Document:

Exhibit 10.2

Exhibit 10.2

FOURTH AMENDMENT

to

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of August 11,
2011 (this “Amendment No. 4”), is by and among Wells Fargo Bank, National Association, a national
banking association, in its capacity as administrative and collateral agent for the Lenders (as
hereinafter defined) pursuant to the Loan Agreement defined below (in such capacity,
“Administrative and Collateral Agent”), the parties to the Loan Agreement as lenders (individually,
each a “Lender” and collectively, “Lenders”), BlueLinx Corporation, a Georgia corporation
(“BlueLinx”), BlueLinx Services Inc., a Georgia corporation (“BSI”), and BlueLinx Florida LP, a
Florida limited partnership (“BFLP”, and together with BlueLinx and BSI, each individually a
“Borrower” and collectively, “Borrowers”), BlueLinx Florida Holding No. 1 Inc., a Georgia
corporation (“BFH1”) and BlueLinx Florida Holding No. 2 Inc., a Georgia corporation (“BFH2”, and
together with BFH1, each individually a “Guarantor” and collectively, “Guarantors”).

W I T N E S S E T H:

WHEREAS, Administrative and Collateral Agent, Lenders, Borrowers and Guarantors have entered
into financing arrangements pursuant to which Lenders (or Administrative and Collateral Agent on
behalf of Lenders) have made and may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Amended and Restated Loan and Security Agreement,
dated August 4, 2006, by and among Administrative and Collateral Agent, Lenders, Borrowers and
Guarantors, as amended by First Amendment to Amended and Restated Loan and Security Agreement,
dated as of October 22, 2008, Second Amendment to Amended and Restated Loan and Security Agreement,
dated as of July 7, 2010 and Third Amendment to Amended and Restated Loan and Security Agreement,
dated as of May 10, 2011 (as from time to time amended, modified, supplemented, extended, renewed,
restated or replaced, the “Loan Agreement”, and together with all agreements, documents and
instruments at any time executed and/or delivered in connection therewith or related thereto, as
from time to time amended, modified, supplemented, extended, renewed, restated, or replaced,
collectively, the “Financing Agreements”);

WHEREAS, Borrowers and Guarantors desire to amend certain provisions of the Loan Agreement as
set forth herein, and Administrative and Collateral Agent and Lenders are willing to agree to such
amendments on the terms and subject to the conditions set forth herein; and

WHEREAS, by this Amendment No. 4, Administrative and Collateral Agent, Lenders, Borrowers and
Guarantors desire and intend to evidence such amendments.

 

 

 

NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions.

(a) Additional Definitions. As used herein or in the Loan Agreement or any of the
other Financing Agreements, the following terms shall have the meanings given to them below and the
Loan Agreement and the other Financing Agreements shall be deemed and are hereby amended to
include, in addition and not in limitation, the following definitions:

(i) “Amendment No. 4” shall mean Fourth Amendment to Amended and Restated Loan and
Security Agreement, dated as of August 11, 2011, by and among Administrative and Collateral Agent,
Lenders, Borrowers and Guarantors, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

(ii) “BlueLinx Canada” shall mean BlueLinx Building Products Canada Ltd., a company
organized under the laws of British Columbia, together with its Subsidiaries (if any), and their
respective successors and assigns.

(iii) “CIBC” shall mean CIBC Asset-Based Lending Inc. and its successors and assigns.

(iv) “U.S. Dollars”, “US$” and “$” shall each mean lawful currency of
the United States of America.

(b) Interpretation. For purposes of this Amendment No. 4, all terms used herein which
are not otherwise defined herein, including but not limited to, those terms used in the recitals
hereto, shall have the respective meanings assigned thereto in the Loan Agreement as amended by
this Amendment No. 4.

2. Liens. Section 9.8 of the Loan Agreement is hereby amended by (a) deleting the word
“and” at the end of clause (l) thereof, (b) deleting the period at the end of clause (m) thereof
and replacing it with “; and” and (c) adding a new clause (n) immediately following clause (m)
thereof to read as follows:

“(m) the security interests and liens of CIBC on the assets and properties of BlueLinx
Canada arising on or after the Amendment No. 4 Effective Date to secure Indebtedness of
BlueLinx Canada permitted under Section 9.9(r).”.

 

-2-

 

3. Indebtedness. Section 9.9 of the Loan Agreement is hereby amended by (a) deleting
the word “and” at the end of clause (p) thereof, (b) deleting the period at the end of clause (q)
thereof and replacing it with “; and” and (c) adding a new clause (r) immediately following clause
(q) thereof to read as follows:

“(r) Indebtedness of BlueLinx Canada arising after the Amendment No. 4 Effective Date, (i)
pursuant to loans and advances in cash or other immediately available funds received by
BlueLinx Canada from CIBC or (ii) consisting of obligations and liabilities, contingent
or otherwise, of BlueLinx Canada, in respect of letters of credit, acceptances and similar
instruments issued for the account of BlueLinx Canada by CIBC; provided,
that, (A) the proceeds of the loans and advances or letter of credit or similar
instruments issued, in each case giving rise to such Indebtedness shall be used for cash
requirements (or as to letters of credit, acceptances or similar instruments otherwise
required) for the conduct of the business of BlueLinx Canada, (B) Administrative and
Collateral Agent shall have received true, correct and complete copies of all agreements,
documents and instruments evidencing or otherwise related to such Indebtedness, (C) no
Borrower or Guarantor shall guarantee or otherwise have any liability or obligation,
directly or indirectly, in connection with such Indebtedness, (D) the maximum principal
amount of such Indebtedness outstanding at any time (whether now existing or arising after
the date hereof) shall not exceed the $20,000,000, (E) such Indebtedness shall be on terms
and conditions reasonably acceptable to Administrative and Collateral Agent, and (F) as of
the date of incurring such Indebtedness and after giving effect thereto, no Event of Default
shall exist or have occurred and be continuing.”.

4. Limitation of Restrictions Affecting Subsidiaries. Section 9.16 of the Loan
Agreement is hereby amended by (a) deleting the word “and” at the end of clause (ii)(E) thereof,
(b) deleting the period at the end of the proviso to clause (ii)(F) thereof and replacing it with
“, and” and (c) adding a new clause (ii)(G) immediately following the proviso to clause (ii)(F)
thereof to read as follows:

“(G) any agreement relating to Indebtedness of BlueLinx Canada permitted under Section
9.9(r).”.

5. Representations and Warranties. Borrowers and Guarantors, jointly and severally,
represent and warrant with and to Administrative and Collateral Agent and Lenders as follows, which
representations and warranties, together with the representations and warranties in the other
Financing Agreements, shall survive the execution and delivery hereof, and the truth and
correctness thereof, in all material respects, being a continuing condition of the making of any
Loans by Lenders (or Administrative and Collateral Agent on behalf of Lenders) to Borrowers:

(a) no Default or Event of Default exists or has occurred and is continuing as of the date of
this Amendment No. 4;

(b) this Amendment No. 4 and each other agreement to be executed and delivered by Borrowers
and Guarantors in connection herewith (collectively, together with this Amendment No. 4, the
“Amendment Documents”) has been duly authorized, executed and delivered by all necessary corporate
or limited partnership action on the part of each Borrower and Guarantor which is a party hereto
and, if necessary, their respective equity holders and is in full force and effect as of the date
hereof, as the case may be, and the agreements and obligations of each of the Borrowers and
Guarantors, as the case may be, contained herein and therein constitute legal, valid and binding
obligations of each of the Borrowers and Guarantors, enforceable against them in accordance with
their terms, except as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors’ rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought;

 

-3-

 

(c) the execution, delivery and performance of each Amendment Document (i) are all within each
Borrower’s and Guarantor’s corporate or limited partnership powers, as applicable, and (ii) are not
in contravention of law or the terms of any Borrower’s or Guarantor’s certificate or articles of
incorporation, by laws, or other organizational documentation, or any indenture, agreement or
undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or
its property are bound;

(d) the resolutions of the Board of Directors or Managers or the General Partner of each
Borrower and Guarantor, as applicable, delivered to Administrative and Collateral Agent by such
Borrower or Guarantor on the date of the effectiveness of the Loan Agreement have not been revoked
and are in full force and effect; and

(e) all of the representations and warranties set forth in the Loan Agreement and the other
Financing Agreements, each as amended hereby, are true and correct in all material respects on and
as of the date hereof, as if made on the date hereof, except to the extent any such representation
or warranty is made as of a specified date, in which case such representation or warranty shall
have been true and correct in all material respects as of such date.

6. Conditions Precedent. The amendments contained herein shall only be effective upon
the satisfaction of each of the following conditions precedent in a manner satisfactory to
Administrative and Collateral Agent (the “Amendment No. 4 Effective Date”):

(a) Administrative and Collateral Agent shall have received counterparts of this Amendment No.
4, duly authorized, executed and delivered by Borrowers, Guarantors and Required Lenders;

(b) Administrative and Collateral Agent shall have received a true and correct copy of each
consent, waiver or approval (if any) to or of this Amendment No. 4, which Borrowers and Guarantors
are required to obtain from any other Person, and such consent, approval or waiver (if any) shall
be in form and substance reasonably satisfactory to Administrative and Collateral Agent;

(c) all of the representations and warranties set forth in the Loan Agreement and the other
Financing Agreements, each as amended by Amendment No. 4, shall be true and correct in all material
respects on and as of the date hereof, as if made on the date hereof, except to the extent any such
representation or warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct in all material respects as of such date; and

(d) no Default or Event of Default shall exist or have occurred and be continuing.

 

-4-

 

7. Effect of Amendment No. 4. Except as expressly set forth herein, no other
amendments, changes or modifications to the Financing Agreements are intended or implied, and
in all other respects the Financing Agreements are hereby specifically ratified, restated and
confirmed by all parties hereto as of the Amendment No. 4 Effective Date and Borrowers and
Guarantors shall not be entitled to any other or further amendment by virtue of the provisions of
this Amendment No. 4 or with respect to the subject matter of this Amendment No. 4. To the extent
of conflict between the terms of this Amendment No. 4 and the other Financing Agreements, the terms
of this Amendment No. 4 shall control. The Loan Agreement and this Amendment No. 4 shall be read
and construed as one agreement.

8. Governing Law. The validity, interpretation and enforcement of this Amendment No.
4 and any dispute arising out of the relationship between the parties hereto, whether in contract,
tort, equity or otherwise, shall be governed by the internal laws of the State of New York but
excluding any principles of conflicts of law or other rule of law that would cause the application
of the law of any jurisdiction other than the laws of the State of New York.

9. Jury Trial Waiver. BORROWERS, GUARANTORS, ADMINISTRATIVE AND COLLATERAL AGENT AND
LENDERS EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER THIS AMENDMENT NO. 4 OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AMENDMENT NO. 4 OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT,
EQUITY OR OTHERWISE. BORROWERS, GUARANTORS, ADMINISTRATIVE AND COLLATERAL AGENT AND LENDERS EACH
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY AND THAT BORROWERS, GUARANTORS, ADMINISTRATIVE AND COLLATERAL AGENT
OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AMENDMENT NO. 4 WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

10. Binding Effect. This Amendment No. 4 shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and assigns.

11. Waiver, Modification, Etc. No provision or term of this Amendment No. 4 may be
modified, altered, waived, discharged or terminated orally, but only by an instrument in writing
executed by the party against whom such modification, alteration, waiver, discharge or termination
is sought to be enforced.

12. Further Assurances. Borrowers and Guarantors shall execute and deliver such
additional documents and take such additional action as may be reasonably requested by
Administrative and Collateral Agent to effectuate the provisions and purposes set forth in this
Amendment No. 4.

 

-5-

 

13. Entire Agreement. This Amendment No. 4 represents the entire agreement and
understanding concerning the subject matter hereof among the parties hereto, and supersedes all
other prior agreements, understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or
written.

14. Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment No. 4.

15. Counterparts. This Amendment No. 4 may be executed in any number of counterparts,
each of which shall be an original, but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of this Amendment No. 4 by telefacsimile or a
substantially similar electronic transmission shall have the same force and effect as the delivery
of an original executed counterpart of this Amendment No. 4. Any party delivering an executed
counterpart of this Amendment No. 4 by telefacsimile or a substantially similar electronic
transmission shall also deliver an original executed counterpart, but the failure to do so shall
not affect the validity, enforceability or binding effect of this Amendment No. 4.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to be duly executed
and delivered by their authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	BORROWERS

BLUELINX CORPORATION

 	 
	 	By:  	/s/ H. Douglas Goforth
 	 
	 	 	Name:  	H. Douglas Goforth 	 
	 	 	Title:  	Treasurer and CFO 	 
	 
	 	BLUELINX FLORIDA LP

 	 
	 	By:  	BlueLinx Florida Holding No. 2 Inc.,
 	 
	 	 	its General Partner 	 
	 	 	 
	 	By:  	/s/ H. Douglas Goforth
 	 
	 	 	Name:  	H. Douglas Goforth 	 
	 	 	Title:  	Treasurer 	 
	 
	 	BLUELINX SERVICES INC.

 	 
	 	By:  	/s/ H. Douglas Goforth
 	 
	 	 	Name:  	H. Douglas Goforth 	 
	 	 	Title:  	Treasurer 	 
	 
	 	GUARANTORS

BLUELINX FLORIDA HOLDING NO. 1 INC.

 	 
	 	By:  	/s/ H. Douglas Goforth
 	 
	 	 	Name:  	H. Douglas Goforth 	 
	 	 	Title:  	Treasurer 	 
	 
	 	BLUELINX FLORIDA HOLDING NO. 2 INC.

 	 
	 	By:  	/s/ H. Douglas Goforth
 	 
	 	 	Name:  	H. Douglas Goforth 	 
	 	 	Title:  	Treasurer 	 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

 

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

	 	 	 	 	 	 	 	 	 
	 	 	ADMINISTRATIVE AND COLLATERAL AGENT AND LENDERS

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative and Collateral Agent and a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas A. Martin	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Thomas A. Martin	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,

as a Documentation Agent and a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Robert Scalzitti	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Robert Scalzitti	 	 
	 

	 	 	 	Title:
	 	Senior Vice President	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,

as a Documentation Agent and a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mario Quintanilla	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Mario Quintanilla	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	REGIONS BANK,

as Syndication Agent and a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ James Barwis	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	James Barwis	 	 
	 

	 	 	 	Title:
	 	SVP	 	 
	 

	 	 	 	 	 	 	 	 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

 

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

	 	 	 	 	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BURDALE CAPITAL FINANCE, INC., as a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:exv10w1

Exhibit 10.1

Execution Version

 

$60,000,000

REVOLVING CREDIT AGREEMENT

dated as of

August 11, 2011

among

CARRIAGE SERVICES, INC.,

as Borrower,

The Lenders Party Hereto,

and

WELLS FARGO BANK, N.A.,

as Administrative Agent and Issuing Bank

 

Andrews Kurth LLP

Counsel to Administrative Agent

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I Definitions
	 	 	1	 
	Section 1.01 Defined Terms
	 	 	1	 
	Section 1.02 Classification of Loans and Borrowings
	 	 	19	 
	Section 1.03 Terms Generally
	 	 	19	 
	Section 1.04 Accounting Terms; GAAP
	 	 	19	 
	 
	 	 	 	 
	ARTICLE II The Credits
	 	 	19	 
	Section 2.01 Commitments
	 	 	19	 
	Section 2.02 Revolving Loans and Borrowings
	 	 	20	 
	Section 2.03 Requests for Revolving Borrowings
	 	 	20	 
	Section 2.04 Letters of Credit
	 	 	21	 
	Section 2.05 Funding of Borrowings
	 	 	25	 
	Section 2.06 Interest Elections
	 	 	26	 
	Section 2.07 Termination and Reduction of Commitments
	 	 	27	 
	Section 2.08 Repayment of Loans; Evidence of Debt
	 	 	27	 
	Section 2.09 Voluntary Prepayment of Loans
	 	 	28	 
	Section 2.10 Fees
	 	 	29	 
	Section 2.11 Interest
	 	 	30	 
	Section 2.12 Alternate Rate of Interest
	 	 	30	 
	Section 2.13 Increased Costs
	 	 	31	 
	Section 2.14 Break Funding Payments
	 	 	32	 
	Section 2.15 Taxes
	 	 	32	 
	Section 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	35	 
	Section 2.17 Mitigation Obligations; Replacement of Lenders
	 	 	37	 
	Section 2.18 Increase in the Commitments
	 	 	38	 
	Section 2.19 Defaulting Lenders
	 	 	38	 
	 
	 	 	 	 
	ARTICLE III Representations and Warranties
	 	 	40	 
	Section 3.01 Organization; Powers
	 	 	40	 
	Section 3.02 Authorization; Enforceability
	 	 	40	 
	Section 3.03 Governmental Approvals; No Conflicts
	 	 	40	 
	Section 3.04 Financial Condition; No Material Adverse Change
	 	 	41	 
	Section 3.05 Properties
	 	 	41	 
	Section 3.06 Litigation and Environmental Matters
	 	 	41	 
	Section 3.07 Compliance with Laws and Agreements
	 	 	42	 
	Section 3.08 Investment and Holding Company Status
	 	 	42	 
	Section 3.09 Taxes
	 	 	42	 
	Section 3.10 ERISA
	 	 	42	 
	Section 3.11 Disclosure
	 	 	42	 
	Section 3.12 Subsidiaries
	 	 	42	 
	Section 3.13 Margin Stock
	 	 	43	 
	Section 3.14 Use of Proceeds
	 	 	43	 
	Section 3.15 Insurance
	 	 	43	 
	Section 3.16 Swap Agreements
	 	 	43	 

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	 	 	Page	 
	Section 3.17 Solvency
	 	 	43	 
	 
	 	 	 	 
	ARTICLE IV Conditions
	 	 	43	 
	Section 4.01 Effective Date
	 	 	43	 
	Section 4.02 Each Credit Event
	 	 	45	 
	Section 4.03 Condition Subsequent
	 	 	45	 
	 
