AMENDED AND RESTATED LOAN AGREEMENT

Exhibit 10.1

      Execution version

AMENDED AND RESTATED LOAN AGREEMENT

Dated as of October 1, 2008

among

G&K RECEIVABLES CORP., as Borrower ,

G&K SERVICES, INC., as initial Servicer,

THREE PILLARS FUNDING LLC, as Lender,

and

SUNTRUST ROBINSON HUMPHREY, INC., as Administrator

TABLE OF CONTENTS

AMENDED AND RESTATED LOAN AGREEMENT

           THIS AMENDED AND RESTATED LOAN AGREEMENT is made and entered into as of October 1, 2008, among G&K RECEIVABLES CORP., a Minnesota corporation (“ Borrower ”), G&K SERVICES, INC., a Minnesota corporation, in its capacity as the initial servicer (in such capacity, together with its successors and permitted assigns in such capacity, “ Servicer ”), THREE PILLARS FUNDING LLC, a Delaware limited liability company (together with its successors and permitted assigns, “ Lender ”), and SUNTRUST ROBINSON HUMPHREY, INC., a Tennessee corporation, as agent and administrator for Lender (in such capacity, together with its successor and assigns in such capacity, “ Administrator ”).

BACKGROUND

     1. The parties hereto are party to that certain Loan Agreement dated as of November 17, 2004 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “ Existing Agreement ”) and wish to amend and restate the Existing Agreement.

     2. Borrower desires that Lender extend financing to Borrower on the terms and subject to the conditions set forth herein.

     3. Lender is willing to provide such financing on the terms and subject to the conditions set forth herein.

           NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree to amend and restate the Existing Agreement as follows:

ARTICLE I.
DEFINITIONS

          Section 1.1 Defined Terms . As used in this Agreement, (a) capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Receivables Sale Agreement (hereinafter defined) regardless of whether those capitalized terms are listed below, and (b) the following terms have the following meanings:

          “ Accounts Receivable Turnover Ratio ” means, on any date of determination, the ratio computed as of the most recent Calculation Date by dividing (a) the aggregate amount of Credit Sales during the 12 fiscal months ending on such Calculation Date by (b) the average fiscal month-end amount of the Aggregate Unpaid Balance of Receivables during the 12 fiscal months ending on such Calculation Date.

          “ Administrator ” has the meaning set forth in the preamble to this Agreement.

          “ Administrator’s Account ” has the meaning set forth in Section 4.5 .

          “ Advance Rate ” means the percentage equal to (a) 100% minus (b) the Reserve Percentage.

          “ Adverse Claim ” has the meaning specified in the Receivables Sale Agreement.

          “ Affected Party ” means each of Lender, any Liquidity Bank, any permitted assignee of Lender or any Liquidity Bank, any Support Provider and any holder of a participation interest in the rights and obligations of any Liquidity Bank or Credit Bank under the Liquidity Agreement or the Credit Agreement, as the case may be, Administrator and any holding company of Bank.

          “ Affiliate ” of any Person means any other Person that (i) directly or indirectly controls, is controlled by or is under common control with such Person or (ii) is an officer or director of such Person. A Person shall be deemed to be “controlled by” another Person if such other Person possesses, directly or indirectly, power (a) to vote 5% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing partners of such other Person, or (b) to direct or cause the direction of the management and policies of such other Person whether by contract or otherwise. The word “ Affiliated ” has a correlative meaning.

          “ Aggregate Dilution Reserve ” means, on any date of determination, the sum of the Short Dilution Reserve and the Long Dilution Reserve.

          “ Aggregate Unpaid Balance ” means, on any date of determination, the aggregate Unpaid Balance of all Eligible Receivables at such time.

          “ Agreement ” means this Amended and Restated Loan Agreement, as it may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof.

          “ Allocations ” has the meaning set forth in Section 3.3 .

          “ Alternative Rate ” means, for any Interest Period, an interest rate per annum equal to either (a) the LIBOR Rate or (b) if the LIBOR Rate is unavailable for any reason or there is less than three (3) Business Days’ prior notice to the Liquidity Banks of any funding by them, the Base Rate.

          “ Alternative Rate Allocation ” has the meaning set forth in Section 3.3 .

          “ Amortization Event ” means any of the events described in Section 10.2 .

          “ Applicable Margin ” has the meaning specified in the Fee Letter.

          “ Bank ” means SunTrust Bank, a Georgia banking corporation.

          “ Bankruptcy Code ” means the Bankruptcy Code, 11 U.S.C. § 101, et seq. , as amended.

          “ Base Rate ” means, on any date of determination, a fluctuating rate of interest per annum equal to the higher of (i) the Prime Rate, or (ii) the Federal Funds Rate most recently determined by Bank plus 0.50% per annum .

          “ Borrower ” has the meaning set forth in the preamble to this Agreement.

          “ Borrowing Base ” means, on any date of determination, an amount equal to the product of (a) the Advance Rate as of the more recent to occur of the Interim Calculation Date or the Calculation Date times (b) the excess, if any, of (i) the Aggregate Unpaid Balance as of the more recent to occur of the Interim Calculation Date or Calculation Date immediately preceding such date of determination, over (ii) the Excess Concentration Amount for all Obligors as of the last Business Day of the most recent Interim Calculation Date or Calculation Date.

          “ Borrowing Base Certificate ” means a certificate, substantially in the form of Exhibit D hereto, duly executed by an authorized officer of Servicer.

          “ Borrowing Base Deficit ” means, on any date of determination, an amount equal to the excess, if any, of (a) the aggregate principal amount of all outstanding Loans at such time over (b) the Borrowing Base (as reflected in the most recent Borrowing Base Certificate or Monthly Report).

          “ Borrowing Request ” has the meaning set forth in Section 2.2 .

          “ Business Day ” means any day on which (a) Bank is not authorized or required to be closed for business in Atlanta, Georgia, and The Depository Trust Company of New York is open for business, and (b) commercial banks in New York City are not authorized or required to be closed and, in the case of a Rate Setting Date for Loans bearing interest by reference to the LIBOR Rate, banks are open for business in London, England.

          “ Calculation Date ” means the last Business Day of each Calculation Period.

          “ Calculation Period ” means a fiscal month.

          “ Charge-Off ” means a Receivable not previously deemed a Defaulted Receivable that is written-off by Servicer or should, in accordance with the Credit and Collection Policy, be written-off.

          “ Closing Date ” means the later to occur of (a) November 18, 2004, or (b) the date of the first Loan hereunder.

          “ Collateral ” has the meaning set forth in Section 5.1(a) .

          “ Collateral Review ” means a report of Commercial Lending Consultants or another firm acceptable to Administrator which satisfies the requirements set forth on Schedule 9.1.5 .

          “ Collections ” has the meaning set forth in the Receivables Sale Agreement.

          “ Commercial Paper Notes ” means short-term promissory notes issued by Lender to fund its Loans or investments in receivables or other financial assets.

          “ Commercial Paper Rate ” means, for any day, the per annum rate equivalent to the weighted average of the per annum rates paid or payable by the Lender from time to time as interest on or otherwise (by means of interest rate hedges or otherwise taking into consideration any incremental carrying costs associated with short-term promissory notes issued by the Lender maturing on dates other than those certain dates on which the Lender is to receive funds) in respect of the promissory notes issued by the Lender that are allocated, in whole or in part, by Administrator (on behalf of the Lender) to fund or maintain any Loan during such period, as determined by Administrator (on behalf of the Lender) and reported to Borrower, which rates shall reflect and give effect to (a) the commissions of placement agents and dealers in respect of such promissory notes, to the extent such commissions are allocated, in whole or in part, to such promissory notes by Administrator (on behalf of the Lender) and (b) other borrowings by the Lender, including, without limitation, borrowings to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market; provided , however , that if any component of such rate is a discount rate, in calculating the Commercial Paper Rate, Administrator shall, for such component, use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum .

          “ Commitment Termination Date ” means the earliest to occur of (i) the Scheduled Commitment Termination Date, (ii) the date of any termination of the Lender’s Commitment pursuant to Section 2.6 , (iii) the effective date on which the Lender’s Commitment is terminated pursuant to Section 10.3 , (iv) the Liquidity Termination Date, (v) termination of the Credit Banks’ commitments under the Credit Agreement, and (vi) the date on which any purchase or other funding is made pursuant to the Liquidity Agreement.

          “ Concentration Account ” means each of the accounts designated as a concentration account on Schedule 8.12 hereto maintained in Borrower’s name.

          “ Concentration Account Agreement ” means an agreement by and among Borrower, Administrator and the bank at which a Concentration Account is maintained, in substantially the form of one of the agreements attached hereto as Exhibit E (or as otherwise approved by Administrator), specifying the rights of Lender and Administrator in a Concentration Account.

          “ Concentration Limit ” means:

     (a) for any other Obligor whose short term unsecured debt ratings are at least both “A-1” from S&P and “P-1” from Moody’s, 4.0% of the Aggregate Unpaid Balance; or

     (b) for all municipal and state Government Obligors in the aggregate, 3.0% of the Aggregate Unpaid Balance; and

     (c) for any other Obligor, 2.0% of the Aggregate Unpaid Balance;

provided that (1) the limitations set forth in the foregoing clauses (a), (b) and (c) shall apply to each specified Obligor and its Affiliates, considered as if they were one and the same Person.

          “ Contract ” has the meaning set forth in the Receivables Sale Agreement.

          “ Covered Taxes ” means Taxes other than Excluded Taxes.

          “ CP Allocation ” has the meaning set forth in Section 3.3 .

          “ Credit Advance ” means a drawing under a letter of credit issued pursuant to a Credit Agreement for the account of Lender, a loan to Lender under a Credit Agreement or any other advance or disbursement of funds to Lender or for Lender’s account pursuant to a Credit Agreement or any such letter of credit, in each case to the extent such drawing, loan, advance or disbursement has not been repaid or reimbursed to Credit Bank in accordance with the related Credit Agreement.

          “ Credit Agreement ” means and includes any program-wide agreement entered into by any Credit Bank providing for the issuance of one or more letters of credit for the account of Lender, the issuance of one or more surety bonds for which Lender is obligated to reimburse the applicable Credit Bank for any drawings hereunder, the sale by Lender to any Credit Bank of receivables or other financial assets owned or held by Lender (or portions thereof) and/or the making of loans and/or other extensions of credit to Lender in connection with its commercial paper program, together with any cash collateral agreement, letter of credit, surety bond or other agreement or instrument executed and delivered in connection therewith (but excluding the Liquidity Agreement, or similar agreement, or any voluntary advance agreement).

          “ Credit and Collection Policy ” has the meaning set forth in the Receivables Sale Agreement

          “ Credit Bank ” means and includes Bank and any other or additional bank or other Person (other than Borrower or other customer of Lender or any liquidity provider as such) now or hereafter extending credit or a purchase commitment to or for the account of Lender or issuing a letter of credit, surety bond or other instrument, in each case to support any obligations arising under or in connection with Lender’s commercial paper program.

          “ Credit Sales ” means, for any period of determination, the Outstanding Balance of all Receivables originated by the Originators during such period.

          “ Days Sales Outstanding Ratio ” means, on any date of determination, the ratio computed as of the most recent Calculation Date by dividing (a) 360 by (b) the Accounts Receivable Turnover Ratio for the Calculation Period ending on such Calculation Date.

          “ Debt ” of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of such Person for the deferred purchase price of property or services (other than property and services purchased, and expense accruals and deferred compensation items arising, in the ordinary course of business), (iii) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments (other than performance, surety and appeal bonds arising in the ordinary course of business), (iv) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (v) all obligations of such Person under leases which have been or should be, in accordance with GAAP, recorded as capital leases, to the extent required to be so recorded,

(vi) all reimbursement, payment or similar obligations of such Person, contingent or otherwise, under acceptance, letter of credit or similar facilities (other than letters of credit in support of trade obligations or in connection with workers’ compensation, unemployment insurance, old-age pensions and other social security benefits in the ordinary course of business), (vii) all net obligations of such Person in respect of interest rate swap, cap, collar, swaption, option or similar agreements, (viii) all obligations arising in connection with a sale or other transfer of any of such Person’s financial assets which are, or are intended to be, classified as loans for federal tax purposes, (ix) all Debt referred to in clauses (i) through (viii) above guaranteed directly or indirectly by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (A) to pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (B) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss in respect of such Debt, (C) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (D) otherwise to assure a creditor against loss in respect of such Debt, and (x) all Debt referred to in clauses (i) through (viii) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any lien, security interest or other charge or encumbrance upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt.

          “ Default Rate ” has the meaning set forth in Section 3.1(c) .

          “ Default Ratio ” means, on any date of determination, the ratio (expressed as a percentage) computed as of the most recent Calculation Date by dividing (a) the Aggregate Unpaid Balance of Receivables that became Defaulted Receivables during the Calculation Period ending on such Calculation Date, by (b) Credit Sales for the Calculation Period ending 4 fiscal months prior to such Calculation Date.

          “ Defaulted Receivable ” means, as of any date of determination, any Receivable (i) which Servicer has or should have charged-off or deemed uncollectible in accordance with the Credit and Collection Policy after taking a reasonable time to apply Collections received to applicable invoices and reconcile the amount of such Receivable, (ii) as to which, as of such date of determination, any payment, or part thereof, remains unpaid for 121 days or more past the Invoice Date for such payment, determined by reference to the original contractual payment terms of such Receivable or (iii) as to which the Obligor thereon has suffered an Event of Bankruptcy.

          “ Delinquency Ratio ” means, as of any date of determination, the ratio (expressed as a percentage) computed as of the last day of the Calculation Period then most recently ended, by dividing (a) the Unpaid Balance of Receivables that are Delinquent Receivables as of the last day of such Calculation Period by (b) an amount equal to the Aggregate Unpaid Balance as of the last day of such Calculation Period, minus the aggregate Excess Concentration Amount as of the last day of such Calculation Period.

          “ Delinquent Receivable ” means, as of any date of determination, any Receivable (other than a Defaulted Receivable) as to which, as of such date of determination, any payment, or part thereof, remains unpaid for 91 days or more past the Invoice Date for such payment.

          “ Deposit Account ” means any depositary account of Borrower (other than a Concentration Account) which is listed on Schedule 8.12 hereto into which proceeds of Receivables are deposited and from which all available funds are swept each Business Day into a Concentration Account.

          “ Deposit Date ” has the meaning set forth in Section 11.2.4(b) .

          “ Designated Obligor ” means, at any time, each Obligor and its Affiliates; provided , however , that any Obligor shall cease to be a Designated Obligor three (3) Business Days after notice is given by Administrator.

          “ Dilutions ” means, for any period of determination, the aggregate amount of returns, allowances, net credits and any other non-cash reductions to the Credit Sales during such period.

          “ Distribution Date ” means the 22nd day of each calendar month after the Closing Date (or, if such day is not a Business Day, the Business Day immediately thereafter).

          “ Documents ” means all documentation relating to the Receivables including, without limitation, the Contracts, billing statements and computer records and programs.

          “ Dollar(s) ” and the sign “ $ ” shall mean lawful money of the United States of America.

