granted hereunder
are to be added to the general funds of the Company and used for its general
corporate purposes as the Board of Directors shall determine.

VIII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE

Unless the Board of Directors or the Committee, as the case may be, shall
determine otherwise (in which event the instrument evidencing the Option granted
hereunder shall so specify), and subject to the provisions of Article IV, any
Incentive Option granted hereunder shall be exercisable during a period of not
more than ten (10) years from the date of grant of such Option at such times and
in such amounts as the Board of Directors or the Committee, as the case may be;
shall determine at such date of grant.

Any Nonqualified Option granted hereunder shall be exercisable at such times, in
such amounts and during such period or periods as the Board of Directors or the
Committee, as the case may be; shall determine at the date of the grant of such
Option.

The Board of Directors or the Committee, as the case may be, shall have the
right to accelerate, in whole or in part, from time to time, conditionally or
unconditionally, rights to exercise any Option granted hereunder.

To the extent that an Option is not exercised within

<PAGE>

the period of exercisability specified herein, it shall expire as to the then
unexercised part. If any Option granted hereunder shall terminate prior to the
Termination Date, the Board of Directors or the Committee, as the case may be,
shall have the right to use the Shares as to which such Option shall not have
been exercised to grant one or more additional Options to any eligible employee,
but any such grant of an additional Option shall be made prior to the close of
business on the Termination Date.

In no event shall an Option granted hereunder be exercised for a fraction of a
share.

IX. EXERCISE OF OPTIONS

Options granted under the Plan shall be exercised by the optionee as to all or
part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Secretary of the Company at the principal business
office of the Company, specifying the number of Shares to be purchased and
accompanied by payment of the purchase price, subject to the terms and
conditions of the Option in each case.

X. STOCK APPRECIATION RIGHTS

In the discretion of the Board of Directors or the Committee, as the case may
be, a Right may be granted (i) alone, (ii) simultaneously with the grant of an
Option (either Incentive or Nonqualified) and in conjunction therewith or in the
alternative thereto, or (iii) subsequent to the grant of a Nonqualified Option
and in conjunction therewith or in the a1ternative thereto .

The exercise price of a Right granted alone shall be determined by the Board of
Directors or the Committee, as the case may be, but shall not be less than one
hundred (100%) percent of the fair market value of one share on the date of
grant of such Right. A Right granted simultaneously with or subsequent to the
grant of an Option and in conjunction therewith or in the alternative thereto
shall have the same exercise price as the related Option, shall be transferable
only upon the same terms and conditions as the related Option, and shall be
exercisable only to the same extent as the related Option; provided, however,
that a Right, by its terms, shall be exercisable only when the fair market value
of the Shares subject to the Right and related Option exceeds the exercise price
thereof.

Upon exercise of a Right granted simultaneously with or subsequent to an
Option and in the alternative thereto, the number of Shares for which the
related Option shall be exercisable shall be reduced by the number of Shares
for which the Right shall have been exercised. The number of Shares for which
a Right shall be exercisable shall be reduced upon any exercise of the
related Option by the number of Shares for which such Option shall have been
exercised.

<PAGE>

Any Right shall be exercisable upon such additional terms and conditions as may
from time to time be prescribed by the Board of Directors or the Committee, as
the case may be.

A Right shall entitle the holder to receive from the Company, upon a written
request filed with the Secretary of the Company at its principal offices (the
"Request"), a number of Shares (with or without restrictions as to
substantial risk of forfeiture and transferability, as determined by the
Board of Directors or the Committee, as the case may be, in its sole
discretion, but subject to the provisions of Article XVI hereof), an amount
of cash, or any combination of Shares and cash, as specified in the Request
(but subject to the approval of the Board of Directors or the Committee, as
the case may be, in its sole discretion, at any time up to and including the
time of payment, as to the making of any cash payment), having an aggregate
fair market value equal to the product of (i) the excess of the fair market
value, determined in the manner provided under Article VI, on the day of such
Request, of one Share over the exercise price per Share specified in such
Right or its related Option, multiplied by (ii) the number of Shares for
which such Right shall be exercised; provided, however, that the Board of
Directors or the Committee, as the case may be, in its discretion, may impose
a maximum limitation on the amount of cash, the fair market value of Shares,
or a combination thereof, which may be received by a holder upon exercise of
a Right.

If the Board of Directors or the Committee, as the case may be, disapproves
in whole or in part any election by a holder to receive cash in full or
partial settlement of a Right or to exercise such Right for cash, such
disapproval shall not effect such holder's right to exercise such Right at a
later date, to the extent that such Right shall be otherwise exercisable, or
to elect the form of payment at a later date, provided that an election to
receive cash upon such later exercise shall be subject to the approval of the
Board of Directors or the Committee, as the case may be. Additionally, such
disapproval shall not affect such holder's right to exercise any related
Option or Options granted to such holder under the Plan.

A Right shall be deemed exercised on the last day of its term, if not
otherwise exercised by the holder thereof, provided that the fair market
value of the Shares subject to the Right exceeds the exercise price thereof
on such date.

XI. NONTRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS

Neither an Option nor a Right granted hereunder shall be transferable, whether
by operation of law or otherwise, other then by will or the laws of descent and
distribution, and any Option or Right granted hereunder shall be exercisable,
during the lifetime of the holder, only by such holder.

XII. TERMINATION OF EMPLOYMENT

Upon termination of employment of any employee with the

<PAGE>

Company and all subsidiary corporations and parent corporations, any Option
or Right previously granted to the employee, unless otherwise specified by
the Board of Directors or the Committee, as the case may be, in the Option or
Right, shall, to the extent not theretofore exercised, terminate and become
null and void, provided that:

(a) if the employee shall die while in the employ of the Company or
such subsidiary or parent corporation or during either the ten (10) day or
ninety (90) day period, whichever is applicable, specified in clause (b)
below and at a time when such employee was entitled to exercise an Option
or Right as herein provided, the legal representative of such employee, or
such person who acquired such Option or Right by bequest or inheritance or
by reason of death of the employee, may, not later than ninety (90) days
from the date an executor or administrator is appointed to administer the
estate of such employee, which 90-day period shall in no event extend
beyond one year from the date of death, exercise such Option or Right, to
the extent not theretofore exercised, in respect of any and all of such
number of Shares as specified by the Board of Directors or the Committee,
as the case may be, in such Option or Right; and

(b) if the employment of any employee to whom such Option or Right
shall have been granted shall terminate either by reason of the employee's
retirement (at such age or upon such conditions as shall be specified by
the Board of Directors or the Committee, as the case way be), voluntary
termination of employment other than in anticipation of being discharged
for cause (as defined below), disability (as described in Section 22(e) (3)
of the Code), or discharge by the employer other than for cause (as defined
below), and while such employee is entitled to exercise such Option or
Right as herein provided, such employee shall have the right to exercise
such Option or Right so granted, to the extent not theretofore exercised,
in respect of any or all of such number of shares as specified by the Board
of Directors or the Committee, as the case may be, in such Option or Right,
at any time up to and including (i) ten (10) days after the date of such
termination of employment in the case of termination by reason of
retirement, voluntary termination by the employee other than in
anticipation of being discharged for cause, physical disability or
discharge other than for cause, and (ii) ninety (90) days after the date on
which a representative is appointed to administer the affairs of such
employee, which 90-day period

<PAGE>

shall in no event extend beyond one year from the date of termination of
employment, in the case of termination by reason of mental disability.

In no event, however, shall any person be entitled to exercise any Option or
Right after the expiration of the period of exercisability of such Option or
Right as specified therein.

If an employee voluntarily terminates his or her employment in anticipation of
being discharged for cause, or is discharged for cause, any Option or Right
granted hereunder, unless otherwise specified by the Board of Directors or the
Committee, as the case may be, in the Option or Right, shall forthwith terminate
with respect to any unexercised portion thereof.

If an Option or Right granted hereunder shall be exercised by the legal
representative of a deceased employee or former employee, or by a person who
acquired an Option or Right granted hereunder by bequest or inheritance or by
reason of the death of any employee or former employee, written notice of such
exercise shall be accompanied by a certified copy of letters testamentary or
equivalent proof of the right of such legal representative or other person to
exercise such Option or Right as well as such other documentation as the Board
of Directors or the Committee, as the case may be, may require.

For the purposes of the Plan, the term "for cause" (i) with respect to an
employee who is party to a written employment agreement with, or, alternatively,
participates in a compensation or benefit plan of, the Company or a subsidiary
corporation or parent corporation of the Company, which agreement or plan
contains a definition of "for cause" or "cause" (or words of like import) for
purposes of termination of employment thereunder by the Company or such
subsidiary corporation or parent corporation of the Company, shall mean "for
cause" or "cause" as defined therein; or (ii) in all other cases, shall be
determined by the Committee or the Board of Directors, in its sole discretion,
and shall include without limitation (a) the willful commission by an employee
of an act that causes or may cause substantial damage to the Company or a
subsidiary corporation or parent corporation of the Company; (b) the commission
by an employee of an act of fraud in the performance of such employee's duties
on behalf of the Company or a subsidiary corporation or parent corporation of
the Company; (c) conviction of the employee for commission of a felony whether
or not in connection with the performance of the duties of such employee on
behalf of the Company or a subsidiary corporation or parent corporation of the
Company; or (d) the failure of an employee to perform the duties of such
employee to the Company or a subsidiary corporation or parent corporation of
the Company after written notice thereof and a reasonable opportunity to cure
such failures are given to the employee by the President of the Company or such
subsidiary or parent corporation or by the Board of Directors or the Committee.