	 	 	 	 
	ARTICLE V Affirmative Covenants
	 	 	45	 
	Section 5.01 Financial Statements; Ratings Change and Other Information
	 	 	45	 
	Section 5.02 Notices of Material Events
	 	 	47	 
	Section 5.03 Existence; Conduct of Business
	 	 	47	 
	Section 5.04 Payment of Obligations
	 	 	47	 
	Section 5.05 Maintenance of Properties
	 	 	47	 
	Section 5.06 Books and Records; Inspection Rights
	 	 	47	 
	Section 5.07 Compliance with Laws
	 	 	48	 
	Section 5.08 Use of Proceeds and Letters of Credit
	 	 	48	 
	Section 5.09 Insurance
	 	 	48	 
	Section 5.10 Required Guarantors
	 	 	48	 
	 
	 	 	 	 
	ARTICLE VI Negative Covenants
	 	 	48	 
	Section 6.01 Indebtedness Covenant
	 	 	49	 
	Section 6.02 Lien Covenant
	 	 	50	 
	Section 6.03 Amendments to Other Indebtedness
	 	 	50	 
	Section 6.04 Limitation on Fundamental Changes
	 	 	50	 
	Section 6.05 Restrictions on Investments, Loans, Advances, Guarantees and
Acquisitions
	 	 	51	 
	Section 6.06 Swap Agreements
	 	 	52	 
	Section 6.07 Restrictions on Transactions with Affiliates
	 	 	52	 
	Section 6.08 Restrictions on Restrictive Agreements
	 	 	52	 
	Section 6.09 Change in Fiscal Year
	 	 	53	 
	Section 6.10 Leverage Ratio
	 	 	53	 
	Section 6.11 Fixed Charge Coverage Ratio
	 	 	53	 
	Section 6.12 Shareholder Equity
	 	 	53	 
	Section 6.13 Dispositions
	 	 	53	 
	 
	 	 	 	 
	ARTICLE VII Events of Default
	 	 	54	 
	 
	 	 	 	 
	ARTICLE VIII The Administrative Agent
	 	 	56	 
	 
	 	 	 	 
	ARTICLE IX Miscellaneous
	 	 	58	 
	Section 9.01 Notices
	 	 	58	 
	Section 9.02 Waivers; Amendments; Release of Guarantors
	 	 	59	 
	Section 9.03 Expenses; Indemnity; Damage Waiver
	 	 	60	 
	Section 9.04 Successors and Assigns
	 	 	62	 
	Section 9.05 Survival
	 	 	65	 
	Section 9.06 Counterparts; Integration; Effectiveness
	 	 	65	 
	Section 9.07 Severability
	 	 	65	 

-ii-

 

	 	 	 	 	 
	 	 	Page	 
	Section 9.08 Right of Setoff
	 	 	66	 
	Section 9.09 Governing Law; Arbitration
	 	 	66	 
	Section 9.10 WAIVER OF JURY TRIAL
	 	 	68	 
	Section 9.11 Headings
	 	 	68	 
	Section 9.12 Confidentiality
	 	 	68	 
	Section 9.13 Interest Rate Limitation
	 	 	68	 
	Section 9.14 USA Patriot Act
	 	 	69	 
	Section 9.15 FINAL AGREEMENT OF THE PARTIES
	 	 	69	 

-iii-

 

EXHIBITS:

	 	 	 

	Exhibit 1.01A

	 	Form of Guarantee Agreement
	Exhibit 1.01B

	 	Form of Joinder Agreement
	Exhibit 1.01C

	 	Form of Revolving Promissory Note
	Exhibit 1.01D

	 	Form of Security Agreement
	Exhibit 4.01(h)

	 	Form of Borrowing Request
	Exhibit 5.01

	 	Form of Compliance Certificate
	Exhibit 9.04

	 	Form of Assignment and Assumption
	Annex I

	 	Standard Terms and Conditions for Assignment and Assumption

SCHEDULES:

	 	 	 

	Schedule 2.01

	 	Commitments
	Schedule 3.01

	 	Qualification Exceptions
	Schedule 3.06

	 	Disclosed Matters
	Schedule 3.12

	 	List of Subsidiaries
	Schedule 3.16

	 	Swap Agreements
	Schedule 6.01(b)

	 	Existing Indebtedness
	Schedule 6.02(b)

	 	Existing Liens
	Schedule 6.05(b)

	 	Existing Investments
	Schedule 6.08

	 	Restrictive Agreements

-iv-

 

          THIS REVOLVING CREDIT AGREEMENT (this “Agreement”), dated as of August 11, 2011, is
entered into among Carriage Services, Inc., a Delaware corporation, the Lenders party hereto and
Wells Fargo Bank, N.A., as Administrative Agent and Issuing Bank.

          The parties hereto agree as follows:

ARTICLE I

Definitions

          Section 1.01 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Base Rate.

          “Adjusted LIBOR” means, for any day, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of
1%) equal to (a) LIBOR for such Interest Period multiplied by (b) the Statutory Reserve Rate.

          “Adjusted One Month LIBOR” means an interest rate per annum equal to the sum of (i)
1.00% per annum plus (ii) Adjusted LIBOR for a one month Interest Period on such day (or if such
day is not a Business Day, the immediately preceding Business Day).

          “Administrative Agent” means Wells Fargo Bank, N.A., in its capacity as administrative
agent for the Lenders hereunder.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

          “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

          “Alternative Financing” means any form of long-term financing used by the Borrower to
refinance or payoff the Senior Notes; provided (i) the principal amount of such Alternative
Financing shall not exceed $160,000,000 and (ii) the maturity date of such Alternative Financing
shall be at least eight years from issuance or closing date of such Alternative Financing.

          “Applicable Margin” means, for any day, with respect to any Base Rate Loan or
Eurodollar Revolving Loan, or with respect to the facility fees payable hereunder, as the case may
be, the Applicable Margin per annum set forth below, as the case may be, based upon the Leverage
Ratio:

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CATEGORY	 	LEVERAGE RATIO:	 	 	BASE RATE MARGIN	 	 	EURODOLLAR MARGIN	 	 	COMMITMENT FEE RATE	 
	1
	 	 	≤ 2.75	 	 	 	0.625	%	 	 	1.625	%	 	 	0.30	%
	2
	 	> 2.75 BUT ≤ 3.75	 	 	 	0.875	%	 	 	1.875	%	 	 	0.40	%
	3
	 	 	>3.75	 	 	 	1.125	%	 	 	2.125	%	 	 	0.50	%

          For purposes of the foregoing, each change in the Applicable Margin resulting from a
change in the Leverage Ratio shall be effective during the period commencing on and including the
date of delivery to the Administrative Agent of consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the next such change;
provided that the Leverage Ratio shall be deemed to be in Category 3 at any time (a) that
an Event of Default has occurred and is continuing or (b) at the option of the Administrative Agent
or at the request of the Required Lenders if the Borrower fails to deliver the consolidated
financial statements required to be delivered by it pursuant to Section 5.01(i) or
Section 5.01(ii), during the period from the expiration of the time for delivery thereof
until such consolidated financial statements are delivered.

          In the event that any financial statement delivered pursuant to Section 5.01(i) or
Section 5.01(ii), as applicable, is shown to be inaccurate when delivered and such
inaccuracy, if corrected, would have led to the application of a higher or lower Applicable Margin
for any such period (an “Applicable Period”) than the Applicable Margin applied for such
Applicable Period, and only in such case, then the Borrower shall immediately (i) deliver to the
Administrative Agent corrected financial statements for such Applicable Period, (ii) determine the
Applicable Margin for such Applicable Period based upon the corrected financial statements and
(iii) immediately pay to the Administrative Agent or immediately be refunded by the Administrative
Agent the accrued additional or lesser interest owing as a result of such changed Applicable Margin
for such Applicable Period. This provision is in addition to the rights of the Administrative
Agent and the Lenders with respect to Section 2.11(c) and their other respective rights
under this Agreement and shall not limit the right of the Administrative Agent to declare an Event
of Default. Financial statements shall not be deemed to be “inaccurate” solely because the same
are subsequently restated to reflect changes in GAAP.

          “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment; provided that in the case of
Section 2.19 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the
percentage of the total Commitments (disregarding any Defaulting Lender’s Commitment) represented
by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Commitments most recently in effect, giving effect
to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
9.04), and accepted by the Administrative Agent, in the form of Exhibit 9.04 or any
other form approved by the Administrative Agent.

-2-

 

          “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitments.

          “Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime
Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1% and
(c) Adjusted One Month LIBOR plus the Applicable Base Rate Margin. Any change in the Base Rate due
to a change in the Prime Rate, the Federal Funds Effective Rate or Adjusted One Month LIBOR shall
be effective from and including the effective date of such change in the Prime Rate, Federal Funds
Effective Rate or Adjusted One Month LIBOR, respectively.

          “Base Rate Loan”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Base Rate.

          “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

          “Borrower” means Carriage Services, Inc. a Delaware corporation.

          “Borrowing” means Revolving Loans of the same Type, made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in
effect.

