FIRST AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
This FIRST
AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT (this
"Amendment") is made and entered into this
7th day of October, 2005 by and
between Galaxy Nutritional Foods, Inc., a
Delaware corporation (the "Company"),
and Frederick A. DeLuca, an individual
("Investor").
WHEREAS,
the Company and Investor previously entered into that certain
Note and Warrant Purchase Agreement dated
as of September 12, 2005 (the
"Original Agreement"). Capitalized terms
not expressly defined herein shall have
the meanings ascribed to them in the
Original Agreement.
WHEREAS,
subsequent to the Original Agreement, the Company entered into
other Note and Warrant Purchase Agreements
substantially similar to the Original
Agreement (the "Other Purchase Agreements")
and offered and sold notes and
warrants substantially similar to the Note
and Warrant issued pursuant to the
Original Agreement (the "Other Notes" and
"Other Warrants", respectively) to
other accredited investors ("Other
Investors") who made loans to the Company in
an aggregate amount (including the Loan) of
$2,400,000.
WHEREAS,
the Company and Investor desire to amend the Original Agreement
to conform it to the Other Purchase
Agreements, in accordance with the terms and
conditions of this Amendment.
NOW,
THEREFORE, for other good and valuable consideration, the receipt
and
sufficiency of which are hereby
acknowledged, each of the parties hereto agree
as follows:
Section 1.
Recitals. Each of the parties hereto agree that the recitals
set forth above are true and correct and
are incorporated into the terms of this
Amendment.
Section 2.
Amendment to the Original Agreement. Article II of the Original
Agreement is hereby amended by adding the
following new Sections 2.4 and 2.5:
"Section
2.4 No Preferential Treatment. Until all of the Company's
obligations hereunder are paid and
performed in full, the Company shall not,
without the prior consent of the Investor,
(a) make any payment or other
consideration with respect to any Other
Note unless the Company makes the same
payment or other consideration with respect
to the Note, pro rata based on the
relative principal amounts of the Note and
Other Notes; or (b) amend or waive
any provision of any Other Purchase
Agreement, Other Note or Other Warrant that
would (i) increase the interest rate of
such Other Note, (ii) shorten the
maturity date of such Other Note, (iii)
provide for any payments of principal
prior to maturity under such Other Note, or
(iv) otherwise materially adversely
affect the rights of the Investor hereunder
or under the Note or Warrant.
Section
2.5 Indebtedness Covenant.
(a)