<PAGE>

For the purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for purposes
of section 422(a) of the Code. If an individual is on leave of absence taken
with the consent of the corporation by which such individual was employed, or is
on active military service, and is determined to be an "employee" for purposes
of the exercise of an Option or Right, such individual shall not be entitled to
exercise such Option or Right during such period and while the employment
relationship is treated as continuing intact unless such individual shall have
obtained the prior written consent of such corporation, which consent shall be
signed by the Chairman of the Board, the President, a senior vice-president or
other duly authorized officer of such corporation.

A termination of employment shall not be deemed to occur by reason of (i) the
transfer of an employee from employment by the Company to employment by a
subsidiary corporation or a parent corporation of the Company or (ii) the
transfer of an employee from employment by a subsidiary corporation or a parent
corporation of the Company to employment by the Company or by another subsidiary
corporation or parent corporation of the Company.

XIII. ADJUSTMENT OF SHARES:
EFFECT OF CERTAIN TRANSACTIONS

Notwithstanding any other provision contained herein:

(a) In the event of any change in the Shares subject to the Plan or to
any Option or Right granted under the plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares, issuance of
rights to subscribe, or change in capital structure) appropriate
adjustments shall be made by the Board of Directors or the Committee, as
the case may be, as to the maximum number of Shares subject to the Plan,
the maximum number of Shares for which Options or Rights may be granted to
any one employee, and the number of Shares and price per Share subject to
outstanding Options or Rights as shall be equitable to prevent dilution or
enlargement of rights under Options or Rights, and the determination of
the Board of Directors or the Committee, as the case may be, as to these
matters shall be conclusive; provided, however, that (i) any such
adjustment with respect to an Incentive Option and any related Right shall
comply with the rules of Section 424(a) of the Code, and (ii) in no event
shall any adjustment be made which would render any Incentive Option
granted hereunder other than an incentive stock option for purposes of
Section 422 of the Code.

(b) In the event that (x) the Board of Directors approves a
consolidation or merger of the Company with another corporation (other than
a subsidiary or parent of the Company), (y) the Board of Directors approves
the sale of all or substantially all of the property or assets of the
Company to an individual, entity (other than one or more subsidiaries
and/or

<PAGE>

the parent of the Company), or cooperating group of such individuals
and/or entities, or (z) more than fifty (50%) percent of the total combined
voting power of all classes of stock of the Company normally entitled to
vote for the election of directors of the Company is acquired by another
person, entity (other than one or more subsidiaries and/or the parent of
the Company) or cooperating group of such individuals or entities, the
Board of Directors or the Committee, as the case may be, shall have the
right, in its discretion:

(i) to permit any and all outstanding Options and Rights to
become immediately exercisable;

(ii) to determine that any and all outstanding Options and
Rights shall terminate within a specified number of days after
notice to the holder or holders thereof;

(iii) to determine that any and all outstanding Options and
Rights shall terminate within a specific number of days after
notice to the holder or holders thereof and that such holder or
holders shall receive, with respect to each Share subject to such
terminated Option or Right, an amount equal to not less than the
excess of the fair market value of the Shares immediately prior to
the occurrence of such transaction over the exercise price of such
Option or Right, such amount to be payable in cash (at such time or
times and with or without interest as the Board of Directors or the
Committee shall determine), in kind or property (including the
property, if any, payable in such transaction), or in a combination
thereof, as the Board of Directors or the Committee, as the case
may be, in its discretion shall determine. The provisions contained
in this subparagraph (iii) shall be inapplicable to an Option or
Right granted within six (6) months before the occurrence of a
transaction described above if the stock subject to the Option or
Right is registered pursuant to Section 12 of the Exchange Act and
if the holder of such Option or Right is a director or officer of
the Company or beneficial owner of shares of the Company who is
described in Section 16(a) of the Exchange Act, unless such holder
dies or becomes disabled (within the meaning of Section 22(e) (3)
of the Code) prior to the expiration of such six-month period;
and/or

(iv) to determine that, with respect to any such consolidation,
merger or acquisition of the properties or assets of the Company, that
the holder of an Option or Right thereafter, on the full exercise
thereof, shall be entitled to receive the number of Shares or other
securities or cash or property to which the Shares issuable upon the
full exercise of the

<PAGE>

Option or Right would have been entitled had they been outstanding immediately
prior to such transaction, and in any such case, if necessary, the provisions of
such Option or Right with respect to the rights and interests thereafter of the
holder thereof shall be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any Shares or other securities or cash or
property thereafter deliverable on the exercise of such Option or Right.

XIV. RIGHT TO TERMINATE EMPLOYMENT

The Plan shall not impose any obligation on the Company or on any subsidiary
corporation or parent corporation thereof to continue the employment of any
holder of an Option or Right; and it shall not impose any obligation on the part
of any holder of an Option or Right to remain in the employ of the Company or of
any subsidiary corporation or parent corporation thereof.

XV. PURCHASE FOR INVESTMENT

Except as hereafter provided, the holder of an Option or Right granted
hereunder shall, upon any exercise thereof, execute and deliver to the
Company a written statement, in form satisfactory to the Company, in which
such holder represents and warrants that such holder is purchasing or
acquiring the Shares acquired thereunder for such holder's own account, for
investment only and not with a view to the resale or distribution thereof,
and agrees that any subsequent offer for sale or sale of any such Shares
shall be made only pursuant to either (a) a Registration Statement or an
appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being offered or sold, or (b) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption the holder shall, prior to any offer for sale or sale
of such Shares, obtain a prior favorable written opinion, in form and
substance satisfactory to the Company, from counsel for or approved by the
Company, as to the application of such exemption thereto. The foregoing
restriction shall not apply to (i) issuances by the Company so long as the
Shares being issued are registered under the Securities Act and a prospectus
in respect thereof is current, or (ii) reofferings of Shares by affiliates of
the Company (as defined in Rule 405 or any successor rule or regulation
promulgated under the Securities Act) if the Shares being reoffered are
registered under the Securities Act and a prospectus in respect thereof is
current.

XVI.RESTRICTIONS ON SHARES ACQUIRED PURSUANT TO EXERCISE OF OPTION OR RIGHT

(a) Restrictions on Transfer or Other Disposition of Shares. So long as the
restrictions imposed by this Article XVI shall be effective pursuant to
subparagraph (j) of this Article XVI below, an employee to whom an Option or
Right is granted

<PAGE>

hereunder (and, in the event of his or her death, his or her heirs,
executors, administrators and personal representatives) shall not, either
directly or indirectly, and whether by operation of law or otherwise, sell,
assign, transfer, encumber (except as permitted by Article VI hereof) or
otherwise dispose of all or any part of the Shares acquired pursuant to the
exercise of the Option or Right without the prior written consent of the
Company, except (i) by will or the laws of descent and distribution subject
to the terms of this Article XVI, or (ii) as provided in subparagraphs (b),
(c), (d), or (f) hereof. No terms of this Article XVI shall be construed as
permitting transfers of Shares in any manner which contravenes restrictions
on transfers of shares provided in the By-laws of the Company.

(b) Termination of Employment --Offer of Shares to the Board of Directors and
Purchase Price. In the event that the employment of any employee (to whom an
Option or Right is granted hereunder) with the Company, or a parent corporation
or any subsidiary corporation thereof, is terminated at any time during the
period in which the limitations set forth in this Article XVI are imposed:

(i) due to voluntary termination by such employee (other than
voluntary termination by the employee in anticipation of being discharged
for cause (as defined in Article XII hereof)) or due to termination by the
Company without cause, the employee immediately shall offer (and in the
event that the employee fails to so offer or is unable to do so, shall be
deemed to have so offered) to the Board of Directors for purchase by the
Company or, in the Board of Directors' discretion, its designee or
designees, all of the employee's Shares acquired pursuant to the exercise
Option or Right. The price per Share at which such Shares shall be
offered, or deemed to have been offered, shall be the fair market value per
share as determined in accordance with subparagraph (e) below

(ii) due to discharge for cause (which shall include voluntary
resignation by the employee in anticipation of being discharged for cause),
the employee shall immediately offer (and in the event that the employee
fails to so offer or is unable to do so, shall be deemed to have so
offered) to the Board of Directors for purchase by the Company or, in the
discretion of the Board of Directors, its designee or designees, all the
employee's Shares acquired pursuant to the exercise of an Option of Right.
The price per share at which such Shares shall be offered, or deemed to
have been offered, shall be the lesser of the price per

<PAGE>

Share paid by the employee for such Shares or the book value per Share of
such Shares ($0.01 per share if book value is negative), as determined by
the Chief Financial Officer or the Vice President, Finance of the Company
on an unaudited basis from the financial records of the Company as of the
last day of the month ending immediately prior to the date of termination
of the employee's employment; or

(iii) due to death or disability (as described in Section 22(e) (3)
of the Code) the employee, his or her executor, personal representative,
or administrator shall offer (or in the event that the employee or such
representative fails to offer or is unable to do so, shall be deemed to
have so offered) no later than ninety (90) days after such event to the
Board of Directors for purchase by the Company or, in the discretion of
the Board of Directors, its designee or designees, all of the employee's
Shares acquired pursuant to the exercise of an Option or Right. The
price per Share at which such Shares shall be offered or deemed to have
been offered, shall be the fair market value per share, as determined in
accordance with subparagraph (e) below.

In the event any Shares subject to an Option or Right had not been
acquired, as of the time of the termination of employment of the holder
of such Option or Right, pursuant to the exercise of such Option or
Right, and if any such Shares subsequently are acquired pursuant to the
exercise of such Option or Right by such holder or a representative of
such holder pursuant to Article XII hereof, the provisions of this
subparagraph (b) shall apply to such Shares immediately upon such
exercise of the Option or Right.