          “Borrowing Request” means a request by the Borrower for a Revolving Borrowing
substantially in the form of Exhibit 4.01(h).

          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in Houston, Texas are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which commercial banks in London, England are not open for
dealings in dollar deposits in the London interbank market.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as a capital lease obligation on a balance sheet of such Person under GAAP, as in
effect on the Effective Date, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP as in effect on the Effective Date.

          “Change in Control” means:

          (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any
Person (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the Effective Date) of Equity Interests
representing more than 35% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests of the Borrower;

-3-

 

          (b) occupation of a majority of the seats (other than vacant seats) on the board of directors
of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower
nor (ii) appointed by directors so nominated; or

          (c) any event that gives holders of preferred Equity Interests or other securities issued
pursuant to any shareholders’ rights plan of the Borrower the right to purchase or to convert such
securities to more than 35% of the aggregate (less the percentage of Equity Interests referenced in
(a) above held by the holders of such preferred Equity Interests) voting Equity Interests of the
Borrower.

          “Change in Law” means the occurrence, after the Effective Date (or with respect to any
Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the
adoption or taking into effect of any law, rule, regulation or treaty, (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority; provided,
however, anything herein to the contrary notwithstanding, the Dodd-Frank Wall Street Reform
and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued
in connection therewith shall be deemed to be a “Change in Law”, regardless of the date
enacted, adopted or issued.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          “Collateral” has the meaning assigned to such term in the Security Agreement,
provided, that notwithstanding anything contained in the Security Agreement to the
contrary, the term “Collateral” shall not include any Equity Interests in any Foreign Subsidiary or
any Unrestricted Subsidiary of the Borrower.

          “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans including the acquisition of participations in Letters of Credit hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.07, (b) increased
from time to pursuant to Section 2.18 and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable. As of
the Effective Date, the initial aggregate amount of the Lenders’ Commitments is $60,000,000.

          “Consolidated EBITDA” means EBITDA for the Borrower and the Subsidiaries, other than
Unrestricted Subsidiaries, on a consolidated basis.

          “Consolidated Interest Expense” means, for any period, the Interest Expense (including
imputed interest expense in respect of Capital Lease Obligations) reflected on the financial
statements of the Borrower and the Subsidiaries during such period.

          “Consolidated Net Income” means, for any period, the total net income or loss of the
Borrower and the Subsidiaries, other than Unrestricted Subsidiaries, for such period determined on
a consolidated basis in accordance with GAAP.

-4-

 

          “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

          “Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure.

          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

          “Defaulting Lender” means any Lender, as determined by the Administrative Agent, that
has (a) failed to fund any portion of its Revolving Loans or participations in Letters of Credit
within three Business Days of the date required to be funded by it hereunder, (b) notified the
Borrower, the Administrative Agent, the Issuing Bank or any Lender in writing that it does not
intend to comply with any of its funding obligations under this Agreement or has made a public
statement to the effect that it does not intend to comply with its funding obligations under this
Agreement or under other agreements in which it commits to extend credit, (c) failed, within three
Business Days after request by the Administrative Agent, to confirm that it will comply with the
terms of this Agreement relating to its obligations to fund prospective Loans and participations in
then outstanding Letters of Credit, (d) otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within three Business Days of
the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or
has a parent company that has become or is insolvent or (ii) become, or has a parent company that
has become, the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or custodian, appointed for it, or has
taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment or has a parent company that has become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation
of its business or custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

          “Deposit Account Control Agreement” means the agreement executed by the Agent and
Wells Fargo as a depository bank, and acknowledged by the Borrower, in regard to all accounts of
the Borrower maintained at Wells Fargo.

          “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.06.

          “Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction, but excluding the issuance of any Equity
Interest of the Borrower) of any property by any Person, including any sale, assignment,

-5-

 

transfer or other disposal, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.

          “dollars” or “$” refers to lawful money of the United States of America.

          “Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary;
provided Unrestricted Subsidiaries shall not be considered Domestic Subsidiaries regardless
of their jurisdiction of organization or formation.

          “EBITDA” means, for any period, without duplication, Consolidated Net Income:

          (i) plus Consolidated Interest Expense;

          (ii) plus provisions for federal, state, local or foreign income tax;

          (iii) plus depreciation and amortization (to the extent included in operating expenses);

          (iv) plus EBITDA of any Permitted Acquisition calculated on an historic basis for such
Permitted Acquisition as if same had occurred on the first day of the period for which such EBITDA
is measured, with such pro-forma adjustments as the Administrative Agent, in its sole discretion,
shall approve;

          (v) plus other non cash expenses;

          (vi) plus non-recurring expenses and minus non-recurring income items (in each case, to the
extent said items are used to calculate Consolidated Net Income), so long as said items, in each
case, remain non-cash items.

          “Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).

          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.

          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

-6-

 

          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

          “ERISA Event” means (a) any “reportable event” listed in Section 4043(c)(5),
4043(c)(6) or 4043(c)(12) of ERISA; (b) the failure of any Plan to satisfy the “minimum funding
standard” (within the meaning of Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(c) of the Code or Section 303(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan (other than a Multiple Employer Plan) in a distress
termination under Section 4041(c) of ERISA; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan
or Plans or for the PBGC to appoint a trustee to administer any Plan; (f) the receipt by the
Borrower or any ERISA Affiliate from the plan administrator of any notice relating to an intention
to terminate a Multiple Employer Plan; (g) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, in each
case concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is insolvent (within the meaning of Section 4245 of ERISA) or in reorganization (within the meaning
of Section 4241 of ERISA).

          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to LIBOR.

          “Event of Default” has the meaning assigned to such term in Article VII.

          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income or
profits (however denominated) by the United States of America (or any political subdivision
thereof), or by the jurisdiction (or any political subdivision thereof) under the laws of which
such recipient is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other jurisdiction in which the
Borrower is located or described in clause (a) of this definition, (c) in the case of a

-7-

 

Lender, any withholding tax that (i) is imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement (or designates a new lending office), except to the
extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.15(a), or (ii) is attributable to such Lender’s
failure to comply with Section 2.15(e), and (d) any withholding tax imposed by FATCA

          “FATCA” means Sections 1471 through 1474 of the Code (and any amendment or successor
sections thereto) and any regulations promulgated thereunder or official interpretations thereof.

          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds for
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.

          “Fitch” means Fitch Ratings, Inc.

          “Fixed Charge Coverage Ratio” means the ratio of (a) EBITDA minus (i) non-financed
Maintenance Capital Expenditures and, (ii) cash income taxes paid, plus any income tax refunds
received, divided by (b) Interest Expense plus (i) scheduled and required principal payments in
respect of Indebtedness actually paid, and, (ii) all cash dividends paid on Equity Interests, in
all cases measured for the immediately preceding four (4) fiscal quarters.

          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

          “Foreign Subsidiary” means any Subsidiary organized under the laws of a jurisdiction
other than the United States, any State thereof or the District of Columbia.

          “GAAP” means generally accepted accounting principles in the United States of America.

          “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

-8-

 

          “Growth Capital Expenditures” means capital expenditures that are neither Maintenance
Capital Expenditures nor expenditures for Permitted Acquisitions.

          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, directly or indirectly, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such Indebtedness or
other obligation of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include (i) endorsements for collection or
deposit in the ordinary course of business, or (ii) continent obligations on performance or surety
bonds provided by third parties.

          “Guarantee Agreement” means the Guarantee of the Guarantors, substantially in the form
of Exhibit 1.01A hereto, guarantying the Obligations of Borrower under this Agreement and
the Loan Documents and all other Indebtedness of the Borrower to any of the Lenders in respect of
any hedging obligations, any overdrafts or treasury, depository, cash management, or similar
services.

          “Guarantors” means all Domestic Subsidiaries of the Borrower and any other Subsidiary
required to execute a Guaranty Agreement pursuant to Section 5.10, but excluding any
Unrestricted Subsidiary.

          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.

          “Increasing Lender” has the meaning set forth in Section 2.18.

          “Indebtedness” of any Person means, without duplication,

          (a) the unpaid principal balance of such Person for borrowed money of any kind,

          (b) the unpaid principal balance of obligations of such Person evidenced by bonds, debentures,
notes or similar instruments,

          (c) the unpaid principal amount of obligations of such Person upon which interest charges are
customarily paid,

-9-

 

          (d) all deferred purchase price arrangements, including obligations of such Person under
conditional sale or other title retention agreements relating to property acquired by such Person,
(excluding current accounts payable incurred in the ordinary course of business),

          (e) all Indebtedness secured by any Lien on property owned or acquired by such Person, whether
or not the Indebtedness secured thereby has been assumed,

          (f) all Guarantees by such Person of Indebtedness of others,

          (g) all Capital Lease Obligations of such Person existing on the Effective Date or newly
created by the Borrower thereafter, but excluding any such obligations which become Capital Lease
Obligations as a result of changes in GAAP occurring after the Effective Date,

          (h) all obligations, contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and

          (i) all obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances.

          The Indebtedness of any Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is not liable
therefor.

