Document:

EXHIBIT 4.4

                 Registration Rights Agreement among Registrant,
         Stonestreet Limited Partnership, Excalibur Limited Partnership,
               Stonestreet Corporation and H&H Securities Limited,
                               dated June 28, 2002

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                          REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"),  is made and entered
into as of June 28,  2002,  by and  among  Galaxy  Nutritional  Foods,  Inc.,  a
Delaware  corporation,  with headquarters located at 2441 Viscount Row, Orlando,
Florida  32809  (the  "COMPANY"),  Stonestreet  Limited  Partnership  ("BUYER"),
Excalibur Limited Partnership ("EXCALIBUR"), and Stonestreet Corporation and H&H
Securities Limited (each a "FINDER" and together, the "Finders").

     WHEREAS:

     A. In connection with the Common Stock and Warrants  Purchase  Agreement by
and  between  the Company  and the Buyer of even date  herewith  (the  "PURCHASE
AGREEMENT"),  the  Company  has  agreed,  upon  the  terms  and  subject  to the
conditions of the Purchase Agreement,  to issue and sell to the Buyer (i) shares
(the "COMMON Shares") of the Company's  common stock,  $0.01 par value per share
(the "COMMON  STOCK"),  and (ii) warrants (the "WARRANTS") to purchase shares of
Common Stock (as issued upon exercise of the Warrants, the "WARRANT SHARES"), as
set forth on the Schedule of Investors attached hereto;

     B. In connection  with the Company's  issuance to Excalibur of that certain
Promissory Note dated June 26, 2002 (the "BRIDGE  NOTE"),  the Company issued to
Excalibur a warrant (the "BRIDGE  WARRANT") to purchase  30,000 shares of Common
Stock (as issued upon exercise of such warrant,  the ("BRIDGE SHARES")),  as set
forth on the Schedule of Investors attached hereto;

     C.  As  payment  of  fees  owed  to the  Finders  in  connection  with  the
transactions  contemplated under the Purchase Agreement,  the Company has agreed
to (i)  issue to H&H  Securities  Limited  the H&H  Shares  (as  defined  in the
Purchase Agreement),  and (ii) issue to Stonestreet  Corporation the Stonestreet
Shares (as defined in the Purchase  Agreement),  as set forth on the Schedule of
Investors attached hereto; and

     D. To induce the Buyer to execute and deliver the Purchase Agreement and to
induce  Excalibur to loan the funds  represented by the Bridge Note, the Company
has agreed to provide  certain  registration  rights under the Securities Act of
1933,  as  amended,  and the rules and  regulations  thereunder,  or any similar
successor  statute   (collectively,   the  "1933  ACT"),  and  applicable  state
securities laws.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged,  the Company, Buyer, Excalibur and
the Finders hereby agree as follows:

     1.   DEFINITIONS.
          -----------

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     As used in this  Agreement,  the  following  terms shall have the following
meanings:

     a. "INVESTOR" means Buyer,  Excalibur or a Finder, any permitted transferee
or assignee  thereof who purchases at least $150,000 of  Registrable  Securities
and to whom Buyer, Excalibur or a Finder assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance
with  Section 9 and any  permitted  transferee  or  assignee  thereof  to whom a
transferee or assignee assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9.

     b.  "PERSON"  means  a  corporation,   a  limited  liability  company,   an
association,  a partnership,  an  organization,  a business,  an  individual,  a
governmental or political subdivision thereof or a governmental agency.

     c. "REGISTER,"  "REGISTERED,"  and  "REGISTRATION"  refer to a registration
effected by preparing and filing one or more Registration Statements (as defined
below) in  compliance  with the 1933 Act and pursuant to Rule 415 under the 1933
Act or any  successor  rule  providing  for offering  securities on a continuous
basis ("RULE 415"),  and the  declaration or ordering of  effectiveness  of such
Registration   Statement(s)  by  the  United  States   Securities  and  Exchange
Commission (the "SEC").

     d. "REGISTRABLE SECURITIES" means (i) the Common Shares, the Bridge Shares,
the H&H Shares,  the Stonestreet  Shares,  any shares  issuable  pursuant to the
antidilution  provisions  of the  Purchase  Agreement,  and the Warrant  Shares,
whether  issued or  issuable  and (ii) any  shares of  capital  stock  issued or
issuable  with respect to the  foregoing  as a result of any stock split,  stock
dividend, recapitalization,  anti-dilution adjustment, exchange or similar event
or otherwise, without regard to any limitation on exercise of the Warrants.

     e. "REGISTRATION  STATEMENT" means a registration statement or registration
statements  of the  Company  filed  under the 1933 Act in which any  Registrable
Securities are included.

     2.   REGISTRATION.
          ------------

     a.  MANDATORY  REGISTRATION.  The Company  shall  prepare,  and, as soon as
practicable,  but in no event  later than July 30, 2002 (the  "SCHEDULED  FILING
DATE"),  file with the SEC a Registration  Statement or Registration  Statements
(as is  necessary)  on Form S-3  covering  the resale of all of the  Registrable
Securities;  provided, however, the Company may extend the Scheduled Filing Date
for up to 30 days in order to  accommodate  its further  financing  plans and to
include selling stockholders from such financing in the Registration  Statement.
In the event that Form S-3 is unavailable  for such  registrations,  the Company
shall use such other form as is available for such registrations, subject to the
provisions of Section 2.e. Any Registration  Statement  prepared pursuant hereto
shall  register for resale at least 125% of the number of shares of Common Stock
equal to the number of Registrable Securities issued and issuable at the

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Closing (as defined in the Purchase  Agreement).  The Company shall use its best
efforts to have each  Registration  Statement  declared  effective by the SEC as
soon as  practicable,  but in no event later than one hundred  twenty (120) days
from the date hereof (the "SCHEDULED EFFECTIVE DATE").

     The Investors  acknowledge that the Company may, at its option,  include in
any  Registration  Statement  filed under this Section 2.a, Common Stock held by
other  Persons.  If the Company  elects to include  such other Common Stock such
Registration  Statement and if a registration pursuant to this Section 2.a is to
be an underwritten  public offering and the managing  underwriter(s)  advise the
Company in writing,  that in their  reasonable good faith opinion,  marketing or
other factors  dictate that a limitation on the number of shares of Common Stock
which may be included in the  registration  statement is necessary to facilitate
and not adversely affect the proposed  offering,  then the Company shall include
in such registration:

     (1)  first,   all   Registrable   Securities   (plus  any  securities  with
          registration  rights  issued prior to expiration of the MFN Period (as
          defined in the Purchase Agreement); and

     (2)  second, the securities requested to be registered by the other holders
          of securities  entitled to participate in the registration,  as of the
          date  hereof,  drawn from them pro rata  based on the number  each has
          requested to be included in such registration.

     In the event that the  Company is engaged  in  material  negotiations  with
respect to the potential sale of the Company or the sale of substantially all of
the Company's  assets,  the Company may, upon written  notice to the  Investors,
extend the Scheduled Filing Date; PROVIDED,  HOWEVER,  that in no event will the
extension of the Scheduled  Filing Date relieve the Company of its obligation to
pay any amounts due upon the occurrence of a Registration Default as provided in
Section 3.v hereof.

     b. PIGGY-BACK REGISTRATIONS.  If at any time prior to the expiration of the
Registration  Period (as hereinafter  defined) the Company proposes to file with
the SEC a registration  statement relating to an offering for its own account or
the account of others under the 1933 Act of any of its securities  (other than a
registration  statement  on Form S-4 or Form S-8 (or their  equivalents  at such
time)  relating  to  securities  to be  issued  solely  in  connection  with any
acquisition  of  any  entity  or  business  or  equity  securities  issuable  in
connection  with stock option or other employee  benefit plans or a registration
statement on any  registration  form that does not permit  secondary  sales) the
Company shall  promptly send to each  Investor  written  notice of the Company's
intention to file a registration  statement and of such Investor's  rights under
this Section 2.b and, if within  twenty (20) days after  receipt of such notice,
such  Investor  shall so request in writing,  the Company  shall include in such
registration  statement  all or any  part  of the  Registrable  Securities  such
Investor requests to be registered,  subject to the priorities set forth in this
Section 2.b below. No right to registration of Registrable Securities under this
Section 2.b shall be construed to limit any registration  required under Section
2.a.  The  obligations  of the Company  under this  Section 2.b may be waived by
Investors holding eighty percent (80%) of the

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Registrable  Securities.  If an offering in connection with which an Investor is
entitled to  registration  under this Section 2.b is an  underwritten  offering,
then  each  Investor   whose   Registrable   Securities  are  included  in  such
registration  statement shall, unless otherwise agreed to by the Company,  offer
and sell such Registrable  Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and  conditions as other shares of Common Stock  included in such
underwritten  offering.  If a registration pursuant to this Section 2.b is to be
an  underwritten  public  offering  and the managing  underwriter(s)  advise the
Company in writing,  that in their  reasonable good faith opinion,  marketing or
other factors  dictate that a limitation on the number of shares of Common Stock
which may be included in the  registration  statement is necessary to facilitate
and not adversely affect the proposed  offering,  then the Company shall include
in such registration:

     (1) first, all securities the Company proposes to sell for its own account;

     (2) second,  up to the full number of securities  proposed to be registered
for the account of the holders of  securities  entitled  to  inclusion  of their
securities  in the  registration  statement  by reason  of  demand or  mandatory
registration rights; and

     (3) third,  the securities  requested to be registered by the Investors and
other holders of securities  entitled to participate in the registration,  as of
the date hereof, drawn from them pro rata based on the number each has requested
to be included in such registration.

     c. ALLOCATION OF REGISTRABLE SECURITIES.  The initial number of Registrable
Securities  included  in any  Registration  Statement  and each  increase in the
number of Registrable  Securities  included  therein shall be allocated pro rata
among the Investors  based on the number of Registrable  Securities held by each
Investor at the time the Registration  Statement covering such initial number of
Registrable  Securities or increase thereof is declared effective by the SEC. In
the event that an Investor sells or otherwise  transfers any of such  Investor's
Registrable Securities, each transferee shall be allocated a pro rata portion of
the  then  remaining   number  of  Registrable   Securities   included  in  such
Registration Statement for such transferor.  Any shares of Common Stock included
in a  Registration  Statement  and which  remain  allocated  to any Person which
ceases to hold any  Registrable  Securities  shall be allocated to the remaining
Investors,  pro rata based on the number of Registrable  Securities then held by
such Investors.

