Exhibit 10.1

Form of Exchange Agreement

May 2, 2018

Carriage Services, Inc.

3040 Post Oak Blvd., Suite 300

Houston, TX 77058

Attn: Carl B. Brink

 

  Re: Carriage Services, Inc. Exchange of 2.75% Convertible Subordinated Notes
due 2021 (CUSIP 143905 AM9)

Ladies and Gentlemen:

The undersigned beneficial owner of Carriage Services, Inc.’s (the “Company”)
2.75% Convertible Subordinated Notes due 2021, CUSIP 143905 AM9 (the “Notes”)
hereby agrees with the Company to exchange the Notes for shares (the “Exchange
Shares”) of the Company’s common stock, par value $0.01 per share (the “Common
Stock”) and the Cash Consideration (as defined below), pursuant to the terms and
conditions of this Exchange Agreement. The undersigned understands that this
exchange (the “Exchange”) is being made without registration of the Exchange
Shares under the Securities Act of 1933, as amended (the “Securities Act”), or
any securities laws of any state of the United States or of any other
jurisdiction, and is being made only to beneficial owners of Notes who are both
“accredited investors” (as defined in Rule 501 of Regulation D under the
Securities Act) and “qualified institutional buyers” (as defined in Rule 144A
under the Securities Act) in reliance on a private placement exemption from
registration under the Securities Act.

1.    Exchange Consideration. Subject to the terms and conditions of this
Exchange Agreement, the undersigned hereby agrees to exchange an aggregate
principal amount of the Notes set forth on the signature page hereto for the
consideration in the amount and form as follows (the “Consideration”):

(a)    Cash Consideration: $[    ] in aggregate, representing an amount of cash
in United States dollars equal to [    ] per $1,000 principal amount of Notes
exchanged (the “Cash Consideration”); and

(b)    Exchange Shares: [    ] Exchange Shares, representing a number of
Exchange Shares equal to [    ] per $1,000 principal amount of Notes exchanged
(with the aggregate number of Exchange Shares delivered to the undersigned in
respect of all of its Notes validly submitted for exchange rounded down to the
nearest whole Exchange Share).

The Exchange shall occur in accordance with the procedures described in
Section 3 hereof.

2.    The Closing. The closing of the Exchange (the “Closing”) shall take place
at the offices of Porter Hedges LLP at 10:00 a.m. Houston, Texas time on May 7,
2018, or at such other time and place as the Company and the undersigned may
mutually agree (the “Closing Date”).

 

1

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

3.    Exchange. Subject to the terms and conditions of this Exchange Agreement,
the undersigned hereby sells, assigns and transfers to, or upon the order of,
the Company, all right, title and interest in such portion of the Notes as is
indicated on the signature page hereto, waives any and all other rights with
respect to such Notes, and releases and discharges the Company from any and all
claims the undersigned may now have, or may have in the future, arising out of,
or related to, such Notes, including, without limitation, any claims arising
from any existing or past defaults, or any claims that the undersigned is
entitled to receive any accrued and unpaid interest or additional interest with
respect to the Notes.

The Depository Trust Company (“DTC”) will act as securities depository for the
Exchange Shares. On or prior to 12:00 p.m. New York City time on the business
day immediately preceding the Closing Date, (i) the undersigned agrees to direct
the eligible DTC participant through which the undersigned holds a beneficial
interest in the Notes to submit a one-sided withdrawal instruction through DTC’s
Deposits and Withdrawal at Custodian (“DWAC”) program to Wilmington Trust,
National Association, in its capacity as trustee of the Notes (the “Trustee”),
for the aggregate principal amount of the Notes to be exchanged pursuant to this
Exchange Agreement (the “DWAC Withdrawal”) and (ii) the Company shall provide an
executed cancellation order (in the form of Exhibit C) to the Trustee
corresponding to each DWAC Withdrawal (each a “Cancellation Order”) and each
such Cancellation Order shall be held in escrow by the Trustee pending release
by the Company on the Closing Date as described in the immediately succeeding
paragraph.

