Galaxy Foods Company
                                2441 Viscount Row
                             Orlando, Florida 32809

                                  June 15, 1999

Angelo S. Morini
c/o 2441 Viscount Row
Orlando, Florida 32809

     RE:  LOAN AGREEMENT

Dear Mr. Morini:

     This letter is in reference to that certain Amended and Restated Employment
Agreement,  dated as of the date hereof, between Angelo S. Morini ("Morini") and
Galaxy Foods Company ("Galaxy") (the "Employment Agreement").

     Pursuant  to the  Employment  Agreement,  Galaxy and Morini  have agreed to
enter into this Loan Agreement pursuant to which two promissory notes previously
delivered to Galaxy by Morini shall be modified and consolidated. The two notes,
in the  amounts of  $1,200,000  (the "1994  Note")  and  $11,572,200  (the "1995
Note"), represented the purchase price for certain Galaxy common stock purchases
made by  Morini  in 1994 and  1995,  respectively.  This  Loan  Agreement  shall
supersede the two notes and shall govern the loan arrangement between Galaxy and
Morini.

     The definitive terms of this Loan Agreement are as follows:

     1.   LOAN.

          a. AMOUNT. Upon the execution and delivery of this Loan Agreement, the
delivery of an executed  Promissory  Note (in  substantially  the form  attached
hereto as EXHIBIT A) with regard to the amount specified,  and the execution and
delivery of the Stock Pledge  Agreement (in the form attached  hereto as EXHIBIT
B),  Galaxy  agrees to cancel  the 1994  Note and the 1995 Note  (forgiving  any
accrued  interest  thereunder),  and lend  Morini  the amount  specified  in the
Promissory  Note (the  "Loan"),  subject to the terms and  conditions  contained
herein.

          b. INTEREST.  The outstanding  principal  amount of the Loan shall not
bear any  interest  unless and until the  occurrence  of an Event of Default (as
discussed below).

          c. TERM AND REPAYMENT.  The outstanding principal balance of this Loan
shall  be due and  payable  in full  on that  date  which  is  seven  (7)  years
subsequent to the date first written above; provided, that the Loan has not been
forgiven pursuant to the terms of the Employment Agreement.

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     2. SECURITY FOR THE LOAN. Morini does hereby affirm,  acknowledge,  ratify,
grant  and  assign  in favor of Galaxy a first,  prior,  sole lien and  security
interest  in  2,571,429   shares  of  Galaxy  common  stock,  par  value  $0.01,
beneficially  owned  by  Morini  and  issued  to  Morini   Investments   Limited
Partnership,  a Delaware limited partnership owned and controlled by Morini (the
"Partnership"),  and  represented  by  certificate  number  _____  (the  "Galaxy
Shares")  and  in  all  accessions,  substitutions,  replacements  and  proceeds
thereof,  including without limitation,  whether by law, merger or exchange,  to
secure the outstanding  principal  balance of the Loan.  Such security  interest
shall be  evidenced  by the  Partnership's  execution  and delivery of the Stock
Pledge Agreement  attached hereto as EXHIBIT B and the Partnership's  compliance
with the terms and conditions contained therein.

     3. REPRESENTATIONS AND WARRANTIES BY MORINI AND THE PARTNERSHIP. Morini and
the  Partnership  (collectively  referred  to as  the  "Borrower")  each  hereby
represent and warrant to Galaxy the following:

          a. The  execution,  delivery and  performance of this  Agreement,  the
Promissory Note, and the Stock Pledge Agreement will not:

               (i)  violate  any  provision  of law,  any  governmental  rule or
regulation,  any  order of any  court  or other  agency  of  government,  or any
provision of any  indenture,  agreement  (including  the  agreement by which the
Partnership  was  established  and  is  governed,  referred  to  herein  as  the
"Partnership  Agreement") or other instrument to which Borrower is a party or by
which Borrower or any of Borrower's properties or assets are bound, or

               (ii) result in the creation or imposition of any lien,  charge or
encumbrance  of any  nature  whatsoever  upon the Galaxy  Shares,  other than as
provided herein.

          b. Borrower is not a party to any contract or agreement (including the
Partnership  Agreement)  which  restricts  or  otherwise  limits  Borrower  from
incurring the debt described herein.  Neither the execution nor delivery of this
Agreement,   the  Promissory  Note  or  the  Stock  Pledge  Agreement,  nor  the
fulfillment  of nor the  compliance  with the  terms  and  provisions  hereof or
thereof will conflict  with,  or result in a breach of the terms,  conditions or
provisions of, or constitute a default under,  or result in any violation of any
agreement, instrument, order, judgment, decree, statute, law, rule or regulation
to which Borrower is subject.

          c. The Partnership is the owner of the Galaxy Shares free and clear of
all  liens,  charges  and  encumbrances,  and the  Partnership  and  Morini,  as
authorized  representative,  have the full  power and  authority,  and the legal
right, to grant a security interest in the Galaxy Shares as provided hereby.

          d. By virtue of this  Agreement  and the  perfection  of the  security
interest in the Galaxy  Shares in  accordance  with the  provisions of the Stock
Pledge

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Agreement,  Galaxy  has a  valid,  enforceable,  perfected  and  first  priority
security interest in the Galaxy Shares.

          e. Borrower has not and will not, without the consent of Galaxy, grant
to any person  other than Galaxy a security  interest  or any other  interest or
claim in the Galaxy Shares.

          f. The Partnership is duly formed and validly  existing under the laws
of the state of Delaware.

     4. REPRESENTATIONS BY GALAXY.  Galaxy hereby represents and warrants to the
following to Borrower:

          a. The execution, delivery and performance of this Agreement by Galaxy
will not violate any  provision  of Galaxy's  Certificate  of  Incorporation  or
Bylaws, or any law,  governmental rule or regulation,  any order of any court or
other agency of  government,  or any  provision of any  indenture,  agreement or
other  instrument  to which  Galaxy is a party or by which  Galaxy or any of its
properties or assets are bound.

          b. Galaxy is duly formed,  validly existing and in good standing under
the laws of the state of Delaware,  and has all requisite power and authority to
enter into and deliver  this  Agreement.  This  Agreement is a valid and binding
obligation of Galaxy, enforceable against Galaxy in accordance with its terms.

     5. EVENTS OF DEFAULT. Each of the following shall be considered an Event of
Default hereunder:

          a. MONETARY DEFAULT.  If any outstanding balance of the Loan shall not
be paid at maturity;

          b. NON-MONETARY  DEFAULT. If Borrower shall default in the performance
of or  compliance  with any material  term or covenant  contained in any of this
Agreement,  the Promissory Note, or the Stock Pledge Agreement, and such default
is not cured  within ten (10) days of the date from which notice of such default
is delivered to Borrower by Galaxy;

          c. FALSE  REPRESENTATION.  If any  representation  or warranty made in
writing by or on behalf of Borrower  herein,  in the  Promissory  Note or in the
Stock  Pledge  Agreement  shall  prove to have been  false or  incorrect  in any
material respect; or

          d. BANKRUPTCY OR INSOLVENCY.  If Borrower shall make an assignment for
the benefit of creditors,  file a petition in  bankruptcy,  petition or apply to
any tribunal for the appointment of a custodian,  receiver or trustee,  or shall
commence  any  proceeding  under any  bankruptcy,  reorganization,  arrangement,
readjustment  of  debt,  dissolution  or  liquidation  law  or  statute  of  any
jurisdiction,  whether now or hereafter  in effect,  or if there shall have been
filed any such petition or application,  or any such proceeding  shall have been
commenced against Borrower in which an order for relief is

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<PAGE>

entered or which remains undismissed for a period of sixty (60) days or more, or
Borrower,  by any act or omission shall indicate its consent to,  approval of or
acquiescence  in any such  petition,  application,  or  proceeding  or order for
relief or the  appointment  of a custodian,  receiver or any  trustee,  or shall
suffer  any  such   custodianship,   receivership  or  trusteeship  to  continue
undischarged for a period of sixty (60) days or more.

     6. REMEDIES UPON  DEFAULT.  Upon the  occurrence of an Event of Default and
during the  continuation  thereof,  Galaxy  may,  at its  option,  thereupon  or
thereafter,  without notice to or demand upon  Borrower,  declare the Promissory
Note  (notwithstanding  any  provisions  thereof),  immediately  due and payable
without  notice or demand and the same shall  immediately  become and be due and
payable without notice or demand, and further, the outstanding principal balance
of the Loan shall  thereafter  bear  interest at the rate of ten  percent  (10%)
until paid in full (or,  until such Event of Default is cured,  if earlier).  In
such event,  Galaxy's  sole  recourse  shall be to foreclose  against the Galaxy
Shares and exercise  its rights  under the Stock Pledge  Agreement of even date,
between Galaxy, as Secured Party and the Partnership,  as Pledgor, in accordance
with the terms thereof.

     7. GOVERNING LAW; VENUE.  This Agreement shall be governed by and construed
in accordance with the laws of the state of Florida applicable to contracts made
and to be performed  wholly  within that state.  Venue for any action  hereunder
shall be in Orange County,  Florida and Borrower hereby agrees to submit to such
jurisdiction.

     8. CONTINUING  SECURITY INTEREST.  This Agreement shall create a continuing
security  interest  in the Galaxy  Shares and shall (i) remain in full force and
effect until payment and performance in full of the obligations  hereunder,  and
(ii) be binding  upon and shall inure to the benefit of and be  enforceable  by,
Borrower and Galaxy and their  respective  successors,  transferees and assigns.
Upon the  payment in full of the  obligations  described  herein,  Galaxy  shall
release  its  security  interest  in the  Galaxy  Shares,  at its sole  cost and
expense. Anything herein to the contrary  notwithstanding,  neither Borrower nor
another person or entity shall have any liability or responsibility with respect
to the repayment of the Loan,  accrued  interest (if any) thereon,  or any other
expenses incurred by Galaxy to collect the same.

     9.  ASSIGNMENT.  The rights and  obligations  of Borrower set forth in this
Agreement  (and the Exhibits  attached  hereto) may be assigned by Borrower upon
thirty thirty (30) days written notice to Galaxy; provided, that Galaxy does not
object in writing to such assignment  within fifteen (15) days of its receipt of
such notice.

     10.  NONWAIVER.  No covenant or condition of this  Agreement  may be waived
except by the written consent of the parties  hereto.  Forbearance or indulgence
by a party in any  regard  whatsoever  shall  not  constitute  a  waiver  of the
covenant or  condition  to be performed by the other party to which the same may
apply,  and,  until  complete  performance by the other party of any covenant or
condition, the other party shall be

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<PAGE>

entitled to invoke any remedy  available  under this  Agreement  or by law or in
equity despite said forbearance or indulgence.

     11. ENTIRE  AGREEMENT.  This  Agreement  constitutes  the entire  agreement
between the parties with regard to the subject  matter hereof and supersedes all
prior  agreements,   representations,   warranties,   statements,  promises  and
understandings  not delivered in connection  herewith.  Neither party has in any
way  relied,  nor shall in any way rely,  upon any oral or  written  agreements,
representations,   warranties,   statements,   promises  or  understandings  not
specifically  set forth in this Agreement or in such other documents as shall be
executed in connection herewith.

     12.  ATTORNEYS'  FEES.  If either  party  hereto is  required  to engage in
litigation against any other party hereto,  either as plaintiff or as defendant,
in order to enforce or defend any of its rights under this  Agreement,  and such
litigation  results in a final judgment in favor of such party (the  "Prevailing
Party"),  then the party or parties against whom said final judgment is obtained
shall  reimburse  the  Prevailing  Party for all direct,  indirect or incidental
expenses  incurred by the  Prevailing  Party in so enforcing  or  defending  its
rights hereunder,  including, but not limited to, all reasonable attorneys' fees
and court costs and other expenses incurred throughout all negotiations,  trials
or  appeals  undertaken  in order  to  enforce  the  Prevailing  Party's  rights
hereunder.

     If Borrower is in agreement  with the above,  please execute this Agreement
where indicated. Thank you.

                                        Sincerely,

                                        GALAXY FOODS COMPANY,
                                        a Delaware corporation


                                        By: /s/ Cynthia L. Hunter
                                            --------------------------------
                                        Name: Cynthia L. Hunter
                                              ------------------------------
                                        Its: Chief Financial Officer
                                             -------------------------------

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<PAGE>

Agreed to and Accepted this 15th day of June, 1999, by:

MORINI INVESTMENTS
LIMITED PARTNERSHIP,
a Delaware limited partnership

By: Morini Investments, LLC
Its: General Partner

By: /s/ Angelo S. Morini
    --------------------------------
Name: Angelo S. Morini
      ------------------------------
Its: General Partner
     -------------------------------

/s/ Angelo S. Morini
------------------------------------
Angelo S. Morini, individually

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