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[DRAFT - 01/11/2005
FOR DISCUSSION PURPOSES ONLY]

                                   EXHIBIT 4.5

                  RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT

            THIS RIGHT OF FIRST REFUSAL AND CO-SALE  AGREEMENT (the "Agreement")
is  made  as of the  28th  day of  January,  2005  by  and  among  PacificHealth
Laboratories,  Inc., a Delaware corporation (the "Company"), the stockholders of
the  Company  listed on  Schedule A hereto  (together  with any  transferee  who
becomes  subject  to the  provisions  hereof  pursuant  to  Section  4, the "Key
Holders")  and the  investors  listed on Schedule B hereto and each other person
who hereafter may become a party hereto pursuant to Sections 5(k) or 5(i) hereof
(each, an "Investor" and, collectively, the "Investors").

            WHEREAS,  the Key Holders are the beneficial owners of the number of
shares of Common Stock of the Company set forth opposite their  respective names
on Schedule A hereto;

            WHEREAS,  the Company and certain of the  Investors  (the  "Series A
Investors") are parties to the Series A Preferred Stock Purchase  Agreement,  of
even date herewith (the  "Purchase  Agreement"),  pursuant to which the Series A
Investors  have agreed to purchase  shares of the  Company's  Series A Preferred
Stock; and

            WHEREAS,  the Key Holders and the Company  desire to further  induce
the Series A Investors to purchase the Series A Preferred Stock;

            NOW,  THEREFORE,  in consideration of the mutual covenants set forth
herein,  and  for  other  good  and  valuable  consideration,  the  receipt  and
sufficiency  of which are  acknowledged,  the  Company,  the Key Holders and the
Investors agree as follows:

            1. Definitions.

                  (a) "Capital  Stock" means (i) shares of Common Stock (whether
now outstanding or hereafter issued in any context), (ii) shares of Common Stock
issued or issuable upon conversion of Preferred Stock and (iii) shares of Common
Stock issued or issuable upon exercise or conversion,  as  applicable,  of stock
options,  warrants or other convertible  securities of the Company, in each case
now owned or  subsequently  acquired by any Key Holder,  any Investor,  or their
respective successors or permitted transferees or assigns.

                  (b)  "Common  Stock"  means  shares  of  Common  Stock  of the
Company.

                  (c) "Company  Notice"  means  written  notice from the Company
notifying the selling Key Holders that it intends to exercise its Right of First
Refusal as to some or all of the Transfer Stock with respect to any Proposed Key
Holder Transfer.

                  (d) "Investor  Notice"  means written  notice from an Investor
notifying the Company and the selling Key Holder that such  Investor  intends to
exercise its Secondary  Refusal Right as to a portion of the Transfer Stock with
respect to any Proposed Key Holder Transfer.

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                  (e) "Investors"  means the persons named on Schedule B hereto,
each person to whom the rights of an Investor are  assigned  pursuant to Section
5(k) and each  person  who  hereafter  becomes  a  signatory  to this  Agreement
pursuant to Section 5(i) and  "Investor"  means any one of them,  as the context
requires.

                  (f) "Key  Holder  Stock"  means any Common  Stock now owned or
subsequently acquired by any Key Holder or his permitted transferees or assigns.

                  (g) "Key Holders" means the persons named on Schedule A hereto
and the  respective  transferees  of such persons' Key Holder Stock  pursuant to
Section 4(a) hereof.

                  (h) "Preferred  Stock" means shares of Preferred  Stock of the
Company.

                  (i)  "Proposed  Key  Holder   Transfer"   means  any  proposed
assignment, sale, offer to sell, pledge, mortgage,  hypothecation,  encumbrance,
disposition  of or any other like transfer or  encumbering  of any Capital Stock
(or any  interest  therein)  proposed by any of the Key Holders;  provided  that
Proposed Key Holder Transfer shall not include any merger, consolidation or like
transfer  effected  pursuant  to a vote of the  holders of Capital  Stock of the
Company.

                  (j) "Proposed Transfer Notice" means written notice from a Key
Holder setting forth the terms and conditions of a Proposed Key Holder Transfer.