          “ Eligible Receivable ” means each Receivable that meets the following criteria:

     (a) that was created by the applicable Originator in compliance, in all material respects, with its Credit and Collection Policy, in the regular and ordinary course of the business of such Originator;

     (b) the Obligor of which is a Designated Obligor;

     (c) that was documented in all material respects in compliance with the applicable Originator’s standard administration and documentation policies and procedures;

     (d) is not a Defaulted Receivable or a Delinquent Receivable;

     (e) as to which, at the time of the sale or contribution of such Receivable to Borrower, the transferring Originator was the sole owner thereof and had good and marketable title thereto, free and clear of all Adverse Claims, and which was sold or contributed to Borrower pursuant to the Receivables Sale Agreement free and clear of all Adverse Claims other than in favor of Administrator;

     (f) the assignment of which by the applicable Originator to Borrower pursuant to the Receivables Sale Agreement does not contravene or conflict with any law, rule or regulation or any contractual or other restriction, limitation or encumbrance, and the sale or assignment of which does not require the consent of the Obligor thereof;

     (g) which is denominated and payable in Dollars and is only payable in the United States of America;

     (h) the Obligor of which is a resident of the United States;

     (i) the Obligor of which is not an officer, director or Affiliate of any Originator or Borrower and is not the United States government or any agency thereof;

     (j) that is in full force and effect and constitutes the legally valid and binding payment obligation of the Obligor with respect thereto, enforceable against such Obligor in accordance with its terms and is not subject to any right of rescission, setoff, counterclaim or defense (including the defense of usury) or to any repurchase obligation or return right;

     (k) that does not contravene any applicable requirements of law (including without limitation all laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, fair debt collection practices and privacy) and which complies with all applicable requirements of law and with respect to which all consents, licenses, approvals or authorizations of, or registrations or declarations with, any governmental authority required to be obtained, effected or given by the related Originator in connection with the creation or the execution, delivery and performance of such Receivable, have been duly obtained, effected or given and are in full force and effect;

     (l) that complies with all applicable requirements of the applicable Credit and Collection Policy;

     (m) as to which each of Borrower’s and Administrator’s (for the benefit of the Secured Parties) first priority security interest in such Receivable has been perfected under the applicable Uniform Commercial Code and other applicable laws;

     (n) as to which Servicer is in possession of the related Receivable File;

     (o) which provides for repayment in full of the Unpaid Balance thereof within 30 days of the date of the creation thereof;

     (p) the terms of which have not been modified or waived except as permitted under the Credit and Collection Policy and this Agreement;

     (q) which constitutes an “account” or a “payment intangible” under and as defined in Article 9 of the Uniform Commercial Code of all applicable jurisdictions;

     (r) which is not subject to any dispute, right of rescission, set-off, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against any Originator or any other Adverse Claim, and the Obligor thereon holds no right as against such Originator to cause such Originator to repurchase the goods the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or goods returned in accordance with the terms of the Contract);

     (s) the applicable Originator has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor; and

     (t) is not a bill-and-hold Receivable.

          “ Event of Bankruptcy ” shall be deemed to have occurred with respect to a Person if either:

     (a) a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts and, solely in the case of the Borrower, such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or

     (b) such Person shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person or for any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors shall vote to implement any of the foregoing.

          “ Event of Default ” means any of the events described in Section 10.1 .

          “ Excess Concentration Amount ” means, on any date of determination, with respect to any Obligor and its Affiliates considered as if they were one and the same Obligor, the amount, if any, by which the Aggregate Unpaid Balance of such Obligor and its Affiliates at such time exceeds the Concentration Limit for such Obligor and its Affiliates at such time.

          “ Excluded Taxes ” means, in the case of any Indemnified Party, taxes imposed on its overall net income, and franchise taxes and branch profit taxes based on net income, imposed on it by (i) the jurisdiction under the laws of which such Indemnified Party is organized or (ii) the jurisdiction in which such Indemnified Party’s principal executive office is located.

          “ Expected Long Dilution Ratio ” means, (a) on any date of determination prior to February 28, 2009, the average Long Dilution Ratio for the period commencing on March 1, 2008 and ending on the most recent Calculation Date and (b) on any date of determination thereafter, the rolling twelve-fiscal-month average Long Dilution Ratio for the twelve-fiscal-month period ending on the most recent Calculation Date.

          “ Expected Short Dilution Ratio ” means, (a) on any date of determination prior to February 28, 2009, the average Short Dilution Ratio for the period commencing on March 1, 2008 and ending on the most recent Calculation Date and (b) on any date of determination thereafter, the rolling twelve-fiscal-month average Short Dilution Ratio for the twelve-fiscal-month period ending on the most recent Calculation Date.

          “ Extension Fee ” has the meaning provided in the Fee Letter.

          “ Facility Limit ” means $60,000,000.

          “ Federal Funds Rate ” means, for any day, the greater of (i) the average rate per annum as determined by Bank at which overnight Federal funds are offered to Bank for such day by major banks in the interbank market, and (ii) if Bank is borrowing overnight funds from a Federal Reserve Bank that day, the average rate per annum at which such overnight borrowings are made on that day. Each determination of the Federal Funds Rate by Bank shall be conclusive and binding on Borrower and Servicer except in the case of manifest error.

          “ Fee Letter ” has the meaning set forth in Section 3.4 .

          “ Fees ” means all fees and other amounts payable by Borrower to Administrator or Lender pursuant to the Fee Letter.

          “ G&K ” means G&K Services, Inc., a Minnesota corporation, and its successors.

          “ GAAP ” has the meaning set forth in the Receivables Sale Agreement.

          “ Government Obligor ” means any Obligor that is a Governmental Authority.

          “ Governmental Authority ” has the meaning set forth in the Receivables Sale Agreement.

          “ Indemnified Amounts ” has the meaning set forth in Section 14.1 .

          “ Indemnified Party ” has the meaning set forth in Section 14.1 .

     “ Interest Period ” means, with respect to any Alternative Rate Allocation, (i) initially, the period commencing on the date of the initial establishment of such Allocation and ending on (but excluding) the Business Day immediately preceding the next following Scheduled Interest Payment Date, and (ii) thereafter, each period commencing on (and including) the Business Day immediately preceding a Scheduled Interest Payment Date and ending on (but excluding) the Business Day immediately preceding the next following Scheduled Interest Payment Date; provided , however , that if any Interest Period for any Allocation that commences before the Commitment Termination Date would otherwise end on a date occurring after such Commitment Termination Date, such Interest Period shall end on such Commitment Termination Date and the duration of each such Interest Period that commences on or after the Commitment Termination Date, if any, shall be of such duration as shall be selected by Administrator.

          “ Interim Calculation Date ” means the last Business Day of the first three fiscal weeks in each Calculation Period.

          “ Invoice Date ” means the date of creation of a Receivable.

          “ Lender ” has the meaning set forth in the preamble to this Agreement.

          “ Lender Note ” has the meaning set forth in Section 2.7 .

          “ Lender’s Commitment ” has the meaning set forth in Section 2.1 .

          “ Liabilities ” means, with respect to any Person, all obligations of such Person which would, in accordance with GAAP, be classified on a balance sheet as liabilities, including, without limitation, (i) Debt secured by liens against property of such Person whether or not such Person is liable for the payment thereof and (ii) deferred liabilities.

          “ LIBOR Rate ” means, for any Interest Period, the rate per annum on the Rate Setting Day of such Interest Period appearing on a Bloomberg L.P. terminal, displayed under the address “ US0001M <Index> Q <Go> ” as of 11:00 a.m. (London time) on the Rate Setting Day; provided that in the event no such rate is shown, the LIBOR Rate shall be the rate per annum (rounded upwards, if necessary, to the nearest 1/16th of one percent) based on the rates at which Dollar deposits for one month are displayed on page “ LIBOR ” of the Reuters Screen as of 11:00 a.m. (London time) on the Rate Setting Day (it being understood that if at least two (2) such rates appear on such page, the rate will be the arithmetic mean of such displayed rates); provided further , that in the event fewer than two (2) such rates are displayed, or if no such rate is relevant, the LIBOR Rate shall be the rate per annum equal to the average of the rates at which deposits in Dollars are offered by Administrator at approximately 11:00 a.m. (London time) on the Rate Setting Day to prime banks in the London interbank market for a one-month period.

          “ Liquidity Agreement ” means and includes (a) the Amended and Restated Liquidity Asset Purchase Agreement (regarding G&K Receivables Corp.), dated as of October 1, 2008 among Lender, as borrower, Bank, as liquidity agent for the Liquidity Banks,

Administrator, and the Liquidity Banks, or (b) any other agreement hereafter entered into by Lender providing for the sale by Lender of Loans (or portions thereof), or the making of loans or other extensions of credit to Lender secured by security interests in the Loans (or portions thereof), to support all or part of Lender’s payment obligations under the Commercial Paper Notes or to provide an alternate means of funding Lender’s investments in accounts receivable or other financial assets, in each case as amended, supplemented, restated or otherwise modified from time to time.

          “ Liquidity Bank ” means and includes Bank and the various financial institutions as are, or may become, parties to the Liquidity Agreement, as purchasers thereunder.

          “ Liquidity Premium ” has the meaning specified in the Fee Letter.

          “ Liquidity Termination Date ” means the earlier to occur of (a) September 30, 2009, as such date may be extended from time to time by the Liquidity Banks in accordance with the Liquidity Agreement, and (b) the occurrence of an Event of Bankruptcy with respect to Lender.

          “ Loan ” means any amount disbursed as principal by Lender to Borrower under this Agreement.

          “ Long Dilution Horizon Ratio ” means, on any date of determination, the ratio computed by dividing (a) the sum of (i) Credit Sales for the Calculation Period then most recently ended plus (ii) 53% of Credit Sales for the Calculation Period immediately preceding such most recently ended Calculation Period, by (b) an amount equal to the Aggregate Unpaid Balance as of the last day of such most recently ended Calculation Period, minus the aggregate Excess Concentration Amount as of the last day of such most recently ended Calculation Period.

          “ Long Dilution Ratio ” means, as of any date of determination, the ratio (expressed as a percentage) computed as of the most recent Calculation Date by dividing (a) Long Dilutions for the Calculation Period ending on such Calculation Date by (b) Credit Sales for the Calculation Period ending 1 fiscal month prior to such Calculation Date.

          “ Long Dilution Reserve ” means, on any date of determination, the product computed as of the most recent Calculation Date, of (a) the sum of (i) the product of (x) the Stress Factor times (y) the Expected Long Dilution Ratio plus (ii) the product of (x) the positive difference, if any, between (1) the Long Dilution Spike Rate less (2) the Expected Long Dilution Ratio times (y) a ratio computed by dividing (1) the Long Dilution Spike Rate by (2) the Expected Long Dilution Ratio times (b) the Long Dilution Horizon Ratio.

          “ Long Dilution Spike Rate ” means, (a) on any date of determination prior to February 28, 2009, the highest Long Dilution Ratio over the period commencing on March 1, 2008 and ending on the most recent Calculation Date and (b) on any date of determination thereafter, the highest Long Dilution Ratio over the twelve-fiscal-month period ending on the most recent Calculation Date.

          “ Long Dilutions ” means, for any period of determination, all Dilutions other than Short Dilutions.

          “ Loss Horizon Ratio ” means, on any date of determination, the ratio computed as of the most recent Calculation Date by dividing (a) Credit Sales for the most recent four (4) Calculation Periods, by (b) an amount equal to the Aggregate Unpaid Balance as of such Calculation Date, minus the aggregate Excess Concentration Amount as of such Calculation Date.

          “ Loss Reserve ” means, on any date of determination, the product of (a) the highest rolling 3-fiscal-month average Default Ratio over the 12 fiscal months ending on the most recent Calculation Date, times (b) the Loss Horizon Ratio as of such Calculation Date, times (c) the Stress Factor.

          “ Material Adverse Effect ” means a material adverse effect on (a) on the business, property, condition (financial or otherwise) or results of operations or prospects of (i) Servicer and its Subsidiaries taken as a whole, or (ii) Borrower, (b) the ability of Borrower or Servicer to perform its respective obligations under the Agreement or any other Transaction Document to which it is a party, (c) the legality, validity or enforceability of the Agreement or any other Transaction Document, (d) the existence, validity, perfection or priority of (i) Administrator’s (for the benefit of the Secured Parties) security interest in the Collateral, or (ii) Borrower’s ownership interest in the Receivables; or (e) the validity, enforceability or collectibility of the Receivables generally or of any material portion of the Receivables.

          “ Material Debt ” has the meaning specified in Section 11.7.7 .

          “ Monthly Report ” means a report, substantially in the form of Exhibit C or in such other form acceptable to Administrator, prepared by Servicer as of the Calculation Date then most recently occurring signed by an authorized officer of Servicer.

          “ Moody’s ” means Moody’s Investors Service, Inc.

          “ Obligations ” means all obligations (monetary or otherwise) of Borrower to Lender, Administrator, any Affected Party or any Indemnified Party and their respective successors, permitted transferees and assigns arising under or in connection with this Agreement, the Lender Note and each other Transaction Document, in each case however created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.

          “ Obligor ” means, with respect to any Receivable, each Person obligated to make payments with respect to such Receivable, including any guarantor thereof.

          “ Organizational Documents ” has the meaning specified in the Receivables Sale Agreement.

          “ Originator ” has the meaning specified in the Receivables Sale Agreement.

          “ Outstanding Balance ” has the meaning specified in the Receivables Sale Agreement.

          “ Permitted Investment ” means, at any time:

     (i) marketable obligations issued by, or the full and timely payment of which is directly and fully guaranteed or insured by, the United States government or any other government with an equivalent rating, or any agency or instrumentality thereof when such marketable obligations are backed by the full faith and credit of the United States government or such other equivalently rated government, as the case may be, but excluding any securities which are derivatives of such obligations;

     (ii) time deposits, bankers’ acceptances and certificates of deposit of any domestic commercial bank or any United States branch or agency of a foreign commercial bank which (x) has capital, surplus and undivided profits in excess of $100,000,000 and which has a commercial paper or certificate of deposit rating meeting the requirements specified in clause (iii) below (or equivalent rating from the Rating Agencies) or (y) is set forth in a list (which may be updated from time to time) (A) approved by Administrator and (B) with respect to which a written statement has been obtained from each of the Rating Agencies to the effect that the rating of the Commercial Paper Notes will not be downgraded or withdrawn solely as a result of the acquisition of such investments;

     (iii) commercial paper which is (x) rated at least as high as the Commercial Paper Notes by the Rating Agencies, or (y) set forth in a list (which may be updated from time to time) (A) approved by Administrator and (B) with respect to which a written statement has been obtained from each of the Rating Agencies to the effect that the rating of the Commercial Paper Notes will not be downgraded or withdrawn solely as a result of the acquisition of such investments;

     (iv) secured repurchase obligations for underlying securities of the types described in clauses (i) and (ii) above entered into with any bank of the type described in clause (ii) above; and

     (v) freely redeemable shares in money market funds which invest solely in obligations, bankers’ acceptances, time deposits, certificates of deposit, repurchase agreements and commercial paper of the types described in clauses(i) through (iv) above, without regard to the limitations as to the maturity of such obligations, bankers’ acceptances, time deposits, certificates of deposit, repurchase agreements or commercial paper set forth below, which are rated at least “AAm” or “AAmg” or their equivalent by both Rating Agencies, provided that there is no “r-highlighter” affixed to such rating.

          “ Person ” has the meaning set forth in the Receivables Sale Agreement

          “ Prime Rate ” means as of any date of determination, the rate of interest most recently announced by Bank at its principal office in Atlanta, Georgia as its prime rate (it being understood that at any one time there shall exist only one such prime rate so announced, which rate is not necessarily intended to be the lowest rate of interest determined by Bank in connection with extensions of credit).

