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                            ASSET PURCHASE AGREEMENT





      This ASSET PURCHASE AGREEMENT ("Agreement") dated June 30, 2005, by and

between SCHREIBER FOODS, INC., a Wisconsin corporation ("Purchaser") and GALAXY

NUTRITIONAL FOODS, INC., a Delaware corporation ("Seller").



      WHEREAS, Seller produces certain imitation dairy products at a facility

located in Orlando, Florida (the "Facility"); and



      WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to

purchase from Seller the Purchased Assets, according to the terms and conditions

set forth in this Agreement.



      NOW, THEREFORE, in consideration of the mutual representations,

warranties, covenants, and agreements contained herein, the parties hereto agree

as follows:



A.    Definitions.



      1.    Agreement. This Asset Purchase Agreement.



      2.    Bill of Sale. The document delivered by the Seller to the Purchaser

            under which Seller shall convey to Purchaser title to the Purchased

            Assets in the form of Exhibit A.2 hereto.



      3.    Closing. The consummation of the transactions contemplated hereby as

            set forth in Section D hereof.



      4.    Closing Date. November 1, 2005, effective as of 12:01 a.m., Central

            Standard Time, or, if later, the date that is three (3) business

            days after the date on which all conditions to closing specified in

            Sections D.2 and D.3 have been satisfied or waived.



      5.    Fixed Assets. Those assets set forth on Exhibit A.5.



      6.    Governmental Approvals. Any order, permission, consent, approval,

            license, authorization, registration, or validation of, or filing

            with, or exemption by any governmental agency, commission, board or

            public authority in connection with the sale of the Purchased Assets

            from Seller to Purchaser, or the execution, delivery or performance

            by the Seller of this Agreement or any other agreement or instrument

            to be executed or delivered by Seller hereunder.



      7.    Material Adverse Effect. An effect that is reasonably likely to

            result in a material diminution in value of the Purchased Assets

            (excluding, however, any such Material Adverse Effect which results

            from any announcement of the transactions contemplated by this

            Agreement, which includes the effect of any announcement on any

            customers, suppliers or employees, and general economic conditions).

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      8.    Ordinary Course. With respect to the Seller's operations at the

            Facility, the ordinary course of commercial operations customarily

            engaged in by the Seller.



      9.    OSHA. The Federal Occupational Safety and Health Act of 1970.



      10.   Purchase Price. Eight Million Seven Hundred Thousand Dollars

            ($8,700,000.00).



      11.   Purchased Assets. The Fixed Assets and all books and records related

            thereto.



      12.   Removal Plan. The Asset Removal Agreement in the form of Exhibit

            A.12 hereto describing the process and procedures for removing the

            Fixed Assets from the Facility.



      13.   Seller Liabilities. As defined in Section H.2(a).



      14.   Supply Agreement. The Supply Agreement between Seller and Purchaser

            dated as of the date hereof.



B.    Purchase and Sale of Assets.



      1.    Assets Being Purchased and Sold. Pursuant to the terms and

            conditions provided herein, and in consideration of the covenants,

            conditions and agreement of Purchaser contained herein, Seller shall

            sell, convey, assign, and transfer to Purchaser, and Purchaser shall

            purchase and acquire from Seller, the Purchased Assets.



      2.    Assumed Liabilities. The Purchaser shall not assume or be obligated

            for any liability, obligation or commitment of Seller, direct or

            indirect, known or unknown, absolute or contingent (the "Pre-Closing

            Liabilities").



C.    Purchase Price/Payment.



1.    Amount. In reliance on the representations and warranties made herein by

      Seller, subject to the terms and conditions of Section I, Purchaser agrees

      to pay Seller the Purchase Price.

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