exv10w1






Exhibit 10.1




SEVENTH AMENDMENT TO CREDIT AGREEMENT




     THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Seventh Amendment”), dated as of
November 4, 2009 (but effective as provided in Section 3 of this Seventh Amendment), 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, as modified by that certain Waiver and
Consent, dated as of September 1, 2006, as amended by that certain Second Amendment to Credit
Agreement, dated as of May 4, 2007, as amended by that certain Third Amendment to Credit Agreement,
dated as of December 1, 2007, as amended by that certain Fourth Amendment to Credit Agreement,
dated as of November 14, 2008, as amended by that certain Fifth Amendment to Credit Agreement,
dated as of December 31, 2008, as modified by that certain Waiver to Credit Agreement, dated as of
March 19, 2009, and as amended by that certain Sixth Amendment to Credit Agreement, dated as of May
4, 2009 (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 Seventh Amendment (which Lenders constitute each of the 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 hereinafter 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 “Applicable Rate” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:




     “Applicable Rate” means the following percentages per annum, based upon the
Leverage Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(a):



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Rate
	 	 	 	 	 	 	 	 	Eurodollar Rate +	 	 
	Pricing Level	 	Leverage Ratio	 	Commitment Fee	 	Letters of Credit	 	Base Rate +
	1

	 	Less than or equal to 2.75 to 1.00
	 	 	0.500	 	 	 	3.000	 	 	 	2.000	 
	2

	 	Less than or equal to 3.75 to
1.00 but greater than 2.75 to
1.00
	 	 	0.500	 	 	 	3.500	 	 	 	2.500	 
	3

	 	Greater than 3.75 to 1.00
	 	 	0.625	 	 	 	4.000	 	 	 	3.000	 






1









 







Any increase or decrease in the Applicable Rate resulting from a change in the Leverage
Ratio shall become effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered pursuant to Section 6.02(a); provided,
however, that if a Compliance Certificate is not delivered when due in accordance
with such Section, then Pricing Level 3 shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered and shall
remain in effect until the first Business Day immediately following the date such Compliance
Certificate is actually delivered to the Administrative Agent. Notwithstanding the
foregoing, the Applicable Rate in effect from the Seventh Amendment Effective Date through
and including the date the first Compliance Certificate is delivered pursuant to Section
6.02(a) after the Seventh Amendment Effective Date shall be determined based upon
Pricing Level 2.




     Notwithstanding anything herein to the contrary contained in this definition, the
determination of the Applicable Rate for any period shall be subject to the provisions of
Section 2.10(b).



     (b) The last sentence of the definition of “Capital Expenditures” set forth in
Section 1.01 of the Credit Agreement is hereby amended to read as follows:




     Capital Expenditures specifically excludes deferred obtaining costs and, for the
avoidance of doubt, Acquisitions.



     (c) The definition of “Maturity Date” set forth in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:




     “Maturity Date” means November 4, 2012.



     (d) The definition of “Real Property Collateral” set forth in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:




     “Real Property Collateral” means (a) all interests in real property owned or
leased by the Borrower or a Domestic Subsidiary on the Closing Date that is used in or
incident to a funeral home or related business anywhere in the States of California,
Connecticut and Texas, (b) the Additional Real Property Collateral, and (c) additional real
property substituted as Collateral in accordance with Section 7.05(e).



     (e) The definition of “Restricted Payment” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:




     “Restricted Payment” means (a) any Dividend, (b) any payment or prepayment of
principal, interest, premium or penalty of or in respect of any Subordinated Debt or any
defeasance, redemption, purchase, repurchase or other acquisition or retirement for value,
in whole or in part, of any of the Subordinated Debt, or (c) any voluntary prepayment,
purchase, repurchase, redemption or defeasance with respect to all or any portion of the
Senior Notes.



     (f) Section 1.01 of the Credit Agreement is hereby amended by adding the following
defined terms thereto in proper alphabetical order to read as follows:




     “Additional Real Property Collateral” means all interests of the Borrower or
any Domestic Subsidiary in the real property set forth on Schedule 1 to the Seventh
Amendment; provided, that Additional Real Property shall not include the property
identified as Location 506 on such Schedule 1 if after using reasonable efforts the
Borrower is unable to obtain consent of the owner of such property to the filing of a Deed
of Trust against the Borrower’s interest in such property.



