Exhibit 10.1

FIRST AMENDMENT TO FIVE YEAR CREDIT AGREEMENT

THIS FIRST AMENDMENT TO FIVE YEAR CREDIT AGREEMENT (this “Amendment”) is dated
as of December 31, 2008, by and among MOHAWK INDUSTRIES, INC., a Delaware
corporation (the “Borrower”), the banks and other financial institutions or
entities from time to time party to the Credit Agreement referred to below (the
“Banks”) that have executed an Authorization in the form set forth as Exhibit A
attached hereto, and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative
agent for the Banks (in such capacity, the “Administrative Agent”).

Statement of Purpose

The Borrower, the Banks and the Administrative Agent are parties to that certain
Five Year Credit Agreement dated as of October 28, 2005 (as amended, restated,
supplemented or otherwise modified from time to time and in effect immediately
prior to the effectiveness of this Amendment, the “Credit Agreement”), pursuant
to which the Banks have extended certain credit facilities to the Borrower.

The Borrower has requested, and the Banks and the Administrative Agent have
agreed, subject to the terms and conditions set forth herein, to amend the
Credit Agreement as specifically set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

1. Capitalized Terms. All capitalized undefined terms used in this Amendment
(including, without limitation, in the Statement of Purpose hereto) shall have
the meanings assigned thereto in the Credit Agreement.

2. Amendments. Subject to and in accordance with the terms and conditions set
forth herein, the Administrative Agent and the Banks hereby agree that the
Credit Agreement is amended as follows:

(a) Section 1.01 of the Credit Agreement is hereby amended as follows:

(i) by adding the following new defined terms in appropriate alphabetical order:

“Defaulting Bank” means any Bank that (a) has failed to fund any portion of the
Revolving Credit Loans, participations in Letter of Credit Obligations or
participations in Swing Loans required to be funded by it hereunder within three
Business Days of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Bank any
other amount required to be paid by it hereunder within three Business Days of
the date when due, unless such amount is the subject of a good faith dispute,
(c) has notified the

 

1

--------------------------------------------------------------------------------

Borrower, the Administrative Agent or any other Bank in writing that it does not
intend to comply with any of its funding obligations under this Agreement or has
made a public statement to the effect that it does not intend to comply with its
funding obligations under this Agreement or under other agreements in which it
commits or is obligated to extend credit, or (d) has (or has a parent
corporation that has) (i) become or is insolvent, as reasonably determined by
the Administrative Agent in consultation with the Borrower, or (ii) become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment.

“Defaulting Bank Termination” has the meaning set forth in Section 8.09.

“Defaulting Bank Termination Date” has the meaning set forth in Section 8.09.

“Supermajority Banks” means at any time Banks having more than 66  2/3% of the
sum of (a) the aggregate amount of the Revolving Credit Commitments plus (b) the
aggregate outstanding principal amount of the Term Loans, or if the Revolving
Credit Commitments are no longer in effect, holding more than 66  2/3% of the
aggregate outstanding principal amount of the Loans; provided, that the
Revolving Credit Commitment of, and the portion of the outstanding principal
amount of the Loans, as applicable, held or deemed held by, any Defaulting Bank
shall be excluded for purposes of making a determination of Supermajority Banks.

(ii) by adding the following proviso to the end of the definition of “Required
Banks”: “provided, that the Revolving Credit Commitment of, and the portion of
the outstanding principal amount of the Loans, as applicable, held or deemed
held by, any Defaulting Bank shall be excluded for purposes of making a
determination of Required Banks.”

(iii) by adding the following proviso to the end of the definition of “Required
Revolving Credit Banks”: “provided, that the Revolving Credit Commitment and the
portion of the outstanding principal amount of the Revolving Credit Loans, Swing
Loans and Letter of Credit Obligations held or deemed held by any Defaulting
Bank shall be excluded for purposes of making a determination of Required
Revolving Credit Banks.”

(iv) by adding the phrase “and 8.09” after both of the references to “Sections
2.08 and 2.09” in the definition of “Revolving Credit Commitment.”

(b) Section 2.07 of the Credit Agreement is hereby amended by adding the phrase
“(other than any Defaulting Bank from and after the date such Bank became a
Defaulting Bank and regardless of whether such Defaulting Bank’s Revolving
Credit Commitment has been terminated pursuant to Section 8.09 or otherwise)” in
each of clauses (a) and (b) of Section 2.07 after the first reference in each
such clause to “Revolving Credit Bank”.

 

2

--------------------------------------------------------------------------------

(c) Section 2.14 of the Credit Agreement is hereby amended by adding the phrase
“(other than any Defaulting Bank from and after the date such Bank became a
Defaulting Bank and regardless of whether such Defaulting Bank’s Revolving
Credit Commitment has been terminated pursuant to Section 8.09 or otherwise)” in
subclause (i) of clause (b) of Section 2.14 after the first reference in such
clause to “Revolving Credit Bank”.