                  (k)  "Prospective  Transferee"  means any person to whom a Key
Holder proposes to make a Proposed Key Holder Transfer.

                  (l) "Right of Co-Sale" means the right, but not an obligation,
of an Investor to participate in a Proposed Key Holder Transfer on the terms and
conditions specified in the Proposed Transfer Notice.

                  (m)  "Right  of First  Refusal"  means the  right,  but not an
obligation, of the Company, or its permitted transferees or assigns, to purchase
some  or all of the  Transfer  Stock  with  respect  to a  Proposed  Key  Holder
Transfer, on the terms and conditions specified in the Proposed Transfer Notice.

                  (n)  "Secondary  Notice" means written notice from the Company
notifying  the Investors and the Key Holders that the Company does not intend to
exercise  its Right of First  Refusal  as to all shares of  Transfer  Stock with
respect to any Proposed Key Holder Transfer.

                  (o)  "Secondary  Refusal  Right"  means the right,  but not an
obligation,  of each Investor to purchase up to its pro rata portion (based upon
the total number of shares of Capital  Stock then held by all  Investors) of any
Transfer  Stock not  purchased  pursuant to the Right of First  Refusal,  on the
terms and conditions specified in the Proposed Transfer Notice.

                  (p) "Transfer  Stock" means shares of Capital Stock subject to
a Proposed Key Holder Transfer.

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                  (q)  "Undersubscription  Notice" means written  notice from an
Investor  notifying  the Company  and the selling Key Holder that such  Investor
intends to exercise its option to purchase a portion of the  Transfer  Stock not
purchased pursuant to the Right of First Refusal or the Secondary Refusal Right.

            2. Agreement Among the Company, the Investors and the Key Holders.

                  (a) Right of First Refusal.

                        (1) Grant.  Each Key Holder hereby  unconditionally  and
irrevocably  grants to the Company a Right of First  Refusal to purchase  all or
any portion of Transfer  Stock that such Key Holder may propose to transfer in a
Proposed  Key  Holder  Transfer,  at the same  price  and on the same  terms and
conditions as those offered to the Prospective Transferee.

                        (2) Notice. Each Key Holder proposing to make a Proposed
Key Holder  Transfer must deliver a Proposed  Transfer Notice to the Company and
each Investor not later than fifteen (15) days prior to the consummation of such
Proposed Key Holder  Transfer.  Such Proposed  Transfer Notice shall contain the
material  terms and  conditions  of the  Proposed  Key Holder  Transfer  and the
identity of the Prospective  Transferee.  The Company must exercise its Right of
First Refusal under this Section 2 by giving a Company Notice to the selling Key
Holder within fifteen (15) days after delivery of the Proposed  Transfer Notice.
In the event of a conflict  between this Agreement and any other  agreement that
may have been  entered  into by a Key Holder  with the Company  that  contains a
preexisting  right of first refusal,  the terms of this Agreement  shall control
and the  preexisting  right  of  first  refusal  shall be  deemed  satisfied  by
compliance with this Section 2(a)(1) and (2).  Notwithstanding the foregoing, in
the event of a  contemplated  private  sale  which  would be within  the  volume
limitations of Rule 144(e) if it were a public sale, the fifteen (15) day period
shall be  reduced  to two (2)  business  days  and the  name of the  Prospective
Transferee need not be provided.

                        (3) Grant of Secondary Refusal Right to Investors.  Each
Key Holder  hereby  unconditionally  and  irrevocably  grants to the Investors a
Secondary Refusal Right to purchase all or any portion of the Transfer Stock not
purchased by the Company pursuant to the Right of First Refusal,  as provided in
this  subparagraph  (3). If the Company does not intend to exercise its Right of
Refusal  with  respect to all  Transfer  Stock  subject to a Proposed Key Holder
Transfer,  the Company must deliver a Secondary  Notice to each Investor to that
effect no later than fifteen (15) days after the selling Key Holder delivers the
Proposed  Transfer  Notice to the  Company.  To exercise its  Secondary  Refusal
Right, an Investor must deliver an Investor Notice to the selling Key Holder and
the  Company  within  ten (10)  days  after the  deadline  for  delivery  of the
Secondary Notice.  Notwithstanding the foregoing, in the event of a contemplated
private sale which would be within the volume  limitations  of Rule 144(e) if it
were a public  sale,  the  fifteen  (15) day period  shall be reduced to two (2)
business days and the name of the Prospective Transferee need not be provided.