As used throughout this Plan the term "designee" or "designees" may
include one or more entities and/or natural persons. In the event the
Board of Directors designates one or more designees to elect to purchase
some or all of the Shares, the Board of Directors will determine the
priority of rights among the designees and amount of Shares each
designee will be entitled to purchase as well as how the Shares which
any given designee elects not to purchase will be allotted among the
remaining designees.

(i) Unless otherwise provided herein, the Board of Directors may
elect to purchase (or designate one or more designees who may then elect
to purchase) all or any part of the Shares offered or deemed to have
been offered under the provisions of this Article XVI, subparagraphs
(b), (f) or (i), within the time limits specified in subparagraph (g) of
this Article XVI. In the event neither the Board of

<PAGE>

Directors, on behalf of the Company, and/or its designee or designees,
elect to purchase all of the Shares within such time frame, then the
employee shall have the right to require the Company to purchase all, or
the balance of such Shares, as the case may be, at the purchase price
determined by subparagraph (b), (f) or (i) of this Article XVI
(whichever is applicable under the circumstances). This right granted to
the employee is referred to herein as the "Put."

(ii) The Put shall be nontransferable, except by the employee to
his or her named beneficiary or executor or administrator upon his or
her death or to his or her guardian or committee upon his or her
permanent incapacity, and may be exercised only once. Such exercise may
occur only during the thirty (30) day period following the notice by the
Board of Directors, or its designee or designees, of its or their
election not to purchase all of the Shares, or within thirty (30) days
following the expiration of the applicable period granted by
subparagraph (g) of this Article XVI for the Board of Directors, on
behalf of the Company, or for the Board of Directors' designee or
designees, for their own account or accounts, to exercise its or their
election to so purchase the Shares; provided, however, if such thirtieth
(30th) day is a Saturday, Sunday or federal holiday, the employee or his
or her proper transferee shall have until the next regular business day
immediately succeeding such thirtieth (30th) day. (The latest date by
which the Put may be exercised is referred to herein as the "Final
Exercise Date"). The employee shall deliver to the Secretary of the
Company written notice (the "Notice") of his or her intent to exercise
the Put on or prior to the Final Exercise Date. Failure to timely
deliver such Notice shall result in cancellation of the Put. The Notice
shall state the number of Shares, up to the full amount to which the Put
is exercisable, with respect to which the employee intends to exercise
the Put.

(iii) Notwithstanding anything to the contrary set forth in this
subparagraph (c), in the event the company (A) does not have the
necessary surplus available to it to legally repurchase the Shares under
applicable corporation law, or (B) has repurchased more than twenty
(20%) percent of its common stock over the prior six (6) month period
whether or not due to the exercise of Puts by employee-shareholders of

<PAGE>

the Company, then, and in either such event, the employee's right to Put
the Shares to the Company will be null and void; provided, however, in
such event the employee may seek to dispose of his or her Shares in
accordance with subparagraph (d) of this Article XVI hereof.

(d) Procedure for Employee to Sell Shares.

(i) So long as the employee is employed by the Company, the
employee may sell, assign, transfer or otherwise dispose of any or all
of the Shares acquired pursuant to the exercise of any such Option or
Right to holders of record of shares of the Company's Common Stock who
are at that time employed by the Company, or permitted assigns, provided
that the employee first notifies the Board of Directors in writing,
setting forth in reasonable detail the terms and conditions of the
proposed sale of such Shares and the identity of the intended purchaser
(who must be an employee of the Company, a bona fide purchaser and the
sale to whom must be legally permissible), and shall first offer such
Shares to the Company for purchase by the Company or its designee or
designees on the same terms and conditions. The offer shall remain open
for acceptance or rejection by the Board of Directors, on behalf of the
Company, and/or the Company's designee or designees, for a period of
thirty (30) days after its receipt. If neither the Board of Directors
nor the Company's designee or designees elects within said thirty (30)
day period to purchase all, but not less than all, of such Shares so
offered, the employee shall thereafter be entitled to sell all, but not
less than all, such Shares for a period of sixty (60) days, but only in
the manner set forth by such employee in his or her offer to the Company
and only on the terms and conditions set forth therein, and if such
Shares are not sold to such proposed purchaser in such manner and on
such terms and conditions within such sixty (60) day period, then the
restrictions of this subsection (i) of this subparagraph (d) shall again
become effective with respect to such Shares as if no offer to sell such
Shares had been made to the Company.

(ii) In the event that the employee's employment with the Company
terminates for any reason whatsoever and (A) neither the Company nor its
designee or designees accepts in full the employee's offer to the
Company to sell all the Shares acquired pursuant to the exercise of any
Option or Right pursuant to subparagraph (b) of

<PAGE>

this Article XVI, and (B) the employees Put is void (as provided in
subparagraph (c) (iii) of this Article XVI), then and in such event the
employee (or his or her personal representative or representatives) may
sell, assign, transfer or otherwise dispose of all such Shares in
accordance with the provisions of subsection (d) (i) above.

(e) Fair Market Value. The fair market value of Shares for purposes of this
Article XVI shall be determined in accordance with Article VI hereof.

(f) Employee Bankruptcy. Except as otherwise provided in subparagraph (h) of
this Article XVI, if an employee to whom an Option or Right is granted
hereunder files a voluntary petition in bankruptcy or a petition for the
appointment of a receiver, or makes an assignment for the benefit of
creditors, or such proceedings be filed or instituted against such employee,
or if any person obtains an attachment or other legal or equitable interest
in any of the Shares owned by the employee acquired pursuant to the exercise
of an Option or Right, and in the event of any of the aforesaid involuntary
acts (insofar as the employee is concerned) the same are not dismissed,
nullified, or removed within sixty (60) days after institution thereof, the
Board of Directors shall forthwith have the right (but not the obligation) to
purchase for the account of the Company or permit the Company's designee or
designees the right to purchase for its of their respective account or
accounts all of such Shares owned by the employee, and such Shares shall be
deemed promptly to have been offered for sale to the Company or its designee
or designees, as the case may be. The price at which Shares shall be offered
to the Company pursuant to the provision of this subparagraph (f) shall be
the fair market value thereof, as determined in accordance with subparagraph
(e) of this Article XVI.

(g) Offer to Company. Any offer of Shares required to be made or deemed to
have been made by an employee or his or her representatives under any
provisions of this Article XVI, or upon receipt by the Board of Directors of
any offer which the employee may make pursuant to subparagraph (d) of this
Article XVI, shall be made to the Board of Directors in writing and, unless
otherwise specified herein, the Board of Directors shall have a period of
thirty (30) days after the date that such offer is received (or deemed to
have been received) to accept or reject the same. The Company or its designee
or designees shall consummate the purchase of Shares offered to or required
to be purchased by it under any provisions hereof on such date as the Company
or its designee or designees shall designate in its acceptance of the offer,
which date shall be not more than ninety (90) days after the date of such
acceptance or the employee's exercise of his or her Put unless otherwise
specified herein.

(h) Shares subject to Company's Security Interest; Remedies Under the Note.
Notwithstanding the provisions of subparagraphs (b) and (f) above, if all or any
part of the

<PAGE>

Shares are pledged to the Company as collateral security under a promissory
note delivered as partial payment for Shares acquired pursuant to the
exercise of an Option, as and to the extent permitted pursuant to Article VI
above, the Shares shall nevertheless remain subject to all of the terms and
conditions of this Article XVI and the Company shall have all the rights and
remedies set forth in this Article XVI and in such note, which rights and
remedies are cumulative and not exclusive.

(i) Transfer Vio1ations. If any transfer of Shares is made or attempted
contrary to the terms of this Article XVI, said transfer shall be null and
void, said Shares shall be deemed to have been offered to the Board of
Directors, and the Board of Directors shall have the right to purchase, for
the account of the Company, or the Company's designee or designees shall have
the right to purchase for its or their own account or accounts, such Shares
from the owner thereof or his or her transferee at any time before or after
the transfer, at the prices and on the terms established in subparagraph (b)
(ii) of this Article XVI. In addition to any other legal or equitable
remedies which it may have, the Company may enforce its rights by injunction
or specific performance to the extent permitted by law. The Company may
refuse for any purpose to recognize as a shareholder of the Company any
transferee who receives any Shares contrary to the provisions of this Article
XVI and the Company may retain and/or recover all dividends or other
distributions in respect of such Shares which were paid or payable subsequent
to the date on which the prohibited transfer was made or attempted.

(j) Termination of Limitations. The limitations imposed in this Article XVI
shall terminate with respect to any Shares owned by an employee upon the later
to occur of (i) the consummation of the transfer of the Shares following (A) the
acceptance by the Board of Directors or its designee or designees of the offer,
or deemed offer, to purchase the employee's Shares pursuant to subparagraph (b)
of this Article XVI upon the termination of the employee's employment with the
Company, or (B) the exercise by the employee of his or her Put, in either case
following the termination of the employee's employment by the Company, or (ii)
the sale of the Shares to the Company or one or more designees pursuant to the
terms of subparagraphs (d), (f) or (i) of this Article XVI, or (iii) a
registered public offering under the Securities Act of the Company's Common
Stock is consummated.