2









 






     “Seventh Amendment” means that certain Seventh Amendment to Credit Agreement,
dated as of November 4, 2009, among the Borrower, the Lenders party thereto and the
Administrative Agent.




     “Seventh Amendment Effective Date” means November 4, 2009.



     (g) Section 2.14(a) of the Credit Agreement is hereby amended to read as follows:




     (a) Request for Increase. Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may on not more
than two occasions request an increase in the Aggregate Commitments by an aggregate amount
not exceeding $20,000,000; provided that neither such request for an
increase shall be in an amount of less than $5,000,000. At the time of sending such notice,
the Borrower (in consultation with the Administrative Agent) shall specify the time period
within which each Lender is requested to respond (which shall in no event be less than ten
Business Days from the date of delivery of such notice to the Lenders).



     (h) Section 5.14(b) of the Credit Agreement is hereby amended to read as follows:




     (b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or
is required to be registered as an “investment company” under the Investment Company Act of
1940.



     (i) Section 5.20 of the Credit Agreement is hereby amended (i) by adding the following
text at the end of clause (b)(ii) thereof: “; provided, however, that a security
interest in bank accounts, cash and Liquid Investments shall not be required to be perfected unless
an Event of Default” shall have occurred and be continuing and (ii) by amending the last sentence
thereof to read as follows: “Other than as set forth in Section 5.20(b)(ii), each of the
foregoing, and each other piece of Collateral, is subject to a perfected first priority Lien
securing the Obligations, subject to Liens permitted to exist in accordance with the terms of
Section 7.01.”



     (j) Section 7.06(a)(ii) of the Credit Agreement is hereby amended to read as follows:




     (ii) so long as there exists no Default both immediately before and after giving effect
to any such transaction, (A) the Borrower may purchase Capital Stock (1) purchased from the
Borrower by employees or former employees of the Borrower or any of its Subsidiaries in
connection with the exercise of stock options or (2) in lieu of withholding taxes resulting
from the vesting of any grant of restricted Capital Stock granted by the Borrower to
employees or former employees of the Borrower or any of its Subsidiaries, (B) the Borrower
and its Subsidiaries may pay or prepay any principal, interest, premium or penalty of or in
respect of any Subordinated Debt or any defeasance, redemption, purchase, repurchase or
other acquisition or retirement for value, in whole or in part, of any of the Subordinated
Debt, and (C) the Borrower may voluntarily prepay, purchase, repurchase, redeem or effect a
defeasance with respect to all or any portion of the Senior Notes; provided,
however, that in the case of clauses (A), (B) and (C) combined, the aggregate amount
of such transactions shall not exceed $5,000,000 during any fiscal year of the Borrower;



     (k) Section 7.08 of the Credit Agreement is hereby amended to read as follows:




     Transactions with Affiliates. Other than as permitted pursuant to Sections
7.04, 7.05 and 7.06 of the Credit Agreement, enter into any transaction
of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to the Borrower
or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in
a comparable arm’s length transaction with a Person other than an Affiliate.



     (l) Section 7.11 of the Credit Agreement is hereby amended to read as follows:




     (a) Maximum Leverage Ratio. Permit the Leverage Ratio as of the end of any
period of four consecutive fiscal quarters of the Borrower to be greater than 4.00 to 1.00.



3









 






     (b) Minimum Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio as of the end of any period of four consecutive fiscal quarters in which the last
fiscal quarter ends on or after September 30, 2005 to be less than 1.25 to 1.00.



     (m) Section 7.16 of the Credit Agreement is hereby deleted.



     (n) Notwithstanding anything in the Credit Agreement to the contrary, the Commitment of each
Lender is hereby increased and amended to be in the amount of revised Schedule 2.01
attached hereto and made a part of the Credit Agreement. Such increase shall not be deemed to be
an exercise by the Borrower of its right to request an increase in the Aggregate Commitments
pursuant to Section 2.14 of the Credit Agreement.



     (o) Schedule 5.13 of the Credit Agreement is hereby amended to be in the form of
Schedule 5.13 attached hereto.