     d. LEGAL COUNSEL. Subject to Section 5 hereof, the Investors holding eighty
percent (80%) of the Registrable  Securities  shall have the right to select one
legal  counsel to review and oversee as their  counsel any offering  pursuant to
this Section 2 ("LEGAL  COUNSEL"),  which shall be Wyrick Robbins Yates & Ponton
LLP or such other  counsel as  thereafter  designated  by the  holders of eighty
percent  (80%) of the  Registrable  Securities.  The  Company  shall  reasonably
cooperate with Legal Counsel in performing the Company's  obligations under this
Agreement.

     e.  INELIGIBILITY  FOR FORM S-3. In the event that Form S-3 is  unavailable
for any registration of Registrable Securities hereunder,  the Company shall (i)
register the sale of the Registrable  Securities on another appropriate form and
(ii) undertake to register the Registrable

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Securities  on Form S-3 as soon as such  form is  available,  provided  that the
Company shall maintain the  effectiveness of the Registration  Statement then in
effect  until such time as a  Registration  Statement  on Form S-3  covering the
Registrable Securities has been declared effective by the SEC.

     f.  SUFFICIENT  NUMBER  OF  SHARES  REGISTERED.  If the  number  of  shares
available  under a  Registration  Statement  filed  pursuant  to Section  2.a is
insufficient  to  cover  all  of the  Registrable  Securities  or an  Investor's
allocated  portion of the  Registrable  Securities  pursuant to Section 2.c, the
Company  shall  amend the  Registration  Statement,  or file a new  Registration
Statement (on the short form available  therefor,  if  applicable),  or both, as
soon as practicable, but in any event not later than fifteen (15) days after the
necessity  therefor  arises (each such date,  an  "ADDITIONAL  SCHEDULED  FILING
DATE"). The Company shall use it best efforts to cause such amendment and/or new
Registration  Statement to become effective as soon as practicable following the
filing thereof,  but in no event later than sixty (60) days after the Additional
Scheduled  Filing  Date (each  such date,  an  "ADDITIONAL  SCHEDULED  EFFECTIVE
DATE"). For purposes of the foregoing provision,  the number of shares available
under a Registration Statement shall be deemed "insufficient to cover all of the
Registrable  Securities" if at any time the number of shares  available  under a
Registration  Statement is less than ninety  percent  (90%) of the number of all
Registrable  Securities  issued  or  issuable  at  that  time  or an  Investor's
allocated  portion of the  Registrable  Securities  pursuant to Section 2.c. For
purposes  of  the  calculation  set  forth  in  the  foregoing   sentence,   any
restrictions  on the  exercisability  of the  Warrants or the issuance of shares
pursuant to antidilution  provisions  shall be disregarded and such  calculation
shall assume that the Warrants are exercisable at the then  prevailing  Exercise
Price.

     3.   RELATED OBLIGATIONS.
          -------------------

     Whenever an Investor  has  requested  that any  Registrable  Securities  be
registered  pursuant to Section 2.b or at such time as the Company is  obligated
to file a  Registration  Statement  with the SEC pursuant to Section 2.a or 2.f,
the  Company  will  use its best  efforts  to  effect  the  registration  of the
Registrable  Securities in accordance  with the intended  method of  disposition
thereof and, pursuant thereto, the Company shall have the following obligations:

     a. The Company shall keep each of the Registration  Statements  required to
be filed hereunder effective pursuant to Rule 415 at all times until the earlier
of (i) the  date as of which  the  Investors  may  sell  all of the  Registrable
Securities covered by such Registration  Statement without restriction  pursuant
to Rule 144(k)  promulgated  under the 1933 Act (or successor  thereto) assuming
for this purpose that the Investors are not officers,  directors,  affiliates or
Control  Persons of the Company,  (ii) the date on which (A) the Investors shall
have sold all the Registrable  Securities covered by such Registration Statement
and (B) none of the Common Shares or Warrants is outstanding, or (iii) two years
from the date hereof (the "REGISTRATION  Period"),  which Registration Statement
(including  any  amendments or supplements  thereto and  prospectuses  contained
therein)  shall not contain any 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 in which they were made, not

<PAGE>

misleading.  The term "best  efforts" shall mean,  among other things,  that the
Company shall submit to the SEC,  subject to the second sentence of Section 3.c,
within  three (3)  business  days after the  Company  learns that no review of a
particular  Registration  Statement will be made by the staff of the SEC or that
the staff has no further comments on the Registration Statement, as the case may
be, a request for acceleration of effectiveness of such  Registration  Statement
to a time and date not later than forty-eight (48) hours after the submission of
such request.

     b.  The  Company  shall  prepare  and file  with  the SEC  such  amendments
(including   post-effective   amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such   Registration
Statement,  which  prospectus  is to be filed  pursuant to Rule 424  promulgated
under the 1933 Act,  as may be  necessary  to keep such  Registration  Statement
effective at all times during the Registration  Period, and, during such period,
comply with the  provisions of the 1933 Act with respect to the  disposition  of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the seller or
sellers  thereof  as set forth in such  Registration  Statement.  In the case of
amendments and supplements to a Registration  Statement which are required to be
filed  pursuant to this  Agreement  (including  pursuant to this  Section 3.b by
reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any
analogous  report under the  Securities  Exchange  Act of 1934,  as amended (the
"1934 ACT")), the Company shall file such amendments or supplements with the SEC
on the same  day on  which  the 1934 Act  report  is  filed  which  created  the
requirement for the Company to amend or supplement the Registration Statement.

     c. The Company  shall (a) permit  Legal  Counsel to review and comment upon
(i) the Registration  Statement at least seven (7) days prior to its filing with
the SEC and  (ii) all  other  Registration  Statements  and all  amendments  and
supplements to all Registration  Statements  within a reasonable  number of days
prior to their  filing  with the SEC and (b) not file any  document in a form to
which Legal Counsel reasonably  objects.  The Company shall not submit a request
for  acceleration  of  the  effectiveness  of a  Registration  Statement  or any
amendment or supplement  thereto  without the prior  approval of Legal  Counsel,
which approval  shall not be  unreasonably  withheld or delayed.  Subject to the
confidentiality  provisions of the Purchase Agreement, the Company shall furnish
to Legal Counsel,  without charge,  (i) any  correspondence  from the SEC or the
staff  of  the  SEC to  the  Company  or  its  representatives  relating  to any
Registration Statement,  (ii) promptly after the same is prepared and filed with
the SEC, one copy of any Registration  Statement and any  amendment(s)  thereto,
including financial statements and schedules, all documents incorporated therein
by  reference  and  all  exhibits  and  (iii)  upon  the  effectiveness  of  any
Registration Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto.

     d. The Company shall furnish to each Investor whose Registrable  Securities
are included in any Registration  Statement,  without charge, (i) promptly after
the  same is  prepared  and  filed  with  the  SEC,  at  least  one copy of such
Registration  Statement  and  any  amendment(s)  thereto,   including  financial
statements and schedules,  all documents incorporated therein by reference,  all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of

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any Registration  Statement,  ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may  reasonably  request) and (iii) such other
documents,  including  copies of any  preliminary or final  prospectus,  as such
Investor may  reasonably  request from time to time in order to  facilitate  the
disposition of the Registrable Securities owned by such Investor.

     e. The Company shall use reasonable efforts to (i) register and qualify the
Registrable  Securities  covered by a  Registration  Statement  under such other
securities  or "blue sky" laws of such  jurisdictions  in the  United  States as
Legal  Counsel or any  Investor  reasonably  requests,  (ii) prepare and file in
those jurisdictions,  such amendments (including post-effective  amendments) and
supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof during the Registration  Period,  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (x)  qualify to do business  in any  jurisdiction  where it would not
otherwise be required to qualify but for this Section 3.e, (y) subject itself to
general  taxation  in any such  jurisdiction,  or (z) file a general  consent to
service of process in any such  jurisdiction.  The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable  Securities of the receipt
by the  Company  of any  notification  with  respect  to the  suspension  of the
registration  or  qualification  of any of the  Registrable  Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the  initiation  or threat of any  proceeding
for such purpose.

     f. In the event  Investors who hold eighty percent (80%) of the Registrable
Securities  being offered in the offering select  underwriters for the offering,
the Company shall enter into and perform its  obligations  under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification  and  contribution  obligations,  with the  underwriters of such
offering; provided, however, that the Company shall have the right to consent to
the  selection of such  underwriter,  which  consent  shall not be  unreasonably
withheld.

     g. As promptly  as  practicable  after  becoming  aware of such event,  the
Company shall notify Legal Counsel and each Investor in writing of the happening
of any event as a result  of which the  prospectus  included  in a  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits 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,  and promptly  prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
ten (10)  copies of such  supplement  or  amendment  to Legal  Counsel  and each
Investor (or such other number of copies as Legal  Counsel or such  Investor may
reasonably  request).  The Company shall also promptly  notify Legal Counsel and
each Investor in writing (i) when a prospectus or any  prospectus  supplement or
post-effective  amendment has been filed,  and when a Registration  Statement or
any  post-effective   amendment  has  become  effective  (notification  of  such
effectiveness shall be delivered to Legal Counsel and each Investor by facsimile
on the same day

<PAGE>

of such effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a Registration  Statement or related  prospectus or
related information,  and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

     h. The Company  shall use its best  efforts to prevent the  issuance of any
stop order or other suspension of effectiveness of a Registration  Statement, or
the suspension of the  qualification  of any of the  Registrable  Securities for
sale in any  jurisdiction  and,  if such an order or  suspension  is issued,  to
obtain the  withdrawal  of such order or  suspension  at the  earliest  possible
moment and to notify  Legal  Counsel  and each  Investor  who holds  Registrable
Securities  being  sold  (and,  in the event of an  underwritten  offering,  the
managing  underwriters) of the issuance of such order and the resolution thereof
or its receipt of actual notice of the  initiation  or threat of any  proceeding
for such purpose.