(k) Tender of Stock. Any Shares which the Board of Directors elects to purchase
under this Article XVI for the account of the Company, or which the Company's
designee or designees elect to purchase for their own account or accounts, shall
be tendered to the Board of Directors or such designee or designees by the
delivery of the certificate or certificates therefor, duly endorsed, or
accompanied by stock powers executed in blank at the Company's principal office
on the date and at the time specified by the Board of Directors, or such
designee or designees, with the appropriate documentary stock transfer tax
stamps, if any, affixed or provided for. In the case of a purchase from a legal
representative, the certificate or certificates representing the Shares shall
also be accompanied

<PAGE>

by letters testamentary, letters of administration or other appropriate
certificate of appointment of the representative, a certified copy of the
Will, if any, an Affidavit to the effect that all legacies, debts, claims and
taxes have been paid or are amply provided for and all other applicable
estate tax waivers and releases of tax liens.

(l) Changes in Number of Shares. In the event of a merger, consolidation or
reorganization of the Company, or any stock split, spin-off, split-up,
split-off, stock dividend, stock distribution, recapitalization,
reclassification, combination of shares, exchange of shares, or other similar
change in the capital stock of the Company, any shares of capital stock of
the Company or any successor to the Company issued in respect of Shares
acquired pursuant to the exercise of an Option or Right shall be subject to
the restrictions imposed by this Article XVI and shall be considered Shares
for the purposes of this Article XVI, and the price per share at which the
Company or the Company's designee or designees shall be entitled or required
to purchase Shares hereunder shall be appropriately adjusted, if required, to
reflect such merger, consolidation, reorganization, stock split, spin-off,
split-up, split-off, stock dividend, stock distribution, recapitalization,
reclassification, combination of shares, exchange of shares or other similar
change in the capital stock of the Company.

(m) Modification of Restrictions. The Board of Directors or the Committee, as
the case may be, shall, at the time of grant of any Options or Right
hereunder, have the authority in its sole discretion to alter or modify any
and all of the provisions set forth in this Article XVI.

XVII. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES

Upon any exercise of an Option or Right which may be granted hereunder and, in
the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares as to which the Option or Right has been exercised
shall be issued by the Company in the name of the person exercising the Option
or Right and shall be delivered to or upon the order of such person or persons.

The Company may endorse such legend or legends upon the certificates for Shares
issued upon exercise of an Option or Right granted hereunder, and the Board of
Directors or the Committee, as the case may be, may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares, as the Board of
Directors or the Committee, as the case may be, in its discretion, determines to
be necessary or appropriate to (i) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act, (ii)
implement the provisions of this Plan and any agreement between the Company and
the optionee or grantee with respect to such Shares, or (iii) permit the Company
to determine the occurrence of a disqualifying disposition, as described in
Section 421(b) of the Code, of Shares transferred upon exercise of any Incentive
Option granted under the Plan.

Except as otherwise provided in subparagraph (k) of

<PAGE>

Article XVI above, the Company shall pay all issue or transfer taxes with
respect to the issuance or transfer of Shares, as well as all fees and
expenses necessarily incurred by the Company in connection with such issuance
or transfer.

All Shares issued as provided herein shall be fully paid and non-assessable
to the extent permitted by law.

XVIII. WITHOLDING TAXES

The Company may require an employee (or former employee) exercising a Right
or a Nonqualified Option granted hereunder, or disposing of Shares acquired
pursuant to the exercise of an Incentive Option in a disqualifying
disposition (within the meaning of Section 421(b) of the Code), to reimburse
the corporation that employs (or employed) such employee for any taxes
required by any government to be withheld or otherwise deducted and paid by
such corporation in respect of the issuance or disposition of Shares. In lieu
thereof, the corporation that employs such employee shall have the right to
withhold the amount of such taxes from any other sums due or to become due
from such corporation to the employee upon such terms and conditions as the
Board of Directors or the Committee, as the case may be, shall prescribe.

XIX. LISTING OF SHARES AND RELATED MATTERS

If at any time the Board of Directors shall determine in its discretion that the
listing, registration or qualification of the Shares covered by the Plan upon
any national securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares under the Plan, no Shares shall be delivered unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the. Board of Directors.

XX. AMENDMENT OF THE PLAN

The Board of Directors may, from time to time, amend the Plan, provided that no
amendment shall be made, without the approval of the stockholders of the
Company, that wi1l (i) increase the total number of Shares reserved for Options
under the plan (other than an increase merely reflecting a change in
capitalization, such as a stock dividend or stock split, as provided in Article
XIII), (ii) reduce the exercise price of any Incentive Option granted hereunder
below the price required by Article VI, (iii) modify the provisions of the Plan
relating to eligibility, or (iv) materially increase the benefits accruing to
participants under the Plan. The rights and obligations under any Option or
Right granted before amendment of the Plan or any unexercised portion of the
such Option or Right shall not be adversely affected by amendment of the Plan or
the Option or Right without the consent of the holder of the Option or Right.

XXI. TERMINATION OR SUSPENSTION OF THE PLAN

The Board of Directors may at any time suspend or terminate the Plan. The
Plan, unless sooner terminated under Article XXV or by action of the Board of
Directors, shall

<PAGE>

terminate at the close of business on the Termination Date. An Option or
Right may not be granted while the Plan is suspended or after it is
terminated. Rights and obligations under any Option or Right granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except upon the consent of the person to whom the
Option or Right was granted. The power of the Board of Directors or the
Committee, as the case may be, to construe and administer any Options or
Rights granted prior to the termination or suspension of the Plan under
Article III nevertheless shall continue after such termination or during such
suspension.

XXII. GOVERNING LAW

The Plan, such Options and Rights as may be granted thereunder and all
related matters shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware from time to time
obtaining.

XXIII. PARTIAL INVALIDITY

The invalidity or illegality of any provision herein shall not be deemed to
affect the validity or legality or any other provision.

XXIV. NOTICES

All notices hereunder may be delivered by hand against receipt therefor, or
shall be sent by certified or registered mail, postage prepaid, to the
Company at its principal place of business, or to a holder of Shares or an
Option or Right, or any permitted transferee, at his or her last known
address, or the address, if any, appearing on the books of the Company.

XXV. EFFECTIVE DATE

The Plan shall become effective at 5:00 P.M., New York City time, on the
Effective Date, the date on which the Plan was adopted by the Board of
Directors; provided, however, that if the Plan is not approved by a vote of
the stockholders of the Company at an annual meeting or any special meeting
or by the necessary written consent of stockholders within twelve (12) months
before or after the Effective Date, the Plan and any Options and Rights
granted hereunder shall terminate.

<PAGE>

Exhibit 10.11

WIT CAPITAL GROUP, INC.
826 Broadway
New York, NY 10003

February 3, 1999

Mr. Jonathan Cohen
74 Old Church Road
Greenwich, CT 06830

Dear Jonathan:

We are pleased to offer to you employment as Director of Research of Wit Capital
Group, Inc., a New York corporation (the "Company") on the following terms and
conditions:

1. EMPLOYMENT. You will be employed as Director of Research commencing
February 4, 1999 and perform those duties for the Company and its
affiliates which the Company may from time to time designate. You agree
to use your best efforts to perform such duties faithfully, to devote
all of your working time, attention and energies to the business of the
Company and its affiliates, and while you remain employed with the
Company, you agree that you will not engage in any other business
activity that is in conflict with your duties and obligations to the
Company. The Company acknowledges that you may make personal
investments in other businesses and manage those investments, so long
as you do not actively participate in such other businesses and such
activity does not interfere with your ability to perform your duties
for the Company, does not violate your obligations under Section 6
below, and does not otherwise constitute a conflict of interest with
the Company or any of its affiliates.

2. CASH COMPENSATION. (a) The Company shall pay you a base salary equal to
$250,000 per annum.

(b) The Company shall pay you a signing bonus of $5 million. The
signing bonus, less applicable withholding taxes of $935,736, will be
wire transferred to the trust account of the law firm of Parson & Brown
LLP (the "Escrow Agent") prior to your signing of this letter
agreement. The Escrow Agent is directed to release the escrowed amount
to you upon your signed acceptance of this offer and delivery of the
signature page to the Company. If, however, the Company notifies the
Escrow Agent that it has not received your signed acceptance of this
offer by close of business on February 3, 1999, the Escrow Agent is
directed to return the escrowed funds to the Company.

(c) In addition, during your employment, you shall participate in the
revenue sharing arrangement described below; PROVIDED, HOWEVER, that
the first $5 million of additional

<PAGE>

compensation earned by you under this arrangement shall not be paid to
you (as such amounts shall be offset by the amount paid or payable to
you pursuant to Section 2(b)). The revenue sharing arrangement will be
as follows: (i) 50% of net cash and warrant revenues generated from
private placement transactions shall be shared by the investment
bankers and salespeople responsible therefor, (ii) 50% of the net cash
and warrants generated from public offering transactions shall be
shared by the investment bankers and salespeople responsible therefor,
and (iii) 50% of the net cash and warrant revenues generated from
financial advisory transactions shall be shared by the investment
bankers responsible therefor. Allocation of such revenues among the
participants involved in any transaction shall be made initially by
agreement of the senior investment bankers involved in the
transactions, with final discretion exercised by the Company's
President and Chief Operating Officer (or such other officer of the
Company to whom the Board of Directors may assign such responsibility).
Additional compensation under the revenue sharing arrangement shall be
earned upon (and not prior to) the closing of the transaction
generating the revenue, and shall be payable (subject to the proviso in
the first sentence of this Section 2(c)) as soon as practicable
thereafter.

3. EMPLOYEE BENEFITS. During your employment, you shall be entitled to
participate in all employee benefit plans, programs and arrangements of
the Company and its subsidiaries that are made available to any other
executives of the Company and its subsidiaries on a basis which is no
less favorable to you than is provided to any other executive of the
Company and its subsidiaries.

