Document:

AMENDMENT OF LOAN AGREEMENT

      THIS  AMENDMENT OF LOAN AGREEMENT is executed this May 28,  2003,  by
GALAXY  NUTRITIONAL FOODS, INC., a Delaware corporation f/k/a GALAXY  FOODS
COMPANY,  a  Delaware  corporation ("Borrower"), and  is  consented  to  by
SOUTHTRUST  BANK,  ("Lender"), and is made with  regard  to  the  following
matters:

R E C I T A L S:

      A.    On  or about March 10, 2000, Borrower executed a loan agreement
(the  "Loan  Agreement") in favor of Lender setting  forth  the  terms  and
conditions upon which the Lender was willing to lend the Borrower  the  sum
of  EIGHT  MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($8,500,000.00)
in  order to refinance and retire existing indebtedness of Borrower and  to
provide  the Borrower with financing for the acquisition of new  equipment,
which  loan  was evidenced by a Note dated March 10, 2000, in  the  sum  of
EIGHT  MILLION  FIVE  HUNDRED THOUSAND AND NO/100 DOLLARS  ($8,500,000.00),
which  was  renewed  and  increased by a  future  advance  in  the  sum  of
$1,500,000.00, as evidenced by that certain Renewal Promissory  Note  dated
September  15,  2000,  in  the  sum  of  TEN  MILLION  AND  NO/100  DOLLARS
($10,000,000.00) and was secured by a Security Agreement  dated  March  10,
2000, encumbering certain collateral of the Borrower as referenced in  said
Security Agreement; and

     B.   Certain terms of the Loan Agreement have previously been amended;
and

      C.    Borrower has again requested Lender to amend the terms  of  the
Loan Agreement and Lender is agreeable to such amendment.

     THEREFORE, for and in consideration of TEN AND NO/100 DOLLARS ($10.00)
and  for other valuable consideration received by the parties, it is hereby
agreed as follows:

1.    Section 1.02, definition of Funded Debt, is hereby modified such that
the  definition  of  Funded Debt shall not include  trade  payables,  trade
credit or accrued liabilities incurred in the ordinary course of business.

2.    Section 1.02, definition of Interest Rate, is hereby modified to read
as follows:

     "means the applicable rate of interest to be borne by the Note (except
     when  the  Default Rate is in effect) with respect to the  Loan,  such
     rate  shall be a floating rate calculated at an annual rate  equal  to
     one  percent  (1.0%) per annum in excess of the SOUTHTRUST  BANK  Base
     Rate  of  Interest in effect from time to time calculated on  a  daily
     moving  basis  upon  the principal balance hereof from  time  to  time
     outstanding,  but in no event to exceed the maximum  rate  allowed  by
     Florida  Law, as amended, or as preempted and prescribed from time  to
     time  by  the  Laws of the United States of America  or  any  rule  or
     regulation  of  any department or agency thereof.  The  Base  Rate  of
     Interest  of SOUTHTRUST BANK shall be that rate of interest  (but  not
     necessarily  the  best or lowest rate charged borrowing  customers  of
     SOUTHTRUST BANK) described by it as its Base Rate of Interest, whether
     or not such rate shall be otherwise published, as such rate shall vary
     from  time to time, and each adjustment shall be effective on the  day
     the change occurs."

3.    Section  1.02,  definition of Note, is hereby  modified  to  read  as
follows:

     "means  that certain Renewal Promissory Note dated May 28, 2003,  made
     by the Borrower to the order of the Bank in the amount of "TEN MILLION
     ONE  HUNDRED THIRTY-ONE THOUSAND NINE HUNDRED EIGHTY-FOUR  AND  85/100
     DOLLARS ($10,131,984.85)."

4.   Section 2.01, subsection (a), is hereby modified to read as follows:

     "The indebtedness of the Borrower under the Loan shall be evidenced by
     the  Note.  Principal and interest shall be repaid as set forth in the
     Note."