     i. At the  request  of any  Investor,  the  Company  shall  furnish to such
Investor,  on the date of the  effectiveness of any  Registration  Statement and
thereafter from time to time on such dates as an Investor may reasonably request
(i) if required by an underwriter, a letter, dated such date, from the Company's
independent certified public accountants in form and substance as is customarily
given  by  independent  certified  public  accountants  to  underwriters  in  an
underwritten  public  offering,  addressed  to the  underwriters,  and  (ii)  an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration  Statement,  in form, scope and substance as is customarily
given in an underwritten public offering,  addressed to the underwriters and the
Investors.

     j. The Company  shall make  available  for  inspection by (i) any Investor,
(ii) Legal  Counsel,  (iii) any  underwriter  participating  in any  disposition
pursuant to a  Registration  Statement,  (iv) one firm of  accountants  or other
agents retained by the Investors and (v) one firm of attorneys  retained by such
underwriters (collectively,  the "INSPECTORS") all pertinent financial and other
records,  and  pertinent  corporate  documents  and  properties  of the  Company
(collectively,  the "RECORDS"),  as shall be reasonably deemed necessary by each
Inspector,  and cause the Company's officers,  directors and employees to supply
all information which any Inspector may reasonably request;  provided,  however,
that  each  Inspector  shall  hold in strict  confidence  and shall not make any
disclosure  (except to an Investor)  or use of any Records or other  information
which the  Company  determines  in good faith to be  confidential,  and of which
determination the Inspectors are so notified,  unless (a) the disclosure of such
Records is  necessary  to avoid or correct a  misstatement  or  omission  in any
Registration  Statement  or is  otherwise  required  under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final,  non-appealable subpoena
or order from a court or government body of competent  jurisdiction,  or (c) the
information  in such  Records has been made  generally  available  to the public
other than by disclosure in violation of this  Agreement or any other  agreement
of which the Inspector has knowledge.  Each Investor agrees that it shall,  upon
learning  that  disclosure  of  such  Records  is  sought  in or by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
notice to the  Company  and allow the  Company,  at its  expense,  to  undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for, the Records deemed confidential.

<PAGE>

     k. The Company  shall hold in  confidence  and not make any  disclosure  of
information concerning an Investor provided to the Company unless (i) disclosure
of such  information  is necessary  to comply with  federal or state  securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or omission in any  Registration  Statement,  (iii) the release of
such   information   is  ordered   pursuant  to  a  subpoena  or  other   final,
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by  disclosure  in  violation  of this  Agreement or any other
agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice to such  Investor  and allow such  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

     l. The  Company  shall  use its best  efforts  either  to (i) cause all the
Registrable  Securities covered by a Registration Statement to be listed on each
securities  exchange or market on which  securities  of the same class or series
issued  by the  Company  are  then  listed,  if  any,  if the  listing  of  such
Registrable  Securities  is then  permitted  under the rules of such exchange or
market,  or (ii) secure the  inclusion  for  quotation  on the  over-the-counter
market on the electronic  bulletin board for such  Registrable  Securities  and,
without  limiting the generality of the  foregoing,  to arrange for at least two
market makers to register with the National  Association of Securities  Dealers,
Inc. ("NASD") as such with respect to such Registrable  Securities.  The Company
shall pay all fees and expenses in connection  with  satisfying  its  obligation
under this Section 3.l.

     m. The Company shall  cooperate  with the  Investors  who hold  Registrable
Securities being offered and, to the extent applicable, any managing underwriter
or  underwriters,   to  facilitate  the  timely   preparation  and  delivery  of
certificates (not bearing any restrictive  legend)  representing the Registrable
Securities to be offered  pursuant to a  Registration  Statement and enable such
certificates to be in such denominations or amounts,  as the case may be, as the
managing  underwriter  or  underwriters,  if any,  or,  if there is no  managing
underwriter or underwriters, the Investors may reasonably request and registered
in such  names as the  managing  underwriter  or  underwriters,  if any,  or the
Investors may request.

     n. The Company  shall  maintain a transfer  agent and registrar of all such
Registrable  Securities not later than the effective  date of such  Registration
Statement.

     o. If requested by the managing  underwriters  or an Investor,  the Company
shall: (i) immediately  incorporate in a prospectus supplement or post-effective
amendment such information as the managing  underwriters and the Investors agree
should be included  therein relating to the sale and distribution of Registrable
Securities,  including,  without  limitation,  information  with  respect to the
number of Registrable  Securities being sold to such underwriters,  the purchase
price  being  paid  therefor  by such  underwriters  and any other  terms of the
underwritten  (or  best  efforts  underwritten)   offering  of  the  Registrable
Securities to be sold in such offering;  (ii) make all required  filings of such
prospectus  supplement  or  post-effective  amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or post-effective

<PAGE>

amendment; and (iii) supplement or make amendments to any Registration Statement
if requested by an Investor or any underwriter of such Registrable Securities.

     p.  The  Company  shall  use its best  efforts  to  cause  the  Registrable
Securities  covered by the  applicable  Registration  Statement to be registered
with or approved by such other  governmental  agencies or  authorities as may be
necessary to consummate the disposition of such Registrable Securities.

     q. The Company shall make  generally  available to its security  holders as
soon as  practical,  but not later than  ninety (90) days after the close of the
period  covered  thereby,  an earnings  statement  (in form  complying  with the
provisions of Rule 158 under the 1933 Act) covering a 12-month period  beginning
not later than the first day of the Company's  fiscal quarter next following the
effective date of the Registration Statement.

     r. The  Company  shall  otherwise  use its best  efforts to comply with all
applicable  rules and regulations of the SEC in connection with any registration
hereunder.

     s. Within three (3) business days after a Registration Statement is ordered
effective by the SEC, the Company shall  deliver,  and shall cause legal counsel
for the Company to deliver, to the transfer agent for the Registrable Securities
covered thereby (with copies to the Investors whose  Registrable  Securities are
included in such  Registration  Statement)  confirmation,  in the form  attached
hereto  as  EXHIBIT  A,  that  such  Registration  Statement  has been  declared
effective by the SEC.

     t. The  Company  shall  take all  other  reasonable  actions  necessary  to
expedite and facilitate  disposition by the Investors of Registrable  Securities
pursuant to a Registration Statement.

     u.  Notwithstanding  anything to the  contrary in Section  3.g, at any time
after the Registration  Statement has been declared  effective,  the Company may
delay the disclosure of material,  non-public information concerning the Company
the  disclosure  of which at the time is not,  in the good faith  opinion of the
Board of Directors of the Company and its counsel,  in the best  interest of the
Company  and, in the opinion of counsel to the  Company,  otherwise  required (a
"GRACE  PERIOD");  provided,  that the  Company  shall  promptly  (i) notify the
Investors in writing of the existence of material, non-public information giving
rise to a Grace  Period and the date on which the Grace  Period will begin,  and
(ii) notify the Investors in writing of the date on which the Grace Period ends;
and,  provided  further,  that during any consecutive  365-day period such Grace
Periods shall not exceed thirty (30) days in the aggregate (an "ALLOWABLE  GRACE
PERIOD").  For purposes of determining  the length of a Grace Period above,  the
Grace  Period  shall  begin on and include  the date the  Investors  receive the
notice referred to in clause (i) above and shall end on and include the date the
Investors  receive the notice referred to in clause (ii) above.  Upon expiration
of the  Allowable  Grace  Period,  the Company shall again be bound by the first
sentence of Section 3.g with respect to the information giving rise thereto.

<PAGE>

Notwithstanding  anything to the contrary  contained  herein,  the Investors may
exercise Warrants during a Grace Period.

     v. Each of the following events shall  constitute a "REGISTRATION  DEFAULT"
for purposes of this Agreement:

     (i) the Company's failure to file a Registration Statement by the Scheduled
Filing Date (except to the extent such date is extended pursuant to Section 2.a)
or Additional Scheduled Filing Date thereof, as appropriate;

     (ii) the SEC's failure to declare a Registration  Statement effective on or
before the Scheduled  Effective  Date or  Additional  Scheduled  Effective  Date
thereof,  as appropriate,  except where the failure to meet such deadline is the
result  solely of actions  by the  holders of  Registrable  Securities  or Legal
Counsel;

     (iii) the Company's failure to request acceleration of the effectiveness of
a  Registration  Statement  within  three (3)  business  days  after the SEC has
notified the Company that it may file such an  acceleration  request as required
by Section  3.a  hereof,  except  where the  failure to meet such  deadline is a
result  solely of actions  by the  holders of  Registrable  Securities  or Legal
Counsel;

     (iv) the Investors'  inability to sell all Registrable  Securities pursuant
to an effective Registration Statement (whether because of a failure to keep the
Registration  Statement effective,  to disclose such information as is necessary
for  sales  to be made  pursuant  to the  Registration  Statement,  to  register
sufficient shares of Common Stock or otherwise); or

     (v) the aggregate days of Grace Period exceed the Allowable Grace Period.

Upon the  occurrence  of a  Registration  Default,  the  Company  shall pay each
Investor an amount  determined in accordance with the following formula for each
30-day period of such Registration Default:

     2% x P x N

     where

     P =  the average  closing sale price of the Common  Stock on the  Principal
          Market for the applicable thirty (30) days; and

     N =  the number of Registrable  Securities  that such Investor holds or may
          acquire  pursuant  to  exercise  of  Warrants  on the  last day of the
          applicable  30-day period (without giving effect to any limitations on
          exercise).