          Notwithstanding anything else herein to the contrary, Indebtedness shall not include either
the convertible junior subordinated debenture due 2029 issued by Carriage Services, Inc. to
Carriage Services Capital Trust, in the original principal amount of $96,949,000, or the Trust
Preferred Stock.

          “Indemnified Taxes” means all Taxes other than Excluded Taxes.

          “Interest Election Request” means a request by the Borrower to convert or continue a
Revolving Borrowing in accordance with Section 2.06.

          “Interest Expense” means interest expense determined under GAAP, less amortization of
deferred loan costs and original issue discounts.

          “Interest Payment Date” means (a) with respect to any Base Rate Loan, the last day of
each March, June, September and December, and (b) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of
a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior
to the last day of such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.

          “Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Borrower may elect;

-10-

 

provided, that (i) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or continuation of such
Borrowing.

          “Issuing Bank” means Wells Fargo Bank, N.A. in its capacity as the issuer of Letters
of Credit hereunder, and its successor or successors in such capacity as provided in Section
2.04(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to
be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include
any such Affiliate with respect to Letters of Credit issued by such Affiliate.

          “Joinder Agreement” means an agreement substantially in the form of Exhibit
1.01B hereof.

          “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of
Credit.

          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

          “Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

          “Letter of Credit” means any letter of credit issued pursuant to this Agreement.

          “Leverage Ratio” means, on any date, the ratio of Senior Debt to Consolidated EBITDA
for the immediately preceding four (4) fiscal quarters.

          “LIBOR” means, with respect to any Eurodollar Borrowing for any Interest Period, the
rate appearing on Reuters Screen LIBOR1 Page (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing rate quotations comparable
to those currently provided on such page of such service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not available at such
time for any reason, then “LIBOR” with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate rounded upwards, if necessary, to the next

-11-

 

1/100 of 1% at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period.

          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

          “Loan Documents” means this Agreement, the Note, the Guarantee Agreement, the Security
Documents and any other documents executed in connection herewith or therewith.

          “Loan Parties” means the Borrower and the Guarantors.

          “Loans” means the Revolving Loans.

          “Maintenance Capital Expenditures” means capital expenditures to replace, repair or
refurbish existing fixed assets.

          “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower and the Subsidiaries
taken as a whole, or (b) the ability of the Borrower to perform any of its obligations under this
Agreement or (c) the rights of or benefits available to the Lenders under this Agreement.

          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) or obligations in respect of Swap Agreements of any one or more of the Borrower and the
Subsidiaries in an aggregate principal amount exceeding $5,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary
in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such
Swap Agreement were terminated at such time.

          “Maturity Date” means October 15, 2014; provided, if the Borrower obtains
Alternative Financing which closes and funds prior to July 15, 2014 or the New Senior Notes are
issued prior to July 15, 2014, the Maturity Date shall automatically be extended to a date that is
five (5) years from the Effective Date.

          “Moody’s” means Moody’s Investors Service, Inc.

          “Multiemployer Plan” shall mean any pension plan that is (i) a multiemployer plan as
defined in Section 4001(a)(3) of ERISA, (ii) subject to the provisions of Title IV of ERISA and
(iii) maintained by the Borrower or any ERISA Affiliate or with respect to which the Borrower or
any ERISA Affiliate may have any liability, contingent or otherwise.

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          “Multiple Employer Plan” shall mean a Plan covered by Title IV of ERISA, other than a
Multiemployer Plan, to which the Borrower or any ERISA Affiliate and at least one employer other
than the Borrower or any ERISA Affiliate are contributing sponsors.

          “Net Cash Proceeds” means, with respect to the sale of any asset by the Borrower or
any Subsidiary (including Equity Interests), the excess, if any, of (i) the sum of cash and cash
equivalents received in connection with such sale (including any cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of Indebtedness that is secured by such
asset and that is required to be repaid in connection with the sale thereof (other than
Indebtedness under the Loan Documents), (B) the out-of-pocket expenses incurred by the Borrower or
any Subsidiary in connection with such sale and (C) income taxes reasonably estimated to be
actually payable within two years of the date of the relevant asset sale as a result of any gain
recognized in connection therewith.

          “New Senior Notes” means unsecured senior notes issued to refinance, renew or replace
the Senior Notes; provided, (i) the principal amount of such Senior Notes shall not exceed
$160,000,000, (ii) the maturity date of such New Senior Notes shall be at least eight years from
issuance date of such New Senior Notes and (iii) the New Senior Notes shall be on terms and
conditions acceptable to Administrative Agent.

          “Note” means the promissory notes substantially in the form of Exhibit 1.01C
executed by the Borrower to the order of a Lender, partially evidencing the Obligations.

          “Obligations” means all of the Borrower’s obligations and duties under this Agreement
and each of the other Loan Documents.

          “One Month LIBOR” means an interest rate per annum equal to LIBOR for a one month
Interest Period on such day (or if such day is not a Business Day, the immediately preceding
Business Day).

          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

          “Participant” has the meaning set forth in Section 9.04.

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

          “Permitted Acquisition” means any acquisition (by merger or otherwise) by the Borrower
or a Subsidiary of all or substantially all the assets of, or all the Equity Interests in, a Person
or division or line of business of a Person, if:

          (a) immediately after giving effect thereto, no Default has occurred and is continuing or
would result therefrom,

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          (b) the business of such acquired Person, or such acquired business, is reasonably related to
the business of the Borrower on the Effective Date,

          (c) the requirements of Section 5.10 shall have been satisfied within the time periods
specified therein,

          (d) the Borrower and the Subsidiaries are in compliance, on a pro forma basis after giving
effect to such acquisition, with Section 6.10, Section 6.11, and Section
6.12, as if such acquisition had occurred on the first day of the relevant period for testing
compliance with such Section,

          (e) such acquisition has been approved by all necessary corporate action by the Person so
acquired or the Person selling the assets or other property so acquired by the Borrower or such
Subsidiary and

          (f) in the case of any acquisition in which the aggregate consideration paid by the Borrower
and the Subsidiaries exceeds $15,000,000, the Borrower has delivered to the Administrative Agent an
officer’s certificate to the effect set forth in clauses (a), (b), (c), (d) and (e) above, together
with all financial information reasonably requested by the Administrative Agent relating to the
Person or assets acquired and reasonably detailed calculations demonstrating satisfaction of the
requirements set forth in clauses (d) and (e) above, and has received the approval of the
Administrative Agent thereto, such approval not to be unreasonably withheld.

          “Permitted Encumbrances” means:

          (a) liens imposed by law for taxes that are not yet delinquent or that are being contested in
good faith, with adequate reserves, and the failure of such contest could not reasonably be
expected to result in a Material Adverse Effect;

          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like liens
imposed by law, arising in the ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in good faith, with adequate reserves and the
failure of such contest could not reasonably be expected to result in a Material Adverse Effect;

          (c) pledges and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or regulations;

          (d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business;

          (e) judgment liens in respect of judgments that do not constitute an Event of Default; and

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          (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of the Borrower or any Subsidiary;

provided that the term “Permitted Encumbrances” shall not include any lien securing
Indebtedness.

          “Permitted Investments” means:

          (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America or Canada (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the United States of America
or Canada), in each case maturing within one year from the date of acquisition thereof;

          (b) investments in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, a rating of A2 or better by S&P or Fitch, or P2
or better by Moody’s;

          (c) investments in certificates of deposit, banker’s acceptances and time deposits (including
Eurodollar deposits) maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or offered by, any Lender or
any domestic office of any commercial bank organized under the laws of the United States of America
or Canada or any State or Province thereof which has a combined capital and surplus and undivided
profits of not less than $500,000,000;

          (d) fully collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial institution satisfying
the criteria described in clause (c) above;

          (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange
Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P or Fitch
or Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000;

          (f) investments in corporate debt securities (including loan participations) that (a) mature
within 60 days from the date of acquisition, and (b) are rated BBB- or better by S&P or Fitch or
Baa3 or better by Moody’s at the date of acquisition;

          (g) investments in municipal securities or auction rate securities that are rated AA or better
by S&P or Fitch or Aa or better by Moody’s, provided that the Borrower has the right to put
such securities back to the issuer or seller thereof at least once every 60 days; and

          (h) investments not covered by clauses (a) through (g) above, in an amount not to exceed at
any time $5,000,000.

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Notwithstanding anything else herein to the contrary, the term “Permitted Investments” shall not
apply to nor restrict the activities of any perpetual care trust, preneed trust, or preconstruction
trust or similar entity required by and governed by federal, state or local statutes and
regulations.

          “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.

          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

          “Prime Rate” means at any time the rate of interest per annum most recently announced
by Wells Fargo at its principal office in San Francisco, as its prime rate, with the understanding
that Wells Fargo’s prime rate is one of its base rates and serves as the basis upon which effective
rates of interest are calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or publications as Wells
Fargo may designate. Each change in the prime rate will be effective on the day the change is
announced within Wells Fargo. The prime rate may not represent the lowest or best rate actually
charged to customers of Wells Fargo.