     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, and immediately
after giving effect to this Seventh Amendment:



     (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, except
to the extent that such representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct as of such earlier date, and except that the
representations and warranties contained in subsection (a) of Section 5.05 of the Credit
Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 6.01 of the Credit Agreement, except that to the extent
that such representations and warranties refer to statements furnished pursuant to clause (b) of
Section 6.01 of the Credit Agreement, the representations and warranties in subclauses (i)
and (ii) of clause (a) of Section 5.05 of the Credit Agreement shall be qualified by
reference to the absence of footnotes and shall be subject to normal year-end audit adjustments;



     (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 Seventh
Amendment and the replacement Revolving Loan Note for each Lender in the amount of each Lender’s
Commitment as in effect after giving effect to this Seventh Amendment (collectively, the
“Replacement Revolving Loan Notes”), (ii) this Seventh Amendment and the Replacement
Revolving Loan Notes have been duly executed and delivered by the Borrower, and (iii) this Seventh
Amendment and the Replacement Revolving Loan Notes constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with their respective
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 Seventh Amendment, the Replacement
Revolving Loan Notes, 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 to be obtained or made
by the Borrower pursuant to statutory law applicable to the Borrower as a condition to (i) the
execution, delivery or performance by the Borrower of this Seventh Amendment or the Replacement
Revolving Loan Notes, or (ii) the acknowledgement by each Guarantor of this Seventh Amendment.



4









 





     3. CONDITIONS OF EFFECTIVENESS. This Seventh Amendment shall be effective on and as
of the date hereof (provided, however, Section 1(i) of this Seventh Amendment and
subclause (2) of Section 1(j) of this Seventh Amendment shall be effective as of April 27, 2005),
subject to the following:



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



     (b) the Administrative Agent shall have received counterparts of this Seventh Amendment
executed by each of the Lenders;



     (c) the Administrative Agent shall have received in immediately available funds from the
Borrower for the account of (i) each Lender, an amount equal to the product of (A) 0.75% and (B)
each Lender’s Commitment, as in effect after giving effect to this Seventh Amendment, and (ii) the
Administrative Agent, an amount agreed upon among the Borrower, the Administrative Agent and each
Lender for structuring this Seventh Amendment;



     (d) the Administrative Agent shall have received counterparts of this Seventh Amendment
executed by the Borrower and acknowledged by each Guarantor; and



     (e) the Administrative Agent shall have received an executed copy of each Replacement
Revolving Loan Note.



     4. ADDITIONAL REAL PROPERTY COLLATERAL. By December 31, 2009 (or such later time as
agreed to by the Administrative Agent in its reasonable discretion) (such applicable date, the
“Collateral Date”), the Borrower shall have (a) if it has timely received the same and had
a reasonable opportunity to review the same, executed and delivered to the Administrative Agent
Deeds of Trust and/or other Lien filings on the Additional Real Property Collateral, and (b) if
timely requested by the Administrative Agent, and promptly following the Borrower’s receipt
thereof, delivered to the Administrative Agent (i) related loan or mortgagee title commitments in
reasonable and customary form and substance, (ii) flood certificates and (iii) tax affidavits, in
each case with respect to the preceding clause (b) to the extent reasonably required by the
Administrative Agent, are generally available at commercially reasonable rates or costs and are
generally made available by relevant third party sources within the time frame required by this
Section, together with payment of all related taxes and fees. If the Borrower fails to deliver the
documents in accordance with the immediately preceding sentence by the Collateral Date, the
Administrative Agent shall send a written notice to the Borrower informing the Borrower of such
failure, identifying such documents that have not been so delivered and stating the basis for such
failure, each in reasonable detail. The Borrower acknowledges and agrees that if it does not
deliver the documents referenced in such notice from the Administrative Agent in accordance with
this Section 4 within ten (10) days of its receipt of such notice, a Default shall then occur.



     5. GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor (a) acknowledges,
consents and agrees to the execution, delivery and performance by the Borrower of this Seventh
Amendment, (b) 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 Seventh
Amendment, or any of the provisions contemplated herein, (c) ratifies and confirms its obligations
under its Guaranty and (d) acknowledges and agrees that it has no claim or offsets against, or
defenses or counterclaims to, its Guaranty.



