HEALTHCENTRAL COM, DEFM14A, 2000-05-09

HEALTHCENTRAL COM
DEFM14A, 2000-05-09
COMPUTER INTEGRATED SYSTEMS DESIGN

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

HealthCentral.com
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[_] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[X] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

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HEALTHCENTRAL.COM
6001 SHELLMOUND STREET, SUITE 800
EMERYVILLE, CA 94608

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 16, 2000

The annual meeting of stockholders of HealthCentral.com, a Delaware
corporation, will be held on Friday, June 16, 2000, at 9:00 a.m. local time, at
the Berkeley Marina Radisson Hotel, 200 Marina Boulevard, Berkeley, California
94710, for the following purposes:

1. To approve the merger of a wholly owned subsidiary of HealthCentral.com
with and into Vitamins.com, Inc. and the issuance of shares of
HealthCentral.com common stock to the stockholders of Vitamins.com, Inc.
pursuant to the Agreement and Plan of Reorganization and Merger, dated
as of March 15, 2000, among HealthCentral.com, HCC Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of HealthCentral.com,
and Vitamins.com, Inc., a Delaware corporation. Approval of the merger
will constitute approval of the appointment of Robert M. Haft and C.
Sage Givens to HealthCentral.com's board of directors;

2. To elect two directors of HealthCentral.com to serve until 2003 or until
their successors are elected and qualified;

3. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants of HealthCentral.com for the fiscal year ending December 31,
2000; and

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

Each of the foregoing items of business is more fully described in the Proxy
Statement that accompanies this notice and a copy of the merger agreement is
attached as Appendix A to the Proxy Statement.

Only stockholders of record at the close of business on May 8, 2000 are
entitled to notice of and to vote at the annual meeting and at any
continuation, postponement or adjournment thereof, including, without
limitation, potential adjournments or postponements of the annual meeting for
the purposes of soliciting additional proxies in order to approve and adopt the
foregoing proposals.

Your vote is important. All stockholders are cordially invited and
encouraged to attend the annual meeting. To ensure your representation at the
annual meeting, please carefully read the accompanying Proxy Statement, which
describes the matters to be voted on at the annual meeting, and sign, date and
return the enclosed proxy card in the reply envelope provided. Should you
receive more than one proxy because your shares are registered in different
names and addresses, each proxy should be returned to assure that all your
shares will be voted. If you attend the annual meeting and vote in person, your
proxy will be revoked automatically and only your vote at the annual meeting
will be counted. The prompt return of your proxy card will assist us in
preparing for the annual meeting.

BY ORDER OF THE BOARD OF DIRECTORS,

/s/ Mark A. Medearis
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Mark A. Medearis
Secretary
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HEALTHCENTRAL.COM
6001 SHELLMOUND STREET, SUITE 800
EMERYVILLE, CA 94608

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PROXY STATEMENT

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May 15, 2000

This Proxy Statement is furnished in connection with the solicitation by the
board of directors of HealthCentral.com ("HealthCentral") of proxies for use at
the annual meeting of stockholders to be held on June 16, 2000 and any
continuation, adjournment or postponement thereof. At the annual meeting,
stockholders will be asked to approve the merger of a wholly owned subsidiary
of HealthCentral with and into Vitamins.com, Inc. ("Vitamins.com") and the
issuance of shares of HealthCentral common stock to the stockholders of
Vitamins.com pursuant to the Agreement and Plan of Reorganization and Merger,
dated as of March 15, 2000, among HealthCentral, HCC Acquisition Corp., a
wholly owned subsidiary of HealthCentral, and Vitamins.com. Consummation of the
merger will result in Vitamins.com becoming a wholly owned subsidiary of
HealthCentral, and in the stockholders of Vitamins.com receiving shares of the
common stock of HealthCentral. Approval of the merger will constitute approval
of the appointment of Robert M. Haft and C. Sage Givens to HealthCentral's
board of directors. At the annual meeting, stockholders will also be asked to
elect two other directors of HealthCentral to serve until 2003 or until their
successors are elected and qualified, and to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants of HealthCentral for the
fiscal year ending December 31, 2000.

As of May 8, 2000, HealthCentral had 22,703,659 shares of common stock
outstanding. Only stockholders of record at the close of business on May 8,
2000, will be entitled to vote at the annual meeting. Each stockholder will be
entitled to one vote for each share of common stock outstanding in his or her
name on the records of HealthCentral. Assuming the presence of a quorum,
approval of the merger and the issuance of shares and the ratification of the
independent accountants require the affirmative vote of a majority of the total
votes cast on each proposal, and election of the nominees to the board requires
a plurality of the votes of the shares present in person or represented by
proxy and entitled to vote on the proposal.

All proxies duly executed and received will be voted on all business
properly presented at the annual meeting and any adjournment or postponement
thereof. Only such business as is brought before the annual meeting by or at
the direction of the board of directors will be conducted at the annual
meeting. Proxies that specify a vote on a proposal will be voted in accordance
with such specification. Proxies that do not specify a vote on a proposal will
be voted in accordance with the recommendation of the board of directors. If a
HealthCentral stockholder abstains from voting or does not vote, either in
person or by proxy, such abstention or non-vote will have no effect on the
voting of the proposals. The board of directors knows of no business to be
brought before the annual meeting other than as described in this Proxy
Statement. However, if other business is properly brought before the annual
meeting, the holder of the proxies will vote on those proposals in his
discretion. A stockholder voting by means of a proxy has the power to revoke it
at any time before it is exercised by submitting another proxy bearing a later
date, by notifying the Secretary of HealthCentral in writing of such revocation
or by voting in person at the annual meeting.

The board of directors of HealthCentral, after careful consideration, has
approved the merger agreement, has declared the merger advisable and in the
best interests of HealthCentral and its stockholders and recommends that you
vote "for" (1) the approval of the merger and the issuance of HealthCentral
common stock pursuant to the merger agreement, (2) the election of the
nominated directors and (3) the ratification of the appointed independent
accountants.

HealthCentral will pay the expense of soliciting proxies. Proxies will be
solicited by mail. Proxies may also be solicited by telephone calls or other
electronic means, or personal calls by officers, directors, or employees of
HealthCentral, none of whom will be specially compensated for soliciting
proxies. This Proxy Statement and the accompanying proxy were mailed on or
about May 16, 2000.
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TABLE OF CONTENTS

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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE......................... 1

SUMMARY TERM SHEET FOR ACQUISITION OF VITAMINS.COM........................ 1

QUESTIONS AND ANSWERS..................................................... 1

SUMMARY OF THE PROXY STATEMENT............................................ 3
Date, Time and Place of Annual Meeting.................................... 3
Purpose of Annual Meeting................................................. 3
Voting Rights............................................................. 3
Required Votes............................................................ 3
The Companies Involved in the Merger...................................... 4
Summary of the Merger..................................................... 4

FORWARD-LOOKING STATEMENTS IN THIS PROXY STATEMENT........................ 7

HEALTHCENTRAL SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA............. 8

VITAMINS.COM SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA.............. 9

UNAUDITED SELECTED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION..... 10

PRO FORMA FINANCIAL DATA.................................................. 12
Unaudited Pro Forma Combined Condensed Balance Sheet...................... 13
Unaudited Pro Forma Combined Statements of Operations..................... 14
Notes to Unaudited Pro Forma Combined Condensed Financial Statements...... 17

COMPARATIVE PER SHARE DATA................................................ 19

THE ANNUAL MEETING........................................................ 20
Date, Time and Place of Annual Meeting.................................... 20
Purpose of Annual Meeting................................................. 20
Votes Required............................................................ 20
Record Date; Outstanding Shares; Quorum; Voting Rights.................... 21
Revocation of Proxies..................................................... 21
Expenses of Proxy Solicitation............................................ 21

PROPOSAL NO. 1--APPROVAL OF THE MERGER.................................... 22
Approval of the Merger and the Issuance of Shares......................... 22
Required Votes............................................................ 22
Recommendation of the Board............................................... 22
Risk Factors Relating to the Merger....................................... 22
HealthCentral may not be able to achieve the benefits it expects to
result from the merger................................................. 22
The exchange ratio for HealthCentral common stock that Vitamins.com
stockholders will receive in the merger depends on the value of
HealthCentral's stock, and may change in the event of any change in
HealthCentral's stock price. .......................................... 23
The merger could adversely affect HealthCentral's combined financial
results or the market price of its common stock. ...................... 23
Uncertainties associated with the merger may cause HealthCentral or
Vitamins.com to lose customers. ....................................... 23
Failure to complete the Merger could hurt HealthCentral's business. .... 23
We may be exposed to liabilities that are not covered by the
indemnification available under the merger agreement, which may harm
our business, results of operation and financial condition. ........... 24
It is likely that HealthCentral will continue to experience operating
losses and negative cash flow from operations.......................... 24
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TABLE OF CONTENTS--(Continued)

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The Combined Company's continuing need for significant capital could
adversely affect our earnings and cash flow. ........................... 24
As a consequence of the merger, our business may become subject to new or
increased risks......................................................... 24
Special Factors About the Merger........................................... 25
Information Concerning Vitamins.com...................................... 25
Background of the Merger................................................. 25
HealthCentral's Reasons for the Merger................................... 27
Opinion of Financial Advisor............................................. 28
Interests of Certain Directors and Officers in the Merger................ 31
Government and Regulatory Approval....................................... 32
Accounting Treatment..................................................... 32
U.S. Federal Income Tax Consequences of the Merger....................... 32
Appraisal Rights......................................................... 32
Resale of HealthCentral Stock............................................ 33
Operations Following the Merger.......................................... 33
Terms of the Merger........................................................ 33
General; Effective Time and Effects of the Merger........................ 33
Directors of HealthCentral Immediately Following the Merger.............. 34
Exchange Ratio........................................................... 34
No Fractional Shares..................................................... 35
Exchange Agent; Exchange of Certificates................................. 35
Representations and Warranties........................................... 35
Conduct of Business Pending the Merger................................... 36
Interim Loans............................................................ 37
No Solicitation by Vitamins.com.......................................... 37
Conditions to the Completion of the Merger............................... 37
Escrow and Indemnification............................................... 39
Registration Rights...................................................... 39
Expenses................................................................. 40
Termination.............................................................. 40
Termination Payments Payable by HealthCentral............................ 40
Amendment................................................................ 41
Treatment of Vitamins.com Stock Options.................................. 41
Voting Agreement......................................................... 41
Written Consent and Agreement of Stockholders of Vitamins.com............ 41
Executive Employment Agreements and Non-Competition Agreements........... 42

PROPOSAL NO. 2--ELECTION OF DIRECTORS...................................... 43
Nominees for Election as Director to Serve Until 2003...................... 43
Required Votes............................................................. 43
Recommendation of the Board................................................ 43
Board Meetings and Committees.............................................. 43
Report of the Compensation Committee of the Board of Directors on Executive
Compensation.............................................................. 44
Executive Officer and Director Compensation................................ 46
Compensation Committee Interlocks and Insider Participation................ 52
Security Ownership of Certain Beneficial Owners and Management............. 52
Stock Performance Graph.................................................... 54
Certain Relationships and Related Transactions............................. 54

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TABLE OF CONTENTS--(Continued)

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PROPOSAL NO. 3--RATIFICATION OF INDEPENDENT ACCOUNTANTS................... 58
Required Votes............................................................ 58
Recommendation of the Board............................................... 58

INFORMATION ABOUT VITAMINS.COM, INC....................................... 59
Business Description...................................................... 59
Business Strategy......................................................... 60
Growth Strategy........................................................... 61
The Vitamins.Com Internet Website......................................... 61
The Vitamins.Com Catalog.................................................. 62
The Vitamins.Com Retail Stores............................................ 63
Merchandising, Advertising And Marketing Strategy......................... 63
Technology and Systems.................................................... 64
Order Processing And Fulfillment.......................................... 64
Competition............................................................... 64
Government Regulation..................................................... 66
Employees................................................................. 67
Intellectual Property..................................................... 68
Facilities................................................................ 68
Legal Proceedings......................................................... 68
Market for Common Equity and Related Stockholder Matters.................. 68

VITAMINS.COM'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................................ 69
Overview.................................................................. 69
Results of Operations..................................................... 69
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998..... 70
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997..... 71
Liquidity and Capital Resources........................................... 71
Recent Accounting Pronouncements.......................................... 72
Year 2000 Compliance...................................................... 73

OTHER MATTERS............................................................. 73
Stockholder Proposals..................................................... 73
Where You Can Find More Information....................................... 73

INDEX TO FINANCIAL STATEMENTS............................................. F-1
Report of Independent Public Accountants.................................. F-2
Consolidated Balance Sheets as of December 31, 1999 and 1998.............. F-3
Consolidated Statements of Operations for the Years Ended December 31,
1999, 1998 and 1997...................................................... F-4
Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 1999, 1998 and 1997......................................... F-5
Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997...................................................... F-6
Notes to Consolidated Financial Statements for the Years Ended December
31, 1999, 1998 and 1997.................................................. F-7

APPENDICES
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The Securities and Exchange Commission (the "SEC") allows this Proxy
Statement to incorporate by reference information which is presented to
stockholders simultaneously with this document. Important business and
financial information about HealthCentral can be found in our Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, filed with the SEC on
March 10, 2000, as amended on April 18, 2000, which is included in the
materials you received with this Proxy Statement and is hereby incorporated by
reference.

SUMMARY TERM SHEET FOR ACQUISITION OF VITAMINS.COM

This Proxy Statement solicits your vote on several matters at
HealthCentral's annual meeting of stockholders on June 16, 2000. The
acquisition of Vitamins.com by HealthCentral is one of the matters that will be
voted on at the annual meeting. HealthCentral proposes to acquire Vitamins.com
on the following terms:

. HealthCentral will acquire all of the shares of capital stock of
Vitamins.com in a merger transaction in exchange for up to $103,500,000
in HealthCentral common stock. The number of shares of HealthCentral
common stock that holders of Vitamins.com capital stock will receive will
vary based on the average closing price of our common stock prior to the
merger, and could result, at the time of the merger, in Vitamins.com
stockholders holding up to one share less than 50% of the stock of the
combined company. See "Terms of the Merger--Exchange Ratio" on page 34.

. Upon the consummation of the merger, Vitamins.com, Inc. will be a wholly
owned subsidiary of HealthCentral. See "Terms of the Merger--General;
Effective Time and Effects of the Merger" on page 33.

. 10% of our common stock otherwise issuable to the Vitamins.com
stockholders will be held in escrow following the merger to indemnify
HealthCentral against losses arising from any breaches of Vitamins.com's
representations, warranties or covenants under the merger agreement, and
from certain pending claims against Vitamins.com. See "Terms of the
Merger--Escrow and Indemnification" on page 39.

. If the merger is consummated, Robert M. Haft and C. Sage Givens will be
placed on the board of directors of HealthCentral to serve until 2003 or
until their successors are elected and qualified. Mr. Haft will continue
to serve as the President of Vitamins.com. See "Terms of the Merger--
Directors of HealthCentral Immediately Following the Merger" on page 34.

QUESTIONS AND ANSWERS

Q. When do you expect the merger to be completed?

A. We are working to complete the merger as soon as possible. In addition to
obtaining stockholder approval, we must satisfy certain other conditions set
forth in the merger agreement. We hope to complete the merger by June 19,
2000.

Q. What will Vitamins.com stockholders receive in the merger?

A. Vitamins.com stockholders will receive up to $103,500,000 in HealthCentral
common stock, subject to specified adjustments and to the escrow provisions
described herein. The exact number of HealthCentral shares to be issued to
Vitamins.com stockholders will depend on the average trading price of
HealthCentral common stock for the ten days preceding the business day prior
to the closing date of the merger. For example, if the average closing price
of our common stock for the ten-day period were $4.125 (the closing price of
our stock on May 4, 2000), and there were no adjustments to the $103,500,000
purchase price, stockholders of Vitamins.com would receive .447 shares of
our common stock for each share of Vitamins.com stock they own, or an
aggregate of 25,090,909 shares. However, under the terms of

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the merger agreement the number of shares of our common stock that
Vitamins.com stockholders may receive in exchange for their Vitamins.com
stock cannot exceed the number of shares of our common stock outstanding
immediately prior to the closing of the merger, less one. Therefore, if the
number of our shares outstanding immediately prior to the merger was less
than 25,090,909, the number of shares of our common stock that Vitamins.com
stockholders would receive would be capped, and immediately after the close
of the merger Vitamins.com stockholders would hold one share less than 50%
of the outstanding shares of the combined company.

Q. When and where will the annual meeting take place?

A. The annual meeting will be held on Friday, June 16, 2000, at 9:00 a.m.
local time, at the Berkeley Marina Radisson Hotel, 200 Marina Boulevard,
Berkeley, California 94710.

Q. What do I need to do now?

A. After carefully reviewing this Proxy Statement, indicate on your proxy card
how you want to vote, sign it and mail it in the enclosed return envelope
as soon as possible. If you sign and send in your card and do not indicate
how you want to vote, your proxy will be counted as a vote in favor of the
merger and the other proposals at the annual meeting or any continuation,
adjournment or postponement thereof.

Q. Can I vote my shares in person?

A. Yes. You may attend the annual meeting and vote your shares in person.

Q. What do I do if I want to change my vote?

A. You may change your vote by delivering a signed notice of revocation or a
later-dated, signed proxy to HealthCentral's corporate Secretary before the
stockholders' meeting, or by attending the stockholders' meeting and voting
in person.

Q. If my shares are held in "street name" by my broker, will my broker vote my
shares for me?

A. Your broker cannot vote your shares for or against the merger without
instructions from you. You should instruct your broker how to vote your
shares, following the directions provided by your broker on how to instruct
your broker to vote your shares.

Q. Who can help answer my questions?

A. If you have any questions about the merger or any other questions relating
to this Proxy Statement, please contact Fred Toney, HealthCentral's
Executive Vice President and Chief Financial Officer, at (510) 250-2603.

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SUMMARY OF THE PROXY STATEMENT

The following is a summary of the information contained elsewhere in this
Proxy Statement and the attached appendices. This summary does not purport to
contain a complete statement of all material information relating to the merger
agreement, the merger, or the other matters discussed herein and is subject to,
and is qualified in its entirety by, the more detailed information contained or
incorporated by reference in or attached to this Proxy Statement. HealthCentral
stockholders should carefully read this Proxy Statement in its entirety, as
well as the appendices attached hereto.

Date, Time and Place of Annual Meeting

The annual meeting of stockholders of HealthCentral will be held on Friday,
June 16, 2000, at 9:00 a.m. local time, at the Berkeley Marina Radisson Hotel,
200 Marina Blvd., Berkeley, California 94710.

Purpose of Annual Meeting

At the Annual meeting, HealthCentral stockholders will be asked to:

1. Approve the merger of a wholly owned subsidiary of HealthCentral with
and into Vitamins.com and the issuance of shares of HealthCentral common
stock to the stockholders of Vitamins.com pursuant to the Agreement and
Plan of Reorganization and Merger, dated as of March 15, 2000, among
HealthCentral, HCC Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of HealthCentral, and Vitamins.com, a Delaware
corporation. Approval of the merger will constitute approval of the
appointment of Robert M. Haft and C. Sage Givens to HealthCentral's
board of directors;

2. Elect two directors of HealthCentral to serve until 2003 or until their
successors are elected and qualified;

3. Ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants of HealthCentral for the fiscal year ending December 31,
2000; and

4. Transact any other business as may properly come before the meeting and
any continuation, adjournment or postponement thereof.

Voting Rights

The board of directors has set the close of business on May 8, 2000 as the
record date for determining stockholders entitled to vote at the annual
meeting. At the annual meeting, each share of HealthCentral common stock
outstanding on the record date will be entitled to one vote. As of the record
date, there were 22,703,659 shares of HealthCentral common stock outstanding
and entitled to vote. As of that date, there were approximately 163 holders of
record of HealthCentral common stock.

Any proxy given at any time by a stockholder may be revoked by the
stockholder at any time before it is voted by delivering a written notice to
the Secretary of HealthCentral, by executing and delivering a later-dated proxy
or by attending the annual meeting and voting in person. Attendance at the
annual meeting by a stockholder who has executed and delivered a proxy to
HealthCentral will not in and of itself constitute a revocation of the proxy.

Required Votes

Assuming the presence of a quorum, the approval of the merger and the
issuance of shares and the ratification of the independent accountants require
the affirmative vote of a majority of the total votes cast on each proposal,
and election of the nominees to the board of directors requires a plurality of
the votes of the shares present in person or represented by proxy and entitled
to vote on the proposal.

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At the time of the execution of the merger agreement, holders of
approximately 41% of HealthCentral's common stock entered into voting
agreements in which they agreed to vote their shares in favor of the merger and
the issuance of shares of HealthCentral common stock to Vitamins.com
stockholders in connection with the merger.

The Companies Involved in the Merger

HealthCentral.com
6001 Shellmound Street, Suite 800
Emeryville, California 94608
(510) 250-2500

HealthCentral provides online healthcare information and sells health-
related products to consumers through the HealthCentral online network. This
network of information services provides consumers with highly personalized
interactive tools, including customized newsletters, personalized health
information pages and personalized risk assessments. HealthCentral's online
drugstore, HealthCentralRx.com, carries over 23,000 different health-related
products and has access to 85 Pharmacy Benefit Manager contracts. In addition,
HealthCentral enables healthcare institutions to provide healthcare information
to their patients and consumers through private label websites that
HealthCentral designs, hosts and maintains.

Vitamins.com, Inc.
2924 Telestar Court
Falls Church, Virginia 22042
(703) 645-8800

Vitamins.com is a retailer that provides vitamins, minerals and other
nutritional supplements, as well as related health and wellness products and
information. Vitamins.com operates an online retail website at
www.vitamins.com, a catalog division and ten retail stores in the Maryland and
Virginia suburbs of Washington, DC, as well as its own warehouse and
fulfillment facility. Vitamins.com offers its customers over 4,000 different
branded and private label products, and provides information on nutritional,
health, wellness and related matters.

HCC Acquisition Corp.
6001 Shellmound Street, Suite 800
Emeryville, California 94608
(510) 250-2500

HCC Acquisition Corp. is a Delaware corporation organized by HealthCentral
for the purpose of effecting the merger. It has no material assets and has not
engaged in any activities except in connection with the merger.

Summary of the Merger

Merger Consideration (See p. 33)

If the merger is completed, holders of Vitamins.com capital stock will
receive $103,500,000 in HealthCentral common stock, less certain transaction
expenses over $100,000 incurred by Vitamins.com and subject to specified
limitations on the number of shares to be issued. The exact number of shares
Vitamins.com stockholders will receive will be calculated using an exchange
ratio that is based on the average closing price of our common stock for the
ten days preceding the last business day prior to the effective time of the
merger. For example, if the average closing price of our common stock for the
ten-day period were $4.125 (the closing price of our stock on May 4, 2000), and
there was no adjustment to the $103,500,000 purchase price, stockholders of

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Vitamins.com would receive .447 shares of our common stock for each share of
Vitamins.com stock they own, or an aggregate of 25,090,909 shares. However,
under the terms of the merger agreement the number of shares of our common
stock that Vitamins.com stockholders may receive in exchange for their
Vitamins.com stock cannot exceed the number of shares of our common stock
outstanding immediately prior to the closing of the merger, less one.
Therefore, if the number of our shares outstanding immediately prior to the
merger was less than 25,090,909, the number of shares of our common stock that
Vitamins.com stockholders would receive would be capped, and immediately after
the close of the merger Vitamins.com stockholders would hold one share less
than 50% of the outstanding shares of the combined company.

Recommendation of HealthCentral's Board of Directors (See p. 22)

On March 14, 2000, HealthCentral's board of directors, after careful
consideration, approved the merger agreement and the merger, and declared the
merger advisable and in the best interests of HealthCentral and the
HealthCentral stockholders. The HealthCentral board of directors recommends
that you vote "for" the approval of the merger and the issuance of shares
pursuant to the merger agreement.

To review the background and reasons for the merger in greater detail, as
well as certain risks related to the merger, see pages 25 and 27.

Stock Options (See p. 41)

When the merger is completed, all outstanding options to purchase
Vitamins.com stock will be assumed by HealthCentral and will be converted into
options to purchase HealthCentral common stock.

Conditions to Completion of the Merger (See p. 37)

The completion of the merger is subject to various conditions, of which the
primary ones are:

. Stockholders of HealthCentral must approve the merger and the issuance of
shares pursuant to the merger agreement; and

. HealthCentral and Vitamins.com must obtain all necessary government and
regulatory approvals, including approval under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. Early termination of the waiting
period required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976 was received on April 14, 2000.

Board Composition (See p. 34)

If the merger is consummated, the number of directors on our board will be
increased from nine to ten, and Robert M. Haft and C. Sage Givens will become
members of Class I, to serve until 2003 or until their successors are elected
and qualified. If the merger is not completed, the number of directors on our
board will be decreased from nine to eight, and there will be only two members
of Class I.

Termination of the Merger Agreement (See p. 40)

The boards of directors of HealthCentral and Vitamins.com may jointly agree
in writing to terminate the merger agreement without completing the merger. In
addition, either company may terminate the merger agreement prior to completion
of the merger if:

. there has been a material breach of any representation, warranty or
covenant by the other party, which breach has not been cured within 15
days; or

. the merger is not completed by September 30, 2000.

5
<PAGE>

Termination Payments (See p. 40)

Under the merger agreement, if the merger does not occur for any reason
other than as a result of a breach by Vitamins.com of its representations,
warranties or covenants, we are required to purchase up to $6,000,000 in shares
of Vitamins.com Series C Preferred Stock.

Escrow and Indemnification (See p. 39)

Under the merger agreement, 10% of the shares of our common stock otherwise
issuable to the Vitamins.com stockholders will be held in escrow until the
first anniversary of the effective date of the merger or until we have issued
our first independent audit report showing our combined results of operations
with Vitamins.com. The shares held in escrow will be available to indemnify us
against potential breaches of Vitamins.com's representations, warranties or
covenants under the merger agreement, and against certain pending claims
against Vitamins.com.

The Voting Agreements (See p. 41)

Concurrently with the execution of the merger agreement, holders of
approximately 41% of our outstanding stock entered into voting agreements under
which they agreed to vote their shares in favor of the merger.

Appraisal Rights (See p. 32)

Our stockholders are not entitled to appraisal rights in this transaction.

Accounting Treatment of the Merger (See p. 32)

HealthCentral and Vitamins.com intend for the business combination to be
effected by the merger to be accounted for as a pooling-of-interests.

Ability to Sell HealthCentral Stock (See p. 33)

The shares to be issued to Vitamins.com stockholders pursuant to the merger
are restricted shares, and may not be sold or exchanged in the public market
except pursuant to an effective registration statement covering those shares or
an exemption from the applicable registration requirements. Pursuant to the
merger agreement, we have agreed to file a registration statement covering
those shares no earlier than December 2000 and no later than 210 days following
the merger.

6
<PAGE>

FORWARD-LOOKING STATEMENTS IN THIS PROXY STATEMENT

This Proxy Statement, including information incorporated by reference,
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 with respect to various matters,
including: the business strategies and projected synergies to be derived from
the merger; pro forma information relating to the merger; tax treatment of the
merger; regulatory matters; competitive positions; growth opportunities for the
combined company; plans and objectives of management; and the stock price of
HealthCentral. Statements in this Proxy Statement that are not historical facts
are identified as "forward-looking statements" for the purpose of the safe
harbor provided by Section 21E of the Securities Exchange Act of 1934 and
Section 27A of the Securities Act of 1933. These forward-looking statements,
including those relating to the future business prospects, revenues and income
of HealthCentral, Vitamins.com and the combined company, wherever they appear
in this Proxy Statement or material incorporated by reference, are necessarily
estimates reflecting the best judgment of the senior management of the subject
company. These forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially from those
suggested by the forward-looking statements. These forward-looking statements
should, therefore, be considered in light of various factors, including those
set forth in this Proxy Statement. Important factors that could cause actual
results to differ materially from estimates or projections contained in the
forward-looking statements include, without limitation, those factors set forth
in "Risk Factors Relating to the Merger" beginning on page 22 and those factors
discussed in HealthCentral's Annual Report on Form 10-K for the year ended
December 31, 1999, as amended, incorporated by reference in this Proxy
Statement.

Words such as "estimate," "project," "plan," "intend," "expect," "believe"
and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are found at various places throughout this Proxy
Statement and HealthCentral's Annual Report on Form 10-K for the year ended
December 31, 1999, as amended, which is incorporated herein by reference. You
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this Proxy Statement or, in the case of
HealthCentral's Annual Report on Form 10-K, as amended, as of the date of that
document.

You should understand that it is not possible to predict or identify all
factors that could affect HealthCentral's and Vitamins.com's ability to achieve
the results described in any forward-looking statements, and that the factors
referred to above should not be considered a complete statement of all
potential risks and uncertainties. You should also realize that if underlying
assumptions prove inaccurate or unknown risks or uncertainties materialize,
actual results could vary materially from HealthCentral's and Vitamins.com's
expectations.

7
<PAGE>

HEALTHCENTRAL SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA

The following selected consolidated statement of operations data for the
years ended December 31, 1997, 1998 and 1999 and the balance sheet data at
December 31, 1998 and 1999 are derived from the audited consolidated financial
statements included in HealthCentral's annual report filed on Form 10-K for the
year ended December 31, 1999, as amended. The statement of operations data for
the period from inception to December 31, 1996 and the balance sheet data at
December 31, 1996 and 1997 are derived from audited financial statements not
included in HealthCentral's annual report filed on Form 10-K for the year ended
December 31, 1999, as amended. The selected historical financial data should be
read in conjunction with HealthCentral's consolidated financial statements and
the notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in HealthCentral's annual report
filed on Form 10-K for the year ended December 31, 1999, as amended, which was
provided to you with this Proxy Statement.

<TABLE>
<CAPTION>
Period from
Inception to Years Ended December 31,
December 31, ----------------------------------
1996 1997 1998 1999
------------ --------- --------- ------------
<S> <C> <C> <C> <C>
Statement of Operations Data:
Revenues:
Advertising and eCommerce... $ -- $ -- $ 15,259 $ 901,331
Content subscription and
license.................... -- -- -- 287,422
--------- --------- --------- ------------
Total revenues............. -- -- 15,259 1,188,753
--------- --------- --------- ------------
Operating and other expenses:
Product, content and product
development................ -- -- 136,788 4,398,580
Sales and marketing......... -- 848 141,516 9,159,290
General and administrative.. 86 300 78,549 2,045,795
Amortization of intangible
assets..................... -- -- -- 3,333,961
Stock compensation.......... -- -- 104,641 4,939,694
Acquired in-process research
and development............ -- -- -- 804,525
--------- --------- --------- ------------
Total operating and other
expenses.................. 86 1,148 461,494 24,681,845
--------- --------- --------- ------------
Loss from operations......... (86) (1,148) (446,235) (23,493,092)
Interest income, net......... -- -- -- 493,706
--------- --------- --------- ------------
Net loss..................... (86) (1,148) (446,235) (22,999,386)
Preferred stock dividend..... -- -- -- 11,388,000
--------- --------- --------- ------------
Net loss attributable to
common stockholders......... $ (86) $ (1,148) $(446,235) $(34,387,386)
========= ========= ========= ============
Basic and diluted net loss
per share................... $ -- $ -- $ (0.10) $ (4.96)
========= ========= ========= ============
Shares used in computing
basic and diluted net loss
per share................... 3,855,486 4,610,000 4,669,628 6,926,485
========= ========= ========= ============
</TABLE>

<TABLE>
<CAPTION>
December 31,
-------------------------------------
1996 1997 1998 1999
------ ------ ---------- ------------
<S> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents................ $7,414 $6,773 $1,091,551 $ 77,654,947
Working capital.......................... 7,414 6,773 1,039,092 75,766,503
Total assets............................. 7,414 6,773 1,670,281 118,143,101
Long-term obligations.................... -- -- -- 292,010
Total stockholders' equity............... 7,414 6,773 1,602,633 112,173,104
</TABLE>
- --------
See Note 1 of Notes to Consolidated Financial Statements for the computation of
per share amounts.

8
<PAGE>

VITAMINS.COM SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA

The following selected consolidated statement of operations data for the
three years ended December 31, 1997, 1998 and 1999, and the balance sheet data
as of December 31, 1998 and 1999 are derived from the audited consolidated
financial statements included elsewhere in this Proxy Statement. The balance
sheet data as of December 31, 1997 is derived from audited financial statements
not included in this Proxy Statement. The balance sheet data as of December 31,
1996 and the statement of operations data for the period from inception (June
19, 1995) to December 31, 1996 are derived from unaudited consolidated
financial statements not included in this Proxy Statement. The selected
financial data should be read in conjunction with Vitamins.com's consolidated
financial statements and the notes thereto and "Vitamins.com's Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Proxy Statement.

<TABLE>
<CAPTION>
Period from
Inception to Years Ended December 31,
December 31, --------------------------------------
1996 1997 1998 1999
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Statement of Operations
Data:
Net sales................ $ -- $ 436,406 $ 4,340,297 $ 16,940,977
Cost of sales............ -- 288,751 2,646,179 11,797,099
--------- ----------- ----------- ------------
Gross profit............. -- 147,655 1,694,118 5,143,878
Website development
expense................. -- -- -- 857,712
Advertising and
marketing............... -- 154,109 324,051 7,749,174
Selling and
administrative.......... 99,449 1,254,149 2,688,008 13,438,817
Amortization............. -- -- -- 323,261
Stock-based
compensation............ -- -- -- 1,306,128
--------- ----------- ----------- ------------
99,449 1,408,258 3,012,059 23,675,092
--------- ----------- ----------- ------------
Operating loss........... (99,449) (1,260,603) (1,317,941) (18,531,214)
Loss on sale of assets... -- -- -- (32,568)
Interest income
(expense), net.......... 367 (2,997) (20,519) 284,161
--------- ----------- ----------- ------------
Net loss................. $ (99,082) $(1,263,600) $(1,338,460) $(18,279,621)
========= =========== =========== ============
Basic and diluted net
loss per common share... $ (0.10) $ (0.23) $ (0.22) $ (1.65)
========= =========== =========== ============
Weighted average common
shares outstanding...... 1,031,976 5,464,790 6,064,051 11,054,837
========= =========== =========== ============
</TABLE>

<TABLE>
<CAPTION>
December 31,
---------------------------------------------
1996 1997 1998 1999
-------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents...... $ 5,025 $ 118,159 $3,010,496 $ 6,035,125
Working capital................ (31,817) (321,150) 2,952,650 5,229,453
Total assets................... 7,760 1,462,904 6,526,378 30,694,894
Long-term obligations.......... -- 157,404 343,352 500,814
Total stockholders' equity
(deficit)..................... (29,082) 477,318 4,738,858 (14,673,448)
</TABLE>
- --------
See Note 1 of Notes to Consolidated Financial Statements for the computation of
per share amounts.

9
<PAGE>

UNAUDITED SELECTED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

The unaudited pro forma combined condensed financial information set forth
below gives effect to accounting for the merger as a pooling-of-interests,
assuming that .391 shares of HealthCentral common stock are issued in exchange
for each share of Vitamins.com capital stock. The pro forma information
combines HealthCentral's audited consolidated statements of operations for the
period from inception (August 12, 1996) to December 31, 1996 and for each of
the years in the three-year period ended December 31, 1999 with Vitamins.com
unaudited results of operations for the period from inception (June 19, 1995)
to December 31, 1996 and audited results of operations for each of the years in
the three-year period ended December 31, 1999. The unaudited pro forma combined
condensed balance sheet data as of December 31, 1996, 1997, 1998 and 1999 give
effect to the merger as if it had occurred on the earliest date presented and
combines the historical consolidated balance sheets of HealthCentral and the
historical consolidated balance sheets of Vitamins.com as of each date. This
data should be read in conjunction with the historical consolidated financial
statements of HealthCentral and Vitamins.com and the notes thereto incorporated
by reference or included elsewhere in this Proxy Statement. The unaudited pro
forma combined condensed financial statements are not necessarily indicative of
the operating results or financial position that would have been achieved had
the merger been consummated at the beginning of the periods presented and
should not be construed as representative of future operations.

10
<PAGE>

<TABLE>
<CAPTION>
Period from
Inception to Years Ended December 31,
December 31, --------------------------------------
1996 1997 1998 1999
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues:
Product sales............ $ -- $ 436,406 $ 4,340,297 16,974,927
Advertising, content and
other................... -- -- 15,259 1,154,803
---------- ----------- ----------- ------------
Total revenues.......... -- 436,406 4,355,556 18,129,730
---------- ----------- ----------- ------------
Operating and other
expenses:
Cost of product sales.... -- 288,751 2,646,179 13,453,654
Advertising, content and
other................... -- -- 136,788 5,284,502
Sales and marketing...... -- 154,957 465,567 16,908,464
General and
administrative.......... 99,535 1,254,449 2,766,557 13,799,847
Amortization of
intangible assets....... -- -- -- 3,657,222
Stock compensation....... -- -- 104,641 6,245,822
Acquired in-process
research and
development............. -- -- -- 804,525
---------- ----------- ----------- ------------
Total operating and
other expenses......... 99,535 1,698,157 6,119,732 60,154,036
---------- ----------- ----------- ------------
Loss from operations...... (99,535) (1,261,751) (1,764,176) (42,024,306)
Other expenses............ -- -- -- (32,568)
Interest income (expense),
net...................... 367 (2,997) (20,519) 777,867
---------- ----------- ----------- ------------
Net loss.................. (99,168) (1,264,748) (1,784,695) (41,279,007)
Preferred stock dividend.. -- -- -- 11,388,000
---------- ----------- ----------- ------------
Net loss attributable to
common stockholders...... $ (99,168) $(1,264,748) $(1,784,695) $(52,667,007)
========== =========== =========== ============
Basic and diluted net loss
per share attributable to
common stockholders...... $ (0.02) $ (0.19) $ (0.25) $ (1.83)
========== =========== =========== ============
Shares used in computing
basic and diluted net
loss per share
attributable to common
stockholders............. 4,162,602 6,746,733 7,040,672 28,840,602
========== =========== =========== ============
</TABLE>

<TABLE>
<CAPTION>
December 31,
---------------------------------------------
1996 1997 1998 1999
-------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalent......... $ 12,439 $ 124,932 $4,102,047 $ 83,690,072
Working capital.................. (24,403) (314,377) 3,991,742 79,520,956
Total assets..................... 15,174 1,469,677 8,196,659 148,837,995
Long-term obligations............ -- 157,404 343,352 792,824
Total stockholders' equity....... (21,668) 484,091 6,341,491 132,590,053
</TABLE>

11
<PAGE>

PRO FORMA FINANCIAL DATA

The following unaudited pro forma combined condensed financial statements
have been prepared to give effect to the merger with Vitamins.com using the
pooling-of-interests method of accounting. These financial statements reflect
certain assumptions deemed probable by HealthCentral's management regarding the
merger (e.g., that share information used in the unaudited pro forma
information approximates actual share information at the effective date). No
adjustments to the unaudited pro forma combined condensed financial statements
have been made to account for different possible results in connection with the
foregoing, as HealthCentral's management believes that the impact of such
information about varying outcomes, individually or in the aggregate, would not
be material.

The unaudited pro forma combined condensed balance sheet as of December 31,
1999 gives effect to the merger as if it had occurred on December 31, 1999, and
combines the historical consolidated balance sheet of HealthCentral and the
historical consolidated balance sheet of Vitamins.com as of such date.

The unaudited pro forma combined condensed statements of operation combine
the historical consolidated statements of operations of HealthCentral and
Vitamins.com as if the merger had occurred at the beginning of the earliest
period presented. The unaudited pro forma combined condensed statements of
operations for each of the years in the three year period ended December 31,
1999 combine the historical consolidated statements of operations of
HealthCentral for each of the years in the three year period ended December 31,
1999 with the historical consolidated results of operations of Vitamins.com for
each of the years in the three year period ended December 31, 1999.

HealthCentral and Vitamins.com estimate that they will incur direct
transaction and integration costs of approximately $1.5 million associated with
the merger, which will be charged to operations upon consummation of the
merger. In addition, it is expected that following the merger, the combined
company will incur additional costs, which cannot currently be estimated,
associated with integrating the operations of the two companies.

Unaudited pro forma combined condensed financial information is presented
for illustrative purposes only and is not necessarily indicative of the
financial position or results of operations that would have actually been
reported had the merger occurred at the beginning of the periods presented, nor
is it necessarily indicative of future financial position or results of
operations. These unaudited pro forma combined condensed financial statements
are based upon the respective historical consolidated financial statements of
HealthCentral and Vitamins.com and notes thereto, incorporated by reference or
appearing elsewhere in this Proxy Statement. These unaudited pro forma combined
condensed financial statements do not incorporate, nor do they assume, any
benefits from cost savings or synergies of operations of the combined company.

12
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
December 31, 1999
----------------------------------------------------------------
HealthCentral.com Vitamins.com Adjustments Pro Forma
----------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........... $ 77,654,947 $ 6,035,125 $ -- $ 83,690,072
Accounts receivable,
net................... 578,314 570,706 -- 1,149,020
Other receivables...... 67,080 553,503 -- 620,583
Prepaid expenses and
other current assets.. 3,144,149 907,617 -- 4,051,766
Inventory.............. -- 5,464,633 -- 5,464,633
------------ ------------ ------------ ------------
Total current assets.. 81,444,490 13,531,584 -- 94,976,074
Property and equipment,
net.................... 1,784,879 3,428,559 -- 5,213,438
Intangible assets, net.. 33,763,444 12,309,525 -- 46,072,969
Website development
costs, net............. -- 1,039,715 -- 1,039,715
Other assets............ 1,150,288 385,511 -- 1,535,799
------------ ------------ ------------ ------------
Total assets.......... $118,143,101 $ 30,694,894 $ -- $148,837,995
============ ============ ============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable....... $ 1,787,428 $ 6,854,873 $ -- $ 8,642,301
Accrued expenses....... 1,052,910 1,268,698 1,475,000 (A) 3,796,608
Deferred revenue....... 149,367 -- -- 149,367
Current portion of
obligations under
capital leases........ 147,498 178,560 -- 326,058
Notes payable.......... 2,540,784 -- -- 2,540,784
------------ ------------ ------------ ------------
Total current
liabilities.......... 5,677,987 8,302,131 1,475,000 15,455,118
Deferred rent, net of
current portion........ -- 171,727 -- 171,727
Obligations under
capital leases, net of
current portion........ 292,010 329,087 -- 621,097
------------ ------------ ------------ ------------
Total liabilities..... 5,969,997 8,802,945 1,475,000 16,247,942
Preferred stock......... -- 36,565,397 (36,565,397)(D) --
Stockholders' equity
(deficit):
Common stock........... 22,396 12,975 9,875 (B)(D) 45,246
Additional paid-in
capital............... 152,397,459 17,241,408 36,555,522 (B)(D) 206,194,389
Note receivable from
stockholder........... (405,931) (59,526) -- (465,457)
Deferred stock
compensation.......... (5,005,965) -- -- (5,005,965)
Accumulated deficit.... (34,834,855) (31,868,305) (1,475,000)(A) (68,178,160)
------------ ------------ ------------ ------------
Total stockholders'
equity (deficit)..... 112,173,104 (14,673,448) 35,090,397 132,590,053
------------ ------------ ------------ ------------
Total liabilities and
stockholders' equity
(deficit)............ $118,143,101 $ 30,694,894 $ -- $148,837,995
============ ============ ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

13
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Years Ended December 31, 1999
------------------------------------------------------------
HealthCentral.com Vitamins.com Adjustments Pro Forma
----------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Product sales.......... $ -- $ 16,940,977 $ 33,950 (E) $ 16,974,927
Advertising and
eCommerce............. 901,331 -- (901,331)(E) --
Content, subscription
and license........... 287,422 -- (287,422)(E) --
Advertising, content
and other............. -- -- 1,154,803 (E) 1,154,803
------------ ------------ ----------- ------------
Total revenues........ 1,188,753 16,940,977 -- 18,129,730
------------ ------------ ----------- ------------
Operating and other
expenses:
1,656,555
Cost of product sales.. -- 11,797,099 (C)(E) 13,453,654
Advertising, content 5,284,502
and other............. -- -- (C)(E) 5,284,502
Product, content and
product development... 4,398,580 -- (4,398,580)(E) --
Sales and marketing.... 9,159,290 7,749,174 -- 16,908,464
General and
administrative........ 2,045,795 13,438,817 (1,684,765)(C) 13,799,847
Website development
expense............... -- 857,712 (857,712)(C) --
Amortization of
intangible assets..... 3,333,961 323,261 -- 3,657,222
Stock compensation..... 4,939,694 1,306,128 -- 6,245,822
Acquired in-process
research and
development........... 804,525 -- -- 804,525
------------ ------------ ----------- ------------
Total operating and
other expenses....... 24,681,845 35,472,191 -- 60,154,036
------------ ------------ ----------- ------------
Loss from operations.... (23,493,092) (18,531,214) -- (42,024,306)
Other expenses.......... -- (32,568) -- (32,568)
Interest income, net.... 493,706 284,161 -- 777,867
------------ ------------ ----------- ------------
Net loss................ (22,999,386) (18,279,621) -- (41,279,007)
Preferred stock
dividend............... 11,388,000 -- -- 11,388,000
------------ ------------ ----------- ------------
Net loss attributable to
common stockholders.... $(34,387,386) $(18,279,621) $ -- $(52,667,007)
============ ============ =========== ============
Basic and diluted net
loss per share
attributable to common
stockholders........... $ (4.96) $ (1.83)
============ ============
Shares used in computing
basic and diluted net
loss per share
attributable to common
stockholders........... 6,926,485 28,840,602
============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

14
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
Years Ended December 31, 1998
-------------------------------------------
HealthCentral.com Vitamins.com Pro Forma
----------------- ------------ -----------
<S> <C> <C> <C>
Revenues:
Product sales................... $ -- $ 4,340,297 $ 4,340,297
Advertising..................... 15,259 -- 15,259
---------- ----------- -----------
Total revenues................. 15,259 4,340,297 4,355,556
---------- ----------- -----------
Operating and other expenses:
Cost of product sales........... -- 2,646,179 2,646,179
Advertising, content and other
............................... 136,788 -- 136,788
Sales and marketing............. 141,516 324,051 465,567
General and administrative...... 78,549 2,688,008 2,766,557
Stock compensation.............. 104,641 -- 104,641
---------- ----------- -----------
Total operating and other
expenses...................... 461,494 5,658,238 6,119,732
---------- ----------- -----------
Loss from operations............. (446,235) (1,317,941) (1,764,176)
Interest (expense), net.......... -- (20,519) (20,519)
---------- ----------- -----------
Net loss......................... $ (446,235) $(1,338,460) $(1,784,695)
========== =========== ===========
Basic and diluted net loss per
share........................... $ (0.10) $ (0.25)
========== ===========
Shares used in computing basic
and diluted net loss per share.. 4,669,628 7,040,672
========== ===========
</TABLE>

The accompanying notes are an integral part of these unaudited combined
financial statements.

15
<PAGE>

PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
Years Ended December 31, 1997
-------------------------------------------
HealthCentral.com Vitamins.com Pro Forma
----------------- ------------ -----------
<S> <C> <C> <C>
Product sales.................... $ -- $ 436,406 $ 436,406
Operating and other expenses:
Cost of product sales........... -- 288,751 288,751
Sales and marketing............. 848 154,109 154,957
General and administrative...... 300 1,254,149 1,254,449
--------- ----------- -----------
Total operating and other
expenses...................... 1,148 1,697,009 1,698,157
--------- ----------- -----------
Loss from operations............. (1,148) (1,260,603) (1,261,751)
Interest (expense), net.......... -- (2,997) (2,997)
--------- ----------- -----------
Net loss......................... $ (1,148) $(1,263,600) $(1,264,748)
========= =========== ===========
Basic and diluted net loss per
share........................... $ -- $ (0.19)
========= ===========
Shares used in computing basic
and diluted net loss per share.. 4,610,000 6,746,733
========= ===========
</TABLE>

The accompanying notes are an integral part of these unaudited combined
financial statements.

16
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS

NOTE 1--BASIS OF PRESENTATION:

On March 15, 2000, HealthCentral entered into a definitive merger agreement
with Vitamins.com. Vitmains.com primarily sells vitamins and nutritional
supplements through a multi-channel approach that includes an Internet website,
a catalog division and retail stores.

This transaction will be recorded using the pooling-of-interests method of
accounting. HealthCentral will acquire all the shares of capital stock of
Vitamins.com in exchange for up to $103,500,000 in HealthCentral common stock.
The exchange ratio will be determined by dividing the lesser of:

. $103,500,000, less certain transaction expenses over $100,000 incurred by
Vitamins.com, divided by the average closing price of HealthCentral's
common stock for the ten days preceding the business day prior to the
merger; or

. the number of shares of HealthCentral common stock outstanding
immediately prior to the merger, less one share,

by the total number of shares of capital stock of Vitamins.com outstanding
immediately prior to the merger. HealthCentral's consolidated financial
statements, upon consummation of the transaction, will reflect the transaction
as if Vitamins.com had been a wholly owned subsidiary of HealthCentral since
inception.

NOTE 2--PRO FORMA ADJUSTMENTS:

The following pro forma adjustments were applied to the historical
consolidated financial statements of HealthCentral and Vitamins.com to arrive
at the unaudited pro forma combined condensed financial information.

(A) Adjustment to record the accrual of the estimated costs resulting from
the merger of HealthCentral and Vitamins.com. Estimated transaction, merger and
integration costs include the following:

<TABLE>
<S> <C>
. Financial advisory fees........................................ $ 400,000
. Legal and accounting professional fees......................... 500,000
. Financial printer fees......................................... 100,000
. Filing fees.................................................... 75,000
. Integration costs.............................................. 400,000
----------
$1,475,000
==========
</TABLE>

These estimated costs are not reflected in the pro forma combined condensed
statements of operations because they are non-recurring.