          “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

          “Required
Lenders” means, at any time, Lenders holding more than
662/3% of the sum of
the total Commitments (or, if the Commitments have terminated or expired, the Credit Exposures) at
such time, as adjusted pursuant to Section 2.19.

          “Revolving Borrowing” means a Borrowing made pursuant to Section 2.03.

          “Revolving Loan” means a Loan made pursuant to Section 2.03.

          “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

          “Security Agreement” means the Pledge and Security Agreement substantially in the form
of Exhibit 1.01D hereto of even date herewith executed by Borrower and (the Guarantors)
granting the Administrative Agent, for the benefit of the Lenders, a security interest in the
Collateral.

          “Security Documents” means the Security and Pledge Agreement, the Deposit Account
Control Agreement, the Guarantee Agreement, and any and all other security agreements, deeds of
trust, mortgages, pledges, assignments, financing statements, continuation statements, and all
other agreements and instruments at any time executed and delivered by any Person to the
Administrative Agent, for the benefit of the Lenders, to secure the payment, the performance, or
both, of all or any part of the Obligations.

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          “Senior Debt” means all Indebtedness of the Borrower and its Subsidiaries, other than
Unrestricted Subsidiaries, including, without limitation, all items listed on Schedule
6.01(b).

          “Shareholder Equity” means total shareholder equity calculated in accordance with
GAAP.

          “Senior Notes” means those certain senior notes issued by Borrower pursuant to the
Senior Notes Indenture in the original principal amount of $130,000,000 as more fully described on
Schedule 6.01(b), the Alternative Financing and the New Senior Notes (as applicable).

          “Senior Notes Indenture” means that certain Indenture dated January 27, 2005, pursuant
to which the Senior Notes were issued.

          “Solvent” means, with respect to any Person, as of any date of determination, that the
fair value of the assets of such Person (at fair valuation) is, on the date of determination,
greater than the total amount of liabilities (including contingent and unliquidated liabilities) of
such Person as of such date, and such Person does not have unreasonably small capital with which to
carry on its business.

          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject with
respect to Adjusted LIBOR, for Eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.

          “Subordinated Indebtedness” means, with respect to the Borrower and as of any date of
its issuance, any unsecured Indebtedness for borrowed money for which the Borrower is directly and
primarily obligated that is expressly subordinated to the Obligations and on terms approved by the
Administrative Agent in its reasonable discretion that (a) arises after the Effective Date, (b)
does not have any stated maturity before one year after the latest maturity of any of the
Obligations, and (c) has terms that are no more restrictive than the terms of the Loan Documents.

          “Subsidiary” means, with respect to the Borrower at any date,

          (a) any corporation, limited liability company, partnership, association or other entity the
accounts of which would be consolidated with those of the Borrower in the Borrower’s consolidated
financial statements if such financial statements were prepared in accordance with GAAP as of such
date, and

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          (b) any other corporation, limited liability company, partnership, association or other entity

               (i) of which securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled or held, or

               (ii) that is, as of such date, otherwise Controlled, by the Borrower or one or more
subsidiaries of the Borrower or by the Borrower and one or more subsidiaries of the Borrower,
provided, that Unrestricted Subsidiaries shall not be bound by this Agreement and, for
purposes of this Agreement, shall not be considered to be Subsidiaries.

          “Swap Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a
Swap Agreement.

          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

          “Transactions” means the execution, delivery and performance by the Borrower of this
Agreement, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of
Credit hereunder.

          “Trust Preferred Stock” means the 7% Convertible Preferred Securities, Term Income
Deferrable Equity Securities, issued by Carriage Services Capital Trust.

          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to
LIBOR or the Base Rate.

          “Unrestricted Subsidiary” means (i) as of the Effective Date, Carriage Services
Capital Trust and Aria Cremation Services, LLC and (ii) any other Person so designated by the
Borrower in writing to the Administrative Agent and agreed to by the Administrative Agent, such
agreement not to be unreasonably withheld or delayed; provided that a majority of such
Person’s outstanding Voting Shares are controlled by the Borrower or one of its Subsidiaries.

          “Wells Fargo” means Wells Fargo Bank, N.A.

          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

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          Section 1.02 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan”). Borrowings
also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).

          Section 1.03 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties.

          Section 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time;

          provided that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any change occurring after
the Effective Date in GAAP or in the application thereof on the operation of such provision (or if
the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), and,

          further provided, that regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be interpreted on the
basis of GAAP as in effect before such change, and shall continue to be applied as if immediately
before such change shall have become effective, until such notice shall have been withdrawn or such
provision amended in accordance herewith.

ARTICLE II

The Credits

          Section 2.01 Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving
Loans to the Borrower from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) such Lender’s Credit Exposure exceeding such Lender’s Commitment
as set forth on Schedule 2.01 or (b) the sum of the total Credit Exposures exceeding the
total Commitments. Within the foregoing limits

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and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

          Section 2.02 Revolving Loans and Borrowings.

          (a) Each Revolving Loan shall be made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be responsible for any
other Lender’s failure to make Loans as required.

          (b) Each Revolving Borrowing shall be comprised entirely of Base Rate Loans or Eurodollar
Loans as the Borrower may request in accordance herewith; provided that all new Borrowings
made on the Effective Date or conversions of existing Base Rate Loans must be made as Base Rate
Borrowings, unless the Borrower shall have notified the Administrative Agent in writing not later
than 10:00 a.m., Houston time, three (3) Business Days before the Effective Date of its election
for the initial Borrowing to be a Eurodollar Borrowing. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such
Revolving Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Revolving Loan in accordance with the terms of this Agreement.

          (c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less
than $1,000,000. At the time that each Base Rate Revolving Borrowing is made, such Borrowing shall
be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000;
provided that an Base Rate Revolving Borrowing may be in an aggregate amount that is equal
to the entire unused balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e). Borrowings of more
than one Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of 6 Eurodollar Revolving Borrowings outstanding.

          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Revolving Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.

          Section 2.03 Requests for Revolving Borrowings. To request a Revolving Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone, electronic mail, or
via the Administrative Agent’s
designated and proprietary electronic transaction system (a) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, Houston time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an Base Rate Borrowing, not later than 12:00 noon, Houston
time, on the date of the proposed Borrowing; provided that any such notice of a Base Rate
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e) may be given not later than 10:00 a.m., Houston time, on the date of the proposed
Borrowing. Each such Borrowing Request shall be irrevocable and any telephonic Borrowing Request
shall be

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confirmed promptly by hand delivery or telecopy or electronic mail to the Administrative
Agent of a written Borrowing Request. Each Borrowing Request shall specify the following
information in compliance with Section 2.02:

     (i) the aggregate amount of the requested Borrowing;

     (ii) the date of such Borrowing, which shall be a Business Day;

     (iii) whether such Borrowing is to be an Base Rate Borrowing or a Eurodollar Borrowing;

     (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and

     (v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving
Borrowing shall be an Base Rate Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance
with this Section, the Administrative Agent shall advise each Lender of the details thereof and of
the amount f such Lender’s Loan to be made as part of the requested Borrowing.

          Section 2.04 Letters of Credit.

          (a) General. Subject to the terms and conditions set forth herein, the Borrower may
request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to
the Administrative Agent and the Issuing Bank, at any time and from time to time during the
Availability Period. In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the Issuing Bank)
to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit,
or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount
of such Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Issuing Bank, the Borrower also shall submit a letter of credit

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application on the
Issuing Bank’s standard form in connection with any request for a Letter of Credit;
provided that (a) in the event of any conflict between such application and this Agreement,
this Agreement shall control, and (b) any grant of a Lien contained in such application shall be
ineffective so long as this Agreement remains in place. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect
to such issuance, amendment, renewal or extension the total Credit Exposures shall not exceed the
total Commitments.

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date;
provided, a Letter of Credit may provide for a later expiration date if, simultaneously
with the issuance (or if applicable, the renewal) thereof, the Borrower pledges to the Issuing
Bank, in a manner reasonably satisfactory to it, funds in an account with the Issuing Bank equal to
105% of the face amount of such Letter of Credit.

          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.
In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or
the occurrence and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever.

          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent an amount equal to such LC Disbursement not later than 11:00 a.m.,
Houston time, on the date that such LC Disbursement is made, if the Borrower shall have
received notice of such LC Disbursement prior to 9:00 a.m., Houston time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date, then not later than
11:00 a.m., Houston time, on (i) the Business Day that the Borrower receives such notice, if such
notice is received prior to 9:00 a.m., Houston time, on the day of receipt, or (ii) the Business
Day immediately following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that, if such LC Disbursement
is not less than $1,000,000 the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be

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financed with an Base
Rate Revolving Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the resulting Base Rate
Revolving Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent
shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of
such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section 2.05 with
respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant
to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of
Base Rate Revolving Loans as contemplated above) shall not constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.

          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, or (iii) any other
event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but
for the provisions of this Section, constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent,
the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the extent permitted
by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to
exercise care when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of
negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court
of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole

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discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.

          (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed electronically or by telecopy) of such demand for payment and whether the
Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement.

          (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to Base Rate Revolving Loans; provided
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.11(c) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after
the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such payment.

