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CARRIAGE SERVICES, INC.

AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS

OF

MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK, SERIES A

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

     The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the
Board of Directors of Carriage Services, Inc., a Delaware corporation (hereinafter called the
“Corporation”), with the preferences and rights set forth therein relating to dividends,
conversion, redemption, dissolution and distribution of assets of the Corporation having been fixed
by the Board of Directors pursuant to authority granted to it under Article IV of the Corporation’s
Amended and Restated Certificate of Incorporation, as amended, and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of Delaware:

     RESOLVED that, whereas no shares of the Corporation’s preferred stock, par value $.01 per
share, designated the Mandatorily Redeemable Convertible Preferred Stock, Series A have been issued
as of the date hereof and whereas pursuant to authority conferred upon the Board of Directors by
the provisions of Article IV of the Amended and Restated Certificate of Incorporation of the
Corporation, as amended, the Board of Directors hereby authorizes the amendment and restatement of
the Corporation’s authorized preferred stock, par value $.01 per share, designated the Mandatorily
Redeemable Convertible Preferred Stock, Series A, and hereby fixes the designations, powers,
preferences and relative, participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such shares, in addition to those set forth in the Amended
and Restated Certificate of Incorporation of the Corporation, as amended (the “Certificate of
Incorporation”), as follows:

     1. DESIGNATION AND AMOUNT. The shares of such series shall be designated “Mandatorily
Redeemable Convertible Preferred Stock, Series A” (the “Series A Preferred Stock”) and the number
of shares constituting such series shall be 20,000.

     2. DIVIDENDS.

     a) The last day of March, June, September and December on which the Series A
Preferred Stock shall be outstanding shall be deemed to be a “Dividend Due Date” (except that if
any such date is a Saturday, Sunday or legal holiday, then the next succeeding date that is not a
Saturday, Sunday or legal holiday shall be the Dividend Due Date, and except that the first
Dividend Due Date will not be earlier than December 31, 2007). The holders of Series A Preferred
Stock shall be entitled to receive, if, when and as declared by the Board of Directors out of funds
legally available therefor, cumulative dividends at the rate of 7% of the Stated Value, defined
below, per share per annum, calculated on the basis of a year of 360 days consisting of twelve
30-day months, payable quarterly on each Dividend Due Date, with respect to the quarter ending on
the Dividend Due Date. Dividends will be paid in cash. The record date for the payment of the
aforementioned dividends shall be the fifteenth day of March, June,

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September or December, as the
case may be, immediately preceding the relevant Dividend Due Date. For purposes hereof, the term
“legal holiday” shall mean any day on which banking institutions are authorized to close in
Houston, Texas.

     b) On each Dividend Due Date all dividends which shall be accumulated on each share of Series
A Preferred Stock outstanding on such Dividend Due Date shall be deemed to become “due.” Any
dividend which shall not be paid on the Dividend Due Date on which it shall become due shall be
deemed to be “past due” until such dividend shall be paid or until the share of Series A Preferred
Stock with respect to which such dividend became due shall no longer be outstanding, whichever is
the earlier to occur.

     c) Any reference to “dividend” or “distribution” in this Section 2 shall not be deemed to
include any distribution made in connection with any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary.

     3. LIQUIDATION, DISSOLUTION OR WINDING UP.

     a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series A Preferred Stock then outstanding shall be entitled
to be paid out of the assets of the Corporation available for distribution to its stockholders,
after and subject to the payment in full of all amounts required to be distributed to the holders
of any other Preferred Stock of the Corporation ranking on liquidation prior and in preference to
the Series A Preferred Stock (such Preferred Stock being referred to hereinafter as “Senior
Preferred Stock”) upon such liquidation, dissolution or winding up, an amount in cash equal to the
Stated Value per share plus any accrued but unpaid dividends thereon (whether or not declared)
through the date of such liquidation, dissolution or winding up. For purposes hereof, the term
“Stated Value” shall mean $10.00 per share, subject to appropriate adjustment in the event of any
stock dividend, stock split, stock distribution or combination with respect to the Series A
Preferred Stock. If upon any such liquidation, dissolution or winding up of the Corporation
the remaining assets of the Corporation available for the distribution to its stockholders after
payment in full of amounts required to be paid or distributed to holders of Senior Preferred Stock
shall be insufficient to pay the holders of shares of Series A Preferred Stock the full amount to
which they shall be entitled, the holders of shares of Series A Preferred Stock, and any class of
stock ranking on liquidation on a parity with the Series A Preferred Stock, shall share ratably in
any distribution of the remaining assets and funds of the Corporation in proportion to the
respective amounts which would otherwise be payable in respect to the shares held by them upon such
distribution if all amounts payable on or with respect to said shares were paid in full.

     b) After the payment of all preferential amounts required to be paid to the holders
of Senior Preferred Stock and Series A Preferred Stock and any other series of Preferred Stock upon
the dissolution, liquidation or winding up of the Corporation, the holders of shares of Common
Stock then outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its stockholders.

