NOTE PURCHASE AGREEMENT

      THIS NOTE PURCHASE  AGREEMENT (the "Agreement") is made as of the 19th day
of July,  2006,  by and  between  Galaxy  Nutritional  Foods,  Inc.,  a Delaware
corporation (the "Company"), and Frederick A. DeLuca (the "Investor").

      WHEREAS,  the Company  desires to issue and sell to  selected  "accredited
investors"  as that  term is  defined  in  Regulation  D  promulgated  under the
Securities Act of 1933, as amended (the "Securities Act"), one or more Notes (as
defined below);

      WHEREAS,  the Investor is the owner of a promissory  note in the principal
amount of One Million Two Hundred  Thousand  Dollars  dated  September 12, 2005,
which matured on June 15, 2006 (the "Existing Note");

      WHEREAS,  the Company and the Investor are also parties to a  Registration
Rights Agreement dated as of October 6, 2004,  pursuant to which the Company was
obligated to cause the  registration  of certain  "Registrable  Securities" by a
specified  "Effective  Date  Deadline"  (as  such  terms  are  defined  in  such
Agreement);

      WHEREAS,  as a result of the Company's inability to cause the registration
of the Registrable  Securities by the Effective Date Deadline,  the Company owes
the Investor the sum of  $285,104.17  pursuant to the terms of the  Registration
Agreement;

      WHEREAS,  the Investor has agreed to exchange the Existing Note, his right
to the foregoing  $285,104.17 and the additional  amount of $1,200,000 for a new
promissory  note and  warrants  pursuant to the terms and  conditions  set forth
herein and in the Note; and

      WHEREAS,  the  Investor  acknowledges  that the Company is offering  Notes
similar to the Note  issued  pursuant  to this  Agreement  to other  "accredited
investors,"  including other holders of promissory notes similar to the Existing
Note.

      NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                                    ARTICLE I

                       TERMS OF THE PURCHASE AND EXCHANGE

Section 1.1 The Purchase and Exchange.

      (a) The New Promissory  Note.  Subject to the terms and conditions  herein
and in the Note, and subject to the  provisions of Section  1.1(b)  hereof,  the
Investor  agrees to purchase a  Promissory  Note in favor of the Investor in the
principal  amount of Two Million Six Hundred  Eighty Five  Thousand  One Hundred
Four and 17/100 Dollars ($2,685,104.17),  in the form attached hereto as Exhibit
A (the "Note").

      (b) Payment;  Note Exchange.  The Note shall be deemed paid to the Company
upon or prior to the execution of this Agreement as follows:

<PAGE>

            (i) One Million Two Hundred  Thousand Dollars  ($1,200,000)  against
      surrender of the Existing Note marked "cancelled", which amount equals the
      outstanding principal balance under the Existing Note;

            (ii) Two  Hundred  Eighty  Five  Thousand  One  Hundred and Four and
      17/100  Dollars  ($285,104.17)  as and  in  complete  satisfaction  of the
      Company's  obligation  to make any payments to the Investor as a result of
      the  Company's  inability  to cause the  registration  of the  Registrable
      Securities by the Effective Date Deadline; and

            (iii) One Million Two Hundred Thousand Dollars  ($1,200,000) by wire
      transfer of immediately  available  funds to an account  designated by the
      Company.

Section 1.2  Warrant.  The Company  does  hereby  agree to issue the  Investor a
Warrant to acquire  200,000 shares of the Company's  Common Stock in the form of
Exhibit B.

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES.

Section 2.1 Company Representations and Warranties.

      (a)  Organization  and Company  Power.  The Company is a corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware.  The  Company has all  required  power and  authority  to carry on its
business as presently conducted,  to enter into and perform this Agreement,  the
Note, the Warrant and any other agreements  contemplated hereby to which it is a
party and to carry out the transactions contemplated hereby and thereby.

      (b) Authorization and Non-Contravention.  This Agreement and all documents
executed  pursuant  hereto are valid and  binding  obligations  of the  Company,
enforceable  in  accordance  with  their  terms.  The  execution,  delivery  and
performance  of this  Agreement and all  agreements,  documents and  instruments
contemplated  hereby,  the issuance  and delivery of the Note and Warrant,  upon
conversion of the Note or exercise of the Warrant,  the issuance and delivery of
the equity securities purchasable upon conversion of the Note or exercise of the
Warrant, have been duly authorized by all necessary corporate or other action of
the Company.