     6. REFERENCE TO THE CREDIT AGREEMENT.



     (a) Upon and during the effectiveness of this Seventh 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 Seventh Amendment.



     (b) Except as expressly set forth herein, this Seventh 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,



5









 







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.



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



     8. EXECUTION IN COUNTERPARTS. This Seventh 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 Seventh 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.



     9. GOVERNING LAW; BINDING EFFECT. This Seventh 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 Seventh Amendment shall be binding
upon the Borrower and each Lender and their respective successors and permitted assigns.



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



     11. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SEVENTH 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.






REMAINDER OF PAGE LEFT INTENTIONALLY BLANK










6












 





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



	 	 	 	 	 	 	 
	 	 	CARRIAGE SERVICES, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Terry E. Sanford
	 	 	 	 	 
	 	 	 	 	Terry E. Sanford
	 	 	 	 	Chief Financial Officer






7









 






	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as
	 	 	Administrative Agent
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 





8









 






	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as a Lender, L/C Issuer and
	 	 	Swing Line Lender
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Gary L. Mingle
	 	 	 	 	 
	 	 	 	 	Gary L. Mingle
	 	 	 	 	Senior Vice President






9









 






	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as
	 	 	Syndication Agent and as a Lender
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 





10









 






	 	 	 	 	 	 	 
	 	 	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. (for itself and as General Partner
	 	 	     of Carriage Management, L.P.)
	 	 	CARRIAGE MANAGEMENT, L.P.
	 	 	COCHRANE’S CHAPEL OF THE ROSES, INC.
	 	 	HORIZON CREMATION SOCIETY, INC.
	 	 	CARRIAGE LIFE EVENTS, INC.
	 	 	CARRIAGE MERGER I, INC.
	 	 	CARRIAGE MERGER II, INC.
	 	 	CARRIAGE FLORIDA HOLDINGS, INC.
	 	 	ARIA CREMATION SERVICES, LLC
	 	 	CLOVERDALE PARK, INC.
	 	 	CATAUDELLA FUNERAL HOME, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Terry E. Sanford
	 	 	 	 	 
	 	 	 	 	Terry E. Sanford
	 	 	 	 	Chief Financial Officer







11












 





SCHEDULE 1




Additional Real Property




Schedule 1









 







Location 487

Seaside Funeral Home

4357 Ocean Drive

Corpus Christi, Texas 78412

Book Value, 12/31/2008: $601,050

Legal Description: See “Tract 3” on report from

Urban Engineering, dated January 4, 2007, excerpted

pages attached.




Location 488

Corpus Christi Funeral Home

2409 Baldwin Boulevard

Corpus Christi, Texas 78405

Book Value, 12/31/2008: $475,582

Legal Description: See “Tract 1” and “Tract 2” on

report from Urban Engineering, dated January 4,

2007, excerpted pages attached.




Location 491 (Building Only on Cemetery Property)

Conejo Mountain Funeral Home

2502 Howard Road

Camarillo, California 93012

Est. Book Value, 12/31/2008: $522,232




Location 506 (Ground Lease)

Evans-Brown Mortuary

27010 Encanto Drive

Sun City, California 92585

Book Value, 12/31/2008: $378,993




Location 507

Evans-Brown Mortuary

126 East Graham Avenue

Lake Elsinore, California 92530

Book Value, 12/31/2008: $1,000,000

Legal Description: See “Parcel 2”, “Parcel 3”, and

“Parcel 4” on title policy pages, attached.




Location 508

Evans-Brown Mortuary

385 West Fourth Street

Perris, California 92570

Book Value: $1,440,000

Legal Description: See “Parcel 1” on title policy

pages, attached.




Location 509

Hemet Valley Mortuary

403 North San Jacinto Street

Hemet, California 92543

Book Value: $1,700,000

Legal Description: See “Parcel 5” and “Parcel 6” on

title policy pages, attached.




Location 484

Aria Cremation Services (Lease)

10116 E. Northwest Highway







Dallas, Texas 75218

Book Value: $0

Legal Description: Block A/7298 Lot 22,

0.4345 acres.




Location 485

Aria Cremation Services

1820 N. Beltline Road

Irving, Texas 75061-1510

Book Value: $876,102.37

Legal Description: Preston Villa, Block A, Lot 16,

0.4362 acres.




Location 486

Aria Cremation Services

19310 Preston Road

Dallas, Texas 75252-2439

Book Value: $885,152.92

Legal Description: Addition of Cleere, Block A, Lot 1.










Schedule 1












 





SCHEDULE 2.01




REVOLVING COMMITMENTS

AND REVOLVING PRO RATA SHARES




	 	 	 	 	 	 	 	 	 
	Lender	 	Revolving Commitment	 	Revolving Pro Rata Share
	 
	 
	 	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	$	20,000,000	 	 	 	50.000000000	%
	 
	 	 	 	 	 	 	 	 
	Wells Fargo Bank,
National Association
	 	$	20,000,000	 	 	 	50.000000000	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	40,000,000	 	 	 	100.000000000	%






Schedule 2.01


















 





SCHEDULE 5.13




CAPITALIZATION; SUBSIDIARIES

(as of October __, 2009)





	I.	 	List of Subsidiaries. Subsidiaries currently consist of the following:






	 	A.	 	Carriage Funeral Holdings, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Services, Inc.

Guarantor:          yes
	 
	 	B.	 	CFS Funeral Services, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Services, Inc.

Guarantor:          yes
	 
	 	C.	 	Carriage Holding Company, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	D.	 	Carriage Funeral Services of Michigan, Inc.

Jurisdiction: Michigan

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	E.	 	Carriage Funeral Services of Kentucky, Inc.

Jurisdiction: Kentucky

Equity Ownership: 100% of Class A Common Stock held by Carriage Funeral Holdings,
Inc.; one share of Class B non-voting Common Stock held by a licensee

Guarantor:          yes
	 
	 	F.	 	Carriage Funeral Services of California, Inc.

Jurisdiction: California

Equity Ownership: 100% held by Carriage Team California (Funeral), LLC

Guarantor:          yes
	 
	 	G.	 	Carriage Cemetery Services of Idaho, Inc.

Jurisdiction: Idaho

Equity Ownership: 100% held by Carriage Cemetery Services, Inc.

Guarantor:          yes
	 
	 	H.	 	Wilson & Kratzer Mortuaries

Jurisdiction: California

Equity Ownership: 100% held by Carriage Funeral Services of California, Inc.

Guarantor:          yes
	 
	 	I.	 	Rolling Hills Memorial Park

Jurisdiction: California

Equity Ownership: 100% held by Carriage Cemetery Services of California, Inc.

Guarantor:          yes
	 
	 	J.	 	Carriage Services of Connecticut, Inc.

Jurisdiction: Connecticut

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes





Schedule 5.13




 









 









	 	K.	 	CSI Funeral Services of Massachusetts, Inc.

Jurisdiction: Massachusetts

Equity Ownership: 100% (1,614 shares) of the Class A Common Stock are held by
licensees and 100% (400 shares) of the Class B Common Stock is held by Carriage
Funeral Holdings, Inc. The Class A and B Common Stock are both voting.

Guarantor:          yes
	 
	 	L.	 	CHC Insurance Agency of Ohio, Inc.

Jurisdiction: Ohio

Equity Ownership: 100% of Class A Voting Common Stock and Class B Nonvoting Common
Stock held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	M.	 	Barnett, Demrow & Ernst, Inc.

Jurisdiction: Kentucky

Equity Ownership: 99.9% (100% of voting stock) is held by Carriage Funeral Services
of Kentucky, Inc.; balance held by licensee

Guarantor:          yes
	 
	 	N.	 	Carriage Services of New Mexico, Inc.

Jurisdiction: New Mexico

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	O.	 	Forastiere Family Funeral Service, Inc.

Jurisdiction: Massachusetts

Equity Ownership: 100% (400 shares) of the Class B Common Stock is held by Carriage
Funeral Holdings, Inc., and 100% (3,200 shares) of the Class A Common Stock are held
by licensees. The Class A and B Common Stock are both voting.

Guarantor:          yes
	 
	 	P.	 	Carriage Cemetery Services, Inc.

Jurisdiction: Texas

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	Q.	 	Carriage Services of Oklahoma, L.L.C.

Jurisdiction: Oklahoma

Equity Ownership: 100% held by Carriage Cemetery Services, Inc.

Guarantor:          yes
	 
	 	R.	 	Carriage Services of Nevada, Inc.

Jurisdiction: Nevada

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	S.	 	Hubbard Funeral Home, Inc.

Jurisdiction: Maryland

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	T.	 	Carriage Team California (Cemetery), LLC

Jurisdiction: Delaware

Equity Ownership: 100% of Class A Units are held by Carriage Cemetery Services, Inc.

Guarantor:          yes





Schedule 5.13




 









 









	 	U.	 	Carriage Team California (Funeral), LLC

Jurisdiction: Delaware

Equity Ownership: 100% of Class A Units are held of record by Carriage Funeral
Holdings, Inc.

Guarantor:          yes
	 
	 	V.	 	Carriage Team Florida (Cemetery), LLC

Jurisdiction: Delaware

Equity Ownership: 100% of Class A Units are held by Carriage Cemetery Services, Inc.

Guarantor:          yes
	 
	 	W.	 	Carriage Team Florida (Funeral), LLC

Jurisdiction: Delaware

Equity Ownership: 100% of Class A Units are held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	X.	 	Carriage Services of Ohio, LLC

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	Y.	 	Carriage Team Kansas, LLC

Jurisdiction: Delaware

Equity Ownership: 100% of Class A Units are held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	Z.	 	Carriage Municipal Cemetery Services of Nevada, Inc.

Jurisdiction: Nevada

Equity Ownership: 100% held by Carriage Cemetery Services, Inc.

Guarantor:          yes
	 
	 	AA.	 	Carriage Cemetery Services of California, Inc.

Jurisdiction: California

Equity Ownership: 100% held by Carriage Team California (Cemetery), LLC

Guarantor:          yes
	 
	 	BB.	 	Carriage Insurance Agency of Massachusetts, Inc.

Jurisdiction: Massachusetts

Equity Ownership: 100% held by Carriage Holding Company, Inc.

Guarantor:          yes
	 
	 	CC.	 	Carriage Internet Strategies, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	DD.	 	Carriage Investments, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	EE.	 	Carriage Management, L.P.

Jurisdiction: Texas

Equity Ownership: Carriage Investments, Inc. is the sole general partner holding a
1% general partnership interest; the limited partner is Cochrane’s Chapel of the
Roses, Inc., holding a 99% limited partnership interest.

Guarantor:          yes





Schedule 5.13




 









 









	 	FF.	 	Cochrane’s Chapel of the Roses, Inc.

Jurisdiction: California

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	GG.	 	Horizon Cremation Society, Inc.

Jurisdiction: California

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	HH.	 	Carriage Life Events, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Services, Inc.

Guarantor:          yes
	 
	 	II.	 	Carriage Merger I, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	JJ.	 	Carriage Merger II, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	KK.	 	Carriage Florida Holdings, Inc. (f/k/a Carriage Merger III, Inc.)

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Funeral Holdings, Inc.

Guarantor:          yes
	 
	 	LL.	 	Aria Cremation Services, LLC (f/k/a Carriage Merger IV, Inc.)

Jurisdiction: Delaware

Equity Ownership: 40% held by Carriage Funeral Holdings, Inc.; balance held by investors.

Guarantor:          yes
	 
	 	MM.	 	Cloverdale Park, Inc.

Jurisdiction: Delaware

Equity Ownership: 100% held by Carriage Cemetery Services of Idaho, Inc.

Guarantor:          yes
	 
	 	NN.	 	Cataudella Funeral Home, Inc.

Jurisdiction: Massachusetts

Equity Ownership: 100% (400 shares) of the Class B Common Stock is held by Carriage
Funeral Holdings, Inc., and 100% (1,165 shares) of the Class A Common Stock are held
by licensees. The Class A and B Common Stock are both voting.

Guarantor:          yes
	 
	 	OO.	 	Carriage Services Capital Trust

Jurisdiction: Delaware

Equity Ownership: 57,990 Common Securities held by Carriage Services, Inc. and
1,875,000 Preferred Securities held by certain holders.

Guarantor:          no





Schedule 5.13




 









 









	II.	 	Unrestricted Subsidiaries
	 
	 	 	None at present.
	 
	III.	 	Borrower’s directors and executive officers





	 	 	 
	                    Directors:

	 	Melvin C. Payne
	 

	 	Richard W. Scott
	 

	 	Vincent D. Foster
	 

	 	L. William Heiligbrodt
	 

	 	Ronald A. Erickson
	                    Officers:

	 	Melvin C. Payne, Chairman of the Board, Chief Executive Officer and President
	 

	 	Terry E. Sanford, Senior Vice President and Chief Financial Officer
	 

	 	Jay D. Dodds, Senior Vice President and Chief Operating Officer
	 

	 	J. Bradley Green, Senior Vice President, General Counsel and Secretary
	 

	 	George J. Klug, Senior Vice President and Chief Information Officer







	IV.	 	Borrower’s Affiliates. The following listing does not necessarily constitute Borrower’s
admission that any person listed is or will remain an Affiliate of Borrower.
	 
	A.	 	All of Borrower’s directors and executive officers identified in III above.
	 
	B.	 	According to most recently filed Schedules 13G, the following are shown on such Schedules to
beneficially own more than 5% of Borrower’s Common Stock, determined in accordance with Rule
13d-3 of the Securities Exchange Act of 1934, as amended:





Schedule 5.13





 












 





	 	 	 	 	 	 	 	 	 
	 	 	Number of Shares	 	Percent of
	Beneficial Owner	 	Beneficially Owned	 	Common Stock (a)
	 
	 	 	 	 	 	 	 	 
	Zazove Associates, LLC (1)
	 	 	2,778,722	 	 	 	13.8	%
	1001 Tahoe Blvd.

Incline Village, NV 89451	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	FMR LLC (2)
	 	 	1,952,945	 	 	 	11.3	%
	82 Devonshire Street

Boston, MA 02109	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Dimensional Fund Advisors LP (3)
	 	 	1,563,445	 	 	 	9.0	%
	1299 Ocean Avenue

Santa Monica, CA 90401	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	First Wilshire Securities Management, Inc. (4)
	 	 	1,354,737	 	 	 	7.8	%
	1224 East Green Street, Suite 200

Pasadena, CA 91106	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Renaissance Technologies (5)
	 	 	940,800	 	 	 	5.4	%
	800 Third Avenue

New York, NY 10022	 	 	 	 	 	 	 	 
	 
	 	 	8,590,649	 	 	 	42.7	%
	 
	 	 	 	 	 	 	 	 









 




			
	(a)	 	Based on 17,340,000 shares of Borrower’s Common Stock outstanding as of September 30, 2009.
	 
	(1)	 	Based solely on Schedule 13G filed with the SEC on February 13, 2009. Zazove Associates, LLC
has sole voting and dispositive power as to 2,778,722 shares, which shares are issuable upon the
conversion of Carriage Services Capital Trust Preferred Securities. Such conversion had not
occurred as of the record date.
	 
	(2)	 	Based solely on Schedule 13G/A filed with the SEC on May 11, 2009. Fidelity Management &
Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC, is the beneficial owner of
1,952,945 shares. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity each has sole
dispositive power as to 1,952,945 shares. According to this Schedule 13G/A, members of the Johnson
family may be deemed to form a controlling group with respect to FMR LLC. According to this
Schedule 13G/A, neither FMR LLC nor Edward C. Johnson 3d has the sole power to vote or direct the
voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds’
Boards of Trustees.
	 
	(3)	 	Based solely on Schedule 13G filed with the SEC on February 9, 2009. Dimensional Fund
Advisors LP has sole voting power as to 1,540,038 shares and sole dispositive power as to 1,563,445
shares.
	 
	(4)	 	Based solely on Schedule 13G filed with the SEC on February 13, 2009. First Wilshire
Securities Management, Inc. has sole voting power as to 77,000 shares and sole dispositive power as
to 1,354,737 shares.
	 
	(5)	 	Based solely on Schedule 13G filed with the SEC on February 13, 2009. Renaissance
Technologies LLC has sole voting and dispositive power as to 940,800 shares.





Schedule 5.13