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     c) The merger or consolidation of the Corporation into or with another corporation, the merger
or consolidation of any other corporation into or with the Corporation, or the sale, conveyance,
mortgage, pledge or lease of all or substantially all the assets of the Corporation shall not be
deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this
Section 3.

     4. VOTING.

     a) Except as provided in this Section 4, no holder of Series A Preferred Stock
shall be entitled to any voting rights at any annual or special meeting of the stockholders of the
Corporation or otherwise.

     b) The Corporation shall not amend, alter or repeal the preferences, special rights or other
powers of the Series A Preferred Stock or effect any change in the Certificate of Incorporation, as
then in effect, so as to affect adversely the rights, preferences or privileges of the Series A
Preferred Stock, without the written consent or affirmative vote of the holders of at least a
majority of the then outstanding shares of Series A Preferred Stock, given in writing or by vote at
a meeting, consenting or voting (as the case may be) separately as a class. For this purpose, the
authorization or issuance of any series of Preferred Stock with preference or priority over, or
being on a parity with the Series A Preferred Stock as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up of the Corporation shall not be
deemed so to affect adversely the Series A Preferred Stock.

     5. CONVERSION.

	 	 	The holders of Series A Preferred Stock shall have the following conversion rights:

     a) Subject to Section 6, each share of Series A Preferred Stock shall be convertible, at any
time at the option of the holder thereof and without payment of any additional consideration, into
validly issued, fully paid and nonassessable shares of Common Stock of the Corporation and such
other securities and property, as hereinafter provided.

     b) The Series A Preferred Stock shall be convertible into such number of fully paid and
non-assessable shares of Common Stock as is determined by dividing the Stated Value by the
Conversion Price (as defined below) then in effect, and then multiplying such quotient by each
share of Series A Preferred Stock to be converted. The conversion price at which shares of Common
Stock shall be issuable upon conversion of the Series A Preferred Stock shall initially be $10 per
share, subject to appropriate adjustment from time to time, as provided in this Section 5 (the
“Conversion Price”).

     c) Each holder of Series A Preferred Stock that desires to convert its shares of Series A
Preferred Stock into shares of Common Stock pursuant to Section 5(b) shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series A Preferred Stock (the “Transfer Agent”), and shall give written
notice to the Corporation at such office that such holder elects to convert the same and

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shall state therein the number of shares of Series A Preferred Stock being converted. Thereupon the
Corporation shall promptly issue and deliver to such holder a certificate or certificates for the
number of shares of Common Stock to which such holder is entitled, together with a cash adjustment
of any fraction of a share as hereinafter provided. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender of the certificate or
certificates representing the shares of Series A Preferred Stock to be converted, and the person or
entity entitled to receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder of such shares of Common Stock on such date.

     d) Adjustment of Conversion Price.

          i) Subject in all events to Section 3 hereof, in case of any stock dividend, split,
combination, reclassification, capital reorganization or similar change of outstanding shares of
Common Stock, or in case of any consolidation or merger of the Corporation with or into another
entity (other than a consolidation or merger in which the Corporation is the continuing
entity and which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock), or in case of any sale or conveyance to another
entity of the property of the Corporation as, or substantially as, an entirety (other than a
sale/leaseback, mortgage or other financing transaction or a liquidation that is otherwise covered
by Section 3), the Corporation shall cause effective provision to be made, through adjustment of
the Conversion Price or otherwise, so that each holder of a share of Series A Preferred Stock shall
be entitled to receive, upon conversion of such share of Series A Preferred Stock, the kind and
number of shares of stock or other securities or property (including cash) receivable upon such
reclassification, capital reorganization or other change, consolidation, merger, sale or conveyance
by a holder of the number of shares of Common Stock into which such share of Series A Preferred
Stock was convertible immediately prior to such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 5. The Corporation shall not effect any such consolidation, merger or sale
unless prior to or simultaneously with the consummation thereof the successor (if other than the
Corporation) resulting from such consolidation or merger or the entity purchasing assets or other
appropriate entity shall assume, by written instrument executed and delivered to the transfer agent
for the Series A Preferred Stock (the “Transfer Agent”), the obligation to deliver to the holder of
each share of Series A Preferred Stock such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holders may be entitled to receive and the other obligations
under these designations. The foregoing provisions shall similarly apply to successive
reclassifications, capital reorganizations and similar changes of outstanding shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.

          ii) After each adjustment of the Conversion Price pursuant to this Section 5(d), the
Corporation will promptly prepare a certificate signed by the Chairman or President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, of the Corporation
setting forth the Conversion Price as so adjusted and a brief statement of the facts accounting for
such adjustment. The Corporation will promptly file such certificate with the Transfer Agent, if
any, and cause a brief summary thereof to be sent by 

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ordinary first class mail to each registered
holder of Series A Preferred Stock at his or her last address as it shall appear on the registry
books of the Corporation or the Transfer Agent (as applicable). No failure to mail such notice nor
any defect therein or in the mailing thereof shall affect the validity of such adjustment. The
affidavit of an officer of the Transfer Agent or the Secretary or an Assistant Secretary of the
Corporation that such notice has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein. The Transfer Agent may rely on the information in the
certificate as true and correct and has no duty or obligation to independently verify the amounts
or calculations set forth therein.

     e) The Corporation shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series A Preferred Stock, such number of its shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred
Stock. The Corporation shall, in accordance with the laws of the State of Delaware, increase the
authorized number of shares of Common Stock if at any time the number of shares of authorized,
unissued and unreserved Common Stock shall not be sufficient to permit the conversion of all the
then-outstanding shares of Series A Preferred Stock.

     f) The Corporation will pay all taxes (other than taxes based upon income) and other
governmental charges that may be imposed with respect to the issuance or delivery of shares of
Common Stock upon conversion of shares of Series A Preferred Stock, including, without limitation,
any tax or other charge imposed in connection with any transfer involved in the issue and delivery
of shares of Common Stock in a name other than that in which the shares of Series A Preferred Stock
so converted were registered.

     6. Mandatory Redemption .

     a) On the fifth anniversary (the “Mandatory Redemption Date”) of the date on which the shares
of Series A Preferred Stock are issued (the “Issue Date”), the Corporation shall redeem the shares
of then outstanding Series A Preferred Stock at a price per share in cash out of legally available
funds equal to the Stated Value (the “Redemption Price”) plus any accrued but unpaid dividends
thereon (whether or not declared) through the date of such redemption. The Corporation must
deliver written notice to the holders of Series A Preferred Stock at least fifteen (15) days prior
to the Mandatory Redemption Date and make payment on the Mandatory Redemption Date or if the
Mandatory Redemption Date is a legal holiday, the next following day that is not a legal holiday.
Upon receipt of payment of the Redemption Price, each holder of Series A Preferred Stock will
deliver the original certificate(s) evidencing the Series A Preferred Stock so redeemed to the
Corporation, unless such holder is awaiting receipt of a new certificate evidencing such shares
from the Corporation pursuant to another provision hereof.

     b) Notice of any redemption of the Series A Preferred Stock required to be given by the
Corporation shall be mailed by means of certified mail (return receipt requested), postage paid,
addressed to the holders of record of the Series A Preferred Stock, at their respective addresses
then appearing on the books of the Corporation and last known address (if different), or sent by
facsimile. Each such notice shall be deemed received by the holder of record upon deposit with the
United States Postal Service or by facsimile to the holder at the last

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fax number supplied by the
holder to the Corporation. Each notice of redemption by the Corporation shall specify (i) the
Redemption Date, (ii) the Redemption Price, (iii) the place for payment and for delivering the
stock certificate(s) and transfer instrument(s) in order to collect the Redemption Price (which
shall be at a reasonable location in the United States), and (iv) the last time at which the shares
of Series A Preferred Stock being called for redemption can be converted in accordance with the
terms hereof and the last sentence of this paragraph, which shall be no later than the close of
business on the fourth business day preceding the Redemption Date. Failure by the Corporation to
give the notice described in this paragraph, or the formal insufficiency of any such notice, shall
not prejudice the rights of any holders of Series A Preferred Stock to cause the Corporation to
redeem any
such shares held by such holder, or the rights of the Corporation to redeem such shares,
provided the holder receives the Redemption Price on the Mandatory Redemption Date. At any time on
or prior to the close of business of the fourth business day preceding the Mandatory Redemption
Date, the holders of Series A Preferred Stock may convert any or all of the shares of Series A
Preferred Stock, and the Corporation shall honor any such conversions in accordance with the terms
hereof. After such time, the Corporation may, but is not required to, honor such request for
conversion.

     c) Provided the Redemption Price of a share of Series A Preferred Stock has been paid or
properly provided for, at the close of business on the Mandatory Redemption Date for the share of
Series A Preferred Stock, such share shall be deemed to cease to be outstanding and all rights of
any person other than the Corporation in such share shall be extinguished on the Redemption Date
(including all rights to vote or consent or to receive future dividends with respect to such share)
except for the right to receive the Redemption Price, without interest, for the share in accordance
with the provisions of this Section, subject to applicable escheat laws.

     d) Notwithstanding the redemption rights granted to the holders of Series A Preferred Stock,
the Corporation shall be required to redeem shares of Series A Preferred Stock only if (i) after
giving effect to the redemption, the Corporation would not be insolvent, (ii) the net assets of the
Corporation are not less than the amount of the proposed redemption, (iii) funds are otherwise
legally available therefor under Delaware law, as from time to time amended and (iv) such
redemption is not prohibited by Section 7 hereof. Without limiting the generality of any provision
hereof or of any applicable law, failure to redeem the Series A Preferred Stock in accordance with
this Section 6(d) shall result (until the date the redemption is made by the Corporation in
compliance with this Section 6(d)) in dividends continuing to accrue and accumulate on such shares
and shall result in the holders of such shares having the right to vote such shares as otherwise
permitted herein (and all other rights and obligations shall continue with respect to such shares
as set forth herein), but shall not result in the Redemption Price of such shares being deemed to
be a debt of the Corporation.

     e) In the event that the total amount of funds legally available for redemption of Series A
Preferred Stock is insufficient to redeem the Series A Preferred Stock that are the subject of a
notice of redemption, then the Series A Preferred Stock shall be redeemed ratably based on the
aggregate redemption amount payable with respect to the shares of Series A Preferred Stock then
redeemable.

     f) Nothing herein contained shall prevent or restrict the purchase by the Corporation, from
time to time either at public or private sale, of the whole or any part of the

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Series A Preferred
Stock at such price or prices as the Corporation may determine, subject to the provisions of
applicable law. Shares of Series A Preferred Stock received upon purchase, conversion or otherwise
acquired by the Corporation will be restored to the status of authorized but unissued shares of
Preferred Stock, without designation as to class, and may thereafter be issued, but not as shares
of Series A Preferred Stock.

     7. LIMITATIONS ON PAYMENTS. The Corporation may not make any payment upon or in
respect of the Series A Preferred Stock (including any mandatory prepayment pursuant to Section 6
hereof) if:

          a) a default in the payment of any Obligations (as defined in that certain Credit Agreement by
and among the Corporation, Bank of America, N.A., as administrative agent (together with successors
and assigns, the “Administrative Agent”), and the lenders party thereto (each, a “Lender”) dated as
of April 27, 2005 (as amended, restated, modified or renewed, including any credit facility which
refunds or refinances the debt outstanding thereunder, the “Credit Agreement”)) of the Corporation,
whether by maturity, acceleration, or otherwise (a “Payment Default”) occurs and is continuing
beyond any applicable grace period with respect to such Obligation; or

          b) an Event of Default (as defined in the Credit Agreement), other than a Payment Default,
occurs and is continuing (a “Nonpayment Default”) and the holders of the Series A Preferred Stock
receive a notice of default (a “Payment Blockage Notice”) from the Corporation or any Lender or the
Administrative Agent, which notice states that an Event of Default has occurred and is continuing,
and that payments upon or in respect of the Series A Preferred Stock shall be blocked for the
period specified in the next following paragraph.

               The Corporation may and shall resume payments upon and in respect of the Series A Preferred
Stock:

               i) in the case of a Payment Default, upon the date on which such Payment Default is cured or
waived or any acceleration is rescinded, as applicable, and

               ii) in the case of a Nonpayment Default, the earlier of (A) the date on which such
Nonpayment Default is cured or waived or (B) 180 days after the date on which the applicable
Payment Blockage Notice is received; provided in each case,
the Corporation may make payments in respect of the Series A Preferred Stock without regard to
the foregoing if it receives written notice approving the same from the Administrative Agent.

     8. NO PREEMPTIVE RIGHTS OR SINKING FUND. The shares of Series A Preferred Stock shall
have no preemptive or subscription rights, except those that may be provided by contract. No
sinking fund shall be established for the Series A Preferred Stock.

     9. SEVERABILITY OF PROVISIONS. Whenever possible, each provision hereof shall be
interpreted in a manner as to be effective and valid under applicable law, but if any provision
hereof is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof.

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     10. AMENDMENTS. No provision of these terms of the Series A Preferred Stock may be
amended, modified or waived without the written consent or affirmative vote of the holders of at
least a majority of the then outstanding shares of Series A Preferred Stock, voting together as a
separate class.

     IN WITNESS WHEREOF, Carriage Services, Inc. has caused this Certificate of Designations to be
duly executed by an authorized officer this 15th day of April, 2008.

	 	 	 	 	 
	 	Carriage Services, Inc.

 	 
	 	By:  	/s/ Melvin C. Payne
 	 
	 	 	Name:  	Melvin C. Payne 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

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Exhibit 10.1

April 20, 2008

Basic Energy Services, Inc.

400 W. Illinois, Suite 800

Midland, Texas 79701

Attention: Board of Directors

Grey Wolf, Inc.

10370 Richmond Avenue, Suite 600

Houston, Texas 77042-4136

Attention: Board of Directors

			
	Re:	 	Waiver of Good Reason under Employment Agreement

Gentlemen,

The closing of the combination through merger of Basic Energy Services, Inc. (“Basic”) and Grey
Wolf, Inc. (“Grey Wolf”) that is being proposed between the companies (the “Combination”) could
trigger certain events that constitute “Good Reason” under my Employment Agreement dated effective
December 31, 2006 with Basic, amended as of January 23, 2007 (the “Employment Agreement”).

In recognition that I will be named Chief Executive Officer of the company resulting from the
Combination (“New Grey Wolf”), I hereby waive and consent to the following potential results of the
Combination under Section 6(d)(8) of the Employment Agreement:

	 	1)	 	Good Reason based on the relocation of my principal office with the Company or its
successor from Midland, Texas to Houston, Texas;
	 
	 	2)	 	Good Reason based on my proposed position as Chief Executive Officer (but not
President) of New Grey Wolf or the description of positions or organizational chart
included in Section 5.16(i) of the Basic Disclosure Letter to the Agreement and Plan of
Merger dated April 20, 2008 for the Combination, which description of positions for New
Grey Wolf is attached hereto as Exhibit A and which organizational chart for New Grey Wolf
is attached hereto as Exhibit B, or other Good Reason under Section 6(d)(8)(C) of the
Employment Agreement created by my proposed duties, control, authority, status, position,
responsibilities, title or power with New Grey Wolf contemplated by such position;
provided, for the avoidance of doubt, that the foregoing waiver shall not apply to future
changes or events, except as they arise out of the Combination events and changes as to
which this waiver is granted; and
	 
	 	3)	 	Any differences in the health and benefit plans (or any other plans described in
Section 6(d)(8)(D) of the Employment Agreement) to be provided by New Grey Wolf from such
plans provided by Basic (provided that I am eligible to participate in such plans on the
same basis as all the then-current officers of New Grey Wolf), other than with respect to

 

 

	 	 	 	the disability plan as expressly required pursuant to Section 5(b) of the Employment
Agreement.

I understand that the headquarters of New Grey Wolf and my principal office with New Grey Wolf
will be in Houston Texas. However, I will initially perform my duties as Chief Executive
Officer of New Grey Wolf without moving from my current residence in Midland, Texas. I
recognize that the need to effectively manage New Grey Wolf, including the successful
integration of the former business units and personnel of Basic and Grey Wolf into a cohesive,
successful company, will require me to travel regularly to Houston and to spend a substantial
amount of time at New Grey Wolf’s headquarters in Houston. After the successful integration of
New Grey Wolf, which is anticipated to take up to approximately a year after the Combination, I
understand and agree that substantially all of my business time will be spent working from New
Grey Wolf’s headquarters in Houston, Texas.

While I understand the need for all parties to clarify our agreement on these issues, I am
enthusiastic about my position with New Grey Wolf and the success of the Combination.

Yours truly,

/s/ Kenneth V. Huseman                                                            

Kenneth V. Huseman

When executed by Grey Wolf and Basic, this letter will constitute an amendment pursuant to
Section 32 of the Employment Agreement.

Acknowledged and Agreed:

GREY WOLF, INC.

By:
/s/ Thomas P. Richards                                                            

Name: Thomas P. Richards

Title: President and CEO

BASIC ENERGY SERVICES, INC.

By:
/s/ Alan Krenek                                                            

Name: Alan Krenek

Title: Senior VP and CFO

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