Exhibit 10.1
FIFTH AMENDMENT TO CREDIT AGREEMENT

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of July
30, 2013, is entered into by and among THE DIXIE GROUP, INC., a Tennessee
corporation (“Dixie”), CANDLEWICK YARNS, LLC, an Alabama limited liability
company (“Candlewick”), FABRICA INTERNATIONAL, INC., a California corporation
(“Fabrica”), MASLAND CARPETS, LLC, a Georgia limited liability company
(“Masland”; together with Dixie, Candlewick and Fabrica, 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, and the Fourth
Amendment to Credit Agreement, dated as of July 1, 2013 (as amended hereby and
as the same may be further amended, modified, supplemented, renewed, restated or
replaced, 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; and

WHEREAS, the Borrowers have requested that Agent and Lenders enter into this
Amendment to make certain changes to the Credit Agreement effective on (and
subject to the occurrence of) the Fifth Amendment Effective Date; and

WHEREAS, Agent and the Lenders are willing to amend the Credit Agreement as 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

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

1.2.    Additional Definitions. As used herein, the following terms shall have
the meanings given to them below, and the Credit Agreement is hereby amended to
include, in addition and not in limitation, the following:

“Fifth Amendment” means the Fifth Amendment to Credit Agreement, dated as of
July 30, 2013, by and among Borrowers, Lenders and Agent, as acknowledged and
agreed to by the Guarantors.

“Fifth Amendment Effective Date” shall have the meaning given to such term in
Section IV of the Fifth Amendment.

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1.3.    Amendments to Definitions

(a)Fixed Asset Availability Amount. Schedule 1.1 of the Credit Agreement is
hereby amended by deleting the definition of “Fixed Asset Availability Amount”
in its entirety and replacing it with the following:

“ 'Fixed Asset Availability Amount' means, as of any date of determination
following the Fifth Amendment Effective Date, the lesser of (a) $15,500,000, and
(b) the sum of (i) 85% of the net orderly liquidation value of Eligible M&E of
Borrowers set forth in an appraisal of such Eligible M&E conducted by an
appraisal company selected by Agent, plus (ii) 75% of the fair market value (as
determined on the basis of a 12-month sale period) of Eligible Real Property of
Borrowers (other than the Susan Street Real Property) set forth in an appraisal
of such Eligible Real Property conducted by an appraisal company selected by
Agent, as such lesser amount shall be reduced on a monthly basis (on the first
day of each calendar month, commencing on September 1, 2013) on (A) a 10-year
straight-line amortization schedule from September 1, 2013 through and including
August 1, 2014, (B) an 8.5-year straight-line amortization schedule from
September 1, 2014 through and including August 1, 2015, and (C) a 7-year
straight-line amortization schedule from and after September 1, 2015. In no
event shall any increase in the appraised value of any Eligible M&E or Eligible
Real Property, as set forth in any appraisal obtained after the Fifth Amendment
Effective Date, be taken into account in the calculation of the Fixed Asset
Availability Amount.”

(b)Maximum Revolver Amount. Schedule 1.1 of the Credit Agreement is hereby
amended by deleting the definition of “Maximum Revolver Amount” in its entirety
and replacing it with the following:

“ 'Maximum Revolver Amount' means $130,000,000, 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.”

(c)Susan Street Real Property Availability Amount. Schedule 1.1 of the Credit
Agreement is hereby amended by deleting the definition of “Susan Street Real
Property Availability Amount” in its entirety and replacing it with the
following:

“ 'Susan Street Real Property Availability Amount' means, as of any date of
determination following the Fifth Amendment Effective Date, the lesser of (a)
$13,500,000, and (b) 75% of the fair market value (as determined on the basis of
a 12-month sale period) of the Susan Street Real Property set forth in an
appraisal thereof conducted by an appraisal company selected by Agent, as such
lesser amount is reduced on a monthly basis (on the first day of each calendar
month, commencing on September 1, 2013) on a 15-year straight-line amortization
schedule. In no event shall any increase in the appraised value of the Susan
Street Real Property, as set forth in any appraisal obtained after the Fifth
Amendment Effective Date, be taken into account in the calculation of the Susan
Street Real Property Availability Amount.”

(d)Trigger Level. Schedule 1.1 of the Credit Agreement is hereby amended by
deleting the definition of “Trigger Level” in its entirety and replacing it with
the following:

“ 'Trigger Level' means $14,440,000.”

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II.
MATURITY

Section 3.3 of the Credit Agreement is amended by deleting such Section in its
entirety and replacing it with the following:

“3.3 Maturity. This Agreement shall continue in full force and effect for a term
ending on August 1, 2018 (the “Maturity Date”). The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of Default.”