If a  Registration  Default  is cured  before  the end of a 30-day  period,  the
applicable formula shall be pro-rated.  The Company shall pay such amount either
in cash or shares of Common Stock, at

<PAGE>

the discretion of the Company,  on demand by an Investor made at any time during
the continuance or after  termination of such Registration  Default.  If paid in
Common Stock,  the Common Stock shall be valued at the closing sale price of the
Common  Stock on the  Principal  Market on the last  trading  day of each 30-day
period.  If the  Company  does  not  remit  payment  of the  amount  due to such
Investor,  the Company will pay the Investor's  reasonable  costs of collection,
including  attorneys'  fees. An Investor's right to demand such payment shall be
in addition to any other rights it may have under this  Agreement,  the Purchase
Agreement or otherwise.

     4.   OBLIGATIONS OF THE INVESTORS.
          ----------------------------

     a. At least seven (7) business days prior to the first  anticipated  filing
date of a  Registration  Statement,  the Company  shall notify each  Investor in
writing of the information the Company  requires from each such Investor if such
Investor elects to have any of such Investor's  Registrable  Securities included
in such  Registration  Statement.  It  shall  be a  condition  precedent  to the
obligations  of the  Company  to  complete  the  registration  pursuant  to this
Agreement with respect to the  Registrable  Securities of a particular  Investor
that such  Investor  shall  furnish to the Company  such  information  regarding
itself,  the  Registrable  Securities  held by it and  the  intended  method  of
disposition  of the  Registrable  Securities  held by it as shall be  reasonably
required to effect the  registration  of such  Registrable  Securities and shall
execute such documents in connection  with such  registration as the Company may
reasonably request.

     b.  Each  Investor  by  such  Investor's   acceptance  of  the  Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with the  preparation  and  filing of any  Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's   Registrable
Securities from such Registration Statement.

     c. In the  event any  Investor  elects to  participate  in an  underwritten
public offering pursuant to Section 2.b, each such Investor agrees to enter into
and perform such  Investor's  obligations  under an underwriting  agreement,  in
usual   and   customary   form,   including,   without   limitation,   customary
indemnification and contribution  obligations,  with the managing underwriter of
such offering and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of the Registrable Securities.

     d. Each Investor  agrees that,  upon receipt of any notice from the Company
of the happening of any event of the kind  described in Section 3.h or the first
sentence of Section 3.g, such Investor will immediately  discontinue disposition
of Registrable  Securities  pursuant to any Registration  Statement(s)  covering
such Registrable  Securities until such Investor's  receipt of the copies of the
supplemented  or amended  prospectus  contemplated  by Section  3.h or the first
sentence of Section 3.g.

     e. No Investor may participate in any underwritten  registration  hereunder
unless such Investor (i) agrees to sell such Investor's  Registrable  Securities
on the basis provided in any underwriting arrangements approved by the Investors
entitled hereunder to approve such

<PAGE>

arrangements,  (ii)  completes  and  executes  all  questionnaires,   powers  of
attorney,  indemnities,  underwriting  agreements and other documents reasonably
required under the terms of such underwriting arrangements,  and (iii) agrees to
pay its pro rata share of all underwriting discounts and commissions.

     f. Each  Investor  agrees not to take any action to cause such  Investor to
become a registered broker-dealer as defined under the 1934 Act or to effect any
change to such Investor's status that would preclude the Company from using Form
S-3 for the Registration Statement.

     5.   EXPENSES OF REGISTRATION.
          ------------------------

     All reasonable  expenses (other than expenses  incurred pursuant to Section
3.j(iv)  and  (v)  and  underwriting  discounts  and  commissions)  incurred  in
connection with registrations,  filings or qualifications pursuant to Sections 2
and  3,  including,   without   limitation,   all   registration,   listing  and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company and reasonable fees and  disbursements of Legal Counsel,
shall  be paid by the  Company.  The  Company's  obligation  for  such  fees and
disbursements of Legal Counsel shall be subject to a cap of $10,000.

     6.   INDEMNIFICATION.
          ---------------

     In the event any  Registrable  Securities  are  included in a  Registration
Statement under this Agreement:

     a. To the fullest  extent  permitted by law, the Company  will,  and hereby
does,  indemnify,  hold  harmless  and  defend  each  Investor  who  holds  such
Registrable Securities, the directors,  officers,  partners,  employees, agents,
representatives  of, and each Person,  if any, who controls any Investor  within
the meaning of the 1933 Act or the 1934 Act, and any  underwriter (as defined in
the 1933 Act) for the  Investors,  and the  directors  and officers of, and each
Person,  if any, who controls,  any such  underwriter  within the meaning of the
1933 Act or the 1934 Act (each,  an "INDEMNIFIED  PERSON"),  against any losses,
claims,  damages,  liabilities,  judgments,  fines,  penalties,  charges, costs,
reasonable  attorneys'  fees,  amounts paid in settlement or expenses,  joint or
several  (collectively,  "CLAIMS"),  incurred  in  investigating,  preparing  or
defending any action, claim, suit, inquiry, proceeding,  investigation or appeal
taken from the foregoing by or before any court or governmental,  administrative
or other  regulatory  agency or body or the SEC,  whether pending or threatened,
whether or not an indemnified  party is or may be a party thereto  ("INDEMNIFIED
DAMAGES"),  to which any of them may become  subject  insofar as such Claims (or
actions or proceedings,  whether  commenced or threatened,  in respect  thereof)
arise out of or are based  upon:  (i) any untrue  statement  or  alleged  untrue
statement of a material fact in a Registration  Statement or any  post-effective
amendment  thereto or in any filing made in connection with the qualification of
the offering under the  securities or other "blue sky" laws of any  jurisdiction
in which Registrable Securities are offered ("BLUE SKY FILING"), or the omission
or alleged  omission to state a material fact  required to be stated  therein or
necessary  to make the  statements  therein  not  misleading,  (ii)  any  untrue
statement or alleged untrue statement of a

<PAGE>

material  fact  contained  in any  preliminary  prospectus  if used prior to the
effective  date  of such  Registration  Statement,  or  contained  in the  final
prospectus  (as  amended or  supplemented,  if the Company  files any  amendment
thereof or supplement  thereto with the SEC) or the omission or alleged omission
to state  therein  any  material  fact  necessary  to make the  statements  made
therein,  in light of the circumstances  under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any other law, including,  without  limitation,  any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable  Securities  pursuant to a Registration  Statement or
(iv) any material  violation  of this  Agreement  (the matters in the  foregoing
clauses (i) through (iv) being, collectively, "VIOLATIONS").

     The Company shall  reimburse the  Investors  and each such  underwriter  or
controlling  person,  promptly as such  expenses  are  incurred  and are due and
payable,  for any reasonable legal fees or reasonable other expenses incurred by
them in connection with investigating or defending any such Claim.

     Notwithstanding   anything   to  the   contrary   contained   herein,   the
indemnification  agreement contained in this Section 6.a: (i) shall not apply to
a Claim by an Indemnified  Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information  furnished in writing
to the Company by such  Indemnified  Person or underwriter for such  Indemnified
Person  expressly for use in connection with the preparation of the Registration
Statement  or  any  such  amendment  thereof  or  supplement  thereto,  if  such
prospectus  was timely made  available  by the Company  pursuant to Section 3.d;
(ii) with respect to any preliminary prospectus,  shall not inure to the benefit
of any such person from whom the person  asserting any such Claim  purchased the
Registrable  Securities  that are the subject  thereof (or to the benefit of any
person  controlling such person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the prospectus, as
then amended or  supplemented,  if such  prospectus was timely made available by
the Company  pursuant to Section  3.d, and the  Indemnified  Person was promptly
advised in writing not to use the incorrect  prospectus  prior to the use giving
rise to a violation and such Indemnified  Person,  notwithstanding  such advice,
used it;  (iii)  shall not be  available  to the extent such Claim is based on a
failure of the  Investor to deliver or to cause to be delivered  the  prospectus
made available by the Company,  if such  prospectus was timely made available by
the Company pursuant to Section 3.d; and (iv) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably  withheld.  Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.

     b. In connection  with any  Registration  Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold  harmless  and defend,  to the same extent and in the same manner as is set
forth in Section 6.a, the Company,  each of its directors,  each of its officers
who signs the  Registration  Statement,  each  Person,  if any, who controls the
Company  within the  meaning of the 1933 Act or the 1934 Act  (collectively  and
together with an Indemnified Person, an "INDEMNIFIED PARTY"),  against any Claim
or

<PAGE>

Indemnified Damages to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise,  insofar as such Claim or  Indemnified  Damages arise
out of or are based upon any Violation,  in each case to the extent, and only to
the extent,  that such Violation  occurs in reliance upon and in conformity with
written information  furnished to the Company by such Investor expressly for use
in connection with such  Registration  Statement;  and,  subject to Section 6.d,
such Investor will reimburse any legal or other expenses  reasonably incurred by
them in connection  with  investigating  or defending any such Claim;  provided,
however,  that the  indemnity  agreement  contained  in this Section 6.b and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such  settlement is effected  without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably withheld;  provided,  further,  however, that the Investor shall be
liable  under this  Section 6.b for only that  amount of a Claim or  Indemnified
Damages as does not exceed the net proceeds to such  Investor as a result of the
sale of Registrable  Securities  pursuant to such Registration  Statement.  Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the   Registrable   Securities   by  the   Investors   pursuant  to  Section  9.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained  in  this  Section  6.b  with  respect  to any  preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the  preliminary  prospectus
was  corrected  on a timely  basis in the  prospectus  and such  prospectus  was
provided to Investors as required, as then amended or supplemented.

     c. The Company shall be entitled to receive  indemnities from underwriters,
selling brokers,  dealer managers and similar securities industry  professionals
participating in any  distribution,  to the same extent as provided above,  with
respect to  information  such  persons so  furnished  in writing  expressly  for
inclusion in the Registration Statement.

     d. Promptly  after receipt by an Indemnified  Person or  Indemnified  Party
under this Section 6 of notice of the  commencement  of any action or proceeding
(including  any  governmental  action or  proceeding)  involving  a Claim,  such
Indemnified  Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any  indemnifying  party under this Section 6, deliver to the
indemnifying  party  a  written  notice  of the  commencement  thereof,  and the
indemnifying  party shall have the right to  participate  in, and, to the extent
the indemnifying  party so desires,  jointly with any other  indemnifying  party
similarly  noticed,  to assume  control  of the  defense  thereof  with  counsel
mutually  satisfactory to the indemnifying  party and the Indemnified  Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying  party, if, in
the  reasonable  opinion of counsel  retained  by the  indemnifying  party,  the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented by such counsel in such  proceeding.  The Company shall
pay reasonable  fees for only one separate legal counsel for the Investors,  and
such legal  counsel shall be selected by the Investors  holding  eighty  percent
(80%)  of  the  issued  or  issuable  Registrable  Securities  included  in  the
Registration Statement to which the Claim relates. The Indemnified Party or

<PAGE>

Indemnified  Person  shall  cooperate  fully  with  the  indemnifying  party  in
connection  with any  negotiation  or defense of any such action or claim by the
indemnifying  party and shall furnish to the indemnifying  party all information
reasonably  available  to the  Indemnified  Party or  Indemnified  Person  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
Indemnified  Party or  Indemnified  Person fully apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  No
indemnifying  party shall be liable for any  settlement of any action,  claim or
proceeding  effected without its written consent;  provided,  however,  that the
indemnifying  party shall not  unreasonably  withhold,  delay or  condition  its
consent.  No  indemnifying  party shall,  without the consent of the Indemnified
Party or Indemnified Person,  consent to entry of any judgment or enter into any
settlement or other compromise  which does not include as an unconditional  term
thereof the giving by the  claimant or plaintiff  to such  Indemnified  Party or
Indemnified  Person of a release from all  liability in respect to such claim or
litigation.   Following   indemnification   as  provided  for   hereunder,   the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified  Person with  respect to all third  parties,  firms or  corporations
relating to the matter for which  indemnification  has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified  Person or Indemnified  Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

     e. The indemnity  agreements  contained  herein shall be in addition to (i)
any cause of action or similar  right of the  Indemnified  Party or  Indemnified
Person against the  indemnifying  party or others,  and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

     7.   CONTRIBUTION.
          ------------

     To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying  party agrees to make the maximum  contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no seller
of Registrable  Securities  guilty of fraudulent  misrepresentation  (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any  seller  of  Registrable   Securities  who  was  not  guilty  of  fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

     8.   REPORTS UNDER THE 1934 ACT.
          --------------------------

     With a view to making  available to the  Investors the benefits of Rule 144
promulgated  under the 1933 Act or any other  similar rule or  regulation of the
SEC that may at any time permit the Investors to sell  securities of the Company
to the public without registration ("RULE 144"), during the Registration Period,
the Company agrees to:

<PAGE>

     a.  make  and  keep  public  information  available,  as  those  terms  are
understood and defined in Rule 144;

     b. file with the SEC in a timely  manner all  reports  and other  documents
required  of the  Company  under  the  1933  Act and the 1934 Act so long as the
Company remains subject to such  requirements and the filing of such reports and
other documents is required for the applicable provisions of Rule 144; and

     c.  furnish to each  Investor  so long as such  Investor  owns  Registrable
Securities,  promptly upon request,  (i) a written statement by the Company that
it has complied  with the reporting  requirements  of Rule 144, the 1933 Act and
the 1934 Act, (ii) a copy of the most recent  annual or quarterly  report of the
Company and such other reports and documents so filed by the Company,  and (iii)
such other information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.

     9.   ASSIGNMENT OF REGISTRATION RIGHTS.
          ---------------------------------

     The rights under this Agreement  shall be  automatically  assignable by the
Investors to any transferee of all or any portion of Registrable  Securities if:
(i) the  Investor  agrees in writing with the  transferee  or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such assignment;  (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such  transferee or assignee,  and (b) the  securities  with
respect to which such  registration  rights are being  transferred  or assigned;
(iii) immediately  following such transfer or assignment the further disposition
of such  securities by the  transferee or assignee is restricted  under the 1933
Act and applicable state securities laws; (iv) at or before the time the Company
receives the written  notice  contemplated  by clause (ii) of this  sentence the
transferee or assignee  agrees in writing with the Company to be bound by all of
the provisions  contained  herein;  (v) the transferee  purchases or acquires at
least $150,000 of Registrable Securities; and (vi) such transfer shall have been
made in accordance with the applicable  requirements of the Purchase  Agreement;
provided  that the Company  shall only be  required to effect one public  resale
hereunder with respect to any particular Registrable Securities.

     10.  AMENDMENT OF REGISTRATION RIGHTS.
          --------------------------------

     Provisions of this Agreement may be amended and the observance  thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively),  only with the written  consent of the Company and Investors
who  then  hold  or have  the  right  to  acquire  fifty  percent  (50%)  of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section  10 shall  be  binding  upon  each  Investor  and the  Company.  No such
amendment  shall be  effective to the extent that it applies to less than all of
the holders of the Registrable Securities.  No consideration shall be offered or
paid to any  Person  to amend or  consent  to a waiver  or  modification  of any
provision of any of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.

<PAGE>

     11.  MISCELLANEOUS.
          -------------

     a. A Person is deemed to be a holder  of  Registrable  Securities  whenever
such Person owns or is deemed to own of record such Registrable  Securities.  If
the Company receives conflicting instructions, notices or elections from two (2)
or more  Persons with respect to the same  Registrable  Securities,  the Company
shall act upon the basis of instructions,  notice or election  received from the
registered owner of such Registrable Securities.

     b. Any  notices,  consents,  waivers or other  communications  required  or
permitted to be given under the terms of this  Agreement  must be in writing and
will be  deemed  to have  been  delivered:  (i)  upon  receipt,  when  delivered
personally;  (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or (iii) one  business  day after  deposit  with a  nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

          If to the Company:

                   Galaxy Nutritional Foods, Inc.
                   2441 Viscount Row
                   Orlando, FL 32809
                   Telephone:  (407) 855-5500
                   Facsimile:  (407) 855-1099
                   Attention:  Angelo S. Morini, Chief Executive Officer

          With a copy to:

                   Baker & Hostetler, LLP
                   200 South Orange Ave., Suite 2300
                   Telephone:  (407) 649-4001
                   Facsimile:  (407) 841-0168
                   Attention:  Ken Wright, Esq.

If to a  Investor,  to its  address  and  facsimile  number on the  Schedule  of
Investors attached hereto, with copies to such Investor's representatives as set
forth on the  Schedule of Investors or to such other  address  and/or  facsimile
number and/or to the  attention of such other person as the recipient  party has
specified  by written  notice  given to each other  party five days prior to the
effectiveness of such change.  Written  confirmation of receipt (A) given by the
recipient  of  such  notice,  consent,   waiver  or  other  communication,   (B)
mechanically  generated by the sender's  facsimile machine  containing the time,
date,  recipient  facsimile  number  and an  image of such  transmission  or (C)
provided by a courier or overnight courier service shall be rebuttable  evidence
of personal service,  overnight or courier delivery or transmission by facsimile
in accordance with clause (i), (ii) or (iii) above, respectively.

<PAGE>

     c.  Failure  of any  party to  exercise  any  right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     d. All questions  concerning the  construction,  validity,  enforcement and
interpretation  of this Agreement  shall be governed by the internal laws of the
State of Delaware, without giving effect to any choice of law or conflict of law
provision  or  rule  that  would  cause  the  application  of  the  laws  of any
jurisdictions  other  than  the  State of  Delaware.  If any  provision  of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or  unenforceability  shall not affect the  validity  or  enforceability  of the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability of any provision of this Agreement in any other jurisdiction. Any
dispute under this Agreement shall be governed and resolved  pursuant to Section
10.2 of the Purchase Agreement.

     e. This  Agreement and the Purchase  Agreement  (and the exhibits  thereto)
constitute  the entire  agreement  among the parties  hereto with respect to the
subject  matter  hereof  and  thereof.  There  are  no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.

     f. Subject to the  requirements of Section 9, this Agreement shall inure to
the benefit of and be binding upon the permitted  successors and assigns of each
of the parties hereto.

     g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

     h. This Agreement may be executed in multiple identical counterparts,  each
of which shall be deemed an original but all of which shall  constitute  one and
the same agreement.  This Agreement,  once executed by a party, may be delivered
to the other party hereto by facsimile  transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

     i. Each party shall do and perform, or cause to be done and performed,  all
such  further  acts and  things,  and shall  execute  and deliver all such other
agreements,  certificates,  instruments  and  documents,  as the other party may
reasonably  request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

     j. The language  used in this  Agreement  will be deemed to be the language
chosen by the  parties to  express  their  mutual  intent and no rules of strict
construction will be applied against any party.

     k. This  Agreement  is intended  for the benefit of the parties  hereto and
their respective  permitted  successors and assigns,  and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.

<PAGE>

     l.  Notwithstanding  anything to the contrary set forth herein, in no event
shall any penalties described herein accrue on or be payable with respect to the
H&H Shares or the Stonestreet Shares.

                                   * * * * * *
<PAGE>

     IN WITNESS  WHEREOF,  the  parties  have caused  this  Registration  Rights
Agreement to be duly executed as of day and year first above written.

