10.1

TWELFTH AMENDMENT TO CREDIT AGREEMENT

This TWELFTH AMENDMENT TO CREDIT AGREEMENT (this “Agreement”), dated as of
October 3, 2019, is entered into by and among THE DIXIE GROUP, INC., a Tennessee
corporation (“Dixie”), CANDLEWICK YARNS, LLC, an Alabama limited liability
company (“Candlewick”), TDG OPERATIONS, LLC, a Georgia limited liability
company, formerly known as Masland Carpets, LLC and successor by merger to
Fabrica International, Inc. (“TDG”; together with Dixie and Candlewick, are
referred to hereinafter each individually as a “Borrower,” and individually and
collectively, jointly and severally, as the “Borrowers”), the persons identified
as the Lenders on the signature pages hereto (the “Lenders”), and WELLS FARGO
CAPITAL FINANCE, LLC, a Delaware limited liability company, as administrative
agent for the Lenders (in such capacity, together with its successors and
assigns in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement dated as of September 13, 2011, as
amended by the First Amendment to Credit Agreement dated as of November 2, 2012,
the Second Amendment to Credit Agreement dated as of April 1, 2013, the Third
Amendment to Credit Agreement dated as of May 22, 2013, the Fourth Amendment to
Credit Agreement dated as of July 1, 2013, the Fifth Amendment to Credit
Agreement dated as of July 30, 2013, the Sixth Amendment to Credit Agreement
dated as of August 30, 2013, the Seventh Amendment to Credit Agreement dated as
of January 20, 2014, the Eighth Amendment to Credit Agreement dated as of March
14, 2014, the Ninth Amendment to Credit Agreement dated as of March 26, 2014,
the Tenth Amendment to Credit Agreement, First Amendment to Security Agreement,
and First Amendment to Guaranty dated as of September 23, 2016, and the Consent
and Eleventh Amendment to Credit Agreement dated as of January 14, 2019 (as
further amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), among Agent, the Lenders and the Borrowers, the
Lenders have made loans and advances and provided other financial accommodations
to the Borrowers;

WHEREAS, the Borrowers have requested that Agent and Lenders enter into this
Agreement to make certain amendments to the Credit Agreement, and Agent and the
Lenders are willing to do so, subject to the terms and conditions set forth
herein.

NOW, THEREFORE, in consideration of the agreements herein contained and other
good and valuable consideration, the parties hereby agree as follows:

I.    DEFINITIONS AND INTERPRETATION.

1.1.    Definitions and Interpretation. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Credit Agreement.

II.        AMENDMENTS TO CREDIT AGREEMENT.
Subject to the satisfaction of each of the conditions precedent set forth in
Section III of this Agreement, the Credit Agreement is hereby amended as
follows:
2.1.    Maximum Revolver Amount Definition. Schedule 1.1 of the Credit Agreement
is hereby amended by restating the definition of “Maximum Revolver Amount” in
its entirety as follows:

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“Maximum Revolver Amount” means $125,000,000, as such amount may be increased by
the amount of Additional Commitment Amounts in accordance with Section 2.2 of
the Agreement or decreased by the amount of reductions in the Commitments made
in accordance with Section 2.4(c) of the Agreement.
 
2.2.    Trigger Level Definition. Schedule 1.1 of the Credit Agreement is hereby
amended by restating the definition of “Trigger Level” in its entirety as
follows:

“Trigger Level” means (a) through and including the earlier of (i) November 15,
2019, and (ii) the date on which a sale of the Susan Street Real Property is
consummated, $13,750,000, and (b) at all times after the earlier of the
foregoing dates, $15,000,000.

2.3.    Amendment to Schedule C-1. Schedule C-1 of the Credit Agreement is
hereby amended and restated in its entirety in the form of Schedule C-1 attached
hereto.

III.        CONDITIONS PRECEDENT.

This Agreement shall become effective as of the date hereof, subject to the
following conditions precedent having been satisfied or waived by Agent:

3.1.    Execution of Agreement. Agent shall have received fully executed
counterparts of this Agreement, duly authorized, executed and delivered by each
Borrower, Agent, and each Lender, and acknowledged by each Guarantor.
3.2.    Amendment Fee. Agent shall have received an amendment fee in the amount
of $25,000 (with each Lender to receive its Pro Rata Share thereof), and
Borrowers hereby authorize Agent to charge the Loan Account for such amendment
fee..
3.3.    Accuracy of Representations and Warranties. Each of the representations
and warranties of the Borrowers set forth in Section 4 of the Credit Agreement
shall be true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof).

3.4.    Other Documents. Agent shall have received such other agreements,
documents, instruments, officer’s certificates, and information executed and/or
delivered by the Loan Parties as Agent may reasonably request.