(B) Adjustment relates to the carrying value of the common stock based on a
par value of $0.001 and the issuance of 22.7 million shares assuming a .391
exchange ratio.

(C) Adjustments to conform Vitamins.com's accounting policies to
HealthCentral's policies in the areas of shipping costs and website development
costs.

(D) Adjustment for the automatic conversion of Vitamins.com's preferred
stock to common stock upon the consummation of the transaction.

(E) Reclassification of certain revenue and expense amounts consistent with
the financial reporting policies which are expected to be adopted after the
merger.

17
<PAGE>

NOTE 3--PRO FORMA NET LOSS PER SHARE:

Basic and diluted weighted average shares outstanding were calculated based
upon the historical basic and diluted shares weighted average outstanding of
HealthCentral for each period, increased by the historical basic and diluted
shares weighted average shares outstanding of Vitamins.com for each period, as
adjusted for an assumed exchange ratio of .391. The weighted average shares
also include the pro forma effects of the automatic conversion of
Vitamins.com's preferred stock into shares of HealthCentral's common stock upon
the consummation of the transaction. Because the companies are in a net loss
position on a pro forma combined basis for each period, inclusion of potential
common stock in the computation of pro forma net loss per share is anti-
dilutive; therefore, potential common stock is excluded from the share amounts.

The following table reconciles the number of shares used in the pro forma
loss per share computations to the numbers set forth in the HealthCentral and
Vitamins.com historical statements of operations:

<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------
1997 1998 1999
--------- --------- ----------
<S> <C> <C> <C>
Shares used in basic and diluted per share
computation:
Historical--Vitamins.com common stock......... 5,464,790 6,064,051 11,054,837
Historical--Vitamins.com preferred stock...... -- -- 44,991,498
--------- --------- ----------
Total stock................................... 5,464,790 6,064,051 56,046,335
Exchange ratio................................ .391 .391 .391
--------- --------- ----------
2,136,733 2,371,044 21,914,117
Historical--HealthCentral.com................. 4,610,000 4,669,628 6,926,485
--------- --------- ----------
Pro forma combined ........................... 6,746,733 7,040,672 28,840,602
========= ========= ==========
</TABLE>

The exchange ratio was calculated by dividing $103,500,000 by an assumed
average closing price of HealthCentral common stock of $4.25 per share, which
was the approximate price on May 5, 2000, and then dividing the resulting
figure by the number of shares of Vitamins.com capital stock outstanding at
December 31, 1999. However, the exchange ratio was capped at .391 due to using
the lesser of the two calculations below (based on an assumed number of
outstanding shares equal to 22,703,659, which was the number of outstanding
shares on May 8, 2000). The actual exchange ratio used will be determined by
dividing the lesser of:

. the number of shares of HealthCentral common stock outstanding
immediately prior to the merger, less one share,

by the total number of shares of capital stock of Vitamins.com outstanding
immediately prior to the merger.

18
<PAGE>

COMPARATIVE PER SHARE DATA

The following table sets forth certain historical per share data of
HealthCentral and Vitamins.com and combined per share data on an unaudited pro
forma basis after giving effect to the merger recorded using the pooling-of-
interests method of accounting, assuming that .391 shares of HealthCentral
common stock are issued in exchange for each share of Vitamins.com capital
stock in the merger. This data should be read in conjunction with the selected
historical consolidated financial data, the unaudited pro forma combined
financial information and the separate historical consolidated financial
statements of HealthCentral and Vitamins.com and notes thereto which are
included elsewhere or incorporated by reference in this Proxy Statement. The
pro forma combined financial data are not necessarily indicative of the
operating results that would have been achieved had the merger been consummated
as of the beginning of the periods presented and should not be construed as
representative of future operations.

<TABLE>
<CAPTION>
Years Ended December
31,
----------------------
1997 1998 1999
------ ------ ------
<S> <C> <C> <C>
Historical--HealthCentral.com:
Net loss per share--basic and diluted................. $ -- $(0.10) $(4.96)
Book value per share(1)............................... $ -- $ 0.34 $ 4.97
<CAPTION>
Years Ended December
31,
----------------------
1997 1998 1999
------ ------ ------
<S> <C> <C> <C>
Historical--Vitamins.com:
Net loss per share--basic and diluted................. $(0.23) $(0.22) $(1.65)
Book value per share(1)............................... $ 0.08 $ 0.52 $(1.13)
<CAPTION>
Years Ended December
31,
----------------------
1997 1998 1999
------ ------ ------
<S> <C> <C> <C>
Pro forma combined net loss per share(2):
HealthCentral.com per share--basic and diluted........ $(0.19) $(0.25) $(1.83)
Vitamins.com per equivalent share(3)--basic and
diluted.............................................. $(0.07) $(0.10) $(0.72)
</TABLE>

<TABLE>
<CAPTION>
December 31,
1999
------------
<S> <C>
Pro forma combined book value per share(4)
HealthCentral.com per share........................................ $2.93
Vitamins.com per equivalent share(3)............................... $1.15
</TABLE>
- --------
(1) The historical book value per share is computed by dividing stockholders'
equity (deficit) by the number of shares of common stock outstanding at the
end of each period.

(2) The pro forma combined net loss per share for the years ended December 31,
1997, 1998 and 1999 includes Vitamins.com's net loss per share for the
years ended December 31, 1997, 1998 and 1999, respectively, assuming the
conversion of 44,991,498 shares of preferred stock to common stock at the
beginning of the year ended December 31, 1999.

(3) The Vitamins.com equivalent pro forma combined per share amounts are
calculated by multiplying the combined pro forma per share amounts by the
exchange ratio of .391 shares of HealthCentral.com common stock for each
share of Vitamins.com common stock.

(4) The pro forma combined book value per share is computed by dividing pro
forma stockholders' equity by the pro forma number of shares of common
stock outstanding at the end of the period.

19
<PAGE>

THE ANNUAL MEETING

Date, Time and Place of Annual Meeting

This Proxy Statement is furnished in connection with the solicitation by the
board of directors of HealthCentral of proxies to be voted at the annual
meeting of stockholders to be held on Friday, June 16, 2000, or at any
continuation, adjournment or postponement thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. Stockholders of
record on May 8, 2000 will be entitled to vote at the annual meeting. The
annual meeting will be held at 9:00 a.m. local time, at the Berkeley Marina
Radisson Hotel, 200 Marina Boulevard, Berkeley, California 94710.

This Proxy Statement and the enclosed proxy card will be mailed to
stockholders on or about May 16, 2000.

Purpose of Annual Meeting

At the annual meeting, holders of our common stock will consider and vote
upon proposals to:

1. Approve the merger of a wholly owned subsidiary of HealthCentral with
and into Vitamins.com and the issuance of shares of HealthCentral
common stock to the stockholders of Vitamins.com pursuant to the
Agreement and Plan of Reorganization and Merger, dated as of March 15,
2000, among HealthCentral, HCC Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of HealthCentral, and
Vitamins.com, a Delaware corporation. Approval of the merger will
constitute approval of the appointment of Robert M. Haft and C. Sage
Givens to HealthCentral's board of directors;

2. Elect two directors of HealthCentral to serve until 2003 or until their
successors are elected and qualified;

3. Ratify the appointment of PricewaterhouseCoopers LLP as our independent
accountants; and

4. Transact any other business as may properly come before the meeting or
any adjournment or postponement thereof.

Neither the Delaware General Corporation Law nor the HealthCentral
certificate of incorporation requires us to obtain stockholder approval of the
merger. However, due to the number of shares of our common stock to be issued
in the merger, the rules of the Nasdaq Stock Market require us to obtain
stockholder approval of the issuance of the shares to Vitamins.com
stockholders. Stockholder approval of the merger and the issuance of shares as
requested in this Proxy Statement and described in the merger agreement will
constitute the approval required by Nasdaq for the issuance of our common stock
in connection with the merger. Additionally, as a matter of corporate policy,
the HealthCentral board of directors requests that our stockholders ratify the
appointment of our accountants.

Votes Required

At the time of the execution of the merger agreement, holders of
approximately 41% of our common stock entered into voting agreements in which
they agreed to vote their shares in favor of the merger and the issuance of
shares of HealthCentral common stock to Vitamins.com stockholders in connection
with the merger.

20
<PAGE>

Record Date; Outstanding Shares; Quorum; Voting Rights

The close of business on May 8, 2000, has been fixed as the record date for
determining the holders of shares of HealthCentral common stock entitled to
notice of and to vote at the annual meeting and at any adjournments thereof. As
of the close of business on the record date, we had 22,703,659 shares of our
common stock outstanding and entitled to vote at the annual meeting, held by
approximately 163 stockholders of record. The presence at the annual meeting of
a majority of these shares of common stock, either in person or by proxy, will
constitute a quorum for the transaction of business at the annual meeting. Each
outstanding share of our common stock on the record date is entitled to one
vote on each matter.

If any stockholder is unable to attend the annual meeting, the stockholder
may vote by proxy. The enclosed proxy is solicited by HealthCentral's board of
directors and, when the proxy card is returned properly completed, it will be
voted as directed by the stockholder on the proxy card. Stockholders are urged
to specify their choices on the enclosed proxy card. If a proxy card is signed
and returned without choices specified, in the absence of contrary
instructions, the shares of common stock represented by the proxy will be voted
"for" Proposals 1, 2, and 3 and will be voted in the proxy holder's discretion
as to other matters that may properly come before the annual meeting.

For purposes of determining whether the proposals have been approved, the
inspector of election will exclude abstentions and broker non-votes from the
number of shares deemed to be present, or represented, and entitled to vote on
the matters at the annual meeting. Accordingly, abstentions and broker non-
votes will have no effect on the voting of the proposals.

As of the record date, our directors and executive officers and their
affiliates were beneficial owners of an aggregate of 8,071,291 shares of our
common stock, exclusive of any shares issuable upon the exercise of stock
options remaining unexercised as of that date, or approximately 36% of the
22,703,659 shares of our common stock that were issued and outstanding as of
that date.

Revocation of Proxies

The grant of a proxy on the enclosed proxy card does not preclude a
stockholder from voting in person at the annual meeting. A stockholder may
revoke a proxy at any time prior to its exercise by:

. filing with the Secretary of HealthCentral a duly executed revocation of
proxy;

. executing and delivering a later-dated proxy; or

. attending the annual meeting and voting in person.

Attendance at the annual meeting will not in itself constitute a revocation
of a proxy. In addition, if your common shares of HealthCentral are held in
street name, you must obtain a proxy, executed in your favor, from the
institution that holds your shares in order to vote in person at the annual
meeting.

Expenses of Proxy Solicitation

HealthCentral will pay the expense of soliciting proxies. Proxies will be
solicited by mail. Proxies may also be solicited by telephone calls or other
electronic means, or personal calls by our officers, directors, or employees,
none of whom will be specially compensated for soliciting proxies.

HealthCentral will cause brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of
common shares of HealthCentral held of record by such persons. HealthCentral
will reimburse these custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses.

21
<PAGE>

PROPOSAL NO. 1--APPROVAL OF THE MERGER

Approval of the Merger and the Issuance of Shares

Stockholders of HealthCentral are being asked to approve the merger of a
wholly owned subsidiary of HealthCentral with and into Vitamins.com and the
issuance of shares of HealthCentral common stock to the stockholders of
Vitamins.com pursuant to the Agreement and Plan of Reorganization and Merger,
dated as of March 15, 2000, among HealthCentral, HCC Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of HealthCentral, and
Vitamins.com, a Delaware corporation. Approval of the merger will constitute
approval of the appointment of Robert M. Haft and C. Sage Givens to
HealthCentral's board of directors.

Required Votes

Assuming the presence of a quorum, the approval of the merger and the
issuance of HealthCentral's shares requires the affirmative vote of a majority
of the total votes cast on the proposal.

Recommendation of the Board

The board of directors has approved the merger agreement, has declared the
merger advisable and in the best interests of HealthCentral and its
stockholders, and recommends that you vote "for" the approval of the merger and
the issuance of HealthCentral common stock pursuant to the merger agreement.

RISK FACTORS RELATING TO THE MERGER

In addition to the other information included or incorporated by reference
in this Proxy Statement, stockholders should consider carefully the matters
described below in determining whether to approve the merger and the issuance
of shares pursuant to the merger agreement.

HealthCentral may not be able to achieve the benefits it expects to result from
the merger.

Achieving the benefits of the merger will depend in part on the ability of
management and key personnel of both companies to integrate the two businesses
in a timely and efficient manner. Such integration may be hampered by various
factors including but not limited to:

. expenses related to funding the operation, development and/or integration
of complementary businesses;

. expenses associated with the merger;

. additional expenses associated with amortization of acquired intangible
assets;

. the ability to meld the companies' respective corporate cultures;

. the difficulty of maintaining uniform standards, controls, procedures and
policies;

. the difficulty in integrating and the strains placed on the companies'
respective websites and technology;

. the ability to turn Vitamins.com's catalog customers into online
customers;

. the impairment of relationships with employees and customers as a result
of any integration of new management personnel; and

. the geographic distance between HealthCentral's and Vitamins.com's
headquarters.

The contemplated assimilation of the Vitamins.com personnel and the execution
of the combined company's e-commerce business plan will require substantial
time and effort on the part of our management, and may divert their attention
from other issues which are currently being addressed by HealthCentral. Our
failure to address these issues adequately could harm our business and
adversely affect our revenues, level of expenses, operating results and stock
price. There can be no assurance that the anticipated benefits of the merger
will be realized.

22
<PAGE>

The exchange ratio for HealthCentral common stock that Vitamins.com
stockholders will receive in the merger depends on the value of HealthCentral's
stock, and may change in the event of any change in HealthCentral's stock
price.

Under the terms of the merger agreement, Vitamins.com stockholders will
receive $103,500,000 in our common stock, less certain transaction expenses
over $100,000 incurred by Vitamins.com and subject to specified limitations on
the number of shares to be issued, in exchange for their Vitamins.com capital
stock. The exact ratio will be based on the average closing price for our stock
for the ten trading days preceding the business day prior to the close of the
merger. Such trading price could vary from our trading price on the date of
this Proxy Statement. The price of our common stock may vary because of any of
the following factors, among others:

. changes in our business or operations or the timing of the merger;

. the effect of any conditions or restrictions imposed on or proposed with
respect to the combined company by regulatory agencies due to the merger;

. the prospects of post-merger operations; and

. general market and economic conditions and other factors.

For example, if the average closing price of our common stock for the ten-
day period were $4.125 (the closing price of our stock on May 4, 2000), and
there was no adjustment to the $103,500,000 purchase price, stockholders of
Vitamins.com would receive .447 shares of our common stock for each share of
Vitamins.com stock they own, or an aggregate of 25,090,909 shares. However,
under the terms of the merger agreement, the number of shares of our common
stock that Vitamins.com stockholders may receive in exchange for their
Vitamins.com stock cannot exceed the number of shares of our common stock
outstanding immediately prior to the closing of the merger, less one.
Therefore, if the number of our shares outstanding immediately prior to the
merger was less than 25,090,909, the number of shares of common stock that
Vitamins.com stockholders would receive would be capped, and immediately after
the close of the merger Vitamins.com stockholders would hold one share less
than 50% of the outstanding shares of the combined company.

The stock market has recently experienced significant price and volume
fluctuations. These market fluctuations could have a material adverse effect on
the market price of the HealthCentral common stock in the ten-day period during
which the exchange ratio will be determined.

The merger could adversely affect HealthCentral's combined financial results or
the market price of its common stock.

If the benefits of the merger do not exceed the costs associated with the
merger, including any dilution to HealthCentral's stockholders resulting from
the issuance of shares in connection with the merger, HealthCentral's financial
results, including earnings per share, could be adversely affected.
HealthCentral expects that the merger will result in merger-related costs of
approximately $1.5 million after taxes. In addition, if HealthCentral does not
achieve the perceived benefits of the merger as rapidly as, or to the extent,
anticipated by financial or industry analysts, the market price of
HealthCentral common stock may decline and our business, results of operations
and financial condition may be harmed.

Uncertainties associated with the merger may cause HealthCentral or
Vitamins.com to lose customers.

Customers of HealthCentral or Vitamins.com may, in response to the
announcement of the merger, delay or defer decisions concerning their use of
products and services from either company. Any such delay or deferral could
have an adverse effect on the combined business of HealthCentral and
Vitamins.com.

Failure to complete the merger could hurt HealthCentral's business.

In the event that the merger is not consummated, we will be subject to a
number of material risks including potential reputational harm and the failure
to meet the expectations of public market analysts and

23
<PAGE>

investors that the merger would be consummated. As a result, the market price
of our common stock may decline and our business, results of operations and
financial condition may be harmed.

We may be exposed to liabilities that are not covered by the indemnification
available under the merger agreement, which may harm our business, results of
operation and financial condition.

Upon consummation of the merger, we will assume all the liabilities of
Vitamins.com. We believe, based upon our due diligence and representations made
in the merger agreement, that we have assessed and can absorb these
liabilities. However, it is possible that liabilities may arise in the future
which we did not discover or anticipate. To the extent these liabilities are
inconsistent with representations and warranties made in the merger agreement,
we may have a claim for indemnification against the former stockholders of
Vitamins.com. The merger agreement provides that 10% of the HealthCentral
common stock to be issued in the merger will be placed in an escrow account and
held for a period of approximately one year to cover any indemnification
claims. The escrow amount will be our sole recourse for indemnification claims
other than in the case of fraud. However, Vitamins.com's liabilities, both at
the time of and arising after the consummation of the merger, may exceed our
expectations and the escrow amount may be insufficient to cover these
liabilities. If total liabilities for which indemnification is available exceed
the escrow amount, or if liabilities arise after the escrow period, we will
suffer financial losses, which may harm our business, results of operation and
financial condition.

It is likely that HealthCentral will continue to experience operating losses
and negative cash flow from operations.

HealthCentral expects that, after the merger, we will continue to build our
network and expand our customer base, causing us to continue to incur
significant operating losses and to generate significant negative cash flow
from operating activities for the foreseeable future, which would adversely
affect our results and could adversely affect our financial condition. In
addition, Vitamins.com has incurred losses since its inception and expects to
continue to incur losses for the foreseeable future. There can be no assurance
that the combined company will achieve or sustain operating profitability or
positive cash flow from operating activities in the future.

The combined company's continuing need for significant capital could adversely
affect our earnings and cash flow.

After the merger, the operation and expansion of the combined company's
network and marketing and distribution efforts will continue to require
substantial capital for, among other things:

. unforeseen delays or costs, engineering design changes and technological
and other risks relating to the integration of Vitamins.com;

. additional acquisitions by HealthCentral and the integration of these
acquisitions; and

. unforeseen customer acquisition costs resulting from heightened
competition in the e-health marketplace.

As a consequence of the merger, our business may become subject to new or
increased risks.

As a consequence of the merger, a larger percentage of HealthCentral's
revenue will be generated from the sale of vitamins and other nutritional
supplements and therefore any increase in government regulation of nutritional
supplements or any negative publicity associated with nutritional supplements
will have a proportionately larger impact on HealthCentral's business and could
have a material adverse effect on the business, results of operations and
financial condition of the combined company.

None of HealthCentral's current employees are unionized. Vitamins.com,
through its subsidiary L&H Vitamins, depends on unionized warehouse employees
to package and ship its products. A strike or other disruption in labor
relations could, therefore, hamper or prevent timely fulfillment of customer
orders, and such disruptions could have an adverse effect on HealthCentral's
business.

24
<PAGE>

SPECIAL FACTORS ABOUT THE MERGER

Information Concerning Vitamins.com

Information concerning Vitamins.com can be found beginning on page 59 of
this Proxy Statement.

Background of the Merger

On January 3, 2000, representatives from Donaldson, Lufkin & Jenrette, Inc.,
Vitamins.com's financial advisor, called C. Fred Toney, HealthCentral's
Executive Vice President and Chief Financial Officer, to inform him that
Vitamins.com was pursuing possible strategic relationships and to inquire as to
whether Mr. Toney would like to meet with representatives from Vitamins.com.

On January 3, 2000, HealthCentral signed a non-disclosure statement with
Vitamins.com and received informational materials on Vitamins.com.

On January 13, 2000, C. Fred Toney held a meeting with Robert M. Haft,
Vitamins.com's President, to learn about Vitamins.com's business plan,
strategy, culture and growth efforts, and to explore potential strategic
relationships or business combinations. Also in attendance were other members
of HealthCentral's management team and employees from the HealthCentral e-
Commerce and Merchandising groups. A representative of Donaldson, Lufkin &
Jenrette was also present.

On January 19, 2000, C. Fred Toney met with representatives of
Vitamins.com's management and financial advisors, including Mr. Haft and Bruce
Kudeviz, Vitamins.com's Chief Financial Officer, to explore synergies between
the companies and to discuss strategy and growth efforts, as well as to discuss
possible business terms of a potential acquisition.

On January 21, 2000, HealthCentral held a regularly scheduled board of
directors meeting. At this meeting, Mr. Toney and Albert Greene,
HealthCentral's President and Chief Executive Officer, informed the
HealthCentral board of directors that discussions were ongoing with
Vitamins.com regarding a possible acquisition and reported on the discussions
to date. The HealthCentral board of directors discussed the potential
acquisition of Vitamins.com and authorized the HealthCentral management team to
continue to pursue the acquisition.

On January 31, 2000, Mr. Greene met with Mr. Haft to discuss a potential
acquisition of Vitamins.com and to review further each company's business plan,
strategy and culture.

On February 3, 2000, HealthCentral's board of directors held a special
meeting to again discuss, among other matters, the potential acquisition of
Vitamins.com. The board of directors reaffirmed HealthCentral's management
team's authority to continue to pursue such discussions.

On February 14, 2000, Mr. Greene and Mr. Toney met with C. Sage Givens, a
member of the Vitamins.com board of directors and Managing Director of Acacia
Venture Partners, and Bruce Keller, a principal of Acacia Venture Partners, to
further discuss potential synergies between HealthCentral and Vitamins.com and
their respective business strategies, cultures and growth efforts.

During the week of February 21, representatives of HealthCentral and
Vitamins.com held a series of telephone conferences to discuss HealthCentral's
due diligence review of Vitamins.com.

During the week of February 28, representatives of HealthCentral's
management and its legal advisors performed on- and off-site due diligence
reviews of Vitamins.com.

On March 3, 2000, HealthCentral engaged PricewaterhouseCoopers LLP to
perform an analysis of the proposed transaction to determine whether the merger
would qualify for pooling-of-interests accounting treatment.

25
<PAGE>

On March 6, 2000, Vitamins.com entered into a nine day binding agreement
with HealthCentral in which it agreed not take any action to solicit, initiate,
entertain or encourage any acquisition, asset purchase or other take-over
proposal of Vitamins.com or participate in any negotiations designed to
accomplish any of the foregoing.

On March 6, 2000, representatives of HealthCentral and Vitamins.com held a
meeting to negotiate the terms of a potential merger. In attendance from
HealthCentral were Mr. Greene and Mr. Toney. In attendance from Vitamins.com
were Mr. Haft and Mr. Kudeviz. Also in attendance were representatives from
Venable, Baetjer, Howard & Civiletti, LLP, Vitamins.com's general counsel;
Donaldson, Lufkin & Jenrette; Howard, Rice, Nemerovski, Canady, Falk & Rabkin,
A Professional Corporation, HealthCentral's special counsel; and Thomas Weisel
Partners, an investment banking firm that HealthCentral was considering
engaging in connection with the potential merger.

During the week of March 6, representatives from HealthCentral and
Vitamins.com held a series of phone conversations to continue due diligence and
to finalize the terms of the proposed acquisition of Vitamins.com.

On March 10, 2000, HealthCentral's management decided not to engage Thomas
Weisel Partners as HealthCentral's investment banking advisor due to a concern
that Thomas Weisel Partners' previous representation of another company in
connection with an attempt to acquire Vitamins.com could present a potential
conflict of interest.

On March 10, 2000, HealthCentral contacted Pacific Growth Equities, Inc. to
discuss the possibility of hiring Pacific Growth to analyze the fairness of the
proposed business combination and to provide other related advice, and on March
11, 2000, HealthCentral engaged Pacific Growth Equities, Inc. to perform those
services.

On March 13, 2000, the Vitamins.com board of directors held a special
telephonic meeting attended by members of Vitamins.com's senior management and
representatives of Donaldson, Lufkin & Jenrette and Venable, Baetjer, Howard
and Civiletti, LLP. Prior to the meeting, Vitamins.com's management provided
each member of the board with a current draft of the merger agreement and
related documents. Following discussions, the Vitamins.com board of directors
approved the merger agreement and related documents.

On March 14, 2000, the HealthCentral board of directors held a special
meeting attended by members of HealthCentral's senior management and
representatives of Pacific Growth Equities, Inc. and Howard, Rice, Nemerovski,
Canady, Falk & Rabkin, A Professional Corporation. Prior to the meeting,
HealthCentral's management provided each member of the board with a current
draft of the merger agreement and related documents. The HealthCentral board of
directors considered the proposed merger agreement and related documents and
the transactions contemplated thereby. HealthCentral's legal counsel
participated in discussions with the board, and a representative from Pacific
Growth Equities, Inc. described the financial analysis performed by Pacific
Growth Equities, Inc. with regard to the proposed merger. Following
discussions, the HealthCentral board of directors concluded that the merger
agreement and the merger were fair to and in the best interests of
HealthCentral and its stockholders and approved the merger agreement and
related documents.

On March 15, 2000, HealthCentral and Vitamins.com signed a definitive
agreement pursuant to which HealthCentral would acquire Vitamins.com. At that
time, the requisite majority of Vitamins.com's stockholders entered into a
written consent approving and authorizing the merger pursuant to the merger
agreement and related documents. Also at that time, holders of approximately
41% of HealthCentral's outstanding stock entered into voting agreements under
which they agreed to vote their shares in favor of the merger.

On March 16, 2000, following execution and delivery of definitive
agreements, HealthCentral announced its intention to acquire Vitamins.com,
subject to regulatory approval and the approval of HealthCentral's
stockholders.

26
<PAGE>

HealthCentral's Reasons for the Merger

In reaching its decision to approve the merger and to recommend that
HealthCentral's stockholders vote to approve the merger and the issuance of
HealthCentral shares pursuant to the merger agreement, the HealthCentral board
of directors consulted with senior management and its financial, accounting and
legal advisors and considered a number of factors. The following is not
intended to be an exhaustive discussion of those factors, but rather are the
primary factors considered by the HealthCentral board of directors in making
its determination that the merger will be fair to and in the best interests of
HealthCentral and its stockholders:

Positive Factors. HealthCentral believes that consolidation in the e-health
industry is creating a group of large, vertically integrated companies that can
offer customers a wide range of health-related content and services.
HealthCentral believes the acquisition of Vitamins.com will add momentum to
HealthCentral's growth strategy and will result in new revenue generation, new
customer development, better customer retention and more favorable customer
acquisition costs, all of which should strengthen HealthCentral's competitive
position. These beliefs stem, in part, from the following factors:

. the belief that the combined company can be run more efficiently than
either company could on its own and will benefit substantially from cost
savings and operating efficiencies gained through:

. streamlining the combined organizations; and

. utilizing the infrastructure of the combined company in a more
efficient manner by, among other things, increasing the flow of traffic
over the HealthCentral network of sites.

. the belief that a strong management team can be drawn from both
HealthCentral and Vitamins.com and that the management and employees of
both companies share a culture and entrepreneurial vision;

. the belief that the combined company will benefit substantially from
revenue synergies, arising primarily from:

. enhanced revenue opportunities relating to the ability to offer a
broader range of products and services to the combined company's
customer base; and

. the ability to offer e-health products and services through a larger
combined company sales force and selling platform.

. the belief that because of increased size and economies of scale, the
combined company will be able to respond to competitive pressures and
implement future transactions necessary to remain competitive in the
United States and internationally. HealthCentral believes that the
combined company's increased capabilities will also enable it to improve
the cost structure for its products and services.

Additional Factors. In the course of the deliberations, the HealthCentral
board of directors also considered a number of additional factors relevant to
the merger, including:

. historical information concerning HealthCentral's and Vitamins.com's
respective businesses, financial performance and condition, operations,
technology, management and competitive position;

. the financial condition, results of operations, businesses and prospects
of HealthCentral and Vitamins.com before and after giving effect to the
merger;

. current industry, economic and market conditions and trends, including
the changing regulatory environment in the United States and the
likelihood of continuing consolidation and increasing competition in the
e-health industry and the corresponding decrease in the number of
suitable strategic merger partners for HealthCentral;

. the terms of the merger agreement;

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. that two members of the current Vitamins.com board of directors would
become directors of HealthCentral; and

. the impact of the merger on HealthCentral's customers, employees and
other constituencies.

Negative Factors. The HealthCentral board of directors also identified and
considered a number of potentially negative factors in its deliberations,
including:

. that while the merger is likely to be completed, there are risks
associated with obtaining necessary approvals and, as a result of
conditions to the completion of the merger, it is possible that the
merger may not be completed even if approved by our stockholders;

. the risk that the synergies and benefits sought in the merger might not
be fully achieved, which could adversely affect or disrupt the level of
service to HealthCentral's customers, reduce the prospects and
opportunities for synergies identified above under "Positive Factors" and
result in the loss of customers and revenues, as well as employees who
may seek employment opportunities elsewhere;

. the risk that Vitamins.com's relationships with customers, partners and
employees may be affected negatively because of uncertainty surrounding
its future status and direction; and

. the risks associated with fluctuations in the price of HealthCentral
common stock prior to completion of the merger and the effect of such
fluctuations on the number of shares to be issued in the transaction.

The HealthCentral board of directors believed that some of these risks were
unlikely to occur, that HealthCentral could avoid or mitigate others, and that
overall, these risks were outweighed by the benefits of the merger.

In view of the variety of material factors considered in connection with its
evaluation of the merger and the complexity of these matters, the HealthCentral
board of directors did not find it useful to and did not attempt to quantify,
rank or otherwise assign relative weights to these factors. In addition,
individual members of the board of directors may have given different weight to
different factors. The HealthCentral board of directors relied on the analysis,
experience, expertise and the recommendation of HealthCentral's management team
and relied on Pacific Growth Equities, Inc. its financial advisor, for analyses
of the financial terms of the merger.

Opinion of Financial Advisor

HealthCentral retained Pacific Growth Equities, Inc. to evaluate the terms
of the merger with Vitamins.com and render an opinion as to its fairness. On
March 14, 2000, Pacific Growth Equities rendered its oral opinion (subsequently
confirmed in writing) to the board of directors of HealthCentral to the effect
that, as of March 14, 2000 and based on and subject to matters stated in the
opinion, the merger consideration to be paid by HealthCentral to Vitamins.com
stockholders in the merger is fair from a financial point of view to
HealthCentral stockholders.

The full text of Pacific Growth Equities' written opinion dated March 14,
2000, which sets forth the assumptions made, matters considered, and
limitations on the review undertaken, is attached as Appendix B to this Proxy
Statement and is incorporated herein by reference. This summary is qualified in
its entirety by reference to the full text of such opinion. Holders of
HealthCentral common stock are urged to, and should, read the opinion carefully
in its entirety. The engagement of Pacific Growth Equities and its opinion are
for the benefit of the HealthCentral board of directors and its opinion was
delivered to the HealthCentral board in connection with the board's
consideration of the merger. Pacific Growth Equities' opinion addresses only
the fairness of the merger consideration from a financial point of view to
HealthCentral stockholders, it does not address any other aspect of the merger
and does not constitute a recommendation to any holder of HealthCentral common
stock as to how to vote with respect to the merger.

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In connection with the Pacific Growth Equities opinion, Pacific Growth
Equities:

. reviewed certain publicly available financial information and other
information concerning HealthCentral and Vitamins.com and certain
internal analyses and other information furnished to it by HealthCentral
and Vitamins.com; and

. held discussions with the members of senior management of HealthCentral
regarding the businesses and prospects of the respective companies and
the joint prospects of a combined HealthCentral.

In addition, Pacific Growth Equities:

. reviewed the historical reported prices and trading activity for
HealthCentral common stock;

. compared certain financial information for both HealthCentral and
Vitamins.com with similar information for selected companies whose
securities are publicly traded;

. compared certain stock market information and valuations for Vitamins.com
with similar information for certain companies whose securities are
publicly traded;

. analyzed information about prices paid in acquisitions of other similar
companies; and

. performed such other studies and analyses and considered such other
factors as it deemed appropriate.

In conducting its review and arriving at its opinion, Pacific Growth
Equities assumed and relied upon, without independent verification, the
accuracy, completeness and fairness of the information furnished to or
otherwise reviewed by or discussed with it for the purposes of rendering its
opinion. Pacific Growth Equities assumed, with the consent of HealthCentral,
that the merger would qualify for pooling-of-interests accounting treatment and
as a tax-free transaction for the stockholders of HealthCentral for federal
income tax purposes, and that the merger would be consummated in accordance
with the terms of the Agreement and Plan of Reorganization and Merger dated
March 15, 2000, without any amendment thereto and without waiver by
HealthCentral or Vitamins.com of any of the conditions to their respective
obligations thereunder. Pacific Growth Equities did not make an independent
evaluation or appraisal of the assets of HealthCentral or Vitamins.com nor was
Pacific Growth Equities furnished with any such evaluations or appraisals. The
Pacific Growth Equities opinion is based on market, economic and other
conditions as they existed and could be evaluated as of the date of the opinion
letter.

The following is a summary of the analyses performed and factors considered
by Pacific Growth Equities in connection with rendering of the Pacific Growth
Equities opinion.

Historical Financial Position. In rendering its opinion, Pacific Growth
Equities reviewed and analyzed the historical financial position of
HealthCentral and Vitamins.com which included:

. an assessment of each of HealthCentral's and Vitamins.com's recent
financial statements;

. an analysis of each of HealthCentral's and Vitamins.com's revenue, growth
and operating performance trends; and

. an assessment of HealthCentral's and Vitamins.com's respective balance
sheet information.

Historical Stock Price Performance. Pacific Growth Equities reviewed and
analyzed the daily closing per share market prices and trading volume for
HealthCentral common stock from February 28, 2000 to March 10, 2000.

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<PAGE>

Analysis of Selected Publicly Traded Companies. This analysis examines a
company's valuation in the public market as compared to the valuation in the
public market of other selected publicly traded companies. Pacific Growth
Equities compared certain financial information (based on the commonly used
valuation measurements described below) relating to Vitamins.com to certain
corresponding information for a group of selected publicly traded companies.
Such financial information included, among other things:

. common equity market capitalization;

. estimated 2001 calendar year revenues;

. cash position;

. ratio of market capitalization to estimated 2001 calendar year revenues;

. ratio of market capitalization to cash; and

. discount of common stock market price relative to 52 week high per share
market price.

The financial information used in connection with the analysis provided
below with respect to Vitamins.com was based on information made available to
Pacific Growth Equities by Vitamins.com. In the case of the selected comparable
companies, the financial information used in connection with the analysis
provided below was based on the most recent publicly available income
statement, balance sheet, and other information. Pacific Growth Equities noted
that, based on the last reported financial information and most recent common
equity prices as of March 10, 2000, the mean multiple of market capitalization
to projected calendar year 2001 revenues was 2.4x for the selected comparable
companies. Applying the mean market capitalization to 2001 revenues of 2.4x to
Vitamins.com's projected 2001 revenues, Pacific Growth Equities arrived at a
market valuation of $127.3 million for Vitamins.com.

Analysis of Selected Mergers and Acquisitions. Pacific Growth Equities
reviewed the financial terms, to the extent publicly available, of four
completed mergers and acquisitions from January 1998 through March 10, 2000 in
the electronic commerce and drug store industries. The four electronic commerce
and drug stores transactions, in chronological order of public announcement,
were: NBTY, Inc./Lee Nutrition, Inc.--April 2, 1998; HORIZON Pharmacies,
Inc./Fulton Drug--June 30, 1999; Rite Aid Corp./Drugstore.com--June 22, 1999;
and USA Networks/STYLECLICK.COM, Inc.--January 24, 2000.

Pacific Growth Equities compared the transaction value to sales multiple of
the offer as of March 14, 2000 to the mean transaction value to the sales
multiple of the relevant comparable transactions listed above. Pacific Growth
Equities noted that these comparable transactions were effected at a mean
transaction value to sales ratio of 4.3x. Applying the mean multiple of 4.3x to
Vitamins.com calendar year 1999 sales of $28.0 million, Pacific Growth Equities
arrived at a valuation of $120.3 million for Vitamins.com. All multiples for
these comparable transactions were based on public information available at the
time of the announcement of each such transaction, without taking into account
specific market and other conditions during the two and a half year period
during which these comparable transactions occurred.

Analysis of Discounted Cash Flow. Pacific Growth Equities analyzed the
discounted cash flow for Vitamins.com using financial and operating data made
available from the internal records of Vitamins.com for projections of
Vitamins.com for the fiscal years 2000 through 2004. Pacific Growth Equities
used a terminal value of 2004 net income and applied an earnings multiple of
30x, based upon an analysis of publicly traded comparable companies and
discount rates from 25% to 35%. The implied value of Vitamins.com based on this
valuation method was $101.2 million.

No company used in the above analysis of selected comparable companies nor
any transaction used in the analysis of the comparable transactions summarized
above is identical to Vitamins.com, HealthCentral, or the merger. Accordingly,
such analyses must take into account differences in the financial and operating
characteristics of the selected comparable companies and the comparable
transactions and other factors that would affect the public trading value and
acquisition value of the selected comparable companies and the comparable
transactions, respectively.

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While the foregoing summary describes analyses and factors that Pacific
Growth Equities deemed material in its presentation to HealthCentral's board of
directors, it is not a comprehensive description of all analyses and factors
considered by Pacific Growth Equities. The preparation of a fairness opinion is
a complex process involving various determinations as to the most appropriate
and relevant methods of financial analysis and the applications of these
methods to the particular circumstances and, therefore, such an opinion is not
readily susceptible to summary description. Pacific Growth Equities believes
that its analyses must be considered as a whole and that selecting portions of
its analyses and the factors considered by it, without considering all analyses
and factors, would create an incomplete view of the evaluation process
underlying Pacific Growth Equities' opinion. In performing its analyses,
Pacific Growth Equities considered general economic, market and financial
conditions and other matters, many of which are beyond the control of
HealthCentral and Vitamins.com. The analyses performed by Pacific Growth
Equities are not necessarily indicative of actual values or future results,
which may be significantly more or less favorable than those suggested by such
analyses. Accordingly such analyses are subject to substantial uncertainty.
Additionally, analyses relating to the value of a business do not purport to be
appraisals or to reflect the prices at which the business actually may be sold.

Pursuant to a letter agreement dated March 11, 2000 between HealthCentral
and Pacific Growth Equities, the fees to date payable to Pacific Growth
Equities for rendering the Pacific Growth Equities opinion have been $400,000,
of which $100,000 was payable upon execution of the letter agreement and
$300,000 at the time Pacific Growth Equities notified HealthCentral of its
preparedness to render the opinion (whether in oral or written form). In
addition to the fee provided for above, HealthCentral agreed to reimburse
Pacific Growth Equities promptly, upon request, for all of Pacific Growth
Equities' reasonable and accountable out-of-pocket expenses (including, without
limitation, travel expenses, charges for public reference documents and
database services, statistical analysis data and legal fees and expenses)
incurred by Pacific Growth Equities in connection with the performance of its
services under the letter agreement, up to a maximum of $25,000. HealthCentral
has agreed to indemnify Pacific Growth Equities and its directors, officers,
agents, employees and controlling persons, for certain costs, expenses, losses,
claims, damages and liabilities related to or arising out of its rendering of
services under its engagement.

The HealthCentral board retained Pacific Growth Equities based upon Pacific
Growth Equities' qualifications, reputation, experience and expertise. Pacific
Growth Equities, as a customary part of its investment banking business, is
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, public equity underwritings, private placements and
valuations for corporate and other purposes. Pacific Growth Equities maintains
a market in the common stock of many publicly traded Internet-related and other
companies and regularly publishes research reports regarding companies in
Internet-related industries and publicly traded companies in Internet-related
industries. C. Fred Toney, HealthCentral's Executive Vice President and Chief
Financial Officer, was a partner with Pacific Growth Equities until July 1999.
Mr. Toney is no longer employed by, and no longer has any beneficial ownership
in, Pacific Growth Equities.

Interests of Certain Directors and Officers in the Merger

If the merger and the issuance of HealthCentral shares are approved by our
stockholders and the merger is completed, Robert M. Haft and C. Sage Givens
will become members of our board of directors. Mr. Haft and Ms. Givens, either
personally or through the entities with which they are associated, are both
stockholders of Vitamins.com and, therefore, after the merger will be
stockholders of HealthCentral. Mr. Haft, in addition to becoming a stockholder
of HealthCentral, will continue to serve as President of Vitamins.com pursuant
to an employment agreement with HealthCentral. Under the terms of his
employment agreement, if Mr. Haft is terminated during the first year of his
employment with HealthCentral without cause and not as a result of his death or
permanent disability, he shall be entitled to receive up to one year's
severance pay so long as he honors his non-competition agreement and does not
provide more than thirty hours of paid employment services per week to any
third party.

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Government and Regulatory Approval

HealthCentral and Vitamins.com have agreed to make reasonable efforts to
obtain all regulatory approvals required to consummate the transactions
contemplated by the merger agreement and intend to complete the filing of
applications and notifications to obtain such approvals of any governmental or
regulatory authority after the date of this document or have completed the
filing of such applications or notifications prior to such date.

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules
promulgated thereunder by the Federal Trade Commission, HealthCentral and
Vitamins.com are required to provide notice of the merger to the Federal Trade
Commission and the Anti-Trust Division of the Department of Justice. The
companies have filed such notifications, and the Federal Trade Commission
granted early termination of the 30 day waiting period on April 14, 2000.

At any time before or after consummation of the merger, the Antitrust
Division of the Department of Justice or the Federal Trade Commission, or any
state, could take action under the antitrust laws that it deems necessary or
desirable in the public interest, including seeking to enjoin the consummation
of the merger or seeking divestiture of substantial assets of HealthCentral or
Vitamins.com. Private parties also may seek to take legal action under the
antitrust laws under some circumstances. In addition, non-United States
governmental and regulatory authorities may seek to take action under
applicable antitrust laws. There can be no assurance that a challenge to the
merger will not be made or, if a challenge is made, that HealthCentral will
prevail.

The respective obligations of HealthCentral and Vitamins.com to consummate
the merger are subject to the condition that there be no preliminary or
permanent injunction or other order by any federal, state or foreign court of
competent jurisdiction that prevents consummation of the merger and that there
be no statute, rule, regulation, executive order, stay, decree or judgment by
any court or governmental authority that prohibits or restricts the
consummation of the merger. See "Conditions to the Completion of the Merger" on
page 37.

Approvals or notices are also required from or to the Securities and
Exchange Commission and the National Association of Securities Dealers National
Market System, and may be required from other regulatory agencies.

Accounting Treatment

HealthCentral and Vitamins.com intend the business combination to be
effected by the merger to be accounted for as a pooling-of-interests. Under the
pooling-of-interests method of accounting, upon completion of the merger the
historical cost basis financial statements of Vitamins.com will be combined
with the financial statements of HealthCentral. In addition, the results of
operations of the combined company will include the results of operations of
HealthCentral and Vitamins.com for the entire fiscal period in which the merger
is completed, and the previously reported results of operations for the prior
periods will be combined and restated for the merger.

U.S. Federal Income Tax Consequences of the Merger

The merger is intended to qualify as a reorganization within the meaning of
Section 368 of the Internal Revenue Code. Assuming the merger does so qualify,
generally no gain or loss will be recognized by HealthCentral as a result of
the merger.

Appraisal Rights

Our stockholders are not entitled to appraisal rights in this transaction.
Any stockholders of Vitamins.com who vote against the merger and perfect their
appraisal rights under Section 262 of the Delaware General Corporation Law have
the right to a court appraisal of the fair value of their shares. However, it
is a condition to HealthCentral's obligations to complete the merger that no
more than 2% of Vitamins.com's shares dissent from the merger.

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Resale of HealthCentral Stock

The issuance of the shares of our common stock in connection with the merger
has not been registered under the Securities Act of 1933, as amended.
Consequently such shares will constitute restricted securities under the
Securities Act and may not be sold, assigned, transferred, exchanged,
mortgaged, pledged or otherwise disposed of or encumbered by a holder thereof
unless (i) they are subsequently registered under the Securities Act or an
exemption from the registration requirements of the Securities Act and the
rules and regulations thereunder, such as Rule 144 under the Securities Act, is
available, and (ii) such disposition or encumbrance is in compliance with
applicable provisions of state securities laws.

In addition, shares of our common stock issued to any Vitamins.com
stockholder that may be deemed to be an "affiliate," as defined under the
Securities Act and generally including, without limitation, directors, certain
executive officers, and beneficial owners of 10% or more of a class of capital
stock of HealthCentral and/or Vitamins.com for purposes of Rule 145 under the
Securities Act, will not be transferable except in compliance with certain
other provisions of the Securities Act. Affiliates also have agreed not to
sell, transfer or otherwise dispose of any shares of HealthCentral received in
the merger during the period commencing 30 days prior to the merger and running
until results covering at least 30 days of combined operations of HealthCentral
and Vitamins.com have been published by HealthCentral.

Operations Following the Merger

Following the merger, Vitamins.com will be a wholly owned subsidiary of
HealthCentral. Robert M. Haft will continue to serve as President of
Vitamins.com, and Bruce Kudeviz will serve as the Executive Vice President and
Chief Financial Officer. Upon consummation of the merger, the membership of
HealthCentral's board of directors will be changed to include Robert M. Haft
and C. Sage Givens. The stockholders of Vitamins.com will become stockholders
of HealthCentral, and their rights as stockholders will be governed by
HealthCentral's certificate of incorporation and HealthCentral's bylaws.
Stockholders' rights will continue to be governed by the laws of the State of
Delaware.

TERMS OF THE MERGER

Upon consummation of the merger, the stockholders of Vitamins.com will
receive $103,500,000 in our common stock, less certain transaction expenses
over $100,000 incurred by Vitamins.com and subject to specified limitations on
the number of shares to be issued, in exchange for all the outstanding capital
stock of Vitamins.com, and Vitamins.com will become our wholly owned
subsidiary. The following description of the material provisions of the merger
agreement is a summary and does not purport to be complete. This description is
qualified in its entirety by reference to the merger agreement, a copy of which
is attached hereto as Appendix A. For more detailed information you should
review the merger agreement.

General; Effective Time and Effects of the Merger

The merger agreement provides that, subject to the approval of the merger
agreement by the affirmative vote of a majority of the votes cast by the
holders of our shares present or represented by proxy at the annual meeting of
stockholders, and the satisfaction or waiver of other conditions to the merger,
HCC Acquisition Corp. will be merged with and into Vitamins.com, with
Vitamins.com continuing as the surviving corporation and as our wholly owned
subsidiary.

If the merger is approved by our stockholders, and the other conditions to
the merger are satisfied or, where permissible, waived, the effective time of
the merger will occur at the time of the filing of the agreement of merger with
the Secretary of State of the State of Delaware.

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Directors of HealthCentral Immediately Following the Merger

If the merger is consummated, our newly combined board of directors will be
comprised of ten members including Robert M. Haft and C. Sage Givens from
Vitamins.com's current board and the following eight directors from our current
board: Sheryle J. Bolton, Annette Campbell-White, Dr. Dean S. Edell,
Albert Greene, James J. Hornthal, Michael D. McDonald, Wesley D. Sterman and
Robin Wollaner. Approval by our stockholders of the merger will also constitute
approval of the appointment of Mr. Haft and Ms. Givens to our board of
directors for terms expiring in 2003. The backgrounds of Mr. Haft and Ms.
Givens are as follows:

Robert M. Haft, age 47, was the founder of Vitamins.com and has served as
President of Vitamins.com, Inc. and its predecessors since June 1995. From
September 1995 to August 1997, he was also the Chairman and Chief Executive
Officer of Phar-Mor, Inc., which operates a chain of retail drugstores. In
1977, Mr. Haft founded Crown Books Corp. and served as its Chief Executive
Officer until June 1993. In addition, in 1982 he founded Trak Auto, a specialty
retailer of automotive parts and accessories that went public in 1983. Mr. Haft
serves as a director of The Second Cup (TSE). At various times prior to 1995,
Mr. Haft has been President of Dart Drug Stores, Inc., Vice Chairman of
Shoppers Food Warehouse Corp., Founder and President of Cabot Morgan Real
Estate and Dart Group Financial, and President of Total Beverage Corp. Mr. Haft
received an MBA from Harvard Business School, a Master in Design from the
Harvard Design School and a B.S. in Economics from University of Pennsylvania
Wharton School.

C. Sage Givens, age 43, is the Managing Partner of Acacia Venture Partners,
a San Francisco-based venture capital firm focused on the healthcare industry
with a particular emphasis on Internet and other technology-driven business
models, a position that she has held since 1995. From 1988 until 1995 she was a
General Partner with First Century Partners, a private venture capital and
buyout fund and an affiliate of Smith Barney. While at First Century, Ms.
Givens launched and managed its diversification into healthcare and also
managed the firm's West Coast operations. Prior to working at First Century,
Ms. Givens was a principal at Smith Barney from 1983 to 1988, when she became a
Managing Director of the firm. Ms. Givens holds an MBA from Stanford University
and a B.A. from Georgetown University. She is a director of HealthSouth (NYSE)
and PhyCor (NASDAQ), as well as of several private Acacia portfolio companies.

Exchange Ratio

The merger agreement provides that each share of Vitamins.com capital stock
issued and outstanding immediately prior to the merger will, at the effective
time, be converted into and exchangeable for a percentage of a share of our
common stock equal to the exchange ratio described below.

The exchange ratio is determined by dividing the lesser of:

. $103,500,000, less certain transaction expenses over $100,000 incurred by
Vitamins.com, divided by the average closing price of our common stock
for the ten trading days immediately preceding the business day
immediately prior to the effective time of the merger; or

. the number of shares of our common stock, less one share, outstanding
immediately prior to the effective time of the merger,

by the number of shares of capital stock of Vitamins.com outstanding
immediately prior to the effective time of the merger. For example, if the
average closing price of our common stock for the ten-day period were $4.125
(the closing price of our stock on May 4, 2000), and there was no adjustment to
the $103,500,000 purchase price, stockholders of Vitamins.com would receive
.447 shares of our common stock for each share of Vitamins.com stock they own,
or an aggregate of 25,090,909 shares. However, under the terms of the merger
agreement the number of shares of our common stock that Vitamins.com
stockholders may receive in exchange for their Vitamins.com stock cannot exceed
the number of shares of our common stock outstanding immediately prior to the
closing of the merger, less one. Therefore, if the number of our shares
outstanding

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immediately prior to the merger was less than 25,090,909, the number of shares
of our common stock that Vitamins.com stockholders would receive would be
capped, and immediately after the close of the merger Vitamins.com stockholders
would hold one share less than 50% of the outstanding shares of the combined
company.

We do not know what the market prices of our common stock will be at the
effective time of the merger or during the period in which the exchange ratio
is calculated. The market price of our common stock at the effective time may
be less than, equal to or greater than the average closing price for the common
stock on the date of this Proxy Statement. The number of shares of our common
stock that the holders of Vitamins.com capital stock will receive upon
consummation of the merger may vary significantly from the number of shares of
our common stock that holders of Vitamins.com capital stock would receive if
the merger was consummated and the holders of Vitamins.com capital stock
received our common stock on the date of this Proxy Statement or on the date of
the annual meeting.

No Fractional Shares

No certificates for fractional shares of our common stock will be issued in
the merger. Instead, each holder of Vitamins.com capital stock who otherwise
would be entitled to receive a fractional share will be paid an amount in cash,
in an amount equal to that fraction, rounded up or down to the next whole
number, multiplied by the last reported sale price for our common stock on the
Nasdaq National Market on the trading day immediately preceding the effective
time of the merger.

Exchange Agent; Exchange of Certificates

We have selected U.S. Stock Transfer Corporation to act as exchange agent
under the merger agreement. At the effective time of the merger, we will
deposit, in trust, with the exchange agent for the benefit of stockholders of
Vitamins.com, certificates representing shares of our common stock to be
delivered and cash for fractional shares to be paid pursuant to the merger
agreement in exchange for shares of Vitamins.com capital stock outstanding
immediately prior to the effective time of the merger. Upon surrender to the
exchange agent of a certificate or certificates for cancellation, the holder
will be entitled to receive a certificate representing our common stock and
cash in lieu of fractional shares.

Representations and Warranties

The merger agreement contains customary mutual representations and
warranties made by us, HCC Acquisition Corp. and Vitamins.com relating to,
among other things:

. due organization and good standing;

. capitalization;

. subsidiaries;

. corporate authority to enter into the contemplated transactions;

. absence of conflicts with corporate governance documents;

. reports and financial statements;

. no undisclosed liabilities;

. filing of tax returns and payment of taxes;

. matters relating to assets owned or leased;

. matters relating to intellectual property;

. matters relating to certain contracts;

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. matters relating to accounts receivable;

. pending or threatened material litigation;

. matters relating to employee benefit plans and the Employee Retirement
Income Security Act;

. absence of environmental liabilities;

. matters relating to certain customers and suppliers;

. matters relating to brokers' or finders' fees; and

. Year 2000 matters.

In addition, the merger agreement contains additional representations and
warranties of Vitamins.com relating to, among other things:

. matters relating to compliance with applicable laws and other
instruments;

. absence of specified changes or events;

. matters relating to insurance coverage;

. matters relating to employees and consultants;

. matters relating to permits, licenses, registration certificates, orders
or approvals from government entities; and

. matters relating to business relationships with affiliates.

All of our representations and warranties and those of HCC Acquisition Corp.
and Vitamins.com expire on the earlier of the date that is twelve months after
the effective time of the merger or the date on which we issue an independent
audit report for the combined entities.

Conduct of Business Pending the Merger

Vitamins.com has agreed, except as otherwise expressly contemplated by the
merger agreement, that until the effective time of the merger it and its
subsidiaries will carry on their respective businesses only in the ordinary
course of business and will use reasonable efforts to maintain and preserve
their business organizations, assets, employees and business relationships and
to maintain all of their properties and assets in useful and good condition.

In addition, unless otherwise provided by the merger agreement, Vitamins.com
has agreed that, among other things, neither it nor any of its subsidiaries,
without our prior written consent, may:

. amend corporate governance documents;

. issue any securities;

. incur any obligation or liability;

. declare or make any payment or distribution to stockholders;

. mortgage, pledge or subject to any lien, charge or any other encumbrance
of its assets or properties, other than mechanic's liens or liens arising
by operation of law;

. sell, assign or transfer any assets;

. cancel any material debts or claims;

. merge or consolidate with or into any corporation or other entity;

. make any election or give any consent under the Internal Revenue Code or
other tax statute or any revocation, termination or cancellation of any
such election or consent;

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<PAGE>

. compromise or settle any claim for taxes due; or

. enter into any material lease, contract, agreement or understanding.

Interim Loans

We have agreed to advance amounts in cash, up to a maximum of $3,000,000, to
enable Vitamins.com to operate in the ordinary course of business until the
effective time of the merger. Each advance will be represented by a promissory
note payable to us at an annual interest rate equal to the Wells Fargo prime
rate plus 3%. If the merger is not consummated, Vitamins.com has agreed to
repay all promissory notes payable to us on the earlier of one year after the
date of each promissory note or upon the closing of a financing pursuant to
which Vitamins.com raises at least $10,000,000.

No Solicitation by Vitamins.com

According to the terms of the merger agreement, Vitamins.com has agreed not
to, directly or indirectly, and to use its best efforts not to permit any of
its officers, directors, employees, representatives or agents to:

. solicit, initiate or encourage any inquiries or proposals that
constitute, or could reasonably be expected to lead to, a proposal or
offer for a merger, consolidation, business combination, sale of
substantial assets or sale of shares of capital stock, other than the
transactions contemplated by the merger agreement;

. engage in negotiations or discussions concerning or provide any non-
public information to any person or entity relating to any transaction
referred to above; or

. agree to, enter into, accept, approve or recommend any of the
transactions referred to above.

Upon receipt of any information with respect to any transaction referred to
above or any request for non-public information in connection with any
transaction or any request for access to the properties, books or records of
Vitamins.com for the purpose of considering any transaction, Vitamins.com must
immediately, but no later than 24 hours after receipt of a proposal, inquiry or
contact, provide us with the name of the person or entity making the proposal,
inquiry or contact and the terms and conditions of the proposal, inquiry or
contact.

Conditions to the Completion of the Merger

Conditions to Each Party's Obligations to Complete the Merger

The respective obligations of HealthCentral, HCC Acquisition Corp. and
Vitamins.com to effect the merger are subject to the satisfaction or waiver of
the following conditions at or prior to the merger:

. no temporary restraining order, preliminary or permanent injunction or
other order of prohibition issued by any government entity shall be in
effect or pending;

. all approvals, waivers and consents required to be made, given or
obtained by us or Vitamins.com with or from any governmental or
regulatory authority in connection with the consummation of the merger
and the other transactions contemplated by the merger agreement,
including all necessary approvals, waivers and consents required under
the Securities Act and under state "blue sky" approvals, shall have been
obtained; and

. the waiting period and any extensions of the waiting period under the
Hart-Scott-Rodino Act shall have expired or terminated.

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<PAGE>

Additional Conditions to Obligations of HealthCentral and HCC Acquisition
Corp.

Our obligations and those of HCC Acquisition Corp. to effect the merger are
also subject to the fulfillment or waiver of each of the following conditions
at or prior to the merger:

. each of the representations and warranties of Vitamins.com set forth in
the merger agreement being true and correct in all material respects at
and as of the effective time of the merger as if made at and as of that
time, and our having received a certificate signed on behalf of
Vitamins.com to that effect; however, if the sum of:

. the reasonably anticipated losses arising out of the failure of a
statement in a representation or warranty to be true and correct in all
material respects as of the date of the merger agreement, and

. the reasonably anticipated losses arising out of the failure of the
representations and warranties that were true and correct as of the
date of the merger agreement to be true and correct as of the effective
time of the merger

is no more than $10,350,000 as adjusted pursuant to the merger agreement,
we shall not have the right to terminate the merger agreement but instead
shall have recourse against the escrow fund for such losses;

. the performance in all material respects by Vitamins.com of its
obligations under the merger agreement;

. the approval of the merger agreement and the other transactions
contemplated by the merger agreement by the requisite vote of the our
stockholders, in accordance with the rules of the Nasdaq National Market;

. the number of Vitamins.com shares dissenting from the merger not
exceeding 2% of the aggregate of the outstanding capital stock of
Vitamins.com;

. our receipt of the legal opinion of Venable, Baetjer, Howard & Civiletti,
LLP;

. the receipt of resignations from all members of the boards of directors
of Vitamins.com and each of its subsidiaries; and

. the filing of the agreement of merger with the Secretary of State of the
State of Delaware.

Additional Conditions to the Obligations of Vitamins.com

The obligations of Vitamins.com to effect the merger are also subject to the
fulfillment or waiver of each of the following conditions at or prior to the
merger:

. each of the representations and warranties of HealthCentral and HCC
Acquisition Corp. set forth in the merger agreement being true and
correct in all material respects at and as of the effective time of the
merger as if made at and as of such time, and Vitamins.com having
received a certificate signed on behalf of HealthCentral and HCC
Acquisition Corp. to such effect, except that where any statement in a
representation or warranty is qualified by a reference to materiality,
such representation and warranty as so qualified being true and correct
in all respects as of the effective time, as if made on and as of the
effective time of the merger;

. our performance and the performance of HCC Acquisition Corp. in all
material respects of our respective obligations under the merger
agreement;

. the receipt by Vitamins.com of the legal opinion of Howard, Rice,
Nemerovski, Canady, Falk & Rabkin, A Professional Corporation;

. the approval of the merger agreement and the other transactions
contemplated by the merger agreement by the requisite vote of our
stockholders and the stockholder of HCC Acquisition Corp.;

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<PAGE>

. the approval of the stock being issued pursuant to the merger and upon
the exercise of the assumed Vitamins.com stock options for listing on the
Nasdaq National Market, upon official notice; and

. the filing of the agreement of merger with the Secretary of State of the
State of Delaware.

Escrow and Indemnification

Indemnification by the Stockholders of Vitamins.com

Pursuant to the terms of the merger agreement, 10% of the shares of our
common stock otherwise issuable to the Vitamins.com stockholders will be held
in escrow following the merger until the earlier of:

. the first anniversary of the effective date of the merger; or

. two business days after the escrow agent receives written notification
from us that we have issued our first independent audit report showing
our combined results of operations with Vitamins.com.

The shares of our common stock held in escrow will be available to indemnify
HealthCentral against losses exceeding $300,000 in the aggregate that arise
from:

. any breach or failure of Vitamins.com to perform any covenants or
agreements required pursuant to the merger agreement; or

. any inaccuracy of any representation or warranty made by Vitamins.com in
the merger agreement.

The shares of our common stock held in escrow will also be available to
indemnify HealthCentral against losses that arise from any inaccuracy of
Vitamins.com's representations and warranties as to its capitalization or any
breach of Vitamins.com's covenant regarding its option plans.

Indemnification by HealthCentral

We have agreed to indemnify and hold harmless Vitamins.com, its
stockholders, directors, officers, employees, fiduciaries, agents and
affiliates against any losses exceeding $300,000 in the aggregate and up to an
amount that is 10% of the purchase price that arise from:

. our breach or failure to perform any covenants or agreements required
pursuant to the merger agreement; or

. any inaccuracy of any of our representations or warranties in the merger
agreement.

Registration Rights

Under the terms of, and except as limited by, the merger agreement, the
Vitamins.com stockholders have registration rights with respect to the shares
of our common stock to be issued upon consummation of the merger as follows:

. we will within 210 days of the effective time of the merger, but in no
event earlier than December 7, 2000, prepare and file a registration
statement on Form S-3 or Form S-1 to effect the registration of the
shares of our common stock received by the holders of Vitamins.com
capital stock pursuant to the merger and use our reasonable best efforts
to keep the registration statement continuously effective for two years
following the date it is declared effective by the Securities and
Exchange Commission; and

. if we file a registration statement relating to any of our securities at
any time after 180 days from the effective time of the merger and prior
to the third anniversary date of the effective time of the merger, then
the holders of our common stock received as a result of the merger have
the right to include their shares in the registration.

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<PAGE>

Upon compliance with the applicable terms and conditions of the merger
agreement and the declaration of effectiveness of the registration statement,
each holder of our common stock will be entitled to resell in the public market
the shares of our common stock such holder received pursuant to the merger,
although stockholders deemed affiliates of Vitamins.com will be subject to
resale restrictions under Rule 145 as promulgated by the Securities and
Exchange Commission. All expenses pursuant to such registration, other than
underwriting discounts and commissions, will be borne by us.

In addition to the foregoing, the merger agreement contains provisions
requiring indemnification for us and the holders of Vitamins.com capital stock
with respect to material misstatements and omissions in a registration
statement or prospectus filed pursuant to the merger agreement.

We have agreed, pursuant to the merger agreement, to file, no later than 45
days after the effective time, a registration statement on Form S-8 covering
the shares of our common stock issuable under outstanding Vitamins.com options
assumed by us. Although Vitamins.com optionees may exercise options for our
common stock before the effective date of such registration statement on Form
S-8, they may not sell the shares of HealthCentral common stock received upon
exercise until after the effective date of such registration statement unless
an exemption from registration is available.

Expenses

Whether or not the merger is completed, all fees, costs and expenses
incurred in connection with the merger and the merger agreement will be paid by
the party incurring such fees, costs or expenses; provided, however, that any
fees, costs and expenses in excess of $100,000 incurred by Vitamins.com shall
reduce dollar for dollar the $103,500,000 purchase price paid if the merger is
consummated.

Termination

The merger agreement may be terminated at any time prior to the effective
time of the merger:

. by mutual consent of us and Vitamins.com; or

. by either us or Vitamins.com upon written notice to the other party if:

. there has been a material breach of any representation, warranty or
covenant by the other party, which breach has not been cured, if
capable of being cured, within 15 calendar days after receipt of
written notice of the breach; or

. the effective time of the merger has not occurred on or before
September 30, 2000 or a later date as established by the boards of
directors of both us and Vitamins.com, unless the failure to
consummate the merger is the result of a breach of a representation,
warranty or covenant or a failure of either party to satisfy a
condition precedent as set forth in the merger agreement by the party
seeking to terminate the merger agreement.

Termination Payments Payable by HealthCentral

If the merger does not occur for any reason other than as a result of a
breach by Vitamins.com of its representations, warranties or covenants, we are
obligated to purchase shares of Vitamins.com Series C preferred stock at the
purchase price of $1 per share. The aggregate purchase price for these shares
will be $6,000,000 less the amount of any interim loans we have made to
Vitamins.com for operating purposes following the date of the merger agreement.
For example, if we advance $3,000,000 in interim loans to Vitamins.com and the
merger subsequently does not occur, we would be obligated to purchase
$3,000,000 of Vitamins.com Series C preferred stock. The interim loans would
continue to be repayable in accordance with their terms.

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<PAGE>

Amendment

The merger agreement may be amended by an instrument in writing signed on
our behalf and on behalf of Vitamins.com prior to the effective time; provided,
however, that after any required approval by HealthCentral stockholders or the
stockholders of Vitamins.com, no amendment can be made that would alter or
change the exchange ratio or have a material adverse effect on the stockholders
except with further stockholder approval.

Treatment of Vitamins.com Stock Options

At the effective time, all outstanding Vitamins.com stock options that have
not been exercised will become and represent options to purchase the number of
shares of our common stock, increased to the nearest whole share, determined by
multiplying the number of Vitamins.com shares subject to the options
immediately prior to the merger by the exchange ratio. The exercise price per
share of the converted options shall be the exercise price per Vitamins.com
share immediately prior to the merger divided by the exchange ratio, rounded to
the nearest whole cent. After the merger, each substitute option will be
exercisable upon the same terms, conditions and restrictions as were applicable
to the related Vitamins.com stock option immediately prior to the merger.

As of the record date, approximately 969,000 shares of Vitamins.com common
stock were issuable upon the exercise of outstanding Vitamins.com options. All
outstanding Vitamins.com stock options will be converted at the effective time
of the merger into options to purchase our common stock.

Voting Agreement

At the time of the execution of the merger agreement, holders of
approximately 41% of our stock entered into a voting agreement with
Vitamins.com and us. Those stockholders agreed, among other things:

. to vote their shares of our common stock in favor of the merger agreement
and the merger with Vitamins.com; and

. not to transfer, sell, exchange, pledge or otherwise dispose of any
shares of our common stock held by them prior to the effective date of
the merger or the termination of the merger agreement in accordance with
its terms except to someone who also agrees to be bound by the voting
agreement.

Written Consent and Agreement of Stockholders of Vitamins.com

At the time of the execution of the merger agreement, Vitamins.com entered
into written consents and agreements with substantially all of its
stockholders. Under the terms of the agreement, those Vitamins.com
stockholders:

. approved the merger and the merger agreement;

. appointed Robert M. Haft as the stockholder representative, to act on
such stockholders' behalf in connection with matters arising under the
merger agreement and the escrow agreement;

. agreed to release and discharge, as of the effective time of the merger,
Vitamins.com from any losses that may arise in connection with any
agreements entered into by such stockholder relating to such holders'
Vitamins.com capital stock ownership; and

. agreed not to transfer, sell, exchange, pledge or otherwise dispose of
any shares of Vitamins.com capital stock held by them prior to the
effective date of the merger or the termination of the merger agreement
in accordance with its terms except to someone who also agrees to be
bound by the written consent.

The stockholders entering into such consents and agreements hold sufficient
shares to approve the foregoing matters pursuant to the merger agreement and
Delaware law.

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<PAGE>

Executive Employment Agreements and Non-Competition Agreements

At the time of the execution of the merger agreement, two of Vitamins.com's
executives, Robert M. Haft and Bruce Kudeviz, entered into at-will employment
agreements with us and Vitamins.com, which become effective only upon
completion of the merger. The employment agreements provide, among other
things, that each executive will receive an annual base salary equal to
$150,000. Further, the employment agreements provide that if the executive is
terminated during the first year of his employment with HealthCentral without
cause and not as a result of his death or permanent disability, he shall be
entitled to receive up to one year's severance pay so long as he honors his
non-competition agreement and does not provide more than thirty hours of paid
employment services per week to any third party.

In addition, the employment agreements provide for entering into
confidential information and invention assignment agreements and non-
competition agreements. Except as otherwise provided in the confidential
information and invention assignment agreement, each executive has agreed to
assign to us his rights throughout the world to all inventions and intellectual
property conceived or developed, jointly or individually, or reduced to
practice during any period of employment, consulting or director relationship
with us and Vitamins.com. The executives also agreed to a confidentiality
provision which survives termination of employment until such time as the
confidential information becomes generally known by the public. Pursuant to the
noncompetition agreement, each executive agrees, that for a period of one year
following termination of employment, he will not compete with the combined
company in any pharmacy or retail drug business or any business that primarily
provides health information, products or services to the general public.

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<PAGE>

PROPOSAL NO. 2--ELECTION OF DIRECTORS

All directors of HealthCentral are elected for three year terms and hold
office until the election and qualification of their successors. Currently
there are nine directors serving on our board, with the directors in Class I
being elected at this annual meeting. Mr. Andersen has declined to stand for
re-election, and in the event that the merger is not consummated, the number of
directors will be only eight and Mr. Andersen's place on the board will be
eliminated. Accordingly, there are only two directors nominated for election at
this annual meeting. If the merger is consummated, the number of directors will
be ten and Robert M. Haft and C. Sage Givens will serve on HealthCentral's
board as members of Class I in addition to the two directors elected at this
annual meeting of stockholders.

It is intended that the proxies will be voted for the nominees named below
for election to HealthCentral's board of directors unless authority to vote for
any nominee is withheld. There are two nominees, each of whom is currently a
director of HealthCentral. Each person nominated has agreed to serve if elected
and the board has no reason to believe that any nominee will be unable or will
decline to serve. In the event that any nominee is unable or declines to serve
as a director at the annual meeting, the proxies will be voted for any nominee
who is designated by the current board of directors to fill the vacancy.

Nominees for Election as Director to Serve Until 2003

The following persons have been nominated to serve on the board of directors
for a three year term expiring in 2003:

Annette Campbell-White has served as a director of HealthCentral since
September 1999. She has been the Managing General Partner of MedVenture
Associates, a life sciences venture capital firm, since May 1986. Ms. Campbell-
White serves on the board of directors of ArthroCare Corporation, a
manufacturer of surgical instruments, and several privately held companies. Ms.
Campbell-White received a B.Sc. in Chemical Engineering and an M.Sc. in
Physical Chemistry from the University of Cape Town, South Africa.

Robin Wolaner has served as a director of HealthCentral since October 1998.
Since October 1997, Ms. Wolaner has served as the Executive Vice President of
CNET, Inc., an Internet media company. From July 1992 to December 1995, Ms.
Wolaner served as President and Chief Executive Officer of Sunset Publishing
Corporation, a magazine and book company and a division of Time Publishing
Ventures. She serves on the board of directors of Burnham Pacific Properties, a
real estate investment trust, as well as on the board of directors of a private
company. Ms. Wolaner received a B.S. in Industrial and Labor Relations from
Cornell University.

Required Votes

Assuming the presence of a quorum, election of the nominees to the board of
directors requires a plurality of the votes of the shares present in person or
represented by proxy and entitled to vote on the proposal.

Recommendation of the Board

The board of directors recommends that stockholders vote "for" election of
both the nominees for director.

Board Meetings and Committees

The board of directors held 11 meetings during fiscal 1999. During fiscal
1999, each director, other than Mr. Hornthal, Mr. Edell and Mr. Sterman,
attended more than 75% of (1) the total number of meetings of the board of
directors and (2) the total number of meetings held by all committees of the
board on which the director served. There are no family relationships among the
executive officers or directors of HealthCentral. The board of directors has an
Audit Committee and a Compensation Committee.

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<PAGE>

The Audit Committee consists of Ms. Campbell-White, Mr. Andersen and Ms.
Bolton. The Audit Committee was formed in September 1999 and did not hold its
first meeting until fiscal year 2000. The Audit Committee:

. makes recommendations to the board of directors regarding the selection
of independent auditors;

. reviews the results and scope of the audit and other services provided by
our independent auditors; and

. reviews and evaluates our audit and control functions.

The Compensation Committee consists of Ms. Bolton, Dr. Sterman and Ms.
Wolaner. The Compensation Committee was formed in September 1999 and met one
time during the last fiscal year. The Compensation Committee:

. reviews and approves the compensation and benefits for our executive
officers and grants stock options under our stock options plans; and

. makes recommendations to the board of directors regarding such matters.

Report of the Compensation Committee of the Board of Directors on Executive
Compensation

HealthCentral's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The committee is comprised of
Sheryle Bolton, Wesley D. Sterman and Robin Wolaner, each of whom is a non-
employee director. Its role is to establish, review and administer
HealthCentral's executive compensation program. The committee approves all
stock option grants to executive officers, all executive officer base salaries
and any cash bonus payments to executive officers.

Compensation Philosophy

HealthCentral's executive compensation policies are designed to attract and
retain executives who will contribute to HealthCentral's long-term success, to
enhance stockholder value by aligning the financial interest of the executive
officers with those of its stockholders and to provide compensation packages
that recognize individual contributions and HealthCentral's performance. The
compensation policies are designed to achieve the following objectives:

. offer compensation opportunities that attract highly qualified
executives, reward outstanding initiative and achievement, and retain the
leadership and skills necessary to build long-term stockholder value;

. offer base salaries that are competitive with those of similarly-situated
Internet companies and long-term incentives through HealthCentral's stock
option programs; and

. offer plans that are designed to provide an incentive to management to
increase revenues, provide quality returns on investment, enhance
stockholder value and contribute to the long-term growth of
HealthCentral.

Compensation Program

Base Salary

The base salaries of executive officers are initially determined by
evaluating the responsibilities of the position held and the experience and
performance of the individual, with reference to the competitive marketplace
for executive talent, including a comparison to base salaries for comparable
positions in high growth, Internet-based companies of reasonably similar size.
Salaries for executive officers are reviewed by the committee on an annual
basis and may be changed based on the individual's performance or a change in
competitive pay levels in the marketplace.

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<PAGE>

Incentive Awards

HealthCentral's executive officers are eligible to receive cash bonus awards
designed to motivate executives to attain short-term and long-term company-wide
goals, such as customer satisfaction, increase in website traffic, revenue
growth and attainment of other performance milestones, as determined by the
Compensation Committee.

Stock Options

Under HealthCentral's 1998 and 1999 Stock Option Plans, stock options may be
granted to executive officers and other employees of HealthCentral. Upon
joining HealthCentral, an individual's initial option grant is based on the
individual's responsibilities and position. Because of the competitive nature
of the Internet industry in which HealthCentral competes, the committee
believes stock option grants are an effective method of providing incentives to
executives to take a longer term view of HealthCentral's performance and to
ensure that the executive's and the stockholders' interests are in alignment.
The board of directors has established certain general guidelines in making
option grants to the executive officers in an attempt to target a fixed number
of unvested option shares based upon each individual's position with
HealthCentral, and his or her existing holdings of unvested options. However,
the board of directors is not required to adhere strictly to these guidelines
and may vary the size of the option grant made to each executive officer as it
determines the circumstances warrant. Stock options are granted at fair market
value and generally vest over a four year period. HealthCentral's stock plans
also provide that upon an acquisition or other change of control of
HealthCentral, fifty percent of an executive officer's unvested options vest
immediately and the remaining fifty percent vest monthly over the next twelve
months, subject to the continued provision of services.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly-held companies for compensation exceeding
$1 million paid to certain of the corporation's executive officers. However,
compensation which qualifies as "performance-based" is excluded from the $1
million limit if, among other requirements, the compensation is payable upon
attainment of pre-established, objective performance goals under a plan
approved by the stockholders.

The compensation to be paid to HealthCentral's executive officers during
1999 did not exceed the $1 million limit per officer, nor is it expected that
the compensation to be paid to HealthCentral's executive officers for 2000 will
exceed that limit. Because the cash compensation paid by HealthCentral to each
of its executive officers is expected to be well below $1 million and the
committee believes that options granted under the 1998 Plan and 1999 Plan will
qualify as performance-based compensation, the committee believes that this
section will not affect the tax deductions available to HealthCentral. Because
it is very unlikely that the cash compensation payable to any of
HealthCentral's executive officers in the foreseeable future will approach the
$1 million limit, the committee has decided at this time not to take any other
action to limit or restructure the elements of cash compensation payable to
HealthCentral's executive officers. The committee will continue to monitor the
compensation levels potentially payable under HealthCentral's cash compensation
programs, but intends to retain the flexibility necessary to provide total cash
compensation in line with competitive practice, HealthCentral's compensation
philosophy and HealthCentral's best interests.

Chief Executive Officer Compensation

In August 1999, HealthCentral entered into an employment agreement with its
Chief Executive Officer, Albert L. Greene. Mr. Greene's base salary, annual
incentive award and long-term incentive compensation are determined by the
committee based upon the same factors as those employed by the committee for
executive officers in general. Mr. Greene's employment agreement provides for
an initial base salary of $235,000 on an annualized basis, subject to annual
review. In addition, during the first three years of the agreement,
HealthCentral is paying Mr. Greene a monthly bonus of between 30% and 60% of
his monthly base salary,

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<PAGE>

with the percentage of such bonus to be based on Mr. Greene's achievement of
certain performance milestones, as mutually agreed by Mr. Greene and the
committee. Mr. Greene's current monthly bonus is equal to 30% of his base
salary. During 1999, Mr. Greene was granted options to purchase a total of
498,582 shares of common stock at exercise prices ranging from $0.248 to
$10.08, the fair market value of HealthCentral's stock on the date of grant. If
Mr. Greene is terminated without cause before August 11, 2000, he will receive
monthly severance payments equal to his monthly base salary until that date.

Sheryle Bolton
Wesley D. Sterman
Robin Wolaner

Executive Officer and Director Compensation

Board of Directors

Our bylaws currently provide for a board of directors consisting of nine
members. Our board of directors is divided into the following three classes:
Class I, whose initial term will expire at the annual meeting of stockholders
in 2000; Class II, whose initial term will expire at the annual meeting of
stockholders in 2001; and Class III, whose initial term will expire at the
annual meeting of stockholders in 2002. After each of these respective
elections, each class of directors will serve staggered three year terms. As a
result, only one class of directors will be elected at each annual meeting of
stockholders of HealthCentral, with the other classes continuing for the
remainder of their respective terms. If the merger with Vitamins.com is
approved by our stockholders, our bylaws will be amended to increase the total
number of directors to ten and the number of Class I directors to four. Louis
Andersen is not standing for re-election, and Robert M. Haft and C. Sage Givens
will join the board as members of Class I. If the merger is not approved by our
stockholders, our bylaws will be amended to decrease the total number of
directors to eight, Louis Andersen will not stand for re-election and Mr.
Andersen's place on the Board as a member of Class I will be eliminated.

The directors of HealthCentral and their ages as of February 29, 2000 are as
follows:

<TABLE>
<CAPTION>
Director
Name Age Principal Occupation Since Class
---- --- -------------------- -------- -----
<C> <C> <S> <C> <C>
Albert L. Greene........ 49 President, Chief Executive 1998 II
Officer and Director of
HealthCentral

James J. Hornthal....... 45 Chairman of the Board of 1996 II
Directors of Preview Travel

Michael D. McDonald..... 43 President and Director of Global 1999 II
Health Initiatives

Louis M. Andersen(1).... 38 Vice President, Strategy and 1999 I
Business Development, United
Healthcare Corporation

Sheryle J. Bolton....... 53 Chief Executive Officer and 1998 III
Director of Scientific Learning
Corporation

Annette Campbell-White.. 52 Managing General Partner of 1999 I
Medventure Associates

Dean S. Edell........... 58 Host of Dr. Dean Edell radio and 1996 III
television programs

Wesley D. Sterman....... 39 Director of Heartport, Inc. 1998 III

Robin Wolaner........... 45 Executive Vice President of 1998 I
Cnet, Inc.
</TABLE>
- --------
(1) Mr. Andersen, who is currently serving as a Class I director, is not
standing for re-election as a board member at the annual meeting of
stockholders.

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<PAGE>

Albert L. Greene has served as our President and Chief Executive Officer
since joining HealthCentral in July 1998 and as a director since October 1998.
From May 1990 to February 1998, Mr. Greene served as President of Alta Bates
Medical Center, a hospital in Berkeley, California. From January 1996 to July
1998, Mr. Greene served as Chief Executive Officer of the East Bay Service Area
of Sutter Health, a healthcare provider. He presently serves on the boards of
directors of Quadramed Corporation, a developer of healthcare software and
services, Lumisys Incorporated, a supplier of medical imaging products, and
Acuson Corporation, a manufacturer of medical ultrasound equipment. Mr. Greene
received a B.A. in Psychology from Ithaca College and an M.H.A. in Hospital
Administration from the University of Michigan.

James J. Hornthal co-founded HealthCentral in August 1996 and has been a
director since inception and co-chairman of the board of directors since
September 1999. In March 1985, Mr. Hornthal founded Preview Travel, an online
travel services company. He has served as chairman of the board of directors of
Preview Travel since inception, as well as President until April 1994 and Chief
Executive Officer until June 1997. Mr. Hornthal is also the chairman of NewsNet
Central, a privately-held media convergence company. Mr. Hornthal received an
A.B. in Economics from Princeton University and an M.B.A. from Harvard Business
School, where he was a Baker Scholar.

Michael D. McDonald has served as co-chairman of the board of directors of
HealthCentral since September 1999 and served as chairman of the board of
directors from August 1999 to September 1999. Since December 1995, he has
served as President and a director at both Global Health Initiatives, a health
information company, and Health Initiatives Foundation, Inc., a health and
technology non-profit company. At Windom Health, Dr. McDonald served as
President and chairman of the board of directors from June 1984 to August 1999.
He also served as Director of Health and Telecom at the C. Everett Koop
Institute from May 1994 to July 1995, and as Director of Health and Telecom at
the Koop Foundation from March 1995 to April 1997. Dr. McDonald received a B.A.
in Interdisciplinary Study of Medicine from the University of California, San
Diego, and an M.P.H. and Dr.P.H. from the University of California, Berkeley.

Louis M. Andersen has served as a director of HealthCentral since August
1999. Mr. Andersen has been Vice President, Strategy and Business Development
at United HealthCare Corporation, a healthcare management and insurance
provider, since September 1998. From October 1989 to September 1998, he was
Director of Strategy at Prudential HealthCare, a healthcare affiliate of
Prudential Insurance Company of America. Mr. Andersen received a B.S./B.A.
degree in Accounting from the University of Nebraska and an M.B.A. from
Columbia University.

Sheryle J. Bolton has served as a director of HealthCentral since October
1998. Since November 1996, Ms. Bolton has served as Chief Executive Officer and
a director of Scientific Learning Corporation, a neuroscience-based,
educational Internet and software company. She has also served as its President
since June 1997. From September 1995 to October 1996, Ms. Bolton was a
consultant to companies in the Internet, healthcare and technology sectors.
From January 1994 to August 1995, Ms. Bolton was the President and
Chief Operating Officer of Physicians' Online, Inc., an online clinical
information resource for physicians. Ms. Bolton serves as a director or trustee
for several mutual fund families of Scudder Kemper Investments, Inc. Ms. Bolton
received a B.A. in English and an M.A. in Linguistics from the University of
Georgia, and an M.B.A. from Harvard Business School.

Annette Campbell-White has served as a director of HealthCentral since
September 1999. For background on Ms. Campbell-White, please see page 43.

Dean S. Edell, M.D. co-founded HealthCentral in August 1996, and has been a
director since inception. From inception to July 1998, Dr. Edell also served as
President and Chief Executive Officer. Dr. Dean Edell has been a medical
journalist for twenty years, and is the host of the Dr. Dean Edell Show, which
is broadcast on more than 300 radio stations. His television news reports
appear in over 50 markets in the United States and Canada. Dr. Edell has
received numerous awards for his broadcasting work, including a C. Everett Koop
Media award, an Edward R. Murrow award, and awards from the American Cancer
Society and the American Heart Association. Dr. Edell received a B.A. in
Zoology from Cornell University and an M.D. from Cornell University Medical
School.

47
<PAGE>

Wesley D. Sterman, M.D. has served as a director of HealthCentral since
December 1998. Dr. Sterman co-founded Heartport, Inc., a cardiovascular medical
technology company, in May 1991 and has served as a director of Heartport since
that time. Dr. Sterman served as Heartport's Chairman of the Board from May
1998 until June 1999 and as its President and Chief Executive Officer from May
1991 until May 1998. Dr. Sterman received a B.S. in both Biology and Chemistry
from Stanford University, an M.B.A. from the Graduate School of Business at
Stanford University, and an M.D. from the Stanford University School of
Medicine. Dr. Sterman also serves on the boards of directors of several private
companies.

Robin Wolaner has served as a director of HealthCentral since October 1998.
For background on Ms. Wolaner, please see page 43.

The additional persons who will become directors if the merger with
Vitamins.com is approved by our stockholders are as follows:

<TABLE>
<CAPTION>
Director
Name Age Principal Occupation Since Class
---- --- -------------------- -------- -----
<C> <C> <S> <C> <C>
C. Sage Givens..... 43 Managing Partner of Acacia Venture -- I
Partners

Robert M. Haft..... 47 Founder and President of -- I
Vitamins.com, Inc.
</TABLE>

For background information on Mr. Haft and Ms. Givens, please see page 34.

Board Compensation

Except for reimbursement for reasonable travel expenses relating to
attendance at board meetings and the grant of stock options, our directors do
not currently receive compensation for their services as members of the board
of directors. Employee directors are eligible to participate in our 1998 stock
plan, 1999 stock plan and 1999 employee stock purchase plan. Non-employee
directors are eligible to participate in our 1998 stock plan, 1999 stock plan
and 1999 directors' stock option plan.

The 1999 directors' plan provides that each person who becomes a non-
employee director after our initial public offering will be automatically
granted a non-statutory stock option to purchase 12,500 shares of common stock
on the date on which he or she first becomes a member of our board of
directors. In addition, on the date of each annual stockholders meeting, each
non-employee director who will continue serving on the board following the
meeting and who has been a director of HealthCentral for at least six months
prior to the meeting date will be granted an option to purchase 6,250 shares of
common stock. All options granted under the directors' plan will have a term of
ten years and an exercise price equal to the fair market value of the common
stock on the date of grant. All options granted under the directors' plan to
new directors shall vest monthly over four years from the date of a grant, and
all options granted at the time of our annual stockholders meeting will vest
monthly over 12 months.

In October 1998, we granted each of Ms. Bolton and Ms. Wolaner non-statutory
stock options to purchase 62,500 shares of our common stock at an exercise
price of $0.25 per share. In February 1999, we granted Dr. Sterman a non-
statutory stock option to purchase 62,500 shares of our common stock at an
exercise price of $0.25 per share. In August 1999, we granted Dr. McDonald a
non-statutory stock option to purchase 62,500 shares of our common stock, Mr.
Andersen a non-statutory stock option to purchase 12,500 shares of our common
stock, and Dr. Sterman a non-statutory stock option to purchase 12,500 shares
of our common stock, each at an exercise price of $1.28 per share. Each of
these option grants vests over a 48-month period, except for Mr. Andersen's
option grant, which vests over a 12-month period.

In August 1999, in connection with the closing of our acquisition of Windom
Health, we entered into a three-year consulting agreement with Michael D.
McDonald, the co-chairman of our board of directors, under which Dr. McDonald
has agreed to provide us with strategic consulting services related to our
institutional business. The consulting agreement provided for an $85,000 bonus
to be paid to him on the closing of our

48
<PAGE>

Series B preferred stock financing and a monthly fee of $5,000 for his
provision of consulting services. If we terminate the consulting agreement
without releasing Dr. McDonald from a non-competition provision, Dr. McDonald
will continue to receive as severance the monthly fee due for the remainder of
the initial term of the consulting agreement.

Compliance with Section 16(a) of the Securities Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires
HealthCentral's directors and executive officers, and persons who own more than
ten percent of a registered class of HealthCentral's equity securities, to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of common stock and other equity securities of
HealthCentral. Officers, directors and holders of more than ten percent of
HealthCentral's common stock are required by the Securities and Exchange
Commission's regulations to furnish HealthCentral with copies of all Section
16(a) forms they file.

To HealthCentral's knowledge, based solely upon review of the copies of such
reports furnished to HealthCentral and written representations that no other
reports were required, during the year ended December 31, 1999, all Section
16(a) filing requirements applicable to HealthCentral's officers, directors and
holders of more than ten percent of HealthCentral's common stock were complied
with.

Executive Officers

The following table sets forth information regarding our executive officers
as of March 31, 2000:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Albert L. Greene........ 50 President, Chief Executive Officer and Director
C. Fred Toney........... 34 Executive Vice President and Chief Financial Officer
Deryk Van Brunt......... 40 Executive Vice President of Operations
Robert M. Cudd.......... 45 Senior Vice President of Marketing
Marcos A. Athanasoulis.. 32 Vice President of Engineering
</TABLE>

Albert L. Greene has served as HealthCentral's President and Chief Executive
Officer since joining HealthCentral in July 1998 and as a director since
October 1998. For background information on Mr. Greene, please see page 47.

C. Fred Toney has served as HealthCentral's Executive Vice President and
Chief Financial Officer since January 2000 and served as HealthCentral's Senior
Vice President and Chief Financial Officer from July 1999, when he joined
HealthCentral, until January 2000. From August 1992 to July 1999, Mr. Toney
served as Research Analyst, Director of Research and Senior Managing Director
at Pacific Growth Equities, Inc., an investment banking firm. He also serves on
the boards of directors of two private companies. Mr. Toney received a B.A. in
both Economics and English from the University of California, Davis.

Deryk Van Brunt has served as HealthCentral's Executive Vice President of
Operations since January 2000 and served as HealthCentral's Senior Vice
President of Operations from August 1999, when HealthCentral acquired Windom
Health, until January 2000. From June 1994 to August 1999, Dr. Van Brunt was
Chief Operating Officer of Windom Health. Dr. Van Brunt received a B.S. in
Natural Resources, an M.P.H. in Epidemiology and a Dr.P.H. in Health
Informatics from the University of California, Berkeley.

Robert M. Cudd has served as HealthCentral's Senior Vice President of
Marketing since January 2000 and served as HealthCentral's Vice President of
Marketing from October 1999, when he joined HealthCentral, until January 2000.
From March 1998 to September 1999, Mr. Cudd served as Vice President of
Marketing and Editorial at Fatbrain.com, an Internet retailer of professional
books and documents. From September 1996 to March 1998, Mr. Cudd served as Vice
President of Marketing for West Marine, Inc., a boating supply and

49
<PAGE>

accessory retailer and, from February 1994 to May 1996, he served as the
Director of Marketing at Computer City, a reseller of computer hardware and
software. Mr. Cudd holds a B.S. degree in Business from Ferris State College.

Marcos A. Athanasoulis has served as HealthCentral's Vice President of
Engineering since HealthCentral acquired Windom Health in August 1999. At
Windom Health, Mr. Athanasoulis served as Director of Engineering from June
1998 to August 1999, and as Director of Research and Development from June 1996
to June 1998. From June 1990 to May 1996, Mr. Athanasoulis was a Research
Scientist at Impact Assessment, Inc., a consulting company. He was also an
independent consultant in health information systems from June 1995 to June
1998. Mr. Athanasoulis received a B.A. in Social Science and an M.P.H. in
Epidemiology and Biostatistics from the University of California, Berkeley, and
is a doctoral fellow in Health Information Sciences at the University of
California Berkeley.

Executive Compensation

The following table shows the compensation received in 1998 and 1999 by each
of (i) HealthCentral's Chief Executive Officer and (ii) the other most highly
compensated executive officer of HealthCentral who earned in excess of $100,000
and who was serving at December 31, 1999 (the "Named Executive Officers").
Prior to 1998, HealthCentral had no operations or employees.

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Annual Compensation Securities
--------------------------- Underlying
Name Year Salary ($) Bonus ($) Options (#)
- ---- ---- ---------- --------- ------------
<S> <C> <C> <C> <C>
Albert Greene......................... 1999 185,008(1) 95,003 498,582
Chief Executive Officer(2) 1998 64,800(1) -- 149,718
C. Fred Toney......................... 1999 94,744 43,750 312,500
Executive Vice President &
Chief Financial Officer(3)
</TABLE>
- --------
(1) Includes amounts that were paid to Mr. Greene as a consultant for a portion
of the year.

(2) As of December 31, 1999, Mr. Greene held 45,522 shares directly and 62,500
shares indirectly through a limited partnership. These shares were valued
at $694,499 at December 31, 1999, based on the fair market value on that
date less consideration paid.

(3) As of December 31, 1999, Mr. Toney held 373,653 shares, which were valued
at $2,014,155 at December 31, 1999, based on the fair market value on that
date less consideration paid.

50
<PAGE>

Option Grants

The following table sets forth information with respect to stock options
granted to each of the Named Executive Officers in 1999. HealthCentral has not
granted any stock appreciation rights.

Option Grants in 1999

<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed
Annual Rates Of Stock
Number Of % Of Total Price Appreciation
Securities Options Granted Exercise For Option Term(5)
Underlying To Employees In Price Expiration ---------------------
Name Options Granted Fiscal Year ($/Share) Date 5% 10%
---- --------------- --------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Al Greene............... 449,156(1) 18.87% $0.248 2/5/09 $5,238,638 $8,407,635
4,783(2) .20% $0.248 2/5/09 $ 55,786 $ 89,532
44,643(3) 1.87% $10.08 10/6/09 $ 81,754 $ 396,731

C. Fred Toney........... 312,500(4) 13.13% $ 1.28 7/12/09 $3,322,279 $5,527,107
</TABLE>
- --------
(1) 1/36th of the total shares vest on the monthly anniversary of August 16,
1999, the vesting commencement date.

(2) Shares vested 100% on grant date.

(3) 1/48th of the total shares vest on the monthly anniversary of October 7,
1999, the vesting commencement date.

(4) 1/4th of the total shares vest on the annual anniversary of January 12,
1999, the vesting commencement date, and 1/48th of the total shares vest on
the monthly anniversary of the vesting commencement date thereafter.

(5) The potential realizable value represents the difference between the fair
market value of the shares on the date of grant, assuming the price per
share as of December 31, 1999 ($7.3125 per share) was the fair market value
on such date, compounded annually for ten years at the listed percentages,
and the exercise price of the option.

Aggregated Option Exercises in 1999 and December 31, 1999 Option Values

The following table sets forth information with respect to the Named
Executive Officers concerning option exercises and the value of exercisable and
unexercisable options for the year ended December 31, 1999.

<TABLE>
<CAPTION>
Number Of Securities
Underlying Value Of Unexercised
Unexercised Options In-The-Money Options
Shares At December 31, 1999 At December 31, 1999
Acquired Value ------------------------- ---------------------------
Name On Exercise Realized Unexercisable Exercisable Unexercisable Exercisable
---- ----------- -------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Albert Greene........... -- -- 605,517 42,783 $4,264,535(2) $ 0(2)

C. Fred Toney........... 312,500 $ 0(1) -- -- --
</TABLE>
- --------
(1) No value realized on exercise date because the fair market value of
HealthCentral's common stock on the date of exercise (as determined by the
board of directors) of $1.28 per share equaled the exercise price of $1.28
per share.

(2) Value based on difference between the closing sale price on the Nasdaq
National Market System of HealthCentral's common stock on December 31, 1999
of $7.3125 per share and the exercise price of an exercisable in-the-money
option to purchase 603,657 shares. Mr. Greene also holds an option, the
exercisable portion of which consists of 1,860 shares, which is not in-the-
money.

51
<PAGE>

Employment and Consulting Agreements

A June 1999 offer letter to Mr. Toney, our Chief Financial Officer and
Executive Vice President, provides that Mr. Toney receives an initial base
salary of $200,000, with an incentive bonus of up to 30% of his base salary
depending on his achievement of performance milestones. In the first year of
his employment, Mr. Toney is guaranteed a bonus of at least 15% of his base
salary. If Mr. Toney is terminated without cause during the first year of his
employment, he will receive monthly severance payments equal to his monthly
base salary until the later of the one year anniversary of his employment start
date or six months after his termination date.

In August 1999, we entered into an employment agreement with our Chief
Executive Officer, Albert L. Greene. Mr. Greene's base salary, annual incentive
award and long-term incentive compensation are determined by the Compensation
Committee based upon the same factors as those employed by the committee for
executive officers in general. Mr. Greene's employment agreement provides for
an initial base salary of $235,000 on an annualized basis, subject to annual
review. In addition, during the first three years of the agreement,
HealthCentral is paying Mr. Greene a monthly bonus of between 30% and 60% of
his monthly base salary, with the percentage of such bonus to be based on Mr.
Greene's achievement of certain performance milestones, as mutually agreed by
Mr. Greene and the committee. Mr. Greene's current monthly bonus is equal to
30% of his base salary. During 1999, Mr. Greene was granted options to purchase
a total of 498,582 shares of common stock at exercise prices ranging from
$0.248 to $10.08, the fair market value of HealthCentral's stock on the date of
grant. If Mr. Greene is terminated without cause before August 11, 2000, he
will receive monthly severance payments equal to his monthly base salary until
that date.

The agreements with Messrs. Greene and Toney also have change of control
provisions, which provide that fifty percent of their unvested shares and
options vest on an acquisition of our company, and that if they are terminated
without cause within twelve months after an acquisition of our company, the
remaining unvested shares vest automatically at that time.

In August 1999, we entered into employment agreements with Dr. Van Brunt,
our Executive Vice President of Operations, and Mr. Athanasoulis, our Vice
President of Engineering, in connection with our acquisition of Windom Health.
These employment agreements each provide that if the officer is terminated
without cause before August 11, 2000, he will receive monthly severance
payments equal to his monthly base salary until that date.

In September 1999, the board of directors amended our stock plans to provide
that fifty percent of any unvested options held by officers vest on our
acquisition by another company and the remaining fifty percent vest monthly
over the next twelve months, subject to the continued provision of services.

Compensation Committee Interlocks and Insider Participation

Ms. Bolton, Mr. Sterman and Ms. Wolaner served on HealthCentral's
Compensation Committee during 1999. No interlocking relationship exists between
any member of HealthCentral's Compensation Committee and any member of any
other company's board of directors or compensation committee.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information known to us with respect to
beneficial ownership of our common stock as of February 29, 2000, by:

. each person, or group of affiliated persons, known by us to own
beneficially more than 5% of our outstanding common stock;

. each director;

. our Chief Executive Officer and each Named Executive Officer; and

. all directors and executive officers as a group.

52
<PAGE>

Except as otherwise noted, the address of each person listed in the table is
c/o HealthCentral, 6001 Shellmound Street, Suite 800, Emeryville, CA 94608.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power
with respect to shares. To our knowledge, except under applicable community
property laws or as otherwise indicated, the persons named in the table have
sole voting and sole investment control with respect to all shares beneficially
owned. The applicable percentage of ownership for each stockholder is based on
22,584,964 shares of common stock outstanding as of February 29, 2000, in each
case together with applicable options for that stockholder. Shares of common
stock issuable upon exercise of options and other rights beneficially owned
that are exercisable on or before April 29, 2000 are deemed outstanding for the
purpose of computing the percentage ownership of the person holding those
options and other rights but are not deemed outstanding for computing the
percentage ownership of any other person. A portion of the shares issued to
officers or issuable upon exercise of options by officers is subject to
repurchase by us at the original exercise price in the event of termination of
that officers' employment, which repurchase right lapses over time.

<TABLE>
<CAPTION>
Total Percent
Number of Beneficially
Name Shares Owned
---- --------- ------------
<S> <C> <C>
James J. Hornthal(1)................................ 2,401,007 10.6%
Dean S. Edell....................................... 2,305,000 10.2%
Michael D. McDonald(2).............................. 1,634,268 7.2%
Albert L. Greene(3)................................. 717,259 3.1%
Annette Campbell-White(4)........................... 683,410 3.0%
C. Fred Toney....................................... 373,653 1.6%
Wesley D. Sterman(5)................................ 160,542 *
Robin Wolaner(6).................................... 57,631 *
Sheryle J. Bolton(7)................................ 40,847 *
Louis M. Andersen(8)................................ 9,333 *
All directors and executive officers as a group (14
persons)(9)........................................ 8,905,092 37.89%
</TABLE>
- --------
* Less than one percent.

(1) Represents 2,401,007 shares held by an investment entity and trust
controlled by Mr. Hornthal.

(2) Includes 10,417 shares issuable pursuant to the exercise of stock options
as of April 29, 2000.

(3) Includes 609,237 shares issuable pursuant to the exercise of outstanding
options as of April 29, 2000.

(4) Includes 653,609 shares held by MedVenture Associates III, L.P. and 27,801
shares held by MedVen Affiliates III, L.P. Annette Campbell-White, a
director of HealthCentral, is a managing member of the general partner of
each of these partnerships. Ms. Campbell-White disclaims beneficial
ownership of these shares. The managing members of the entity that is the
general partner of each of MedVenture Associates III, L.P. and MedVen
Affiliates III, L.P. are Annette Campbell-White, Gary H. Story and George
Y. Choi, all of whom share voting and dispositive power over these shares.

(5) Includes 20,312 shares issuable pursuant to the exercise of stock options
as of April 29, 2000.

(6) Includes 23,438 shares issuable pursuant to the exercise of stock options
as of April 29, 2000.

(7) Includes 23,438 shares issuable pursuant to the exercise of stock options
as of April 29, 2000.

(8) Includes 8,333 shares issuable pursuant to the exercise of stock options as
of April 29, 2000.

(9) Includes an aggregate of 920,175 shares issuable pursuant to the exercise
of outstanding options.

53
<PAGE>

Stock Performance Graph
[PERFORMANCE GRAPH APPEARS HERE]

Total Return Analysis

<TABLE>
<CAPTION>
12/7/99 12/31/99
------- --------
<S> <C> <C>
HealthCentral.com......................................... $100.00 $ 74.05
Peer Group................................................ $100.00 $ 73.91
Nasdaq Composite.......................................... $100.00 $113.47
</TABLE>

Source: Carl Thompson Associates www.ctaonline.com (800-959-9677). Data from
Bloomberg Financial Markets.

Certain Relationships and Related Transactions

Preferred Stock Issuances

Since January 1, 1999, we issued a total of 4,038,455 shares of Series B
preferred stock at a price of $5.20 per share in August and September 1999, all
of which converted into shares of common stock on a 1-for-1 basis upon the
closing of our initial public offering in December 1999. The following table
summarizes the shares of preferred stock purchased since January 1, 1999 and
held as of February 29, 2000 by our executive officers, directors and holders
of more than 5% of our outstanding stock and their affiliates.

<TABLE>
<CAPTION>
Shares Issued on Exercise
of Series A Preferred Series B
Stock Warrants Preferred Stock
------------------------- ---------------
<S> <C> <C>
Directors
Entities affiliated with James J.
Hornthal........................ 24,000 19,230
Entities affiliated with Annette
Campbell-White.................. -- 673,077
Wesley D. Sterman................ 36,000 19,230
Robin Wolaner.................... 9,818 --
Sheryle J. Bolton................ 4,909 --

Executive Officers
Albert L. Greene................. 6,000 9,615
C. Fred Toney.................... -- 61,153
</TABLE>

54
<PAGE>

Option Grants and Stock Issuances under Stock Plans

The following table summarizes the options granted to, and the shares of
common stock purchased under our stock plans since January 1, 1999 and held as
of February 29, 2000 by, our executive officers, directors, holders of more
than 5% of our outstanding stock and their affiliates:

<TABLE>
<CAPTION>
Common Vesting
Name Stock Options Price Issuance Date Schedule
---- ------- ------- ------ ------------- --------
<S> <C> <C> <C> <C> <C>
Albert Greene.................. 4,783 $ 0.25 Feb. 1999 (1)
449,156 $ 0.25 Feb. 1999 (2)
44,643 $10.08 Oct. 1999 (3)
Louis Andersen................. 12,500 $ 1.28 Aug. 1999 (7)
Marcos Athanasoulis............ 62,500 $ 1.28 Aug. 1999 (4)
31,250 $10.00 Dec. 1999 (4)
Ann-Marie Buddrus.............. 62,500 $ 1.28 Aug. 1999 (4)(5)
Robert Cudd.................... 125,000 $10.08 Oct. 1999 (4)
31,250 $10.00 Dec. 1999 (4)
Michael McDonald............... 62,500 $ 1.28 Aug. 1999 (4)
Wes Sterman.................... 62,500 $ 0.25 Feb. 1999 (4)
12,500 $ 1.28 Aug. 1999 (4)
C. Fred Toney.................. 312,500 -- $ 1.28 July 1999 (6)
Deryk Van Brunt................ 100,000 $ 1.28 Aug. 1999 (4)
25,000 $ 8.19 Sept. 1999 (4)
</TABLE>
- --------
(1) Shares underlying this option were 100% vested on the grant date.

(2) Shares vest at the rate of 1/36th per month from the vesting commencement
date (August 1999).

(3) Shares vest at the rate of 1/48th per month from the vesting commencement
date (October 1999).

(4) One fourth of the total shares underlying the option vest on the annual
anniversary of the vesting commencement date, and 1/48th of the total
shares vest on the monthly anniversary of the vesting commencement date
thereafter.

(5) Ms. Buddrus resigned as an officer of the Company in March 2000.

(6) Shares were purchased by execution of an interest-bearing promissory note
in the amount of $400,000, which is due at the earlier of July 2003 or
termination of services.

(7) Shares vest at the rate of 1/12th per month from the vesting commencement
date (August 1999).

Promissory Notes

In April 1999, we issued promissory notes in the aggregate principal amount
of $500,000 to MedVenture Associates III, L.P. and MedVen Affiliates III, L.P.,
both of which are affiliated with Annette Campbell-White, one of our directors.
The promissory notes bore an interest rate of 4.99%. The principal amount of
these notes was converted into shares of Series B preferred stock and the
interest of $8,340 was paid in full in September 1999.

In July 1999, we issued a promissory note in the principal amount of
$100,000 and a warrant to purchase 2,777 shares of our common stock at a
purchase price of $3.60 per share to the Hornthal Living Trust, an entity with
which James J. Hornthal, a co-chairman of our board of directors, is
affiliated. The promissory note bore an interest rate of 10.00%. The principal
amount of this note was converted into shares of Series B preferred stock and
the interest of $822 was paid in full in September 1999.

In July 1999, we issued a promissory note in the principal amount of
$100,000 to C. Fred Toney, our Executive Vice President and Chief Financial
Officer. The promissory note bore an interest rate of 10.00%. The principal
amount of this note was converted into shares of Series B preferred stock and
the interest of $822 was paid in full in September 1999.

55
<PAGE>

In August 1999, we issued promissory notes in the total principal amount of
$300,000 and warrants to purchase 8,333 shares of Series B preferred stock at a
purchase price of $3.60 per share to MedVenture Associates III, L.P. and MedVen
Affiliates III, L.P., both of which are affiliated with Annette Campbell-White,
one or our directors. The promissory notes bore an interest rate of 10.00%. The
principal amount of these notes was converted into shares of Series B preferred
stock and the interest of $1,315 was paid in full in September 1999.

Other Transactions with Affiliates

In connection with our acquisition of Windom Health in August 1999, we
issued cash, shares of our common stock and promissory notes to the following
individuals who are directors or executive officers:

. 1,642,272 shares of common stock, approximately $39,795 in cash and a
promissory note in the principal amount of $357,684 to Michael D.
McDonald, the co-chairman of our board of directors;

. 204,852 shares of common stock, approximately $4,960 in cash and a
promissory note in the principal amount of $44,617 to Deryk Van Brunt,
our Executive Vice President of Operations; and

. 81,689 shares of common stock, approximately $1,980 in cash and a
promissory note in the principal amount of $17,792 to Marcos A.
Athanasoulis, our Vice President of Engineering.

The amounts due under these promissory notes were paid in full in August
1999. The proceeds from our issuances of promissory notes in 1998 and 1999 were
used for working capital and general corporate purposes.

In May 1999, we entered into a fifteen year agreement with Dr. Edell, a
director and 5% stockholder, in which he granted us the exclusive right to the
use of his name in connection with our business and exclusive commercialization
rights to his services over the Internet, except for publication of radio
transcripts and Internet broadcasts of his radio program. Under this agreement,
we own all content that Dr. Edell creates for our HealthCentral network. Dr.
Edell has the right to review and reasonably approve all content and
advertising in the Dr. Dean section of our HealthCentral website. We are not
obligated to make any payments of cash or equity under the terms of this
Agreement.

In August 1999, we entered into a Joint Development Agreement with Global
Health Initiatives, of which Dr. McDonald, one of the co-chairmen of our board
of directors, is the president and chairman of the board. This agreement
provides for our joint collaboration in the performance of services and
development of products, with pricing to be determined and agreed upon by the
parties on a project-by-project basis. Among other provisions, the agreement
provides that, other than with respect to consumer health informatics, we may
not compete with Global Health Initiatives in the areas of:

. healthcare systems consulting;

. enterprise engineering;

. health information systems; or

. virtual health management.

We have entered into subcontracts with Global Health Initiatives for certain
technical and planning services pursuant to the Joint Development Agreement.

In August 1999, we entered into a services agreement with NewsNet Central
and Dr. Edell, providing for the joint marketing of a consumer health
programming service that will include health-related video clips produced by
Dr. Edell. Mr. Hornthal is the co-chairman of our board of directors and the
chairman of the board of directors of NewsNet Central.

In April 2000, we obtained an assignment of the "Dr. Dean Edell" brand name,
owned by Dr. Edell, one of our co-founders and directors, for our use in
connection with the marketing, sale and distribution of

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prescription and non-prescription eyewear through December 31, 2006. We have
agreed to pay Dr. Edell $1.5 million in cash in connection with this
assignment.

We have entered into indemnification agreements with all of our officers and
directors.

We believe that all of our transactions with affiliates were entered into on
terms and conditions no less favorable to us than those that could have been
obtained from unaffiliated third parties. In addition, transactions with our
affiliates are approved by a majority of our board of directors, including a
majority of our independent and disinterested directors.

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PROPOSAL NO. 3--RATIFICATION OF INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP served as HealthCentral's independent accountants
for fiscal year 1999. We are asking our stockholders to ratify the selection of
PricewaterhouseCoopers as HealthCentral's independent accountants for the
fiscal year ending December 31, 2000. The affirmative vote of the holders of a
majority of the shares represented and voting at the annual meeting will be
required to ratify the selection of PricewaterhouseCoopers.

In the event our stockholders fail to ratify the appointment, the Audit
Committee of the board of directors will consider it as a direction to select
other auditors for the subsequent year. Even if the selection is ratified, the
board in its discretion may direct the appointment of a different independent
accounting firm at any time during the year if the board determines that the
change would be in the best interest of HealthCentral and its stockholders.

A representative of PricewaterhouseCoopers, expected to be present at the
annual meeting, will have the opportunity to make a statement if he or she
desires to do so and will be available to respond to stockholder questions.

Required Votes

Assuming the presence of a quorum, ratification of the selection of
PricewaterhouseCoopers LLP as HealthCentral's independent accountants for the
fiscal year ended December 31, 2000 requires the affirmative vote of a majority
of the total votes cast on the proposal.

Recommendation of the Board

The board of directors recommends that you vote "for" the ratification of
the selection of PricewaterhouseCoopers LLP as HealthCentral's independent
public accountants for the fiscal year ended December 31, 2000.

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INFORMATION ABOUT VITAMINS.COM, INC.

Business Description

. the Vitamins.com Internet website--located at www.vitamins.com;

. the Vitamins.com catalog--entitled "L&H Vitamins, Inc., a Vitamins.com
Company;" and

. the chain of Vitamins.com retail stores.

Vitamins.com seeks to offer its customers a comprehensive nutrition, health
and wellness shopping package--a broad range of products at competitive prices,
coupled with access to useful and reliable educational information on
nutrition, health, wellness and related matters. The Vitamins.com Internet
website currently offers approximately 6,000 products, representing over 200
health-related national brands, as well as the Vitamins.com brand. Product
offerings include vitamins, minerals, homeopathic products, personal care
items, body building supplements and other healthcare products at discounts
ranging from 15% to 50% off suggested retail prices. The Vitamins.com catalog,
a monthly publication with a circulation in excess of 500,000 copies as of
February 2000, offers approximately 7,000 products from over 200 brands in
addition to the Vitamins.com brand. Ten Vitamins.com stores, seven of which
currently operate under the name "Vitamin Superstore," in the Maryland and
Virginia suburbs of Washington, DC generally stock approximately
4,000 products, representing over 200 national brands, as well as the
Vitamins.com brand.

Customers seeking information on health and nutrition may also access
Vitamins.com's 1,200 page online encyclopedia, which has been researched and
annotated by leading practitioners in the health field. The encyclopedia is
available from the Vitamins.com website and via computer terminals in the
retail stores. Customers shopping the Vitamins.com Internet website can also
access the Vitamins.com Products A-Z link, which provides an index of
Vitamins.com's product offerings, in order to obtain additional information and
make informed product selections. Vitamins.com's on-staff medical director,
nutritionist and trainer are available through the Internet website, where they
post responses to certain relevant consumer questions through a Frequently
Asked Questions (FAQ) feature.

Vitamins.com offers a money-back customer satisfaction guarantee on all of
its products, as well as discounted or free shipping and handling on certain
catalog and Internet orders.

Vitamins.com's management believes that the retail market for vitamins,
nutritional supplements, minerals and related products presents opportunities,
both because of its potential for growth and the margins that may be achieved
in the retail sale of these products. According to industry research, domestic
sales of vitamins, supplements and minerals have grown at a 10.7% compounded
annual rate between 1989 and 1998, to $12.9 billion. Since the relaunch of the
Vitamins.com's current website in October 1999, more than 250,000 customers
have placed orders online. During this period, the average order, before
discounts and excluding shipping charges, was approximately $30. The daily
average number of orders placed through Vitamins.com's Internet website grew
from 1,100 in October 1999 to 1,350 in February 2000.

The first two Vitamins.com stores were opened in the last quarter of 1997,
with four additional stores opened in each of 1998 and 1999. The catalog
operation was acquired in August 1999.

Vitamins.com's predecessor was organized as a Delaware limited liability
company under the name "Beauty National, LLC" in June 1995. In June 1996, it
changed its name to "Vitamin Superstore, LLC." In March 1999, Vitamin
Superstore, LLC changed its name to "Vitamins.com, LLC." On August 15, 1999,
Vitamins.com, LLC became a wholly owned subsidiary of Vitamins.com, Inc., a
newly formed Delaware corporation and, on August 16, 1999, Vitamins.com, Inc.
acquired L&H Vitamins, Inc. and its affiliate, J&M Direct Corporation.

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The executive offices of Vitamins.com are located at 2924 Telestar Court,
Falls Church, Virginia 22042. Its telephone number is (703) 645-8800.

Business Strategy

Vitamins.com's current strategy is to become one of the leading sources for
vitamins, minerals, nutritional supplements and related products. It seeks to
target the "knowledgeable" vitamin shopper, as well as consumers interested in
nutrition, health and wellness information, together with exceptional service.

Broad and deep product selection. The Vitamins.com Internet website
currently offers approximately 6,000 products, representing over 200 health-
related national brands, as well as the Vitamins.com brand. Product offerings
include vitamins, minerals, homeopathic products, personal care items, body
building supplements and other healthcare products. The Vitamins.com catalog
offers approximately 7,000 products, while the ten Vitamins.com stores in the
Maryland and Virginia suburbs of Washington, DC generally stock approximately
4,000 products. Vitamins.com intends to standardize the inventory available
through its three distribution channels. In addition, Vitamins.com is committed
to broadening and deepening its product offerings in all channels as the market
evolves.

Vitamins.com purchases directly from manufacturers and wholesalers and
operates its own fulfillment facility for its catalog and Internet website.
This facilitates inventory control for the catalog and e-commerce operations
and ensures that product availability is optimized. In addition, Vitamins.com's
purchasing and fulfillment practices are designed to ensure that catalog and
Internet orders are filled and shipped promptly.

Competitive prices and an Internet price guarantee. Vitamins.com seeks to be
the low cost source for vitamins, minerals and other nutritional supplements,
as well as related health and wellness products. Its pricing structure is based
on everyday low prices and reflects prices that generally are from 15% to 50%
below manufacturers' suggested retail prices. This structure is possible
because of the volume purchasing to supply all three of the Vitamins.com
distribution channels. In order to ensure that its customers and potential
customers are aware of its price position, Vitamins.com currently offers a
price guarantee--if a customer finds a lower "everyday price" Internet price on
certain national brand products, subject to certain restrictions, Vitamins.com
will provide the product free to that consumer.

In addition to its low regular prices, Vitamins.com has implemented a
program of promotions and discounts. At any given time, certain selected
products may be offered through the Internet website and catalog and in the
Vitamins.com retail stores at "special" prices of up to 15% off Vitamins.com's
regular prices and up to 50% off suggested retail prices. Vitamins.com also
currently offers a discount of up to $15 on a customer's first Internet order,
as well as discounted or free shipping on eligible catalog and Internet orders.

A convenient and pleasant shopping experience. Vitamins.com is built on the
concept of customer satisfaction which, in turn, requires that it provide its
customers with a convenient and pleasant shopping experience, whether through
the Vitamins.com Internet website, the catalog or in the Vitamins.com retail
stores. The easy-to-navigate Vitamins.com website permits customers to seek out
products in four different ways--by specific product, product category, health
concern or brand name. In addition, Vitamins.com's Internet "Auto Reorder"
service permits customers to replenish their supply of Vitamins.com products
automatically. The Vitamins.com Internet website provides consumers with the
ability to shop 24 hours per day, seven days per week, supported by online
customer service and a toll-free number staffed six days per week by trained
customer service representatives. The Vitamins.com catalog offers similar ease
of use, with items both indexed and arranged logically by category. The
Vitamins.com catalog also provides telephone shopping.

Vitamins.com seeks to locate its retail stores in high-traffic, high-volume
retail centers, and in the future may seek to lease space in key downtown
locations. The stores are designed to be comfortable and welcoming and the
staff is trained to provide guidance in product selection, as well as
nutrition, health, wellness

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and related topics. The stores also provide access to health information and
are equipped with computer kiosks through which customers can access the
Vitamins.com website, as well as other vitamin, nutrition, health and wellness
information.

Accurate and timely information on topics related to nutrition and
health. The Vitamins.com website offers articles of current interest through
Reuters, as well as access to the Vitamins.com encyclopedia, Vitamins.com's
online nutritionist, trainer and medical director and hyperlinks to reputable
third-party sources on well-known health-related websites, such as
www.healthfinder.gov, a gateway site developed by the U.S. Department of Health
and Human Services. Customer and sales representatives receive training in
nutrition and related subjects.

A guarantee of customer information security. Vitamins.com offers its
customers a "100% Trust Guarantee" covering privacy and security that pledges
never to release a customer's personal information to a third party.

Growth Strategy

Vitamins.com's growth strategy is to build a customer base for each of its
distribution channels based on its broad product offerings, competitive prices,
enjoyable shopping environments and valuable nutrition, health and wellness
information, and to employ each distribution channel to leverage the customer
bases of the others. Through this approach, Vitamins.com expects to establish
brand recognition, build and sustain customer loyalty, encourage repeat
purchases and increase average order size, thereby producing recurring and
increasing revenues.

Vitamins.com expects to continue to expand its Internet presence through
marketing campaigns and strategic partnerships. Similarly, Vitamins.com intends
to continue to build its catalog business. Finally, Vitamins.com may, in the
future, open new retail stores, which, management believes, enhance visibility
and recognition of the Vitamins.com name.

Vitamins.com initially intends to target its advertising and promotion to
cities with high Internet penetration and high vitamin usage. According to
industry research, these cities include San Francisco, Washington, DC, Seattle,
New York, Chicago, Los Angeles and Miami.

The Vitamins.Com Internet Website

Vitamins.com's Internet website is designed to provide convenience, ease of
use, privacy, broad product selection and relevant product information. The
easy-to-navigate Vitamins.com website permits customers to seek out products in
four different ways--by specific product, product category, health concern or
brand name. In addition, Vitamins.com's Internet "Auto Reorder" service permits
customers to replenish their supply of Vitamins.com products automatically. The
Vitamins.com website provides keyword search functionality and other
capabilities that enable customers to search for and select products quickly
and reliably and to place orders easily. The site is designed to permit
customers to gather a variety of items in their online shopping carts, which
encourages larger orders, and to process orders efficiently for rapid checkout.
For certain products, website functionality allows customers to compare the
prices of various options and to select those that best meet their personal
criteria for price, brand and size.

In addition to retail offerings, the Vitamins.com website provides a broad
range of timely information on topics of current interest. From the site,
customers may access articles on a variety of health- and wellness- related
topics through Reuters. Recent articles have addressed topics including
alternative cancer therapies, the potential link between salt intake and
cataracts, broken feet as an early sign of osteoporosis, the growing demand for
"organically grown" foods and medicinal teas. The Vitamins.com website also
permits access to the Vitamins.com encyclopedia, which in turn provides
information on health concerns, herbal remedies, homeopathic remedies,
supplements and drug interactions.

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Vitamins.com also has on staff a medical director, a director of nutrition
and a trainer who provide information in frequently updated online columns and
reply to certain relevant customer inquiries through a Frequently Asked
Questions (FAQ) feature. These on-staff professionals are as follows:

Medical Director. Kent DeLong, M.D., is a board certified Internal
Medicine physician practicing in Southern California. His training includes
Medical School at Wayne State University in Detroit, Michigan and an
Internal Medicine Residency at Loma Linda University in Southern
California, where he spent a year as the Chief Medical Resident, followed
by a year in research at the University of Michigan. He has written
extensively on many medical topics with over 250 published articles. He has
been the Medical Director of Vitamins.com since March 1999.

Director of Nutrition. Dana Reed holds a Master of Science degree in
Clinical Nutrition from the University of Bridgeport with an emphasis in
biochemistry and physiology. Ms. Reed did her masters thesis work on
osteoporosis, bone density and nutrition, and completed an internship in
nutrition at the Atkins Center for Complementary Medicine in New York City.
She is a staff nutritionist at the Center for New Medicine in Rockville,
Maryland and has participated in numerous nutrition research projects. In
addition, Ms. Reed has been certified in exercise physiology by the
American Council on Exercise (ACE). Ms. Reed has served as Director of
Nutrition for Vitamins.com since August 1997.

Trainer. Yaz Boyum is a national bodybuilder certified by the
International Federation of Body Builders (IFBB). In addition, Ms. Boyum is
a trainer certified by the National Strength and Conditioning Association
(NSCA), John Philbin's National Sports Performance Association (NSPA) and
the Aerobics Fitness Association of America (AFAA). She has won a number of
bodybuilding awards including First Place in the lightweight category at
the NPC National Bodybuilding Competition in November 1999. Ms. Boyum has
been Vitamins.com's online trainer since October 1999.

The Vitamins.com website also provides hyperlinks to reputable third-party
information sources about health and nutrition on well-known health-related
websites, such as www.healthfinder.gov, a gateway site developed by the U.S.
Department of Health and Human Services.

Online visitors can subscribe to the Vitamins.com monthly electronic
newsletter. A recent issue of the newsletter contained articles on childhood
asthma and allergies, the enzyme Bromelain, research on migraine headaches,
and the possible beneficial effects of B vitamins for those at higher risk of
heart disease.

Internet orders typically are shipped the same day that they are received,
with expedited delivery available.

Vitamins.com's customer service representatives provide timely responses to
customer inquiries by e-mail or telephone. These inquiries typically involve
questions about products or order status and requests for general support as
to use of the website.

The Vitamins.Com Catalog

The Vitamins.com catalog is a full-color publication distributed monthly.
It typically contains between 90 and 100 pages and offers approximately 7,000
products. Each issue features up to 100 products at "special" prices of up to
30% off of regular catalog prices and up to 50% off of manufacturers'
suggested retail prices. As of February 2000, circulation of the catalog was
in excess of 500,000 copies per issue.

Customers wishing to order through the catalog may do so by calling
Vitamins.com's toll-free number during extended business hours, six days a
week. In addition to telephone operators, customer service representatives are
available during extended hours, seven days a week, to respond to consumer
inquiries and guide purchasing decisions. Catalog orders typically are shipped
the same day that they are received, with expedited delivery available.

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The Vitamins.Com Retail Stores

Vitamins.com currently operates ten retail stores in the Maryland and
Virginia suburbs of Washington, DC. Of these, three currently operate under the
name "Vitamins.com," with the remainder operating as "Vitamin Superstores."
Vitamins.com currently is rebranding the Vitamin Superstores which, in the
future, are expected to operate under the "Vitamins.com" name. Vitamins.com
seeks to locate its retail stores in high-traffic, high-volume retail centers
and may, in the future, lease space in key downtown locations. Vitamins.com
stores typically are between 2,500 and 3,500 square feet in size which,
Vitamins.com's management believes, is substantially larger than the stores of
its major retail competitors. Vitamins.com stores generally stock approximately
4,000 products. The stores are designed to be comfortable and welcoming and to
provide the atmosphere typical of upscale bookstores and other specialty
stores. Vitamins.com does not have any current plans or leases for new store
openings. However, in the future it may elect to operate additional stores.

Merchandising, Advertising And Marketing Strategy

Vitamins.com currently offers approximately 6,000 products through the
Internet website, 7,000 through the catalog and 4,000 in the Vitamins.com
retail stores. These products represent over 200 health-related national
brands, as well as the Vitamins.com brand. Product offerings include vitamins,
minerals, homeopathic products, personal care items, body building supplements
and various healthcare products. Vitamins.com intends to standardize the
inventory available through its three distribution channels. In addition,
Vitamins.com is committed to broadening and deepening its product offerings in
all channels as the market evolves.

By carrying both national brands and the Vitamins.com brand, Vitamins.com
seeks to meet the needs of casual, intermediate and sophisticated consumers of
vitamins, minerals and other nutritional supplements, as well as both brand-
loyal and value-oriented customers. Vitamins.com's products include a wide
array of national and popular brands, including Country Life(R), Natrol(R),
Met-Rx(R), Solgar(R) and Nature's Way(R), as well as the Vitamins.com brand and
a variety of specialty brands. Products generally are available in various
formulations and delivery forms, including tablets, capsules, soft gels,
liquids and powders.

Vitamins.com carries a comprehensive vitamin line which includes vitamins A,
B, C, D, E and K in a variety of forms and doses, featuring major and trace
minerals, including calcium, boron, zinc, selenium, chromium, magnesium and
potassium. Vitamins.com's herbal products include St. John's wort, ginkgo
biloba, echinacea and kava kava. Its homeopathic products draw on natural
ingredients to aid digestion and blood circulation and address other ailments.
Vitamins.com also provides natural alternatives to traditional lines of
personal care products, including soaps, shampoos, moisturizers, toners,
massage oils and related products.

Vitamins.com also offers a wide selection of products designed to assist the
beginning and advanced athlete in enhancing muscular performance and endurance.
Vitamins.com has built relationships with well-known third-party information
sources, including www.healthfinder.gov, that offer balanced content related to
health and nutrition. These information sources provide additional research
opportunities to aid customers in making informed purchase decisions.

Vitamins.com has implemented an advertising and marketing campaign to
increase awareness of the Vitamins.com brand and to acquire new customers
through multiple channels, including traditional and online advertising, direct
marketing and expansion and strengthening of its strategic relationships. In
addition to specific strategies using the direct marketing knowledge of
Vitamins.com's management team, Vitamins.com has attempted to maximize the
lifetime value of its customers by focusing on purchase frequency through the
"Auto Reorder" online feature and e-mails to its customer base encouraging
repeat purchases.

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Technology and Systems

Vitamins.com has implemented a broad array of website management, search
engine, customer support, order processing and order fulfillment systems using
a combination of commercially available, licensed technologies and selected
proprietary technologies. The front end of its website is built on industry
standard technologies, including the Linux operating system and a robust Oracle
database. These technologies are integrated using a variety of proprietary
computer programs, the majority of which are written in HTML, JavaScript and
Pearl. These programs handle user interface, product search, ordering, order
tracking and customer communications. The website front end can be scaled to
handle increases in traffic and usage. Further, in response to capacity
concerns and site development needs, Vitamins.com recently increased from one
to four the number of servers that run its website and is in the process of
configuring these servers to handle additional traffic. Vitamins.com intends to
continue to invest in technologies that will enable it to handle growth in
traffic and advancements in site infrastructure. In the near future,
Vitamins.com plans to implement several new systems, including tools for
providing enhanced personalization of the front end in response to consumer
demographics and shopping preferences.

The continued, uninterrupted operation of the Vitamins.com website, catalog
and retail stores and its transaction processing systems is essential to
Vitamins.com's business. Vitamins.com employs systems administrators to monitor
and manage the website, network operations, inventory and fulfillment and
transaction processing systems to ensure their continued operation and
reliability. In addition, the system includes redundant hardware on critical
components and has been designed to survive a variety of failures with minimal
downtime.

Vitamins.com subcontracts the hosting of its servers to XOR, an Internet web
developer and hosting specialist. XOR provides Internet connections to multiple
Internet access points, a secure physical environment, climate control,
redundant power and 24-hour-a-day, seven-day-a-week monitoring services. XOR
currently hosts several of Vitamins.com's servers in its Boulder, Colorado data
center. Vitamins.com believes that XOR has adequate capacity for expansion in
its Boulder facility to support Vitamins.com's growth. XOR has multiple
connections to the Internet through separate connections to various Internet
service providers, and these connections can be expanded as necessary to handle
the traffic and demands of Vitamins.com's site.

Order Processing And Fulfillment

Vitamins.com supports its website by operating fully integrated systems,
including product sourcing, warehouse management, inventory management, order
processing and order fulfillment, out of its 60,000 square foot warehouse and
fulfillment facility in Long Island City, New York. Vitamins.com believes that,
because it handles order processing and fulfillment internally, it retains
greater control over the quality, timeliness and cost of fulfilling product
orders than competitors that outsource these services. During 1999,
Vitamins.com shipped an average of 12,000 packages weekly from its warehouse
and fulfillment center. Vitamins.com's efficient operations enable it to
provide same-business-day shipping, with expedited delivery upon customer
request. Customers generally receive orders within two to five business days.

Competition

The market for vitamins, minerals and other nutritional supplements and
related products is highly fragmented and competitive. Additionally, the online
commerce market is new, rapidly evolving and highly competitive. Because it
costs relatively little to launch a website, Vitamins.com anticipates that
competition in its online sector will continue to intensify.

Vitamins.com believes that the key competitive factors in its industry are:

. brand recognition;

. the ability to attract and retain customers;

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. breadth and depth of product offerings;

. product pricing;

. the availability and quality of educational information on nutrition,
health and wellness topics; and

. the quality and responsiveness of customer service.

Vitamins.com also believes that these competitive factors are significant to
its traditional retail business, as well as its catalog operations and online
presence.

Vitamins.com competes with a variety of companies, including health/natural
specialty retailers, drugstores, supermarkets and grocery stores and mass
merchant retailers, as well as other online retailers. Competitors operate in
one or more distribution channels, including online commerce, retail stores,
catalog operations or direct selling.

Health/natural specialty retailers. This category is highly fragmented and
includes local, regional and national retail chains, as well as mail order and
catalog marketers and online retailers. One of the largest participants in this
sector is General Nutritional Centers (GNC), which has a nationwide retail
presence and, in addition, recently launched a website. Similarly,
Vitaminshoppe and its affiliate, Vitaminshoppe.com, operate both retail stores
and an Internet site. Competitors focusing exclusively on online operations
include MotherNature.com and More.com. Mail order and catalog competitors
include NBTY, Amrion, Rexall Sundown and Vitaminshoppe.

Drugstores. This category is dominated by national chains, such as
Walgreen's, CVS and RiteAid. Most national chains currently have limited online
presence, although CVS has recently acquired soma.com and RiteAid has invested
in Drugstore.com. Other competitors in this category include PlanetRx.com,
More.com and SelfCare.com. Competitors in this category currently offer a
moderate selection of vitamins, minerals and nutritional supplements, which
generally are ancillary to their main product lines of prescription and
over-the-counter products.

Supermarkets and grocery stores. This category includes traditional
supermarkets such as Kroger and Safeway, as well as natural food markets, such
as Whole Foods. Some of these retailers have entered the online market and
provide a limited selection of vitamins, minerals and other nutritional
supplements. Online grocery stores, such as Peapod.com and netgrocer.com, also
compete in this sector. Retailers in this category generally offer a limited
selection of vitamins, nutritional supplements and minerals and infrequent
discounts.

Mass merchants. This category is dominated by companies such as Wal-Mart,
Kmart and Target, which have extensive retail locations but currently have
limited online presence. These chains offer attractive pricing on vitamins,
minerals and nutritional supplements, but typically stock a limited selection
at retail stores and offer little product information.

Many of Vitamins.com's current and potential competitors have longer
operating histories, larger customer bases, greater brand recognition and
significantly greater financial, marketing and other resources than does
Vitamins.com. Competitors may develop products or services that are equal or
superior to Vitamins.com offerings and may achieve greater market acceptance.
Additionally, larger, better-established and better-financed entities may
acquire, invest in or form joint ventures with online competitors or suppliers
as the use of the Internet increases. Competitors have in the past adopted, and
may continue to implement, aggressive pricing and promotion policies or devote
more resources to development of their websites, catalogs or retail stores than
Vitamins.com is able to devote. Increased competition could result in reduced
operating margins, as well as erosion of market share and diminished brand
loyalty.

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Government Regulation

The formulation, manufacturing, processing, packaging, labeling,
advertising, export, import, distribution and sale of dietary supplements are
subject to regulation by federal agencies in the United States and counterpart
governmental agencies in other countries. In the United States, the principal
governmental agencies that regulate dietary supplements include the Food and
Drug Administration (the "FDA") and the Federal Trade Commission (the "FTC").
Dietary supplements are also regulated by governmental agencies for the states
and localities where products are sold. Among other matters, the FDA and FTC
prohibit claims with respect to a product that refer to the value of the
product in treating or preventing disease or other adverse health conditions.
The Internet is relatively new and, as a consequence, there is little common
law or regulatory guidance that clarifies the manner in which government
regulation may impact online sales of vitamins, minerals and nutritional
supplements. This lack of clarity lends uncertainty to the laws regulating
online promotional claims and website structure.

Governmental agencies, such as the FDA and FTC, utilize a variety of
remedies and processes. They may initiate investigations, issue warning letters
and cease-and-desist orders, require corrective labels or advertising, require
that a company offer to repurchase products, seek injunctive relief or product
seizure, impose civil penalties or commence criminal prosecution. Some state
agencies have similar authority, as well as the authority to prohibit or
restrict the manufacture or sale of products within their jurisdictions. In the
past, these agencies have used their remedies to regulate industry
participants, and federal agencies have imposed civil penalties in the million-
dollar range. Increased sales of, and publicity regarding, dietary supplements
may result in increased regulatory scrutiny of the industry. Generally, similar
regulatory risks and penalties exist in foreign jurisdictions.

The Dietary Supplement Health and Education Act of 1994 established a new
statutory definition of "dietary supplements," which includes vitamins,
minerals, herbs, amino acids and other dietary ingredients for human use to
supplement the diet. With respect to all dietary ingredients already on the
domestic market as of October 15, 1994, the manufacturer or distributor is not
required to submit evidence of a history of use or other evidence of safety
establishing that a supplement containing only these dietary ingredients will
reasonably be expected to be safe. In contrast, a manufacturer of a supplement
that contains a dietary ingredient not on the domestic market on October 15,
1994 must submit to the FDA evidence of a history of use or other evidence of
safety. Among other things, the statute prevents the further regulation of
dietary ingredients as "food additives" and allows the use of "statements of
nutritional support" on product labels.

In September 1997, the FDA issued final regulations to implement the Dietary
Supplement Health and Education Act. Among other things, these regulations
established a procedure for manufacturers and distributors of dietary
supplements to notify the FDA about the intended marketing of a new dietary
ingredient or about the use in labeling and advertising of statements of
nutritional support. The regulations also established a new format for
nutritional labeling on dietary supplements, which became effective on March
23, 1999 for products with labels attached after that date.

The Nutrition Labeling and Education Act of 1990, which amended the Federal
Food, Drug and Cosmetic Act, prohibits the use of any health claim, which
generally means any statement relating a substance to reducing the risk of
disease, for any foods, including dietary supplements, unless the health claim
is supported by "significant scientific agreement" and is preapproved by the
FDA. The FDA Modernization Act of 1997, which also amended the Federal Food,
Drug and Cosmetic Act, relaxed this prohibition somewhat by permitting health
claims based upon authoritative statements of specific scientific bodies
without FDA preapproval, but only following notification of the FDA. To date,
the FDA has approved or accepted notification for only a limited number of
health claims for dietary supplements.

66
<PAGE>

Dietary supplement manufacturers, marketers and distributors are allowed to
make statements of nutritional support. Under the Dietary Supplement Health and
Education Act, manufacturers and marketers must notify the FDA of any
statements of nutritional support no later than 30 days after the first
marketing of a supplement with the statement. There are four permissible types
of statements of nutritional support:

. a benefit related to a classical nutrient deficiency disease;

. the role of a nutrient or dietary ingredient that is intended to affect
the structure or function of the body;

. the documented mechanism by which a nutrient or dietary ingredient acts
to maintain a bodily structure or function; and

. general well-being from consuming a nutrient or dietary ingredient.

A statement of nutritional support developed by a manufacturer or distributor
of vitamins, nutritional supplements and minerals generally must carry a
disclaimer in the labeling, stating that the claim "has not been evaluated by
the FDA" and that the product "is not intended to diagnose, treat, cure or
prevent any disease."

In January 2000, the FDA issued a final rule regarding the regulation of
claims with respect to dietary supplements. This rule describes the distinction
between statements of nutritional support, which are permitted for a dietary
supplement, and claims for the treatment, prevention, cure, or mitigation of a
disease or condition, which are not permitted for a dietary supplement and will
cause a dietary supplement for which such claims are made to be regulated as an
unapproved new drug subject to FDA enforcement. This distinction, however,
remains relatively untested, and it is possible that the FDA would take action
on this basis against a dietary supplement notwithstanding the manufacturer's
position that its claims constituted permitted statements of nutritional
support.

Under the Dietary Supplement Health and Education Act, retailers are allowed
to use "third-party literature" to educate customers in connection with product
sales. The literature must be balanced, objective, scientific information about
the use of the product. The literature must not be misleading, must be
displayed or presented with other literature to present a balanced view, must
not promote a particular brand and, if in a store, must be physically separate
from the associated product. Vitamins.com believes that the relationship
between health and product information and the product listings on
Vitamins.com's website is consistent with the provisions of this statute
governing the use of third-party literature.

Vitamins, nutritional supplements and minerals must also comply with
adulteration and misbranding provisions of laws administered by the FDA. In
addition, all ingredients must be safe and suitable for use. All mandatory
label information must be presented in accordance with governing regulations,
and no information may be false or misleading. The FTC enforces against unfair
acts or practices in commerce, including false or deceptive advertising of
dietary supplements. Under the Federal Trade Commission Act and the policies
published by the FTC to implement it, product claims must be properly
substantiated and stated in a non-deceptive manner.

Employees

As of March 3, 2000, Vitamins.com had approximately 200 employees who
devoted all or substantially all of their time to Vitamins.com's business. Of
these, approximately 50 were engaged in activities related to the Vitamins.com
website, 75 in activities related to the catalog business, 55 in activities
related to the Vitamins.com retail stores and the remaining 20 in overall
corporate pursuits. From time to time, independent contractors are employed to
supplement its staff. Vitamins.com is not a party to any collective bargaining
agreements. However, L&H Vitamins, Inc. is a party, along with Local 804
International Brotherhood of Teamsters Chauffeurs, Warehousemen and Helpers of
America, to a collective bargaining agreement, effective February 16, 1999
through February 15, 2002. L&H Vitamins has never experienced a labor
disturbance. Vitamins.com believes that its relations with its employees are
good.

67
<PAGE>

Intellectual Property

Vitamins.com owns the trademark for "Vitamin Superstore (stylized)" and the
copyright for the logo and content of its website and catalog. In addition,
Vitamins.com has filed servicemark applications with the U.S. Patent and
Trademark Office for the marks "Vitamins.com (stylized)" and "Vitamins.com
lowest price or free (stylized)." Vitamins.com also owns the domain name
"vitamins.com," as well as approximately 38 additional domain names which it
has in the past used, currently is using or anticipates that it may in the
future use in connection with its business. Vitamins.com subsidiaries also own
the copyrights for certain logos, domain names and printed material used in
connection with their respective businesses prior to their acquisition by
Vitamins.com. Vitamins.com believes that it owns all of the intellectual
property that is material to the conduct of its business.

Facilities

Vitamins.com's corporate headquarters are housed in approximately 9,900
square feet of leased office space in Falls Church, Virginia under a lease
which expires in June 2002, but is subject to two renewal options for three
years each. The Vitamins.com warehouse and fulfillment facility in Long Island
City, New York is housed in approximately 60,000 square feet of mixed-use space
occupied under a lease which expires in 2003, subject to seven additional three
year renewal options. All ten of the Vitamins.com retail stores are in the
Maryland and Virginia suburbs of Washington, DC. The following table sets forth
certain information about the Vitamins.com retail store facilities and the
lease applicable to each.

<TABLE>
<CAPTION>
Lease Term
Approx. Size ----------------------------------
Location (Sq. Ft.) Expiration Renewal(s)
- -------- ------------ ----------------- ----------------
<S> <C> <C> <C>
Alexandria, VA.................. 2,362 January 15, 2009 Two 5 Year Terms
Annapolis MD.................... 3,000 June 8, 2003 Two 5 Year Terms
Bethesda, MD.................... 2,965 August 12, 2004 One 5 Year Term
Fairfax, VA..................... 2,500 January 23, 2009 One 5 Year Term
Falls Church, VA................ 2,250 August 20, 2002 Two 5 Year Terms
Gaithersburg, MD................ 3,133 March 13, 2008 None
Laurel, MD...................... 3,171 October 14, 2003 One 5 Year Term
Potomac, MD..................... 3,056 April 23, 2004 Two 5 Year Terms
Rockville, MD................... 4,041 September 4, 2007 None
Vienna, VA...................... 3,769 July 24, 2003 One 5 Year Term
</TABLE>

Vitamins.com management believes that each of its facilities is well suited
to its current use and will remain adequate for such use for the foreseeable
future. Vitamins.com also believes that, should the need arise, additional and
alternative space would be available with respect to each of its facilities.

Legal Proceedings

Vitamins.com is not a party to any legal proceeding that management believes
would have a material adverse effect on its business results.

Market for Common Equity and Related Stockholder Matters

Vitamins.com is a privately held company and as such there is no public
market for its stock. Vitamins.com has never paid any cash dividends on its
common stock.

68
<PAGE>

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

The following discussion should be read in conjunction with the selected
historical financial data and audited consolidated financial statements with
related notes of Vitamins.com included elsewhere in this Proxy Statement. This
discussion contains forward-looking statements that involve risks and
uncertainties. Vitamins.com's actual results could differ materially from those
contemplated by this discussion as a result of uncertainties and other factors,
including those listed below and elsewhere in this Proxy Statement.

Overview

Vitamins.com is a retailer that provides vitamins, minerals and other
nutritional supplements, as well as related products and information. During
1999, Vitamins.com generated $16.9 million in net sales from its Internet
website, catalog operations and retail stores.

Vitamins.com's predecessor was formed as a Delaware limited liability
company under the name "Beauty National, LLC" on June 19, 1995 and began
operations in September 1997. Since inception, Vitamins.com has worked to
establish the infrastructure of a premier health-oriented retail business. In
particular, Vitamins.com management has worked to develop a business model
catering to the needs of customers, to establish favorable relationships with
suppliers, to develop distribution channels and its own distribution facilities
and to recruit and train a superior management team and knowledgeable
employees.

In March 1999, Vitamins.com purchased the "vitamins.com" domain name and, in
October 1999, Vitamins.com relaunched the current "vitamins.com" website, which
is an e-commerce site that enables retail transactions and provides
applications and interaction with its customers. On August 15, 1999,
Vitamins.com reorganized, becoming a wholly owned subsidiary of Vitamins.com,
Inc. On August 16, 1999, Vitamins.com, Inc. acquired L&H Vitamins, Inc. and its
affiliate, J&M Direct Corporation (collectively "L&H Vitamins") in a
transaction accounted for as a purchase. This acquisition provided Vitamins.com
with a catalog and direct marketing business and warehouse and fulfillment
facilities to accommodate its increasing Internet sales activity.

Vitamins.com opened its first retail store in September 1997. By the end of
1998, Vitamins.com was operating six retail stores and, by the end of 1999,
Vitamins.com added four more stores to reach the current total of ten. Overall,
and taking into account the acquisition of L&H Vitamins during 1999,
Vitamins.com's net sales have grown from approximately $436,000 in 1997, the
first year in which it had operations, to approximately $16,941,000 in 1999.

Since inception, Vitamins.com has generated a net loss from operations and
has required capital to open new stores, acquire its domain name and L&H
Vitamins and launch its website. Vitamins.com has funded its operations through
capital contributions and the issuance of common and preferred stock.
Vitamins.com will need additional financing to fund its continuing operations
and capital expenditures. There can be no assurance that such financing will be
available. If Vitamins.com is not able to raise additional financing,
Vitamins.com may not have adequate capital to fund its operations or meet its
growth strategy.

Results of Operations

Vitamins.com has a limited operating history and the nature of its business
has changed substantially with the introduction of new retail distribution
channels through its acquisition of L&H Vitamins and the launch of its website.
In light of its limited operating history and the rapid and significant changes
in the nature of its business, Vitamins.com believes that period-to-period
comparisons may not accurately reflect the changes that its business has
undergone or of its possible future performance.

69
<PAGE>

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Net Sales. Net sales consist of product sales, including any shipping and
handling costs incurred by Vitamins.com customers, net of customer discounts
(such as any discount allowed on initial Internet orders). Vitamins.com's net
sales increased by 290%, to $16,941,000 for 1999 from $4,340,000 for 1998. Of
this increase, $7,434,000 is attributable to the operations of L&H Vitamins for
the period subsequent to its acquisition by Vitamins.com, from August 16, 1999
to December 31, 1999, and $1,571,000 is attributable to the operations of the
Internet website primarily since its relaunch in October 1999. The remaining
increase of $7,936,000 relates to the operations of the retail stores in 1999
and represents an 83% increase from 1998. This increase is primarily due to the
increase to ten stores in 1999 from six stores in 1998 and to full year results
in 1999 of the six stores in operation as of December 31, 1998.

Cost of Sales. Vitamins.com's cost of sales consists primarily of the costs
of its products sold to customers. It does not include costs of outbound
shipping, which are included in selling, general and administrative expenses.
Vitamins.com's cost of sales increased by 346%, to $11,797,000 in 1999 from
$2,646,000 in 1998. Of this increase, $3,994,000 is attributable to sales by
L&H Vitamins subsequent to its acquisition by Vitamins.com, for the period from
August 16, 1999 to December 31, 1999, and $2,930,078 is attributable to the
operations of the Internet website primarily since its relaunch in October
1999. The remaining increase of $4,873,000 relates to the operations of the
retail stores in 1999 and represents an 84% increase from 1998. This increase
is primarily due to the increase in net sales for retail stores described
above.

Vitamins.com's cost of sales as a percentage of net sales increased in 1999
to 70%, compared to 61% for 1998. This decline in gross profit is primarily due
to significant discounts provided to first time Internet customers. The gross
margin for 1999 was 46%, (86%), and 39% for the operations of the catalog,
Internet website and retail stores, respectively. The gross margin for the
retail stores did not change in 1999 from 1998.

Operating Expenses. Vitamins.com's operating expenses generally consist of:

. selling and administrative expenses, including outbound shipping costs,
payroll and related expenses for administrative and executive personnel,
corporate facilities expenses, professional fees, depreciation and other
general corporate expenses;

. advertising and marketing expenses, including advertising and promotional
expenditures for television, radio, print and Internet advertisements;
and

. amortization of purchased intangible assets.

Vitamins.com's operating expenses increased by 686%, to $23,675,000 for 1999
from $3,012,000 for 1998. The overall increase in operating expenses includes:

. an increase of $10,751,000, or 400%, in selling and administrative
expenses due to significant one-time expenditures incurred in building
its distribution channels and corporate infrastructure, new employee
costs, corporate facilities renovation and expansion, professional fees
and internal costs of maintaining the Internet site and integrating its
business models and, to a lesser extent, significant recurring operating
expenses such as shipping and postage, printing, and expenditures in
connection with opening new retail stores;

. an increase of $7,425,000, or 2,292%, in advertising and marketing
expenses due primarily to developing national brand recognition for the
Internet site primarily through expenditures for mass media advertising
in markets with heavy concentrations of Internet users;

. stock-based compensation expense of $1,306,000 in 1999, due primarily to
the forgiveness of a note receivable from a stockholder originally
accepted by Vitamins.com in return for equity; there was no comparable
expense in 1998;

. website development expenses of $858,000 in 1999, representing the
unamortized portion of the development expenses for its initial website,
which was abandoned in October 1999; there was no comparable expense in
1998; and

70
<PAGE>

. amortization expense of $323,000 in 1999, due to purchased intangible
assets related to the L&H Vitamins acquisition (customer list amortized
over six years and goodwill amortized over 20 years), purchase of the
vitamins.com domain name (amortized over ten years) and the amortization
of capitalized software development (amortized over 30 months); there was
no comparable expense in 1998.

Loss on Sale of Assets. In 1999 Vitamins.com sold or abandoned equipment no
longer used in operations and realized a loss of $33,000. There were no
comparable transactions during 1998.

Interest Income (Expense). Interest income (expense) consists of the
interest that Vitamins.com earns on its cash balances and balances in money
market and other highly liquid accounts, offset by interest expense
attributable to capital lease obligations. Interest income (expense) reflected
net interest income of $284,000 for 1999, compared to net interest expense of
$21,000 for the prior year. The increase in net interest income during 1999 was
due to short-term interest realized from capital raised from equity
transactions.

Income Taxes. Vitamins.com has experienced operating losses in each period
since inception. However, its financial statements do not reflect an income tax
benefit because, based on a number of factors, there is sufficient uncertainty
as to when, if ever, it will be able to realize the tax benefits attributable
to these carryforwards that it has recorded a full valuation allowance against
the net deferred tax benefit. Vitamins.com has a net operating loss
carryforward of approximately $4,887,000.

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

Net Sales. Vitamins.com's net sales increased by 895%, to $4,340,000 for
1998 from $436,000 in 1997. This increase is due primarily to full year results
for the two retail stores in operation as of December 31, 1997, with the
addition of partial year results for the six stores opened during 1998.

Cost of Sales. Vitamins.com's cost of sales increased by 816%, to $2,646,000
in 1998 from $289,000 in 1997. This increase is due primarily to the increase
in net sales described above. Its gross margin for 1998 was 39%, compared to
34% for 1997. This increase in margin is primarily due to significant
improvements in purchase terms due to increased sales levels and economies of
scale through bulk orders.

Operating Expenses. Vitamins.com's operating expenses increased by 114%, to
$3,012,000 for 1998 from $1,408,000 in 1997. During the same period, the number
of retail stores increased to six in 1998 from two in 1997. The overall
increase in operating expenses includes:

. an increase of $1,434,000, or 114%, in selling and administrative
expenses due to expenses incurred in connection with store openings and
to expand and improve regional and corporate support for continued store
expansion and, to a lesser extent, a full year of depreciation expense;

. an increase of $170,000, or 110%, in advertising and marketing expenses
due to promotional efforts in publicizing new and existing stores; and

. an increase of $17,000 in net interest expense of $21,000 due to the
increased level of assets under capital as a consequence of the opening
of six retail stores.

Liquidity and Capital Resources

Since inception, Vitamins.com's operations have not generated sufficient
cash flow to support such current operations. It has funded its operations and
its expansion through capital contributions and the issuance and sale of
preferred stock. Vitamins.com anticipates that it will require additional
infusions of capital in order to carry out its business plan.

Net cash provided by financing activities was $26.5 million, $5.5 million
and $1.8 million for the years ended December 31, 1999, 1998 and 1997,
respectively. This funding was primarily related to cash raised in

71
<PAGE>

equity financings through the issuance of member interests and rights to
acquire member interests, net of offering costs, during the period that
Vitamins.com was operating as a limited liability company. In August 1999, all
member interests and rights to acquire member interests in the limited
liability company were exchanged for common stock, options to acquire common
stock and convertible preferred stock of Vitamins.com, Inc., when the limited
liability company became a wholly owned subsidiary of Vitamins.com, Inc.

Net cash used in operating activities was $15.1 million, $1.6 million and
$1.0 million for the years ended December 31, 1999, 1998 and 1997,
respectively. Net cash used in operating activities in 1999 was comprised
primarily of a $16.0 million net loss after noncash adjustments and a $2.9
million increase to inventory. This net loss was partially offset by $4.4
million increase to accounts payable. Net cash used in operating activities in
1998 was comprised primarily of a $1.0 million net loss after noncash
adjustments and a $1.0 million increase to inventory. This net loss was
partially offset by a $0.5 million increase to accounts payable. Net cash used
in operating activities in 1997 was comprised primarily of $1.2 million net
loss after noncash adjustments and a $0.4 million increase to inventory. This
net loss was partially reduced by a $0.7 million increase to accounts payable.

Net cash used in investing activities was $8.4 million, $1.0 million and
$0.7 million for the years ended December 31, 1999, 1998 and 1997,
respectively. Net cash used in investing activities in 1999 was comprised
primarily of the purchase of L&H Vitamins, net of cash acquired, for $5.5
million and the purchase of the Vitamins.com domain name for $1.4 million. The
remaining cash used in investing activities relates to net purchases of
property and equipment of $1.5 million. Net cash used in investing activities
in 1998 and 1997 was entirely attributable to purchases of property and
equipment.

Vitamins.com anticipates significant additional expenditures for online and
traditional advertising and promotion in order to build the Vitamins.com brand,
attract new customers and preserve its customer base. In addition, it
anticipates significant additional expenditures to expand its catalog
operations and provide the physical infrastructure and additional personnel
needed to support this growth. If it should decide to open additional retail
stores in the future, such activities would require substantial capital
expenditures.

If the proposed merger with HealthCentral were not consummated, Vitamins.com
would have to seek alternative sources of funds. If such financing were not
available in sufficient amounts, on favorable terms, or at all, Vitamins.com
could find it necessary to scale back its expansion plans or its business
significantly.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for
Derivatives and Hedging Activities. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. In July
1999, the FASB issued SFAS No. 137, Accounting for Derivative Instruments and
Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133.
SFAS No. 137 deferred the effective date of SFAS No. 133 until fiscal years
beginning after June 15, 2000. Vitamins.com will adopt SFAS No. 133 during its
year ending December 31, 2001. To date, Vitamins.com has not engaged in
derivative or hedging activities.

In December 1999, the SEC issued Staff Accounting Bulletin No. (SAB) 101,
Revenue Recognition in Financial Statements, which provides guidance on the
recognition, presentation and disclosure of revenue in financial statements
filed with the SEC. This bulletin outlines the basic criteria that must be met
to recognize revenue and provides guidance for disclosure related to revenue
recognition policies. In March 2000, the SEC issued SAB No. 101A--Amendment:
Revenue Recognition in Financial Statements which amends the transition
provisions of SAB No. 101 until the second fiscal quarter for registrants with
a fiscal year beginning after December 15, 1999. Vitamins.com will apply the
accounting and disclosures of SAB No. 101 during the fiscal quarter ending June
30, 2000. Vitamins.com's management believes that the impact of SAB No. 101 and
SAB No. 101A will not have a material effect on the financial position or
results of operations of Vitamins.com.

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<PAGE>

Year 2000 Compliance

Vitamins.com is a relatively new business and, accordingly, the majority of
its software and hardware has been purchased or developed by it in the six
months prior to January 1, 2000. To date, it has not experienced significant
Year 2000 disruptions to its operating or administrative systems. Vitamins.com
believes that its significant vendors and service providers are Year 2000
compliant and has not, to date, been made aware that any of its significant
vendors or service providers have suffered Year 2000 disruptions in their
systems. Accordingly, it does not anticipate incurring material expenses or
experiencing any material operational disruptions as a result of any Year 2000
problems. Vitamins.com spent an immaterial amount on Year 2000 testing and
compliance during the year ended December 31, 1999. Most of its expenses
related to the operating costs associated with time spent by its employees in
the evaluation and planning process and Year 2000 compliance matters.

OTHER MATTERS

Stockholder Proposals

Proposals of stockholders that are intended to be presented at
HealthCentral's annual meeting of stockholders for the fiscal year 2000 must be
received by January 15, 2001 to be included in the proxy statement and proxy
relating to that meeting.

Where You Can Find More Information

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

The Securities and Exchange Commission allows this Proxy Statement to
incorporate by reference information which is simultaneously presented to
stockholders with this Proxy Statement. Important business and financial
information can be found in our Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 and filed with the SEC on March 10, 2000, as amended,
which is included in the materials you received with this Proxy Statement and
is hereby incorporated by reference.

HealthCentral has supplied all information contained or incorporated by
reference in this Proxy Statement relating to HealthCentral, and Vitamins.com
has supplied all information contained in this Proxy Statement relating to
Vitamins.com. Neither HealthCentral nor Vitamins.com warrants the accuracy or
completeness of information relating to the other.

You should rely only on the information contained or incorporated by
reference in this Proxy Statement to vote on the merger. Neither HealthCentral
nor Vitamins.com has authorized anyone to provide you with information that is
different from or in addition to what is contained in this Proxy Statement.
This Proxy Statement is dated May 15, 2000. You should not assume that the
information contained in this Proxy Statement is accurate as of any other date,
and neither the mailing of this Proxy Statement to stockholders nor the
issuance of HealthCentral common stock in the merger will create any
implication to the contrary.

73
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants................................. F-2

Consolidated Balance Sheets as of December 31, 1999 and 1998............. F-3

Consolidated Statements of Operations for the Years Ended December 31,
1999, 1998 and 1997..................................................... F-4

Consolidated Statements of Stockholders' Equity (Deficit) for the Years
Ended December 31, 1999, 1998 and 1997.................................. F-5

Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997..................................................... F-6

Notes to Consolidated Financial Statements for the Years Ended December
31, 1999, 1998 and 1997................................................. F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Vitamins.com, Inc.:

We have audited the accompanying consolidated balance sheets of
Vitamins.com, Inc. (formerly Vitamin Superstore, LLC; the "Company," a Delaware
corporation), as of December 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity (deficit), and cash flows for
each of the three years in the period ended December 31, 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Vitamins.com, Inc., as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999 in conformity with accounting principles generally accepted
in the United States.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
Note 1 to the consolidated financial statements, the Company has suffered
recurring losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern. Management
plans to raise sufficient financing to meet its needs for the coming year (see
Note 1). The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

ARTHUR ANDERSEN LLP

Vienna, Virginia
February 17, 2000 (except with
respect to the matter discussed
in Note 9, as to which the
date is March 15, 2000)

F-2
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

CONSOLIDATED BALANCE SHEETS

As of December 31, 1999 and 1998

<TABLE>
<CAPTION>
1999 1998
------------ -----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................... $ 6,035,125 $ 3,010,496
Accounts receivable, net........................... 570,706 17,560
Purchase price receivable.......................... 553,503 --
Inventory.......................................... 5,464,633 1,310,256
Prepaid expenses................................... 907,617 58,506
------------ -----------
Total current assets............................... 13,531,584 4,396,818
------------ -----------
Property and equipment, at cost:
Store and warehouse equipment...................... 2,392,402 1,054,573
Office equipment................................... 314,833 226,992
Leasehold improvements............................. 1,466,793 851,787
------------ -----------
4,174,028 2,133,352
Less--Accumulated depreciation and amortization.... (745,469) (243,111)
------------ -----------
Net property and equipment......................... 3,428,559 1,890,241
Web development costs, net.......................... 1,039,715 --
Intangible assets, at cost:
Domain name........................................ 1,540,583 --
Customer list...................................... 1,566,279 --
Goodwill........................................... 9,525,923 --
------------ -----------
12,632,785 --
Less--Accumulated amortization..................... (323,260) --
------------ -----------
Net intangible assets.............................. 12,309,525 --
Other assets........................................ 385,511 239,319
------------ -----------
Total assets....................................... $ 30,694,894 $ 6,526,378
============ ===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<S> <C> <C>
Current liabilities:
Accounts payable................................... $ 6,854,873 $ 1,160,557
Accrued expenses................................... 1,268,698 145,134
Current portion of capital lease obligations....... 178,560 138,477
------------ -----------
Total current liabilities.......................... 8,302,131 1,444,168
Capital lease obligations, net of current portion... 329,087 218,047
Deferred rent liability, net of current portion..... 171,727 125,305
------------ -----------
Total liabilities.................................. 8,802,945 1,787,520
------------ -----------
Commitments and contingencies (Note 7)

Series A Convertible Redeemable Preferred Stock, par
value $.001; 11,627,573 shares authorized, issued,
and outstanding; aggregate liquidation preference
of $7,105,610...................................... 7,105,610 --
Series B Convertible Redeemable Preferred Stock, par
value $.001; 10,038,925 shares authorized, issued,
and outstanding; aggregate liquidation preference
of $6,134,787...................................... 6,134,787 --
Series C Convertible Redeemable Preferred Stock, par
value $.001; 28,000,000 shares authorized;
23,325,000 issued, and outstanding; aggregate
liquidation preference of $23,325,000.............. 23,325,000 --

Stockholders' Equity (deficit) (Notes 2 and 3):
Common stock, par value $.001; 66,650,000 shares
authorized; 12,974,414 and 9,169,087 shares issued
and outstanding in 1999 and 1998, respectively.... 12,975 9,169
Due from stockholders.............................. (59,526) (4,535,780)
Additional paid-in capital......................... 17,241,408 11,966,611
Accumulated deficit................................ (31,868,305) (2,701,142)
------------ -----------
Total stockholders' equity (deficit)............... (14,673,448) 4,738,858
------------ -----------
Total liabilities and stockholders' equity
(deficit)......................................... $ 30,694,894 $ 6,526,378
============ ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
Net sales............................. $ 16,940,977 $ 4,340,297 $ 436,406
Cost of sales......................... 11,797,099 2,646,179 288,751
------------ ----------- -----------
Gross profit.......................... 5,143,878 1,694,118 147,655
Selling and administrative expenses... 13,438,817 2,688,008 1,254,149
Advertising and marketing expenses.... 7,749,174 324,051 154,109
Stock-based compensation expense...... 1,306,128 -- --
Website development expense........... 857,712 -- --
Amortization.......................... 323,261 -- --
------------ ----------- -----------
Operating loss........................ (18,531,214) (1,317,941) (1,260,603)
Loss on sale of assets................ (32,568) -- --
Interest income (expense), net........ 284,161 (20,519) (2,997)
------------ ----------- -----------
Net loss.............................. $(18,279,621) $(1,338,460) $(1,263,600)
============ =========== ===========
Basic and diluted net loss per common
share................................ $ (1.65) $ (.22) $ (.23)
============ =========== ===========
Weighted average common shares
outstanding.......................... 11,054,837 6,064,051 5,464,790
============ =========== ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
Convertible Redeemable Preferred Stock
------------------------------------------------------------------
Series A Series B Series C
--------------------- --------------------- ----------------------
Shares Amount Shares Amount Shares Amount
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1996............ -- $ -- -- $ -- -- $ --
Shares issued
for notes
receivable...... -- -- -- -- -- --
Shares issued... -- -- -- -- -- --
Net loss........ -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- -----------
Balance at
December 31,
1997............ -- -- -- -- -- --
Shares issued
for notes
receivable...... -- -- -- -- -- --
Shares issued,
net of offering
costs of
$200,000........ -- -- -- -- -- --
Net loss........ -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- -----------
Balance at
December 31,
1998............ -- -- -- -- -- --
Shares issued
for domain name
purchase........ -- -- -- -- -- --
Exercise of
Dilution Right
(Note 3)........ -- -- -- -- -- --
Forgiveness of
note receivable
from
stockholder..... -- -- -- -- -- --
Collection of
notes receivable
from
stockholders.... -- -- -- -- -- --
Recapitalization
(Note 2)........ 11,627,573 7,105,610 6,092,757 3,723,284 -- --
Shares issued
for the purchase
of L&H.......... -- -- 3,946,168 2,411,503 -- --
Shares issued,
net of offering
costs of
$207,232........ -- -- -- -- 23,325,000 23,325,000
Shares issued
for note
receivable...... -- -- -- -- -- --
Stock-based
compensation.... -- -- -- -- -- --
Net loss........ -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- -----------
Balance at
December 31,
1999............ 11,627,573 $7,105,610 10,038,925 $6,134,787 23,325,000 $23,325,000
========== ========== ========== ========== ========== ===========
<CAPTION>
Stockholders' Equity
--------------------------------------------------------------------------
Common Stock Additional
------------------- Due From Paid-In Accumulated
Shares Amount Stockholders Capital Deficit Total
----------- ------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1996............ 5,224,669 $ 5,225 $ -- $ 64,775 $ (99,082) $ (29,082)
Shares issued
for notes
receivable...... 184,853 185 (1,175,780) 1,175,595 -- --
Shares issued... 278,275 278 -- 1,769,722 -- 1,770,000
Net loss........ -- -- -- -- (1,263,600) (1,263,600)
----------- ------- ------------- ------------ ------------- -------------
Balance at
December 31,
1997............ 5,687,797 5,688 (1,175,780) 3,010,092 (1,362,682) 477,318
Shares issued
for notes
receivable...... 1,576,579 1,576 (3,360,000) 3,358,424 -- --
Shares issued,
net of offering
costs of
$200,000........ 1,904,711 1,905 -- 5,598,095 -- 5,600,000
Net loss........ -- -- -- -- (1,338,460) (1,338,460)
----------- ------- ------------- ------------ ------------- -------------
Balance at
December 31,
1998............ 9,169,087 9,169 (4,535,780) 11,966,611 (2,701,142) 4,738,858
Shares issued
for domain name
purchase........ 500,709 501 -- 1,249,499 -- 1,250,000
Exercise of
Dilution Right
(Note 3)........ 675,594 676 -- (676) -- --
Forgiveness of
note receivable
from
stockholder..... -- -- 1,175,780 -- -- 1,175,780
Collection of
notes receivable
from
stockholders.... -- -- 3,360,000 -- -- 3,360,000
Recapitalization
(Note 2)........ -- -- -- -- (10,828,894) (10,828,894)
Shares issued
for the purchase
of L&H.......... 2,303,832 2,304 -- 3,836,193 -- 3,838,497
Shares issued,
net of offering
costs of
$207,232........ 232,280 232 -- -- (58,648) (58,416)
Shares issued
for note
receivable...... 92,912 93 (59,526) 59,433 -- --
Stock-based
compensation.... -- -- -- 130,348 -- 130,348
Net loss........ -- -- -- -- (18,279,621) (18,279,621)
----------- ------- ------------- ------------ ------------- -------------
Balance at
December 31,
1999............ 12,974 ,414 $12,975 $ (59,526) $17,241,408 $(31,868,305) $(14,673,448)
=========== ======= ============= ============ ============= =============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss............................... $(18,279,621) $(1,338,460) $(1,263,600)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization......... 898,989 218,403 24,612
Stock-based compensation expense...... 1,306,128 -- --
Loss on sale of property and
equipment............................ 32,568 -- --
Increase in deferred rent liability... 46,422 109,597 15,708
Changes in operating assets and
liabilities, net of effect of
acquisition:
Accounts receivable.................. (178,483) (17,560) --
Inventory............................ (2,858,812) (940,242) (370,014)
Prepaid expenses..................... (550,088) (39,647) (18,859)
Other long-term assets............... (146,192) (136,729) (102,590)
Accounts payable..................... 4,402,534 492,072 668,485
Accrued expenses..................... 244,797 59,208 49,084
------------ ----------- -----------
Net cash used in operating
activities......................... (15,081,758) (1,593,358) (997,174)
------------ ----------- -----------
Cash flows from investing activities:
Purchases of property and equipment.... (1,471,272) (990,300) (640,029)
Proceeds from the sale of property and
equipment............................. 1,625 -- --
Cash paid for domain name and website
development........................... (1,390,069) -- --
Acquisition of L&H, net of cash
acquired.............................. (5,532,508) -- --
------------ ----------- -----------
Net cash used in investing
activities......................... (8,392,224) (990,300) (640,029)
------------ ----------- -----------
Cash flows from financing activities:
Payments under capital lease
obligations........................... (127,973) (124,005) (19,663)
Collection of notes receivable......... 3,360,000 -- --
Proceeds from the issuance of stock,
net of offering costs................. 23,266,584 5,600,000 1,770,000
------------ ----------- -----------
Net cash provided by financing
activities......................... 26,498,611 5,475,995 1,750,337
------------ ----------- -----------
Net increase in cash and cash
equivalents........................... 3,024,629 2,892,337 113,134
Cash and cash equivalents, beginning of
year.................................. 3,010,496 118,159 5,025
------------ ----------- -----------
Cash and cash equivalents, end of
year.................................. $ 6,035,125 $ 3,010,496 $ 118,159
============ =========== ===========
Supplemental disclosure of cash flow
information:
Cash paid during the year for
interest.............................. $ 42,583 $ 37,065 $ 5,918
============ =========== ===========
Supplemental disclosures of noncash
investing and financing activities:
Equipment financed through capital
leases............................... 279,096 138,314 235,130
Contribution of note receivable to
purchase shares...................... 59,526 3,360,000 --
(Forgiveness) contribution of note
from stockholder..................... (1,175,780) -- 1,175,780
Common Stock issued in conjunction
with the domain name purchase........ 1,250,000 -- --
Series B Convertible Redeemable
Preferred and common stock issued in
conjunction with the purchase of
L&H.................................. 6,250,000 -- --
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 1999, 1998 and 1997

1. Organization and Summary of Significant Accounting Policies:

Vitamins.com, Inc. (formerly Vitamin Superstore, LLC; the "Company"), was
founded in 1995 as a Delaware limited liability company and converted to a C
corporation on August 1999.

The Company sells primarily vitamins and nutritional supplements through a
multi-channel approach that includes retail stores, an Internet website, and a
catalog division. As of December 31, 1999, 1998 and 1997, the Company operated
ten, six and two stores, respectively, in Virginia and Maryland. In May 1999,
the Company launched the website www.vitamins.com to facilitate sales to a
national audience.

The Company purchased L&H Vitamins, Inc., and its affiliate J&M Direct
Corporation (together "L&H") in August 1999 to obtain a nationally recognized
catalog operation and to expand its fulfillment and warehousing activities to
accommodate sales growth from the Internet website (see Note 4).

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and include the accounts of the
Company and its wholly owned subsidiary L&H. All significant intercompany
accounts, balances, and transactions have been eliminated in consolidation.

Risks and Liquidity

Since inception, the Company has generated a net loss from operations and
has required capital to open new stores, acquire L&H, and launch its website.
The Company has funded its operations through capital contributions and the
issuance of common and preferred stock. The Company will need additional
financing in the coming year to fund its continuing operations and capital
expenditures. There can be no assurance that such financing will be available.
If the Company is not able to raise additional financing, the Company may not
have adequate capital to fund its operations or meet its growth strategy.

The Company's operations are subject to a number of risks, including
competitors with greater access to capital, dependence on key management
personnel, and uncertainty of future profitability.

Credit Risk

The Company's assets that are exposed to credit risk consist primarily of
cash and cash equivalents. The Company generally does not extend credit to
customers, except through the use of third-party credit cards. Credit under
these accounts is extended by third parties, and accordingly, the Company bears
no financial risk under these agreements except in the case of fraud.
Significant accounts receivable balances reflect amounts due from the third-
party processors and are usually received within several days. The Company has
historically experienced only immaterial and infrequent bad debt write-offs and
has therefore recorded an allowance for doubtful accounts of approximately
$15,000 as of December 31, 1999.

Fair Value of Financial Instruments

The Company's financial instruments, including cash and cash equivalents,
accounts and notes receivable, and accounts payable, are carried at cost, which
approximates fair value because of the short-term maturity of these financial
instruments. The carrying value of the capital lease obligations approximates
fair value because the interest rates on these obligations are comparable to
the interest rates that could be obtained currently.

F-7
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with
original maturities of three months or less to be cash equivalents. As of
December 31, 1999, 1998 and 1997, cash and cash equivalents consisted primarily
of money market demand deposits. The Company maintains a bank account with a
federally insured financial institution. At times, balances may exceed insured
limits.

Inventory

The Company's inventory is priced at the lower of cost or market. The
Company uses the weighted-average method of inventory costing.

Property and Equipment

Property and equipment are stated at cost. The Company depreciates property
and equipment using the straight-line method over the estimated useful lives of
the assets, generally three to seven years. Amortization of leasehold
improvements is provided on a straight-line basis over the estimated useful
lives of the assets or the remaining lease term, whichever is shorter.
Maintenance and repairs are charged directly to expense as incurred.

Web Development Costs

The Company accounts for web development costs in accordance with the AICPA
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." Web development costs consist of
external costs incurred to purchase and implement the web software and
enhancements used in the Company's business. These costs are amortized using
the straight-line method over a useful life of 30 months. Amortization expense
for the year ended December 31, 1999, includes approximately $59,800 related to
web development costs.

Internal and external costs of developing web content are expensed as
incurred and are included in selling and administrative expenses in the
accompanying consolidated statements of operations.

The Emerging Issues Task Force is currently reviewing issues related to the
accounting for the costs of developing a website, but it has not yet reached a
final consensus. Management will follow the appropriate guidance when the final
consensus is reached.

Intangible Assets

Intangible assets include purchased customer lists, the Company's domain
name, and goodwill generated from the purchase of L&H and are amortized using
the straight-line method over their estimated useful lives of 6, 10, and 20
years, respectively.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of," issued by the Financial Accounting Standards Board
("FASB"). SFAS No. 121 requires recognition of impairment of long-lived assets
in the event that the net book value of such assets exceeds the future
undiscounted cash flows attributable to such assets.

F-8
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Revenue Recognition

The Company recognizes revenue for the sale of its vitamins and vitamin
supplements through its Internet and catalog delivery channels at the time the
product is shipped to the customer. Net revenue includes outbound shipping and
handling charges incurred by the customer and is shown net of the Company's
discounts presented to customers at the time of purchase, including one-time
discounts on initial e-commerce sales. Costs of outbound shipping from the
Company are included in selling and administrative expenses in the accompanying
consolidated statements of operations.

Advertising and Marketing Expense

Advertising and marketing expenses include advertising and promotional
expenditures related to building the Company's brand awareness. The Company
uses media such as television, radio, print, and Internet advertisements to
promote its brand. Advertising costs are expensed as incurred.

Website Development Expense

The Company launched its initial website in May 1999 in order to begin its
e-commerce business. In October 1999, the Company abandoned the initial website
and launched a more sophisticated e-commerce website that enables it to sell
vitamins and vitamin supplements throughout the United States. Accordingly, all
costs related to development of the initial website were expensed.

Income Taxes

Until August 15, 1999, the Company operated as a limited liability company
("LLC") as defined by the Internal Revenue Code, whereby the Company was not
subject to taxation for federal or state purposes. The limited liability
company's members reported their shares of the Company's taxable earnings or
losses on their respective tax returns.

As of August 15, 1999, the Company accounts for income taxes in accordance
with SFAS No. 109, "Accounting for Income Taxes." Under SFAS No. 109, deferred
tax assets or liabilities are computed based on the difference between
financial statement and income tax bases of assets and liabilities using the
enacted marginal tax rate. Deferred income tax expenses or credits are based on
the changes in the asset or liability from period to period. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amounts expected to be realized.

Net Loss per Share

SFAS No. 128, "Earnings Per Share," requires the presentation of basic and
diluted earnings per share. Basic net income (loss) per share is computed by
dividing income (loss) by the weighted average number of common shares
outstanding for the period. The diluted net income (loss) per share data is
computed using the weighted average number of common shares outstanding plus
the dilutive effect of common stock equivalents, unless the common stock
equivalents are antidilutive.

Options to acquire approximately 969,000 shares of common stock and
preferred shares that are convertible into approximately 44,991,000 shares of
common stock as of December 31, 1999 were excluded from the computation of
diluted loss per share because inclusion of these amounts would have an
antidilutive effect on loss per share.

F-9
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Store Openings

All costs of a noncapital nature incurred in opening a new store are charged
to expense as incurred.

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 reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Reclassifications

Certain prior-year balances have been reclassified to conform to the
current-year presentation.

2. Stockholders' Equity (deficit):

The Company was initially formed as an LLC and capitalized in 1995 with a
contribution of $1,000 under an LLC agreement (the "LLC Agreement"). The LLC
Agreement was subsequently amended in March 1997, March 1998, and December
1998. On August 1999, the LLC became a wholly owned subsidiary of the Company,
which was formed at that time as a C corporation (the "Recapitalization"). To
effect the Recapitalization, all member interests and rights to acquire member
interests in the LLC were exchanged for common stock, options to acquire common
stock, and convertible preferred stock of the Company. Each stockholder
received approximately 1.71 shares of preferred stock together with every share
of common stock issued by the Company. Though the preferred stock was issued as
an integrated part of the transfer of the interests in the LLC to the Company,
for financial reporting purposes the issuance of the preferred stock was
accounted for as a noncash dividend. All share and per share amounts have been
restated to reflect these events.

F-10
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The Company has authorized the issuance of Series A Preferred, Series B
Preferred, and Series C Preferred Stock (together, the "Preferred Stock"). Each
share of the Preferred Stock is convertible, at any time, at the option of the
holder into one share of the Company's common stock. Additionally, in the event
of a public offering of the Company's equity securities in which the price per
share is at least $5.00 and which results in gross proceeds to the Company of
$20,000,000 or more, each outstanding share of Preferred Stock will
automatically convert into one share of common stock.

Each share of Preferred Stock entitles the holder to voting rights
substantially equal to the voting rights of the common stock into which it is
convertible. In accordance with the restated certificate of incorporation,
certain amendments to existing agreements require the consent of the majority
of the holders of Series A Preferred, Series B Preferred, and Series C
Preferred Stock voting each as a separate series.

The holders of Series A Preferred, Series B Preferred, and Series C
Preferred Stock are entitled to receive, when and if declared by the Board of
Directors, annual dividends of approximately $.06, $.06, and $.10 per share,
respectively. The preferred dividends are not cumulative. The Company did not
declare any dividends for the year ended December 31, 1999.

In the event of liquidation, dissolution, or winding-up of the Company, the
holders of Series A Preferred, Series B Preferred, and Series C Preferred Stock
are entitled to receive in preference to the holders of the common stock, any
distribution of the Company's assets, in an amount per share equal to
approximately $.61, $.61, and $1.00, respectively, plus any declared but unpaid
dividends.

At any time after August 16, 2003, holders of the Preferred Stock may
require the Company to redeem the Series A Preferred, Series B Preferred, and
Series C Preferred Stock for cash of approximately $.61, $.61, and $1.00 per
share, respectively. The redemption must be approved by a majority of the
Series C Preferred and a majority of the Series A Preferred or a majority of
the Series B Preferred stockholders.

In 1997, the Company entered into a subscription agreement (the "First
Subscription Agreement") to issue 184,853 units of LLC member interests in
return for the assignment to the Company of a note valued at $1,175,780
including interest. The assignor of the note was an existing member of the
Company. The First Subscription Agreement contained a redemption right whereby,
at any time from March 7, 1999, to March 7, 2005, the Company could repurchase
the units issued under the Subscription Agreement for $1,153,800 plus 8 percent
per annum. In 1999, the Company distributed the note to its maker as a
distribution with respect to his capital account in the Company. For financial
reporting purposes, the transfer of the note was reflected as a period expense
in the amount of $1,175,780. The First Subscription Agreement was effectively
terminated in August 1999 as a result of the acquisition by the Company of all
the interests in the LLC.

In March 1998, the Company entered into a second subscription agreement (the
"Second Subscription Agreement") to issue 268,961 units of LLC member interests
in the Company for $2,000,000. The Second Subscription Agreement contained a
redemption right whereby, at any time from March 7, 1999, to March 7, 2005, the
Company could repurchase the units issued under the Second Subscription
Agreement for $2,000,000 plus 8 percent per annum. The Second Subscription
Agreement was effectively terminated in August 1999 as a result of the
acquisition by the Company of all the interests in the LLC.

In December 1998, the Company entered into a third subscription agreement
(the "Third Subscription Agreement") to issue 3,056,331 units of LLC member
interests in the Company for the $3 million currently paid plus a $3 million
deferred contribution obligation. The Third Subscription Agreement contained
redemption rights whereby, at any time from June 10, 2003, to June 10, 2004,
the Company could repurchase or the LLC member could sell the interests issued
under the Third Subscription Agreement at fair market value.

F-11
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Under the Third Subscription Agreement, the original LLC members agreed to a
deferred contribution obligation of an additional $360,000. The issuance costs
associated with this transaction totaled $200,000 and are reflected as a
reduction of the related contribution in the accompanying consolidated
financial statements. The deferred contribution obligations of $3,360,000 were
satisfied in 1999 by transfers of the specified amounts in cash to the Company.
The Third Subscription Agreement was effectively terminated in August 1999 as a
result of the acquisition by the Company of all the interests in the LLC.

Pursuant to an agreement in March 1999, the Company issued 325,192 units of
LLC member interests in August 1999 to members of the Board of Directors and an
executive of the Company for a total of $208,342 or approximately $.64 per
share. Payment of $148,816 was received in cash, and a note was issued to the
Company for $59,526. The difference between the purchase price of the units and
their fair market value in August 1999 has been recorded as a current period
expense of $90,908 in the accompanying consolidated statements of operations.

3. Options and Rights to Acquire Interests in the Company:

In connection with the sale of LLC member interests to a new investor in
December 1998 under the Third Subscription Agreement, the Company granted to
Robert M. Haft (acting as nominee for the LLC's founders), a right (the
"Dilution Right"), exercisable at any time before December 16, 2008, to
purchase up to an additional 1,998,998 units of LLC member interests in the
Company, at approximately $1.96 per unit. Because the number of units issued to
the new investor under the Third Subscription Agreement was based on an assumed
enterprise value of $1.96 per unit, the effect of the Dilution Right, if
exercised, was to reduce the percentage interest in the Company acquired by the
new investor if and when the Company achieved an enterprise value that was
higher than the enterprise value of the Company that had been used to determine
the initial purchase price paid by the new investor under the Third
Subscription Agreement. In June 1999, the Company issued 675,594 units of LLC
member interests in consideration for the cancellation of this right.

On August 15, 1999, the Company adopted the Vitamins.com, Inc. 1999 Stock
Incentive Plan (the "Plan"), which authorizes the Company to grant options and
awards to purchase up to an aggregate of 4,009,088 shares of common stock.
Under the Plan, incentive and nonqualified stock options and other awards may
be granted to employees, officers, directors, advisors, and consultants.
Options are granted by a Board-- appointed committee (the "Committee"). Each
outstanding option granted under the Plan expires at various dates, not to
exceed ten years from the date of the grant, and becomes exercisable in varying
installments as determined by the Committee at the date of the grant.

The status of the options granted under the Plan as of December 31, 1999,
and changes during the year then ended is presented below:

<TABLE>
<CAPTION>
Weighted-
Average
Options Shares Exercise Price
------- ------- --------------
<S> <C> <C>
Outstanding, beginning of year...................... -- $ --
Granted............................................. 969,016 1.05
Exercised........................................... -- --
Forfeited........................................... -- --
-------
Outstanding, end of year............................ 969,016 1.05
=======
Options exercisable at year-end..................... 69,684
=======
Weighted-average fair value of options granted
during the year.................................... $ 1.24
=======
</TABLE>

F-12
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 defines a "fair value based method" of accounting
for stock-based compensation. Under the fair value based method, compensation
cost is measured at the grant date based on the fair value of the award and is
recognized over the service period. Prior to the issuance of SFAS No. 123,
stock-based compensation was accounted for under the "intrinsic value method"
as defined by Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees." Under the intrinsic value method, compensation
is the excess, if any, of the market price of the stock, at grant date or other
measurement date, over the amount an employee must pay to acquire the stock.

SFAS No. 123 allows the entity to continue to use the intrinsic value
method. However, entities electing to apply APB Opinion No. 25 must make pro
forma disclosures as if the fair value based method of accounting had been
applied. The Company applies APB Opinion No. 25 and the related interpretations
in accounting for its stock-based compensation. Under APB Opinion No. 25,
compensation expense of $39,440 has been recorded in the accompanying
consolidated financial statements related to 1999 stock option grants.

If the Company had applied SFAS No. 123, the net loss for the years ended
December 31, 1999, 1998 and 1997, would have increased as follows:

<TABLE>
<CAPTION>
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
Net loss:
As reported........................ $(18,279,621) $(1,338,460) $(1,263,600)
Pro forma.......................... $(18,662,989) $(2,725,989) $(1,263,600)
</TABLE>

The fair value of each option is estimated on the date of grant using the
Black-Scholes option-pricing model based on the following assumptions: no
dividend yield, expected volatility of zero, risk-free interest rate of 5.5
percent, and an expected term of ten years.

4. Acquisitions:

Purchase of the Domain Name

In March 1999, the Company purchased the domain name, www.vitamins.com (the
"Domain Name"), the Vitamins.com website, and copyrighted content available on
that website. The Company paid $290,583 in cash, which includes direct costs of
the purchase of $40,583, and issued 500,709 shares of common stock that were
valued at approximately $2.50 per share.

Purchase of L&H Vitamins, Inc.

On August 16, 1999, the Company acquired L&H Vitamins, Inc., and its
affiliate for a total purchase price of $5,563,822 in cash, which includes
acquisition costs of $230,323, and 2,303,832 and 3,946,168 shares of the
Company's common and Series B Preferred stock, respectively, valued at $1.00
per share. The purchase price was subsequently reduced based on L&H's adjusted
net worth, and the Company has recorded the reduction of $553,503 as a purchase
price receivable. In addition, the former owners of L&H have been granted
employment agreements with the Company for a period of four years.

F-13
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The acquisition has been accounted for as a stock purchase. The purchase
price has been allocated as follows:

<TABLE>
<S> <C>
Cash............................................................ $ 31,314
Accounts receivable............................................. 374,663
Inventory....................................................... 1,295,565
Property and other assets....................................... 637,123
Customer lists.................................................. 1,566,279
Goodwill........................................................ 9,525,923
Liabilities assumed............................................. (2,170,548)
Stock consideration............................................. (6,250,000)
Purchase price receivable....................................... 553,503
-----------
Payment for acquisition......................................... 5,563,822
Less--Cash acquired............................................. (31,314)
-----------
Payment for acquisition, net of cash acquired................... $ 5,532,508
===========
</TABLE>

The unaudited pro forma summary information for the years ended December 31,
1999 and 1998 assumes that the acquisition of L&H had been consummated on
January 1, 1998.

<TABLE>
<CAPTION>
1999 1998
------------ -----------
(unaudited)
<S> <C> <C>
Net sales........................................ $ 30,576,210 $26,070,392
Net loss attributable to common stockholders..... (19,862,496) (2,412,050)
Basic and diluted net loss per share............. $ (1.80) $ (.40)
</TABLE>

5. Accrued Expenses:

Accrued expenses consisted of the following at December 31:
<TABLE>
<CAPTION>
1999 1998
---------- --------
<S> <C> <C>
Accrued payroll and related expenses.................... $ 395,994 $ 56,946
Accrued taxes........................................... 104,287 14,453
Accrued professional fees............................... 275,000 18,000
Frequent buyer program liability........................ 320,994 --
Other accrued liabilities............................... 172,423 55,735
---------- --------
Total................................................... $1,268,698 $145,134
========== ========
</TABLE>

F-14
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. Income Taxes:

The Company did not provide an income tax benefit for the period presented
because, based on a number of factors, there is sufficient uncertainty
regarding the realizability of carryforwards that a full valuation allowance
has been recorded against the net deferred tax asset. The significant
components of the net deferred tax asset at December 31, 1999, were as follows:

<TABLE>
<S> <C>
Deferred tax assets:
Coupon liability............................................... $ 112,332
Accrued payroll................................................ 65,100
Amortization................................................... 29,913
Inventory...................................................... 28,000
Customer deposits.............................................. 27,300
Professional fees.............................................. 36,750
Other.......................................................... 8,590
----------
Gross deferred tax assets........................................ 307,985
Deferred tax liability:
Depreciation and amortization.................................... (7,999)
Net operating loss carryforward.................................. 4,887,364
----------
Net tax asset.................................................... 5,187,350
Valuation allowance.............................................. (5,187,350)
----------
$ --
==========
</TABLE>

The Internal Revenue Code stipulates that the loss may be carried forward
for a period of 20 years and may be used to offset future taxable income.
Despite the net operating loss ("NOL") carryforward, the Company may have an
income tax liability in future years due to the application of the alternative
minimum tax rules. The NOL may also be limited in its ability to offset future
income in the event that there is a change in the stock ownership as defined by
federal tax regulations.

7. Commitments and Contingencies:

Lease Commitments

The Company leases its office and retail store facilities under
noncancelable lease agreements ranging from three to ten years. Renewal options
are available on the majority of the leases for one or more periods of five
years each. The leases provide for minimum rent, with certain retail store
leases providing for a pro rata share of common operating expenses and
additional contingent rent based upon a percentage of sales. Certain of these
lease agreements contain rent abatements and escalation clauses that are
accrued to rent expense on a straight-line basis. Total rent expense was
approximately $1,058,000, $529,000 and $94,017 for the years ended December 31,
1999, 1998 and 1997, respectively, of which approximately $902,000, $405,000
and $74,000 were for the minimum lease obligations. Rent expense is included in
selling and administrative expenses. As of December 31, 1999, 1998 and 1997,
the Company has property and equipment of approximately $429,000, $257,000 and
$214,438, respectively, net of $194,000, $88,000 and $14,756, respectively, in
accumulated amortization under capital lease obligations.

F-15
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The following is a schedule of future minimum payments under capital lease
obligations and noncancelable operating leases as of December 31, 1999:

<TABLE>
<CAPTION>
Capital Operating
Fiscal Year Lease Leases
----------- --------- ----------
<S> <C> <C>
2000.................................................. $ 229,840 $1,197,145
2001.................................................. 167,853 1,202,421
2002.................................................. 124,326 1,218,145
2003.................................................. 66,547 841,438
2004.................................................. 30,559 289,785
Thereafter............................................ -- 697,817
--------- ----------
Total................................................. 619,125 $5,446,751
==========
Less--Imputed interest................................ (111,478)
---------
Present value of net minimum lease payments........... 507,647
Less--Current maturities.............................. (178,560)
---------
Long-term capital lease obligations................... $ 329,087
=========
</TABLE>

Included in future minimum lease payments are commitments of approximately
$1,287,000 through 2003 due to a related entity for an operating lease for the
Company's fulfillment and warehouse space. Rent expense under the Company's
related-party lease was approximately $111,000 for the year ended December 31,
1999.

Contingencies

The Company, like other retailers of products that are ingested, faces an
inherent risk of exposure to product liability claims in the event that, among
other things, the use of its products results in injury. With respect to
product liability coverage, the Company currently has a general liability
policy, followed by additional umbrella liability insurance coverage. There can
be no assurance that such insurance will continue to be available at a
reasonable cost, or if available, that it will be adequate to cover
liabilities.

8. Segment Information:

The Company operates in a single industry segment, retail sales of vitamins
and nutritional supplements. In 1999, the Company began to provide multiple
methods, or channels, for product sales. The channels consist of, an Internet
website, a catalog, and retail stores. Prior to 1999, the Company only operated
in retail stores. The Company's management team monitors the Company's
performance according to this multi-channel approach. For the year ended
December 31, 1999, the net sales, cost of sales, and gross profit for each of
the channels were as follows:

<TABLE>
<CAPTION>
Website Catalog Stores Total
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net Sales..................... $ 1,570,531 $7,434,094 $7,936,352 $16,940,977
Cost of sales................. 2,930,078 3,993,549 4,873,472 11,797,099
Gross profit.................. $(1,359,547) $3,440,545 $3,062,880 $ 5,143,878
</TABLE>

There are a number of shared expenses and assets related to managing the
different channels. Management does not allocate such amounts for internal use.

F-16
<PAGE>

VITAMINS.COM, INC.
(formerly Vitamin Superstore, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

9. Subsequent Event:

On March 15, 2000, the Company entered into the Agreement and Plan of
Reorganization and Merger (the "Agreement") with HealthCentral.com. Pursuant to
the Agreement, HealthCentral.com will acquire all of the shares of capital
stock of the Company for $103,500,000 in HealthCentral.com common stock.
Vitamins.com will become a wholly owned subsidiary of HealthCentral.com. The
completion of the merger is contingent upon the approval of the
HealthCentral.com stockholders.

F-17
<PAGE>

APPENDIX A

AGREEMENT AND PLAN OF REORGANIZATION AND MERGER

Among

HEALTHCENTRAL.COM, HCC ACQUISITION CORP.

and VITAMINS.COM, INC.

March 15, 2000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Article I DEFINITIONS.................................................... A-1
1.1 Acquisition Proposal........................................... A-1
1.2 Affiliate Agreement............................................ A-1
1.3 Affiliates..................................................... A-1
1.4 Cause.......................................................... A-1
1.5 Certificates................................................... A-1
1.6 Closing........................................................ A-1
1.7 Closing Date................................................... A-2
1.8 Code........................................................... A-2
1.9 Dissenting VCI Shares.......................................... A-2
1.10 Effective Time................................................. A-2
1.11 Effectiveness Period........................................... A-2
1.12 Escrow Agreement............................................... A-2
1.13 Escrow Fund.................................................... A-2
1.14 Escrow Holder.................................................. A-2
1.15 Exchange Act................................................... A-2
1.16 Exchange Agent................................................. A-2
1.17 Exchange Ratio................................................. A-2
1.18 GAAP........................................................... A-2
1.19 Governmental Entity............................................ A-2
1.20 Hazardous Material............................................. A-2
1.21 Hazardous Materials Activities................................. A-2
1.22 HCC Disclosure Schedule........................................ A-2
1.23 HCC Employee Benefit Plans..................................... A-2
1.24 HCC ERISA Affiliate............................................ A-2
1.25 HCC Parties.................................................... A-2
1.26 HCC SEC Reports................................................ A-2
1.27 Holders........................................................ A-3
1.28 HSR Act........................................................ A-3
1.29 Indemnified Party.............................................. A-3
1.30 Indemnifying Party............................................. A-3
1.31 Intellectual Property.......................................... A-3
1.32 Loss or Losses................................................. A-3
1.33 Material Adverse Effect........................................ A-3
1.34 Merger......................................................... A-3
1.35 Merger Agreement............................................... A-3
1.36 Merger Shares.................................................. A-3
1.37 Most Recent VCI Balance Sheet.................................. A-3
1.38 Most Recent HCC Balance Sheet.................................. A-3
1.39 1933 Act....................................................... A-3
1.40 Numerator...................................................... A-3
1.41 Ordinary Course of Business.................................... A-3
1.42 Permits........................................................ A-3
1.43 Proxy Statement................................................ A-3
1.44 Registrable Securities......................................... A-4
1.45 Registration Expenses.......................................... A-4
1.46 Registration Statement......................................... A-4
1.47 Rule 145 Affiliate............................................. A-4
1.48 SEC............................................................ A-4
</TABLE>

A-i
<PAGE>

TABLE OF CONTENTS--(Continued)

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
1.49 Security Interest............................................ A-4
1.50 Selling Expenses............................................. A-4
1.51 Stockholder Representative................................... A-4
1.52 Subsidiary................................................... A-4
1.53 Taxes........................................................ A-4
1.54 Tax Returns.................................................. A-4
1.55 Underwritten Offering........................................ A-4
1.56 VCI Disclosure Schedule...................................... A-4
1.57 VCI Employee Benefit Plans................................... A-4
1.58 VCI ERISA Affiliate.......................................... A-4
1.59 VCI Parties.................................................. A-4
1.60 Voting Agreement............................................. A-5
1.61 Written Consent and Agreement................................ A-5
Article II MERGER, CLOSING AND CONVERSION OF SHARES..................... A-5
2.1 Merger....................................................... A-5
2.2 Closing...................................................... A-5
2.3 Conversion of Shares......................................... A-5
2.4 Escrow....................................................... A-6
2.5 VCI Options.................................................. A-6
2.6 Exchange of Certificates..................................... A-7
2.7 Dissenting VCI Shares........................................ A-8
2.8 Tax Free Reorganization...................................... A-8
2.9 Voting Agreement............................................. A-8
2.10 Representation on HCC Board of Directors..................... A-8
2.11 Affiliate Agreements......................................... A-8
2.12 Escrow Agreement............................................. A-8
2.13 Securities Exemption; Stockholders Letter.................... A-8
2.14 Employment and Noncompetition Agreement...................... A-8
Article III REPRESENTATIONS OF VCI....................................... A-9
3.1 Organization................................................. A-9
3.2 Capitalization of VCI........................................ A-9
3.3 Subsidiaries................................................. A-9
3.4 Authorization................................................ A-9
3.5 Compliance with Laws and Other Instruments................... A-10
3.6 VCI Financial Statements..................................... A-10
3.7 No Undisclosed Liabilities................................... A-10
3.8 Absence of Certain Changes or Events......................... A-11
3.9 Tax Matters.................................................. A-11
3.10 Assets....................................................... A-12
3.11 Intellectual Property........................................ A-13
3.12 Contracts.................................................... A-13
3.13 Accounts Receivable.......................................... A-14
3.14 Insurance.................................................... A-14
3.15 Litigation................................................... A-15
3.16 Employees and Consultants.................................... A-15
3.17 Employee Benefits............................................ A-15
3.18 Environmental and OSHA....................................... A-17
3.19 Permits...................................................... A-17
3.20 Certain Business Relationships with Affiliates............... A-17
</TABLE>

A-ii
<PAGE>

TABLE OF CONTENTS--(Continued)

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
3.21 Brokers' Fees................................................. A-18
3.22 Minute Books.................................................. A-18
3.23 Customers and Suppliers....................................... A-18
3.24 Year 2000..................................................... A-18
3.25 Disclosure.................................................... A-18
Article IV REPRESENTATIONS OF HCC AND ACQUISITION CORP. ................. A-18
4.1 Organization.................................................. A-18
4.2 HCC Capital Structure......................................... A-18
4.3 Subsidiaries.................................................. A-19
4.4 HCC's Authorization........................................... A-19
4.5 SEC Filings; Financial Statements............................. A-19
4.6 No Undisclosed Liabilities.................................... A-20
4.7 Tax Matters................................................... A-20
4.8 Assets........................................................ A-21
4.9 Intellectual Property......................................... A-21
4.10 Contracts..................................................... A-21
4.11 Accounts Receivable........................................... A-22
4.12 Litigation.................................................... A-22
4.13 Employee Benefits............................................. A-22
4.14 Environmental and OSHA........................................ A-24
4.15 Brokers' Fees................................................. A-24
4.16 Customers and Suppliers....................................... A-24
4.17 Year 2000..................................................... A-24
4.18 Disclosure.................................................... A-24
Article V CERTAIN COVENANTS OF VCI...................................... A-24
5.1 Conduct of Business and Certain Key Employees................. A-24
5.2 Absence of Material Changes................................... A-25
5.3 Reports, Taxes................................................ A-25
5.4 Non-Solicitation.............................................. A-25
5.5 Option Plans.................................................. A-26
Article VI ADDITIONAL COVENANTS.......................................... A-26
6.1 Proxy Statement............................................... A-26
6.2 Access to Information......................................... A-26
6.3 Stockholders Meetings......................................... A-26
6.4 Legal Conditions to Merger.................................... A-26
6.5 Public Disclosure............................................. A-26
6.6 Tax-Free Reorganization....................................... A-26
6.7 Pooling Accounting............................................ A-27
6.8 Nasdaq Quotation.............................................. A-27
6.9 Consents...................................................... A-27
6.10 FIRPTA........................................................ A-27
6.11 Securities Laws............................................... A-27
6.12 Expenses...................................................... A-27
6.13 Commercially Reasonable Efforts and Further Assurances........ A-27
6.14 Registration of Shares issued to VCI Shareholders............. A-27
6.15 Tax Matters................................................... A-35
6.16 Interim Operations of VCI..................................... A-36
6.17 Issuance of Additional Shares by HCC.......................... A-36
6.18 Payment of Dividends by HCC................................... A-36
</TABLE>

A-iii
<PAGE>

TABLE OF CONTENTS--(Continued)

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Article VII CONDITIONS TO THE MERGER..................................... A-36
7.1 Conditions to Obligations of Each Party to Effect the
Merger....................................................... A-36
7.2 Additional Conditions to Obligations of HCC and Acquisition
Corp. ....................................................... A-37
7.3 Additional Conditions to Obligations of VCI.................. A-37
Article VIII TERMINATION.................................................. A-38
8.1 Termination.................................................. A-38
8.2 Effect of Termination........................................ A-38
8.3 HCC Obligation to Purchase VCI Shares........................ A-38
Article IX SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.. A-39
9.1 Survival of Representations and Warranties................... A-39
9.2 Indemnification by Holders................................... A-39
9.3 Indemnification by HCC....................................... A-39
9.4 Limitation................................................... A-39
9.5 Claims for Indemnification................................... A-40
9.6 Defense by Indemnifying Party................................ A-40
9.7 Arbitration.................................................. A-41
9.8 Subrogation.................................................. A-41
9.9 Section 6.14(f) Indemnification.............................. A-41
Article X MISCELLANEOUS................................................ A-42
10.1 Amendment.................................................... A-42
10.2 Entire Agreement............................................. A-42
10.3 Governing Law................................................ A-42
10.4 Headings..................................................... A-42
10.5 Notices...................................................... A-42
10.6 Severability................................................. A-43
10.7 Waiver....................................................... A-43
10.8 Assignment................................................... A-43
10.9 Counterparts................................................. A-43
10.10 Third Party Beneficiaries.................................... A-43
10.11 Attorneys' Fees.............................................. A-43
</TABLE>

A-iv
<PAGE>

AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
AMONG HEALTHCENTRAL.COM, HCC ACQUISITION CORP.
AND VITAMINS.COM, INC.

This Agreement and Plan of Reorganization and Merger ("Agreement") is made
as of March 15, 2000 among HealthCentral.com, a Delaware corporation ("HCC"),
HCC Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
HCC ("Acquisition Corp."), and Vitamins.com, Inc., a Delaware corporation
("VCI").

RECITAL:

The parties hereto desire that Acquisition Corp. be merged with and into
VCI; that VCI be the surviving corporation and become a wholly-owned
subsidiary of HCC; and that the shares of capital stock of VCI outstanding
immediately prior to the Effective Time of the merger, other than those shares
subject to a demand for appraisal pursuant to Section 262 of the Delaware
General Corporation Law (the "DCL"), be converted as set forth in this
Agreement into shares of common stock of HCC ("HCC common stock").

NOW THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

The terms defined in this Article I shall, for purposes of this Agreement,
have the meanings specified in this Article I unless the context requires
otherwise:

1.1 Acquisition Proposal. "Acquisition Proposal" shall have the meaning set
forth in Section 5.4(a) of this Agreement.

1.2 Affiliate Agreement. "Affiliate Agreement" shall mean the Affiliate
Agreement in the form of Exhibit F attached to this Agreement.

1.3 Affiliates. "Affiliates" of any party to the Agreement shall be persons
that directly or indirectly through one or more intermediaries, control, or
are controlled by, or are under common control with, such party.

1.4 Cause. "Cause" shall mean for purposes of Section 2.10, (i) intentional
failure to perform duties as a director of HCC after written notice thereof
from HCC to the director and the failure to cure within thirty (30) days of
receipt of such notice; (ii) intentional misrepresentation or the commission
of an act of fraud in the performance of duties as a director of HCC; (iii)
breach of fiduciary duty involving personal profit including, without
limitation, embezzlement, misrepresentation or conversion of assets or
opportunities of HCC; (iv) willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) in connection with the
performance of duties as a director; or (v) a director, together with his or
her Affiliates, owns less than fifty percent (50%) of the total number of
shares of HCC Common Stock owned by them immediately following consummation of
the Merger and the related transactions contemplated under this Agreement.

1.5 Certificates. "Certificates" shall have the meaning set forth in
Section 2.6(c) of this Agreement.

1.6 Closing. "Closing" shall mean the delivery by the parties hereto of the
various documents contemplated by this Agreement or otherwise required in
order to consummate the Merger.

A-1
<PAGE>

1.7 Closing Date. "Closing Date" shall have the meaning set forth in
Section 2.2 of this Agreement.

1.8 Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.9 Dissenting VCI Shares. "Dissenting VCI Shares" shall mean all shares,
if any, of the outstanding capital stock of VCI for which appraisal rights
shall be perfected under Section 262 of the DCL.

1.10 Effective Time. "Effective Time" shall mean the time when the Merger
becomes effective under the DCL.

1.11 Effectiveness Period. "Effectiveness Period" shall have the meaning
set forth in Section 6.14(a) of this Agreement.

1.12 Escrow Agreement. "Escrow Agreement" shall mean the Agreement relating
to an escrow of certain shares of HCC common stock pursuant to Section 2.4 of
this Agreement, in the form attached to this Agreement as Exhibit C.

1.13 Escrow Fund. "Escrow Fund" shall have the meaning set forth in Section
2.4 of this Agreement.

1.14 Escrow Holder. "Escrow Holder" shall mean U.S. Bank Trust National
Association.

1.15 Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

1.16 Exchange Agent. "Exchange Agent" shall have the meaning set forth in
Section 2.6(a) of this Agreement.

1.17 Exchange Ratio. "Exchange Ratio" shall have the meaning set forth in
Section 2.3 of this Agreement.

1.18 GAAP. "GAAP" shall mean United States generally accepted accounting
principles.

1.19 Governmental Entity. "Governmental Entity" means any government,
municipality or political subdivision thereof, whether federal, state, local
or foreign, or any governmental or quasi-governmental agency, authority,
board, bureau, commission, department, instrumentality or public body, or any
court, arbitrator, administrative tribunal or public utility.

1.20 Hazardous Material. "Hazardous Material" shall have the meaning set
forth in Section 3.18(a) of this Agreement.

1.21 Hazardous Materials Activities. "Hazardous Materials Activities" shall
have the meaning set forth in Section 3.18(b) of this Agreement.

1.22 HCC Disclosure Schedule. "HCC Disclosure Schedule" shall have the
meaning set forth in Article IV of this Agreement.

1.23 HCC Employee Benefit Plans. "HCC Employee Benefit Plans" shall have
the meaning set forth in Section 4.13 of this Agreement.

1.24 HCC ERISA Affiliate. "HCC ERISA Affiliate" shall have the meaning set
forth in Section 4.13(a) of this Agreement.

1.25 HCC Parties. "HCC Parties" shall have the meaning set forth in Section
9.2(a) of this Agreement.

1.26 HCC SEC Reports "HCC SEC Reports" shall have the meaning set forth in
Section 4.5(a) of this Agreement.

A-2
<PAGE>

1.27 Holders. "Holders" shall mean the holders of VCI capital stock
immediately prior to the Effective Time.

1.28 HSR Act. "HSR Act" means The Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

1.29 Indemnified Party. "Indemnified Party" shall mean the HCC Parties or
the VCI Parties, as the case may be, who or which are asserting a claim for
indemnification under Section 9.2 or 9.3 hereof.

1.30 Indemnifying Party. "Indemnifying Party" shall mean the HCC Parties or
the VCI Parties, as the case may be, against whom or which an indemnification
claim has been asserted under Section 9.2 or 9.3 hereof.

1.31 Intellectual Property. "Intellectual Property" shall have the meaning
set forth in Section 3.11(a) of the Agreement.

1.32 Loss or Losses. "Loss" or "Losses" shall have the meaning set forth in
Section 9.2(a) of this Agreement.

1.33 Material Adverse Effect. "Material Adverse Effect" means, with respect
to a party, a material adverse change in the assets, liabilities, business,
financial condition or the results of operations of such party and its
Subsidiaries, taken as a whole. The parties acknowledge and agree that (i) VCI
and HCC are both engaged in Internet-based start-up enterprises that are in
highly competitive and dynamic markets; (ii) because of the volatility in these
markets, VCI and HCC are each subject to a variety of external factors that can
impact their businesses in a very quick time frame with potential significant
effects on their assets, liabilities, business, financial conditions and
results of operations; and (iii) accordingly, changes in the assets,
liabilities, business, financial conditions or results of operations of either
VCI or HCC arising out of external factors or economic conditions that affect
the industry generally shall not be a "Material Adverse Effect" for purposes of
this Agreement.

1.34 Merger. "Merger" shall mean the merger of Acquisition Corp. with and
into VCI.

1.35 Merger Agreement. "Merger Agreement" shall mean the Agreement of Merger
in the form attached to this Agreement as Exhibit A.

1.36 Merger Shares. "Merger Shares" shall have the meaning set forth in
Section 6.14(a) of this Agreement.

1.37 Most Recent VCI Balance Sheet. "Most Recent VCI Balance Sheet" shall
have the meaning set forth in Section 3.6 of this Agreement.

1.38 Most Recent HCC Balance Sheet. "Most Recent HCC Balance Sheet" shall
have the meaning set forth in Section 4.5(b) of this Agreement.

1.39 1933 Act. "1933 Act" shall mean the Securities Act of 1933, as amended.

1.40 Numerator. "Numerator" shall have the meaning set forth in Section
2.3(a) of this Agreement.

1.41 Ordinary Course of Business. "Ordinary Course of Business" shall have
the meaning set forth in Section 3.7 of this Agreement.

1.42 Permits. "Permits" shall have the meaning set forth in Section 3.19 of
this Agreement.

1.43 Proxy Statement. "Proxy Statement" shall mean the proxy statement to be
mailed to the stockholders of HCC in connection with the Merger in order to
obtain the approval of the stockholders of HCC as required by the rules of the
Nasdaq National Market.

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1.44 Registrable Securities. "Registrable Securities" shall have the
meaning set forth in Section 6.14(b)(ii) of this Agreement.

1.45 Registration Expenses. "Registration Expenses" shall have the meaning
set forth in Section 6.14(c) of this Agreement.

1.46 Registration Statement. "Registration Statement" shall have the
meaning set forth in Section 6.14(a) of this Agreement.

1.47 Rule 145 Affiliate. "Rule 145 Affiliate" shall have the meaning set
forth in Section 6.8 of this Agreement.

1.48 SEC. "SEC" shall mean the Securities and Exchange Commission.

1.49 Security Interest. "Security Interest" shall have the meaning set
forth in Section 3.10 of this Agreement.

1.50 Selling Expenses. "Selling Expenses" shall have the meaning set forth
in Section 6.14(c) of this Agreement.

1.51 Stockholder Representative. "Stockholder Representative" shall mean
the individual authorized by the stockholders of VCI to act as the
representative of the stockholders of VCI under this Agreement and in
connection with the transactions contemplated herein, and any substitute
representatives selected in accordance with the Written Consent and Agreement.

1.52 Subsidiary. "Subsidiary" shall mean, with respect to a particular
party hereto, any corporation or other organization, whether incorporated or
unincorporated, of which at least a majority of the securities or interests
are directly or indirectly owned by such party or by one or more Subsidiaries
of such party.

1.53 Taxes. "Taxes" means all taxes, charges, fees, levies or other similar
assessments or liabilities, including without limitation income, gross
receipts, ad valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, payroll and franchise
taxes imposed by the United States of America or any state, local or foreign
government, or any agency thereof, or other political subdivision of the
United States or any such government, and any interest, fines, penalties,
assessments or additions to tax resulting from, attributable to or incurred in
connection with any tax or any contest or dispute thereof.

1.54 Tax Returns. "Tax Returns" means all reports, returns, declarations,
statements or other information required to be supplied to a taxing authority
in connection with Taxes.

1.55 Underwritten Offering. "Underwritten Offering" shall mean an offering
of Merger Shares pursuant to a Registration Statement that is effected in the
form of a registration statement pursuant to which the Merger Shares are sold
to an underwriter for reoffering to the public.

1.56 VCI Disclosure Schedule. "VCI Disclosure Schedule" shall have the
meaning set forth in Article III of this Agreement.

1.57 VCI Employee Benefit Plans. "VCI Employee Benefit Plans" shall have
the meaning set forth in Section 3.17 of this Agreement.

1.58 VCI ERISA Affiliate. "VCI ERISA Affiliate" shall have the meaning set
forth in Section 3.17(a) of this Agreement.

1.59 VCI Parties. "VCI Parties" shall have the meaning set forth in Section
9.3 of this Agreement.

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1.60 Voting Agreement. "Voting Agreement" shall have the meaning set forth
in Section 2.9 of this Agreement.

1.61 Written Consent and Agreement. "Written Consent and Agreement" shall
mean the Written Consent and Agreement in the form of Exhibit E attached
hereto.

ARTICLE II

MERGER, CLOSING AND CONVERSION OF SHARES

2.1 Merger. Subject to and in accordance with the terms and conditions of
this Agreement and the Merger Agreement, HCC, Acquisition Corp. and VCI shall
execute and file the Merger Agreement with the Secretary of State of Delaware,
and Acquisition Corp. shall, pursuant to the terms thereof, be merged with and
into VCI pursuant to Section 251 of the DCL.

2.2 Closing. The Closing shall take place at the offices of Howard, Rice,
Nemerovski, Canady, Falk & Rabkin, at 10:00 a.m., within 5 business days
following the date on which the Merger has been approved by the stockholders of
HCC or on such other day and time as shall be agreed to by the parties (the
"Closing Date").

2.3 Conversion of Shares.

(a) In accordance with the Merger Agreement, (i) each share of
Acquisition Corp. common stock issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted at and as of the Effective
Time into one share of common stock of VCI, and (ii) each share of capital
stock of VCI issued and outstanding immediately prior to the Effective Time
(except those shares which are Dissenting VCI Shares) shall, by virtue of
the Merger and without any action on the part of the Holders, be converted
at and as of the Effective Time into the right to receive that number of
shares of HCC common stock, as illustrated on Exhibit B attached hereto,
equal to the amount determined by dividing the (1) lesser of (A)
$103,500,000 (less any adjustments required by Section 6.12 hereof) (the
"Numerator") divided by the average closing price of HCC common stock on
the Nasdaq National Market (or if not so listed, the average closing bid
price on such other market in which such prices are regularly quoted) for
the ten consecutive trading days immediately preceding the business day
prior to the Closing Date as reported in The Wall Street Journal, and (B)
the number of shares that is equal to the number of shares of HCC common
stock outstanding immediately prior to the Effective Time less one share,
by (2) the total number of shares of capital stock of VCI outstanding
immediately prior to the Closing (including for this purpose any capital
stock of VCI issuable under then outstanding options, warrants or other
convertible securities, in each case whether or not vested or exercisable)
and carrying the quotient thereof out to three decimal places (the
"Exchange Ratio"). The Holders shall receive only whole shares of HCC
common stock (or if the provisions of Section 2.3(b)(ii) are applicable,
the surviving corporation's or acquiring corporation's capital stock) and,
in lieu of any fractional share of HCC common stock, Holders shall receive
in cash the fair market value of such fractional share (rounded up or down
to the nearest whole number, with a fractional interest equal to .5 rounded
to the next whole number), valuing HCC common stock (or if the provisions
of Section 2.3(b)(ii) are applicable, the surviving corporation's or
acquiring corporation's capital stock) at the closing price for such stock
on the Nasdaq National Market on the trading day immediately preceding the
Closing Date.

(b) If on or before the Effective Time (i) the issued and outstanding
shares of HCC common stock are changed into a different number of shares by
reason of any recapitalization, stock split or stock dividend, then the
number of shares of HCC common stock received by the Holders pursuant to
Section 2.3(a) above (the "Conversion Stock") shall be adjusted to that
number and class of shares of common stock of HCC, that would have been
issued to the Holders if the Conversion Stock had been

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issued to the Holders immediately prior to such recapitalization, stock
split or stock dividend; or (ii) there shall be a merger, share exchange or
consolidation of HCC with or into another corporation or entity, as part of
such merger, share exchange or consolidation, then the Conversion Stock
shall be adjusted to that number and class of shares of stock of the
surviving corporation resulting from such merger or consolidation or the
acquiring corporation in such share exchange, that would have been issued
to the Holders if the Conversion Stock had been issued to the Holders
immediately prior to such merger, share exchange or consolidation. For
purposes of this Section 2.3(b), (i) the determination of the adjustment to
the number and class of shares shall be based on the formula set forth in
Section 2.3(a)(ii), assuming that the Effective Time is the day immediately
prior to the subject recapitalization, stock split, stock dividend, merger,
share exchange or consolidation and (ii) in the event of a merger, share
exchange or consolidation of HCC prior to the Effective Time, the shares of
VCI common stock being converted under Section 2.3(a) shall be converted
into shares of the surviving corporation's or the acquiring corporation's
capital stock.

2.4 Escrow. In order to provide indemnification in accordance with Article
IX of this Agreement and with the Escrow Agreement, at the Effective Time or as
soon thereafter as possible, stock certificates representing in the aggregate
10% of the shares of HCC common stock (rounded to the nearest whole share) into
which the Holders' shares of capital stock of VCI were converted pursuant to
Section 2.3 of this Agreement (the "Escrow Fund") shall be delivered to the
Escrow Holder (which shares shall be withheld from each Holder ratably based on
the number of shares of capital stock of VCI held by such Holder immediately
prior to the Effective Time). The Stockholder Representative is authorized to
act hereunder and under the Escrow Agreement with the powers and authority
provided for herein and therein, as the representative of the Holders and their
successors. Approval of this Agreement and the Merger by the Holders shall
constitute approval of the terms and conditions of the Escrow Agreement and
ratification of the selection of the Stockholder Representative and of his
authority to act hereunder and under the Escrow Agreement on behalf of the
Holders and their successors. Any rights of the Holders to receive any shares
placed in such escrow shall in no circumstances be sold, assigned or otherwise
transferred by them other than by will or pursuant to the laws of descent and
distribution. All certificates representing securities delivered to the Escrow
Holder shall be accompanied by separate stock powers endorsed in blank by the
Stockholder Representative on behalf of the Holders. Subject to the Escrow
Agreement, the Holders shall retain their voting rights with respect to
securities deposited with the Escrow Holder in accordance with this Section
2.4.

2.5 VCI Options.

(a) At the Effective Time, each of the outstanding options to purchase
common stock of VCI shall be assumed by HCC and shall automatically be
converted into options to purchase the number of shares of HCC common stock
determined by multiplying the number of shares of common stock of VCI
covered by the option by the Exchange Ratio, at an exercise price for each
full share of HCC common stock equal to the quotient obtained by dividing
(a) the exercise price per share of VCI common stock with respect to such
option by (b) the Exchange Ratio, which exercise price per share shall be
rounded to the nearest whole cent, as illustrated on Exhibit B attached
hereto. The number of shares of HCC common stock that may be purchased by a
holder under any option assumed by HCC hereunder shall not include any
fractional share of HCC common stock but shall be rounded up to the next
higher whole share of HCC common stock. Notwithstanding the foregoing, VCI
stock options which meet the requirements of Section 422 of the Code will
be converted into HCC stock options in a manner which complies with Section
424(a) of the Code. The assumption by HCC of the options hereunder shall
not terminate or modify (except as required hereunder) (i) the VCI 1999
Stock Incentive Plan, dated August 15, 1999 (the "VCI Plan"), any Stock
Option Agreement issued pursuant to the VCI Plan or the terms of any stock
option agreements issued by VCI other than under the VCI Plan; (ii) any
right, vesting schedule, or other restriction on transferability relating
to the VCI Plan, any Stock Option Agreement issued pursuant to the VCI Plan
or any stock option agreement issued by VCI other than under the VCI Plan;
or (iii) give the holders of such options any additional benefits which
they did not have immediately prior to the Effective Time. Continuous
employment with VCI shall be credited to an optionee for vesting purposes
after the

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Effective Time. Nothing contained in this Section 2.5(a) shall require HCC
to offer or sell shares of HCC common stock upon the exercise of options
assumed by HCC hereunder if, in the reasonable judgment of HCC or its
counsel, such offer or sale would not be in accordance with the applicable
federal or state securities laws, provided that HCC shall use its
reasonable best efforts to take such actions, if any, as are necessary for
such offer or sale to be in accordance with such laws, including without
limitation the filing with the SEC within 45 days following the Effective
Time of a registration statement on Form S-8 under the 1933 Act covering
the shares of HCC common stock issuable upon exercise of options assumed
hereunder by HCC.

(b) If on or before the Effective Time (i) the issued and outstanding
shares of HCC common stock are changed into a different number of shares by
reason of any recapitalization, stock split or stock dividend, then the
number of shares of HCC common stock issuable upon exercise of VCI options
assumed and converted pursuant to Section 2.5(a) above shall be
correspondingly adjusted to that number and class of shares of common stock
of HCC, if such options had been converted into options to acquire HCC
common stock immediately before such recapitalization, stock split or stock
dividend and the exercise price thereof shall be correspondingly adjusted;
or (ii) there shall be a merger, share exchange or consolidation of HCC
with or into another corporation or entity, then, as part of such merger,
share exchange or consolidation, the VCI options to be assumed and
converted pursuant to Section 2.3(a) above shall be equitably converted
into options to acquire that number and class of shares of stock of the
surviving corporation resulting from such merger or consolidation or the
acquiring corporation in such share exchange, as if such VCI options had
been converted into options to acquire HCC shares of common stock
immediately prior to such merger, share exchange or consolidation, and the
exercise price thereof shall be correspondingly and equitably adjusted.

2.6 Exchange of Certificates.

(a) Prior to the Closing Date, HCC shall appoint U.S. Stock Transfer
Corporation to act as exchange agent (the "Exchange Agent") in the Merger.

(b) Promptly after the Closing Date, but in no event later than three
business days thereafter, HCC shall give instructions to the Exchange Agent
to make available within three business days thereafter for exchange in
accordance with this Section 2.6, the shares of HCC common stock issuable
pursuant to Section 2.3 in exchange for outstanding shares of capital stock
of VCI, subject to the issuance of 10% of the shares of HCC common stock
issuable to the Holders into escrow pursuant to Section 2.4 hereof.

(c) As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each Holder of record of a stock certificate that,
immediately prior to the Effective Time, represented outstanding shares of
capital stock of VCI (a "Certificate"), whose shares are being converted
into HCC common stock pursuant to Section 2.3, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other customary provisions as HCC may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates evidencing HCC common stock. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such
letter of transmittal, duly executed, the Holder of such Certificate shall
be entitled to receive in exchange therefor and HCC shall cause the
Exchange Agent to deliver to such Holder the number of shares of HCC common
stock and payments in lieu of fractional shares to which the Holder is
entitled pursuant to Section 2.3 hereof, subject to the provisions of
Section 2.4 hereof. Until surrendered as contemplated by this Section
2.6(c), each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender such whole
number of shares of HCC common stock and payments for fractional shares as
is provided for in Section 2.3.

(d) No dividends or distributions payable to holders of record of HCC
common stock after the Effective Time, or cash payable in lieu of
fractional shares, shall be paid to the Holder of any unsurrendered
Certificate until the Holder of the Certificate shall surrender such
Certificate.

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2.7 Dissenting VCI Shares. Holders of Dissenting VCI Shares shall have those
rights, but only those rights, of holders who perfect their appraisal rights
under Section 262 of the DCL. VCI shall give HCC prompt notice of any demand,
purported demand, objection, notice, petition, or other communication received
from stockholders or provided to stockholders by VCI with respect to any
Dissenting VCI Shares or shares claimed to be Dissenting VCI Shares, and HCC
shall have the right to participate in all negotiations and proceedings with
respect to such shares. VCI agrees that, without the prior written consent of
HCC, it shall not voluntarily make any payment with respect to, or settle or
offer to settle, any demand or purported demand respecting such shares.

2.8 Tax Free Reorganization. The parties intend to adopt this Agreement as a
plan of reorganization and to consummate the Merger in accordance with the
provisions of Section 368(a) of the Code.

2.9 Voting Agreement. Concurrently with the execution of this Agreement, the
holders of at least forty percent (40%) of the outstanding voting capital stock
of HCC shall enter into Voting Agreements with VCI in the form attached hereto
as Exhibit D, pursuant to which they shall agree, subject to the terms and
conditions of the Voting Agreement, to vote all the shares of capital stock of
HCC or VCI, as applicable, held by them or by the entities they represent in
favor of the Merger. HCC agrees to use its reasonable best efforts to maintain
the percentage of outstanding voting capital stock of HCC subject to the Voting
Agreements at no less than 40% through the date of the HCC stockholders'
meeting for the purpose of approving the Merger. In addition, concurrently with
the execution of this Agreement, Holders of at least ninety-eight percent (98%)
of the outstanding voting capital stock of VCI shall execute and deliver a
Written Consent and Agreement in the form attached hereto as Exhibit E,
pursuant to which the Holders shall authorize and approve the Merger and agree
to certain other terms and conditions. There shall be no amendments or
modifications to the Voting Agreement or the Written Consent and Agreement
without the written consent of VCI and HCC, respectively.

2.10 Representation on HCC Board of Directors. At the Effective Time, HCC
shall take all necessary actions so that, immediately following the Effective
Time, the following persons shall be appointed to three-year terms on the Board
of Directors of HCC: Robert M. Haft and Sage Givens. The approval by the HCC
stockholders of the Merger shall constitute their vote in favor of the
appointment of Robert M. Haft and Sage Givens as members of the HCC Board of
Directors. Robert M. Haft and Sage Givens may not be removed as a member of the
Board of Directors during their three-year terms for any reason other than
Cause.

2.11 Affiliate Agreements. Concurrently with the execution of this
Agreement, each affiliate of VCI, within the meaning of Rule 145 promulgated
under the 1933 Act ("Rule 145 Affiliates"), shall execute and deliver an
Affiliate Agreement, in the form of Exhibit F attached hereto, which shall be
effective as of the Closing Date, under which each Rule 145 Affiliate of VCI
agrees to comply with the applicable requirements of Rule 145 and any
requirements under the rules applicable to pooling of interests accounting
treatment. HCC shall be entitled to place appropriate legends on the
certificates evidencing any HCC common stock to be received by such Rule 145
Affiliates pursuant to the terms of this Agreement, and to issue appropriate
stop transfer instructions to the transfer agent for the HCC common stock,
consistent with the terms of the Affiliate Agreements.

2.12 Escrow Agreement. Concurrently with the execution of this Agreement,
HCC, the Stockholder Representative and the Escrow Holder shall have executed
the Escrow Agreement, which shall be effective as of the Closing Date.

2.13 Securities Exemption; Stockholders Letter. Concurrently with the
execution of this Agreement, each stockholder of VCI shall have executed and
delivered a Stockholder's letter in the form of Exhibit G hereto, which shall
be effective no later than the date hereof.

2.14 Employment and Noncompetition Agreement. Concurrently with the
execution of this Agreement, HCC shall have received an Employment Agreement
and a Noncompetition Agreement in the forms of Exhibits H and I hereto executed
by Robert M. Haft and Bruce Kudeviz, each of which shall be effective as of the
Closing Date.

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ARTICLE III

REPRESENTATIONS OF VCI

VCI represents and warrants to HCC that, except as set forth in the
Disclosure Schedule dated as of the date hereof and signed by the Chief
Executive Officer of VCI (the "VCI Disclosure Schedule"), each of which
exceptions shall specifically identify the relevant Section hereof to which it
relates or be specifically enough stated to make it clear that it is also
relevant to such Section:

3.1 Organization. VCI and each of its Subsidiaries are corporations or
limited liability companies duly organized, validly existing and in good
standing under the laws of the jurisdictions of their incorporation or
formation (as the case may be), and have all requisite power and authority to
own their properties and to carry on their businesses as now being conducted.
VCI has all requisite power to execute and deliver this Agreement and the
agreements contemplated herein, and to consummate the transactions contemplated
hereby and thereby. VCI and its Subsidiaries are duly qualified to do business
and in good standing in all jurisdictions in which ownership of property or the
character of their business requires such qualification and where failure to be
so qualified would reasonably be expected to have a Material Adverse Effect.
Copies of the Certificates of Incorporation and Bylaws or Certificate of
Formation and limited liability company agreement (as applicable) of VCI and
its Subsidiaries, as amended to date, have been previously delivered to HCC,
are complete and correct, and no amendments have been made thereto or have been
authorized since the date thereof.

3.2 Capitalization of VCI. VCI's authorized capital stock consists of
66,650,000 shares of common stock, of which 12,974,414 shares are issued and
outstanding on the date hereof, and 49,666,498 shares of Preferred Stock,
classified into three series, as follows: 11,627,573 shares of Series A
Convertible Preferred Stock, of which 11,627,573 shares are issued and
outstanding on the date hereof; 10,038,925 shares of Series B Convertible
Preferred Stock, of which 10,038,925 shares are issued and outstanding as of
the date hereof; and 28,000,000 shares of Series C Convertible Preferred Stock,
of which 23,325,000 shares are issued and outstanding as of the date hereof.
Section 3.2(a) of the VCI Disclosure Schedule sets forth the number of
authorized shares of each class of VCI capital stock and the number of issued
and outstanding shares of each class of capital stock and the record owner
thereof. Shares of Preferred Stock are convertible into shares of Common Stock
on a one share-for-one share basis. All issued and outstanding shares of VCI's
capital stock are duly authorized, validly issued, fully paid and non-
assessable, and were issued in compliance with applicable federal and state
securities laws. There are options outstanding covering 969,016 shares of
common stock of VCI; all of such options, to the extent not exercised prior to
the Effective Time, shall be assumed by HCC and converted into options to
purchase HCC common stock pursuant to the provisions of Section 2.5 hereof and
no consents of optionholders are required with respect to such assumption.
Except for such Preferred Stock and outstanding options and except as set forth
in Section 3.2(b) of the VCI Disclosure Schedule, there are not outstanding (i)
any options, warrants or other rights to purchase from VCI any capital stock of
VCI; (ii) any securities convertible into or exchangeable for shares of capital
stock of VCI; or (iii) any other commitments or rights of any kind for the
issuance by VCI of additional shares of capital stock or options, warrants or
other securities of VCI.

3.3 Subsidiaries. The only Subsidiaries of VCI are those listed in Section
3.3 of the VCI Disclosure Schedule. All of the outstanding shares of capital
stock of each of VCI's Subsidiaries which is a corporation are duly authorized,
validly issued, fully paid and nonassessable and all such shares are owned by
VCI or another Subsidiary of VCI free and clear of all security interests,
liens, claims, pledges, agreements, limitations on VCI's voting rights, charges
or other encumbrances of any nature. VCI owns all of the membership interests
in Vitamins.com, LLC, a Delaware limited liability company, free and clear of
all security interests, liens, claims, pledges, agreements, limitations on
VCI's voting rights, charges or other encumbrances of any nature.

3.4 Authorization. The execution and delivery by VCI of this Agreement and
the agreements provided for herein, and the consummation by VCI of all
transactions contemplated hereunder and thereunder by VCI, have been duly
authorized by all requisite corporate action. This Agreement has been duly
executed and

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delivered by VCI. This Agreement and all other agreements and obligations
entered into and undertaken in connection with the transactions contemplated
hereby to which VCI is a party constitute the valid and legally binding
obligations of VCI enforceable against it in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws affecting the rights of creditors
generally and subject to equitable remedies.

3.5 Compliance with Laws and Other Instruments. Except as set forth in
Section 3.5 of the VCI Disclosure Schedule, neither VCI nor any of its
Subsidiaries is in violation or default (a) of any provision of its Certificate
of Incorporation or Bylaws or Certificate of Formation or limited liability
company agreement (as the case may be), or of any instrument, judgment, order,
writ or decree, or (b) except for when any such violation or default would not
reasonably be expected to have a Material Adverse Effect, of any lease,
license, permit, contract or other arrangement to which it is a party or by
which it is bound, of any copyright laws with respect to its use and posting of
information on its website or of any other provision of any federal or state
statute, rule or regulation applicable to VCI or any of its Subsidiaries. The
execution, delivery and performance by VCI of this Agreement and the agreements
provided for herein, and the consummation by VCI of the transactions
contemplated hereby and thereby, do not and will not, with or without the
giving of notice or the passage of time or both, (a) violate the provisions of
any law, rule or regulation applicable to VCI (assuming compliance with the
requirements of the HSR Act), and which would reasonably be expected to have a
Material Adverse Effect; (b) violate the provisions of the Certificate of
Incorporation or Bylaws or Certificate of Formation or limited liability
company agreement (as the case may be) of VCI or any of its Subsidiaries;
(c) violate any judgment, decree, order or award of any court, governmental
body or arbitrator applicable to VCI; (d) except as set forth in Section 3.5 of
the VCI Disclosure Schedule, conflict with, contravene, constitute a default or
breach of, result in an acceleration of, or create in any party the right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any instrument, judgment, order, writ, decree, lease, license,
permit, contract, lease, or other agreement or other arrangement to which VCI
or any of its Subsidiaries is a party or by which VCI or any Subsidiaries is
bound or to which its assets are subject and which would reasonably be expected
to have a Material Adverse Effect; or (e) constitute an event that results in
the creation of any lien, charge or encumbrance upon any assets of VCI or any
of its Subsidiaries or the suspension, revocation, impairment, forfeiture, or
nonrenewal of any permit, license, authorization, or approval applicable to VCI
or any of its Subsidiaries, their businesses or operations or any of their
assets or properties and which would reasonably be expected to have a Material
Adverse Effect.

3.6 VCI Financial Statements. VCI has delivered to HCC the audited
consolidated balance sheets of VCI as of December 31, 1999 ("Most Recent VCI
Balance Sheet") and December 31, 1998 and the related statements of income,
changes in shareholders' equity and cash flows. Such financial statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby, fairly present in all material respects the
financial condition, results of operations and cash flows of VCI as of the
respective dates thereof and for the periods referred to therein and are
consistent with the books and records of VCI.

3.7 No Undisclosed Liabilities. Except as set forth in Section 3.7 of the
VCI Disclosure Schedule, VCI and its Subsidiaries have no liability (whether
absolute or contingent, whether liquidated or unliquidated and whether due or
to become due), and there is no existing condition, situation or set of
circumstances which would reasonably be expected to result in such a liability,
except for (a) liabilities shown on the Most Recent VCI Balance Sheet, (b)
liabilities which have arisen since December 31, 1999 in the ordinary course of
business consistent with past custom and practice for start up internet e-
commerce enterprises ("Ordinary Course of Business"), (c) contractual
liabilities incurred in the Ordinary Course of Business which are not required
by GAAP to be reflected on a balance sheet or disclosed in the notes thereto
under GAAP, and (d) liabilities for accounting, investment banking and legal
fees incurred in connection with the Merger and the transactions contemplated
thereby; provided that any difference between the adjusted tax basis and the
fair market value of any asset held by VCI or its Subsidiaries on the Closing
Date shall not be treated as an existing condition, situation or set of
circumstances for purposes of this Section 3.7.

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3.8 Absence of Certain Changes or Events. Except as contemplated by this
Agreement and as set forth in Section 3.8 of the Disclosure Schedule, since
December 31, 1999, neither VCI nor any of its Subsidiaries has entered into
any transaction that is not in the Ordinary Course of Business or has:

(a) suffered any Material Adverse Effect or had any event occur which
reasonably would be expected to result in a Material Adverse Effect;

(b) incurred any material obligation or liability for borrowed money
other than in the Ordinary Course of Business;

(c) discharged or satisfied any lien or encumbrance or paid any
obligation or liability other than (i) current liabilities reflected in the
Most Recent VCI Balance Sheet or (ii) those incurred in the Ordinary Course
of Business since the date of the Most Recent VCI Balance Sheet;

(d) made any material amendment to or termination of any contract or
lease or done any act or omitted to do any act which would cause a breach
of any contract or lease where such breach would reasonably be expected to
have a Material Adverse Effect;

(e) suffered any loss of personal or real property in excess of $50,000
in the aggregate, or waived any rights of any value;

(f) authorized any declaration or payment of dividends, or paid any such
dividends, or authorized any transfer of assets of any kind whatsoever to
any of its stockholders (other than payments or transfers by any Subsidiary
of VCI to VCI);

(g) made any material change in the terms, status or funding condition
of any VCI Employee Benefit Plan;

(h) made any capital expenditure in excess of $50,000 in any instance or
$500,000 in the aggregate;

(i) acquired or disposed of, or committed to acquire or dispose of, any
asset, or entered or committed to enter into any contract, agreement or
commitment, in any such case which involves the payment in the case of an
acquisition of more than $50,000, or in the case of a disposition of more
than $500,000, except agreements, commitments or transactions involving the
purchase of inventory or supplies in the ordinary course of business
consistent with past practice and which do not have a remaining term
exceeding twelve months;

(j) increased or agreed to increase the compensation or bonuses payable
or to become payable to any employees with annual salaries exceeding
$50,000, or increased any salaries or bonuses payable or to become payable
to any employees in any manner not in the Ordinary Course of Business;

(k) made or agreed to make any loan to any of its employees, officers,
stockholders or directors, other than travel advances made in the Ordinary
Course of Business;

(l) granted or agreed to grant to any person any option, right or
warrant or other commitment calling for the issuance or sale of any shares
of capital stock, bonds or other corporate securities (other than options
granted in the Ordinary Course of Business to employees, consultants and
members of the Board of Directors of VCI and which are being assumed
pursuant to Section 2.5 hereof); or

(m) granted or voluntarily subjected any material asset to a lien or
encumbrance (other than any purchase money security interest, conditional
title retention arrangement, mechanic's lien, lien for taxes not yet due or
lien arising by operation of law).

3.9 Tax Matters.

(a) VCI and its Subsidiaries have filed all Tax Returns that they were
required to file and all such Tax Returns were correct and complete in all
material respects. VCI and its Subsidiaries have paid all Taxes owed in
respect of the periods covered by such Tax Returns whether or not shown as
due on such Tax Return. The unpaid Taxes of VCI and its Subsidiaries for
tax periods through December 31, 1999 do

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not exceed the accruals and reserves for Taxes set forth on the Most Recent
VCI Balance Sheet. VCI has no actual or, to its knowledge, potential
liability for any Tax obligation of any taxpayer (including without
limitation any affiliated group of corporations or other entities that
included VCI during a prior period) other than VCI or its Subsidiaries.
Except as set forth in Section 3.9 of the VCI Disclosure Schedule, all
Taxes that VCI is or was required by law to withhold or collect have been
duly withheld or collected and, to the extent required, have been paid to
the proper Governmental Entity.

(b) Except as set forth in Section 3.9 of the VCI Disclosure Schedule,
none of VCI and its Subsidiaries has ever had any examination report issued
or statement of deficiencies assessed against it which have not been
resolved or satisfied. For taxable periods ending after December 31, 1994,
except as set forth in Section 3.9 of the VCI Disclosure Schedule, no Tax
Returns of VCI have been audited by any Governmental Entity. Except as set
forth in Section 3.9 of the VCI Disclosure Schedule, no examination or
audit of any Tax Returns of VCI by any Governmental Entity is currently in
progress or, to the knowledge of VCI, threatened or contemplated. None of
VCI and its Subsidiaries has waived any statute of limitations with respect
to Taxes or agreed to an extension of time with respect to a tax assessment
or deficiency, which is currently in effect.

(c) VCI is not a "consenting corporation" within the meaning of Section
341(f) of the Code and none of the assets of VCI are subject to an election
under Section 341(f) of the Code. VCI has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code during the preceding five (5) years. VCI is not a party to any Tax
allocation or sharing agreement.

(d) VCI is not and has never been a member of an "affiliated group" of
corporations (within the meaning of Section 1504 of the Code) other than
the "affiliated group" of which VCI is the common parent corporation. VCI
has not made an election under Treasury Reg. Section 1.1502-20(g). VCI is
not and has not been required to make a basis reduction pursuant to
Treasury Reg. Section 1.1502-20(b) or Treasury Reg. Section 1.337(d)-2T(b),
except as may be required if VCI does not join in the filing of Federal
consolidated returns with HCC after the Closing Date.

(e) As of the date of this Agreement and as of the Closing Date, VCI has
not, and will not have, taken any action that could reasonably be expected
to cause the Merger to fail to qualify as a reorganization within the
meaning of Section 368(a) of the Code.

(f) None of VCI and its Subsidiaries will be required to report any
amount in taxable income in any taxable period ending after the Closing
pursuant to Section 481 of the Code by reason of a change of accounting
method occurring in a taxable period ending on or before the Effective
Time.

(g) Since the date of its incorporation, VCI has been reporting its
income in accordance with the accrual method of accounting.

3.10 Assets. VCI and its Subsidiaries do not own any real property. VCI and
its Subsidiaries have good and defensible title to all of their respective
personal properties, as reflected in the Most Recent VCI Balance Sheet (except
properties sold or otherwise disposed of since December 31, 1999 in the
Ordinary Course of Business) or acquired after December 31, 1999, or with
respect to leased properties and assets, valid leasehold interests in, free and
clear of all Security Interests, except as listed in Section 3.10 of the VCI
Disclosure Schedule. The plants, property and equipment of VCI and its
Subsidiaries that are used in the operations of their respective businesses are
in good operating condition and repair subject to ordinary wear and tear and to
requirements for periodic maintenance. All properties used in the operations of
VCI and its Subsidiaries, except for those acquired after December 31, 1999,
are reflected in the Most Recent VCI Balance Sheet to the extent required by
GAAP. Section 3.10 of the VCI Disclosure Schedule identifies all personal
property leases of VCI and its Subsidiaries. For purposes of this Agreement,
"Security Interest" means any mortgage, pledge, security interest, encumbrance,
charge, or other lien (whether arising by contract or by operation of law),
other than (i) mechanic's, materialmen's, and similar liens, (ii) liens arising
under worker's compensation, unemployment insurance, social security,
retirement, and similar legislation, (iii) liens on goods in transit incurred
pursuant to documentary letters of credit, and (iv) liens for Taxes not yet due
and payable, in each case arising in the

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Ordinary Course of Business of VCI or its Subsidiaries and not material to VCI
and its Subsidiaries, as a whole.

3.11 Intellectual Property.

(a) VCI and its Subsidiaries own, or license or otherwise possess
legally enforceable rights to use, all patents, trademarks, trade names,
service marks, Internet domain names, copyrights, and any applications for
such patents, trademarks, trade names, service marks, Internet domain names
and copyrights, schematics, technology, trade secrets, know-how, computer
software programs or applications, processes and other tangible or
intangible proprietary information or material that are used to conduct
their respective businesses as currently conducted, including without
limitation the technology, information, databases, data lists, data
compilations, and all proprietary rights developed or discovered or used in
connection with or contained in all versions and implementations of any
World Wide Web sites, except as set forth in Section 3.11 of the VCI
Disclosure Schedule, free and clear of all liens, claims and encumbrances
(including without limitation licensing and distribution rights), all of
which are "Intellectual Property." Section 3.11 of the VCI Disclosure
Schedule contains an accurate and complete (i) list of all patents and
patent applications and all trademarks (indicating registered and
unregistered trademarks) and applications therefor, registered copyrights,
trade names, service marks and Internet domain names owned or licensed by
VCI, including the jurisdictions in which each such Intellectual Property
right has been issued or registered or in which any such application for
such issuance or registration has been filed, (ii) list of all written
licenses, sublicenses and other agreements to which VCI or any of its
Subsidiaries is a party and pursuant to which any person is authorized to
use any Intellectual Property rights of VCI or any of its Subsidiaries, and
(iii) list of all written licenses, sublicenses and other agreements as to
which VCI or any of its Subsidiaries is a party and pursuant to which VCI
or any of its Subsidiaries is authorized to use any third party
Intellectual Property. Neither VCI nor any of its Subsidiaries is a party
to any oral license, sublicense or agreement which, if reduced to written
form, would be required to be listed in Section 3.11 of the VCI Disclosure
Schedule under the terms of this Section 3.11(a).

(b) All of the patents, copyrights, trademarks, trade names or Internet
domain name registrations of VCI and its Subsidiaries related to their
businesses are valid and in full force and effect and will not be altered
or impaired by the consummation of the transactions contemplated hereby.
Neither VCI nor any of its Subsidiaries is, and will not be as a result of
the execution and delivery of this Agreement or the performance of VCI's
obligations under this Agreement, in breach of any license, sublicense or
other agreement relating to VCI's Intellectual Property or third party
Intellectual Property rights.

(c) Except as set forth in Section 3.11 of the VCI Disclosure Schedule,
neither VCI or any of its Subsidiaries, nor to VCI's knowledge any of the
employees of VCI or any of its Subsidiaries, has received a claim, or is
aware of a reasonable basis for a claim, of infringement or violation of
any Intellectual Property right of any third party. To VCI's knowledge, the
manufacturing, marketing, licensing or sale of the products or performance
of the service offerings of VCI and its Subsidiaries do not infringe or
violate any Intellectual Property right of any third party; and, to the
knowledge of VCI, the Intellectual Property rights of VCI and its
Subsidiaries are not being infringed or violated by activities, products or
services of any third party.

3.12 Contracts. Section 3.12 of the VCI Disclosure Schedule lists all
material written agreements to which VCI or any of its Subsidiaries is a party
or by which it is bound, including but not limited to:

(a) any written arrangement for the provision of products or services to
customers or other third parties;

(b) any written arrangement for the purchase of raw materials,
commodities, supplies, products or other personal property or for the
receipt of consulting or other services;

(c) any written arrangement establishing a partnership, joint venture
development, marketing or distribution arrangement;

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(d) any written arrangement under which it has created, incurred,
assumed, or guaranteed (or may create, incur, assume, or guarantee)
indebtedness (including capitalized lease obligations) or under which it
has imposed (or may impose) a Security Interest on any of its assets,
tangible or intangible;

(e) any written arrangement concerning confidentiality or noncompetition
(other than standard confidentiality agreements with employees, consultants
or directors);

(f) any written agreement, contract or commitment that calls for fixed
and/or contingent payments or expenditures (including without limitation
any advertising or revenue sharing arrangement);

(g) any written outstanding sales or advertising contract, commitment or
proposal (including, without limitation, insertion orders, slotting
agreements or other agreements under which VCI or any of its Subsidiaries
has allowed third parties to advertise on or otherwise be included in World
Wide Web sites of VCI or any of its Subsidiaries)

(h) any written agreements, contracts or commitments with officers,
employees, agents, consultants, advisors, salesmen, sales representatives,
distributors or dealers that are not cancelable "at will" and without
liability, penalty or premium.

(i) any written employment, independent contractor or similar agreement,
contract or commitment that is not terminable on thirty (30) days' notice
or less without penalty, liability or premium of any type, including,
without limitation, severance or termination pay.

(j) any written arrangement involving any VCI shareholders or their
Affiliates.

Neither VCI nor any of its Subsidiaries is a party to any oral contract,
agreement or other arrangement which, if reduced to written form, would be
required to be listed in Section 3.12 of the VCI Disclosure Schedule. All of
the agreements listed in the VCI Disclosure Schedule to which VCI or any of its
Subsidiaries is a party are valid, binding, in full force and effect and
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and except that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought (whether at law or in equity). Except as set forth in Section 3.12
of the VCI Disclosure Schedule, no such contract contains any liquidated
damages, penalty or similar provision. To VCI's knowledge, no party to any such
contract intends to cancel, withdraw, modify or amend such contract, agreement
or arrangement. Except as set forth in Section 3.12 of the VCI Disclosure
Schedule, neither VCI nor any of its Subsidiaries is in default under or in
breach or violation of, nor, to VCI's knowledge, is there any valid basis for
any claim of default by VCI or any of its Subsidiaries under, or breach or
violation by VCI or any of its Subsidiaries of, any material provision of any
contract listed on the VCI Disclosure Schedule. Except as set forth in Section
3.12 of the VCI Disclosure Schedule, to VCI's knowledge no other party is in
default under or in breach or violation of, nor is there any valid basis for
any claim of default by any other party under or any breach or violation by any
other party of, any such contract.