COMPANY:                                             INVESTORS:
-------                                              ---------

GALAXY NUTRITIONAL FOODS, INC.           STONESTREET LIMITED PARTNERSHIP
                                         By: Stonestreet Corporation,
                                         Its General Partner

By:        /s/                           By:       /s/
       --------------------------------         --------------------------------
Name:      Angelo S. Morini              Name:     M. Finkelstein
       --------------------------------         --------------------------------
Title:     CHAIRMAN, PRESIDENT & CEO     Title:    PRESIDENT
       --------------------------------         --------------------------------

EXCALIBUR:

EXCALIBUR LIMITED PARTNERSHIP
By:  Excalibur Capital Management, Inc.
Its General Partner

By:     /s/
    -----------------------------------
Name:   William Hechter, President

FINDERS:

STONESTREET CORPORATION

By:     /s/
   ------------------------------------
Name:   M. FINKELSTEIN
     ----------------------------------
Title:  PRESIDENT
      ---------------------------------

H&H SECURITIES LIMITED
By:
   ------------------------------------
By:     /s/
   ------------------------------------
Name:   WILLIAM HECHTER
     ----------------------------------
Title:  PRESIDENT
      ---------------------------------

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

ATTN:

     Re:  GALAXY NUTRITIONAL FOODS, INC.
          ------------------------------

Ladies and Gentlemen:

     We are counsel to Galaxy Nutritional  Foods,  Inc., a Delaware  corporation
(the  "COMPANY"),  which has entered into that certain Common Stock and Warrants
Purchase  Agreement (the "PURCHASE  AGREEMENT") by and among the Company and the
Investor named therein  (collectively with Excalibur Limited Partnership and the
Finders  (as  defined in the  Registration  Rights  Agreement),  the  "HOLDERS")
pursuant to which the Company  issued to the Holders shares of its common stock,
$0.01 par value per share (the "COMMON  STOCK") and warrants to purchase  Common
Stock.  Pursuant to the Purchase Agreement,  the Company also has entered into a
Registration  Rights Agreement with the Holders,  Excalibur Limited  Partnership
and the Finders  (the  "REGISTRATION  RIGHTS  AGREEMENT")  pursuant to which the
Company agreed,  among other things, to register the Registrable  Securities (as
defined in the Registration  Rights Agreement) under the Securities Act of 1933,
as amended (the "1933 ACT"). In connection with the Company's  obligations under
the Registration Rights Agreement, on ___________ ___, 2002, the Company filed a
Registration  Statement  on  Form  S-___  (File  No.   333-_____________)   (the
"REGISTRATION  STATEMENT")  with the  Securities  and Exchange  Commission  (the
"SEC") relating to the Registrable  Securities  which names each of the Holders,
Excalibur  Limited   Partnership  and  the  Finders  as  a  selling  stockholder
thereunder.

<PAGE>

     In connection with the foregoing,  we advise you that a member of the SEC's
staff has advised us by  telephone  that the SEC has entered an order  declaring
the  Registration  Statement  effective  under  the 1933 Act at  [ENTER  TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,  after
telephonic  inquiry  of a  member  of the  SEC's  staff,  that  any  stop  order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and the  Registrable
Securities  are  available  for  resale  under  the  1933  Act  pursuant  to the
Registration Statement.

                                        Very truly yours,

                                        [ISSUER'S COUNSEL]

                                        By:
                                           --------------------------------

cc:  [LIST NAMES OF HOLDERS, EXCALIBUR AND FINDERS]

<PAGE>

                              SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
NAME OF BUYER:                                           INITIAL NUMBER OF    INITIAL NUMBER OF    INITIAL NUMBER OF
                                                           COMMON SHARES       WARRANT SHARES        BRIDGE SHARES
                                                                               UNDERLYING THE       UNDERLYING THE
                                                                                  WARRANTS          BRIDGE WARRANT
--------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>                   <C>
Stonestreet Limited Partnership
Address: 260 Town Center Blvd.                                367,647              122,549                N/A
Suite 200
Markham, Ontario, Canada L3R BH8
Fax: ____________________
Attention:  Michael Finkelstein
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
EXCALIBUR:                                               INITIAL NUMBER OF
                                                           BRIDGE SHARES
                                                          UNDERLYING THE
                                                          BRIDGE WARRANT
--------------------------------------------------------------------------------------------------------------------
Excalibur Limited Partnership
33 Prince Arthur Avenue                                       30,000
Toronto, Ontario, Canada M5R 1B2
Fax: (416) 964-8868
Attention: William Hechter, President
--------------------------------------------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------------------------------------------
NAME OF FINDER:                                          INITIAL NUMBER OF    INITIAL NUMBER OF
                                                            H&H SHARES       STONESTREET SHARES
--------------------------------------------------------------------------------------------------------------------
Stonestreet Corporation
Address: 260 Town Center Blvd.                                  N/A                 4,687
Suite 200
Markham, Ontario, Canada L3R BH8
Fax: ____________________
Attention:  Michael Finkelstein
--------------------------------------------------------------------------------------------------------------------
H&H Securities Limited                                         7,812                 N/A
33 Prince Arthur Avenue
Toronto, Ontario, Canada M5R 1B2
Fax: (416) 964-8868
Attention: William Hechter
--------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>EXHIBIT 4.5

                       Securities Purchase Agreement among
                    Registrant and Hart Design & Mfg., Inc.,
                           dated as of August 27, 2002

<PAGE>

                          SECURITIES PURCHASE AGREEMENT

     SECURITIES  PURCHASE AGREEMENT (this  "AGREEMENT"),  dated as of AUGUST 27,
2002 by and between GALAXY NUTRITIONAL FOODS, INC., a Delaware corporation, with
its principal  place of business at 2441 Viscount  Row,  Orlando,  FL 32809 (the
"COMPANY"),  and HART  DESIGN & MFG.,  INC,  or its  registered  assigns,  whose
address is 1940 Radisson Street, Green Bay, WI 54302 (the "BUYER").

                             PRELIMINARY STATEMENTS

     A. The Company and Buyer are executing  and  delivering  this  Agreement in
reliance upon the exemption from  securities  registration  afforded by Rule 506
under  Regulation  D  ("REGULATION  D")  as  promulgated  by the  United  States
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 ACT");

     B.  Buyer  wishes  to  purchase,  in the  amounts  and upon the  terms  and
conditions  stated in this  Agreement (i) shares of the Company's  common stock,
par value $.01 per share (the "COMMON STOCK");

     NOW THEREFORE, the Company and Buyer hereby agrees as follows:

     1.   PURCHASE AND SALE OF COMMON STOCK
          ---------------------------------

     a. PURCHASE OF COMMON STOCK.  The Company shall issue and sell to Buyer and
Buyer shall purchase an aggregate of $266,848.32  face value of shares of Common
Stock  (the  "COMMON  SHARES")  at a per  share  purchase  price of  $4.08  (the
"PURCHASE  PRICE"),  which  Purchase  Price  shall be forgiven by the Company in
exchange  for  partial  settlement  of  its  current  financial   obligation  of
$306,850.74 by the Company to the Buyer as of the date first written above.  The
Buyer  understands that by signing this Agreement and by receiving 65,404 Common
Shares,  the Buyer has  extinguished  all claims  against the Company  regarding
$266,848.32 of the Buyer's  current  financial  claim of $306,850.74 and retains
only the right to claim $40,002.42 from the Company.  The Company shall promptly
deliver  a  stock   certificate,   duly  executed  on  behalf  of  the  Company,
representing the Common Shares (the "STOCK CERTIFICATE") to Buyer.

     b. CLOSING DATE.  The date of the closing of the sale of the Securities (as
defined  below) shall be fourteen  days from the date first  written  above (the
"CLOSING DATE").

     2.   BUYER'S REPRESENTATIONS AND WARRANTIES
          --------------------------------------

     Buyer represents and warrants to the Company that:

     a.  INVESTMENT  PURPOSE.  The Common Shares are being  acquired by Buyer in
good faith solely for its own personal  account,  for investment  purposes only,
and are not being purchased for resale, resyndication, distribution, subdivision
or  fractionalization  thereof;  Buyer has no contract or  arrangement  with any
person to sell,  transfer  or pledge to any  person the  Securities  or any part
thereof, any interest therein or any rights thereto;  Buyer has no present plans
to enter into any such contract or arrangement;  and Buyer understands that as a
result it must bear the economic risk of the investment for an indefinite period
of time because the Securities have not been registered under the 1933 Act, and,
therefore, cannot be sold unless they are subsequently registered under the 1933
Act.

     b. ACCREDITED  INVESTOR STATUS.  Buyer is an "accredited  investor" as that
term is defined in Rule 501(a)(4) of Regulation D.

     c. RELIANCE ON EXEMPTIONS.  Buyer understands that the Securities are being
offered and sold to it under the exemption from the registration requirements of
the United States federal and state

<PAGE>

securities  laws and that the Company is relying upon the truth and accuracy of,
and  Buyer's  compliance  with,  the  representations,  warranties,  agreements,
acknowledgments  and  understandings  of  Buyer  set  forth  herein  in order to
determine the  availability  of such  exemptions and the eligibility of Buyer to
acquire the Securities.

     d.  INFORMATION.  Buyer  understands and acknowledges that it is purchasing
the Securities  without being furnished any offering  literature,  prospectus or
other materials other than copies of the SEC Documents (as defined hereinbelow),
that  this   transaction  has  not  been  scrutinized  by  the  SEC  or  by  any
administrative  agency charged with the administration of the securities laws of
any state, that all documents, records and books, pertaining to the Company, its
business,  finances and operations, and this investment have been made available
to Buyer,  and its advisors and  representatives,  including its  attorney,  its
accountant and/or its purchaser  representative,  and that the books and records
of the Company will be available upon reasonable  notice for inspection by Buyer
during reasonable  business hours at the Company's  principal place of business.
Buyer  and  its  advisors  and  representatives,  including  its  attorney,  its
accountant  and/or its purchaser  representative,  if any, have reviewed the SEC
Documents and been afforded the  opportunity to ask questions of the Company and
have received  complete and  satisfactory  answers to any such inquiries.  Buyer
understands  that its investment in the Securities is speculative and involves a
high  degree of risk high degree of risk of loss and that Buyer must be prepared
to lose its entire investment in the Company.  Buyer has sought such accounting,
legal and tax advice, as it has considered  necessary to an informed  investment
decision with respect to its  acquisition  of the  Securities.  Buyer,  or Buyer
together with its  purchaser  representative,  if any,  have such  knowledge and
experience in financial and business matters that it and such representative are
capable of evaluating  the merits and risks of an  investment in the  Securities
and of making an informed investment decision.

     e. GOVERNMENTAL  REVIEW. Buyer understands that no United States federal or
state  agency or any other  government  or  governmental  agency has approved or
disapproved  or  passed  on or made any  recommendation  or  endorsement  of the
Securities or the fairness or suitability  of the investment in the  Securities,
nor have such authorities  passed upon or endorsed the merits of the offering of
the Securities or the accuracy or adequacy of any of the information provided by
the Company to Buyer regarding the Company,  the Securities or any other matter,
and  that  the   Company  is  relying   on  the  truth  and   accuracy   of  the
representations,  declarations  and warranties  herein made by Buyer in offering
the Securities for sale to it without having first registered the same under the
1933 Act.

