Exhibit 10.1


 


AMENDMENT NO. 2 TO NOTE PURCHASE
AGREEMENT


 


THIS AMENDMENT NO. 2 TO
NOTE PURCHASE AGREEMENT, dated as of May 28, 2004 (this “Amendment”), is entered into
by and between Carriage Services, Inc., a Delaware corporation (the “Company”),
and each of the holders (the “Holders”) of the Notes of the Company
referred to in Recital B below.


 


RECITALS


 


A.                                   The
Company and the Holders (or their predecessors in interest) are parties to the
Note Purchase Agreement dated as of July 1, 1999, as amended by Amendment
No. 1 dated as of November 6, 2000 (as the same hereafter may be amended,
supplemented or otherwise modified from time to time, the “Agreement”; capitalized terms
used herein that are not defined herein and that are defined in the Agreement
shall have the same meanings as therein defined).


 


B.                                     The
Holders constitute the registered or beneficial holders of the 7.73% Senior
Notes, Series 1999-A, of the Company, due July 30, 2004, the 7.96% Senior
Notes, Series 1999-B, of the Company due July 30, 2006, and the 8.06%
Senior Notes, Series 1999-C, of the Company due July 30, 2008
(collectively, the “Notes”).


 


C.                                     As
a result of a change in GAAP, commencing with the financial reporting period
ended March 31, 2004, the Trust Convertible Preferred Securities are no
longer reflected in the Company’s consolidated balance sheet and have been
replaced with the Trust Debentures on the balance sheet.  The Company and the Holders have therefore
agreed, subject to the terms and conditions set forth herein, to amend the definition
of “Adjusted Consolidated Net Worth” in Schedule B to the Agreement to
reflect the addition to consolidated stockholders’ equity of either the Trust
Convertible Preferred Securities or the Trust Debentures, whichever is
reflected on the balance sheet in accordance with GAAP.


 


NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
the Holders hereby agree as follows:


 


Section 1.                                          Amendment.  The definition of “Adjusted Consolidated Net
Worth” set forth on Schedule B to the Agreement is hereby amended in its
entirety to read as follows:


 


“Adjusted
Consolidated Net Worth”
means, as of any date, consolidated stockholders’ equity of the Company and its
Restricted Subsidiaries on such date, determined in accordance with GAAP, plus
(without duplication) the amount of outstanding Trust Convertible Preferred
Securities or outstanding Trust Debentures, as the case may be, that are
reflected on the consolidated balance sheet of the Company as of such date in
accordance with GAAP, less the amount by which outstanding Restricted
Investments on such date exceed 15% of consolidated stockholders’ equity of the
Company and its Restricted Subsidiaries on such date.


 

















 


Section 2.                                          Effective
Date.


 


2.1                                 Effective
Date.  This Amendment shall become
binding upon the Company and each Holder upon its execution of a counterpart
hereof, subject to the condition that the following shall have been received by
each Holder on or before June 30, 2004:


 


(a)                                  counterparts
of this Amendment executed by the Company and the Required Holders;


 


(b)                                 written
evidence that the execution, delivery and performance by the Company of this
Amendment have been duly authorized by all requisite corporate action on the
part of the Company; and


 


(c)                                  from
March 31, 2004 until the foregoing conditions have been satisfied, there
shall have been no change in the financial condition, operations, business or
properties of the Company and its Restricted Subsidiaries which, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.


 


No party to this
Amendment may revoke its execution of this Amendment prior to June 30,
2004, but this Amendment shall not be deemed effective until all of the
foregoing conditions have been satisfied (the date on which such conditions are
satisfied being herein referred to as the “Effective Date”).  The Holders further acknowledge that the Company substituted the
Trust Debentures for the Trust Convertible Preferred Securities for purposes of
calculating financial ratios for the period ended March 31, 2004, as
reflected in the Officer’s Certificate for such period delivered pursuant to
Section 7.2 of the Agreement, and the Holders accept and agree to such
treatment for such period.


 


Section 3.                                          Representations
and Warranties.


 


The Company represents
and warrants, both on and as of the date hereof and on and as of the Effective
Date, to the Holders that:


 


3.1                                 The
Company has all requisite corporate power to execute, deliver and perform its
obligations under this Amendment.  The
Company has duly executed and delivered this Amendment, and this Amendment
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms.


 


3.2                                 Neither
the execution and delivery of this Amendment by the Company, nor the
consummation of the transactions contemplated hereby, nor fulfillment of nor
compliance with the terms and provisions hereof will conflict with, or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, or result in any violation of, or result in the creation of any security
interest, lien or other encumbrance upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, the charter or bylaws of the
Company or any of its Subsidiaries, any award of any arbitrator or any
agreement, instrument, order, judgment, decree, statute, law, rule or
regulation to which the Company or any of its Subsidiaries is subject.


 


2

















 


3.3                                 Neither
the nature of the business conducted by the Company, nor any of its properties,
nor any relationship between the Company and any other Person, nor any
circumstance in connection with the transactions contemplated by this Amendment
is such as to require any authorization, consent, approval, exemption or other
action by or notice to or filing with any court or administrative or governmental
body or any other Person in connection with the execution and delivery of this
Amendment or the fulfillment of or compliance with the terms and provisions
hereof. Without limiting the generality of the foregoing, the execution and
delivery of this Amendment shall not require the consent or approval of or
notice to any lender or agent under the Company’s Credit Agreement dated
August 4, 2003.


 


3.4                                 Upon
the effectiveness of this Amendment, no Event of Default or Default shall exist
under the Agreement.


 


Section 4.                                          Miscellaneous.


 


4.1                                 This
Amendment shall be construed in connection with and as part of each of the
Agreement and the Notes, and except as modified and expressly amended by this
Amendment, all terms, conditions and covenants contained in the Agreement and
the Notes are hereby ratified and shall be and remain in full force and effect.


 


4.2                                 Any
and all notices, requests, certificates and other instruments executed and
delivered after the execution and delivery of this Amendment may refer to the Agreement
and Notes without making specific reference to this Amendment but,
nevertheless, all such references shall include this Amendment unless the
context otherwise requires.


 


4.3                                 Other
than as expressly set forth herein, the execution, delivery and effectiveness
of this Amendment shall not operate as a waiver of any right, power or remedy
of any Holder nor constitute a waiver of any provision of the Agreement, the
Notes or any other document, instrument or agreement executed and delivered in
connection with the Agreement.


 


4.4                                 The
Company confirms its agreement, pursuant to Section 15.1 of the Agreement,
to pay all costs and expenses of the Holders related to this Amendment and all
matters contemplated by this Amendment.


 


4.5                                 This
Amendment shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the law of the State of Illinois, excluding
choice-of-law principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State.


 


4.6                                 This
Amendment may be executed in any number of counterparts, each of which shall be
deemed an original and all of which taken together shall constitute one and the
same document.  Delivery of this
Amendment may be made by telecopy of a duly executed counterpart copy hereof.


 


[Remainder of Page Intentionally Left Blank; Signature Page
Follows]


 


3

















 


IN WITNESS WHEREOF, the
parties hereto have caused their duly authorized officers to execute this
Amendment as of the day and year first above written.


 


	
   

  	
  CARRIAGE SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Joseph
  Saporito

  	
   

  
	
   

  	
   

  	
  Joseph
  Saporito, Senior Vice President and

  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AIG ANNUITY INSURANCE
  COMPANY (Formerly

  AMERICAN GENERAL ANNUITY INSURANCE

  COMPANY)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MERIT LIFE INSURANCE
  CO.

  	
   

  
	
   

  	
  AMERICAN GENERAL LIFE
  INSURANCE

  COMPANY (successor by merger to

  THE FRANKLIN LIFE INSURANCE COMPANY)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  AIG Global Investment
  Corp., investment adviser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Peter
  DeFazio

  	
   

  
	
   

  	
   

  	
  Peter DeFazio, Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MASSACHUSETTS
  MUTUAL LIFE INSURANCE

  COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: David L. Babson
  & Company Inc. as Investment Adviser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Elisabeth A. Perenick

  	
   

  
	
   

  	
   

  	
  Elisabeth A. Perenick,
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  C.M. LIFE INSURANCE
  COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  David L. Babson &
  Company Inc. as Investment

  Sub-Adviser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Elisabeth A. Perenick

  	
   

  
	
   

  	
   

  	
  Elisabeth A. Perenick,
  Managing Director

  	
   

  
								



 


4

















 


	
   

  	
  BAYSTATE HEALTH SYSTEMS
  INC.

  	
   

  
	
   

  	
  By:

  	
  David L. Babson &
  Company Inc. as Investment Adviser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Elisabeth A. Perenick

  	
   

  
	
   

  	
   

  	
  Elisabeth A. Perenick,
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MINNESOTA LIFE
  INSURANCE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  
	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT WESTERN INSURANCE
  COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  
	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CATHOLIC AID
  ASSOCIATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  
	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROTECTED
  HOME MUTUAL LIFE INSURANCE

  COMPANY (Now-National Guardian Life Ins. Co.)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ R. A.
  Mucci

  	
   

  
	
   

  	
   

  	
  R. A. Mucci, Vice
  President & Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  National Guardian Life
  Insurance Company

  	
   

  
	
   

  	
  Investment Dept. (RAM)

  	
   

  
	
   

  	
  P. O. Box 1191

  	
   

  
	
   

  	
  Madison, WI  53701-1191

  	
   

  
								



 


5

















 


	
   

  	
  REASSURE AMERICA LIFE
  INSURANCE COMPANY

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  SWISS RE ASSET
  MANAGEMENT, INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/ John H.
  DeMaillie

  	
   

  
	
   

  	
   

  	
  John H. DeMaillie, Vice
  President

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  EMC NATIONAL LIFE
  COMPANIES, formerly held by

  NATIONAL TRAVELERS LIFE COMPANY

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  
	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  MTL INSURANCE COMPANY

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  
	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  FARM BUREAU LIFE
  INSURANCE COMPANY OF

  MICHIGAN

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  	 

	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  	 

										



 


6

















 


	
   

  	
  FARM
  BUREAU MUTUAL INSURANCE COMPANY

  OF MICHIGAN

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  
	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  FARM
  BUREAU GENERAL INSURANCE

  COMPANY OF MICHIGAN

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  
	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  UNITY
  MUTUAL LIFE INSURANCE COMPANY –

  ANNUITY PORTFOLIO

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  ADVANTUS CAPITAL
  MANAGEMENT, INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/
  Theodore R. Hoxmeier

  	
   

  	 

	
   

  	
   

  	
  Theodore R. Hoxmeier,
  Vice President

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  J. ROMEO & CO.,
  Registered Holder of Note No. BR-16

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  MONY LIFE INSURANCE
  COMPANY

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
    /s/ K.
  Duffy

  	
   

  	 

	
   

  	
   

  	
  K. Duffy, A Partner

  	
   

  	 

												



 


7

















 


	
   

  	
  THE
  TRAVELERS INSURANCE COMPANY, for itself

  and for one of its separate accounts

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Denise
  T. Duffee

  	
   

  
	
   

  	
   

  	
  Denise T. Duffee,
  Investment Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  CANADA LIFE ASSURANCE COMPANY, as

  beneficial owner of Note numbers AR-9 and BR-18

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Eve
  Hampton

  	
   

  	
  By:

  	
    /s/ J. G.
  Lowery

  	
   

  
	
   

  	
  Eve Hampton, V. P.,

  Investments, U.S. Operations

  	
   

  	
  J. G. Lowery, Asst.
  V.P., Investments,

  U. S. Operations

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CANADA
  LIFE INSURANCE COMPANY OF

  AMERICA, as beneficial owner of Note number AR-10

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Eve
  Hampton

  	
   

  	
  By:

  	
    /s/ J. G.
  Lowery

  	
   

  
	
   

  	
  Eve Hampton, V. P.,

  Investments, CLICA

  	
   

  	
  J. G. Lowery, Asst.
  V.P.,Investments, CLICA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CANADA
  LIFE INSURANCE COMPANY OF NEW

  YORK, as beneficial owner of Note number AR-11

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Eve
  Hampton

  	
   

  
	
   

  	
   

  	
  Eve Hampton, Vice
  President, Investments, CLAC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ J.G.
  Lowery

  	
   

  
	
   

  	
   

  	
  J.G. Lowery, Asst.
  V.P., Investments, CLAC

  	
   

  



 


8

















 


	
   

  	
  GREAT-WEST
  LIFE & ANNUITY INSURANCE

  COMPANY, as beneficial owner of Note No. BR-19

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Eve
  Hampton

  	
   

  
	
   

  	
   

  	
  Eve Hampton, Vice
  President, Investments

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ James
  G. Lowery

  	
   

  
	
   

  	
   

  	
  James G. Lowery,
  Assistant Vice President, Investments

  	
   

  



 


9