3.13 Accounts Receivable. All accounts receivable reflected on the Most
Recent VCI Balance Sheet are valid receivables, and, to VCI's knowledge, are
subject to no setoffs or counterclaims and are current and collectible (within
90 days after the date on which it first became due and payable), net of the
applicable reserve for bad debts on the Most Recent VCI Balance Sheet. All
accounts receivable reflected in the financial or accounting records of VCI and
its Subsidiaries that have arisen since the Most Recent VCI Balance Sheet Date
are valid receivables, and to VCI's knowledge, subject to no setoffs or
counterclaims and are collectible, net of a reserve for bad debts in an amount
proportionate to the reserve shown on the Most Recent VCI Balance Sheet.

3.14 Insurance. Section 3.14 of the VCI Disclosure Schedule sets forth a
true, correct and complete list of all insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, software
errors and omissions, employees, officers and directors of VCI and its
Subsidiaries and all claims made under any insurance policy since January 1,
1998. Except as set forth in Section 3.14 of the VCI

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Disclosure Schedule, there is no claim by VCI or any of its Subsidiaries
pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies and bonds have been paid
and VCI and its Subsidiaries are otherwise in compliance in all material
respects with the terms of such policies and bonds. VCI has no knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.

3.15 Litigation. Section 3.15 of the VCI Disclosure Schedule identifies, and
contains a brief description of, (a) any unsatisfied judgment, order, decree,
stipulation or injunction issued by or enforceable by a Governmental Entity,
(b) any written claim, demand, complaint, action, suit, proceeding, or hearing
or, to VCI's knowledge any investigation of or in, any Governmental Entity or
before any arbitrator to which VCI or any of its Subsidiaries or is a party or,
to the knowledge of VCI, is threatened to be made a party, and (c) any written
claims by third persons of which VCI is aware and any reasonable basis for any
third party claims. None of the demands, claims, complaints, actions, suits,
proceedings, hearings, and investigations set forth in Section 3.15 of the VCI
Disclosure Schedule would reasonably be expected to have a Material Adverse
Effect.

3.16 Employees and Consultants. Section 3.16 of the VCI Disclosure Schedule
contains a list of all current employees and consultants of VCI and its
Subsidiaries, along with the position and the annual rate of compensation of
each such person. Except as specified in Section 3.16 of the VCI Disclosure
Schedule, each current management level employee, key employee and consultant
to VCI and its Subsidiaries has entered into a confidentiality and assignment
of inventions agreement with VCI, a copy of each of which has previously been
delivered to HCC. To the knowledge of VCI, no key employee or consultant or
group of employees or consultants has any plans to terminate employment or the
provision of consulting services with VCI or any of its Subsidiaries. Except as
set forth in Section 3.16 of the VCI Disclosure Schedule, neither VCI nor any
of its Subsidiaries is a party to or bound by any collective bargaining
agreement, nor has it experienced any strikes, grievances, and claims of unfair
labor practices or other collective bargaining disputes. Except as set forth in
Section 3.16 of the VCI Disclosure Schedule, VCI has no knowledge of any
organizational effort made or threatened, either currently or since its
inception, by or on behalf of any labor union with respect to employees of VCI
or any of its Subsidiaries. Neither VCI nor any of its Subsidiaries has any
agreements or arrangements with persons titled as independent contractors or
consultants, as a result of which, by virtue of the control exercised by VCI or
any of its Subsidiaries, the type of work performed by the persons or any other
circumstances, such persons could reasonably be deemed to be employees of VCI
or any of its Subsidiaries. VCI and its Subsidiaries have complied in all
material respects with all record keeping and tax reporting obligations
relating to income and employment taxes due with respect to compensation paid
to employees or independent contractors providing services to VCI or any of its
Subsidiaries.

3.17 Employee Benefits.

(a) Section 3.17 of the VCI Disclosure Schedule contains a complete and
accurate list of all VCI Employee Benefit Plans (as defined below) which
are maintained, or contributed to, by VCI, or any VCI ERISA Affiliate (as
defined below). For purposes of this Agreement, "VCI Employee Benefit Plan"
means any "employee pension benefit plan" (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
any "employee welfare benefit plan" (as defined in Section 3(1) of ERISA),
and any other written or oral plan, agreement or arrangement involving
direct or indirect compensation, including without limitation insurance
coverage, severance benefits, disability benefits, deferred compensation,
bonuses, stock options, stock purchase, phantom stock, stock appreciation
or other forms of incentive compensation or post-retirement compensation
maintained, or contributed to, by VCI or any VCI ERISA Affiliate. For
purposes of this Agreement, "VCI ERISA Affiliate" means any entity which is
a member of (i) a controlled group of corporations (as defined in Section
414(b) of the Code), (ii) a group of trades or businesses under common
control (as defined in Section 414(c) of the Code), or (iii) an affiliated
service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes VCI.
Complete and accurate copies of (i) all VCI Employee Benefit Plans which
have been reduced to writing, (ii) written summaries, if any, of all

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unwritten VCI Employee Benefit Plans, (iii) all related trust agreements,
insurance contracts and summary plan descriptions, if any, and (iv) the
most recent annual report filed, if any, on IRS Form 5500, 5500C or 5500R
for each VCI Employee Benefit Plan, have been delivered to the Buyer. Each
VCI Employee Benefit Plan has been administered in all material respects in
accordance with its terms, and each of VCI and the VCI ERISA Affiliates has
in all material respects met its obligations with respect to such VCI
Employee Benefit Plan and has made all contributions thereto which are
required to be made prior to the date hereof. To the knowledge of VCI, VCI
and all VCI Employee Benefit Plans are in compliance in all material
respects with the currently applicable provisions of ERISA and the Code and
the regulations thereunder.

(b) There are no termination proceedings or other claims (except claims
for benefits payable in the normal operation of VCI Employee Benefit Plans
and proceedings with respect to qualified domestic relations orders) suits
or proceedings and, to VCI's knowledge, there are no investigations by any
Governmental Entity, against or involving any VCI Employee Benefit Plan or
asserting any rights or claims to benefits under any VCI Employee Benefit
Plan that could give rise to any material liability.

(c) All VCI Employee Benefit Plans that are intended to be qualified
under Section 401(a) of the Code have received determination letters from
the Internal Revenue Service to the effect that such VCI Employee Benefit
Plans are qualified and the plans and the trusts related thereto are exempt
from federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, no such determination letter has been revoked and, revocation
has not been threatened, and no such VCI Employee Benefit Plan has been
amended since the date of its most recent determination letter in any
respect which would adversely affect such letter, and, to VCI's knowledge,
no act or omission has occurred, that would adversely affect its
qualification or materially increase its cost.

(d) Except as set forth in Section 6.17 of the VCI Disclosure Schedule,
neither VCI nor any VCI ERISA Affiliate has ever maintained a VCI Employee
Benefit Plan subject to Section 412 of the Code or Title IV of ERISA.

(e) At no time has VCI or any VCI ERISA Affiliate been obligated to
contribute to any "multi-employer plan" (as defined in Section 4001(a)(3)
of ERISA).

(f) Except as set forth in Section 3.17 of the VCI Disclosure Schedule,
there are no unfunded obligations under any VCI Employee Benefit Plan
providing benefits after termination of employment to any employee of VCI
or any VCI ERISA Affiliate (or to any beneficiary of any such employee),
including but not limited to retiree health coverage and deferred
compensation, but excluding continuation of health coverage required to be
continued under Section 4980B of the Code and insurance conversion
privileges under state law.

(g) To the knowledge of VCI, no act or omission has occurred and no
condition exists with respect to any VCI Employee Benefit Plan that would
subject VCI or any VCI ERISA Affiliate to any material fine, penalty, tax
or fiduciary liability imposed under ERISA or the Code.

(h) No VCI Employee Benefit Plan is funded by, associated with, or
related to a "voluntary employee's beneficiary association" within the
meaning of Section 501(c)(9) of the Code.

(i) Except as set forth in Section 3.17 of the VCI Disclosure Schedule,
no VCI Employee Benefit Plan, plan documentation or agreement, summary plan
description or other written communication distributed generally to
employees by its terms prohibits VCI or any VCI ERISA Affiliate from
amending or terminating any such VCI Employee Benefit Plan.

(j) Section 3.17 or 3.12 of the VCI Disclosure Schedule discloses each:
(i) written, and, to VCI's knowledge, oral, agreement with any director,
officer or other employee of VCI and Affiliates (A) the benefits of which
are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving VCI or its Affiliates of the nature
of any of the transactions contemplated by this Agreement, (B) providing
any term of employment or compensation guarantee or (C) providing severance

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benefits or other benefits after the termination of employment of such
director, officer or employee; (ii) agreement, plan or arrangement under
which any person may as a result of the Merger receive payments from VCI or
its affiliates that may be subject to the tax imposed by Section 4999 of
the Code or included in the determination of such person's "parachute
payment" under Section 280G of the Code; and (iii) agreement or plan
binding VCI or its affiliates, including without limitation any stock
option plan, stock appreciation right plan, restricted stock plan, stock
purchase plan, severance benefit plan, or any VCI Employee Benefit Plan,
any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.

3.18 Environmental and OSHA.

(a) Hazardous Material. Except as set forth in Section 3.18 of the VCI
Disclosure Schedule, no material amount of any substance that is regulated
by any Governmental Entity or that has been designated by any Governmental
Entity to be radioactive, toxic, hazardous or otherwise a danger to health
or the environment, including, without limitation, PCBs, asbestos, urea-
formaldehyde and all substances listed pursuant to the United States
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended from time to time, and the United States Resource Recovery
and Conservation Act of 1976, as amended from time to time, and the
regulations and publications promulgated pursuant to said laws (a
"Hazardous Material"), is, to the knowledge of VCI, present as a result of
the actions of VCI or any of its Subsidiaries (or, to the knowledge of VCI,
as a result of any actions of any third party or otherwise) in violation of
any law in effect on or before the Closing Date, in, on or under any
property, including the land and the improvements, ground water and surface
water thereof, that VCI or any of its Subsidiaries has at any time
operated, occupied or leased.

(b) Hazardous Materials Activities. Neither VCI nor any of its
Subsidiaries has transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous Materials in
violation of any law in effect on or before the Closing Date, nor has VCI
or any of its Subsidiaries disposed of, transferred, sold or manufactured
any product containing a Hazardous Material (collectively "Hazardous
Materials Activities") in violation of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Recovery and Conservation Act of 1976, the Toxic Substances Control Act of
1976, and other applicable state or federal acts (including the rules and
regulations thereunder) as in effect on or before the Closing Date.

(c) Permits. VCI currently holds no environmental approvals, permits,
licenses, clearances and consents and none are necessary for the conduct of
VCI's Hazardous Material Activities, if any, and other business activities
of VCI as such activities are currently being conducted.

3.19 Permits. Section 3.19 of the VCI Disclosure Schedule sets forth a list
of all permits, licenses, registrations, certificates, orders or approvals from
any Governmental Entity (including without limitation those issued or required
under Environmental Laws and those relating to the occupancy or use of owned or
leased real property) ("Permits") issued to or held by VCI that are material to
the operation of its business. Such listed Permits are the only Permits that
are required for VCI to conduct its business as conducted, except for those the
absence of which could not reasonably be expected to have any Material Adverse
Effect. Each such Permit is in full force and effect.

3.20 Certain Business Relationships with Affiliates. Except as set forth in
Section 3.20 of the VCI Disclosure Schedule, no Affiliate of VCI (a) owns any
property or right, tangible or intangible, which is used in the business of
VCI, (b) has any claim or cause of action against VCI, (c) owes any money to
VCI, or (d) has loaned any money to VCI. Section 3.20 of the VCI Disclosure
Schedule describes any transactions or relationships between VCI and any
Affiliate thereof.

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3.21 Brokers' Fees. VCI has no liability or obligation to pay any fees or
commissions to any broker, investment banker, finder or agent with respect to
the transactions contemplated by this Agreement other than to Donaldson, Lufkin
& Jenrette.

3.22 Minute Books. The minute books and other similar records of VCI and its
Subsidiaries which are corporations contain true and materially complete
records of all actions taken at any meetings of VCI's shareholders, Board of
Directors or any committee thereof and of all written consents executed in lieu
of the holding of any such meeting, and all charter and bylaw documents and
amendments thereto.

3.23 Customers and Suppliers. No material licensor to or supplier of VCI or
any of its Subsidiaries has indicated that it will stop, or decrease the rate
of, licensing intellectual property or supplying materials, products or
services to VCI or any of its Subsidiaries and no material customer of VCI or
any of its Subsidiaries has indicated that it will stop, or decrease the rate
of, buying, leasing or licensing materials, products or services from VCI or
any of its Subsidiaries. Section 3.23 of the VCI Disclosure Schedule sets forth
a list of each supplier of vitamins, nutritional supplements and minerals that
is the sole supplier of any such significant product to VCI or to any of its
Subsidiaries.

3.24 Year 2000. To VCI's knowledge, the systems and facilities operated by
or on behalf of VCI or any of its Subsidiaries in the conduct of their
respective businesses are capable of providing uninterrupted and error-free
recordation, storage, processing, output and presentation of data, including
calendar dates falling before, on or after January 1, 2000. As of the date
hereof, VCI and its Subsidiaries have operated without any material Year 2000
problems.

3.25 Disclosure. No representation or warranty by VCI contained in this
Agreement, and no statement contained in the VCI Disclosure Schedule or in any
other transaction document delivered to or to be delivered by VCI pursuant to
this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact necessary, in light of
the circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading, as a whole.

ARTICLE IV

REPRESENTATIONS OF HCC AND ACQUISITION CORP.

HCC and Acquisition Corp. represent and warrant to VCI and the Holders that,
except as set forth in the Disclosure Schedule dated as of the date hereof and
signed by the Chief Executive Officer of HCC (the "HCC Disclosure Schedule"),
each of which exceptions shall specifically identify the relevant Section
hereof to which it relates or be specifically enough stated to make it clear
that it is also relevant to such Section:

4.1 Organization. HCC and each of its Subsidiaries are corporations duly
organized, validly existing and in good standing under the laws of the
jurisdictions of their incorporation, and have all requisite power and
authority to own their properties and to carry on their business as now being
conducted. HCC has all requisite power to execute and deliver this Agreement
and the agreements contemplated herein, and to consummate the transactions
contemplated hereby and thereby. HCC and its Subsidiaries are duly qualified to
do business and in good standing in all jurisdictions in which their ownership
of property or the character of their business requires such qualification and
where failure to be so qualified would reasonably be expected to have a
Material Adverse Effect. Certified copies of the Certificates of Incorporation
and the Bylaws of HCC and Acquisition Corporation, as amended to date, have
been previously delivered to VCI, are complete and correct, and no amendments
have been made thereto or have been authorized since the date thereof.

4.2 HCC Capital Structure. The authorized capital stock of HCC consists of
100,000,000 shares of common stock and 5,000,000 shares of preferred stock. As
of March 14, 2000, (i) 22,651,630 shares of HCC common stock were issued and
outstanding, all of which are duly authorized, validly issued, fully paid and
nonassessable, (ii) no shares of HCC preferred stock were outstanding, and
(iii) 7,637,395 shares of HCC

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common stock were reserved for future issuance pursuant to HCC's stock option
plans and outstanding warrants. Section 4.2 of the HCC Disclosure Schedule sets
forth the outstanding shares of common stock that were not covered by the S-1
registration statement that became effective on December 7, 1999 and the record
owners thereof. All of the outstanding shares of capital stock of each of HCC's
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable
and all such shares are owned by HCC free and clear of all security interests,
liens, claims, pledges, agreements, limitations on HCC's voting rights, charges
or other encumbrances of any nature. The shares of HCC common stock issued
pursuant to this Agreement will, when issued, be duly authorized, validly
issued, fully paid and nonassessable. The shares of HCC common stock owned of
record and beneficially by the HCC stockholders executing the Voting Agreement
comprise not less than forty percent (40%) of the total voting power of HCC as
of the date of this Agreement.

4.3 Subsidiaries. The only Subsidiaries of HCC are those listed in the HCC
Disclosure Schedule. All of the outstanding shares of capital stock of each of
HCC's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and all such shares are owned by HCC free and clear of all
security interests, liens, claims, pledges, agreements, limitations on HCC's
voting rights, charges or other encumbrances of any nature. Acquisition Corp.
has been formed by HCC for the purpose of effecting the Merger and has no
significant assets or liabilities (other than its obligations under this
Agreement) and has not engaged in any material activities except as are related
to the Merger.

4.4 HCC's Authorization. Subject to the obtaining of the approval of HCC's
stockholders, the execution and delivery by HCC and Acquisition Corp. of this
Agreement, and the agreements provided for herein, and the consummation by HCC
and Acquisition Corp. of the transactions contemplated hereby and thereby, have
been duly authorized by all requisite corporate action. This Agreement has been
duly executed and delivered by HCC and Acquisition Corp. Subject to the
obtaining of approval of HCC's stockholders, this Agreement and all such other
agreements and written obligations entered into and undertaken in connection
with the transactions contemplated hereby constitute the valid and legally
binding obligations of HCC and Acquisition Corp., enforceable against them in
accordance with their respective terms subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or other similar laws
affecting the rights of creditors generally and subject to equitable remedies.
The execution, delivery and performance of this Agreement and the agreements
provided for herein, and the consummation by HCC and Acquisition Corp. of the
transactions contemplated hereby and thereby, do not and will not, with or
without the giving of notice of the passage of time or both, (a) violate the
provisions of any law, rule or regulation applicable to HCC (assuming
compliance with the requirements of the HSR Act) and which would reasonably be
expected to have a Material Adverse Effect; (b) violate the provisions of the
Certificates of Incorporation or Bylaws of HCC or Acquisition Corp.;
(c) violate any judgment, decree, order or award of any court, governmental
body or arbitrator; or (d) conflict with or result in the breach or termination
of any term or provision of, or constitute a default under, or cause any
acceleration under, or cause the creation of any lien, charge or encumbrance
upon the properties or assets of HCC or of any of its Subsidiaries pursuant to,
any indenture, mortgage, deed of trust or other agreement or instrument to
which HCC or any of its Subsidiaries is a party or by which HCC or any of its
Subsidiaries is or may be bound and which would reasonably be expected to have
a Material Adverse Effect.

4.5 SEC Filings; Financial Statements.

(a) HCC has filed and provided to VCI all forms, reports and documents,
including all exhibits thereto, required to be filed by HCC with the SEC
since December 7, 1999 (the date on which its initial public offering
became effective), including its Form 10-K filed for the year ended
December 31, 1999 (collectively, the "HCC SEC Reports"). The HCC SEC
Reports (i) at the time filed, complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as the
case may be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the
date of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in such HCC SEC Reports
or necessary in order to make the statements in such HCC SEC Reports, in
the light of the circumstances under which they were made, not misleading.

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(b) Each of the consolidated financial statements (including, in each
case, any related notes) contained in the HCC SEC Reports, including HCC's
audited consolidated balance sheet as of December 31, 1999 ("Most Recent
HCC Balance Sheet") complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto,
was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved and fairly presented in all material
respects the consolidated financial position of HCC as at the respective
dates and the consolidated results of its operations and cash flows for the
periods indicated.

(c) Since December 31, 1999, HCC has not suffered any Material Adverse
Effect, and no event has occurred which reasonably would be expected to
result in a Material Adverse Effect.

4.6 No Undisclosed Liabilities. HCC and its Subsidiaries have no liability
whether absolute or contingent, whether liquidated or unliquidated and whether
due or to become due), and there is no existing condition, situation or set of
circumstances which would reasonably be expected to result in such a liability,
except for (a) liabilities shown on the Most Recent HCC Balance Sheet, (b)
liabilities which have arisen since December 31, 1999 in the Ordinary Course of
Business, (c) contractual liabilities incurred in the Ordinary Course of
Business which are not required by GAAP to be reflected on a balance sheet or
disclosed in the notes thereto under GAAP, and (d) liabilities for accounting,
investment banking and legal fees incurred in connection with the Merger and
the transactions contemplated thereby.

4.7 Tax Matters. Except as disclosed on the HCC Disclosure Schedule:

(a) HCC and each of its Subsidiaries (together the "HCC Group") have
filed all Tax Returns (as defined below) that they were required to file
and all such Tax Returns were correct and complete in all material
respects. The HCC Group has paid all Taxes owed in respect of the periods
covered by such Tax Returns whether or not shown as due on such Tax Return.
The unpaid Taxes of the HCC Group for tax periods through December 31, 1999
do not exceed the accruals and reserves for Taxes set forth on the Most
Recent HCC Balance Sheet. The HCC Group has no actual or, to HCC's
knowledge, potential liability for any Tax obligation of any taxpayer
(including without limitation any affiliated group of corporations or other
entities that included any member of the HCC Group during a prior period)
other than members of the HCC Group. All Taxes that any member of the HCC
Group is or was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the
proper Governmental Entity.

(b) The HCC Group has never had any examination report issued or
statements of deficiencies assessed against it which have not been resolved
or satisfied. No Tax Returns of the HCC Group have been audited by any
Governmental Entity. No examination or audit of any Tax Returns of the HCC
Group by any Governmental Entity is currently in progress or, to the
knowledge of HCC, threatened or contemplated. The HCC Group has not waived
any statute of limitations with respect to taxes or agreed to an extension
of time with respect to a tax assessment or deficiency.

(c) The HCC Group is not a "consenting corporation" within the meaning
of Section 341(f) of the Code and none of the assets of the HCC Group are
subject to an election under Section 341(f) of the Code. HCC has not been a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(l)(A)(ii) of the Code. The HCC Group is not a party to any
Tax allocation or sharing agreement.

(d) The HCC Group is not and has never been a member of an "affiliated
group" of corporations (within the meaning of Section 1504 of the Code)
other than an affiliated group of which HCC was the common parent. The HCC
Group has not made an election under Treasury Reg. Section 1.1502-20(g).
HCC is not and has not been required to make a basis reduction pursuant to
Treasury Reg. Section 1.1502-20(b) or Treasury Reg. Section 1.337(d)-2T(b).

(e) As of the date of this Agreement and as of the Closing Date, HCC and
its Affiliates are not aware of any existing condition or circumstance (and
have not, and will not have, taken any action) that would cause the Merger
to fail to qualify as a reorganization within the meaning of Section 368(a)
of the Code.

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4.8 Assets. HCC and its Subsidiaries do not own any real property. HCC and
its Subsidiaries have good and defensible title to all of their respective
properties as reflected in the Most Recent HCC Balance Sheet (except
properties, interests in properties and assets sold or otherwise disposed of
since December 31, 1999 in the Ordinary Course of Business) or acquired after
December 31, 1999, or with respect to leased properties and assets, valid
leasehold interests in, free and clear of all Security Interest, except as
listed in Section 4.8 of the HCC Disclosure Schedule. The plants, property and
equipment of HCC and its Subsidiaries that are used in the operations of their
respective businesses are in good operating condition and repair subject to
ordinary wear and tear and to requirements for periodic maintenance. All
properties used in the operations of HCC and its Subsidiaries, except for those
acquired after the Most Recent Balance Sheet Date, are reflected in HCC's Most
Recent Balance Sheet to the extent required by GAAP. Section 4.8 of the HCC
Disclosure Schedule identifies all personal property leases of HCC.

4.9 Intellectual Property.

(a) HCC and its Subsidiaries own, or license or otherwise possess
legally enforceable rights to use, all Intellectual Property free and clear
of all liens, claims and encumbrances (including, without limitation,
licensing and distribution rights). Section 4.9 of the HCC Disclosure
Schedule contains an accurate and complete (i) list of all patents and
patent applications and all trademarks (indicating registered and
unregistered trademarks) and applications therefor, registered copyrights,
trade names, service marks and Internet domain names owned or licensed by
HCC or any of its Subsidiaries, including the jurisdictions in which each
such Intellectual Property right has been issued or registered or in which
any such application for such issuance or registration has been filed, (ii)
list of all written licenses, sublicenses and other agreements to which HCC
or any of its Subsidiaries is a party and pursuant to which any person is
authorized to use any Intellectual Property rights of HCC or any of its
Subsidiaries, and (iii) list of all written licenses, sublicenses and other
agreements as to which HCC or any of its Subsidiaries is a party and
pursuant to which HCC or any of its subsidiaries is authorized to use any
third party Intellectual Property. Neither HCC nor any of its Subsidiaries
is a party to any oral license, sublicense or agreement which, if reduced
to written form, would be required to be listed in Section 4.9 of the HCC
Disclosure Schedule under the terms of this Section 4.9(a).

(b) All of the patents, copyrights, trademarks, trade names or Internet
domain name registrations of HCC and its Subsidiaries related to their
current or currently proposed businesses are valid and in full force and
effect and will not be altered or impaired by the consummation of the
transactions contemplated hereby. Neither HCC nor any of its Subsidiaries
is, and will not be as a result of the execution and delivery of this
Agreement or the performance of HCC's obligations under this Agreement, in
breach of any license, sublicense or other agreement relating to HCC's
Intellectual Property or third party Intellectual Property rights.

(c) Neither HCC or any of its Subsidiaries, nor to HCC's knowledge any
of the employees of HCC or any of its Subsidiaries has received a claim, or
is aware of a reasonable basis for a claim, of infringement or violation of
any Intellectual Property right of any third party. To HCC's knowledge, the
manufacturing, marketing, licensing or sale of the products or performance
of the service offerings of HCC and its Subsidiaries do not infringe or
violate any Intellectual Property right of any third party and, to the
knowledge of HCC, the Intellectual Property rights of HCC and its
Subsidiaries are not being infringed or violated by activities, products or
services of any third party.

4.10 Contracts. All material written agreements to which HCC or any of its
Subsidiaries is a party or by which it is bound are listed in HCC's Form 10-K
for the year ended December 31, 1999 or set forth in Section 4.10 of the HCC
Disclosure Schedule. All of the agreements so listed are valid, binding, in
full force and effect and enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought (whether at law or in equity). No such contract
contains any liquidated damages, penalty or similar provision. To HCC's
knowledge, no party to any such

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contract intends to cancel, withdraw, modify or amend such contract, agreement
or arrangement. Neither HCC nor any of its Subsidiaries is in default under or
in breach or violation of, nor, to HCC's knowledge, is there any valid basis
for any claim of default by HCC or any of its Subsidiaries under, or breach or
violation by HCC or any of its Subsidiaries of, any material provision of any
contract so listed. To HCC's knowledge, no other party is in default under or
in breach or violation of, nor is there any valid basis for any claim of
default by any other party under or any breach or violation by any other party
of, any such contract.

4.11 Accounts Receivable. All accounts receivable reflected on the Most
Recent HCC Balance Sheet are valid receivables, and, to HCC's knowledge, are
subject to no setoffs or counterclaims and are current and collectible (within
90 days after the date on which it first became due and payable), net of the
applicable reserve for bad debts on the Most Recent HCC Balance Sheet. All
accounts receivable reflected in the financial or accounting records of HCC and
its Subsidiaries that have arisen since the Most Recent HCC Balance Sheet Date
are valid receivables, and to HCC's knowledge, subject to no setoffs or
counterclaims and are collectible, net of a reserve for bad debts in an amount
proportionate to the reserve shown on the Most Recent HCC Balance Sheet.

4.12 Litigation. Section 4.12 of the HCC Disclosure Schedule identifies, and
contains a brief description of, (a) any unsatisfied judgment, order, decree,
stipulation or injunction issued by or enforceable by a Governmental Entity,
(b) any written claim, demand, complaint, action, suit, proceeding, or hearing
or, to HCC's knowledge any investigation of or in, any Governmental Entity or
before any arbitrator to which HCC or any of its Subsidiaries or is a party or,
to the knowledge of HCC, is threatened to be made a party, and (c) any written
or oral claims by third persons of which HCC is aware and any reasonable basis
for any third party claims. None of the demands, claims, complaints, actions,
suits, proceedings, hearings, and investigations set forth in Section 4.12 of
the HCC Disclosure Schedule would reasonably be expected to have a Material
Adverse Effect.

4.13 Employee Benefits.

(a) Section 4.13 of the HCC Disclosure Schedule contains a complete and
accurate list of all HCC Employee Benefit Plans (as defined below) which
are maintained, or contributed to, by HCC, or any HCC ERISA Affiliate (as
defined below). For purposes of this Agreement, "HCC Employee Benefit Plan"
means any "employee pension benefit plan" (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
any "employee welfare benefit plan" (as defined in Section 3(1) of ERISA),
and any other written or oral plan, agreement or arrangement involving
direct or indirect compensation, including without limitation insurance
coverage, severance benefits, disability benefits, deferred compensation,
bonuses, stock options, stock purchase, phantom stock, stock appreciation
or other forms of incentive compensation or post-retirement compensation
maintained, or contributed to, by HCC or any HCC ERISA Affiliate. For
purposes of this Agreement, "HCC ERISA Affiliate" means any entity which is
a member of (i) a controlled group of corporations (as defined in Section
414(b) of the Code), (ii) a group of trades or businesses under common
control (as defined in Section 414(c) of the Code), or (iii) an affiliated
service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes HCC.
Complete and accurate copies of (i) all HCC Employee Benefit Plans which
have been reduced to writing, (ii) written summaries, if any, of all
unwritten HCC Employee Benefit Plans, (iii) all related trust agreements,
insurance contracts and summary plan descriptions, if any, and (iv) the
most recent annual report filed, if any, on IRS Form 5500, 5500C or 5500R
since HCC's inception for each HCC Employee Benefit Plan, have been
delivered to the Buyer. Each HCC Employee Benefit Plan has been
administered in all material respects in accordance with its terms, and
each of HCC, and HCC ERISA Affiliates has in all material respects met its
obligations with respect to such HCC Employee Benefit Plan and has made all
contributions thereto which are required to be made prior to the date
hereof. To the knowledge of HCC, HCC and all HCC Employee Benefit Plans are
in compliance in all material respects with the currently applicable
provisions of ERISA and the Code and the regulations thereunder.

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(b) There are no termination proceedings or other claims (except claims
for benefits payable in the normal operation of HCC Employee Benefit Plans
and proceedings with respect to qualified domestic relations orders) suits
or proceedings and, to HCC's knowledge, there are no investigations by any
Governmental Entity, against or involving any HCC Employee Benefit Plan or
asserting any rights or claims to benefits under any HCC Employee Benefit
Plan that could give rise to any material liability.

(c) All HCC Employee Benefit Plans that are intended to be qualified
under Section 401(a) of the Code have received determination letters from
the Internal Revenue Service to the effect that such HCC Employee Benefit
Plans are qualified and the plans and the trusts related thereto are exempt
from federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, no such determination letter has been revoked and, revocation
has not been threatened, and no such HCC Employee Benefit Plan has been
amended since the date of its most recent determination letter in any
respect which would adversely affect such letter, and, to HCC's knowledge,
no act or omission has occurred, that would adversely affect its
qualification or materially increase its cost.

(d) Neither HCC nor any HCC ERISA Affiliate has ever maintained an HCC
Employee Benefit Plan subject to Section 412 of the Code or Title IV of
ERISA.

(e) At no time has HCC or any HCC ERISA Affiliate been obligated to
contribute to any "multi-employer plan" (as defined in Section 4001(a)(3)
of ERISA).

(f) There are no unfunded obligations under any HCC Employee Benefit
Plan providing benefits after termination of employment to any employee of
HCC or any HCC ERISA Affiliate (or to any beneficiary of any such
employee), including but not limited to retiree health coverage and
deferred compensation, but excluding continuation of health coverage
required to be continued under Section 4980B of the Code and insurance
conversion privileges under state law.

(g) To the knowledge of HCC, no act or omission has occurred and no
condition exists with respect to any HCC Employee Benefit Plan that would
subject HCC, or any HCC ERISA Affiliate to any material fine, penalty, tax
or fiduciary liability imposed under ERISA or the Code.

(h) No HCC Employee Benefit Plan is funded by, associated with, or
related to a "voluntary employee's beneficiary association" within the
meaning of Section 501(c)(9) of the Code.

(i) No HCC Employee Benefit Plan, plan documentation or agreement,
summary plan description or other written communication distributed
generally to employees by its terms prohibits HCC or any HCC ERISA
Affiliate from amending or terminating any such HCC Employee Benefit Plan.

(j) Section 4.13 of the HCC Disclosure Schedule discloses each: (i)
written, and, to HCC's knowledge, oral, agreement with any director,
officer or other employee of HCC and affiliates (A) the benefits of which
are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving HCC or its Affiliates of the nature
of any of the transactions contemplated by this Agreement, (B) providing
any term of employment or compensation guarantee or (C) providing severance
benefits or other benefits after the termination of employment of such
director, officer or employee; (ii) agreement, plan or arrangement under
which any person may receive payments from HCC or its Affiliates that may
be subject to the tax imposed by Section 4999 of the Code or included in
the determination of such person's "parachute payment" under Section 280G
of the Code; and (iii) agreement or plan binding HCC or its affiliates,
including without limitation any stock option plan, stock appreciation
right plan, restricted stock plan, stock purchase plan, severance benefit
plan, or any HCC Employee Benefit Plan, any of the benefits of which will
be increased, or the vesting of the benefits of which will be accelerated,
by the occurrence of any of the transactions contemplated by this Agreement
or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement.

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4.14 Environmental and OSHA.

(a) Hazardous Material. No material amount of any Hazardous Material is,
to the knowledge of HCC, present as a result of the actions of HCC or any
of its Subsidiaries (or, to the knowledge of HCC, as a result of any
actions of any third party or otherwise) in violation of any law in effect
on or before the Closing Date, in, on or under any property, including the
land and the improvements, ground water and surface water thereof, that HCC
or any of its Subsidiaries has at any time owned, operated, occupied or
leased.

(b) Hazardous Materials Activities. Neither HCC nor any of its
Subsidiaries has transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous Materials in
violation of any law in effect on or before the Closing Date, nor has HCC
or any of its Subsidiaries engaged in any "Hazardous Materials Activities")
in violation of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Resource Recovery and Conservation
Act of 1976, the Toxic Substances Control Act of 1976, and other applicable
state or federal acts (including the rules and regulations thereunder) as
in effect on or before the Closing Date.

(c) Permits. HCC currently holds no environmental approvals, permits,
licenses, clearances and consents and none are necessary for the conduct of
HCC's Hazardous Material Activities, if any, and other business activities
of HCC as such activities are currently being conducted.

4.15 Brokers' Fees. HCC has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement other than Pacific Growth.

4.16 Customers and Suppliers. No material licensor to or supplier of HCC has
indicated that it will stop, or decrease the rate of, licensing intellectual
property or supplying materials, products or services to HCC and no material
customer of HCC has indicated that it will stop, or decrease the rate of,
buying, leasing or licensing materials, products or services from HCC. Section
4.16 of the HCC Disclosure Schedule sets forth a list of each supplier that is
the sole supplier of any significant product, component or service to HCC.

4.17 Year 2000. To HCC's knowledge, the systems and facilities operated by
or on behalf of HCC or any of its Subsidiaries in the conduct of their
respective businesses are capable of providing uninterrupted and error-free
recordation, storage, processing, output and presentation of data, including
calendar dates falling before, on or after January 1, 2000. As of the date
hereof, HCC and its Subsidiaries have operated without any material Year 2000
problems.

4.18 Disclosure. No representation or warranty by HCC contained in this
Agreement, and no statement contained in the HCC Disclosure Schedule or in any
other transaction document delivered to or to be delivered by HCC pursuant to
this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact necessary, in light of
the circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading, as a whole.

ARTICLE V

CERTAIN COVENANTS OF VCI

From and after the date hereof and until the earlier of the Closing Date or
termination of this Agreement pursuant to Article VIII hereof and subject to
Section 6.17 hereof:

5.1 Conduct of Business and Certain Key Employees. VCI and its Subsidiaries
shall carry on their businesses in the Ordinary Course of Business. All of the
property of VCI and its Subsidiaries shall be used, operated, repaired and
maintained in a manner consistent with past practice. VCI will use its
commercially reasonable efforts to maintain the relationships of VCI and its
Subsidiaries with their employees, customers and suppliers.

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5.2 Absence of Material Changes. Without the prior written consent of HCC,
which consent shall not be unreasonably delayed, conditioned or withheld,
neither VCI nor any of its Subsidiaries shall:

(a) take any action to amend its charter documents or bylaws;

(b) issue any stock (except upon the exercise of outstanding options or
warrants to purchase common stock in exchange for full payment), bonds or
other corporate securities or grant any option or issue any warrant to
purchase or subscribe for any of such securities or issue any securities
convertible into such securities;

(d) declare or make any payment or distribution to its stockholders or
purchase or redeem any shares of its capital stock;

(e) mortgage, pledge, or subject to any lien, charge or any other
encumbrance any of their assets or properties, other than mechanic's liens
or liens arising by operation of law;

(f) sell, assign, or transfer any of their assets, except in the
Ordinary Course of Business;

(g) cancel any material debts or claims, except in the Ordinary Course
of Business;

(h) merge or consolidate with or into any corporation or other entity;

(i) make any election or give any consent under the Code or the tax
statutes of any state or other jurisdiction, except that on or before the
Closing VCI may make an election under Section 1501 of the Code to file a
consolidated tax return without the prior written consent of HCC, or make
any termination, revocation or cancellation of any such election or any
consent or compromise or settle any claim for past or present tax due; or

(j) enter into any lease, contract, agreement or understanding, other
than those entered into in the ordinary course of business calling for
payments by VCI and its Subsidiaries which in the aggregate do not exceed
$50,000 for each such lease, contract, agreement or understanding or extend
for more than one year from the date hereof.

5.3 Reports, Taxes. VCI and its Subsidiaries shall duly and timely file all
reports or returns required to be filed with federal, state, local and foreign
authorities on or prior to the Closing Date and will promptly pay all federal,
state, local and foreign taxes, assessments and governmental charges levied or
assessed upon them or any of their properties (unless contesting such in good
faith and adequate provision has been made therefor).

5.4 Non-Solicitation.

(a) VCI shall not, directly or indirectly, through any officer,
director, employee, representative or agent, (i) solicit, initiate, or
encourage any inquiries or proposals that constitute, or could reasonably
be expected to lead to, a proposal or offer for a merger, consolidation,
business combination, sale of substantial assets, or sale of shares of
capital stock, other than the transactions contemplated by this Agreement
(any of the foregoing inquiries or proposals being referred to in this
Agreement as an "Acquisition Proposal"), (ii) engage in negotiations or
discussions concerning, or provide any non-public information to any person
or entity relating to, any Acquisition Proposal, or (iii) agree to, enter
into, accept, approve or recommend any Acquisition Proposal.

(b) VCI shall notify HCC immediately (and no later than 24 hours) after
receipt by VCI (or its advisors), of any Acquisition Proposal or any
request for nonpublic information in connection with an Acquisition
Proposal or for access to the properties, books or records of VCI by any
person or entity that informs VCI that it is considering making an
Acquisition Proposal. Such notice to HCC shall be made orally and in
writing and shall indicate in reasonable detail the identity of the offeror
and the terms and conditions of such proposal, inquiry or contact.

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5.5 Option Plans. VCI agrees to take all actions necessary to ensure that
all outstanding options to acquire capital stock of VCI can be assumed by HCC
and converted into options to purchase HCC common stock pursuant to Section 2.6
of this Agreement. VCI also agrees not to take any action that would result in
acceleration of vesting of any such options beyond any acceleration that is
presently required by the options.

ARTICLE VI

ADDITIONAL COVENANTS

6.1 Proxy Statement.

(a) As promptly as practical after the execution of this Agreement, HCC
shall prepare, and VCI shall reasonably cooperate with the preparation of,
the Proxy Statement and HCC shall file the Proxy Statement with the SEC.

(b) The information supplied by HCC and VCI for inclusion in the Proxy
Statement shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated in the Proxy Statement or
necessary in order to make the statements in the Proxy Statement, in the
light of the circumstances under which they were made, not misleading.

6.2 Access to Information. Upon reasonable notice, HCC and VCI shall each
afford to the officers, employees, accountants, counsel and other
representatives of the other, access, during normal business hours during the
period prior to the Effective Time, to all information concerning its business,
properties and personnel as may reasonably be requested. Unless otherwise
required by law, the parties will hold any such information that is nonpublic
in confidence. No information or knowledge obtained in any investigation
pursuant to this Section 6.2 shall affect or be deemed to modify any
representation or warranty construed in this Agreement or the conditions to the
obligations of the parties to consummate the Merger.

6.3 Stockholders Meetings. HCC shall call a meeting of its stockholders to
be held as promptly as practicable for the purpose of voting upon this
Agreement as required by the rules of the Nasdaq Market. Subject to
satisfaction of the conditions contained in this Agreement, and except as
otherwise required based upon the exercise of applicable fiduciary duties in
reliance upon the advice of counsel, HCC will, through its Board of Directors,
recommend to its stockholders approval of this Agreement and the Merger, and
shall use its commercially reasonable efforts to hold such meeting as soon as
practicable after the date hereof.

6.4 Legal Conditions to Merger. Each of HCC and VCI shall take all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on itself with respect to the Merger (which actions shall
include, without limitation, furnishing all information required under the HSR
Act) and in connection with approvals of or filings with any other governmental
entity and will promptly cooperate with and furnish information to each other
in connection with any such requirements imposed in connection with the Merger.

6.5 Public Disclosure. HCC and VCI shall consult with each other before
issuing any press release or otherwise making any public statement with respect
to the Merger or this Agreement and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by law.

6.6 Tax-Free Reorganization. HCC and VCI shall each use commercially
reasonable efforts to cause the Merger to be treated as a reorganization within
the meaning of Section 368(a) of the Code. If HCC or VCI shall at any time
before the Closing become aware of any event, circumstance or other condition
which may cause the Merger to fail to qualify as a reorganization within the
meaning of Section 368(a) of the Code, HCC or VCI, as the case may be, shall
immediately give notice thereof to the other. After the Closing, each of HCC
and its Affiliates shall not take any action (or fail to take any action) which
action or failure to act would cause the Merger to fail to qualify as a
reorganization within the meaning of Section 368(a) of the Code. HCC, VCI

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and each of the Holders agree that they will report in their respective income
Tax Returns that the Merger qualified as a reorganization under Section 368(a)
of the Code (unless there is no reasonable basis for such a reporting
position), and will properly file with their federal income Tax Returns all
information required by Treas. Regs. (S)1.368-3.

6.7 Pooling Accounting. HCC and VCI shall each use their reasonable best
efforts to cause the business combination to be effected by the Merger to be
accounted for as a pooling of interests.

6.8 Nasdaq Quotation. HCC shall use its reasonable best efforts to cause the
shares of HCC common stock to be issued in the Merger to be approved for
quotation on the Nasdaq National Market, subject to official notice of
issuance, prior to the Effective Time.

6.9 Consents. Each of HCC and VCI shall use commercially reasonable efforts
to obtain all necessary consents, waivers and approvals under any of their
material agreements, contracts, licenses or leases in connection with the
Merger.

6.10 FIRPTA. VCI shall, prior to the Closing Date, provide HCC with a
properly executed Foreign Investment and Real Property Tax Act of 1980
("FIRPTA") Notification Letter, which states that shares of capital stock of
VCI do not constitute "United States real property interests" under Section
897(c) of the Code, for purposes of satisfying HCC's obligations under Treasury
Regulation Section 1.1445-2(c)(3). In addition, simultaneously with delivery of
such Notification Letter, VCI shall have provided to HCC, as agent for VCI, a
form of notice to the Internal Revenue Service in accordance with the
requirements of Treasury Regulation Section 1.897-2(h)(2), hereto along with
written authorization for HCC to deliver such notice form to the Internal
Revenue Service on behalf of VCI upon the Closing of the Merger.

6.11 Securities Laws. HCC shall take such steps as may be reasonably
necessary to comply with the securities and blue sky laws of all jurisdictions
that are applicable to the issuance of the HCC common stock in connection with
the Merger. VCI shall use its commercially reasonable efforts to assist HCC as
may be necessary to comply with the securities and blue sky laws of all
jurisdictions that are applicable in connection with the issuance of HCC Common
Stock in connection with the Merger. The HCC common stock will be issued under
a Section 4(2) "private placement" exemption from the registration requirements
of federal securities laws.

6.12 Expenses. Whether or not the Merger is consummated, all fees, costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby shall be paid by the party incurring such fee,
cost or expense; provided, however, that any transaction fees (including but
not limited to legal, accounting, banking, investment banking and other
advisory fees), costs and expenses (including but not limited to all filing
fees and other non-fee disbursements and expenses such as copy, fax and word
processing charges) in excess of $100,000 incurred in connection with the
consummation of this Agreement on behalf of VCI (other than those that are paid
directly by VCI stockholders or any of their affiliates or are reimbursed to
VCI by VCI stockholders or any of their affiliates) shall reduce dollar for
dollar the Numerator.

6.13 Commercially Reasonable Efforts and Further Assurances. Each of the
parties to this Agreement shall use its commercially reasonable efforts to
effectuate the transactions contemplated hereby and to fulfill and cause to be
fulfilled the conditions to closing under this Agreement. Each party hereto, at
the reasonable request of another party hereto, shall execute and deliver such
other instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated hereby.

6.14 Registration of Shares issued to VCI Shareholders.

(a) Shelf Registration. Within thirty (30) days after the expiration of
the 180 day period commencing as of the Effective Time (but in no event
prior to December 7, 2000), HCC shall prepare and

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file with the SEC a "Shelf" registration statement (such registration
statement including the prospectus, amendments and supplements to such
registration statement or prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement, a "Registration Statement") covering all of the shares of HCC
common stock into which VCI's shares of common stock are converted as a
result of the Merger (including any shares of HCC capital stock issued or
issuable as a dividend on or in exchange for or otherwise with respect to
such shares of HCC common stock, the "Merger Shares") for an offering to be
made on a continuous basis pursuant to Rule 415. The Registration Statement
shall be on Form S-3 (except if HCC is not then eligible to register for
resale the Merger Shares on Form S-3, in which case such registration shall
be on Form S-1 or another appropriate form in accordance herewith as the
Holders, by vote of the Holders of a majority of the Merger Shares, may
consent). HCC shall use its reasonable best efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, and shall use its reasonable
best efforts to keep such Registration Statement continuously effective
under the Securities Act until the date which is two (2) years after the
date that such Registration Statement is declared effective by the SEC or
such earlier date when all Merger Shares covered by such Registration
Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144(k) as determined by the counsel to HCC pursuant to a
written opinion letter to such effect (the "Effectiveness Period").
Anything to the contrary contained herein notwithstanding, HCC shall not
voluntarily take any action that would result in the Holders not being able
to sell the Merger Shares during the Effectiveness Period, unless such
action is required under applicable law, as evidenced by an opinion of
counsel to HCC or such other evidence as the Holders may deem acceptable,
or HCC has, upon written advice of counsel, filed a post-effective
amendment to the Registration Statement and the SEC has not declared it
effective.

(b) Piggyback Registration Rights. If at any time beginning after 180
days after the Effective Time and expiring on the third anniversary
thereof, HCC shall determine to register any of its securities either for
its own account or the account of a security holder or holders exercising
demand registration rights, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule 145
transaction, or a registration on any registration form which does not
permit secondary sales, HCC will:

(i) promptly give to the Holders written notice thereof; and

(ii) include in such registration the (A) the Merger Shares and (B)
any other shares of HCC common stock held by HCC stockholders who have
the right to and elect to sell shares in such offering ("Registrable
Securities") specified in a written request made by the Holders within
ten (10) days after receipt of the written notice from HCC described in
clause (i) above, except as set forth in Section 6.14(b) below.

Notwithstanding the foregoing, HCC shall not be required to include in any
such registration shares a Holder requests be included in the registration
if all of such shares could then be sold by such Holder pursuant to Rule
144 under the Securities Act or, if such registration will not cover an
Underwritten Offering, pursuant to the "Shelf" registration statement
provided for in Section 6.14(a) hereof.

If the registration of which HCC gives notice is for a registered public
offering involving an underwriting, HCC shall so advise the Holders as a
part of the written notice given pursuant to this Section 6.14(b). In such
event the right of the Holders to registration pursuant to this Section
6.14(b) shall be conditioned upon the Holders participation in such
underwriting and the inclusion of the Holder's Registrable Securities in
the underwriting to the extent provided herein. The Holder shall, if it
proposes to distribute its securities through such underwriting (together
with HCC and other shareholders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected by HCC.
Notwithstanding any other provision of this Section 6.14(b), if the
representative of the underwriters advises HCC that marketing factors
require a limitation or elimination on the number of shares to be
underwritten, the representative

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<PAGE>

may limit the number of Registrable Securities to be included in the
registration and underwriting. HCC shall so advise all holders of
securities that are entitled to be included in the registration and
underwriting and participation shall be allocated first to HCC for
securities being sold for its own account, and the balance, if any, of the
number of shares that may be included in the registration statement and
underwriting shall be allocated among the Holders and other shareholders in
proportion, as nearly as practicable, to the respective amounts of shares
which they had requested to be included in such registration at the time of
filing the registration statement.