     f. TRANSFER OR RESALE.  Buyer understands that, (i) the Securities have not
been and are not being  registered  under  the 1933 Act or any state  securities
laws, and may not be transferred unless (a) subsequently  registered thereunder,
or  (b)  Buyer  shall  have  provided  the  Company  with  a  statement  of  the
circumstances  surrounding the proposed  disposition and shall have delivered to
the Company an opinion of counsel,  reasonably  satisfactory in form,  scope and
substance to the Company,  to the effect (1) that the  Securities  to be sold or
transferred  may be sold or  transferred  pursuant  to an  exemption  from  such
registration and (2) that  appropriate  action necessary for compliance with the
1933 Act has been taken;  (ii) any sale of such  Securities  made in reliance on
Rule 144 promulgated  under the 1933 Act may be made only in accordance with the
terms of said Rule and further,  if said Rule is not  applicable,  any resale of
such Securities  under  circumstances in which the seller (or the person through
whom the sale is made)  may be  deemed  to be an  underwriter  (as that  term is
defined in the 1933 Act) may require  compliance with some other exemption under
the 1933 Act or the  rules  and  regulations  of the SEC  thereunder;  and (iii)
neither  the Company nor any other  person is under any  obligation  to register
such  Securities  under the 1933 Act or any state  securities  laws or to comply
with the terms and conditions of any exemption thereunder.

     g. LEGENDS. Buyer understands that the stock certificates  representing the
Common Shares shall bear a  restrictive  legend in  substantially  the following
form (and a stop-transfer  order shall be placed against  transfer of such stock
certificates):

<PAGE>

          THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED.  THE SECURITIES HAVE BEEN ACQUIRED
          FOR INVESTMENT AND MAY NOT BE REOFFERED,  SOLD, TRANSFERRED,  PLEDGED,
          OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE  REGISTRATION STATEMENT
          FOR THE SECURITIES UNDER SAID ACT AND THE STATE SECURITIES ACT OR BLUE
          SKY ACT OF ANY STATE HAVING JURISDICTION THEREOF, OR (B) AN OPINION OF
          COUNSEL,  REASONABLY  SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE
          COMPANY,  THAT  REGISTRATION  IS NOT  REQUIRED  UNDER  SAID ACT OR THE
          SECURITIES ACT OR BLUE SKY ACT OF ANY STATE HAVING  JURISDICTION  WITH
          RESPECT THERETO.

     h.  AUTHORIZATION;  ENFORCEMENT.  This  Agreement has been duly and validly
authorized,  executed and delivered on behalf of Buyer and are valid and binding
agreements of Buyer  enforceable in accordance  with their terms,  subject as to
enforceability  to general  principles of equity and to bankruptcy,  insolvency,
moratorium,  and other  similar laws  affecting  the  enforcement  of creditors'
rights generally.

     i. DOMICILE.  Buyer's  principal  place of business is located in the State
set forth in Buyer's address in the preamble to this Agreement.

     j. NO CONFLICTS. The execution,  delivery and performance of this Agreement
by the Buyer and the consummation by the Buyer of the transactions  contemplated
hereby will not (i) result in an violation of the Certificate of  Incorporation,
as amended, as in effect on the date hereof ("CERTIFICATE OF INCORPORATION") and
the  Company's  Bylaws,  as in effect on the date hereof (the  "BYLAWS") or (ii)
conflict  with,  or constitute a default (or an event which with notice or lapse
of time or both would become a default)  under,  or give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument to which the Buyer or by which any property or asset of
Buyer is  bound  or  affected,  or  result  in a  violation  of any  law,  rule,
regulation,  order,  judgment or decree (including  federal and state securities
laws and regulations)  applicable to the Buyer or by which any property or asset
of the  Buyer is bound or  affected.  The  business  of the  Buyer is not  being
conducted,  and shall not be conducted through the Closing Date, in violation of
any law, ordinance,  regulation of any governmental  entity.  Except as required
under the 1933 Act and any applicable  state  securities  laws, the Buyer is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental  agency in order for it to execute,
deliver or perform any of its  obligations  under this  Agreement in  accordance
with the terms hereof.

     k.  INDEMNIFICATION.  Buyer acknowledges that Buyer understands the meaning
and legal consequences of the  representations and warranties in this Section 2,
and that the Company has relied upon such  representations  and warranties,  and
Buyer hereby agrees to indemnify and hold harmless the Company and its officers,
directors, shareholders, agents and representatives from and against any and all
claims, demands, losses, damages,  expenses or liabilities (including attorneys'
fees) due to or arising  out of,  directly or  indirectly,  a breach of any such
representations  or  warranties.  Notwithstanding  the  foregoing,  however,  no
representation, warranty, acknowledgment or agreement made herein by Buyer shall
in any manner be deemed to  constitute  a waiver of any  rights  granted to such
Buyer under federal or state securities laws.

     l.  SHORT  POSITION  AND  MARKET  PURCHASES.  Buyer is not  purchasing  the
Securities for the purpose of covering any short position in the Securities.

<PAGE>

     3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY
          ---------------------------------------------

     The Company represents and warrants to Buyer that:

     a.  ORGANIZATION  AND  QUALIFICATION.  The  Company is a  corporation  duly
organized and existing in good standing under the laws of the State of Delaware,
and has the requisite  corporate  power to own their  properties and to carry on
their  business  as now being  conducted.  The  Company is duly  qualified  as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the  business  conducted  by it makes such  qualification
necessary  and where the  failure  so to qualify  would have a material  adverse
effect on the operations, properties or financial condition of the Company taken
as a whole (a "MATERIAL ADVERSE EFFECT").

     b. AUTHORIZATION;  ENFORCEMENT. (i) The Company has the requisite corporate
power and  authority to enter into and perform this  Agreement  and to issue the
Securities in accordance  with the terms hereof and thereof,  (ii) the execution
and delivery of this Agreement by the Company and the  consummation by it of the
transactions  contemplated  hereby have been duly  authorized  by the  Company's
Board of Directors and no further consent or authorization  of the Company,  its
Board of Directors,  or its  stockholders is required,  (iii) this Agreement has
been duly  executed  and  delivered  by the  Company,  and (iv)  this  Agreement
constitutes the valid and binding obligations of the Company enforceable against
the Company in accordance with its terms,  except as such  enforceability may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,   moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors'  rights and remedies or by other  equitable  principles of general
application.

     c.  CAPITALIZATION.  As of August 27, 2002, the authorized capital stock of
the  Company  consists  of (i)  85,000,000  shares  of  Common  Stock  of  which
11,921,189  shares were issued and  outstanding,  (ii)  4,940,810  warrants  and
options were issued,  and (iii) 1,000,000  shares of preferred  stock,  $.01 par
value, of which 200,000 shares have been designated  "Series A Preferred Stock,"
72,646 of which were issued and outstanding. All of such outstanding shares have
been validly issued and are fully paid and nonassessable. Except as set forth in
the SEC Documents (as defined  herein),  (i) there are no  outstanding  options,
warrants  scrip,  rights to subscribe to, calls or  commitments of any character
whatsoever  relating to, or securities or rights convertible into, any shares of
capital  stock of the Company,  or  arrangements  by which the Company is or may
become bound to issue  additional  shares of capital  stock of the Company,  and
(ii)  there  are no  agreements  or  arrangements  under  which the  Company  is
obligated to register the sale of any of its securities  under the 1933 Act with
respect to securities  which have been  previously  purchased and are subject to
current registration statements.

     d. ISSUANCE OF SECURITIES.  The Common Shares are duly authorized and, upon
issuance  in  accordance  with the terms  hereof and  thereof,  shall be validly
issued,  fully  paid and  non-assessable,  and free  from all  taxes,  liens and
charges with respect to the issue thereof.

     e. NO CONFLICTS. The execution,  delivery and performance of this Agreement
by the  Company  and  the  consummation  by  the  Company  of  the  transactions
contemplated  hereby will not (i) result in a violation  of the  Certificate  of
Incorporation  or Bylaws or (ii)  conflict  with, or constitute a default (or an
event which with notice or lapse of time or both would become a default)  under,
or  give to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation of, any agreement,  indenture or instrument to which the Company is
a party, or result in a violation of any law, rule, regulation,  order, judgment
or  decree  (including  federal  and  state  securities  laws  and  regulations)
applicable  to the  Company or by which any  property or asset of the Company is
bound  or  affected   (except  for  such  conflicts,   defaults,   terminations,
amendments,   accelerations,   cancellations   and   violations  as  would  not,
individually or in the aggregate,  have a Material Adverse Effect). The business
of the  Company  is not being  conducted  in  violation  of any law,  ordinance,
regulation of any  governmental  entity,  except for possible  violations  which
either singly or in the aggregate do not have a Material Adverse Effect.  Except
as required under the 1933 Act and any  applicable  state  securities  laws, the
Company is not  required to obtain any  consent,  authorization  or order of, or
make any filing or

<PAGE>

registration with, any court or governmental  agency in order for it to execute,
deliver or perform any of its  obligations  under this  Agreement in  accordance
with the terms hereof.

     f. COMMON STOCK.  The Company has  registered  its Common Stock pursuant to
Section  12(b)  or (g)  of the  1934  Act  (as  defined  below)  and is in  full
compliance  with all reporting  requirements of the 1934 Act, and the Company is
in compliance with all  requirements  for the continued  listing or quotation of
its Common  Stock,  and such Common Stock is currently  listed or quoted on, the
Principal Market.  (Principal Market shall mean the American Stock Exchange, the
New York Stock  Exchange,  the NASDAQ  National  Market,  or the NASDAQ SmallCap
Market,  whichever is at the time the principal  trading  exchange or market for
the Common Stock,  based upon share volume, or if the Common Stock is not traded
on an exchange or market,  the OTC Bulletin  Board.) As of the date hereof,  the
Principal Market is the American Stock Exchange,  and except as set forth in the
SEC  Documents,  the Company has not received any notice  regarding,  and to its
knowledge  there is no threat  of,  the  termination  or  discontinuance  of the
eligibility of the Common Stock for such posting or listing.