          (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall
pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.10(b). From and after the effective date of any such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall require. After the replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this Agreement
with respect to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

          (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives notice from the Administrative Agent or the Required
Lenders demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the Administrative Agent and
for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided that the

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obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article VII. Such deposit
shall be held by the Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such account. Other than
any interest earned on the investment of such deposits, which investments shall be in any of the
types listed in paragraphs (a) through (e) of the defined term “Permitted Investments” in this
agreement, and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest
or profits, if any, on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of Required Lenders),
be applied to satisfy other obligations of the Borrower to the Lenders under this Agreement. If
the Borrower is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of Default have been cured or
waived.

          Section 2.05 Funding of Borrowings.

          (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 2:00 p.m., Houston time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly crediting the
amounts so received, in like funds, to an account of the Borrower maintained with the
Administrative Agent in Houston and designated by the Borrower in the applicable Borrowing Request;
provided that Base Rate Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.04(e) shall be remitted by the Administrative Agent
to the Issuing Bank.

          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the Borrower, the interest rate applicable to such Borrowing (without any
obligation to pay any break funding payment under Section 2.14 in connection with such
payment). If such Lender pays such amount to the Administrative Agent,

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then such amount shall
constitute such Lender’s Loan included in such Borrowing. If the Borrower pays such amount to the
Administrative Agent, it shall not relieve the defaulting Lender of its legal responsibility for
its default.

          Section 2.06 Interest Elections.

          (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate Borrowing.

          (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone, electronic mail, or via the Administrative Agent’s designated
and proprietary electronic transaction system by the time that a Borrowing Request would be
required under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the
Type resulting from such election to be made on the effective date of such election. Each such
Interest Election Request shall be irrevocable and any telephonic Interest Election Request shall
be confirmed promptly by hand delivery or telecopy or electronic mail to the Administrative Agent
of a written Interest Election Request in a form approved by the Administrative Agent and signed by
the Borrower.

          (c) Each Interest Election Request shall specify the following information in compliance with
Section 2.02:

     (i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

     (iii) whether the resulting Borrowing is to be an Base Rate Borrowing or a Eurodollar
Borrowing; and

     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration.

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          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be
converted to an Base Rate Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an Base Rate Borrowing at the end of the
Interest Period applicable thereto.

          Section 2.07 Termination and Reduction of Commitments.

          (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

          (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $1,000,000 and not less than $1,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.09, the Credit Exposure would exceed the total
Commitments; provided that for purposes of this paragraph, the LC Exposure shall be deemed
to be zero if there exists either cash collateral equal to 105% of the LC Exposure or one or more
back-up letters of credit for the benefit of the Issuing Bank in form and substance and issued by
issuer(s) satisfactory to the Issuing Bank in its sole discretion. Upon the provision of such cash
collateral or back-up letters of credit and the payment in full of all Obligations, then the
Lenders shall be released from their obligations under Section 2.04(d), and all letter of
credit fees accruing after the termination of the Commitments shall be for the account of the
Issuing Bank.

          (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Commitments under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Borrower may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of
the Commitments shall be made ratably among the Lenders in accordance with their respective
Commitments.

          Section 2.08 Repayment of Loans; Evidence of Debt.

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          (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan on the Maturity
Date.

          (b) Each Lender shall maintain in accordance with its usual practice a record evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

          (c) The Administrative Agent shall maintain records in which it shall record (i) the amount of
each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

          (d) The entries made in the records maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.

          (e) Any Lender may request that Loans made by it be evidenced by a Note. In such event, the
Borrower shall prepare, execute and deliver to such Lender a Note payable to the order of such
Lender (or, if requested by such Lender, to such Lender and its registered assigns). Thereafter,
the Loans evidenced by such Note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory notes in
substantially the form of Exhibit 1.01B payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its registered assigns).

          Section 2.09 Voluntary Prepayment of Loans.

          (a) The Borrower shall have the right at any time and from time to time to prepay any
Revolving Borrowing in whole or in part, subject to prior notice in accordance with paragraph (b)
of this Section.

          (b) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than
12:00 noon, Houston time, three Business Days before the date of prepayment, or (ii) in the case of
prepayment of an Base Rate Revolving Borrowing, not later than 12:00 noon, Houston time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date
and the principal amount of each Borrowing or portion thereof to be prepaid; provided that,
if a notice of prepayment is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.07, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with Section 2.07. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each

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partial prepayment of any Revolving Borrowing shall be in an amount that would be
permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in
Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.11.

          Section 2.10 Fees.

          (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee, which shall accrue at the Commitment Fee Rate described in the definition of
“Applicable Margin” on the daily undrawn amount of the Commitment of such Lender during the period
from and including the Effective Date to but excluding the date on which such Commitment
terminates. The face amount of any outstanding Letters of Credit shall be considered to be drawn
under the Commitment for purposes of calculating commitment fees. Accrued commitment fees shall be
payable in arrears on the last day of March, June, September and December of each year and on the
date on which the Commitments terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but excluding the last
day).

          (b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender
a participation fee with respect to its participations in Letters of Credit, which shall accrue at
the same Applicable Margin used to determine the interest rate applicable to Eurodollar Revolving
Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and including the Effective
Date to but excluding the later of the date on which such Lender’s Commitment terminates and the
date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the date of termination
of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through
and including the last day of March, June, September and December of each year shall be payable on
the third Business Day following such last day, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the Commitments terminate
shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

          (c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.

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          (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of facility fees and participation fees, to the Lenders. Fees paid shall
not be refundable under any circumstances.

          Section 2.11 Interest.

          (a) The Loans comprising each Base Rate Borrowing shall bear interest at the Base Rate plus
the Applicable Margin.

          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at LIBOR for the
Interest Period in effect for such Borrowing plus the Applicable Margin.

          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2.0% plus
the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2.0% plus the rate applicable to Base Rate Loans as
provided in paragraph (a) of this Section.

          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an Base Rate Revolving Loan prior
to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Base Rate at times when the Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first day but excluding
the last day). The applicable Base Rate, Adjusted LIBOR or LIBOR shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest error.

          Section 2.12 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:

     (i) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining Adjusted
LIBOR or LIBOR, as applicable, for such Interest Period; or

     (ii) the Administrative Agent is advised by the Required Lenders that Adjusted LIBOR or
LIBOR, as applicable, for such Interest Period will not adequately

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and fairly reflect the
cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included
in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing
to, or continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective, and
(ii) any request for a new Eurodollar Borrowing shall be made as an ABR Borrowing.

          Section 2.13 Increased Costs.

          (a) If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement already reflected in Adjusted LIBOR or in
the Base Rate, as applicable) or the Issuing Bank; or

     (ii) impose on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of
Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, or an after-tax basis for such
additional costs incurred or reduction suffered.

          (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements (except any such change already reflected in Adjusted LIBOR or the Base Rate, as
applicable) has or would have the effect of reducing the rate of return on such
Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing
Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the
Issuing Bank’s holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s
holding company on an after-tax basis for any such reduction suffered.

          (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company, as

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the case may be,
as specified in paragraph (a) or (b) of this Section, with supporting calculation in reasonable
detail, shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within ten (10) days after receipt thereof.

          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided that the Borrower shall not be required to compensate
a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than one hundred eighty (180) days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

          Section 2.14 Break Funding Payments. In the event of (a) the payment of any principal
of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant
hereto (regardless of whether such notice may be revoked under Section 2.09(b) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.18, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBOR that would have
been applicable to such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such
principal amount for such period at the interest rate which such Lender would bid were it to
bid, at the commencement of such period, for dollar deposits of a comparable amount and period from
other banks in the Eurodollar market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section, with supporting
calculations in reasonable detail, shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

          Section 2.15 Taxes.

          (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be
made free and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional sums payable

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under
this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
imposed on the Borrower in accordance with applicable law.

          (c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within 30 days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error. Notwithstanding anything herein to the contrary, neither the Administrative Agent, the
Issuing Bank nor any Lender shall be indemnified for any Indemnified Taxes or Other Taxes hereunder
unless the Administrative Agent, the Issuing Bank or such Lender, as applicable, shall make written
demand on the Borrower for such reimbursement no later than six (6) months after the earlier of (i)
the date on which the relevant Governmental Authority makes written demand upon the Administrative
Agent, the Issuing Bank or such Lender, as applicable, and (ii) the date on which the
Administrative Agent, the Issuing Bank or such Lender, as applicable, as made payment of such
Indemnified Taxes or Other Taxes; provided that if the Indemnified Taxes or Other Taxes imposed or
asserted giving rise to such claims are retroactive, then the 6-month period referred to above
shall be extended to include the retroactive effect thereof.

          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement or under any other Loan
Document shall deliver to the Borrower (with a copy to the Administrative Agent), on or prior to
the date on which such Foreign Lender becomes a Lender hereunder (and from time to time thereafter)
at the time or times prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent), such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower or the Administrative Agent as will permit such
payments to be made without withholding or at a reduced rate of withholding. In addition, each
Lender, on or prior to the date on which it becomes a Lender hereunder (and from time to time
thereafter at the time or times prescribed by

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applicable law or reasonably requested by the
Borrower or the Administrative Agent), shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine that such Lender is not subject to United
States federal backup withholding tax and to determine whether or not such Lender is subject to
United States information reporting requirements.