          “ Program Documents ” means the Liquidity Agreement, the Credit Agreement, the Voluntary Advance Agreement, the documents under which Administrator performs its obligations with respect to Lender’s commercial paper program and the other documents to be executed and delivered in connection therewith, as amended, supplemented, restated or otherwise modified from time to time.

          “ Purchase Price Credit ” has the meaning set forth in the Receivables Sale Agreement

          “ Rate Setting Day ” means, for any Interest Period, two (2) Business Days prior to the commencement of such Interest Period. In the event such day is not a Business Day, then the Rate Setting Day shall be the immediately preceding Business Day.

          “ Rating Agencies ” means S&P and Moody’s.

          “ Receivable ” has the meaning specified in the Receivables Sale Agreement.

          “ Receivable File ” means with respect to a Receivable, (i) the Contract giving rise to the Receivable and other evidences of the Receivable including, without limitation, tapes, discs, punch cards and related property and rights and (ii) each UCC financing statement related thereto, if any.

          “ Receivables Sale Agreement ” means the Receivables Sale Agreement, dated as of November 17, 2004, by and among Originators, as sellers, and Borrower, as buyer, as such Receivables Sale Agreement may be amended, supplemented, restated or otherwise modified from time to time with the prior written consent of Administrator.

          “ Regulatory Change ” means, relative to any Affected Party:

     (a) any change in (or the adoption, implementation, change in the phase-in or commencement of effectiveness of) any: (i) United States federal, state or municipal law or foreign law applicable to such Affected Party, (ii) regulation, interpretation, directive, requirement or request (whether or not having the force of law) applicable to such Affected Party of (A) any court or government authority charged with the interpretation or administration of any law referred to in clause (a)(i) , or of (B) any fiscal, monetary or other authority having jurisdiction over such Affected Party, or (iii) GAAP or regulatory accounting principles applicable to such Affected Party and affecting the application to such Affected Party of any law, regulation, interpretation, directive, requirement or request referred to in clause (a)(i) or (a)(ii) above;

     (b) any change in the application to such Affected Party of any existing law, regulation, interpretation, directive, requirement, request or accounting principles referred to in clause (a)(i) , (a)(ii) or (a)(iii) above; or

     (c) the issuance, publication or release of any regulation, interpretation, directive, requirement or request of a type described in clause (a)(ii) above to the effect that the obligations of any Liquidity Bank under the

Liquidity Agreement are not entitled to be included in the zero percent category of off-balance sheet assets for purposes of any risk-weighted capital guidelines applicable to such Liquidity Bank or any related Affected Party.

          For the avoidance of doubt, any change in accounting standards (including, without limitation, FASB Statements of Financial Account Standards 140 and 156 and FASB Interpretation No. 46R) or the issuance of any other pronouncement, release or interpretation (or revisions to the foregoing) that causes or requires the consolidation of all or a portion of the assets and liabilities of Borrower or Lender with the assets and liabilities of any Affected Party shall constitute a Regulatory Change with respect to such Affected Party.

          “ Related Security ” has the meaning specified in the Receivables Sale Agreement.

          “ Required Capital Amount ” has the meaning specified in the Receivables Sale Agreement.

          “ Requirements of Law ” for any Person or any of its property shall mean the Organizational Documents of such Person or any of its property, and any statute, law, treaty, rule or regulation, or determination of an arbitrator or Governmental Authority, in each case applicable to or binding upon such Person or any of its property or businesses or to which such Person or any of its property or businesses is subject, whether federal, state or local.

          “ Reserve Floor ” means, for any Calculation Period, the sum of (a) 10% plus (b) the product of (i) the Expected Short Dilution Ratio and (ii) the Short Dilution Horizon Ratio plus (c) the product of (i) the Expected Long Dilution Ratio and (ii) the Long Dilution Horizon Ratio.

          “ Reserve Percentage ” means the percentage equal to the greater of (a) the sum of (i) the Loss Reserve, (ii) the Aggregate Dilution Reserve, (iii) the Yield Reserve, and (iv) the Servicing Reserve, and (b) the Reserve Floor.

          “ S&P ” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc.

          “ Scheduled Commitment Termination Date ” means September 27, 2011, as extended from time to time by mutual agreement of the parties hereto.

          “ Scheduled Interest Payment Date ” means, with respect to each Loan, each Distribution Date hereafter.

          “ Secured Obligations ” has the meaning set forth in Section 5.1(b) .

          “ Secured Parties ” means Lender, Administrator and each Indemnified Party, and the successors and permitted assigns of each of the foregoing.

          “ Servicer ” means G&K, or any successor Servicer appointed as provided in Section 11.5 .

          “ Servicer Event of Default ” shall have the meaning specified in Section 11.7 .

          “ Servicing Fee ” means, as to any Calculation Period, the fee payable to Servicer which, so long as G&K or one of its Affiliates is Servicer, shall be equal to the Servicing Fee Rate divided by 12 multiplied by the Aggregate Unpaid Balance at the beginning of such Calculation Period. The Servicing Fee for any successor Servicer shall be equal to the fee reasonably agreed to by Administrator and such successor Servicer.

          “ Servicing Fee Rate ” means 2.40%.

          “ Servicing Reserve ” means, on any date of determination, the product of: (a) the highest Day Sales Outstanding Ratio during the 12 fiscal months ending on the most recent Calculation Date, (b) the Stress Factor, (c) 2.40%, and (d) 1/360.

          “ Short Dilution Horizon Ratio ” means, on any date of determination, the ratio computed by dividing (a) 33% of Credit Sales for the Calculation Period then most recently ended by (b) an amount equal to the Aggregate Unpaid Balance as of the last day of such most recently ended Calculation Period, minus the aggregate Excess Concentration Amount as of the last day of such most recently ended Calculation Period.

          “ Short Dilution Ratio ” means, as of any date of determination, the ratio (expressed as a percentage) computed as of the most recent Calculation Date by dividing (a) Short Dilutions for the Calculation Period ending on such Calculation Date by (b) Credit Sales for the Calculation Period ending 1 fiscal month prior to such Calculation Date.

          “ Short Dilution Reserve ” means, on any date of determination, the product computed as of the most recent Calculation Date, of (a) the sum of (i) the product of (x) the Stress Factor times (y) the Expected Short Dilution Ratio plus (ii) the product of (x) the positive difference, if any, between (1) the Short Dilution Spike Rate less (2) the Expected Short Dilution Ratio times (y) a ratio computed by dividing (1) the Short Dilution Spike Rate by (2) the Expected Short Dilution Ratio times (b) the Short Dilution Horizon Ratio.

          “ Short Dilution Spike Rate ” means, (a) on any date of determination prior to February 28, 2009, the highest Short Dilution Ratio over the period commencing on March 1, 2008 and ending on the most recent Calculation Date and (b) on any date of determination thereafter, the highest Short Dilution Ratio over the twelve-fiscal-month period ending on the most recent Calculation Date.

          “ Short Dilutions ” means, for any period of determination, the aggregate amount of all Dilutions that are net credit invoices and that have been applied within ten (10) Business Days of the creation of such Dilutions during such period.

          “ Significant Event ” means any Amortization Event or Event of Default.

          “ Solvent ” means with respect to any Person that as of the date of determination both (A)(i) the then fair saleable value of the property of such Person is (y) greater than the total amount of liabilities (including contingent liabilities) of such Person and (z) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts

as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person; (ii) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (iii) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; and (B) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

          “ Stress Factor ” means 2.0.

          “ Subordinated Note ” has the meaning specified in the Receivables Sale Agreement.

          “ Subsidiary ” means, with respect to any Person, a corporation of which such Person and/or its other Subsidiaries own, directly or indirectly, such number of outstanding shares as have more than 50% of the ordinary voting power for the election of directors.