On or prior to 9:00 a.m. New York City time on the Closing Date, the Company
will (i) submit, through the DWAC Online System of American Stock Transfer &
Trust Company, LLC, acting as the Company’s Transfer Agent for the Common Stock
(the “Transfer Agent”), a deposit instruction for the aggregate number of
Exchange Shares (the “Exchange Shares DWAC Deposit”) and (ii) provide email
notification to the Trustee that each Cancellation Order is released from
escrow. Upon receipt of such email, the Trustee shall process the DWAC
Withdrawals in accordance with the Cancellation Orders and shall provide email
notification to the Company of each DWAC Withdrawal it processes. In the event
that any DWAC Withdrawal corresponding to a Cancellation Order has not been
posted by 4 p.m., New York City time, on the Closing Date, the Trustee shall
notify the Company by email and the Cancellation Order for such DWAC Withdrawal
shall be deemed revoked and an updated Cancellation Order with an updated
cancellation date shall be provided by the Company. The Exchange Shares will not
be delivered until a valid DWAC Withdrawal of the Notes has been received by the
Trustee. In the event the Closing does not occur, any Notes submitted for DWAC
Withdrawal will be returned to the DTC participant that submitted the withdrawal
instruction in accordance with the procedures of DTC.

On the Closing Date, subject to satisfaction of the conditions precedent
specified in this Exchange Agreement and the prior receipt of the DWAC
Withdrawal conforming with the aggregate principal amount of the Notes to be
exchanged, the Company hereby agrees to (i) transfer by wire of immediately
available funds to the account of the undersigned at a bank in the

 

2

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

United States of America provided by the undersigned as Exhibit A to this
Exchange Agreement all Cash Consideration on the Notes to be exchanged; and
(ii) issue the Exchange Shares, and direct the Transfer Agent to accept the
Exchange Shares DWAC Deposit conforming with the aggregate number of Exchange
Shares to be issued in the Exchange and deliver the Exchange Shares (or comply
with such other settlement procedures mutually agreed in writing by the
undersigned, the Company and the Transfer Agent). If (a) the Trustee or Transfer
Agent is unable to locate the DWAC Withdrawal or the Exchange Shares DWAC
Deposit or (b) the DWAC Withdrawal or Exchange Shares DWAC Deposit does not
conform with the Notes or the Exchange Shares, respectively, to be exchanged
pursuant to this Exchange Agreement, the Company will promptly notify the
undersigned.

All questions as to the form of all documents and the validity and acceptance of
the Notes and the Exchange Shares will be determined by the Company, in its sole
discretion, which determination shall be final and binding.

All authority herein conferred or agreed to be conferred in this Exchange
Agreement shall survive the dissolution of the undersigned and any
representation, warranty, undertaking and obligation of the undersigned
hereunder shall be binding upon the trustees in bankruptcy, legal
representatives, successors and assigns of the undersigned.

4.    Representations, Warranties and Undertakings of the Company. The Company
represents and warrants to, and covenants with, the undersigned that:

(a)    The Company is duly formed and validly existing under the laws of the
State of Delaware, and the consummation of the transactions contemplated hereby
are within the powers of the Company and have been or will have been duly
authorized by all necessary action on the part of the Company, and this Exchange
Agreement constitutes a valid and binding agreement of the Company, enforceable
in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement or creditors’ rights generally or (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.

(b)    The execution of this Exchange Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby (i) do not
require the consent, approval, authorization, order, registration or
qualification of, or filing (assuming the truth and accuracy of the
representations and warranties in Section 5 and excluding any filing required
under the requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) with, any governmental authority, non-governmental regulatory
authorities (including the New York Stock Exchange, other than the filing with
the New York Stock Exchange of a Supplemental Listing Application (“SLAP”) which
the Company will so file prior to the issuance of Exchange Shares included in
the Consideration on Closing), or court, or body or arbitrator having
jurisdiction over the Company (except as may be required under the securities or
Blue Sky laws of the various states); and (ii) do not and will not constitute or
result in a breach, violation or default under any note, bond, mortgage, deed,
indenture, lien,

 

3

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

instrument, contract, agreement, lease or license, whether written or oral,
express or implied, or with the Company’s organizational documents or by-laws,
or any statute, law, ordinance, decree, order, injunction, rule, directive,
judgment or regulation of any court, administrative or regulatory body,
governmental authority, arbitrator, mediator or similar body on the part of the
Company or on the part of any other party thereto or cause the acceleration or
termination of any obligation or right of the Company or any other party
thereto, except, in case of b(ii), for any such breach, violation or default as
would not, individually or in the aggregate, have a material adverse affect on
the business, properties, financial position, stockholders’ equity, or results
of operations of the Company and its subsidiaries taken as a whole.