3.5.    No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing.

IV.        MISCELLANEOUS.

4.1.    No Additional Obligations. The Borrowers acknowledge and agree that the
execution, delivery and performance of this Agreement shall not create (nor
shall the Borrowers rely upon the existence of or claim or assert that there
exists) any obligation of any of Agent or Lenders to consider or agree to any
other amendment of or waiver or consent with respect to the Credit Agreement or
any other instrument or agreement to which Agent or any Lender is a party
(collectively, an “Additional Amendment” or “Consent”), and in the event that
Agent and the Lenders subsequently agree to consider any requested Additional

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Amendment or Consent, neither the existence of this Agreement nor any other
conduct of Agent or the Lenders related hereto, shall be of any force or effect
on the Lenders’ consideration or decision with respect to any such requested
Additional Amendment or Consent, and the Lenders shall not have any obligation
whatsoever to consider or agree to any such Additional Amendment or Consent.

4.2.    Acknowledgments and Stipulations. In order to induce Agent and Lenders
to enter into this Agreement, each Borrower acknowledges, stipulates and agrees
that (a) the Loan Documents executed by each Borrower are legal, valid and
binding obligations of such Borrower enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors’ rights generally; (b) the
Liens granted by each Borrower to Agent in the Collateral are valid and duly
perfected, first priority Liens, subject only to Permitted Liens; (c) each of
the recitals contained at the beginning of this Agreement is true and correct;
and (d) prior to executing this Agreement, each Borrower consulted with and had
the benefit of advice of legal counsel of its own selection and has relied upon
the advice of such counsel, and in no part upon the representation of Agent, any
Lender or any counsel to Agent or any Lender concerning the legal effects of
this Agreement or any provision hereof.

4.3.    Additional Representations and Warranties of the Borrowers. Each
Borrower hereby represents and warrants that on the date hereof and after giving
effect to the amendments and waivers contained herein: (a) the representations
and warranties contained in Section 4 of the Credit Agreement shall be correct
in all material respects on and as of such date as though made on and as of such
date, and (b) no Default or Event of Default exists under the Credit Agreement
on and as of such date. Without limitation of the preceding sentence, each
Borrower hereby expressly re-affirms the validity, effectiveness and
enforceability of each Loan Document to which it is a party (in each case, as
the same may be modified by the terms of this Agreement).

4.4.    Effect of this Agreement. Except as expressly amended pursuant hereto,
no other changes or modifications to the Credit Agreement or any of the other
Loan Documents are intended or implied, and in all other respects, the Credit
Agreement and each of the other Loan Documents is hereby specifically ratified,
restated and confirmed by all parties hereto as of the date hereof. To the
extent that any provision of the Credit Agreement or any of the other Loan
Documents is inconsistent with the provisions of this Agreement, the provisions
of this Agreement shall control. All references in the Credit Agreement
(including without limitation the Schedules thereto) to the “Agreement” and all
references in the other Loan Documents to the “Credit Agreement” shall be deemed
to refer to the Credit Agreement, as amended hereby.

4.5.    Further Assurances. The Loan Parties shall execute and deliver such
additional documents and take such additional action as may be reasonably
requested by Agent to effectuate the provisions and purposes hereof.

4.6.    Governing Law. THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS,
CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF GEORGIA.

4.7.    Binding Effect. This Agreement shall bind and inure to the benefit of
the respective successors and permitted assigns of each of the parties hereto.

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4.8.    Counterparts; Electronic Execution. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.

[Continued on following page.]

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Each of the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

BORROWERS:
THE DIXIE GROUP, INC.

By:________________________
Name: Jon A. Faulkner 
Title: VP/CFO

 
CANDLEWICK YARNS, LLC

By:________________________
Name: Jon A. Faulkner 
Title: President

 
TDG OPERATIONS, LLC

By:_________________________
Name: Jon A. Faulkner 
Title: President

[DIXIE—TWELFTH AMENDMENT TO CREDIT AGREEMENT]

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10.1

AGENT AND LENDERS:
WELLS FARGO CAPITAL FINANCE, LLC,
as Agent and as a Lender

By:_______________________
Name: Zachary S. Buchanan
Title: Authorized Signatory

[DIXIE—TWELFTH AMENDMENT TO CREDIT AGREEMENT]

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10.1

 
BANK OF AMERICA, N.A.,
as a Lender

By:________________________
Name: Todd Tarrance
Title: Vice President

   

SCHEDULE C-1
COMMITMENTS
Lender
Amount
Wells Fargo Capital Finance, LLC
$62,500,000
Bank of America, N.A.
$62,500,000

[DIXIE—TWELFTH AMENDMENT TO CREDIT AGREEMENT]