AMENDMENT #1 TO CREDIT AND SECURITIY AGREEMENT



Exhibit No. 10.36




AMENDMENT #1 TO CREDIT AND SECURITIY AGREEMENT



THIS AMENDMENT
#1  (this
"Amendment")
is entered into by the undersigned parties as of October 24, 2001 with respect
to the CREDIT AND SECURITIY Agreement
dated as of October 25, 2000 (the "Credit and Security Agreement"), by
and among Mohawk Factoring, Inc. a Delaware corporation ("Borrower"), Mohawk
Servicing, Inc., a Delaware corporation, as initial Servicer, Blue Ridge Asset
Funding Corporation, a Delaware corporation, and Wachovia Bank, N.A.,
individually as Agent.   Unless
defined elsewhere herein, capitalized terms used in this Amendment shall have
the meanings assigned to such terms in the Credit and Security Agreement.


PRELIMINARY STATEMENTS


On
the terms and subject to the conditions hereinafter set forth, each of the
parties wishes to amend the Sale Agreement to add Mohawk Carpet of Texas, L.P.,
a Delaware limited partnership of which Mohawk Carpet is the sole general
partner, as an Originator thereunder.


NOW,
THEREFORE,
in consideration of the premises and the mutual agreements herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:


1.             Amendments.
 


1.1.          The Sale Agreement is hereby amended
to add Mohawk Carpet of Texas, L.P., a Delaware limited partnership, as an
Originator.  By its signature below,
Mohawk Carpet of Texas, L.P. hereby agrees to become an Originator under the
Sale Agreement and to abide by each of the representations, covenants and other
agreements of the Originators therein contained.


1.2.          The definition of "Initial Cutoff Date" is
hereby amended and restated in its entirety to read as follows:


"Initial
Cutoff Date" means, as to each Originator, the close of business on the Business
Day immediately prior to the date on which it became a party to this Agreement.


1.3.          Exhibit II to the Sale Agreement is
hereby amended and restated in its entirety to read as set forth in Annex A
to this Amendment.


2.             Conditions Precedent to Effectiveness. The effectiveness of this
Amendment is subject to the conditions precedent that the Agent shall have
received (a) counterparts hereof duly executed by each of the parties to the
Credit and Security Agreement and (b) an amendment to the UCC-1 financing
statement filed by the Agent against the Borrower in the State of Delaware
reflecting the foregoing change in the definition of ", reasonably describing
the  Receivables and Related Security to
be conveyed by Mohawk Carpet of Texas, L.P. to Buyer under the Sale Agreement.


3.             Scope of Amendment. Except as expressly amended hereby, the Credit
and Security Agreement remains in full force and effect in accordance with its
terms and this Amendment to the Credit and Security Agreement shall not by
implication or otherwise alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Credit
and Security Agreement, all of which are ratified and affirmed in all respects
and shall continue in full force and effect. 




4.             Governing Law. This Amendment and the Credit and Security Agreement
as amended hereby shall be governed by and construed in accordance with the
laws of the State of Georgia.


5.             Counterparts.  This
Amendment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed an original, and all such
counterparts shall together constitute but one and the same instrument.


 


<signature pages
follow>




IN WITNESS
WHEREOF,
the parties hereto have caused this Amendment to be executed and delivered by
their duly authorized officers as of the date hereof .


Mohawk Carpet
Corporation






By:         
                                                                
 


Name:                     Sidney J. Frost


Title:                       Vice President and
Treasurer








Mohawk Commercial,
Inc.






By:         
                                                                
 


Name:                     Sidney J. Frost


Title:                       Vice President and
Treasurer








Durkan Patterned
Carpets, Inc.






By:         
                                                                
 


Name:                     Sidney J. Frost


Title:       Vice President, Treasurer and Secretary










mohawk
carpet of texas, l.p.




By:  Mohawk
Carpet Corporation, its general partner






By:         
                                                                
 


Name:                     Sidney J. Frost


Title:                       Vice President and
Treasurer




Address:               
 160 S. Industrial Blvd.


Calhoun,
GA 30703


Attn:  Sidney J. Frost


Phone:    (706) 624-2239


Fax:
        (706) 625-3851






MOHAWK FACTORING, INC.






By:         
                                                                
 


Name:     Linda Bubacz


Title:       Assistant Treasurer and Secretary








The foregoing
amendment is hereby consented to

as of the date first above written:


 




WACHOVIA
BANK, N.A., as Agent






By:                                                                                         
 


Name:


Title:




ANNEX A


Exhibit II




Places
of Business; Locations of Collection Records;


Federal
Employer Identification Number(s); Other Names






Places of
Business:




Mohawk
Carpet Corporation


Mohawk
Carpet of Texas, L.P.


Durkan
Patterned Carpets, Inc.


Mohawk
Commercial, Inc.  




Address for
all:


160
S. Industrial Blvd.  


Calhoun,
GA 30703


 


Location of
Collection Records:


 


Mohawk
Servicing, Inc


235
Industrial Blvd.  


Chatsworth,
GA 30705




Mohawk
Servicing, Inc.  


160
S. Industrial Blvd.


Calhoun,
GA 30703




Federal
Employer Identification Numbers:


 


Mohawk
Carpet Corporation


FEI
# 58-2185429




Mohawk
Commercial, Inc.  


FEI#
58-2357716




Durkan
Patterned Carpets, Inc.


FEI#
58-1729913




Mohawk
Carpet of Texas, L.P.

FEI#  n/a (same as Mohawk Carpet
Corporation's, its general partner)






Legal, Trade
and Assumed Names:


 


Alladin
Mills


World
Contract


Mohawk
Commercial


IMAGE


Galaxy


Merit
Hospitality


Custom
Weave


Wunda
Wave


Mohawk
International


Karastan


Alliance
Pad


Mohawk
Non-Woven


Mohawk
Carpet


World


Diamond


Durkan
Patterned Carpet


Rug
& Textile Group


Aladdin
Rug


Townhouse


New
Mark & James


J
MAR


American
Rug Craftsman


Horizon


Alexander
Smith


Bigelow


Harbinger


Helios


Delaware
Valley Wool Scouring


Greenville
Yarn


Burton
Rug


Insignia


Sunrise


Hamilton


Cyboney


Mohawk
Rug & Textile


Ultra
Weave


Durkan
Commercial


American
Weavers