5.    Section  8.03, Addresses for Notices, Etc., is hereby  modified  such
that  all  notices  sent to the Bank shall also be sent  to  the  following
address:

     SOUTHTRUST BANK
     150 Second Avenue North, Suite 200
     St. Petersburg, Florida 33701
     Facsimile: (727) 898-5319

6.    Section  5.01(a) Accounting, Financial Statements,  Etc.,  is  hereby
amended  by deleting therefrom subsections (i), (ii) and (iv) and, in  lieu
thereof, substituting the following:

           "(i)  Within ten (10) days after filing with the Securities  and
Exchange Commission the following:  (i) a copy of Borrower's annual  report
on Form 10-K; and (ii) a copy of Borrower's quarterly reports on Form 10-Q.
Such reports may by furnished by email and will be deemed furnished if they
are publicly available and accessible.

          (ii) Intentionally omitted.

          (iv) Intentionally omitted."

7.        Section 5.01(j) Tangible Net Worth, is hereby amended to read  as
          follows:

           "(j)  Tangible  Net Worth.  The Borrower  must  have  a  minimum
Tangible  Net  Worth  equal to at least Eleven Million and  No/100  Dollars
($11,000,000.00).  Preferred stock shall be excluded for  the  purposes  of
calculating Tangible Net Worth."

8.    Section  5.01(k) Total Liabilities to Tangible Net Worth,  is  hereby
amended to read as follows:

          "(k)  Total Liabilities to Tangible Net Worth, The Borrower shall
maintain a ratio of Total Liabilities to Tangible Net Worth of no more than
2.50 to 1.00 as calculated for any rolling four quarter period, which shall
be  measured quarterly.  Preferred stock shall be excluded for the purposes
of calculating Tangible Net Worth."

9.    Section  5.01(l) Maximum Funded Debt to EBITDA, is hereby amended  to
read as follows:

           "(l)  Maximum Funded Debt to EBITDA  The Borrower shall maintain
a  ratio of maximum Funded Debt to EBITDA of not greater than 3.25 to 1  as
of,  and  to be measured at, March 31, 2004 and the same date of each  year
thereafter until all of the obligations have been repaid.  In the event  of
a  material  expansion  of  the Borrower's manufacturing  facilities,  Bank
agrees to readdress this covenant.  Non-cash stock expense/benefit shall be
excluded for the purposes of calculating EBITDA."

10.   Other  than  as specifically set forth herein above,  the  terms  and
provisions  of the Loan Agreement shall remain the same and in  full  force
and effect.

      IN  WITNESS  WHEREOF,  the  undersigned parties  have  executed  this
document effective the day and year first above written.

                              GALAXY NUTRITIONAL FOODS, INC.,
                              a Delaware corporation

                              By:  /s/ CHRISTOPHER J. NEW
                                   ------------------------------
                                   CHRISTOPHER J. NEW
                                   Chief Executive Officer

                              SOUTHTRUST BANK

                              By:  /s/ Todd H. Banes
                                   ------------------------------
                                   Todd H. Banes, Group Vice PresidentAMENDMENT OF SECURITY AGREEMENT

     THIS AMENDMENT OF SECURITY AGREEMENT is executed this 28th day of
May, 2003, by GALAXY NUTRITIONAL FOODS, INC., a Delaware corporation
authorized to do business in the State of Florida f/k/a GALAXY FOODS
COMPANY, a Delaware corporation ("Borrower"), and is consented to by
SOUTHTRUST BANK, ("Lender"), and is made with regard to the following
matters:

                             R E C I T A L S:

     A.   On or about March 10, 2000, Borrower executed a security
agreement (the "Security Agreement") in favor of Lender setting forth the
terms and conditions upon which the Lender was willing to lend the Borrower
the sum of EIGHT MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($8,500,000.00) in order to refinance and retire existing indebtedness of
Borrower and to provide the Borrower with financing for the acquisition of
new equipment, which loan was evidenced by a Note dated March 10, 2000, in
the sum of EIGHT MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($8,500,000.00), which was renewed and increased by a future advance in the
sum of $1,500,000.00, as evidenced by that certain Renewal Promissory Note
dated September 15, 2000, in the sum of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) ("Note One"), which is secured by the Security Agreement,
encumbering certain collateral of the Borrower as referenced in said
Security Agreement.