4. STOCK OPTION. As of the date of your employment, you shall be granted
an option under the Company's Stock Option and Restricted Stock
Purchase Plan to purchase from the Company 1,000,000 shares of Common
Stock of the Company at an exercise price of $1.50 per share. The terms
and conditions of such option shall be set forth in a Stock Option
Agreement attached hereto as Exhibit A.

5. TERMINATION OF EMPLOYMENT. (a) If, during the two-year period following
your commencement date, (i) your employment is terminated prior to a
Sale (as defined in Section 10 below): (x) by the Company for Cause (as
defined in Section 10 below) or because of your Disability (as defined
in Section 10 below), (y) by reason of your death, or (z) by you
without Good Reason (as defined in Section 10 below), or (ii) you
violate the provisions of Section 6 below, then you shall, within 5
days of such termination or violation, pay to the Company an amount in
cash equal to $2.5 million multiplied by a fraction, the numerator of
which is the number of days remaining in such two-year period at the
time of such termination or violation, and the denominator of which is
730.

(b) You acknowledge that no severance or similar or other damages or
payments of any kind whatsoever shall be payable to you by the Company
in connection with, or in the event of, your termination or resignation
from employment for any reason; PROVIDED, HOWEVER, that you shall
remain entitled to compensation and benefits earned and payable as of
the date of

2
<PAGE>

your termination of employment but not yet paid.

6. RESTRICTIVE COVENANTS. You agree that you will not at any time prior to
the second anniversary of your date of employment with the Company, or
at any time while you are employed by the Company (and, with respect to
(iii) below, at all times thereafter), directly or indirectly: (i) own,
manage, operate, join, control or participate in the ownership,
management, operation or control of, or be connected as a director,
officer, employee, or lender with, or be compensated by, any entity or
business (including a sole proprietorship) that is an NASD registered
broker-dealer, provided that up to a 4.9% interest in a publicly traded
entity shall be permitted; (ii) employ or otherwise engage, or offer to
employ or otherwise engage, or solicit, entice or induce for himself or
any other person, entity or corporation, the services or employment of
any person who is, or during the three months prior thereto has been,
an employee of, or independent contractor, consultant or agent, in each
case, devoting a majority of its business time to, the Company or any
of its affiliates (other than your personal secretary); or (iii) use or
disclose, or authorize any other person or entity to use or disclose,
any information of a confidential nature (i.e., strategic plans,
specifications for existing or future technology) other than as
necessary to further the business objectives of the Company in
accordance with the terms of your engagement hereunder; PROVIDED that
the restrictions contained in this clause (iii) shall not apply to (A)
information that becomes publicly known (other than as a result of
your breach of this restriction), (B) information which was known to
you prior to the date of this agreement, and (C) information which you
are required to disclose pursuant to any court or other governmental
order, provided you give the Company reasonable written notice prior
to such disclosure and you comply with any applicable protective
order, and (D) information, the disclosure of which is reasonably
necessary to defend yourself, or assert your rights, in connection
with any proceeding to which the Company or its affiliates is directly
or indirectly a party. You understand that your services for the
Company will be of a special and unique nature, and that the breach or
threatened breach of the provisions of this Section 6 would cause the
Company irreparable harm which could not be adequately compensated for
in damages by an action at law. In the event of a breach or threatened
breach by you of this Section 6, in addition to all other remedies
available to the Company at law or in equity, the Company will be
entitled to seek a temporary or permanent injunction or injunctions,
or temporary restraining orders or orders to prevent breaches hereof,
in each case, without the need to post any security or bond. Clauses
(i) and (ii) of this Section 6 shall cease to apply upon a Sale, or
upon any termination of your employment that would not trigger your
obligation to make a payment to the Company pursuant to clause (i) of
Section 5(a).

7. CERTAIN REPRESENTATIONS. You represent and warrant to the Company your
employment hereunder will not conflict with or result in a violation or
breach of, or constitute a default under any contract, agreement or
understanding to which you are or were a party. This agreement
constitutes the complete and exclusive statement of the agreement
between you and the Company. It supersedes all prior written and oral
agreements, and no representation, statement, condition or warranty not
contained in this agreement shall be binding on the you

3
<PAGE>

or the Company or have any force or effect whatsoever.

8. WITHHOLDING. The Company shall have the right to withhold from any
amount payable hereunder any amount necessary in order for the Company
to satisfy any withholding tax obligation it may have under applicable
law.

9. APPLICABLE LAW. Our agreement outlined in this letter will be governed
by, and construed and enforced in accordance with, the laws of the
State of New York applicable to agreements made and to be performed
wholly therein, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.

10. DEFINITIONS. As used in this letter agreement:

"Cause" means (i) your persistent or repeated refusal to perform the
material duties of your employment (other than by reason of a physical
or mental illness or impairment), after written notice thereof from the
Board specifying in reasonable detail instances of such conduct and a
30-day opportunity to cure, (ii) any act of fraud or embezzlement to
the detriment of the Company after written notice thereof from the
Board specifying in reasonable detail instances of such act, (iii) your
material breach of any provision hereof (including, without limitation,
Section 6) after written notice thereof from the Board specifying in
reasonable detail instances of such breach and a 30-day opportunity to
cure, or (iv) your conviction of the commission of a felony (including
pleading guilty to a felony); "Disability" shall mean a determination
by the Board that you have been unable to perform the material duties
of your employment with the Company for any 180 days within a one-year
period by reason of a physical or mental illness or impairment.

"Good Reason" means, without your consent, (i) a material reduction in
your authority or responsibilities, a change in your title or your
reporting lines, or (ii) the failure to pay compensation due hereunder,
in each case after written notice thereof from you specifying in
reasonable detail instances of such reduction, change or failure and a
30-day opportunity to cure.

"Sale" means any transaction whereby, after giving effect to such
transaction, the beneficial owners of the Company's capital stock
immediately prior to such transaction cease to beneficially own, either
singly or in the aggregate, at least 20% of the voting power (as to the
election of directors) of the Company or any successor to substantially
all of the business or assets of the Company.

4
<PAGE>

If the foregoing is acceptable to you, kindly sign and return to me one copy of
this letter.

Sincerely yours,

/s/ Ronald Readmond
----------------------
Ronald Readmond

AGREED TO:

/s/ Jonathan Cohen
- -------------------------------
Jonathan Cohen

<PAGE>
Exhibit 10.13

EMPLOYMENT AGREEMENT

This Employment Agreement (the "AGREEMENT") is entered into effective
as of March 22, 1999, between Wit Capital Group, Inc., a Delaware corporation
(the "CORPORATION"), and Robert C. Mendelson (the "EXECUTIVE").

W I T N E S S E T H:

The Corporation desires to employ the Executive to have the benefits of
his expertise and knowledge. The Executive, in turn, desires employment with the
Corporation. The parties, therefore, enter into this Agreement to establish the
terms and conditions of the Executive's employment with the Corporation.

In consideration of the mutual covenants and representations contained
in this Agreement, the Corporation and the Executive agree as follows:

1. EMPLOYMENT OF EXECUTIVE; DUTIES.

(a) The Corporation agrees to employ the Executive, and the
Executive agrees to be employed by the Corporation, as Co-General Counsel and
Senior Vice President for the period specified in Section 2 (the "EMPLOYMENT
PERIOD"), subject to the terms and conditions of this Agreement. During the
Employment Period, the Executive shall have such duties and responsibilities
generally consistent with his position and such other duties not inconsistent
with his title and position as may be properly assigned to him by the
Corporation.

(b) The Executive shall report directly to Ronald W. Readmond,
Co-Chief Executive Officer. Any change in the reporting procedure shall require
the consent of the Executive, which consent shall not be unreasonably withheld.

2. EMPLOYMENT PERIOD. The Employment Period shall begin on April 15,
1999 and shall continue for three (3) years.

3. BASE SALARY. During the Employment Period, the Corporation shall pay
the Executive a minimum annual base salary of Two Hundred Forty Thousand Dollars
($240,000). The base salary shall be payable in equal periodic installments
which are not less frequent than the periodic installments in effect for
salaries of other senior executives of the Corporation. The base salary shall be
subject to annual review by the Board of Directors ("BOARD") (or a committee
appointed by the Board) for upward adjustments based on the policies of the
Corporation and the Executive's contributions to the business of the
Corporation.

4. ANNUAL BONUS PLAN, LONG-TERM INCENTIVE PLAN AND OTHER BONUS. During
the Employment Period, the Executive shall be entitled to participation at the
senior executive level in both the Annual Bonus Plan for Executives and the
Long-Term Incentive Plan. In addition, during the Employment Period, the
Executive also shall be entitled to guaranteed annual bonuses as follows: (i)
Four Hundred Eighty Thousand Dollars ($480,000) for the first year of

<PAGE>

employment; and (ii) Seven Hundred Twenty Thousand Dollars ($720,000) for each
of the second and third years of employment ("GUARANTEED BONUS"). The Guaranteed
Bonus shall be paid to the Executive on a semi-annual basis with the first
payment due six (6) months from the effective date of this Agreement.

5. BENEFITS.

(a) In addition to and except for the matters governed by this
Agreement, the Executive shall be entitled to employee benefits and perquisites,
including but not limited to pension, deferred compensation plans, stock
options, group life insurance, disability, sickness and accident insurance and
health benefits under such plans and programs as provided to other senior
executives of the Corporation from time to time.

(b) The Executive shall be provided, at the Corporation's
expense, an office and support staff at the Corporation's offices in New York
City.

(c) The Executive shall be entitled to four (4) weeks paid
vacation as well as holidays, leave of absence and leave for illness and
temporary disability in accordance with the policies of the Corporation.