(c) Expenses of Registration. HCC shall pay all Registration Expenses
(as hereafter defined) in connection with any registration, qualification
or compliance pursuant to this Section 6.14, and each Holder shall pay all
Selling Expenses (as hereafter defined) and other expenses that are not
Registration Expenses relating to the Registrable Securities resold by him
or her. For purposes of this Section 6.14, "Registration Expenses" shall
mean all expenses, except as otherwise stated below, incurred by HCC in
complying with Sections 6.14(a), 6.14(b) and 6.14(d), including, without
limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for HCC, blue sky
fees and expenses and the expense of any special audits incident to or
required by any such registration and the reasonable fees and expenses of
one counsel for all of the selling Holders up to a maximum of $25,000. For
purposes of this Section 6.14(c), "Selling Expenses" shall mean all selling
discounts, commissions and stock transfer or other Taxes applicable to the
Registrable Securities and all fees and disbursements of counsel for any
Holder.

(d) Registration Procedures. In the case of any registration effected by
HCC pursuant to this Section 6.14, HCC will keep each Holder advised in
writing as to the initiation of each registration and as to the completion
thereof. HCC will:

(i) Not less than ten (10) days prior to the filing of a
Registration Statement or any related prospectus or any amendment or
supplement thereto (including any document that would be incorporated
or deemed to be incorporated therein by reference), (A) furnish to the
Holders and their designated counsel, and any managing underwriters,
copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Holders, their counsel
and such managing underwriters, and (B) cause its officers and
directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable
opinion of respective counsel to such Holders and such underwriters, to
conduct a reasonable investigation within the meaning of the Securities
Act.

(ii) (A) Prepare and file with the SEC such amendments, including
post-effective amendments, to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective for the Effectiveness
Period; (B) cause the related prospectus to be amended or supplemented
by any required prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 (or any similar provisions
then in force); (C) respond as promptly as reasonably possible to any
comments received from the SEC with respect to the Registration
Statement or any amendment thereto and as promptly as reasonably
possible provide the Holders true and complete copies of all
correspondence from and to the SEC relating to the Registration
Statement; and (D) comply in all material respects with the provisions
of the Securities Act and the Exchange Act with respect to the
disposition of all Merger Shares covered by the Registration Statement
during the Effectiveness Period.

(iii) File such supplements or attach "stickers" to the Registration
Statement or prospectus as and when required by the SEC to evidence a
material amount of resales by a Holder pursuant to a prospectus.

(iv) Notify the Holders of Merger Shares to be sold, their
designated counsel and any managing underwriters as promptly as
reasonably possible (and, in the case of (A)(1) below, not less than
five (5) days (or, in the case of a supplement or "sticker" required to
be filed or attached, within

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<PAGE>

two (2) days) prior to such filing) and (if requested by any such
person) confirm such notice in writing no later than two (2) days
following the day (A)(1) when a prospectus or any prospectus supplement
or post-effective amendment to the Registration Statement is proposed
to be filed; (2) when the SEC notifies HCC whether there will be a
"review" of such Registration Statement and whenever the SEC comments
in writing on such Registration Statement (HCC shall provide true and
complete copies thereof and all written responses thereto to each of
the Holders and to their designated counsel); and (3) with respect to
the Registration Statement or any post-effective amendment, when the
same has become effective; (B) of any request by the SEC or any other
Governmental Entity for amendments or supplements to the Registration
Statement or prospectus or for additional information; (C) of the
issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Merger Shares or
the initiation of any proceedings for that purpose; and (D) in the case
of Underwritten Offerings, if at any time any of the representations
and warranties of HCC contained in any agreement (including any
underwriting agreement) contemplated hereby ceases to be true and
correct in all material respects; (E) of the receipt by HCC of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Merger Shares for sale in
any jurisdiction, or the initiation or threatening of any proceeding
for such purpose; and (F) of the occurrence of any event or passage of
time that makes the financial statements included in the Registration
Statement ineligible for inclusion therein or any statement made in the
Registration Statement or prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to the Registration Statement,
prospectus or other documents so that, in the case of the Registration
Statement or the prospectus, as the case may be, it will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

(v) Use its reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (A) any order suspending the
effectiveness of the Registration Statement, or (B) any suspension of
the qualification (or exemption from qualification) of any of the
Merger Shares for sale in any jurisdiction, at the earliest practicable
moment.

(vi) If requested by any managing underwriter or the Holders of a
majority of the Merger Shares to be sold in connection with an
Underwritten Offering, (A) promptly incorporate in a prospectus
supplement or post-effective amendment to the Registration Statement
such information as such managing underwriters and such Holders
reasonably agree should be included therein, and (B) make all required
filings of such prospectus supplement or such post-effective amendment
as soon as practicable after HCC has received notification of the
matters to be incorporated in such prospectus supplement or post-
effective amendment; provided, however, that HCC shall not be required
to take any action pursuant to this subsection (vi) that would, in the
opinion of counsel for HCC, violate applicable law or be materially
detrimental to the business prospects of HCC.

(vii) Furnish to each Holder, their designated counsel and any
managing underwriters, without charge, at least one (1) conformed copy
of each Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the
extent requested by such person (including those previously furnished
or incorporated by reference) promptly after the filing of such
documents with the SEC.

(viii) Promptly deliver to each Holder, their designated counsel,
and any underwriters, without charge, as many copies of the prospectus
or prospectuses (including each form of prospectus) and each amendment
or supplement thereto as such persons may reasonably request; and HCC
hereby consents to the use of such prospectus and each amendment or
supplement thereto by each of the selling Holders and any underwriters
in connection with the offering and sale of the Merger Shares covered
by such prospectus and any amendment or supplement thereto.

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(ix) Prior to any public offering of Merger Shares, use its
commercially reasonable efforts to register or qualify or cooperate
with the selling Holders, any underwriters and their designated counsel
in connection with the registration or qualification (or exemption from
such registration or qualification) of such Merger Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder or underwriter requests in writing, to
keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Merger Shares covered by a Registration Statement;
provided, however, that HCC shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or
to take any action that would subject it to general service of process
in any such jurisdiction where it is not then so subject or subject HCC
to any material tax in any such jurisdiction where it is not then so
subject.

(x) Cooperate with the Holders and any managing underwriters to
facilitate the timely preparation and delivery of certificates
representing Merger Shares to be delivered to a transferee pursuant to
a Registration Statement, which certificates shall be free of all
restrictive legends, and to enable such Merger Shares to be in such
denominations and registered in such names as any such managing
underwriters or Holders may request.

(xi) Upon the occurrence of any event contemplated by Section
(iv)(F) hereof, as promptly as reasonably possible, prepare a
supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related prospectus or any
document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such prospectus will
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.

(xii) Use its reasonable best efforts to cause all Merger Shares
relating to such Registration Statement to be listed on each securities
exchange or quotation system on which similar securities issued by HCC
are then listed or quoted, and in connection therewith to file with the
Nasdaq National Market (or such other exchange or quotation system as
is then the principal trading market for HCC's common stock) an
application for listing of additional shares with respect to the Merger
Shares.

(xiii) Provide a transfer agent and registrar for all Merger Shares
registered pursuant to the Registration Statement and a CUSIP number
for all such Merger Shares, in each case not later than the effective
date of the Registration Statement.

(xiv) Enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in Underwritten
Offerings) and take all such other reasonable actions in connection
therewith (including those reasonably requested by any managing
underwriters and the Holders of a majority of the Merger Shares being
sold) in order to expedite or facilitate the disposition of such Merger
Shares, and whether or not an underwriting agreement is entered into,
(A) make such representations and warranties to such Holders and such
underwriters as are customarily made by issuers to underwriters in
underwritten public offerings (subject to the scheduling of appropriate
exceptions to insure such representations and warranties are accurate),
and confirm the same if and when requested; (B) in the case of an
Underwritten Offering obtain and deliver copies thereof to each Holder
and the managing underwriters, if any, of opinions of counsel to HCC
and updates thereof addressed to each Holder and each such underwriter,
in form, scope and substance reasonably satisfactory to any such
managing underwriters and the designated counsel of the selling Holders
covering the matters customarily covered in opinions requested in
Underwritten Offerings and such other matters as may be reasonably
requested by such designated counsel and underwriters; (C) use its
reasonable best efforts immediately prior to the effectiveness of the
Registration Statement, and, in the case of an Underwritten Offering,
at the time of delivery of any Merger Shares sold pursuant thereto,
deliver copies to the Holders and the managing underwriters, if

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any, of "cold comfort" letters and updates thereof obtained from the
independent certified public accountants of HCC (and, if necessary, any
other independent certified public accountants of any subsidiary of HCC
or of any business acquired by HCC for which financial statements and
financial data is, or is required to be, included in the Registration
Statement); (D) if an underwriting agreement is entered into, the same
shall contain customary indemnification provisions and procedures
acceptable to the managing underwriters, if any, and holders of a
majority of Merger Shares participating in such Underwritten Offering);
and (E) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Merger Shares being sold,
their designated counsel and any managing underwriters to evidence the
continued validity of the representations and warranties made pursuant
to clause (A) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement
entered into by HCC.

(xv) Make available for inspection by the selling Holders, any
representative of such Holders, any underwriter participating in any
disposition of Merger Shares, and any attorney or accountant retained
by such selling Holders or underwriters, at the offices where normally
kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of HCC and its
subsidiaries, and cause the officers, directors, agents and employees
of HCC and its subsidiaries to supply all information in each case
reasonably requested by any such Holder, representative, underwriter,
attorney or accountant in connection with the Registration Statement;
provided, however, that any information that is determined in good
faith by HCC in writing to be of a confidential nature at the time of
delivery of such information shall be kept confidential by such
Persons, unless (W) disclosure of such information is required by court
or administrative order or is necessary to respond to inquiries of
regulatory authorities; (X) disclosure of such information, in the
opinion of counsel to such person, is required by law; (Y) such
information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by such person; or (Z)
such information becomes available to such person from a source other
than HCC and such source is not known by such person to be bound by a
confidentiality agreement with HCC.

(xvi) Comply with all applicable rules and regulations of the SEC.

(e) Information by Holder. Each Holder of Registrable Securities shall
furnish to HCC such information regarding such Holder and the distribution
proposed by such Holder as HCC may reasonably request in connection with
any registration, qualification or compliance referred to in this Section
6.14, but only to the extent that such information is required in order for
HCC to comply with its obligations under all applicable securities and
other laws and to ensure that the Registration Statement relating to such
Registrable Securities conforms to the applicable requirements of the
Securities Act and the rules and regulations thereunder. Each Holder
covenants that it will promptly notify HCC of any changes in the
information set forth in the Registration Statement or otherwise provided
by such Holder to HCC regarding such Holder or such Holder's plan of
distribution as a result of which the Registration Statement or any
prospectus relating to the Registrable Securities contains or would contain
an untrue statement of a material fact regarding such Holder or its
intended method of distribution of such Registrable Securities or omits to
state any material fact regarding such Holder or its intended method of
distribution of such Registrable Securities required to be stated therein
or necessary to make the statements therein, not misleading.

(f) Indemnification and Contribution.

(i) HCC agrees to indemnify and hold harmless each Holder from and
against any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) to which such Holder may become subject
(under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement, alleged untrue
statement, omission or alleged omission of a material fact in the

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Registration Statement, any prospectus included in the Registration
Statement, or any amendment or supplement to the Registration Statement
or any such prospectus, or any violation or alleged violation by HCC of
the Securities Act, the Exchange Act, any state law, rule or regulation
promulgated thereunder, and HCC will, as incurred, reimburse such
Holder for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that the indemnity contained in
this Section 6.14(f)(1) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of HCC (which consent shall
not be unreasonably withheld), nor shall HCC be liable in any such case
to the extent that such loss, claim, damage or liability arises out of,
or is based upon (A) an untrue statement or alleged untrue statement
made in such Registration Statement in reliance upon and in conformity
with written information furnished to HCC by such Holder specifically
furnished for use in preparation of the Registration Statement, (B) the
failure of such Holder to comply with any of the covenants and
agreements contained in this Section 6.14, or (C) any untrue statement
in any prospectus that is corrected in any subsequent prospectus that
was delivered to the Holder prior to the pertinent sale or sales by the
Holder.

(ii) Each Holder, severally and not jointly, agrees to indemnify and
hold harmless HCC from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which HCC
may become subject (under the Securities Act or otherwise) insofar as
such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of, or are based upon (A) an untrue
statement, alleged untrue statement, omission or alleged omission of a
material fact in the Registration Statement, any prospectus included in
the Registration Statement, or any amendment or supplement to the
Registration Statement or any such prospectus in reliance upon and in
conformity with written information furnished to HCC by such Holder in
an instrument executed by such Holder and specifically stated to be for
use in preparation of the Registration Statement, or any violation or
alleged violation by Holder of the Securities Act, the Exchange Act,
any state law, rule or regulation promulgated thereunder, provided,
however, the indemnity contained in this Section 6.14(f)(ii) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent
of Holder (which consent shall not be unreasonably withheld), and
provided that no Holder shall be liable in any such case for any untrue
statement included in any Prospectus which statement has been corrected
in a writing delivered to HCC at least two business days before the
sale from which such loss arose, (B) the failure of such Holder to
comply with any of the covenants and agreements contained in Section
6.14, or (C) any untrue statement in any Prospectus that is corrected
in any subsequent Prospectus that was delivered to the Holder prior to
the pertinent sale or sales by the Holder; and each Holder, severally
and not jointly, will, as incurred, reimburse HCC for any legal or
other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim. In no event
shall the amount payable by any Holder to HCC pursuant to this Section
6.14(f) by reason of a sale of HCC Common Stock by such Holder exceed
the amount of the net proceeds to such Holder from the sale of HCC
Common Stock from which such liability arose.

(iii) Promptly after receipt by any indemnified person under
subsections (i) or (ii) above of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 6.14(f), such indemnified
person shall notify the indemnifying person in writing of such claim or
of the commencement of such action (provided, however, that no failure
to provide such notice shall relieve any indemnifying person of any
liability hereunder except to the extent that such indemnifying person
is prejudiced thereby), and, subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified
person and the indemnifying person shall have been notified thereof,
the indemnifying person shall be entitled to participate therein, and,
to the extent that it shall wish, to assume the defense thereof, with
counsel reasonably satisfactory to the indemnified person. After notice
from the indemnifying person to such indemnified person of the
indemnifying person's election to assume the defense thereof, the
indemnifying person shall not be liable to such indemnified person for
any legal expenses

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subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that, if the indemnifying person
shall propose that the same counsel represent it and the indemnified
person, and if counsel for the indemnified person shall reasonably have
concluded that there is an actual conflict of interest posed by the
representation proposed by the indemnifying person, the indemnified
person shall be entitled to retain its own counsel reasonably
satisfactory to the indemnifying person at the expense of such
indemnifying person; provided, however that if more than one
indemnified person makes a claim against an indemnifying person based
on substantially similar facts, the indemnifying person shall not be
responsible for the fees of more than one counsel for all indemnified
persons whose claims are based on substantially similar facts.

(iv) if the indemnification provided for in this Section 6.14(f) is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (i) or (ii) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect
thereof), in such proportion as is appropriate to reflect the relative
fault of each such party, as well as any other relevant equitable
considerations, provided, however, that any contribution by a Holder
shall not exceed the net proceeds to such Holder for the sale of HCC
Common Stock from which such liability arose, except in the case of
willful fraud by such Holder. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by HCC on the one
hand or a Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. HCC and the Holders agree that it would not
be just and equitable if contribution pursuant to this Section 6.14(f)
were determined by any method of allocation which does not take account
of the equitable considerations referred to above in this Section
6.14(f)(iv). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in
respect thereof) referred to above in this Section 6.14(f)(iv) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action, proceeding or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.

(v) The obligations of the HCC and the Holders under this Section
6.14(f) shall be in addition to any liability which HCC and the
respective Holders may otherwise have and shall extend, upon the same
terms and conditions, to each director and officer of HCC or any
Holder, and to each person, if any, who controls HCC or any Holder
within the meaning of the Securities Act or the Exchange Act.

(g) Restrictive Legend. Each certificate representing Merger Shares
shall bear substantially the following legend (in addition to any legends
required under applicable securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.

And with respect to Affiliates of VCI, shall bear the following additional
legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT
APPLIES, AND MAY ONLY BE TRANSFERRED (1) IN CONFORMITY WITH RULE
145, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (3) IN
ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL, REASONABLY ACCEPTABLE
TO THE ISSUER, IN FORM AND SUBSTANCE TO THE EFFECT THAT

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SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933.

The legends contained in this Section 6.14(g) shall be removed from a
certificate in connection with any sale in compliance with the terms of
this Agreement and pursuant to the Resale Registration Statement or a
registration statement covered by Section 6.14(b), or pursuant to Rule 144
(if accompanied by any legal opinion reasonably required by the HCC), but
shall not be removed in any other circumstance without HCC's prior written
consent (which consent shall not be unreasonably withheld or delayed and
shall be granted if such legend is no longer appropriate).

(h) Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the
sale of the Registrable Securities to the public without registration, HCC
agrees to use its reasonable best efforts to:

(i) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all
times after the Merger;

(ii) File with the SEC in a timely manner all reports and other
documents required of HCC under the Securities Act and the Exchange
Act; and

(iii) So long as a Holder owns any Registrable Securities, to
furnish to that Holder forthwith upon request a written statement by
HCC as to its compliance with the reporting requirements of said
Rule 144, and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of HCC, and such other reports
and documents of HCC as such Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing such Holder to
sell any such Registrable Securities without registration.

6.15 Tax Matters.

(a) HCC shall cause to be prepared and filed any required Tax Returns
due to be filed by VCI or any of its Subsidiaries after the Closing Date.
The Stockholder Representative shall be responsible for preparation and
filing of Tax Returns of Vitamins.com, LLC for its final taxable year ended
August 15, 1999. HCC shall timely pay or cause to be paid all Taxes shown
to be due on such Tax Returns, without prejudice to any right to indemnity
which the HCC Parties may have pursuant to Section 9.2 of this Agreement
with respect to such Taxes.

(b) For each Tax Return that HCC shall prepare (or cause to be prepared)
with respect to VCI or any Subsidiary for any taxable period which includes
any period ending on or prior to the Closing Date, HCC shall, not less than
30 days prior to the date on which each such Tax Return is required to be
filed, provide a copy of such Tax Return to the Stockholder Representative
for comment and review. The Stockholder Representative shall have the right
to direct HCC to adopt any filing position in such Tax Return if (i) such
position is supported by a "more likely than not" opinion of reputable tax
counsel and (ii) the reporting position initially proposed by HCC on such
Tax Return would result in Holders' liability for indemnification pursuant
to Section 9.2 hereof. HCC shall cause all such Tax Returns to be prepared
in a manner consistent with the methodology of VCI and its Subsidiaries
used in prior taxable years, except as otherwise required by applicable law
or regulations.

(c) HCC shall not file, nor cause to be filed, on behalf of VCI or any
Subsidiary any amended Tax Return with respect to a taxable period (or
portion of a period) ending on or prior to the Closing Date without the
prior written consent of the Stockholder Representative (which consent
shall not be unreasonably withheld or delayed), unless (i) HCC agrees to
release the Holders from liability for indemnification pursuant to Section
9.2 hereof, if any, which results from such amended Tax Return, or
(ii) such amendment is compelled by the relevant taxing authority.

(d) HCC and VCI and the Stockholder Representative agree to cooperate
with one another in the preparation of any Tax Return pursuant to this
Section 6.15 and amendment of any Tax Return for periods

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referred to in Section 6.15(c) hereof, and to negotiate in good faith
regarding the Tax reporting positions to be taken on such Tax Returns. Any
costs of preparing an amended Tax Return at the request of the Stockholder
Representative shall be subject to reimbursement or indemnification out of
the Escrow Fund. VCI shall be entitled to direct an election to file
consolidated, combined or unitary returns with its Subsidiaries for the
taxable period ending on or before the Closing Date by notice to HCC on or
before the Closing Date, unless HCC agrees to release the Holders from
liability for indemnification pursuant to Section 9.2 hereof for any
increase in tax liability attributable to the failure to file on a
consolidated basis as requested by VCI.

6.16 Interim Operations of VCI. HCC agrees that during the period commencing
on the date of this Agreement and ending on the Closing Date it shall advance
to or on behalf of VCI such amounts in cash, up to a maximum of $3,000,000, as
may be reasonably requested by VCI from time to time in writing to allow VCI to
operate in the Ordinary Course of Business. Each amount advanced by HCC to VCI
shall be represented by a promissory note providing for interest at the rate of
the Wells Fargo Bank prime rate plus 3% per annum and payment on the earlier of
(i) one year after the date thereof, or (ii) the closing by VCI of any
financing that raises $10,000,000 or more.

6.17 Issuance of Additional Shares by HCC. Commencing on the date of this
Agreement and continuing through Closing, if HCC shall issue or sell any shares
of its capital stock which, in the aggregate, exceeds two percent (2%) of the
total issued and outstanding shares of HCC capital stock, as determined on the
date of this Agreement, HCC shall use commercially reasonable efforts to obtain
Voting Agreements with respect to such excess shares issued.

6.18 Payment of Dividends by HCC. Between the date of this Agreement and the
Closing Date, HCC agrees not to, without the consent of VCI (such consent not
to be unreasonably withheld), declare or pay any dividend or otherwise make a
distribution with respect to its capital stock, other than a stock dividend of
shares of HCC common stock, or to repurchase or offer to repurchase any shares
of HCC capital stock (other than repurchases of HCC capital stock pursuant to
written agreements with its employees which were in existence on the date of
this Agreement).

ARTICLE VII

CONDITIONS TO THE MERGER

7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by agreement of all the
parties hereto:

(a) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order or prohibition
issued by any Governmental Entity shall be in effect, nor shall any action
or proceeding seeking any of the foregoing be pending, that would prevent
the consummation of the Merger or restrict the operation of the business of
VCI.

(b) Governmental Approval. HCC, VCI and Acquisition Corporation and
their respective subsidiaries shall have timely obtained from each
Governmental Entity all approvals, waivers and consents necessary for
consummation of or in connection with the Merger and the several
transactions contemplated hereby, including such approvals, waivers and
consents as may be required under the Securities Act under state blue sky
laws and DCL.

(c) HSR Act Compliance. All waiting, review and investigation periods
(and any extensions thereof) applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.

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7.2 Additional Conditions to Obligations of HCC and Acquisition Corp. The
obligations of HCC and Acquisition Corp. to consummate the Merger are subject
to the fulfillment, at or before the Closing of all the following conditions,
any one or more of which may be waived by HCC.

(a) Representations and Warranties. The representations and warranties
of VCI contained in this Agreement shall be true in all material respects
(except for such representations and warranties as are qualified by their
terms by a reference to materiality, which representations and warranties
as so qualified shall be true in all respects) as of the Closing as though
such representations were made on and as of such time; provided, however,
that if as of the Closing Date the sum of (1) reasonably anticipated Losses
arising out of the failure of the representations and warranties to be true
and correct in all material respects as of the date of this Agreement and
(2) reasonably anticipated Losses arising out of the failure of the
representations and warranties that were true and correct in all material
respects as of the date of this Agreement to be true and correct as of the
Closing Date is no more than 10% of the Numerator, then in such event HCC
shall not have the right to terminate this Agreement based upon the non-
satisfaction of this condition but rather shall have recourse for such
Losses against the Escrow Fund in accordance with the terms and procedures
of the Escrow Agreement.

(b) Covenants Performed. All of the obligations of VCI to be performed
at or before the Closing pursuant to the terms of this Agreement shall have
been duly performed in all material respects.

(c) Certificate. At the Closing, HCC shall have received a certificate
signed by the Chief Executive Officer of VCI to the effect that the
conditions set forth in Sections 7.2(a) and 7.2(b) have been satisfied.

(d) Stockholder Approval. The stockholders of HCC shall have duly
approved this Agreement and the Merger Agreement in accordance with the
rules of the Nasdaq National Market.

(e) Dissenting VCI Shares. The aggregate number of Dissenting VCI Shares
shall not exceed 2 percent of the aggregate of the outstanding shares of
capital stock of VCI.

(f) Opinion of Counsel to VCI. Counsel to VCI, shall have issued an
opinion in favor of HCC in the form of Exhibit J hereto.

(g) Resignations. VCI shall have delivered to HCC signed resignations
from the Board of Directors of VCI and its Subsidiaries.

(h) Merger Agreement. The Merger Agreement shall have been filed with
the Secretary of State of the State of Delaware and shall have become
effective.

7.3 Additional Conditions to Obligations of VCI. The obligations of VCI to
consummate the Merger are subject to the fulfillment, at or before the Closing,
of all of the following conditions, any one or more of which may be waived by
VCI:

(a) Representations and Warranties True at Closing. The representations
and warranties of HCC and Acquisition Corp. contained in this Agreement
shall be true in all material respects except for such representations and
warranties as are qualified by their terms by a reference to materiality,
which representations and warranties as so qualified shall be true in all
respects as of the Closing, as though such representations were made on and
as of such time.

(b) Covenants Performed. All of the obligations of HCC and Acquisition
Corp. to be performed at or before the Closing pursuant to the terms of
this Agreement shall have been duly performed in all material respects.

(c) Certificate. At the Closing, VCI shall have received a certificate
signed by the Chief Executive Officer of each of HCC and Acquisition Corp.
to the effect that the conditions set forth in Sections 7.3(a) and 7.3(b)
have been satisfied.

(d) Stockholder Approval. The stockholders of Acquisition Corp. and HCC
shall have duly approved this Agreement and the Merger Agreement.

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(e) Opinion of Counsel to HCC. Counsel to HCC, shall have issued an
opinion in favor of VCI in the form of Exhibit K.

(f) Nasdaq Notification. HCC shall have notified Nasdaq of the proposed
issuance of HCC common stock pursuant to the Merger and upon exercise of
the stock options of VCI assumed by HCC pursuant to the Merger and such
stock shall have been approved for quotation on the Nasdaq National Market.

(g) Merger Agreement. The Merger Agreement shall have been filed with
the Secretary of State of the State of Delaware and shall have become
effective.

ARTICLE VIII

TERMINATION

8.1 Termination. At any time prior to the Effective Time, whether before or
after approval of the matters presented in connection with the Merger by the
shareholders of HCC or VCI, this Agreement be terminated:

(a) by mutual consent of HCC and VCI;

(b) by VCI, by giving written notice to HCC that HCC is in material
breach of any representation, warranty, or covenant of HCC contained in
this Agreement, which breach shall not have been cured, if subject to cure,
within 15 calendar days following receipt by HCC of written notice of such
breach;

(c) by HCC, by giving written notice to the Stockholder Representative
that VCI is in material breach of any representation or warranty (unless,
the Stockholder Representative has exercised its option pursuant to Section
7.2(a) hereof to increase the Escrow Fund) or covenant contained in this
Agreement, which breach shall not have been cured, if subject to cure,
within 15 calendar days following receipt by the Stockholder Representative
of written notice of such breach.

(d) by HCC, by giving written notice to VCI, if the Closing shall not
have occurred on or before September 30, 2000, or such later date as is
agreed to by the Boards of Directors of both VCI and HCC, by reason of the
failure of any condition precedent under Section 7.1 or 7.2 (unless the
failure results primarily from a breach by HCC of any representation,
warranty, or covenant of HCC contained in this Agreement or HCC's failure
to fulfill a condition precedent to closing or other default); or

(e) by VCI, by giving written notice to HCC, of the Closing shall not
have occurred on or before September 30, 2000, or such later date as is
agreed to by the Boards of Directors of both VCI and HCC, by reason of the
failure of any condition precedent under Section 7.1 or 7.3 (unless the
failure results primarily from a breach by VCI of any representation,
warranty, or covenant of VCI contained in this Agreement or VCI's failure
to fulfill a condition precedent to closing or other default).

8.2 Effect of Termination. In the event of termination of this Agreement as
provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of HCC or VCI or their
respective officers, directors, shareholders or affiliates, except to the
extent that such termination results from the material breach by a party hereto
of any of its representations, warranties or covenants set fort in this
Agreement; provided that, the provisions of Section 6.2 relating to
confidentiality this Section 8.2, Section 8.3 and Section 9.2 shall remain in
full force and effect and survive any termination of this Agreement.

8.3 HCC Obligation to Purchase VCI Shares. In the event that Closing does
not occur for any reason whatsoever, other than as the direct result of VCI's
breach of any of its representations, warranties and covenants hereunder, HCC
shall upon written demand promptly given by VCI purchase from VCI for $1.00 per
share the number of shares of VCI's Series C Preferred Stock determined by
subtracting from $6,000,000 the amount owed to HCC as a result of loans made
pursuant to Section 6.16 hereof and dividing the result thereof by $1.00.
Closing on such purchase shall occur at VCI's principal office within 15
calendar days after any such

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demand. At the closing of such purchase, HCC shall tender by wire transfer to
VCI's designated account the purchase price so determined, and VCI shall tender
to HCC a stock certificate representing the shares purchased. The dollar and
share amounts provided for herein shall be appropriately adjusted in the event
of any stock dividend, stock split or other similar change in the
capitalization of VCI.

ARTICLE IX

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

9.1 Survival of Representations and Warranties. All statements contained in
any exhibit, certificate, schedule or other instrument delivered or to be
delivered by or on behalf of the parties hereto, or in connection with the
transactions contemplated hereby, shall be deemed representations and
warranties hereunder. All such representations, warranties, and indemnification
rights contained herein shall survive the Closing and any audit or
investigation made by or on behalf of the parties, but shall expire on the
earlier of the date that is twelve (12) months after the Effective Time or the
date on which HCC issues its first independent audit report for the combined
entities, and no claims for indemnification hereunder may be made after such
date.

9.2 Indemnification by Holders.

(a) The Holders, by their approval of this Agreement and the Merger,
shall be deemed to have agreed jointly, but only to the extent of the
Escrow Fund, to indemnify and hold HCC and its directors, officers,
employees, fiduciaries, agents and Affiliates, and each other person, if
any, who controls such persons (collectively, the "HCC Parties") harmless
against any claims, actions, suits, proceedings, investigations, losses,
expenses, damages, obligations, liabilities, judgments, fines, fees, costs
and expenses (including costs and reasonable attorneys' fees) and amounts
paid in settlement of any pending, threatened or completed claim, action,
suit, proceeding or investigation (collectively "Loss" or "Losses") which
arise out of or result from or are related to (i) any breach by or failure
of VCI to perform any of its covenants or agreements set forth herein, (ii)
the inaccuracy of any representation or warranty made by VCI herein, or
(iii) any amounts paid, in settlement or otherwise, of the matters
described in Sections 3.2(b) and 3.15 of the VCI Disclosure Schedule.

(b) If the HCC Parties are entitled to indemnification under this
Agreement, they shall be entitled to recover shares of HCC common stock
pursuant to the Escrow Agreement (subject to each Holder's right under the
Escrow Agreement to satisfy all or any part of any indemnification
obligation by paying cash in lieu of HCC common stock) having an aggregate
value, based on the average closing price used to calculate the Exchange
Ratio, equal to the amount of its Loss or Losses. The aggregate liability
of the Holders for indemnification under this Article IX shall not exceed
the Escrow Fund and the HCC Parties sole and exclusive remedy for
indemnification claims under this Article IX shall be to seek recovery
against the Escrow Fund.

9.3 Indemnification by HCC. HCC agrees to indemnify and hold VCI, the
Holders and VCI's directors, officers, employees, fiduciaries, agents and
Affiliates and each other person, if any, who controls such persons (the "VCI
Parties") harmless against any Loss or Losses which arise out of or result from
or are related to (a) any breach by or failure of HCC to perform any of its
covenants or agreements set forth herein, or (b) the inaccuracy of any
representation or warranty made by HCC herein.

9.4 Limitation.

(a) Notwithstanding the foregoing, the Holders shall be liable for
Losses incurred as a result of any breach, failure or inaccuracy of any
representation, warranty, covenant or agreement made by VCI herein only if
the aggregate of such Losses exceeds $300,000, and HCC shall be liable for
Losses incurred as a result of any breach, failure or inaccuracy of any
representation, warranty, covenant or agreement made by it herein only if
the aggregate of such Losses exceeds $300,000; provided, however, that the
$300,000 limitation shall not apply with respect to any breach, failure or
inaccuracy of any representation and

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warranty contained in Section 3.2 hereof or the covenant contained in
Section 5.5 hereof or as to the matters described in Section 3.2(b) of the
VCI Disclosure Schedule. The aggregate liability of the Holders for Losses
incurred as a result of any breach, failure or inaccuracy of any
representation, warranty, covenant or agreement made by VCI herein shall
not exceed the Escrow Fund and the aggregate liability of HCC for Losses
incurred as a result of any breach, failure or inaccuracy of any
representation, warranty, covenant or agreement made by it herein shall not
exceed 10% of the Numerator. The liability of the Holders for Losses
incurred as a result of any breach, failure or inaccuracy of any
representation, warranty, covenant or agreement of VCI shall be limited to
the return of the HCC Common Stock in the Escrow Fund, as provided in the
Escrow Agreement.

(b) Notwithstanding anything to the contrary in this Agreement, any
amounts payable by the Holders pursuant to Section 9.1(a) or by HCC
pursuant to Section 9.2(b) hereof, shall be appropriately adjusted to take
into account (i) the amount of any insurance proceeds received by VCI and
Holders or HCC, as the case may be, in connection with the indemnification
claim, (ii) the income tax consequences associated with the tax treatment
of the Loss item in question and any related indemnity payment and (iii)
any recovery under third party indemnification of VCI.

9.5 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder, the Indemnified Party shall notify in writing within
30 days (or such earlier time as might be required to avoid prejudicing the
Indemnifying Party's position) of receiving notice of or obtaining actual
knowledge of facts constituting the basis of such claim (whichever occurs
first), the Indemnifying Party of the claim and, when known, the facts
constituting the basis for such claim. The failure to notify the Indemnifying
Party will not vitiate the right of the Indemnified Party to indemnity to the
extent the Indemnifying Party is not prejudiced as a result of such failure. In
the event of any claim for indemnification, the Indemnified Party shall be
entitled to full indemnification in the amount claimed unless, within 30 days
after receipt of written notice of a claim for indemnification, the
Indemnifying Party delivers a written notice to the Indemnified Party objecting
to the claim for indemnification, which notice specifies in reasonable detail
the basis for the objection. If the parties are unable to resolve the dispute
within 30 days, the claim for indemnification shall be settled pursuant to
Section 9.7 hereof. In the event of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal proceedings
by a third party, the notice to the Indemnifying Party shall specify, if known,
the amount or an estimate of the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim by a third party for
which it is entitled to indemnification hereunder without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
delayed, conditioned or withheld, unless suit shall have been instituted
against the Indemnified Party and the Indemnifying Party shall not have taken
control of such suit after notification thereof as provided in Section 9.6
below.

9.6 Defense by Indemnifying Party. In connection with any claims giving rise
to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person who is not a party to this Agreement, the Indemnifying
Party at its sole cost and expense may, upon written notice to the Indemnified
Party, assume the defense of any such claim or legal proceedings; provided
that, if by reason of the claim of such third party a lien, attachment,
garnishment or execution has been placed on any material portion of the
property or assets of the Indemnified Party at the time of such election, the
Indemnifying Party, if it desires to exercise the right to assume the defense,
shall furnish a satisfactory indemnity bond to obtain the release of such lien,
attachment, garnishment or execution. The Indemnified Party shall be entitled
to participate in (but not control) the defense of any such action, with its
counsel and at its own expense. If the Indemnifying Party assumes the defense,
it shall take all actions and steps reasonably necessary to defend or settle
any claim against the Indemnified Party. The Indemnified Party shall reasonably
cooperate with the Indemnifying Party in such defense. In the event that the
Indemnifying Party proposes a settlement to any such claim or legal proceeding,
which settlement is satisfactory to the party instituting such claim or legal
proceeding and includes (i) an unconditional release of the Indemnified Party,
from all liability with respect to such claim or litigation, to the extent that
it is reasonably necessary to provide assurance to the Indemnified Party that
the claim will be finally settled without further liability to the Indemnified
Party or the dismissal of such claim or litigation against the Indemnified

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Party with prejudice and (ii) provision that all damages and settlement
payments are to be made by the Indemnifying Party (subject to the limitations
in Section 9.4 hereof), and the Indemnified Party withholds its consent to such
settlement, then in any such case the Indemnifying Party shall have no
obligation to indemnify the Indemnified Party under this Agreement against and
in respect of the amount by which the damages resulting from a final judgment
relating to such claim or legal proceeding exceeds the amount of the proposed
settlement. In the event that the Indemnifying Party shall assume the defense
of any such claim or legal proceeding and it is later determined that such
claim was not a claim for which the Indemnifying Party is required to indemnify
the Indemnified Party under this Article IX, the Indemnified Party shall
reimburse the Indemnifying Party for all its reasonable costs and expenses with
respect to such defense, including reasonable attorneys' fees and
disbursements. If the Indemnifying Party does not assume the defense of any
such claim or legal proceeding resulting therefrom within 30 days after the
date of receipt of the notice referred to in Section 9.5 above (or, if earlier,
by the tenth day preceding the day on which an answer or other pleading must be
served in order to prevent judgment by default in favor of the person asserting
such claim), (a) the Indemnified Party may defend against such claim or legal
proceeding, in such manner as it may deem appropriate, including, but not
limited to, settling such claim or legal proceeding on such terms as the
Indemnified Party may deem appropriate, and (b) the Indemnifying Party shall be
entitled to participate in (but not control) the defense of such action, with
its counsel and at its own expense. Notwithstanding the foregoing, (i) the
Holders may not control any matter involving the consolidated, or combined or
unitary Tax Returns of HCC or any Affiliate of HCC for any taxable period
ending after the Closing Date and (ii) in any such case, HCC agrees to keep the
Stockholder Representative fully informed with respect to such matter which may
be the subject to indemnification hereunder and not to settle or resolve any
such matter without the consent of the Stockholder Representative (which
consent may not be unreasonably withheld or delayed).

9.7 Arbitration.

(a) Either HCC or the Stockholders Representative may submit a dispute
that has not been resolved pursuant to the provisions of Section 9.5 above
to arbitration by filing a written demand for arbitration with the American
Arbitration Association ("AAA") in Wilmington, Delaware with written notice
to the other party. The arbitration shall be conducted in accordance with
the Commercial Dispute Resolution procedures of the AAA, and shall be
conducted by a single arbitrator who shall be qualified by experience in
complex commercial disputes and chosen in accordance with the procedures of
the AAA. The arbitrator so designated shall not be a current or former
employee, consultant, officer, director or stockholder of any party hereto
or any Affiliate of any party to this Agreement.

(b) The determination of the arbitrator as to the resolution of any
dispute shall be binding and conclusive upon all parties hereto. All
rulings of the arbitrator shall be in writing and shall be delivered to the
parties hereto. The arbitrator shall have full discretion to award to
either party or allocate between them the costs of the arbitration
proceedings, including reasonable attorneys fees.

(c) Any arbitration pursuant to this Section 9.7 shall be conducted in
Wilmington, Delaware. Any arbitration award may be entered in and enforced
by any court having jurisdiction and the parties hereby consent and commit
themselves to the jurisdiction of the courts of the State of Delaware and
the United States District Court for the District of Delaware for purposes
of the enforcement of any arbitration award.

9.8 Subrogation. In the event VCI or the Holders shall be required to
provide indemnification under this Article IX, then, to the extent of any such
indemnification, VCI and/or the Holders shall subrogate to, assume and enjoy
the benefit of all of the rights and claims (including cross-claims and
counter-claims) of the HCC Parties in connection with the Loss for which
indemnification is provided, including, without limitation, any rights of the
HCC Parties to any surety, indemnification, reimbursement or contribution
against or from other parties.

9.9 Section 6.14(f) Indemnification. Nothing in this Article 9, shall affect
the provisions in Section 6.14(f) of this Agreement.

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ARTICLE X

MISCELLANEOUS

10.1 Amendment. This Agreement shall not be amended except by a writing duly
executed by both parties and shall not be amended after it has been approved by
the stockholders of HCC or VCI, without further stockholder approval, if the
amendment would alter or change the Exchange Ratio or have a material adverse
effect on the stockholders of HCC or VCI.

10.2 Entire Agreement. This Agreement, including the Exhibits, Schedules,
and other documents delivered pursuant to this Agreement, contains all the
terms and conditions agreed upon by the parties relating to the subject matter
of this Agreement and supersedes all prior agreements, negotiations,
correspondence, undertakings, and communications of the parties, whether oral
or written, respecting that subject matter.

10.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to principles
of conflicts of law.

10.4 Headings. The headings contained in this Agreement are intended for
convenience and shall not be used to determine the rights of the parties.

10.5 Notices. All notices, requests, demands, and other communications made
in connection with this Agreement shall be in writing and shall be deemed to
have been duly given on the date of delivery if delivered by hand delivery or
by facsimile to the persons identified below or two days after mailing by air
courier addressed as follows:

If to HCC or Acquisition Corp.:

HealthCentral.com
6001 Shellmound Street, Suite 800
Emeryville, CA 94608
Attn: C. Fred Toney
Tel. No. (510) 250-2500
Facsimile No. (510) 250-2525

With a copy to:

Howard, Rice, Nemerovski, Canady,Falk & Rabkin
A Professional Corporation
Three Embarcadero Center, Seventh Floor
San Francisco, California 94111
Attention: Richard W. Canady
Tel. No. (415) 434-1600
Facsimile No. (415) 217-5910

If to VCI (prior to Closing) or Stockholder Representative (after the
Closing):

Vitamins.com, Inc.
2924 Telestar Court
Falls Church, VA 22042
Attn: Robert M. Haft
Tel. No. (703) 849-0800
Facsimile No. (703) 849-8227

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<PAGE>

With a copy to:

Venable, Baetjer, Howard and Civiletti, LLP
1615 L Street, N.W., Suite 400
Washington, DC 20036
Attention: Michael A. Schlesinger
Tel. No. (202) 429-3288
Facsimile No. (202) 429-3231

Such addresses may be changed, from time to time by means of a notice given
in the manner provided in this section.

10.6 Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent.

10.7 Waiver. Waiver of any term or condition of this Agreement by any party
shall not be construed as a waiver of a subsequent breach or failure of the
same term or condition, or a waiver of any other term or condition in this
Agreement.

10.8 Assignment. Neither party may assign, by operation of law or otherwise,
all or any portion of its rights or duties under this Agreement without the
prior written consent of the other party, which consent may be withheld in the
absolute discretion of the party asked to give consent; provided, however, that
Holders may assign their rights under Section 6.14 hereof to any transferee of
their shares of HCC common stock without the requirement of such consent.

10.9 Counterparts. This Agreement may be signed in counterparts with the
same effect as if the signatures to each party were upon a single instrument.
All counterparts shall be deemed an original of this Agreement.

10.10 Third Party Beneficiaries. The Holders shall be third party
beneficiaries of this Agreement.

10.11 Attorneys' Fees. In the event any dispute arises hereunder, the
arbitrator or the court, as the case may be, shall have the authority to award
costs and attorneys' fees to the prevailing party.

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<PAGE>

IN WITNESS WHEREOF, HCC, Acquisition Corp. and VCI have executed this
Agreement as of the date first above written.

HEALTHCENTRAL.COM

By: /s/ Albert Greene
___________________________________
Title: President and Chief Executive
Officer

HCC ACQUISITION CORP.

By: /s/ C. Fred Toney
___________________________________
Title: President

VITAMINS.COM, INC.

By: /s/ Robert M. Haft
___________________________________
Title: President

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<PAGE>

APPENDIX B

March 15, 2000

Board of Directors
HealthCentral.com
6001 Shellmound Street
Suite 800
Emeryville, CA 94608

Members of the Board of Directors:

You asked for our opinion as to the fairness, from a financial point of
view, to the holders of common stock, par value $0.001 per share
("HealthCentral Common Stock") of HealthCentral.com, a Delaware corporation
("HealthCentral" or the "Company") of certain transactions in which
HealthCentral is considering participating.

Background of Transactions

HealthCentral entered into an Agreement and Plan of Reorganization and
Merger dated March 15, 2000 (the "Merger Agreement") with Vitamins.com, Inc., a
Delaware corporation, pursuant to which a wholly owned subsidiary of
HealthCentral will merge with and into Vitamins.com and Vitamins.com will
become a wholly owned subsidiary of HealthCentral (the "Merger"). Pursuant to
the Merger Agreement, the outstanding shares of Vitamins.com capital stock will
be converted into a number of shares (the "Conversion Shares") of HealthCentral
Common Stock, at a conversion ratio specified in the Merger Agreement (the
"Exchange Ratio"). The number of shares of HealthCentral Common Stock to be
received by Vitamins.com stockholders will be based on the average closing
price of HealthCentral Common Stock, as reported on the Nasdaq National Market,
over the ten (10) trading days ending one (1) day prior to the Merger. More
specifically, the consideration or base purchase price will be $103.5 million
paid in the form of HealthCentral common stock and the number of shares issued
to Vitamins.com will be determined by dividing the total purchase price of
$103.5 million by the average closing price as determined above. The number of
shares issued to Vitamins.com will be capped in order to avoid a change in
ownership. The Merger is to be accounted for as a pooling-of-interests and is
to be a tax-free reorganization under Section 368 of the Internal Revenue Code
of 1986, as amended.

Investigation and Analysis

In conducting our investigation and analysis and in arriving at the opinion
set forth below, we reviewed such information and took into account such
financial and economic factors as we deemed relevant under the circumstances.
In that connection, we, among other things: (i) reviewed publicly available
information about Vitamins.com (ii) reviewed publicly available information
about HealthCentral, including but not limited to Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, proxy and other information filed with the
Securities and Exchange Commission, (iii) analyzed information regarding the
market prices of HealthCentral and similar publicly traded companies over
various periods; (iv) analyzed information on publicly-traded comparable
companies; and (v) analyzed information about prices paid in acquisitions of
electronic commerce and drug stores transactions during the period January 1998
through March 10, 2000.

We reviewed with senior management of HealthCentral the state of
HealthCentral's business and operations prepared and furnished to us by the
Company. We held discussions with certain members of HealthCentral's and
Vitamins.com's senior management concerning HealthCentral's and Vitamins.com's
respective historical and current business condition and operating results. We
considered such other information, financial studies, analyses and
investigations and financial, economic and market criteria that we deemed
relevant for the preparation of this opinion. We did not consider any benefits
that may inure to any

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<PAGE>

stockholder of the Company as a result of the Merger or any related
transactions other than in such party's capacity as a stockholder of the
Company.

In arriving at our opinion, we assumed and relied upon the accuracy and
completeness of all of the financial and other information provided to us by or
on behalf of HealthCentral, and all of the publicly available financial and
other information referred to above, and did not attempt independently to
verify any such information. We also assumed, with your consent, that the
Merger would be consummated in accordance with the terms of the Merger
Agreement, without any amendment thereto and without waiver by HealthCentral or
Vitamins.com of any of the conditions to their respective obligations
thereunder. We relied upon assurances of senior management of HealthCentral and
Vitamins.com that such management was unaware of any fact that would make their
respective information provided to us incomplete or misleading.

Our opinion necessarily was based upon economic, monetary and market
conditions as they existed and could be evaluated on the date hereof, and did
not predict or take into account any changes that could have occurred, or
information that could have become available, after the date of our opinion,
including without limitation changes in the terms of the Merger Agreement. It
should be understood that subsequent developments may have affected this
opinion and we do not have any obligation to update, revise or reaffirm this
opinion. Except as noted above, this opinion did not address the relative
merits of the Merger and any other potential transactions or business
strategies considered by the Board of Directors of HealthCentral. We did not
participate in the negotiation of the terms of the Merger, provide any legal
advice or provide any advice with respect to the Merger or any possible
alternatives to the Merger.

PGE received a fee for rendering this written opinion pursuant to the terms
of an engagement letter. PGE and/or its employees may from time to time trade
the securities of HealthCentral for its or their own account/s or the accounts
of PGE's customers and, accordingly, may at any time hold long or short
positions in such securities.

Opinion

Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, the Merger is fair, from a financial point of view, to the
holders of HealthCentral's common stock.

Our opinion was prepared solely for the information of the board of
directors, and may not be used for any other purpose or disclosed to or relied
upon by any other party without the prior written consent of PGE; provided,
however, that if HealthCentral proposes to state in any proxy statement filed
under the Securities Exchange Act of 1934 that PGE rendered this written
opinion and/or describe the conclusions reached herein, PGE's consent shall not
be unreasonably withheld.

Very truly yours,

/s/ Pacific Growth Equities, Inc.

Pacific Growth Equities, Inc.

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[Side 1]

HEALTHCENTRAL.COM
Proxy for Annual Meeting of Stockholders on June 16, 2000
This Proxy is solicited on behalf of the Board of Directors

The undersigned hereby appoints Albert Greene, with the full power of substitution, as proxy for the undersigned to attend the
annual meeting of the Stockholders of HealthCentral.com at the Berkeley Marina Radisson Hotel located at 200 Marina Blvd., Berkeley,
California 94710, on June 16, 2000 at 9:00 a.m. local time, and at any adjournment or postponement thereof, and to vote the number
of shares the undersigned would be entitled to vote if personally present on the matters set forth herein.

MARK HERE [_] IF YOU PLAN TO ATTEND THE MEETING

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3

1. Approval of the merger of HCC Acquisition Corp., a wholly owned subsidiary of HealthCentral.com, with and into Vitamins.com,
Inc. and the issuance of shares pursuant to the merger
<S> <C> <C>
[_] FOR [_] AGAINST [_] ABSTAIN

2. Election of Directors [_] FOR All Nominees Listed Below [_] WITHHOLD AUTHORITY

Annette Campbell-White Robin Wolaner

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.

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

3. Ratification of Appointment of Independent Auditors
<S> <C> <C>
[_] FOR [_] AGAINST [_] ABSTAIN

PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN IMMEDIATELY

[Side 2]

DATE:
----------------------------------

----------------------------------
Signature

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Signature, if held jointly
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