(c)    The Exchange Shares, when issued, delivered and paid for in the manner
set forth in this Exchange Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Exchange Shares will not be subject to
any preemptive or similar rights.

(d)    Assuming the accuracy of the representations and warranties of the
undersigned, the issuance of the Exchange Shares in book-entry form through DTC
in exchange for the Notes pursuant to this Exchange Agreement is exempt from the
registration requirements of the Securities Act and, assuming the undersigned is
not, and during the past three months has not been, an affiliate of the Company,
the undersigned shall have the ability to rely on the tacking provisions set
forth in Rule 144(d)(3) under the Securities Act, subject to the limitations set
forth therein, with respect to the resale of the Exchange Shares, and such
Exchange Shares will be issued without any restrictive legends.

(e)    (A) As of the date hereof, (x) the Company is not aware of any material
non-public information regarding the Company, other than the fact and proposed
terms of the Exchange and (y) all reports and other documents filed by the
Company with the Securities and Exchange Commission (the “SEC”) pursuant to the
Securities Exchange Act of 1934, as amended, since January 1, 2016 when
considered as a whole (with the more recent such reports and documents deemed to
amend inconsistent statements contained in any earlier such reports and
documents), do not contain any untrue statement of a material fact or any
omission of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading, other than the fact and proposed terms of the Exchange or
any information referred to in the wall-crossing email referenced in
Section 5(y) below and (B) The Company hereby agrees to publicly disclose on or
before 8:30 a.m., New York City time, on the business day immediately following
the date hereof, the exchange of the Notes as contemplated by this Exchange
Agreement in a press release; provided that (i) if the Exchange does not take
place and (ii) the Company believes, in good faith, that there is no legal
requirement to publicly disclose information about the Exchange, no press
release will be required. The Company hereby acknowledges and agrees that this
press release will disclose all confidential information to the extent the
Company believes such confidential information constitutes material non-public
information, if any, with respect to the Exchange or otherwise communicated by
the Company to the undersigned or any exchanging investor in connection with the
Exchange.

 

4

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

(f)    Neither the Company nor any of its subsidiaries is (i) in violation of
its charter or by-laws or similar organizational documents; (ii) in default,
and, to the knowledge of the Company (having made due and reasonable enquiry),
no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority (including, without limitation, the rules and
regulations of the New York Stock Exchange), in each case, applicable to the
Company, except, in the case of clauses (ii) and (iii) above, for any such
conflict, breach or violation that would not, individually or in the aggregate,
have a material adverse effect on the business, properties, financial position,
stockholders’ equity, or results of operations of the Company and its
subsidiaries taken as a whole.

(g)    The Company is not and, after giving effect to the transactions
contemplated by this Exchange Agreement, will not be required to register as an
“investment company” or an entity “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder.

(h)    The Company will, upon request, execute and deliver any additional
documents deemed by the Trustee or the Transfer Agent to be reasonably necessary
to complete the transactions contemplated by this Exchange Agreement.

5.    Representations, Warranties and Undertakings of the Undersigned. The
undersigned hereby represents and warrants to, and covenants with, the Company
that:

(a)    The undersigned has full power and authority to exchange, sell, assign
and transfer the Notes exchanged hereby and to enter into this Exchange
Agreement and perform all obligations required to be performed by the
undersigned hereunder.

(b)    The undersigned has been the beneficial owner of the Notes continuously
for the immediately preceding three weeks and is the current beneficial owner of
the Notes. When the Notes are exchanged, the Company will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances. The Notes exchanged hereby are not
subject to any adverse claims, rights or proxies.

(c)    The Exchange will not contravene any law, rule or regulation binding on
the undersigned or any investment guideline or restriction applicable to the
undersigned.

 

5

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

(d)    The undersigned is a resident of the state set forth on the signature
page hereto and is not acquiring the Exchange Shares as a nominee or agent or
otherwise for any other person.

(e)    The undersigned will comply with all applicable laws and regulations in
effect in any jurisdiction in which the undersigned purchases (or acquires
pursuant to the Exchange) or sells Exchange Shares and will obtain any consent,
approval or permission required for such purchases, acquisitions or sales under
the laws and regulations of any jurisdiction to which the undersigned is subject
or in which the undersigned makes such purchases, acquisitions or sales, and the
Company shall have no responsibility therefor.

