Termination of Overadvance Option under Loan and Security Agreement between Galaxy Nutritional Foods, Inc. and Textron Financial Corporation

Summary

Galaxy Nutritional Foods, Inc. and Textron Financial Corporation agree to terminate Galaxy's option to request additional Overadvances under their existing Loan and Security Agreement, effective immediately, even though the original end date for this option had not yet passed. From this date forward, Textron is no longer obligated to provide Overadvances, and the outstanding loan balance will continue to accrue interest at the agreed rate. This agreement is confirmed by both parties' signatures.

EX-10.18 3 v020525_ex10-18.txt GALAXY LETTERHEAD June 17, 2005 Textron Financial Corporation 11575 Great Oaks Way, Suite 210 Alpharetta, GA 30022 Ladies and Gentlemen: Please refer to that certain Loan and Security Agreement dated as of May 27, 2003, as amended by that certain First Amendment to Loan and Security Agreement dated as of December 31, 2003, as further amended by that certain Second Amendment to Loan and Security Agremeent dated as of June 25, 2004, as further amended by that certain Third Amendment to Loan and Security Agreement dated as of November 10, 2004 and as further amended by that certain Fourth Amendment to Loan and Security Agreement dated as of June 3, 2005 (the "Fourth Amendment") (as may be further amended, modified, or supplemented from time to time, the "Loan Agreement") between you and Galaxy Nutritional Foods, Inc., a Delaware corporation ("Borrower"). Capitalized terms used herein without definitions shall have the meanings ascribed thereto in the Loan Agreement. Pursuant to Section 9 of the Fourth Amendment, you have agreed to make Overadvances (as defined in the Fourth Amendment) to Borrower in an amount not to exceed $750,000 until July 31, 2005 (the "Termination Date"). Notwithstanding the fact that the Termination Date has not been reached, the undersigned hereby requests, effective immediately, to terminate its option to request Overadvances. By your signature below, you hereby acknowledge and agree that, as of the date hereof, (i) you have no further obligation to make any Overadvance and (ii) the unpaid principal balance of the Revolving Loan Advances shall bear interest at the rate set forth in Section 1.3(a) of the Loan Agreement. Textron Financial Corporation June ___, 2005 Page 2 Sincerely, GALAXY NUTRITIONAL FOODS, INC. By: /s/ Salvatore J. Furnari -------------------------------------- Name: Salvatore J. Furnari Title: Chief Financial Officer ACCEPTED AND AGREED this 17th day of June, 2005: TEXTRON FINANCIAL CORPORATION By: /s/ Stuart A. Hall ----------------------------------------- Name: Stuart A. Hall Title: Senior Account Executive