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                        (4) Forfeiture of Rights. Notwithstanding the foregoing,
if the total  number  of  shares of  Transfer  Stock  that the  Company  and the
Investors  indicate an interest in  purchasing in the Company  Notice,  Investor
Notices and Undersubscription Notices is less than the total number of shares of
Transfer  Stock,  then the  Company  and the  Investors  shall be deemed to have
forfeited any right to purchase the Transfer  Stock,  and the selling Key Holder
shall be free to sell all, but not less than all, of the  Transfer  Stock to the
Prospective  Transferee  (subject  to the other terms and  restrictions  of this
Agreement,  including  without  limitation  the  provisions  of  Section  2(b)),
provided,  that such sale shall be  consummated  within 45 days after receipt of
the Proposed Transfer Notice by the Company.

                        (5)   Consideration;   Closing.   If  the  consideration
proposed to be paid for the  Transfer  Stock is in  property,  services or other
non-cash  consideration,  the fair market  value of the  consideration  shall be
determined in good faith by the Company's Board of Directors.  If the Company or
any Investor  cannot for any reason pay for the Transfer  Stock in the same form
of non-cash  consideration,  the Company or such Investor may pay the cash value
equivalent thereof, as determined by the Board of Directors.  The closing of the
purchase of Transfer  Stock by the Company and the  Investors  shall take place,
and all payments from the Company and the Investors shall have been delivered to
the selling Key Holder,  by the later of (i) the date  specified in the Proposed
Transfer  Notice as the intended  date of the  Proposed Key Holder  Transfer and
(ii) forty-five (45) days after delivery of the Proposed Transfer Notice.

                  (b) Right of Co-Sale.

                        (1) If any  Transfer  Stock  subject to a  Proposed  Key
Holder  Transfer is not purchased  pursuant to Section 2(a) above and thereafter
is to be sold to a Prospective Transferee, each respective Investor may elect to
exercise  its  Right of  Co-Sale  and  participate  on a  pro-rata  basis in the
Proposed Key Holder  Transfer on the same terms and conditions  specified in the
Proposed  Transfer  Notice.  Each  Investor who desires to exercise its Right of
Co-Sale must give the selling Key Holder  written  notice to that effect  within
five (5) days after the deadline for delivery of the Investor  Notice  described
above,  and upon  giving  such  notice  such  Investor  shall be  deemed to have
effectively exercised the Right of Co-Sale.

                        (2) Each Investor who timely  exercises  his, her or its
Right of Co-Sale by delivering the written notice  provided for above in Section
2(b)(1) may include in the Proposed Key Holder  Transfer all or any part of his,
her or its Capital Stock equal to the product  obtained by  multiplying  (i) the
aggregate  number of shares of Key  Holder  Stock  subject to the  Proposed  Key
Holder  Transfer  (excluding  shares  purchased by the Company or the  Investors
pursuant to the Right of First Refusal or the Secondary Refusal Right) by (ii) a
fraction,  the numerator of which is the number of shares of Capital Stock owned
by such  Investor  immediately  before  consummation  of the Proposed Key Holder
Transfer  (including any shares purchased by such time pursuant to the Secondary
Refusal  Right) and the  denominator  of which is the total  number of shares of
Capital Stock owned, in the aggregate, by all Investors immediately prior to the
consummation of the Proposed Key Holder Transfer (including any shares purchased
by such time pursuant to the Secondary  Refusal Right) plus the number of shares
of Capital  Stock held by the selling  Key Holder.  To the extent one or more of
the Investors  exercise such right of participation in accordance with the terms
and conditions set

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forth herein,  the number of shares of Capital Stock that the selling Key Holder
may sell in the Proposed Key Holder Transfer shall be correspondingly reduced.