(f)    The undersigned acknowledges that no person has been authorized to give
any information or to make any representation or warranty concerning the Company
or the Exchange other than the information set forth herein in connection with
the undersigned’s examination of the Company and the terms of the Exchange and
the Shares, and the Company does not, and Goldman Sachs & Co. LLC (the
“Placement Agent”) does not, take any responsibility for, and neither the
Company nor the Placement Agent can provide any assurance as to the reliability
of, any other information that others may provide to the undersigned.

(g)    The undersigned acknowledges that (i) it has reviewed the Company’s
filings with the SEC and (ii) it is relying only upon the information contained
in the Company’s filings with the SEC and the representations and warranties of
the Company in this Agreement and not upon any other information

(h)    The undersigned understands and accepts that the Exchange Shares to be
acquired in the Exchange involve risks, including those described in the
Company’s filings with the SEC. The undersigned has such knowledge, skill and
experience in business, financial and investment matters that the undersigned is
capable of evaluating the merits and risks of the Exchange and an investment in
the Exchange Shares. With the assistance of the undersigned’s own professional
advisors, to the extent that the undersigned has deemed appropriate, the
undersigned has made its own legal, tax, accounting and financial evaluation of
the merits and risks of an investment in the Exchange Shares and the
consequences of the Exchange and this Exchange Agreement. The undersigned has
considered the suitability of the Exchange Shares as an investment in light of
its own circumstances and financial condition and the undersigned is able to
bear the risks associated with an investment in the Exchange Shares.

(i)    The undersigned confirms that it is not relying on any communication
(written or oral) of the Company, the Placement Agent or any of their affiliates
or representatives as investment advice or as a recommendation to participate in
the Exchange and receive the Consideration in exchange for the Notes. It is
understood that information provided by the Company, the Placement Agent or any
of their affiliates or representatives shall not be considered investment advice
or a recommendation to conduct the Exchange, and that none of the Company, the
Placement Agent or any of their affiliates or representatives is acting or has
acted as an advisor to the undersigned in deciding to invest in the Exchange
Shares.

 

6

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

(j)    The undersigned confirms that the Company has not (A) given any guarantee
or representation as to the potential success, return, effect or benefit (either
legal, regulatory, tax, financial, accounting or otherwise) of an investment in
the Exchange Shares or (B) made any representation to the undersigned regarding
the legality of an investment in the Exchange Shares under applicable investment
guidelines, laws or regulations. In deciding to participate in the Exchange, the
undersigned is not relying on the advice or recommendations of the Company and
the undersigned has made its own independent decision that the investment in the
Exchange Shares is suitable and appropriate for the undersigned.

(k)    The undersigned is familiar with the business and financial condition and
operations of the Company and has conducted its own investigation of the Company
and the Exchange Shares. The undersigned has had access to the filings made by
the Company with the SEC and such other information concerning the Company and
the Exchange Shares as it deems necessary to enable it to make an informed
investment decision concerning the Exchange. The undersigned has been offered
the opportunity to ask questions of the Company and its representatives and
received answers thereto, as it deems necessary to enable it to make an informed
investment decision concerning the Exchange.

(l)    The undersigned understands that no federal or state agency has passed
upon the merits or risks of an investment in the Exchange Shares or made any
finding or determination concerning the fairness or advisability of this
investment.

(m)    The undersigned is a corporation, limited partnership, limited liability
company or other entity, as the case may be, duly formed, validly existing and
in good standing under the laws of the jurisdiction of its formation.

(n)    The undersigned is an “accredited investor” as defined in Rule 501(a)
under the Securities Act and it and any account for which it is acting is a
“qualified institutional buyer” as defined in Rule 144A under the Securities
Act. The undersigned agrees to furnish any additional information requested by
the Company or any of its affiliates to assure compliance with applicable U.S.
federal and state securities laws in connection with the Exchange.

(o)    The undersigned is not directly, or indirectly through one or more
intermediaries, controlling or controlled by, or under direct or indirect common
control with, the Company and is not, and has not been for the immediately
preceding three months, an “affiliate” within the meaning of Rule 144 under the
Securities Act (an “Affiliate”) of the Company. To its knowledge, the
undersigned did not acquire any of the Notes from an Affiliate of the Company.

