Document:

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
WeaversAMENDMENT #2 TO CREDIT AND SECURITY AGREEMENT

Exhibit No. 10.37

AMENDMENT
#2 TO CREDIT AND SECURITY AGREEMENT

THIS AMENDMENT #2  (this "Amendment") is entered into by the undersigned parties as of July
19, 2002 with respect to the Credit and Security Agreement dated as of October
25, 2000 (as amended, 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, National
Association, individually and 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
STATEMENT

On
the terms and subject to the conditions hereinafter set forth, each of the
parties wishes to amend the Credit and Security Agreement amend the definition
of Receivable.

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.             Amendment.  The definition of "Receivable" in the
Credit and Security Agreement is hereby amended by amending the first proviso to
read "provided, however, in no event shall the term "Receivable" include
any Receivable for which any of Kmart Corporation (including without
limitation, Kmart Corporation d/b/a Kmart Fashions), Builders Square, Inc. or
Sourcing & Technical Services, Inc., is the Obligor or any Receivable
coming into existence after the Facility Termination Date.

2.             Conditions Precedent to
Effectiveness.  The effectiveness of
this Amendment is subject to the conditions precedent that the Agent shall have
received counterparts hereof duly executed by each of the parties to the Credit
and Security 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.

6.             No Rating Agency Condition.  By signing below, the Agent confirms that
this Amendment will not require satisfaction of the Rating Agency Condition.

<signature
pages follow>

 IN
WITNESS WHEREOF, the parties hereto have caused this Amendment #2 to Credit and
Security Agreement to be executed and delivered by their duly authorized
officers as of the date hereof.

MOHAWK
FACTORING, INC.

By:                                                                                         
 

Name:  ______________________________

Title:  _______________________________

MOHAWK
SERVICING, INC.

By:                                                                                         
 

Name:                                                                                     
 

Title:        
                                                                               
 

BLUE
RIDGE ASSET FUNDING CORPORATION

BY:  WACHOVIA BANK, NATIONAL ASSOCIATION,
 ITS ATTORNEY-IN-FACT

By:  __________________________________

                Name: 
 

                Title:   
 

WACHOVIA
BANK, NATIONAL ASSOCIATION, as Sole Liquidity Bank and as Agent

By:                                                                                         
 

Name:

Title:

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