     B.   On or about October 19, 2000, Borrower executed a Promissory Note
in the original  principal amount of ONE MILLION FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($1,500,000.00) (herein "Note Two") in favor of Lender
secured, in part, by the securities referenced in Exhibit "A" to that
certain UCC-1 Financing Statement executed in connection with Note Two by
Borrower in favor of Lender, and the Security Agreement was simultaneously
modified such that the collateral referenced in the Security Agreement was
also made to secure the repayment of the indebtedness evidenced by Note
Two.

     C.   Borrower has requested and Lender has agreed to make a loan to
Borrower for an additional sum of TWO MILLION AND NO/100 DOLLARS
($2,000,000.00) (herein the "Future Advance") to be evidenced by that
certain Renewal Promissory Note executed by Borrower in favor of Lender
dated of even date herewith in the original principal amount of TEN MILLION
ONE HUNDRED THIRTY-ONE THOUSAND NINE HUNDRED EIGHTY-FOUR AND 85/100 DOLLARS
($10,131,984.85) conditioned upon the Borrower agreeing to modify the
Security Agreement to specifically state that the collateral referenced in
the Security Agreement shall continue to secure the repayment of: (i) Note
One, as renewed by the Renewal Promissory Note of even date herewith and
including the Future Advance of $2,000,000.00; and (ii) Note Two.

          D.   Borrower has requested and Lender has agreed to renew and
          modify the terms of Note Two.

     E.   Borrower has requested Lender to amend the terms of the Security
Agreement and Lender is agreeable to such amendment.

     THEREFORE, for and in consideration of TEN AND NO/100 DOLLARS ($10.00)
and for other valuable consideration received by the parties, it is hereby
agreed as follows:

          1.   Paragraph 2 of the Security Agreement is hereby amended to
          read as follows:

                    "2.  Indebtedness Secured.  This Security Agreement and
               the Security Interest created hereby secures the payment of
               all obligations of any kind owing by Debtor to Secured Party
               whether now existing or hereafter incurred, direct or
               indirect, primary or secondary, sole or joint and several,
               contingent or non-contingent, liquidated or non-liquidated,
               or otherwise, arising from loans, advances, guaranties,
               endorsements or otherwise, whether related or unrelated to
               the purpose of the original extension of credit, whether of
               the same or a different class as the primary obligation,
               including, without limitation, any sums advanced and any
               expenses or obligations incurred by Secured Party pursuant
               to this Security Agreement (including attorneys' fees and
               costs as provided herein) or any other agreement concerning,
               evidencing or securing obligations of Debtor to Secured
               Party, and any liabilities of Debtor to Secured Party
               arising from any source whatsoever and all extensions,
               renewals and modifications thereof, including but not
               limited to: (i) all obligations and indebtedness arising
               from the loan evidenced by Note One, as renewed of even date
               herewith (including all renewals, modifications and future
               advances thereof) and all loan documents related thereto;
               and (ii) all obligations and indebtedness arising from the
               loan evidenced by Note Two as renewed of even date herewith
               (including all renewals, modifications and future advances
               thereof) and all loan documents related thereto
               (collectively, the "Indebtedness")."

          2.   Paragraph 5, subparagraph (a) of the Security Agreement is
          hereby amended to read as follows:

                    "(a) will furnish Secured Party within ten (10) days
               after filing with the Securities and Exchange Commission the
               following:  (i) a copy of Debtor's annual report on Form 10-
               K; and (ii) a copy of Debtor's quarterly reports on Form 10-
               Q.  Such reports may by furnished by email and will be
               deemed furnished if they are publicly available and
               accessible."

          3.   Other than as specifically set forth herein above, the terms
          and provisions of the
Security Agreement shall remain the same and in full force and effect.

     IN WITNESS WHEREOF, the undersigned parties have executed this
document effective the day and year first above written.

                              GALAXY NUTRITIONAL FOODS, INC.,
                              a Delaware corporation

                              By:  /s/ CHRISTOPHER J. NEW
                                   --------------------------
                                   CHRISTOPHER J. NEW
                                   Chief Executive Officer

                              SOUTHTRUST BANK

                              By:  /s/ TODD H. BANES
                                   --------------------------
                                   TODD H. BANES
                                   Group Vice President

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