 

7

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

(p)    The undersigned is acquiring the Exchange Shares solely for the
undersigned’s own beneficial account (or for any account for which it has sole
investment discretion), for investment purposes, and not with a view to, or for
resale in connection with, any distribution of the Exchange Shares. The
undersigned understands that the Exchange Shares have not been registered under
the Securities Act or any state securities laws by reason of specific exemptions
under the provisions thereof which depend in part upon the investment intent of
the undersigned and the accuracy of the other representations made by the
undersigned in this Exchange Agreement. The undersigned understands that the
Company is relying upon the representations and agreements contained in this
Exchange Agreement (and any supplemental information) for the purpose of
determining whether the undersigned’s participation in the Exchange meets the
requirements for such exemptions.

(q)    The undersigned acknowledges that the terms of the Exchange have been
mutually negotiated between the undersigned and the Company.

(r)    The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company, the Trustee or the Transfer Agent to be
necessary or desirable to complete the exchange, assignment and transfer of the
Notes exchanged hereby.

(s)    The undersigned understands that, unless the undersigned notifies the
Company in writing to the contrary at or before the Closing, each of the
undersigned’s representations and warranties contained in this Exchange
Agreement will be deemed to have been reaffirmed and confirmed as of the
Closing, taking into account all information received by the undersigned.

(t)    The undersigned was given a meaningful opportunity to negotiate the terms
of the Exchange.

(u)    The undersigned’s participation in the Exchange was not conditioned by
the Company on the undersigned’s exchange of a minimum principal amount of Notes
for the Consideration.

(v)    The undersigned does not have an ownership interest equal to or greater
than either 5% of the number of shares of Common Stock or 5% of the voting power
outstanding of the Company, in each case, before the initial issuance of the
securities issued in the Exchange.

(w)    The undersigned had a sufficient amount of time to consider whether to
participate in the Exchange and the Company did not put any pressure on the
undersigned to respond to the opportunity to participate in the Exchange. The
undersigned acknowledges that it did not become aware of the Exchange through
any form of general solicitation or advertising within the meaning of Rule 502
under the Securities Act or otherwise through a “public offering” under
Section 4(a)(2) of the Securities Act.

 

8

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

(x)    The operations of the undersigned have been conducted in material
compliance with the applicable rules and regulations administered or conducted
by the U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”),
the applicable rules and regulations of the Foreign Corrupt Practices Act
(“FCPA”) and the applicable Anti-Money Laundering (“AML”) rules in the Bank
Secrecy Act.

(y)    The undersigned acknowledges and agrees that it has not transacted, and
will not transact, in any securities of the Company, including, but not limited
to, any hedging transactions, from the time the undersigned was first contacted
by the Company, the Placement Agent or any of their advisors or representatives
with respect to the transactions contemplated by this Exchange Agreement until
after the confidential information (as described in the confirmatory
wall-crossing email received by the undersigned from the Company, the Placement
Agent or of their advisors) is made public.

(z)    The undersigned acknowledges that the Company may issue appropriate
stop-transfer instructions to the Transfer Agent, if any, and may make
appropriate notations to the same effect in its books and records to ensure
compliance with the provisions of this Section 5.

(aa)    The undersigned acknowledges it understands that the Company intends to
pay the Placement Agent a fee in respect of the Exchange.

(bb)    There is no investment banker, broker, finder or other intermediary
which has been retained by, will be retained by or is authorized to act on
behalf of the undersigned who might be entitled to any fee or commission from
the Company or the undersigned upon consummation of the transactions
contemplated by this Exchange Agreement.

(cc)    The undersigned understands that the Company, the Placement Agent and
others will rely upon the truth and accuracy of the foregoing representations,
warranties and covenants and agrees that if any of the representations and
warranties deemed to have been made by it by its participation in the
transactions contemplated by this Exchange Agreement and acquisition of the
Exchange Shares are no longer accurate, the undersigned shall promptly notify
the Company and the Placement Agent. The undersigned understands that, unless
the undersigned notifies the Company in writing to the contrary before the
Closing, each of the undersigned’s representations and warranties contained in
this Exchange Agreement will be deemed to have been reaffirmed and confirmed as
of the Closing. If the undersigned is exchanging any Notes and acquiring the
Exchange Shares as a fiduciary or agent for one or more accounts, it represents
that (i) it has sole investment discretion with respect to each such account,
(ii) it has full power to make the foregoing representations, warranties and
covenants on behalf of such account and (iii) it has contractual authority with
respect to each such account.