III.
SCHEDULES TO CREDIT AGREEMENT

Schedule C-1 to the Credit Agreement (Commitments) is hereby amended by deleting
such schedule in its entirety and replacing it with Schedule C-1 to this
Amendment.

IV.
CONDITIONS PRECEDENT

This Amendment shall become effective as of the date hereof (the “Fifth
Amendment Effective Date”), subject to the following conditions precedent having
been satisfied or waived by Agent:

4.1.    Execution of Amendment. Agent shall have received fully executed
counterparts of this Amendment.

4.2.    Amendment Fee. Agent shall have received an amendment fee in the amount
of $125,000 to be apportioned on a pro-rata basis among the Lenders according to
each Lender's Commitment, and Borrowers hereby authorize Agent to charge the
Loan Account for such amendment fee.

4.3.    Accuracy of Representations and Warranties. Each of the representations
and warranties of the Loan Parties 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).

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

V.
MISCELLANEOUS

5.1.    No Additional Obligations. The Borrowers acknowledge and agree that the
execution, delivery and performance of this Amendment 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
Amendment or Consent, neither the existence of this Amendment 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.

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5.2.    Acknowledgments and Stipulations. In order to induce Agent and Lenders
to enter into this Amendment, 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 Amendment is true and correct;
and (d) prior to executing this Amendment, 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 Amendment or any provision hereof.

5.3.    Additional Representations and Warranties of the Borrowers. Each
Borrower hereby represents and warrants that on the Fifth Amendment Effective
Date 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, (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 Amendment).

5.4.    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 are inconsistent with the provisions of this Amendment, the provisions
of this Amendment 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.

5.5.    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.

5.6.    Governing Law. THE VALIDITY OF THIS AMENDMENT, 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.

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

5.8.    Counterparts; Electronic Execution. This Amendment 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 Amendment by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Amendment. Any
party delivering an executed counterpart of this Amendment by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart

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of this Amendment but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Amendment.

5.9.    Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

[Remainder of Page Intentionally Left Blank]
            

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

BORROWERS:
THE DIXIE GROUP, INC.

By:  /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: VP/CFO
 
CANDLEWICK YARNS, LLC

By: /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President
 
FABRICA INTERNATIONAL, INC.

By:  /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President
 
MASLAND CARPETS, LLC

By:  /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President

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

By: /s/ Gary J. Forlenza, Jr.
Name: Gary J. Forlenza, Jr.
Title: Vice President
 
BANK OF AMERICA, N.A.,
as a Lender

By: /s/ Robert B. H. Moore
Name: Robert B. H. Moore
Title: Senior Vice President

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GUARANTOR'S ACKNOWLEDGEMENT

The undersigned, a guarantor of the “Obligations” of THE DIXIE GROUP, INC., a
Tennessee corporation (“Dixie”), CANDLEWICK YARNS, LLC, an Alabama limited
liability company (“Candlewick”), FABRICA INTERNATIONAL, INC., a California
corporation (“Fabrica”), MASLAND CARPETS, LLC, a Georgia limited liability
company (“Masland”; together with Dixie, Candlewick and Fabrica, are referred to
hereinafter each individually as a “Borrower”, and individually and
collectively, jointly and severally, as the “Borrowers”), under and as defined
in that certain 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, and the Fifth Amendment to Credit
Agreement (the “Fifth Amendment”), dated as of the date hereof (as amended,
restated, supplemented, or otherwise modified prior to the date hereof, the
“Credit Agreement”) among the Borrowers, the lenders party thereto (the
“Lenders”), 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, the “Agent”), hereby
(a) acknowledges receipt of the foregoing Fifth Amendment; (b) consents to the
terms thereof and the execution thereof by the Borrowers; (c) reaffirms its
obligations pursuant to the terms of the Guaranty Agreement, dated as of
September 13, 2011, by the undersigned in favor of Agent and Lenders (the
“Guaranty”); and (d) acknowledges that Agent and the Lenders may amend, restate,
extend, renew or otherwise modify the Credit Agreement and any indebtedness or
agreement of the Borrowers, or enter into any agreement or extend additional or
other credit accommodations to the Borrowers, without notifying or obtaining the
consent of the undersigned and without impairing the liability of the
undersigned under the Guaranty for the Borrowers' present and future
Obligations. Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.

 
C-KNIT APPAREL, INC.

By:  /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President

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SCHEDULE C-1
TO
FIFTH AMENDMENT TO CREDIT AGREEMENT

SCHEDULE C-1 (Commitments)

Lender
Commitment

Wells Fargo Capital Finance, LLC
$
65,000,000

Bank of America, N.A.
$
65,000,000

Total
$
130,000,000

C-1