                        (3) Each Investor shall effect its  participation in the
Proposed Key Holder Transfer by delivering to the  transferring  Key Holder,  no
later than  fifteen  (15) days after such  Investor's  exercise  of the Right of
Co-Sale,  one or more stock certificates,  properly endorsed for transfer to the
Prospective Transferee, representing:

                              (i) the number of shares of Common Stock that such
      Investor elects to include in the Proposed Key Holder Transfer; or

                              (ii) the number of shares of Preferred  Stock that
      is at such time convertible into the number of shares of Common Stock that
      such  Investor  elects to include  in the  Proposed  Key Holder  Transfer;
      provided,  however,  that if the  Prospective  Transferee  objects  to the
      delivery of  convertible  Preferred  Stock in lieu of Common  Stock,  such
      Investor  shall first  convert the  Preferred  Stock into Common Stock and
      deliver  Common Stock as provided  above.  The Company  agrees to make any
      such conversion concurrent with and contingent upon the actual transfer of
      such shares to the Prospective Transferee.

                        (4) The terms and  conditions  of any sale  pursuant  to
this Section 2(b) will be memorialized  in, and governed by, a written  purchase
and sale agreement with customary terms and provisions for such a transaction.

                        (5) Each stock  certificate an Investor  delivers to the
selling Key Holder pursuant to subparagraph (3) above will be transferred to the
Prospective  Transferee  against payment therefor in consummation of the sale of
the  Transfer  Stock  pursuant  to the terms  and  conditions  specified  in the
Proposed  Transfer Notice and the purchase and sale  agreement,  and the selling
Key Holder shall  concurrently  therewith  remit to each Investor the portion of
the  sale  proceeds  to  which  such  Investor  is  entitled  by  reason  of its
participation  in  such  sale.  If any  Prospective  Transferee  or  Transferees
refuse(s)  to  purchase  securities  subject  to the Right of  Co-Sale  from any
Investor  exercising its Right of Co-Sale hereunder,  no Key Holder may sell any
Key Holder Stock to such Prospective  Transferee or Transferee unless and until,
simultaneously  with such sale, such Key Holder purchases all securities subject
to the Right of Co-Sale from such Investor.

                        (6)  If  any  Proposed   Key  Holder   Transfer  is  not
consummated  within  forty-five (45) days after receipt of the Proposed Transfer
Notice by the  Company,  the Key  Holders  proposing  the  Proposed  Key  Holder
Transfer  may not sell any Key  Holder's  Stock unless they first comply in full
with each  provision of this Section 2. The exercise or election not to exercise
any right by any  Investor  hereunder  shall not  adversely  affect its right to
participate in any other sales of Transfer Stock subject to this Section 2(b).

                  (c) Effect of Failure to Comply.

                        (1)  Any  Proposed  Key  Holder  Transfer  not  made  in
compliance  with the  requirements  of this Agreement  shall be null and void ab
initio,  shall not be recorded on the books of the Company or its transfer agent
and shall not be recognized by the

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Company.  Each party  hereto  acknowledges  and  agrees  that any breach of this
Agreement would result in substantial harm to the other parties hereto for which
monetary damages alone could not adequately compensate.  Therefore,  the parties
hereto unconditionally and irrevocably agree that any non-breaching party hereto
shall be  entitled  to seek  protective  orders,  injunctive  relief  and  other
remedies available at law or in equity (including,  without limitation,  seeking
specific  performance or the rescission of purchases,  sales and other transfers
of Capital Stock not made in strict compliance with this Agreement).

                        (2) If any Key  Holder  becomes  obligated  to sell  any
Capital  Stock to the Company  under this  Agreement  and fails to deliver  such
Capital Stock in accordance with the terms of this  Agreement,  the Company may,
at its option,  in addition to all other remedies it may have,  send to such Key
Holder the purchase  price for such  Capital  Stock as is herein  specified  and
cancel on its books the  certificate or  certificates  representing  the Capital
Stock to be sold.