          “ Support Provider ” means and includes any entity now or hereafter extending credit or liquidity support or having a commitment to extend credit or liquidity support to or for the account of, or to make loans to or purchases from, Lender or issuing a letter of credit, surety bond or other instrument to support any obligations arising under or in connection with the commercial paper program of Lender.

          “ Taxes ” means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and any and all liabilities (including but not limited to interest and penalties) with respect to the foregoing, imposed by any Governmental Authority.

          “ Transaction Documents ” means this Agreement, the Receivables Sale Agreement, the Lender Note, the Fee Letter, the Subordinated Note, and the other instruments, certificates, agreements, reports and documents to be executed and delivered under or in connection with this Agreement or the Receivables Sale Agreement (except the Program Documents), as any of the foregoing may be amended, supplemented, amended and restated, or otherwise modified from time to time in accordance with this Agreement.

          “ UCC ” means the Uniform Commercial Code as from time to time in effect in the applicable jurisdiction or jurisdictions.

          “ Unmatured Servicer Event of Default ” means any event that, if it continues uncured, will, with lapse of time or notice or lapse of time and notice, constitute a Servicer Event of Default.

          “ Unmatured Significant Event ” means any event that, if it continues uncured, will, with lapse of time or notice or lapse of time and notice, constitute a Significant Event.

          “ Unpaid Balance ” means, with respect to any Receivable, the sum of (a) the Outstanding Balance thereof, plus (without duplication), (b) the aggregate amount required to repay in full all interest, finance, prepayment and other fees or charges of any kind payable in respect of, such Outstanding Balance.

          “ Voluntary Advance Agreement ” means the Voluntary Advance Agreement, dated as of March 11, 1999, among Lender, Administrator and Bank, as it may be amended, supplemented, restated or otherwise modified from time to time.

          “ Yield Reserve ” means, on any date of determination, the product of (a) the highest Day Sales Outstanding Ratio during the 12 fiscal months ending on the most recent Calculation Date, (b) the Stress Factor, (c) the Prime Rate as in effect on such Calculation Date and (d) 1/360.

          Section 1.2 Other Definitional Provisions.

     (a) Unless otherwise specified therein, all terms defined in this Agreement have the meanings as so defined herein when used in the Lender Note or any other Transaction Document, certificate, report or other document made or delivered pursuant hereto.

     (b) Each term defined in the singular form in Section 1.1 or elsewhere in this Agreement shall mean the plural thereof when the plural form of such term is used in this Agreement, the Lender Note or any other Transaction Document, certificate, report or other document made or delivered pursuant hereto, and each term defined in the plural form in Section 1.1 shall mean the singular thereof when the singular form of such term is used herein or therein.

     (c) The words “ hereof ”, “ herein ”, “ hereunder ” and similar terms when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, subsection, schedule and exhibit references herein are references to articles, sections, subsections, schedules and exhibits to this Agreement unless otherwise specified.

          Section 1.3 Other Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC and not specifically defined herein, are used herein as defined in such Article 9.

          Section 1.4 Computation of Time Periods . Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “ from ” means “ from and including ” and the words “ to ” and “ until ” each means “ to but excluding ”.

ARTICLE II.
THE LENDER’S COMMITMENT, BORROWING PROCEDURES AND LENDER
NOTE

          Section 2.1 Lender’s Commitment . On the terms and subject to the conditions set forth in this Agreement, Lender agrees to make loans to Borrower on a revolving basis from time to time (the “ Lender’s Commitment ”) before the Commitment Termination Date in such amounts as may be from time to time requested by Borrower pursuant to Section 2.2 ; provided , however , that the aggregate principal amount of all Loans from time to time outstanding hereunder shall not exceed the lesser of (a) the Facility Limit and (b) the Borrowing Base. Within the limits of the Lender’s Commitment, Borrower may borrow and (subject to Section 4.1(a) ) prepay and reborrow under this Section 2.1 .

          Section 2.2 Borrowing Procedures . Borrower (or Servicer on its behalf) may request a Loan hereunder by giving notice to Administrator of a proposed borrowing not later than 2:00 p.m. (Atlanta, Georgia time), (a) three (3) Business Days prior to the proposed date of any borrowing that will accrue interest at the LIBOR Rate and (b) two (2) Business Days prior to the proposed date of any other borrowing (or such lesser period of time as Lender may consent). Each such notice (herein called a “ Borrowing Request ”) shall be in the form of Exhibit A (or, if acceptable to Administrator, the information required therein may be given by telephone) and shall include the date and amount of such proposed borrowing. Any Borrowing Request given by Borrower (or Servicer on its behalf) pursuant to this Section 2.2 shall be irrevocable and binding on Borrower. Any Borrowing Request may be delivered by facsimile transmission or by electronic mail message attaching a portable data format or “.pdf” file containing an image of the signed request, provided , however , that no such transmission or electronic mail message shall be deemed to be delivered unless and until Borrower (or Servicer on its behalf) confirms Administrator’s actual receipt thereof by telephone.

          Section 2.3 Funding . Subject to the satisfaction of the conditions precedent set forth in Article VII with respect to such Loan and the limitations set forth in Section 2.1 , Lender shall make the proceeds of such requested Loan available to Administrator at its office in Atlanta, Georgia in immediately available funds on the proposed date of borrowing. Upon receipt by Administrator of such funds, Administrator will make such funds available to Borrower at such office on such date. Each borrowing shall be on a Business Day and shall be in an amount of at least $1,000,000 and in integral multiples of $500,000 (or in such other amounts as Lender or Administrator may approve).

          Section 2.4 Representation and Warranty . Each request for a borrowing pursuant to Section 2.2 shall automatically constitute a representation and warranty by Borrower to Administrator and Lender that on the requested date of such borrowing (a) the representations and warranties contained in Article VIII will be true and correct as of such requested date as though made on such date, (b) no Significant Event or Unmatured Significant Event has occurred and is continuing or will result from such borrowing, and (c) after giving effect to such requested borrowing, the aggregate principal balance of the outstanding Loans hereunder will not exceed the lesser of the Borrowing Base and the Facility Limit.

          Section 2.5 Extension of Lender’s Commitment . The Lender’s Commitment shall terminate on the Commitment Termination Date. Notwithstanding the foregoing:

     (a) Lender or Administrator, on Lender’s behalf, shall use reasonable effort to give Borrower not less than 60 days’ prior notice of any scheduled termination of the Credit Banks’ commitments under the Credit Agreement and shall promptly notify Borrower of any extension thereof,

     (b) Not more than 60 days prior to the Liquidity Termination Date in effect from time to time, Borrower may request that Lender or Administrator, on Lender’s behalf, seek the Liquidity Banks’ consent to extend the Liquidity Termination Date for a period which, when aggregated with the number of days remaining until the existing Liquidity Termination Date would not cause the Liquidity Banks’ commitments under the Liquidity Agreement as so extended to exceed 364 days in toto , and

     (c) Not more than 60 days prior to the Scheduled Commitment Termination Date in effect from time to time, Borrower may request that Lender consent to extend the Scheduled Commitment Termination Date for an additional 364-day period.

Administrator shall advise Borrower in writing whether each request made pursuant to the foregoing clause (b) or clause (c) has been granted within thirty (30) days after such request has been made and whether such consent is subject to satisfaction of any conditions precedent. If any such request is not granted within thirty (30) days after such request has been made, the Liquidity Termination Date or Scheduled Commitment Termination Date, as the case may be, shall remain unchanged. If any such request is granted within thirty (30) days after such request has been made, the Liquidity Termination Date or Scheduled Commitment Termination Date, as the case may be, shall be extended as provided in Administrator’s written notice upon satisfaction of any conditions precedent specified therein (including, without limitation, payment of the Extension Fee).

          Section 2.6 Voluntary Termination of Lender’s Commitment; Reduction of Facility Limit . Borrower may, in its sole discretion for any reason upon at least 10 days’ notice to Administrator (with a copy to Lender), terminate the Lender’s Commitment in whole, or, reduce in part the unused portion of the Facility Limit; provided , however that (a) each such partial reduction will be in a minimum amount of $5,000,000 or a higher integral multiple of $1,000,000 and shall not reduce the Facility Limit below $40,000,000, and (b) in connection therewith Borrower shall comply with Section 3.2(b) and Section 4.1(b) .

          Section 2.7 Note . Each Loan from Lender shall be evidenced by a single promissory grid note (herein, as amended, modified, extended or replaced from time to time, called the “ Lender Note ”) substantially in the form set forth in Exhibit B , with appropriate insertions, payable to the order of Lender. Borrower hereby irrevocably authorizes Administrator in connection with the Lender Note to make (or cause to be made) appropriate notations on the grid attached to the Lender Note (or on any continuation of such grid, or at Administrator’s option, in its records), which notations, if made, shall evidence, inter alia , the

date of, the outstanding principal of, and the interest rate and Interest Period applicable to the Loans evidenced thereby. Such notations shall be rebuttably presumptive evidence of the subject matter thereof, absent manifest error; provided , however , that the failure to make any such notations shall not limit or otherwise affect any Obligations of Borrower.

          Section 2.8 Concentration Accounts . Borrower will ensure that each of the Concentration Accounts has been transferred into Borrower’s name on or before the Closing Date, and will ensure that all available funds from each of the Deposit Accounts are swept on a daily basis into a Concentration Account.

ARTICLE III.
INTEREST, FEES, ETC.

          Section 3.1 Interest Rates . Borrower hereby promises to pay interest on the unpaid principal amount of each Loan (or each portion thereof) for the period commencing on the date of such Loan until such Loan is paid in full, as follows:

     (a) for each day while the making or maintenance of such Loan (or the applicable portion thereof) by Lender is funded by the issuance of Commercial Paper Notes of Lender, at a rate per annum equal to the sum of (i) the Commercial Paper Rate applicable to such day, plus (ii) the Applicable Margin;

     (b) at all times while the making or maintenance of such Loan (or the applicable portion thereof) by Lender is funded during each Interest Period pursuant to the Liquidity Agreement or the Voluntary Advance Agreement, at a rate per annum equal to the sum of (i) the Alternative Rate applicable to such Interest Period, plus (ii) the Liquidity Premium; and

     (c) notwithstanding the provisions of the preceding clauses (a) and (b), in the event that a Significant Event or an Unmatured Significant Event has occurred and is continuing, at a rate per annum (the “ Default Rate ”) equal to the Base Rate applicable from time to time (but not less than the interest rate in effect for such Loan as at the date of such Significant Event or Unmatured Significant Event), plus the Applicable Margin applicable during the existence and continuance of an Event of Default. After the date any principal amount of any Loan is due and payable (whether on the Scheduled Commitment Termination Date, upon acceleration or otherwise) or after any other monetary Obligation of Borrower arising under this Agreement shall become due and payable, Borrower shall pay (to the extent permitted by law, if in respect of any unpaid amounts representing interest) interest (after as well as before judgment) on such amounts at a rate per annum equal to the Default Rate. No provision of this Agreement or the Lender Note shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable law.

          Section 3.2 Interest Payment Dates . Interest accrued on each Allocation shall be payable, without duplication:

     (a) on each Scheduled Interest Payment Date prior to the Scheduled Commitment Termination Date, for the period since the creation of such Allocation (in the case of the first Scheduled Interest Payment Date thereafter) or since the prior Scheduled Interest Payment Date (in the case of any subsequent Scheduled Interest Payment Date);

     (b) on the date of any payment or prepayment (in whole or in part) of principal outstanding in such Allocation, on the amount paid or prepaid if requested by the Lender (it being understood that, regardless of any such request by the Lender, any prepayment shall be accompanied by any amounts owing under Section 6.2 );

     (c) in full, on the Scheduled Commitment Termination Date (whether at scheduled maturity or upon acceleration thereof pursuant to Section 10.3 ); and

     (d) from and after the Scheduled Commitment Termination Date, upon demand.

          Section 3.3 Interest Allocations . Administrator shall from time to time and in its sole discretion determine whether interest in respect of the Loans then outstanding, or any portion thereof, shall be calculated by reference to the Commercial Paper Rate (such portion being herein called a “ CP Allocation ”) or an Alternative Rate (such portion being herein called an “ Alternative Rate Allocation ”, and together with a CP Allocation individually called an “ Allocation ”, and collectively, “ Allocations ”); provided , however , that, Administrator shall use its reasonable efforts to allocate all or substantially all of the Loans from Lender to a CP Allocation (it being understood that if Lender is not able to issue sufficient Commercial Paper Notes to fund all of its assets at such time and no Significant Event or Unmatured Significant Event has occurred and is continuing, Lender and Administrator shall, at least, fund the Loans pro rata with its other non-defaulted assets with Commercial Paper Notes); provided further , however , that Administrator may determine, at any time and in its sole discretion, that the Commercial Paper Rate is unavailable or otherwise not desirable, in which case the Loans from Lender will be allocated to an Alternative Rate Allocation (unless the Default Rate is in effect).

          Section 3.4 Fees . Borrower agrees to pay Administrator and Lender certain Fees in the amounts and on the dates set forth in the letter agreement executed in connection herewith between Borrower, Administrator and Lender (as the same may be amended, supplemented, restated or otherwise modified, the “ Fee Letter ”).

          Section 3.5 Computation of Interest and Fees . All interest, Fees and Servicing Fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest, Fee or Servicing Fee is payable over a year comprised of 360 days.

ARTICLE IV.
REPAYMENTS AND PREPAYMENTS; DISTRIBUTION OF COLLECTIONS

          Section 4.1 Repayments and Prepayments . Borrower shall repay in full the unpaid principal amount of each Loan on the Scheduled Commitment Termination Date. Prior thereto, Borrower:

     (a) may, from time to time on any Business Day, make a prepayment, in whole or in part, of the outstanding principal amount of any Loans; provided , however , that, (i) unless otherwise consented to by Administrator, all such voluntary prepayments shall require at least two (2) Business Days’ (or, in the case of a voluntary prepayment of $10,000,000 or more, at least seven (7) Business Days’) prior written notice to Administrator, (ii) unless otherwise consented to by Administrator, all such voluntary partial prepayments shall be in a minimum amount of $1,000,000 and an integral multiple of $100,000, and (iii) unless and until the aggregate outstanding principal balance of the Loans hereunder is less than 10% of the highest amount ever borrowed hereunder, no such prepayment may be made with any funds other than (A) Collections and (B) the Borrower’s initial paid-in cash capital (if any then remains);

     (b) shall, on each date when any reduction in the Facility Limit shall become effective pursuant to Section 2.6 , make a prepayment of the Loans in an amount equal to the excess, if any, of the aggregate outstanding principal amount of the Loans over the Facility Limit as so reduced;

     (c) shall, immediately upon any acceleration of the Scheduled Commitment Termination Date of any Loans pursuant to Section 10.3 , repay all Loans, unless, pursuant to Section 10.3(a) , only a portion of all Loans is so accelerated, in which event Borrower shall repay the accelerated portion of the Loans; and

     (d) shall, immediately upon discovering that a Borrowing Base Deficit exists, make a prepayment of the Loans in an amount equal to such Borrowing Base Deficit. Each such prepayment shall be subject to the payment of any amounts required by Section 6.2 .

          Section 4.2 Application of Collections .

     (a) All Collections deposited in each Concentration Account shall be distributed by Servicer at such times and in the order of priority set forth in this Section 4.2.

     (b) On each Distribution Date prior to the Commitment Termination Date, Servicer shall distribute from Collections on deposit in the Concentration Accounts on such Distribution Date, if any, the following amounts, without duplication in the following order of priority:

      first , to the extent due and owing under this Agreement or any other Transaction Document, the accrued Servicing Fee payable for the prior Calculation Period ( plus , if applicable, the amount of Servicing Fee payable for any prior Calculation Period to the extent such amount has not been distributed to Servicer);

      second , interest accrued on the Loans pursuant to Section 3.1 during the period from the most recent Distribution Date to the current Distribution Date ( plus , if applicable, the amount of interest on the Loans accrued for any prior period to the extent such amount has not been paid, and to the extent permitted by law, interest thereon);

      third , to the extent due and owing under any Transaction Document, all Fees accrued during the prior Calculation Period ( plus , if applicable, the amount of Fees accrued for any prior Calculation Period to the extent such amount has not been distributed to Lender or Administrator);

      fourth , as a repayment of principal of the Loans, an amount equal to the Borrowing Base Deficit, if any;

      fifth , to the extent due and owing under any Transaction Document on such Distribution Date, all other Secured Obligations owed to any Secured Party;

      sixth , to the extent due and owing under this Agreement or any other Transaction Document on such Distribution Date, all other obligations then payable by Borrower to Administrator or Lender; and

      seventh , the balance, if any, to Borrower.

     (c) On each Distribution Date from and after the Commitment Termination Date, Servicer shall distribute from Collections, if any, on deposit in each Concentration Account on such Distribution Date the following amounts, without duplication in the following order of priority:

      first , the accrued but unpaid Servicing Fee due and owing on such Distribution Date;

      second , all other Secured Obligations due and owing on such Distribution Date; and

      third , once all amounts described in clauses first and second above have been paid in full, the balance, if any, to Borrower.

          Section 4.3 Application of Certain Payments . Each payment of principal of the Loans shall be applied to such Loans as Borrower shall direct or, in the absence of such notice or during the existence of a Significant Event or after the Commitment Termination Date, as Administrator shall determine in its discretion.

          Section 4.4 Due Date Extension . If any payment of principal or interest with respect to any Loan falls due on a day which is not a Business Day, then such due date shall be extended to the next following Business Day, and additional interest shall accrue at the applicable interest rate and be payable for the period of such extension.

          Section 4.5 Making of Payments . All payments of principal of, or interest on, the Loans and of all Fees, and all amounts to be deposited by Borrower or Servicer hereunder, shall be made by Borrower or Servicer, as applicable, no later than 12:00 noon (Atlanta, Georgia time), on the day when due in lawful money of the United States of America in immediately available funds to Bank, as Administrator, Reference: Three Pillars Funding LLC/G&K Receivables Corp. Transaction, Account No. 8800171236, ABA No. 061000104, at Bank’s office at 303 Peachtree Street, NE, 23rd Floor, in Atlanta, Georgia, Attn: James Watkins (the “ Administrator’s Account ”). Funds received by Administrator after 12:00 noon (Atlanta, Georgia time), on the date when due, will be deemed to have been received by Administrator on its next following Business Day.

ARTICLE V.
SECURITY INTEREST

          Section 5.1 Grant of Security .

          (a) Borrower hereby assigns and pledges to Administrator (for the benefit of the Secured Parties), and hereby grants to Administrator (for the benefit of the Secured Parties) a security interest in all of Borrower’s right, title and interest in and to the following, whether now or hereafter existing and wherever located:

     (i) all Receivables, Related Security and Receivable Files;

     (ii) all of Borrower’s rights, remedies, powers and privileges in respect of the Receivables Sale Agreement, including, without limitation, its rights to receive Purchase Price Credits and indemnity payments thereunder;

     (iii) the Concentration Account and all funds on deposit therein, together with all certificates and instruments, if any, from time to time evidencing such accounts and funds on deposit; and

     (iv) all products and proceeds (including, without limitation, insurance proceeds) of, and additions, improvements and accessions to, and books and records describing or used in connection with, all and any of the property described above (items (i) through (iii) are collectively referred to as the “ Collateral ”) .

          (b) This grant of security secures the payment and performance of all Obligations of Borrower now or hereafter existing or arising under, or in connection with, this Loan Agreement, the Lender Note and each other Transaction Document, whether for principal, interest, costs, Fees, Indemnified Amounts, expenses or otherwise (all such Obligations of Borrower being called the “ Secured Obligations ”).

          (c) This grant of security shall create a continuing security interest in the Collateral and shall:

     (i) remain in full force and effect until Administrator’s (for the benefit of the Secured Parties) interest in the Collateral shall have been released in accordance with Section 5.4 ;

     (ii) be binding upon Borrower, its successors, transferees and assigns; and

     (iii) inure, together with the rights and remedies of Administrator (for the benefit of the Secured Parties) hereunder, to the benefit of Administrator and each Secured Party and their respective successors, transferees and assigns.

          Section 5.2 Administrator Appointed Attorney-in-Fact . Borrower hereby irrevocably appoints Administrator (for the benefit of the Secured Parties) as Borrower’s attorney-in-fact, with full authority in the place and stead of Borrower and in the name of Borrower or otherwise, from time to time in Administrator’s discretion, after the occurrence and during the continuation of a Significant Event to take any action and to execute any instrument which Administrator may deem necessary or advisable to accomplish the purposes of the Transaction Documents, including, without limitation:

     (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;

     (b) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper, in connection with clause (a) above;

     (c) to file any claims or take any action or institute any proceedings which Administrator may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Administrator (for the benefit of the Secured Parties) with respect to any of the Collateral;

     (d) to sell, transfer, assign or otherwise deal in or with the Collateral or any part thereof pursuant to the terms and conditions hereunder; and

     (e) to perform the affirmative obligations of Borrower under the Transaction Documents. Administrator agrees to give Borrower and Servicer written notice of the taking of any such action, but the failure to give such notice shall not affect the rights, power or authority of Administrator with respect thereto. Borrower hereby acknowledges, consents and agrees that the power of attorney granted pursuant to this Section 5.2 is irrevocable and coupled with an interest.

          Section 5.3 Administrator May Perform . If Borrower fails to perform any agreement contained herein, Administrator (for the benefit of the Secured Parties) may itself perform, or cause performance of such agreement, and the expenses of Administrator incurred in connection therewith shall be payable by Borrower.

          Section 5.4 Release of Collateral . Administrator’s (for the benefit of the Secured Parties) right, title and interest in the Collateral shall be released effective on the date occurring after the Commitment Termination Date on which all Secured Obligations shall have been finally and fully paid and performed.

ARTICLE VI.
INCREASED COSTS, ETC.

          Section 6.1 Increased Costs . If any change in Regulation D of the Board of Governors of the Federal Reserve System, or any Regulatory Change, in each case occurring after the date hereof:

     (a) shall subject any Affected Party to any tax, duty or other charge with respect to any Loan made or funded by it, or shall change the basis of taxation of payments to such Affected Party of the principal of or interest on any Loan owed to or funded by it or any other amounts due under this Agreement in respect of any Loan made or funded by it (except for changes in the rate of tax on the overall net income of such Affected Party imposed by the jurisdiction in which such Affected Party’s principal executive office is located); or

     (b) shall impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve included in the determination of interest rates pursuant to Section 3.1 ), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party; or

     (c) shall change the amount of capital maintained or required or requested or directed to be maintained by any Affected Party; or

     (d) shall impose on any Affected Party any other condition affecting any Loan made or funded by any Affected Party;

and the result of any of the foregoing is or would be to (i) increase the cost to or to impose a cost on (I) an Affected Party funding or making or maintaining any Loan (including extensions of credit under the Liquidity Agreement, the Voluntary Advance Agreement or any Credit Advance, or any c