AMENDMENT 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. ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (▇) 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/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. NEW
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▇▇▇▇▇▇▇▇▇▇▇ ▇. NEW
Chief Executive Officer
SOUTHTRUST BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Group Vice President