(dd)    The undersigned acknowledges and agrees that the Placement Agent has not
acted as a financial advisor or fiduciary to the undersigned and that the
Placement

 

9

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

Agent and its respective directors, officers, employees, representatives and
controlling persons have no responsibility for making, and have not made, any
independent investigation of the information contained herein or in the
Company’s SEC filings and make no representation or warranty to the undersigned,
express or implied, with respect to the Company, the Notes or the Exchange
Shares or the accuracy, completeness or adequacy of the information provided to
the undersigned or any other publicly available information, nor shall any of
the foregoing persons be liable for any loss or damages of any kind resulting
from the use of the information contained therein or otherwise supplied to the
undersigned.

6.    Conditions to Obligations of the Undersigned and the Company. The
obligations of the undersigned to deliver the Notes and of the Company to
deliver the Consideration are subject to the satisfaction at or prior to the
Closing of the following conditions precedent: the representations and
warranties of the Company contained in Section 4 hereof and of the undersigned
contained in Section 5 hereof shall be true and correct as of the Closing in all
respects with the same effect as though such representations and warranties had
been made as of the Closing.

7.    Covenant and Acknowledgment of the Company. At or prior to 9:00 a.m., New
York City time, on the second business day following the Closing, the Company
shall file its press release announcing the Exchange (including the “Exchanges”,
if any, with holders of Notes executing exchange agreements on the date hereof)
on Form 8-K.

8.    Waiver, Amendment. Neither this Exchange Agreement nor any provisions
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing, signed by the party against whom any waiver, change,
discharge or termination is sought.

9.    Assignability. Neither this Exchange Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or the undersigned without the prior written
consent of the other party.

10.    Taxation. As set forth on Exhibit B hereto, The undersigned acknowledges
that either (i) the Company must be provided with a correct taxpayer
identification number (“TIN”), generally a person’s social security or federal
employer identification number, and certain other information on Internal
Revenue Service (“IRS”) Form W-9, which is provided as an attachment hereto, and
a certification, under penalty of perjury, that such TIN is correct, that the
undersigned is not subject to backup withholding and that the undersigned is a
United States person, or (ii) another basis for exemption from backup
withholding must be established.

11.    Waiver of Jury Trial. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED BY THIS EXCHANGE AGREEMENT.

12.    Governing Law. This Exchange Agreement and any claim, controversy or
dispute (whether in contract, in tort or by statute) arising under or related to
this Exchange Agreement or

 

10

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

the transactions contemplated by this Exchange Agreement or the rights, duties
and relationship of the parties hereto, shall be governed by and construed and
enforced in accordance with the laws of the State of New York, excluding any
conflicts of law, rule or principle that might refer construction of provisions
to the laws of another jurisdiction.

13.    Section and Other Headings. The section and other headings contained in
this Exchange Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Exchange Agreement.

14.    Counterparts. This Exchange Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.

15.    Notices. All notices and other communications to the Company provided for
herein shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid to the following addresses, or in the case of the
undersigned, the address provided on the signature page below (or such other
address as either party shall have specified by notice in writing to the other):

 

If to the Company:   

Carriage Services, Inc.

3040 Post Oak Blvd., Suite 300

Houston, TX 77058

Attn: Carl B. Brink

Telephone: (713) 332-8441

E-mail: ben.brink@carriageservices.com

16.    Binding Effect. The provisions of this Exchange Agreement shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.

17.    Notification of Changes. The undersigned hereby covenants and agrees to
notify the Company upon the occurrence of any event prior to the closing of the
Exchange pursuant to this Exchange Agreement which would cause any
representation, warranty, or covenant of the undersigned contained in this
Exchange Agreement to be false or incorrect.

18.    Reliance by Placement Agent and Financial Advisor. The Placement Agent,
acting as financial advisor to the Company, may rely on each representation and
warranty of the Company and the undersigned made herein or pursuant to the terms
hereof with the same force and effect as if such representation or warranty were
made directly to the Placement Agent. The Placement Agent shall be a third-party
beneficiary of this Agreement to the extent provided in this Section 18.

19.    Expenses. All costs and expenses incurred in connection with this
Exchange Agreement shall be paid by the party incurring such cost or expense

20.    Severability. If any term or provision of this Exchange Agreement is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Exchange Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction.

