exv4w16






Exhibit 4.16




FIFTH AMENDMENT TO CREDIT AGREEMENT




     THIS
FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Fifth Amendment”), dated effective
as of December 31, 2008, 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, and as amended by that certain
Fourth Amendment to Credit Agreement, dated as of November 14, 2008 (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 Fifth 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 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 “EBITDA” set forth in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:




     “EBITDA” means, for any period, for the Borrower and its Subsidiaries on a
consolidated basis, an amount equal to Net Income for such period plus (a) the
following to the extent deducted in calculating such Net Income: (i) Interest Expense for
such period, (ii) the provision for federal, state, local and foreign income taxes payable
by the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization
expense and payments in respect of Deferred Purchase Price, and (iv) other expenses of the
Borrower and its Subsidiaries reducing such Net Income which do not represent a cash item
in such period or any future period and minus (b) all non-cash items increasing Net



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Income for such period; provided, however, notwithstanding the above, for
the calculation of EBITDA (A) for the four consecutive fiscal quarters period ending
December 31, 2008, there shall be added back to Net Income, (x) $3,300,000 in respect of
settlement costs for the litigation related to the alleged underpayment of employees for
overtime work (the “Overtime Claim Litigation”) and (y) an amount not in excess of
$895,000 in respect of legal fees and expenses for the Overtime Claim Litigation
(“Overtime Claim Litigation Fees and Expenses”) and (B) for each the four
consecutive fiscal quarter periods ending March 31, 2009, June 30, 2009 and September 30,
2009, there should be added back to Net Income (x) $3,300,000 in respect of the settlement
costs for the Overtime Claim Litigation and (y) such amount of Overtime Claim Litigation
Fees and Expenses incurred in each of such four consecutive fiscal quarter periods.



     (b) Exhibit B, the Compliance Certificate, is hereby amended to be in the form of
Exhibit B to this Fifth Amendment.



     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 Fifth 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 Fifth Amendment,
(ii) this Fifth Amendment has been duly executed and delivered
by the Borrower, and (iii) this Fifth
Amendment constitutes the legal, valid and binding obligations of the Borrower, enforceable against
the Borrower 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 Fifth 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



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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 Fifth Amendment or (ii) the
acknowledgement by each Guarantor of this Fifth Amendment.



     3. CONDITIONS OF EFFECTIVENESS. This Fifth Amendment shall be effective
on and as of December 31, 2008, subject to the following:



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



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



     (c) the Administrative Agent shall have received from the Borrower for the account of each
Lender, an amount in immediately available funds equal to the product of (i) 0.125% and (ii) each
Lender’s Commitment; and



     (d) the Administrative Agent shall have received counterparts of this Fifth 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 Fifth
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 Fifth 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 Fifth 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 Fifth Amendment.



     (b) Except as expressly set forth herein, this Fifth 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.



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     6. 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 Fifth Amendment and the other instruments and documents to be
delivered hereunder.



     7. EXECUTION IN COUNTERPARTS. This Fifth 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 Fifth 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 Fifth 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 Fifth Amendment shall be binding
upon the Borrower and each Lender and their respective successors and permitted assigns.



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



     10. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIFTH 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







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



	 	 	 	 	 
	 	CARRIAGE SERVICES, INC.

 	 
	 	By:  	/s/ Terry E. Sanford
 	 
	 	 	Terry E. Sanford 	 
	 	 	Chief Financial Officer 	 



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	 	BANK OF AMERICA, N.A., as 

Administrative Agent

 	 
	 	By:  	/s/ Rosanna Parsill
 	 
	 	 	Name:  	Rosanna Parsill 	 
	 	 	Title:  	Assistant 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
 	 
	 	 	Gary L. Mingle 	 
	 	 	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. (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 MERGER III, INC. 

ARIA CREMATION SERVICES, LLC 

CLOVERDALE PARK, INC. 

CATAUDELLA FUNERAL HOME, INC.

 	 
	 	By:  	/s/ Terry E. Sanford
 	 
	 	 	Terry E. Sanford 	 
	 	 	Chief Financial Officer 	 
	 




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