(d) Section 8.07 of the Credit Agreement is hereby amended by adding the phrase
“or becomes a Defaulting Bank,” after the phrase “that it can no longer
participate in Eurocurrency Loans or Alternative Currency Loans, as applicable,”

(e) The following new provision is hereby added as a new Section 8.09 of the
Credit Agreement:

“Section 8.09. Optional Termination of Revolving Credit Commitment of Defaulting
Bank.

(a) If any Bank becomes a Defaulting Bank, the Borrower may terminate in full
the Revolving Credit Commitment of such Defaulting Bank by giving notice to such
Defaulting Bank and the Administrative Agent (such termination, a “Defaulting
Bank Termination”); provided, that on the effective date of such Defaulting Bank
Termination and after giving effect thereto and to any repayment of Revolving
Credit Loans in connection therewith, (i) no Default or Event of Default has
occurred and is continuing (unless the Required Revolving Credit Banks otherwise
consent to such Defaulting Bank Termination), (ii) the aggregate outstanding
principal amount of Revolving Credit Loans, if any, owing to such Defaulting
Bank shall have been repaid in full in accordance with clause (d) below and
(iii) the sum of (x) the aggregate outstanding principal amount of all remaining
Revolving Credit Loans plus (y) the Letter of Credit Obligations plus (z) the
Swing Loan Reserve shall not exceed the aggregate Revolving Credit Commitments
of all remaining Revolving Credit Banks. Each such notice shall specify the
effective date of such Defaulting Bank Termination (the “Defaulting Bank
Termination Date”), which shall be not less than five Business Days (or such
shorter period as agreed to by the Administrative Agent and such Defaulting
Bank) after the date on which such notice is delivered to such Defaulting Bank
and the Administrative Agent.

(b) On each such Defaulting Bank Termination Date, (i) the Revolving Credit
Commitment of such Defaulting Bank shall be reduced to zero, (ii) such
Defaulting Bank shall cease to be a “Bank” hereunder (provided that any
Defaulting Bank shall continue to be entitled to the indemnification provisions
contained herein, but only with respect to matters arising prior to the
applicable Defaulting Bank Termination Date), (iii) the Revolving Credit
Commitments of all other Banks shall remain unchanged and (iv) the Revolving
Credit Commitment Percentages of outstanding Letter of Credit Obligations and
Swing Loans will be reallocated by the Administrative Agent among the Revolving
Credit Banks (other than the Defaulting Bank) in accordance with their Revolving
Credit Commitment Percentages after giving effect to the Defaulting Bank
Termination.

 

3

--------------------------------------------------------------------------------

(c) Except as otherwise provided in clause (d) below, each Defaulting Bank shall
be paid all interest and/or fees owed thereto concurrently with any payment of
such interest or fees required by this Agreement on or after such Defaulting
Bank Termination Date.

(d) If on the Defaulting Bank Termination Date for a Defaulting Lender, the
outstanding principal balance of Revolving Credit Loans is not zero, the
Borrower may, notwithstanding any other provision of this Agreement to the
contrary, including without limitation Section 9.05(b), but only with the prior
written consent of the Supermajority Banks, repay the entire outstanding
principal balance of Revolving Credit Loans owing to such Defaulting Lender on
the Defaulting Bank Termination Date, together with all accrued and unpaid
interest thereon.

(e) The exercise by the Borrower of its rights under this Section or any other
provision of this Agreement applicable to a Defaulting Bank, shall not be to the
exclusion of, nor be a limitation on, any other rights or remedies that may be
available to the Borrower with respect to a Defaulting Bank under applicable
law.

(f) Section 9.05(b) of the Credit Agreement is hereby amended by adding the
phrase “Except as otherwise expressly permitted by this Agreement,” to the
beginning of the first sentence of such Section 9.05(b).

(g) Section 9.06(a) of the Credit Agreement is hereby amended by adding the
phrase “except as otherwise permitted by Section 8.09,” to the beginning of
clauses (i)(A) and (i)(F) of such Section 9.06(a).

3. Effectiveness. This Amendment shall become effective upon receipt by the
Administrative Agent of (a) counterparts of this Amendment executed by the
Borrower and the Administrative Agent and (b) Authorizations executed by the
requisite Banks pursuant to Section 9.06 of the Credit Agreement. The amendments
to the Credit Agreement effected by this Amendment shall be deemed to have
retroactive application to the Closing Date.