Section 2.2 Securities Law Compliance.

      (a) The  Investor  agrees that its Note,  the  Warrant and the  securities
issuable upon conversion of the Note and exercise of the Warrant  (collectively,
the "Securities"), are being acquired for investment and that such Investor will
not  offer,  sell  or  otherwise   dispose  of  the  Securities,   except  under
circumstances  which will not result in a  violation  of the  Securities  Act of
1933, as amended (the  "Securities  Act"),  or any applicable  state  securities
laws. Each  certificate or other  instrument  representing any of the Securities
(unless  registered under the Securities Act and any applicable state securities
laws) shall be stamped or imprinted with a legend in substantially the following
form:


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<PAGE>

"THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE  "SECURITIES  ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY
NOT BE SOLD,  OFFERED FOR SALE,  MORTGAGED,  PLEDGED,  HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY  APPLICABLE  STATE  SECURITIES  LAWS, OR (B) AN EXEMPTION
THEREFROM, AND, IF REQUESTED BY THE COMPANY, THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL  SATISFACTORY  TO THE  COMPANY  THAT THE  TRANSFER IS EXEMPT FROM THE
REGISTRATION  PROVISIONS OF THE SECURITIES ACT AND APPLICABLE  STATE  SECURITIES
LAWS."

      (b) Restricted  Securities.  The Investor  understands that the Securities
will not be registered at the time of their  issuance  under the  Securities Act
for the reason that the sales provided for in this Agreement are exempt pursuant
to  Section  4(2) of the  Securities  Act  based on the  representations  of the
Investor set forth herein.  The Investor  represents  that it is  experienced in
evaluating  companies such as the Company,  has such knowledge and experience in
financial  and business  matters as to be capable of  evaluating  the merits and
risks of its  investment,  and has the  ability  to suffer the total loss of the
investment.  The Investor further  represents that it has had the opportunity to
ask questions of and receive  answers from the Company  concerning the terms and
conditions  of the  Securities  and the business of the  Company,  and to obtain
additional information to such Investor's satisfaction.  All documents,  records
and books pertaining to the Company and this investment have been made available
to the Investor and its representatives,  including each Investor's attorney and
accountant,  that the books and records of the Company  will be  available  upon
reasonable  notice for  inspection by the Investor  during  reasonable  business
hours at the Company's  principal  place of business,  and the Investor have had
access to and the opportunity to request  information  from and ask questions of
the officers and a directors of the  Company.  The Investor  further  represents
that it is an "accredited investor" within the meaning of Regulation D under the
Securities Act, as presently in effect. The Investor further represents that the
Securities are being acquired (and any shares issued upon conversion of the Note
or exercise of the Warrant  will be acquired)  for the account of such  Investor
for  investment  only  and not  with a view  to,  or with  any  intention  of, a
distribution  or  resale  thereof,  in  whole or in  part,  or the  grant of any
participation  therein.  If  an  Investor  is  a  corporation,  business  trust,
partnership, limited liability company or other entity, such Investor represents
that it was not formed for the  specific  purpose of  acquiring  the  Securities
offered hereby and has total assets of more than  $5,000,000.  If an Investor is
an  individual,  such Investor  represents  that:  (A) the Investor is a natural
person whose  individual net worth,  or joint net worth with spouse,  exceeds $1
million at the time of purchase  (in this  instance,  the term "net worth" means
the excess of assets at fair market value, including home and personal property,
over total  liabilities,  including  mortgages  and income  taxes on  unrealized
appreciation  of assets);  or (B) the  Investor is a natural  person who has had
individual  income of more than  $200,000 in each of the two most  recent  years
(2004 and 2005), or joint income with that person's spouse of more than $300,000
in each of those years, and reasonably expects to reach the same income level in
the current year (2006).

      (c)  State  of  Residence.  The  Investor  represents  that  it is a legal
resident  of, or, if such  Investor  is an entity,  has its  principal  place of
business in, the state listed on the signature page of this Agreement.


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<PAGE>

Section 2.3 Advice of  Consultants.  The  Investor  has  obtained  the advice of
independent  counsel and tax advisors of Investor's choice in entering into this
Agreement and the transactions  contemplated hereby or has knowingly elected not
to receive such counsel.

                                   ARTICLE III

                              TRANSFER RESTRICTIONS

Section 3.1  Transfers  Void.  The Investor  agrees that it may not sell,  give,
transfer,  assign or otherwise  dispose of the  Securities,  except as expressly
permitted by Section 3.2 hereof. Any purported sale, gift, transfer,  assignment
or other disposition,  or pledge of or grant of security interest in, any of the
Securities in violation of this Article III shall be null and void.

Section 3.2 Legend.  The Securities  shall be stamped or imprinted with a legend
in substantially the following form:

"THIS  NOTE/WARRANT/THESE  SHARES  IS/ARE  SUBJECT TO THE  PROVISIONS  OF A NOTE
PURCHASE  AGREEMENT,  INCLUDING  THEREIN  CERTAIN  RESTRICTIONS  ON TRANSFER.  A
COMPLETE AND CORRECT COPY OF SUCH  AGREEMENT IS AVAILABLE FOR  INSPECTION AT THE
PRINCIPAL  OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN  REQUEST AND
WITHOUT CHARGE."

                                   ARTICLE IV

                                     DEFAULT

Section 4.1 Events of Default. With respect to the Investor,  if, while any part
of the principal of the Investor's Note remains unpaid, any one of the following
"Events of Default" shall occur:

      (a) An  order,  judgment  or  decree  shall  be  entered  by any  court of
competent   jurisdiction,   approving  a  petition  seeking   reorganization  or
liquidation of the Company,  or appointing a receiver,  trustee or liquidator of
the  Company of all or a  substantial  part of its  assets,  which  such  order,
judgment or decree has not been effectively  stayed within sixty (60) days after
entry;

      (b) the  Company  shall (i) make a general  assignment  for the benefit of
creditors;  (ii) be  adjudicated  bankrupt or insolvent;  (iii) file a voluntary
petition in bankruptcy or a petition or an answer seeking  reorganization  or an
arrangement  with creditors to take  advantage of any insolvency  law; (iv) file
any answer admitting the material  allegations of a petition filed against it in
any bankruptcy,  reorganization or insolvency proceeding or fail to dismiss such
petition within sixty (60) days after the filing thereof; or (v) take any action
for the purpose of effecting any of the foregoing;

      (c) the  failure by the  Company  to  observe  and  perform  any  material
covenant,  condition and  agreement  under this  Agreement  which failure is not
cured  within  thirty  (30) days,  after  written  notice  from the  Investor or
discovery by the Company; and


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<PAGE>

      (d) the  failure by the  Company  to  observe  and  perform  any  material
covenant,  condition  and  agreement  under the Note which  failure is not cured
within the  applicable  cure  period (or thirty  (30) days if no cure  period is
expressly provided for such failure),  after written notice from the Investor or
discovery by the Company;

then and in every such event  such  Investor  may,  upon  written  notice to the
Company,  declare  the Note to be due and  payable in full,  whereupon  the Note
shall become due and payable in full.

                                    ARTICLE V

                                  MISCELLANEOUS

Section 5.1 Notices.  All necessary  notices,  demands and requests permitted or
required under this Agreement shall be in writing and shall be deemed  effective
(a) if  given  by  facsimile  or  E-mail,  when  such  facsimile  or  E-mail  is
transmitted  to the facsimile  number or E-mail  address  specified  below,  the
appropriate  answer back is received (in the case of a facsimile)  and a copy is
sent to such party by an express  mail carrier at the address  indicated  below,
(b) three  business days after being mailed by certified  mail,  return  receipt
requested,  postage  prepaid to the  applicable  party at the address  indicated
below or (c) one business day after being sent by an express mail carrier to the
applicable party at the address indicated below:

If to the Company:     Galaxy Nutritional Foods, Inc.
                       2441 Viscount Row
                       Orlando, Florida 32809
                       Facsimile: (407) 855-1099
                       E-mail: c/o Michael E. Broll [MBroll@galaxyfoods.com: and
                       Salvatore Furnari [SFurnari@galaxyfoods.com]
                       Attention: Michael E. Broll

With copies to:        Proskauer Rose LLP
                       2255 Glades Road, Suite 340 West
                       Boca Raton, Florida  33341
                       Facsimile: (561) 241-7145
                       E-mail: dthompson@proskauer.com
                       Attn: Donald E. "Rocky" Thompson, II, Esq.

If to the Investor:    Frederick A. DeLuca
                       c/o Doctor's Associates, Inc.
                       325 Bic Drive
                       Milford, CT 06460
                       E-mail: c/o Joe Esposito [esposito_j@subway.com]
                       and David Worroll [worroll_d@subway.com]
                       Facsimile: ______________________________

or such other address or facsimile  number as such party may  hereafter  specify
for the  purpose  of  receiving  notice  hereunder.  A copy of any notice to the
Investor shall be provided, as described above, to any counsel designated by the
Investor in writing to the Company as above provided.


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<PAGE>

Section 5.2 No Waiver.  No failure to exercise,  and no delay in exercising,  on
the part of an Investor,  any right, power or privilege  hereunder shall operate
as a waiver  thereof;  nor shall any  single or partial  exercise  of any right,
power or privilege  hereunder  preclude any other or further exercise thereof or
the exercise of any other  right,  power or  privilege.  The rights and remedies
herein  provided  are  cumulative  and not  exclusive  of any rights or remedies
provided by law.

Section  5.3  Governing  Law;  Construction.  This  Agreement,  the Note and the
Warrant  shall each be deemed to be a contract  made under the laws of the State
of Florida,  and shall be construed in accordance  with the laws of the State of
Florida.  The  descriptive  headings  of the  several  Sections  hereof  are for
convenience  only and shall not control or affect the meaning or construction of
any of the provisions hereof. This Agreement, the Note and the Warrant, together
with  the  Exhibits  hereto  and  thereto  and all  documents,  instruments  and
agreements  executed  pursuant  hereto,  constitute  the  entire  agreement  and
understanding  between the parties  hereto  with  respect to the subject  matter
hereof,  supersede  all  prior  agreements,  understandings  or  representations
pertaining to the subject matter hereof, whether oral or written, and may not be
contradicted  by evidence of any alleged  oral  agreement.  Venue for any action
brought under this Agreement or the Note shall be in Orange County, Florida.

Section 5.4 Amendments, Waivers and Consents. Any term, covenant or condition of
this  Agreement  may be amended,  omitted or waived  (either  generally  or in a
particular  instance and either  retroactively or prospectively) only by written
consent of all of the parties hereto.

Section 5.5 Expenses.  Any expense incurred by either party (including,  without
limitation, reasonable attorneys' fees and disbursements) in connection with the
negotiation,  execution,  administration  or enforcement of this Agreement,  the
Note  and any  other  document  executed  in  connection  with  the  obligations
hereunder or thereunder  and any  amendment  hereto or thereto shall be the sole
responsibility and shall be paid such party.

Section  5.6  Counterparts.  This  Agreement  may be  executed  in  two or  more
counterparts,  each of  which  shall  be  deemed  an  original  and all of which
together  shall  constitute but one and the same  instrument.  The signatures to
this  Agreement need not all be on a single copy of this  Agreement,  and may be
facsimiles rather than originals,  and shall be fully as effective as though all
signatures were originals on the same copy.

Section  5.7  Attorneys'  Fees.  In the event of a  judicial  or  administrative
proceeding  or action by one party  against the other party with  respect to the
interpretation  or enforcement of this Agreement,  the prevailing party shall be
entitled  to  recover  reasonable  costs  and  expenses   including   reasonable
attorneys' fees and expenses,  whether at the investigative,  pretrial, trial or
appellate  level.  The  prevailing  party shall be determined by the court based
upon an assessment of which party's major arguments or position prevailed.

Section 5.8  Construction  of Agreement.  This Agreement  shall not be construed
more  strictly  against one party than against the other merely by virtue of the
fact that it may have been prepared primarily by counsel for one of the parties.

                                   *    *    *


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<PAGE>

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

                                    "COMPANY"

                                    GALAXY NUTRITIONAL FOODS, INC., a
                                    Delaware corporation


                                    By:      /s/ Michael E. Broll
                                       -----------------------------------------
                                             Michael E. Broll
                                             Chief Executive Officer


                                   "INVESTOR"


                                    /s/ Frederick A. DeLuca
                                    --------------------------------------------
                                    FREDERICK A. DELUCA, an individual


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