6. STOCK PURCHASE.

The Executive shall have the right to purchase Six Hundred
Fifty Thousand (650,000) shares of the Common Stock of the Corporation in
accordance with the Stock Purchase Agreement attached hereto as Exhibit I.

7. STOCK OPTIONS.

The Executive shall have the option to purchase Two Hundred
Thousand (200,000) shares of the Corporation's Common Stock at One Dollar and
Fifty Cents ($1.50) per share. Such options shall vest incrementally as follows:
Twelve Thousand Five Hundred (12,500) Shares on June 30, 1999 and Twelve
Thousand Five Hundred (12,500) Shares on the last day of September, December,
March and June thereafter until March 31, 2003 at which time the entire Two
Hundred Thousand (200,000) Shares will have become fully vested; provided,
however, that vesting shall accrue only if the Executive is employed with the
Corporation on the specified vesting date or as otherwise specified in the stock
option grant agreement. Such options shall be Incentive Stock Options to the
degree permitted under law and shall be subject to all the terms and conditions
of the option plan under which they are granted.

8. NON-DISCLOSURE; NON-COMPETITION.

As a condition to the employment arrangement, Executive agrees
to execute and comply with the terms and conditions of the "Wit Capital Group,
Inc. Employee Non-Disclosure, Non-Competition and Assignment of Inventions
Agreement" attached hereto as Exhibit II.

2
<PAGE>

9. TERMINATION.

9.1 TERMINATION BY THE CORPORATION.

(a) The Corporation, by action of its Board, may terminate the
Executive's employment under this Agreement without Cause (as defined in Section
9.1(b)), at any time by giving notice thereof to the Executive at least ninety
(90) days before the effective date of such termination. The Employment Period
shall terminate as of the date of such termination of employment.

(b) The Corporation, by action of its Board, may terminate the
Executive's employment under this Agreement for Cause at any time by notifying
the Executive of such termination. For all purposes of this Agreement, the
Employment Period shall end as of the date of such termination of employment.
"CAUSE" means the Executive's: (i) persistent and repeated refusal, failure or
neglect to perform the material duties of his employment under this Agreement
(other by reason of the Executive's physical or mental illness or impairment),
provided that such Cause shall be deemed to occur only after the Corporation
gave notice thereof to the Executive specifying in reasonable detail the conduct
constituting Cause, and the Executive failed to cure and correct his conduct
within thirty (30) days after such notice; (ii) committing any act of fraud or
embezzlement, provided that such Cause shall be deemed to occur only after the
Corporation gave notice thereof to the Executive specifying in reasonable detail
the instances of such conduct, and the Executive had the opportunity to be heard
at a meeting of the Board; (iii) breach of the Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement or of such other
subsequent agreements entered into during the Employment Period that results in
a material detriment to the Corporation; (iv) conviction of a felony (including
pleading guilty to a felony); or (v) habitual abuse of alcohol or drugs.

9.2 TERMINATION BY THE EXECUTIVE. The Executive may terminate this
Agreement at any time, for any reason or for no reason at all, by giving notice
thereof to the Corporation at least ninety (90) days before the effective date
of such termination. The Employment Period shall terminate as of the date of
such termination of employment.

9.3 SEVERANCE BENEFITS.

(a) If the Executive's employment under this Agreement is
terminated before the end of the Employment Period by the Corporation without
Cause or by the Executive for Good Reason (as defined in Section 9.3(c)), the
Corporation shall pay the Executive a lump sum cash payment, within thirty (30)
days of the date of such termination, equal to the sum of: (i) the aggregate
amount of the Executive's unpaid Base Salary, payable at the annual rate in
effect on the termination date, through the end of the three (3) year Employment
Period; (ii) an amount representing the Executive's unpaid Annual Bonus amounts
accrued through the date of termination; and (iii) an amount representing the
Executive's unpaid Guaranteed Bonus prorated through date of termination plus
fifty percent (50%) of the aggregate amount of the Executive's unpaid Guaranteed
Bonus for the period commencing with the date of termination through the end of
the three (3) year Employment Period. Additionally, COBRA benefits shall be
provided

3
<PAGE>

at the expense of the Corporation commencing as of the date of termination and
continuing for the applicable statutory period, but in no event to exceed an
eighteen (18) month period.

(b) If the Executive's employment under this Agreement is
terminated by the Corporation for Cause, by the Executive without Good Reason or
if the Executive dies or becomes totally disabled (as defined in Section 9.4),
the Corporation shall only pay the Executive a lump sum cash payment within
thirty (30) days of the date of such termination, equal to the sum of: (i)
Executive's unpaid Base Salary earned to the termination date; (ii) an amount
representing the Executive's unpaid Annual Bonus amounts accrued through the
date of termination; and (iii) an amount representing the Executive's unpaid
Guaranteed Bonus prorated to date of termination.

(c) "GOOD REASON" means: (i) any material reduction in the
Executive's authority, duties or responsibilities; (ii) any material change in
the Executive's reporting lines or removal of the Executive from his principal
positions as of the beginning of the Employment Period (other than a promotion);
or (iii) any material failure by the Corporation to pay or provide the
compensation and benefits under this Agreement; provided that, in each such
event, the Executive shall give the Corporation notice thereof which shall
specify in reasonable detail the circumstances constituting Good Reason, and
there shall be no Good Reason with respect to any such circumstances cured by
the Corporation within thirty (30) days after such notice.

(d) If the Executive is entitled to receive payments or other
benefits under this Agreement upon the termination of his employment with the
Corporation, the Executive hereby irrevocably waives the right to receive any
payments or other benefits under any other severance or similar plan maintained
by the Corporation ("OTHER SEVERANCE PLAN"), provided, however, that if the
payments and other benefits provided under such Other Severance Plan exceed the
payments and other benefits under this Agreement, the Executive, in his sole
discretion, may elect to receive the payments and benefits under such Other
Severance Plan in lieu of the payments and benefits under this Agreement upon
his termination of employment.

9.4 TERMINATION BY DEATH OR DISABILITY. This Agreement shall terminate
automatically upon the Executive's death. If the Corporation determines in good
faith that the Executive has a "total disability" (within the meaning of such
term or of a similar term as defined in the Corporation's long-term disability
plan as in effect from time to time), the Corporation may terminate his
employment under this Agreement by notifying the Executive thereof at least
thirty (30) days before the effective date of such termination.

10. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Corporation or, in the case of the Corporation, to the
Corporation's principal executive offices.

11. WITHHOLDING TAXES. The Corporation shall have the right, to the
extent permitted by law, to withhold from any payment of any kind due to the
Executive under this Agreement to satisfy the tax withholding obligations of the
Corporation under applicable law.

4
<PAGE>

12. BINDING AGREEMENT. This Agreement shall be binding upon the
Executive and the Corporation on and after the date of this Agreement. The
rights and obligations of the Corporation under this agreement shall inure to
the benefit of and shall be binding upon the Corporation and any successor of
the Corporation, and the benefits of this Agreement shall inure to the benefit
of the Executive's estate and beneficiaries in the event of the Executive's
death. The Corporation may assign this Agreement to any subsidiary, parent or
affiliate, without the consent of the Executive, and such assignment shall not,
in and of itself, constitute, a termination of employment under this Agreement.

13. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the Executive and the Corporation with respect to the subject
matter hereof and supersedes and voids any and all prior agreements or
understandings, written or oral, regarding the subject matter hereof. This
Agreement may not be changed, modified, or discharged orally, but only by an
instrument in writing signed by the parties.

14. GOVERNING LAW AND SEVERABILITY. This Agreement shall be governed by
the laws of the State of New York (without giving effect to choice of law
principles or rules thereof that would cause the application of the laws of any
jurisdiction other than the State of New York) and the invalidity or
unenforceability of any provisions hereof shall in no way affect the validity or
enforceability of any other provision. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

15. ARBITRATION. DISPUTES REGARDING THE EXECUTIVE'S EMPLOYMENT WITH THE
CORPORATION, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT
WHICH CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN THE CORPORATION AND THE
EXECUTIVE, BUT EXCLUDING ANY DISPUTES REGARDING THE EXECUTIVE'S COMPLIANCE WITH
THE RESTRICTIONS OF THE EMPLOYEE NON-DISCLOSURE, NON-COMPETITION AND ASSIGNMENT
OF INVENTIONS AGREEMENT REFERRED TO IN SECTION 8 OF THIS AGREEMENT, SHALL BE
SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING ARBITRATION CONDUCTED
BY JAMS/ENDISPUTE, INC.'S ARBITRATION RULES APPLICABLE TO EMPLOYMENT DISPUTES,
AND THE PARTIES AGREE TO BE BOUND BY THE FINAL AWARD OF THE ARBITRATOR IN ANY
SUCH PROCEEDING. THE ARBITRATOR SHALL APPLY THE LAWS OF THE STATE OF NEW YORK
WITH RESPECT TO THE INTERPRETATION OR ENFORCEMENT OF ANY MATTER RELATING TO THIS
AGREEMENT; IN ALL OTHER CASES THE ARBITRATOR SHALL APPLY THE LAWS OF THE STATE
SPECIFIED IN THE CORPORATION'S ALTERNATIVE DISPUTE RESOLUTION POLICY AS IN
EFFECT FROM TIME TO TIME (IF ANY). ARBITRATION MAY BE HELD IN NEW YORK, NEW
YORK, OR SUCH OTHER PLACE AS THE PARTIES HERETO MAY MUTUALLY AGREE, AND SHALL BE
CONDUCTED SOLELY BY A FORMER JUDGE. JUDGMENT UPON THE AWARD BY

5
<PAGE>

THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.

IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.

WITNESS/ATTEST WIT CAPITAL GROUP, INC.