[SIGNATURE PAGES FOLLOW]

 

11

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

IN WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of
the date first written above.

 

Holder:

 

                                                                    
                   

By:                                                                             
     Name:                              
                                               
Title:                                                                        
       Address:                              
                                           
Telephone:                                                                     

                                                                    
                   

State/Country of Domicile or Formation:

 

Notes to Be Exchanged    $ aggregate principal amount of the Notes   
                                                              Beneficial Owner
of Note:    Principal Amount of Notes to be exchanged:    $
principal                                            Account Broker:   
                                                              DTC Participant
No.:                                                                  Cash
Consideration    $                                                           

Account for Shares (if different from Notes)

DTC Participant Number:

DTC Participant Name:

DTC Participant Phone Number:

DTC Participant Contact Email:

FFC Account #:

Account # at Bank/Broker:

Exchanging Investor Address:

Telephone:

Country of Residence:

Taxpayer Identification Number:

[SIGNATURE PAGE TO FORM OF EXCHANGE AGREEMENT]

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

The offer to exchange Notes for the Consideration as set forth above is
confirmed and accepted by the Company.

 

CARRIAGE SERVICES, INC. By:                                   
                                              
Name:                                                                        
      Title:                              
                                                

[SIGNATURE PAGE TO FORM OF EXCHANGE AGREEMENT]

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

Exhibit A

Wiring instructions for Cash Consideration on the Notes

Beneficial Owner of Note                                        
                    

Bank Name                                          
                                        

ABA #                                          
                                                

For Credit To

Account #                                          
                                         

For Further Credit to

Account #                                          
                                         

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

Exhibit B

Under U.S. federal income tax law, a holder who exchanges Notes for the
Consideration generally must provide such holder’s correct taxpayer
identification number (“TIN”) on IRS Form W-9 (attached hereto) or otherwise
establish a basis for exemption from backup withholding. A TIN is generally an
individual holder’s social security number or a holder’s employer identification
number. If the correct TIN is not provided, the holder may be subject to a $50
penalty imposed by the IRS. In addition, certain payments made to holders may be
subject to U.S. backup withholding tax (currently set at 24% of the payment). If
a holder is required to provide a TIN but does not have the TIN, the holder
should consult its tax advisor regarding how to obtain a TIN. Certain holders
are not subject to these backup withholding and reporting requirements. Non-U.S.
Holders generally may establish their status as exempt recipients from backup
withholding by submitting a properly completed applicable IRS Form W-8
(available from the Company or the IRS at www.irs.gov), signed, under penalties
of perjury, attesting to such holder’s exempt foreign status. U.S. backup
withholding is not an additional tax. Rather, the U.S. federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained provided that the required information is timely furnished to the
IRS. Holders are urged to consult their tax advisors regarding how to complete
the appropriate forms and to determine whether they are exempt from backup
withholding or other withholding taxes.

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

Exhibit C

[On Issuer’s Letterhead]

[insert Closing Date]

Wilmington Trust, National Association, as Trustee

1100 North Market Street

Wilmington, DE 19801

Attention: Carriage Services, Inc. Administrator

Re: Cancellation Order related to Indenture, dated as of March 19, 2014 (the
“Indenture”), between Carriage Services, Inc., as issuer, and Wilmington Trust,
National Association, as trustee

Issue:    Carriage Services, Inc. 2.75% Convertible Subordinated Notes Due 2021
(the “Notes”)

In connection with the exchange by the Issuer of the Notes pursuant to
Section 2.14 of the Indenture, you, as Trustee under the Indenture, are hereby
instructed pursuant to Section 2.10 of the Indenture to cancel (in the manner
provided in the Indenture) the aggregate principal amount of Notes exchanged as
set forth below and record a corresponding reduction on the Global Notes
principal balance.

Accordingly, we hereby authorize and direct you to cancel the following Notes
via a DTC one-sided DWAC withdrawal(s)* request to be initiated by:

DTC Participant: [insert applicable DTC participant entity name]

DTC Participant #: [insert applicable DTC participant number]

Principal Amount: $[insert applicable principal amount]

CUSIP: [insert applicable CUSIP number]

DWAC cancellation date: [insert applicable cancellation date]

Please contact [insert issuer contact point’s name and phone/email address] if
you have any questions.

 

Very truly yours,

 

Carriage Services, Inc.

By:     Name:   Title: [insert officer title]