                        (3) If any Key Holder purports to sell any Capital Stock
in  contravention  of the  Right of  Co-Sale  (a  "Prohibited  Transfer"),  each
Investor,  in addition to such remedies as may be available by law, in equity or
hereunder,  is entitled to require such Key Holder to purchase shares of Capital
Stock from such Investor,  as provided below,  and such Key Holder will be bound
by the terms of such option. If a Key Holder makes a Prohibited  Transfer,  each
Investor who timely  exercises  his, her or its Right of Co-Sale  under  Section
2(b) may require  such Key Holder to purchase  from such  Investor  the type and
number of shares of Capital Stock that such Investor would have been entitled to
sell to the  Prospective  Transferee  under  Section  2(b)  had  the  Prohibited
Transfer been effected  pursuant to and in compliance  with the terms of Section
2(b). The sale will be made on the same terms and subject to the same conditions
as would  have  applied  had the Key Holder  not made the  Prohibited  Transfer,
except  that  the sale  (including,  without  limitation,  the  delivery  of the
purchase  price) must be made within ninety (90) days after the Investor  learns
of the Prohibited  Transfer,  as opposed to the timeframe  proscribed in Section
2(b).  Such Key Holder shall also  reimburse  each Investor for any and all fees
and  expenses,  including  legal fees and  expenses,  incurred  pursuant  to the
exercise or the attempted exercise of the Investor's rights under Section 2(b).

                  (d) Voting.  Each Key Holder  hereby agrees with the Investors
that it will vote its Common  Stock in favor of (i) a Deemed  Liquidation  Event
(as  defined in the  Certificate  of  Incorporation  of the  Company)  or (ii) a
transaction  in which  fifty  percent  (50%) or more of the voting  power of the
Company is transferred,  such Deemed  Liquidation  Event or transfer having been
approved  by the Board of  Directors  and by the  holders of Series A  Preferred
Stock.

            3. Exempt Transfers.

                  (a)  Notwithstanding the foregoing or anything to the contrary
herein,  the  provisions of Sections  2(a) and 2(b) shall not apply:  (i) in the
case of a Key Holder  that is an entity,  upon a transfer  by such Key Holder to
its  stockholders,  members,  partners  or  other  equity  holders,  (ii)  to  a
repurchase  of  Capital  Stock  from a Key  Holder by the  Company at a price no
greater than that  originally paid by such Key Holder for such Capital Stock and
pursuant  to  an  agreement  containing  vesting  and/or  repurchase  provisions
approved by a majority of the Board

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of  Directors,  or (iii) in the case of a Key Holder  that is a natural  person,
upon a transfer of Capital  Stock by such Key Holder,  either  during his or her
lifetime  or on death by will or  intestacy  to his or her  siblings,  children,
grandchildren,  spouse or any other relatives approved by the Board of Directors
of the Company, or any custodian or trustee for the account of a Key Holder or a
Key Holder's siblings,  children,  grandchildren or spouse,  provided,  however,
notwithstanding  any such permitted  transfer,  such  transferred  Capital Stock
shall remain Capital Stock for all purposes hereunder, and such transferee shall
be  treated  as a Key  Holder  (but  only  with  respect  to the  securities  so
transferred to the transferee) for all purposes of this Agreement (including the
obligations  of a Key Holder with  respect to Proposed  Key Holder  Transfers of
such Capital Stock pursuant to Section 2).

                  (b)  Notwithstanding the foregoing or anything to the contrary
herein,  the  provisions  of  Section  2 shall  not apply to (i) the sale of any
Capital Stock to the public in an offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended (a "Public  Offering") or
(ii) the sale by the Key Holder of up to 1% of the  outstanding  Common Stock of
the  Company  in any  three  (3)  month  period  pursuant  to Rule 144 under the
Securities Exchange Act of 1934, as amended.

            4. Legend.

                  (a) Each certificate representing shares of Capital Stock held
by the Key Holders or issued to any permitted  transferee  in connection  with a
transfer  permitted  by Section 3 hereof  shall be endorsed  with the  following
legend:

            THE  SALE,  PLEDGE,  HYPOTHECATION  OR  TRANSFER  OF THE  SECURITIES
            REPRESENTED BY THIS  CERTIFICATE IS SUBJECT TO, AND IN CERTAIN CASES
            PROHIBITED  BY, THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST
            REFUSAL  AND CO-SALE  AGREEMENT  BY AND AMONG THE  STOCKHOLDER,  THE
            CORPORATION  AND CERTAIN OTHER HOLDERS OF STOCK OF THE  CORPORATION.
            COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
            SECRETARY OF THE CORPORATION.