By:/s/Ronald W. Readmond
- --------------------------- ---------------------------------
Ronald W. Readmond,
Co-Chief Executive Officer

EXECUTIVE

/s/Robert C. Mendelson
- --------------------------- ------------------------------------
Robert C. Mendelson

<PAGE>
Exhibit 10.14

EMPLOYMENT AGREEMENT

This Employment Agreement (the "AGREEMENT") is entered into effective as of
October __, 1999, between Wit Capital Group, Inc., a Delaware corporation
(together with each of its subsidiaries and divisions, the "CORPORATION"), and
___________ (the "EXECUTIVE").

W I T N E S S E T H:

In consideration of the mutual covenants and representations contained
in this Agreement, the corporation and the Executive agree as follows:

1. EMPLOYMENT OF EXECUTIVE; DUTIES.

The Corporation agrees to employ the Executive, and the
Executive agrees to be employed by the Corporation, as a [MANAGING DIRECTOR OF
THE STAMFORD SUBSIDIARY OR OTHER APPROPRIATE TITLE] for the period specified in
Section 2 (the "EMPLOYMENT PERIOD"), subject to the terms and conditions of this
Agreement. During the Employment Period, the Executive shall have such duties
and responsibilities with the Corporation and its Subsidiaries as may be
properly assigned to him by the Corporation.

2. EMPLOYMENT PERIOD. The Employment Period shall begin at the
Effective Time of the Merger (as such terms are defined therein) contemplated by
the Agreement and Plan of Merger dated as of October __, 1999 by and among the
Corporation, Soundview Technology Group, Inc. ("Soundview") and W/S Merger Corp.
(the "MERGER AGREEMENT") and shall continue for [30-42 MONTHS].

3. BASE SALARY. During the Employment Period, the Corporation shall pay
the Executive a minimum annual base salary of [INSERT BASE SALARY]. The base
salary shall be payable in equal periodic installments which are not less
frequent than the periodic installments in effect for salaries of other senior
executives of the Corporation. The base salary shall be subject to annual review
by the Board of Directors ("BOARD") (or a committee appointed by the Board) for
upward adjustments based on the policies of the Corporation and the Executive's
contributions to the business of the Corporation.

<PAGE>

4. BONUS. During the Employment Period, the Executive shall be entitled
to participate in such bonus plans as are in effect from time to time for other
employees of the Company with equal status. [For the period ending ________, the
Executive shall be entitled to a guaranteed bonus of at least [INSERT AMOUNT, IF
APPLICABLE] ("GUARANTEED BONUS").]

5. BENEFITS.

(b) The Executive shall be entitled to four (4) weeks paid
vacation as well as holidays, leave of absence and leave for illness and
temporary disability in accordance with the policies of the Corporation.

6. RETENTION POOL. The Executive shall be entitled to participate in a
pool of shares of the Corporation's Common Stock being allocated to certain
executives of the Corporation to encourage them to remain as highly productive
numbers of senior management (the "Retention Pool"). The Executive's interest in
the Retention Pool shall be initially ______ shares and shall be subject to the
vesting, forfeiture and early vesting provisions set forth in the Merger Agree
ment.

7. NON-DISCLOSURE; NON-COMPETITION.

8. TERMINATION.

8.1 TERMINATION BY THE CORPORATION.

(a) The Corporation, by action of its Board, may terminate the
Executive's employment under this Agreement without Cause (as defined in Section
8.1(b)), at any time by giving notice thereof to the Executive at least thirty
(30) days before the effective date of such termination. The Employment Period
shall terminate as of the date of such termination of employment.

2
<PAGE>

of such termination of employment. "Cause" shall mean the Executive's (i)
neglect, failure or refusal to timely perform the duties of his employment
(other than by reason of a physical or mental illness or impairment), or his
gross negligence in the performance of his duties, (ii) material breach of any
agreements, covenants and representations made in any employment agreement or
other agreement with the Corporation or any of its Subsidiaries, (iii) violation
of any law, rule, regulation or by-law of any governmental authority (state,
federal or foreign), any securities exchange or association or other regulatory
or self-regulatory body or agency applicable to the Corporation or any of its
Subsidiaries or any material general policy or directive of the Corporation or
any of its Subsidiaries applicable to the Executive, (iv) conviction of, or plea
of guilty or nolo contendere to, a crime involving moral turpitude, dishonesty,
fraud or unethical business conduct, or a felony, (v) giving or accepting
undisclosed material commissions or other payments in cash or in kind in
connection with the affairs of the Corporation or any of its Subsidiaries or
their clients, (vi) failure to obtain or maintain any registration, license or
other authorization or approval that the Corporation reasonably believes is
required in order for the Executive to perform his duties, or (vii) habitual
abuse of alcohol or drugs.

8.2 TERMINATION BY THE EXECUTIVE. The Executive may terminate this
Agreement at any time, for any reason or for no reason at all, by giving notice
thereof to the Corporation at least thirty (30) days before the effective date
of such termination. The Employment Period shall terminate as of the date of
such termination of employment.

8.3 SEVERANCE BENEFITS.

(b) If the Executive's employment under this Agreement is
terminated by the Corporation for Cause, by the Executive without Good Reason or
if the Executive dies or becomes totally disabled (as defined in Section 8.4),
the Corporation shall only pay the Executive a lump sum cash payment within
thirty (30) days of the date of such termination, equal to the sum of: (i)
Executive's unpaid Base Salary earned to the termination date; and (ii) an
amount representing the Executive's unpaid Guaranteed Bonus prorated to the date
of termination.

(c) "GOOD REASON" means (i) any failure by the Corporation to
pay or provide the compensation and benefits under this Agreement;

3
<PAGE>

(ii) a change, without Cause, in the Executive's
responsibilities which represents a materially adverse change from the
employee's responsibilities as in effect at any time within the preceding six
(6) months or a material reduction, without Cause, in the Executive's corporate
title (such as from Managing Director to Vice President) in effect at any time
within the preceding six (6) months;

(iii) requiring the Executive to be based at any
place outside a 50-mile radius from the Executive's previous job location or
residence, except for reasonably required travel on business;

(iv) the Corporation acquires or creates an
additional business as a result of which Soundview's institutional brokerage
business, its investment banking technology group or its technology research
group, as developed and expanded within the Corporation, is no longer the
Corporation's primary institutional brokerage business or its primary investment
banking technology group, as the case may be; or

(v) the Corporation changes its compensation
methodology from the basic methodology utilized by Soundview before the Merger
such that it no longer uses a combination of cash, stock and options in a merit
based compensation system rewarding individual performance within prevalent
industry standards, as determined by senior management and the Board of
Directors.

(d) If the Executive is entitled to receive a payment or other
benefits under this Agreement upon termination of his employment with the
Corporation, the Executive hereby irrevocably waives the right to receive any
similar payments or other benefits under any broad based severance or similar
plan maintained by the Corporation ("OTHER SEVERANCE PLAN"), provided, however,
that if the payments and other benefits provided under such Other Severance Plan
exceed the payments and other benefits under this Agreement, the Executive, in
his sole discretion, may elect to receive the payments and benefits under such
Other Severance Plan in lieu of the payments and benefits under this Agreement
upon his termination of employment.

8.4 TERMINATION BY DEATH OR DISABILITY. This Agreement shall terminate
automatically upon the Executive's death. If the Corporation determines in good
faith that the Executive has a "total disability" (within the meaning of such
term or of a similar term as defined in the Corporation's long-term disability
plan as in effect from time to time), the Corporation may terminate his
employment under this Agreement by notifying the Executive thereof at least
thirty (30) days before the effective date of such termination.

9. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Corporation or, in the case of the Corporation, to the
Corporation's principal executive offices.

4
<PAGE>

10. WITHHOLDING TAXES. The Corporation shall have the right, to the
extent permitted by law, to withhold from any payment of any kind due to the
Executive under this Agreement to satisfy the tax withholding obligations of the
Corporation under applicable law.

11. BINDING AGREEMENT. This Agreement shall be binding upon the
Executive and the Corporation on and after the date of this Agreement. The
rights and obligations of the Corporation under this Agreement shall inure to
the benefit of and shall be binding upon the Corporation and any successor of
the Corporation, and the benefits of this Agreement shall inure to the benefit
of the Executive's estate and beneficiaries in the event of the Executive's
death. Wit Capital Group, Inc. may assign this Agreement to any subsidiary,
parent or affiliate, without the consent of the Executive, and such assignment
shall not, in and of itself, constitute, a termination of employment under this
Agreement.

12. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the Executive and the Corporation with respect to the subject
matter hereof and supersedes and voids any and all prior agreements or
understandings, written or oral, regarding the subject matter hereof, whether
with the Corporation or any of its Subsidiaries, including Soundview. This
Agreement may not be changed, modified, or discharged orally, but only by an
instrument in writing signed by the parties.

13. GOVERNING LAW AND SEVERABILITY. This Agreement shall be governed by
the laws of the State of New York (without giving effect to choice of law
principles or rules thereof that would cause the application of the laws of any
jurisdiction other than the State of New York) and the invalidity or
unenforceability of any provisions hereof shall in no way affect the validity or
enforceability of any other provision. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

14. ARBITRATION. DISPUTES REGARDING THE EXECUTIVE'S EMPLOYMENT WITH THE
CORPORATION, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT
WHICH CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN THE CORPORATION AND THE
EXECUTIVE, BUT EXCLUDING ANY DISPUTES REGARDING THE EXECUTIVE'S COMPLIANCE WITH
THE RESTRICTIONS OF THE EMPLOYEE-NON-DISCLOSURE, NON-COMPETITION AND ASSIGNMENT
OF INVENTIONS AGREEMENT REFERRED TO IN SECTION 7 OF THIS AGREEMENT, SHALL BE
SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING ARBITRATION CONDUCTED
BY JAMS/ENDISPUTE, INC.'S ARBITRATION RULES APPLICABLE TO EMPLOYMENT DISPUTES,
AND THE PARTIES AGREE TO BE BOUND BY THE FINAL AWARD OF THE ARBITRATOR IN ANY
SUCH PROCEEDING. THE ARBITRATOR SHALL APPLY THE LAWS OF THE STATE OF NEW YORK
WITH RESPECT TO THE INTERPRETATION OR ENFORCEMENT OF ANY MATTER

5
<PAGE>

RELATING TO THIS AGREEMENT; IN ALL OTHER CASES THE ARBITRATOR SHALL APPLY THE
LAWS OF THE STATE SPECIFIED IN THE CORPORATION'S ALTERNATIVE DISPUTE RESOLUTION
POLICY AS IN EFFECT FROM TIME TO TIME (IF ANY). ARBITRATION MAY BE HELD IN
CONNECTICUT WITH RESPECT TO AGREEMENTS WITH EXECUTIVES BASED IN CONNECTICUT, SAN
FRANCISCO WITH RESPECT TO AGREEMENTS WITH EXECUTIVE BASED IN CALIFORNIA, OR SUCH
OTHER PLACE AS THE PARTIES HERETO MAY MUTUALLY AGREE, AND SHALL BE CONDUCTED
SOLELY BY A FORMER JUDGE. JUDGMENT UPON THE AWARD BY THE ARBITRA TOR MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.

IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.

WITNESS/ATTEST WIT CAPITAL GROUP, INC.

By:
- --------------------------- -------------------------------
Ronald W. Readmond,
Co-Chief Executive Officer

EXECUTIVE

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

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report dated February 16, 1999, included in this Registration Statement on
Form S-4 of Wit Capital Group, Inc., relating to the consolidated statements
of financial condition of Wit Capital Group, Inc. and subsidiaries as of
December 31, 1998 and 1997, and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for the years
ended December 31, 1998 and 1997 and for the period from March 27, 1996
(inception) to December 31, 1996 and to all references to our Firm included
in this Registration Statement.

/s/ARTHUR ANDERSEN LLP

New York, New York
December 15, 1999

<PAGE>

Exhibit 23.2

December 15, 1999

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of Wit Capital
Group, Inc. in connection with the proposed merger of SoundView Technology
Group, Inc. (the "Company") with Wit Capital Group, Inc. and to the inclusion
of our report dated January 21, 1999, except for Note 20, which is dated
October 31, 1999, with respect to the consolidated financial statements of
the Company for the year ended December 31, 1998, filed with the Securities
and Exchange Commission.

/s/ Ernst & Young LLP
- ------------------------

New York, New York
December 15, 1999

<PAGE>

Exhibit 23.3

[LETTERHEAD OF GOLDMAN, SACHS & CO.]

[FORM OF CONSENT LETTER]

PERSONAL AND CONFIDENTIAL

[ ], 1999

Board of Directors
Wit Capital Group, Inc.
826 Broadway
New York, New York 10003

Re: Initially Filed Registration Statement of Wit Capital
Group, Inc., relating to the registration of its
Common Stock, par value $0.01 per share, in
connection with the merger of Wit Capital Group, Inc.
(the "Company")and SoundView Technology Group, Inc.
("SoundView") pursuant to the Agreement and Plan of
Merger, dated as of October 31, 1999, among the
Company, W/S Merger Corp., a wholly owned subsidiary of
the Company, and SoundView.

Ladies and Gentlemen:

Reference is made to our opinion letter dated October 31, 1999 with respect to
the fairness from a financial point of view to the Company of the Stock
Consideration and the Cash Consideration (as defined therein), in the aggregate,
to be exchanged for each share of Common Stock, par value $0.01 per share, of
SoundView pursuant to the Agreement and Plan of Merger, dated as of October 31,
1999, among the Company, W/S Merger Corp., a wholly owned subsidiary of the
Company, and SoundView.

The foregoing opinion letter is provided for the information and assistance of
the Board of Directors of the Company in connection with its consideration of
the

<PAGE>

Wit Capital Group, Inc.
[ ], 1999
Page Two

transaction contemplated therein and is not to be used, circulated, quoted or
otherwise referred to for any other purpose, nor is it to be filed with,
included in or referred to in whole or in part in any registration statement,
proxy statement or any other document, except in accordance with our prior
written consent. We understand that the Company has determined to include our
opinion in the above-referenced Registration Statement.

In that regard, we hereby consent to the reference to the opinion of our Firm
under the captions "Summary of Proxy Statement/Prospectus; Opinion of Wit
Capital's Financial Advisor,""The Merger; Background of the Merger," "The
Merger; Reasons for the Merger; Wit Capital's Reasons for the Merger" and "The
Merger; Opinion of Wit Capital's Financial Advisor," and to the inclusion of the
foregoing opinion in the Proxy Statement/Prospectus included in the
above-mentioned Registration Statement. Notwithstanding the foregoing, it is
understood that our consent is being delivered solely in connection with the
filing of the above-mentioned version of the Registration Statement and that our
opinion is not to be used, circulated, quoted or otherwise referred to for any
other purpose, nor is it to be filed with, included in or referred to in whole
or in part in any registration statement (including any subsequent amendments to
the above-mentioned Registration Statement), proxy statement or any other
document, except in accordance with our prior written consent. In giving such
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933 or the
rules and regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

- ----------------------
GOLDMAN, SACHS & CO.

<PAGE>
Exhibit 99.2

INSTRUCTIONS FOR VOTING YOUR PROXY

Wit Capital Group, Inc. is offering stockholders of record three alternative
ways of voting your proxies:
- - BY TELEPHONE (using a touch-tone telephone)- THROUGH THE INTERNET (using a
browser)- BY Mail (traditional method)

Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you had returned your proxy card. We encourage you to
use these cost effective and convenient ways of voting, 24 hours a day, 7 days a
week.

/TELEPHONE VOTING/ Available only until 5:00 p.m. Eastern time on
January __, 2000

- - This method of voting is available for residents of the U.S. and Canada.
- - On a touch tone telephone, call TOLL FREE 1-800-[ ],
24 hours a day, 7 days a week.
- - You will be asked to enter ONLY the control number shown below.
- - Have your proxy card ready, then follow these instructions:

OPTION 1: To vote FOR a proposal, press 1. OPTION 2: To vote AGAINST a
proposal, press 2. OPTION 3: To ABSTAIN from voting on a proposal, press 3.

- - Your vote will be confirmed and cast as you directed.

/INTERNET VOTING/ Available only until 5:00 p.m. Eastern time on
January __, 2000

- - Visit our Internet voting website at http://cybervote.georgeson.com.
- - Enter the Company Number AND Control Number shown below and follow the
instructions on your screen.
- - You will incur only your usual Internet charges.

/VOTING BY MAIL/

- - Simply mark, sign and date your proxy card and return it in the postage-paid
envelope.
- - If you are voting by telephone or the Internet, please do not mail your proxy
card.

/COMPANY NUMBER/ /CONTROL NUMBER/

TO VOTE BY MAIL, PLEASE DETACH CONSENT CARD HERE
- -------------------------------------------------------------------------------

/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS INDICATED, THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS BELOW.

<TABLE>

<S> <C> <C> <C> <C>
1. To consider and vote on a proposal to approve For Against Abstain Date , 1999
the Agreement and Plan of Merger, dated as of / / / / / / ------------------------
October 31, 1999, by and among Wit Capital
Group, Inc., W/S Merger Corp. and Soundview ------------------------
Technology Group, Inc.
------------------------

2. To consider and vote on a proposal to approve For Against Abstain SIGNATURE(S)
an amend ment to the 1999 Stock Incentive Plan / / / / / /
to increase the num ber of shares reserved for
issuance under the Stock Incentive Plan to Please sign your name exactly as it
27,350,000 shares. appears hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give
3. To consider and vote on a proposal to approve an For Against Abstain your full title as it appears
amendment to the 1999 Stock Incentive Plan to / / / / / / hereon. When signing as joint
limit the maximum number of options and other tenants, all parties in the joint
awards which may be granted to an employee in any tenancy must sign. When a proxy
fiscal year to ensure compliance with Section is given by a corporation, it
162(m) under the Internal Revenue Code. should be signed by an authorized
officer and the corporate seal
affixed. No postage is required if
4. Other matters as may properly come before the returned in the enclosed envelope
special meeting or any adjournment or adjournments and mailed in the United States.
thereof.
PLEASE SIGN, DATE AND MAIL THIS
PROXY IMMEDIATELY IN THE ENCLOSED
ENVELOPE.

</TABLE>

<PAGE>

TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- -------------------------------------------------------------------------------
WIT CAPITAL GROUP, INC.
SPECIAL MEETING OF STOCKHOLDERS
JANUARY __, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

P The undersigned stockholder of Wit Capital Group, Inc., a Delaware
corporation (the "Company"), acknowledges receipt of the Notice of Special
R Meeting of Stockholders and Proxy Statement, dated January __, 2000, and
hereby constitutes and appoints [ ] or [ ], and either jointly or severally,
O to vote all shares of Common Stock of which the undersigned would be
entitled to vote at the Special Meeting of Stockholders, and at any
X adjournment or adjournments thereof, hereby revoking any proxy or proxies
heretofore given and ratifying and confirming all that said proxies may do
Y or cause to be done by virtue thereof with respect to the following matters: