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      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;&lt;b&gt;2.

      Private Placement&lt;/b&gt;&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: left; LINE-HEIGHT: 1.25; MARGIN: 0pt" id="PARA1652"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;On

      February 16, 2012, the Company entered into a purchase

      agreement (the &amp;#8220;Purchase Agreement&amp;#8221;) by and among

      Vitacost, JHH Capital, LLC, an entity affiliated with Jeffrey

      Horowitz, our Chief Executive Officer (&amp;#8220;JHH&amp;#8221;),

      Great Hill Equity Partners III, L.P. (&amp;#8220;Great Hill

      III&amp;#8221;), Great Hill Equity Partners IV, L.P.

      (&amp;#8220;Great Hill IV&amp;#8221;), Great Hill Investors, LLC

      (&amp;#8220;Great Hill Investors&amp;#8221;), Freshford Partners, LP

      (&amp;#8220;Freshford Partners&amp;#8221;), Freshford Master Fund,

      Ltd (&amp;#8220;Freshford Master Fund&amp;#8221;) and Baron Small Cap

      Fund (&amp;#8220;Baron&amp;#8221; and, together with JHH, Great Hill

      III, Great Hill IV, Great Hill Investors, Freshford Partners,

      Freshford Master Fund, collectively, the

      &amp;#8220;Investors&amp;#8221;) pursuant to which the Investors

      purchased, and Vitacost sold, an aggregate of 4.9 million

      shares of the Company&amp;#8217;s common stock at a purchase

      price of $7.04 per share, and warrants to purchase an

      aggregate of 1.7 million shares of the Company&amp;#8217;s common

      stock for an aggregate purchase price of $34.8 million. The

      warrants have an exercise price of $7.04 per share and a term

      of four years. The net proceeds of $33.6 million, after the

      deduction of fees of $1.2 million incurred in connection with

      the transaction, were allocated between common stock and

      warrants based on their relative fair values as of the

      purchase date.&lt;/font&gt;

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