                  (b) Each Key Holder  agrees that the Company may  instruct its
transfer  agent to impose  transfer  restrictions  on the shares  represented by
certificates bearing the legend referred to in Section 4(a) above to enforce the
provisions  of this  Agreement,  and the  Company  agrees to promptly do so. The
legend shall be removed upon termination of this Agreement at the request of the
holder.

            5. Miscellaneous.

                  (a) Term.  This Agreement  shall terminate upon the earlier of
(i)  immediately  prior  to the  Company's  first  Public  Offering),  (ii)  the
occurrence  of a Deemed  Liquidation  Event (as  defined in the  Certificate  of
Incorporation  of the  Company),  and (iii) the transfer of more than 50% of the
Company's voting power to another party.

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                  (b) Stock Split.  All  references to numbers of shares in this
Agreement shall be appropriately adjusted to reflect any stock dividend,  split,
combination  or other  recapitalization  affecting the Capital  Stock  occurring
after the date of this Agreement.

                  (c) Ownership. Each Key Holder represents and warrants that he
is the sole legal and beneficial owner of the shares of Key Holder Stock subject
to this  Agreement  and that no other  person has any  interest  in such  shares
(other than a  community  property  interest as to which the holder  thereof has
acknowledged   and  agreed  in  writing  to  the  restrictions  and  obligations
hereunder).

                  (d) Dispute  Resolution.  Any unresolved  controversy or claim
arising out of or relating to this Agreement,  except as (i) otherwise  provided
in this  Agreement,  or (ii) any such  controversies  or claims  arising  out of
either party's  intellectual  property rights for which a provisional  remedy or
equitable relief is sought,  shall be submitted to arbitration by one arbitrator
mutually  agreed upon by the parties,  and if no agreement can be reached within
30 days after names of potential  arbitrators have been proposed by the American
Arbitration  Association (the "AAA"),  then by one arbitrator  having reasonable
experience in corporate  finance  transactions  of the type provided for in this
Agreement  and who is chosen by the AAA.  The  arbitration  shall  take place in
Newark,  New  Jersey,  in  accordance  with the AAA rules  then in  effect,  and
judgment upon any award rendered in such  arbitration will be binding and may be
entered  in any  court  having  jurisdiction  thereof.  There  shall be  limited
discovery prior to the arbitration  hearing as follows:  (a) exchange of witness
lists and copies of  documentary  evidence and documents  relating to or arising
out of the issues to be arbitrated,  (b)  depositions of all party witnesses and
(c) such other  depositions as may be allowed by the arbitrators  upon a showing
of good cause.  Depositions shall be conducted in accordance with the New Jersey
Code of Civil Procedure,  the arbitrator shall be required to provide in writing
to the parties the basis for the award or order of such arbitrator,  and a court
reporter shall record all hearings,  with such record  constituting the official
transcript  of such  proceedings.  The  prevailing  party  shall be  entitled to
reasonable  attorney's fees,  costs, and necessary  disbursements in addition to
any other  relief to which such party may be  entitled.  Each of the  parties to
this Agreement consents to personal jurisdiction for any equitable action sought
in the U.S.  District  Court for the  District of New Jersey or any court of the
State of New Jersey having subject matter jurisdiction.

                  (e)  Notices.  All notices and other  communications  given or
made  pursuant  to this  Agreement  shall be in  writing  and  shall  be  deemed
effectively  given: (a) upon personal delivery to the party to be notified,  (b)
when sent by  confirmed  electronic  mail or  facsimile  if sent  during  normal
business  hours  of the  recipient,  and if not so  confirmed,  then on the next
business  day,  (c)  five (5) days  after  having  been  sent by  registered  or
certified mail, return receipt  requested,  postage prepaid,  or (d) one (1) day
after deposit with a nationally  recognized  overnight courier,  specifying next
day delivery,  with written verification of receipt. All communications shall be
sent to the  respective  parties at their  address as set forth on Schedule A or
Schedule  B hereof,  as the case may be,  or to such  email  address,  facsimile
number or address as subsequently modified by written notice given in accordance
with this Section.  If notice is given to the Company, a copy shall also be sent
to Gary A. Miller,  Eckert  Seamans  Cherin & Mellott,  LLC, 1515 Market Street,
Ninth  Floor,  Philadelphia,  Pennsylvania  19102  and if notice is given to the
Investors, a copy shall also be given to Kimberley R. Anderson, Dorsey & Whitney
LLP, 1420 Fifth Avenue, Suite 3400, Seattle, WA 98101.