     g. SEC DOCUMENTS,  FINANCIAL STATEMENTS.  During the Company's last two (2)
fiscal years, the Company has filed all reports,  schedules,  forms,  statements
and other  documents  required  to be filed by it with the SEC  pursuant  to the
reporting  requirements of the Securities  Exchange Act of 1934, as amended (the
"1934  ACT")  (all of the  foregoing  filed  prior  to the date  hereof  and all
exhibits  included  therein and financial  statements and schedules  thereto and
documents  (other  than  exhibits)  incorporated  by  reference  therein,  being
hereinafter  referred  to  herein  as the  "SEC  DOCUMENTS").  The  Company  has
delivered to Buyer true and  complete  copies of the SEC  Documents,  except for
such exhibits,  schedules and  incorporated  documents.  As of their  respective
dates,  subject to,  with  respect to certain  SEC  Documents,  the filing of an
amendment  to such SEC  Documents,  the SEC  Documents  complied in all material
respects with the  requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents,  and none of the
SEC  Documents,  at the time they were filed with the SEC,  contained any untrue
statement of a material  fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the  circumstances  under  which they were  made,  not  misleading.  As of their
respective  dates,  the financial  statements of the Company included in the SEC
Documents  complied  as  to  form  in  all  material  respects  with  applicable
accounting  requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally  accepted  accounting  principles,  consistently  applied,  during the
periods  involved  (except (i) as may be otherwise  indicated in such  financial
statements  or the  notes  thereto,  or (ii) in the  case of  unaudited  interim
statements,  to the extent they may exclude  footnotes  or may be  condensed  or
summary  statements)  and fairly present in all material  respects the financial
position  of  the  Company  as of the  dates  thereof  and  the  results  of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited   statements,   to  normal  year-end  audit  adjustments).   No  other
information  provided by or on behalf of the Company to Buyer and referred to in
Section 2(d) of this Agreement  contains any untrue statement of a material fact
or omits to state any material  fact  necessary in order to make the  statements
therein, in the light of the circumstance under which they are or were made, not
misleading.

     h. ABSENCE OF LITIGATION.  Except as disclosed in the SEC Documents,  there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public  board or body pending or, to the  knowledge  of the Company,  threatened
against the Company,  wherein an unfavorable  decision,  ruling or finding would
have a Material  Adverse Effect or which would adversely  affect the validity or
enforceability  of, or the  authority  or ability of the  Company to perform its
obligations under, this Agreement or any of the documents contemplated herein.

     4.   COVENANTS
          ---------

     a. BEST EFFORTS. The parties shall use their best efforts timely to satisfy
each of the conditions described in Section 6 and 7 of this Agreement.

<PAGE>

     b.  FORM  D.  The  Company  agrees  to  file a Form D with  respect  to the
Securities as required under Regulation D and to provide a copy thereof to Buyer
promptly after such filing.

     c.  REPORTING  STATUS.  Until the earlier of (i) the date as of which Buyer
may sell all the Common  Shares  without  restriction  pursuant  to Rule  144(k)
promulgated under the 1933 Act, or (ii) the date on which Buyer has sold all the
Common Shares,  the Company shall file all reports required to be filed with the
SEC pursuant to the 1934 Act, and the Company  shall not terminate its status as
an issuer  required to file  reports  under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would permit such termination.  Buyer shall
give notice to the Company when it has sold all of the Common Shares.

     5.   TRANSFER AGENT INSTRUCTIONS
          ---------------------------

     Buyer  acknowledges  that the Securities shall be "restricted"  securities,
that the Stock Certificate shall bear a restrictive  legend specified in Section
2(g) of this Agreement,  and that stop-transfer  instructions have been given by
the  Company to its  transfer  agent with  respect to the  Securities.  If Buyer
provides  the Company  with an opinion of counsel,  reasonably  satisfactory  in
form, scope and substance to the Company, that registration of a resale by Buyer
of any of the  Securities is not required  under the 1933 Act or any  applicable
state  securities  or blue sky laws,  the Company  shall permit the transfer and
promptly  instruct its transfer agent to issue one or more  certificates in such
name and in such denominations as specified by Buyer.

     6.   CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
          ----------------------------------------------

     The  obligation of the Company  hereunder to sell the Securities is subject
to the  satisfaction,  at or before the Closing  Date,  of each of the following
conditions,  provided that these  conditions  are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:

          a. The parties shall have  executed  this  Agreement and delivered the
same to each other.

          b. The  representations  and  warranties  of  Buyer  shall be true and
correct in all material  respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific  date),  and Buyer shall have  performed,  satisfied  and
complied in all material respects with the covenants,  agreements and conditions
required by this Agreement to be performed,  satisfied or complied with by Buyer
at or prior to the Closing Date.

     7.   CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE
          --------------------------------------------

     The obligation of Buyer  hereunder to purchase the Securities is subject to
the  satisfaction,  at or before  the  Closing  Date,  of each of the  following
conditions,  provided that these conditions are for Buyer's sole benefit and may
be waived by Buyer at any time in its sole discretion:

          a. The parties shall have  executed  this  Agreement and delivered the
same to each other.

          b. The representations and warranties of the Company shall be true and
correct in all material  respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants,  agreements and conditions
required by this  Agreement to be  performed,  satisfied or complied with by the
Company at or prior to the Closing Date.

          c. Until the Closing Date,  the Common Stock shall be  authorized  for
quotation  on the  American  Stock  Exchange  ("AMEX") and trading in the Common
Stock shall not have been suspended by the SEC or AMEX.

<PAGE>

          d. The Company  shall have  delivered  the Stock  Certificates  to the
Buyer.

     8.   GOVERNING LAW; MISCELLANEOUS
          ----------------------------

          a. GOVERNING LAW. This Agreement  shall be governed by and interpreted
in  accordance  with the laws of the  State of  Florida  without  regard  to the
principles of conflict of laws.

          b.  COUNTERPARTS.  This  Agreement  may be  executed  in  two or  more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  delivered  to the other  party.  In the event any  signature  page is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall  cause  three  (3)  additional  original  executed  signature  pages to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof.

          c.  HEADINGS.  The headings of this  Agreement are for  convenience of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.

          d.  SEVERABILITY.  If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction,  such invalidity or unenforceability shall
not affect the validity or  enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.

          e. ENTIRE  AGREEMENT;  AMENDMENTS.  This Agreement and the instruments
referenced  herein contain the entire  understanding of the parties with respect
to the matters covered herein and therein and, except as specifically  set forth
herein or therein,  neither the Company nor any Buyer makes any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

          f.  NOTICES.  Any notices  required or permitted to be given under the
terms of this  Agreement  shall be sent by mail or  delivered  personally  or by
courier  and shall be  effective  five days after being  placed in the mail,  if
mailed,  certified or registered,  return receipt requested, or upon receipt, if
delivered  personally  or by courier,  in each case  addressed  to a party.  The
addresses for such communications shall be:

          If to the Company:

          Galaxy Nutritional Foods, Inc.
          2441 Viscount Row
          Orlando, FL 32809
          Telephone: (407) 855-5500
          Telecopy: (407) 855-1099
          Attention: Mr. Angelo S. Morini

          With copy to:

          Baker & Hostetler LLP
          200 South Orange Avenue
          Orlando, FL 32801
          Telephone: (407) 649-4000
          Telecopy: (407) 841-0168
          Attention: Kenneth C. Wright, Esq.

<PAGE>

          If to Buyer:

          Hart Design & Mfg. Inc.
          1940 Radisson Street
          Green Bay, WI  54302
          Telephone: (920) 468-5927
          Telecopy: (920) 468-5888
          Attention:  Mr.Gerry Schaetz

Each party shall provide notice to the other party of any change in address.

          g.  SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their  successors  and assigns.  Neither
the Company nor Buyer shall assign this Agreement or any  obligations  hereunder
without the prior  written  consent of the other (which  consent may be withheld
for any reason in the sole discretion of the party from whom consent is sought).

          h. THIRD PARTY  BENEFICIARIES.  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

          i.  SURVIVAL.  The  representations  and warranties of the Company and
Buyer  contained in Sections 2 and 3 and the  agreements and covenants set forth
in Sections 4, 8(g),  8(h), 8(k) and 8(l), and this subsection shall survive the
closing for a period of two (2) years thereafter.

          k.  PUBLICITY.  The  Company and Buyer shall have the right to approve
before  issuance any press releases or any other public  statements with respect
to the transactions  contemplated hereby;  PROVIDED,  HOWEVER,  that the Company
shall be  entitled,  without  the prior  approval  of  Buyer,  to make any press
release with respect to such transactions as the Company  determines is required
by applicable law and regulations.

          l. FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and  performed,  all such  further acts and things,  and shall  execute and
deliver all such other agreements,  certificates,  instruments and documents, as
the other  party may  reasonably  request  in order to carry out the  intent and
accomplish  the  purposes  of  this  Agreement  and  the   consummation  of  the
transactions contemplated hereby.

          m. TERMINATION.  In the event that the closing shall not have occurred
on or before  fourteen  (14) days from the date  hereof,  this  Agreement  shall
terminate at the close of business on such date.

<PAGE>

          IN WITNESS WHEREOF,  Buyer and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.

                                     "Company"

                                     GALAXY NUTRITIONAL FOODS, INC.

                                     By:     /s/ Angelo S. Morini
                                          -------------------------------
                                     Name:   Angelo S. Morini
                                     Title:  Chief Executive Officer

                                     "Buyer"

                                     By:     /s/ John P. Adams
                                         --------------------------------

                                     Name:   John P. Adams
                                           ------------------------------

                                     Title:  Vice President
                                            -----------------------------
<PAGE>

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