4. Limited Effect. Except as expressly provided herein, the Credit Agreement and
the other Loan Documents shall remain unmodified and in full force and effect.
This Amendment shall not be deemed (a) to be a waiver of, or consent to, or a
modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document, (b) to prejudice any right or rights which
the Administrative Agent or the Banks may now have or may have in the future
under or in connection with the Credit Agreement or the other Loan Documents or
any of the instruments or agreements referred to therein, as the same may be
amended, restated, supplemented or modified from time to time, or (c) to be a
commitment or any other undertaking or expression of any willingness to engage
in any further discussion with the Borrower or any other Person with respect to
any waiver, amendment, modification or any other change to the Credit Agreement
or the Loan Documents or any rights or remedies arising in favor of the Banks or
the Administrative Agent, or any of them, under or with respect to any such
documents. References in the Credit Agreement to “this Agreement” (and indirect
references such as “hereunder”, “hereby”, “herein”, “hereof” or other words of
like

 

4

--------------------------------------------------------------------------------

import) and in any Loan Document to the “Credit Agreement” shall be deemed to be
references to the Credit Agreement as modified hereby.

5. Representations and Warranties. The Borrower represents and warrants that
(a) it has the corporate power and authority to make, deliver and perform this
Amendment, (b) it has taken all necessary corporate or other action to authorize
the execution, delivery and performance of this Amendment, (c) this Amendment
has been duly executed and delivered on behalf of the Borrower, (d) this
Amendment constitutes a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles, (e) each of the
representations and warranties contained in Article IV of the Credit Agreement
(other than those contained in Sections 4.04(b) and 4.05 of the Credit
Agreement) is true on and as of the date hereof, except for changes permitted by
the Credit Agreement and except to the extent they relate solely to an earlier
date; provided, that with respect to the representations and warranties
contained in Sections 4.01, 4.06, 4.11, 4.12 and 4.13 of the Credit Agreement,
the determination of whether any Material Adverse Effect has occurred as set
forth therein shall be made solely by the Borrower, in its reasonable, good
faith judgment and (f) no Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect hereto.

6. Expenses. In accordance with Section 9.03 of the Credit Agreement, the
Borrower agrees to pay all out-of-pocket expenses of the Administrative Agent,
including reasonable fees and disbursements actually incurred of special counsel
for the Administrative Agent, in connection with the preparation of this
Amendment.

7. Execution in Counterparts. This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Amendment or
Authorization by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

8. Governing Law. This Amendment and the rights and obligations of the parties
under this Amendment shall be construed in accordance with and governed by the
law of the State of Georgia.

9. Entire Agreement. This Amendment is the entire agreement, and supersedes any
prior agreements and contemporaneous oral agreements, of the parties concerning
its subject matter.

10. Successors and Assigns. This Amendment shall be binding on and inure to the
benefit of the parties and their respective heirs, beneficiaries, successors and
permitted assigns.

[Signature Pages Follow]

 

5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
under seal by their duly authorized officers, all as of the day and year first
written above.

 

MOHAWK INDUSTRIES, INC., as Borrower By:  

/s/ SCOTT R. VELDMAN

Name:   Scott R. Veldman Title:   Vice President and Treasurer WACHOVIA BANK,
NATIONAL ASSOCIATION, as Administrative Agent (on behalf of itself and the Banks
who have executed an Authorization) and Bank By:  

/s/ ANTHONY D. BRAXTON

Name:   Anthony D. Braxton Title:   Director

--------------------------------------------------------------------------------

Exhibit A

Form of Authorization

--------------------------------------------------------------------------------

AUTHORIZATION

Mohawk Industries, Inc.

Five Year Credit Agreement

December     , 2008

Wachovia Bank, National Association, as Administrative

Agent 1525 West W.T. Harris Blvd.

Charlotte, North Carolina 28262

Attention: Syndication Agency Services

 

  Re: First Amendment to Five Year Credit Agreement (the “First Amendment”)
amending the Five Year Credit Agreement dated as of October 28, 2005 (as
amended, the “Credit Agreement”) by and among Mohawk Industries, Inc. (the
“Borrower”), the banks and other financial institutions or entities from time to
time party thereto, as lenders (the “Banks”), and Wachovia Bank, National
Association, as administrative agent (the “Administrative Agent”)

This Authorization acknowledges our receipt and review of the execution copy of
the First Amendment in the form posted on the Mohawk Industries, Inc. SyndTrak
Online workspace. By executing this Authorization, we hereby approve the First
Amendment and authorize the Administrative Agent to execute and deliver the
First Amendment on our behalf.

Each financial institution executing this Authorization agrees or reaffirms that
it shall be a party to the Credit Agreement and the other Loan Documents (as
defined in the Credit Agreement) to which Banks are parties and shall have the
rights and obligations of a Bank (as defined in the Credit Agreement), and
agrees to be bound by the terms and provisions applicable to a “Bank”, under
each such agreement. In furtherance of the foregoing, each financial institution
executing this Authorization agrees to execute any additional documents
reasonably requested by the Administrative Agent to evidence such financial
institution’s rights and obligations under the Credit Agreement.

 

 

[Insert name of applicable financial institution]

By:

 

 

Name:

 

 

Title: