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Exhibit 4.1




SECOND AMENDMENT TO CREDIT AGREEMENT




     THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Second Amendment”), dated as of May
4, 2007, is by and among CARRIAGE SERVICES, INC., a Delaware corporation (the “Borrower”),
the banks listed on the signature pages hereof (the “Lenders”), WELLS FARGO BANK, N.A., as
Syndication Agent (in said capacity, the “Syndication Agent”), and BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer (in said capacity as Administrative
Agent, the “Administrative Agent”).



BACKGROUND




     A. The Borrower, the Lenders, the Syndication Agent, and the Administrative Agent are
parties to that certain Credit Agreement, dated as of April 27, 2005, as amended by that certain
First Amendment to Credit Agreement, dated as of August 31, 2005, and as modified by that certain
Waiver and Consent, dated as of September 1, 2006 (said Credit Agreement, as amended and modified,
the “Credit Agreement”; the terms defined in the Credit Agreement and not otherwise
defined herein shall be used herein as defined in the Credit Agreement).



     B. The Borrower has requested that the Lenders amend the Credit Agreement, as more fully set
forth herein.



     C. The Lenders parties to this Second Amendment (which Lenders constitute the Required
Lenders as required under the Credit Agreement) are willing to agree to such amendment, subject to
the performance and observance in full of each of the covenants, terms and conditions, and in
reliance upon all of the representations and warranties of the Borrower, set forth herein.



     NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereafter set
forth, and for other good and valuable consideration, the receipt and adequacy of which are all
hereby acknowledged, the parties hereto covenant and agree as follows:



     1. AMENDMENTS.



     (a) The definition of “Acquisition Consideration” set forth in Section 1.01
of the Credit Agreement is hereby amended to read as follows:




     “Acquisition Consideration” means the consideration given by the Borrower or
any of its Subsidiaries for an Acquisition, including but not limited to the sum of
(without duplication) (a) the fair market value of any cash, property (excluding Capital
Stock) or services given, plus (b) the amount of any Debt assumed, incurred or guaranteed
(to the extent not otherwise included) in connection with such Acquisition by the Borrower
or any of its Subsidiaries. In determining Acquisition Consideration, there shall be (a)
deducted the amount of Net Cash Proceeds arising from any sale of assets included in the
Acquisition which are sold (other than to an Affiliate of the Borrower) within 365 days
after consummation of such Acquisition and (b) not included the amount of Net Cash Proceeds
arising from the sale of assets pursuant to Section 7.05(d) which are used to
purchase assets as provided therein.



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     (b) Section 7.02(d) of the Credit Agreement is hereby amended to read as follows:




     (d) Investments as a result of Acquisitions, if each of the following conditions has
been satisfied: (i) immediately before and after giving effect to such Acquisition, no
Default shall have occurred and be continuing, (ii) immediately after giving effect to the
proposed Acquisition, the aggregate Acquisition Consideration for all Acquisitions
(excluding, however, Acquisitions made during the period from and including January 1, 2007
through and including April 2, 2007) during each period of four consecutive fiscal quarters
shall not exceed the sum of (A) 100% of EBITDA (plus, without duplication, the EBITDA for
such period of any Person or assets acquired in an Acquisition during such period, if so
requested by the Borrower in the manner provided in the definition of “Leverage Ratio”) for
such period of four consecutive fiscal quarters plus (B) the aggregate amount of Net
Cash Proceeds received by the Borrower from the issuance of Capital Stock after the Closing
Date and not used for Acquisitions prior to such four fiscal quarter period, minus
(C) the aggregate amount of Senior Note Prepayments during such four fiscal quarter period,
(iii) such Acquisition is a Core Acquisition, (iv) such Acquisition shall not be opposed by
the board of directors or similar governing body of the Person or assets being acquired, (v)
if such Acquisition results in a Domestic Subsidiary, (A) such Subsidiary shall execute a
Joinder Agreement and a Security Agreement, (B) the Administrative Agent, on behalf of the
Lenders, shall have received such board resolutions, officer’s certificates, opinions of
counsel and Organization Documents with respect to such Subsidiary as the Administrative
Agent shall reasonably request in connection with the actions described in clause (A) above,
(C) the Administrative Agent shall have received such items required by Section
6.12(a) (other than as to real property) and (D) 100% of the Covered Capital Stock of
such Subsidiary so acquired shall be pledged to secure the Obligations, (vi) if such
Acquisition results in a Foreign Subsidiary of the Borrower, (A) 66% of such Subsidiary’s
Capital Stock shall be pledged to secure the Obligations and (B) the Administrative Agent,
on behalf of the Lenders, shall have received such board resolutions, officer’s
certificates, opinions of counsel and Organization Documents with respect to such Subsidiary
as the Administrative Agent shall reasonably request in connection with the actions
described in clause (A) above, and (vii) the Property to be acquired in connection with such
Acquisition is in compliance with Environmental Law and the Borrower, at its expense, shall
have conducted such affirmative due diligence concerning the environmental condition of such
Property (which may include environmental questionnaires or independent site assessments) as
the Borrower reasonably believes shall be warranted by such Property



     2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its execution and delivery hereof, the Borrower represents and warrants that,
as of the date hereof:



     (a) the representations and warranties contained in the Credit Agreement and the other Loan
Documents are true and correct on and as of the date hereof as made on and as of such date;



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     (b) no event has occurred and is continuing which constitutes a Default or Event of Default;



     (c) (i) the Borrower has full power and authority to execute and deliver this Second
Amendment, (ii) this Second Amendment has been duly executed and delivered by the Borrower, and
(iii) this Second Amendment constitutes the legal, valid and binding obligations of the Borrower,
enforceable in accordance with its terms, except as enforceability may be limited by applicable
debtor relief laws and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and except as rights to indemnity may be limited by federal or
state securities laws;



     (d) neither the execution, delivery and performance of this Second Amendment, nor the
consummation of any transactions contemplated herein, will conflict with (i) the certificate or
articles of incorporation or the applicable constituent documents or bylaws of the Borrower or its
Subsidiaries, (ii) to Borrower’s knowledge, any provision or law, statute, rule or regulation
applicable to the Borrower or its Subsidiaries or (iii) any indenture, agreement or other
instrument to which the Borrower, the Subsidiaries or any of their properties are subject; and



     (e) no authorization, approval, consent, or other action by, notice to, or filing with, any
governmental authority or other Person not previously obtained is required for (i) the execution,
delivery or performance by the Borrower of this Second Amendment or (ii) the acknowledgement by
each Guarantor of this Second Amendment.



     3. CONDITIONS OF EFFECTIVENESS. This Second Amendment shall be effective on and as
May 4, 2007, subject to the following:



     (a) the representations and warranties set forth in Section 2 of this Second Amendment shall
be true and correct;



     (b) the Administrative Agent shall have received counterparts of this Second Amendment
executed by the Required Lenders; and



     (c) the Administrative Agent shall have received counterparts of this Second Amendment
executed by the Borrower and acknowledged by each Guarantor.



     4. GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor (i) acknowledges,
consents and agrees to the execution, delivery and performance by the Borrower of this Second
Amendment, (ii) acknowledges and agrees that its obligations in respect of its Guaranty are not
released, diminished, waived, modified, impaired or affected in any manner by this Second
Amendment, or any of the provisions contemplated herein, (iii) ratifies and confirms its
obligations under its Guaranty and (iv) acknowledges and agrees that it has no claim or offsets
against, or defenses or counterclaims to, its Guaranty.



     5. REFERENCE TO THE CREDIT AGREEMENT.



     (a) Upon and during the effectiveness of this Second Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, or words of like import shall mean and be a reference
to the Credit Agreement, as affected and amended by this Second Amendment.



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     (b) Except as expressly set forth herein, this Second Amendment shall not by implication or
otherwise limit, impair, constitute a waiver of, or otherwise affect the rights or remedies of the
Administrative Agent or the Lenders under the Credit Agreement or any of the other Loan Documents,
and shall not alter, modify, amend, or in any way affect the terms, conditions, obligations,
covenants, or agreements contained in the Credit Agreement or the other Loan Documents, all of
which are hereby ratified and affirmed in all respects and shall continue in full force and
effect.



     6. COSTS AND EXPENSES. The Borrower shall be obligated to pay the costs and expenses
of the Administrative Agent in connection with the preparation, reproduction, execution and
delivery of this Second Amendment and the other instruments and documents to be delivered
hereunder.



     7. EXECUTION IN COUNTERPARTS. This Second Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which when taken together shall
constitute but one and the same instrument. For purposes of this Second Amendment, a counterpart
hereof (or signature page thereto) signed and transmitted by any Person party hereto to the
Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be
treated as an original. The signature of such Person thereon, for purposes hereof, is to be
considered as an original signature, and the counterpart (or signature page thereto) so transmitted
is to be considered to have the same binding effect as an original signature on an original
document.



     8. GOVERNING LAW; BINDING EFFECT. This Second Amendment shall be governed by and
construed in accordance with the laws of the State of Texas applicable to agreements made and to
be performed entirely within such state; provided that the Administrative Agent and each
Lender shall retain all rights arising under federal law. This Second Amendment shall be binding
upon the Borrower and each Lender and their respective successors and assigns.



     9. HEADINGS. Section headings in this Second Amendment are included herein for
convenience of reference only and shall not constitute a part of this Second Amendment for any
other purpose.



     10. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SECOND AMENDMENT, AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE SUBJECT
MATTER THEREIN AND HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.



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     IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the date
above written.



	 	 	 	 	 
	 	CARRIAGE SERVICES, INC.

 	 
	 	By:  	/s/      Terry E. Sanford
 	 
	 	 	Terry E. Sanford 	 
	 	 	Senior Vice President 	 
	 




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	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	By:  	/s/ Suzanne M. Paul
 	 
	 	 	Suzanne M. Paul 	 
	 	 	Vice President 	 
	 




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	 	BANK OF AMERICA, N.A., as a Lender, L/C

Issuer and Swing Line Lender

 	 
	 	By:  	/s/ Gary L. Mingle
 	 
	 	 	Name:  	Gary L. Mingle 	 
	 	 	Title:  	Senior Vice President 	 
	 




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	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Syndication Agent and as a Lender

 	 
	 	By:  	/s/      Warren R. Ross
 	 
	 	 	Name:  	Warren R. Ross 	 
	 	 	Title:  	Vice President 	 
	 




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GUARANTORS:



	 	 	 
	CARRIAGE FUNERAL HOLDINGS, INC.

	 	 
	CFS FUNERAL SERVICES, INC.
	 	 
	CARRIAGE HOLDING COMPANY, INC.
	 	 
	CARRIAGE FUNERAL SERVICES OF MICHIGAN, INC.
	 	 
	CARRIAGE FUNERAL SERVICES OF KENTUCKY, INC.
	 	 
	CARRIAGE FUNERAL SERVICES OF CALIFORNIA, INC.
	 	 
	CARRIAGE CEMETERY SERVICES OF IDAHO, INC.
	 	 
	WILSON & KRATZER MORTUARIES
	 	 
	ROLLING HILLS MEMORIAL PARK
	 	 
	CARRIAGE SERVICES OF CONNECTICUT, INC.
	 	 
	CSI FUNERAL SERVICES OF MASSACHUSETTS, INC.
	 	 
	CHC INSURANCE AGENCY OF OHIO, INC.
	 	 
	BARNETT, DEMROW & ERNST, INC.
	 	 
	CARRIAGE SERVICES OF NEW MEXICO, INC.
	 	 
	FORASTIERE FAMILY FUNERAL SERVICES, INC.
	 	 
	CARRIAGE CEMETERY SERVICES, INC.
	 	 
	CARRIAGE SERVICES OF OKLAHOMA, L.L.C.
	 	 
	CARRIAGE SERVICES OF NEVADA, INC.
	 	 
	HUBBARD FUNERAL HOME, INC.
	 	 
	CARRIAGE TEAM CALIFORNIA (CEMETERY), LLC
	 	 
	CARRIAGE TEAM CALIFORNIA (FUNERAL), LLC
	 	 
	CARRIAGE TEAM FLORIDA (CEMETERY), LLC
	 	 
	CARRIAGE TEAM FLORIDA (FUNERAL), LLC
	 	 
	CARRIAGE SERVICES OF OHIO, LLC
	 	 
	CARRIAGE TEAM KANSAS, LLC
	 	 
	CARRIAGE MUNICIPAL CEMETERY SERVICES OF NEVADA, INC.
	 	 
	CARRIAGE CEMETERY SERVICES OF CALIFORNIA, INC.
	 	 
	CARRIAGE INSURANCE AGENCY OF MASSACHUSETTS, INC.
	 	 
	CARRIAGE INTERNET STRATEGIES, INC.
	 	 
	CARRIAGE INVESTMENTS, INC.
	 	 
	CARRIAGE MANAGEMENT, L.P.
	 	 
	HORIZON CREMATION SOCIETY, INC.
	 	 
	CARRIAGE LIFE EVENTS, INC.
	 	 
	CARRIAGE MERGER I, INC.
	 	 
	CARRIAGE MERGER II, INC.
	 	 
	CARRIAGE MERGER III, INC.
	 	 
	ARIA CREMATION SERVICES, LLC
	 	 






	 	 	 	 
	 	 
	By:  	 /s/      Terry E. Sanford
 	 
	 	Terry E. Sanford, Senior Vice President 	 
	 	 	 




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	 	COCHRANE’S CHAPEL OF THE ROSES, INC.

 	 
	 	By:  	/s/      Brian Dixon Lennett
 	 
	 	 	Brian Dixon Lennett, Regional Managing Director 	 
	 	 	 	 
	 




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