<PAGE>

                  (f) Entire Agreement.  This Agreement  (including the Exhibits
hereto,  if any), the Certificate of  Incorporation of the Company and the other
Transaction  Agreements  (as defined in the Purchase  Agreement)  constitute the
full and entire  understanding and agreement between the parties with respect to
the subject matter hereof,  and any other written or oral agreement  relating to
the subject matter hereof existing between the parties are expressly canceled.

                  (g) Delays or Omissions.  No delay or omission to exercise any
right,  power or remedy  accruing  to any party under this  Agreement,  upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such  non-breaching or non-defaulting  party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein,  or of or in any similar breach or default  thereafter  occurring;  nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default  theretofore  or  thereafter  occurring.  Any waiver,  permit,
consent or  approval  of any kind or  character  on the part of any party of any
breach or default under this  Agreement,  or any waiver on the part of any party
of any provisions or conditions of this Agreement,  must be in writing and shall
be effective  only to the extent  specifically  set forth in such  writing.  All
remedies,  either under this  Agreement  or by law or otherwise  afforded to any
party, shall be cumulative and not alternative.

                  (h)  Amendment.  This Agreement may be amended or modified and
the  observance  of any term  hereof  may be waived  (either  generally  or in a
particular instance and either retroactively or prospectively) only by a written
instrument  executed by (i) the Key Holders  holding 66% of the Shares then held
by the Key  Holders  and (ii) the  holders of 66% of the shares of Common  Stock
issued or issuable upon  conversion of the Series A Preferred  Stock held by the
Investors (voting as a single class and on an as-converted basis). Any amendment
or waiver so effected shall be binding upon the Company, the Investors,  the Key
Holders and all of their respective  successors and permitted assigns whether or
not such party,  assignee or other  shareholder  entered  into or approved  such
amendment or waiver.

                  (i) Transfers, Successors and Assigns.

                        (1) The terms and  conditions  of this  Agreement  shall
inure to the  benefit  of and be  binding  upon the  respective  successors  and
assigns of the  parties.  Nothing in this  Agreement,  express  or  implied,  is
intended  to  confer  upon any  party  other  than the  parties  hereto or their
respective  successors  and  assigns  any  rights,  remedies,   obligations,  or
liabilities under or by reason of this Agreement,  except as expressly  provided
in this Agreement.

                        (2)  The  rights  of the  Investors  hereunder  are  not
assignable without the Company's written consent, except by each Investor to any
stockholder of such Investor or to an entity or entities controlled by, or under
common control with,  such Investor.  Except as expressly set forth herein or in
connection with an assignment by the Company by operation of law to the acquirer
of the  Company,  the rights and  obligations  of the Company  and the  Founders
hereunder may not be assigned under any circumstances.

                  (j) Severability.  The invalidity of  unenforceability  of any
provision  hereof shall in no way affect the validity or  enforceability  of any
other provision.

<PAGE>

                  (k)  Additional  Investors.  Notwithstanding  anything  to the
contrary  contained  herein,  if the  Company  issues  additional  shares of the
Company's Series A Preferred Stock after the date hereof,  any purchaser of such
shares  of Series A  Preferred  Stock may  become a party to this  Agreement  by
executing  and  delivering  an  additional  counterpart  signature  page to this
Agreement  and  thereafter  shall  be  deemed  an  "Investor"  for all  purposes
hereunder.

                  (l)  Governing  Law. This  Agreement  shall be governed by and
construed  in  accordance  with  the  General  Corporation  Law of the  State of
Delaware as to matters  within the scope  thereof,  and as to all other  matters
shall be governed by and construed in  accordance  with the internal laws of the
State of New Jersey, without regard to its principles of conflicts of laws.

                  (m) Titles and  Subtitles.  The titles and  subtitles  used in
this  Agreement  are used for  convenience  only and are not to be considered in
construing or interpreting this Agreement.

                  (n)  Counterparts.  This  Agreement  may be executed in two or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute one and the same  instrument.  This Agreement may also
be  executed  and   delivered  by  facsimile   signature  and  in  two  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

                  (o) Aggregation of Stock.  All shares of Capital Stock held or
acquired by affiliated  entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.  For
purposes  hereof,  an  "Affiliated  Entity" of an Investor  means any general or
limited  partner of any Investor that is a partnership,  or any person or entity
that, directly or indirectly,  through one or more intermediaries,  controls, or
is controlled by, or is under common control with, such Investor.

                  (p)  Consent  of  Spouse.  If any Key Holder is married on the
date of this  Agreement,  such Key Holder's  spouse shall execute and deliver to
the  Company a consent  of spouse in the form of Exhibit A hereto  ("Consent  of
Spouse"),  effective  on the date  hereof.  Notwithstanding  the  execution  and
delivery  thereof,  such consent  shall not be deemed to confer or convey to the
spouse  any  rights in such Key  Holder's  shares of  Capital  Stock that do not
otherwise exist by operation of law or the agreement of the parties.  If any Key
Holder should marry or remarry  subsequent to the date of this  Agreement,  such
Key Holder shall within thirty (30) days thereafter  obtain his/her new spouse's
acknowledgement  of and  consent  to the  existence  and  binding  effect of all
restrictions  contained in this  Agreement by causing such spouse to execute and
deliver a Consent  of Spouse  acknowledging  the  restrictions  and  obligations
contained in this Agreement and agreeing and consenting to the same.

                  [Remainder of Page Intentionally Left Blank]

<PAGE>

            IN WITNESS  WHEREOF,  the parties have executed this Agreement as of
the date first above written.

                                        PACIFICHEALTH LABORATORIES, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________
                                        Address: _______________________________
                                                 _______________________________


                                        KEY HOLDERS:

                                        DR. ROBERT PORTMAN

                                        By: ____________________________________
                                        Name: __________________________________

                                        Address: _______________________________
                                                 _______________________________


                                        INVESTORS:

                                        HORMEL HEALTH LABS, LLC

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________
                                        Address: _______________________________
                                                 _______________________________

<PAGE>

                                   SCHEDULE A
                                   KEY HOLDERS

Name and Address                        Number of Shares Held
----------------                        ---------------------

Dr. Robert Portman
247 Kemp Ave
Fair Haven, NJ 07704

<PAGE>

                                   SCHEDULE B
                                    INVESTORS

Name and Address                        Number of Shares Held
----------------                        ---------------------

Hormel Health Labs, LLC                        90,909

<PAGE>

                                    EXHIBIT A
                                CONSENT OF SPOUSE

      I, ______________________,  spouse of Dr. Robert Portman, acknowledge that
I have  read the  Right of First  Refusal  and  Co-Sale  Agreement,  dated as of
January  28,  2005  to  which  this  Consent  is  attached  as  Exhibit  A  (the
"Agreement"), and that I know the contents of the Agreement. I am aware that the
Agreement contains provisions  regarding certain rights to certain other holders
of Capital Stock of the Company upon a Proposed Key Holder Transfer of shares of
Capital  Stock of the company  which my spouse may own  including any interest I
might have therein.

      I hereby agree that my interest, if any, in any shares of Capital Stock of
the Company subject to the Agreement shall be irrevocably bound by the Agreement
and further understand and agree that any community property interest I may have
in such shares of Capital Stock of the Company  shall be similarly  bound by the
Agreement.

      I am aware that the legal,  financial and related matters contained in the
Agreement  are  complex  and  that I am free to  seek  independent  professional
guidance or counsel  with  respect to this  Consent.  I have either  sought such
guidance or counsel or determined after reviewing the Agreement carefully that I
will waive such right.

Dated as of the 28th day of January, 2005.


                                        ______________________________
                                        Signature

                                        ______________________________
                                        Print Name