               Without limiting the generality of the foregoing, a Foreign Lender shall deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be reasonably requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a Lender hereunder (and
from time to time thereafter at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent), whichever of the following is applicable:

     (i) duly completed copies of Internal Revenue Service Form W-8BEN (or any successor
form) claiming eligibility for benefits of an income tax treaty to which the United States
is a party;

     (ii) duly completed copies of Internal Revenue Service Form W-8ECI (or any successor
form);

     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (A) a certificate to the effect that
such Foreign Lender is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, (2) a “1 percent shareholder” of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in Section
881(c)(3)(C) of the Code, and (B) duly completed copies of Internal Revenue Service Form
W-8BEN (or any successor form); or

     (iv) any other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States federal withholding tax duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the Borrower to
determine the withholding or deduction required to be made.

               Without limiting any of the foregoing, each Lender further agrees that it shall (i) promptly
notify the Borrower of any change in circumstances which would modify or render invalid any claimed
exemption or reduction in withholding taxes with respect to payments made hereunder or under any
other Loan Document; and (ii) in the event any previous form delivered by such Lender pursuant to
this Section 2.15(e) expires or becomes obsolete or inaccurate or an event or change in law
occurs requiring a change in the previous form delivered by such Lender, promptly deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be reasonably requested by
the recipient) any properly completed and executed documentation prescribed by applicable law as
will permit payments hereunder or under other Loan Documents to be made without, or at a reduced
rate of, withholding if such Lender continues to be so entitled.

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          (f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to this Section
2.15, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 2.15 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses
of the Administrative Agent or such Lender and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative
Agent or such Lender is required to repay such refund to such Governmental Authority. This Section
shall not be construed to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.

          (g) In the case of a Lender that would be subject to withholding tax imposed by FATCA on
payments made on the account of any obligation of the Borrower hereunder if such Lender fails to
comply with the applicable requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall provide such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Administrative Agent or the Borrower as may be
necessary for the Borrower to comply with its obligations under FATCA, to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct
and withhold from any such payments.

          Section 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

          (a) The Borrower shall make each payment required to be made by it hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 2.13, Section 2.14, or Section 2.15 or otherwise) prior to 12:00
noon, Houston time, on the date when due, in immediately available funds, without set off or
counterclaim. Any amounts received after such time on any date shall be deemed to have been
received on the next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 1100 Louisiana, Third
Floor, Houston, Texas 77002, except payments to be made directly to the Issuing Bank as expressly
provided herein and except that payments pursuant to Section 2.13, Section 2.14, or
Section 2.15 or Section 9.03 shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall
be extended to the next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments hereunder shall
be made in dollars.

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          (b) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then
due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal and unreimbursed LC Disbursements then due to such parties.

          (c) If any Lender shall, by exercising any right of set off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Revolving Loans or
participations in LC Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements
and accrued interest thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement
or any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation as fully as if
such Lender were a direct creditor of the Borrower in the amount of such participation.

          (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

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          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(d), Section 2.04(e), Section 2.05(b), Section 2.16(d)
or Section 9.03(c) then the Administrative Agent may, in its discretion and notwithstanding
any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative
Agent for the account of such Lender and for the benefit of the Administrative Agent or the Issuing
Bank to satisfy such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash
collateral for, and application to, any future funding obligations of such Lender under such
Sections; in the case of each of (i) and (ii) above, in any order as determined by the
Administrative Agent in its discretion.

          Section 2.17 Mitigation Obligations; Replacement of Lenders.

          (a) If any Lender requests compensation under Section 2.13, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.13 or Section 2.15, as the case may be, in the future
and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or assignment.

          (b) If any Lender requests compensation under Section 2.13, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, or if any Lender becomes a Defaulting Lender, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of
all other amounts) and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.13 or payments required to be made pursuant to Section
2.15, such assignment will result in a reduction in such compensation or payments in the
future. A Lender shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

          (c) If any Lender fails to consent to an issue requiring approval in an instance where Lenders
holding greater than 66 2/3% of the aggregate amount of the Loans and unused Commitments have
provided a consent, then the Borrower may require such non-consenting

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Lender to assign all of its
outstanding Loans and unused Commitments, at par, to another lender acceptable to the Borrower and
the Administrative Agent which is not an Affiliate of the Borrower.

          Section 2.18 Increase in the Commitments. The Borrower may, by written notice to the
Administrative Agent executed by the Borrower and one or more financial institutions (any such
financial institution referred to in this Section being called an “Increasing Lender”), which may
include any Lender, cause the Commitments to be extended by the Increasing Lenders (or cause the
Commitments of the Increasing Lenders to be increased, as the case may be) in an amount for each
Increasing Lender set forth in such notice; provided, that (i) each extension of new
Commitments or increase in existing Commitments pursuant to this paragraph shall result in the
aggregate Commitments being increased by no less than $5,000,000, (ii) no extension of new
Commitments or increase in existing Commitments pursuant to this paragraph may result in the
aggregate Commitments exceeding $75,000,000, (iii) each Increasing Lender, if not already a Lender
hereunder, shall be subject to the approval of the Administrative Agent (which approval shall not
be unreasonably withheld) and (iv) each Increasing Lender, if not already a Lender hereunder, shall
become a party to this Agreement by completing and delivering to the Administrative Agent a duly
executed accession agreement in a form reasonably satisfactory to the Administrative Agent and the
Borrower (an “Accession Agreement”). New Commitments and increases in Commitments shall
become effective on the date specified in the applicable notices delivered pursuant to this
paragraph. Upon the effectiveness of any Accession Agreement to which any Increasing Lender is a
party, (i) such Increasing Lender shall thereafter be deemed to be a party to this Agreement and
shall be entitled to all rights, benefits and privileges accorded a Lender hereunder and subject to
all obligations of a Lender hereunder and (ii) Schedule 2.01 shall be deemed to have been
amended to reflect the Commitment of such Increasing Lender as provided in such Accession
Agreement. Upon the effectiveness of any increase pursuant to this Section in the
Commitment of a Lender already a party hereto, Schedule 2.01 shall be deemed to have
been amended to reflect the increased Commitment of such Lender. Notwithstanding the foregoing, no
increase in the aggregate Commitments (or in the Commitment of any Lender) shall become effective
under this Section unless, on the date of such increase, the Administrative Agent shall have
received a certificate, dated as of the effective date of such increase and executed by a Financial
Officer of the Borrower, to the effect that the conditions set forth in paragraphs (i) and (ii) of
Section 4.02 shall be satisfied (with all references in such paragraphs to a Borrowing
being deemed to be references to such increase and attaching resolutions of the Borrower approving
such increase). Following any extension of a new Commitment or increase of a Lender’s Commitment
pursuant to this paragraph, any Revolving Loans outstanding prior to the effectiveness of such
increase or extension shall continue to be outstanding until the end of the respective Interests
Periods applicable thereto, and shall then be repaid and, if the Borrower shall so elect,
refinanced with new Revolving Loans made pursuant to Section 2.01 ratably in accordance
with the Commitments in effect following such extension or increase.

          Section 2.19 Defaulting Lenders. Notwithstanding any provision of this Agreement to
the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender:

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          (a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting
Lender pursuant to Section 2.10(a);

          (b) the Commitment and Credit Exposure of such Defaulting Lender shall not be included in
determining whether all Lenders or the Required Lenders have taken or may take any action hereunder
(including any consent to any amendment or waiver pursuant to Section 9.02),
provided that any waiver, amendment or modification requiring the consent of all Lenders or
each affected Lender which affects such Defaulting Lender differently than other affected Lenders
shall require the consent of such Defaulting Lender, unless the effect of same is to eliminate the
Defaulting Lender’s Commitment (which shall require only the consent of the Lenders that are not
Defaulting Lenders);

          (c) if any LC Exposure exists at the time a Lender becomes a Defaulting Lender then:

     (i) all or any part of such LC Exposure shall be reallocated among the non-Defaulting
Lenders in accordance with their respective Applicable Percentages but only to the extent
(x) the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting
Lender’s LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments
and (y) the conditions set forth in Section 4.02 are satisfied at such time;

     (ii) if the reallocation described in clause (i) above cannot, or can only partially,
be effected, the Borrower shall within one Business Day following notice by the
Administrative Agent cash collateralize such Defaulting Lender’s LC Exposure in
accordance with the procedures set forth in Section 4.02 for so long as such LC
Exposure is outstanding;

     (iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC
Exposure pursuant to Section 2.19(c), the Borrower shall not be required to pay any
fees to such Defaulting Lender pursuant to Section 2.10(b) with respect to such
Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is
cash collateralized;

     (iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
Section 2.19(c), then the fees payable to the Lenders pursuant to Section 2.10(a) and
Section 2.10(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable
Percentages; and

     (v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.19(c), then, without prejudice to any rights or
remedies of the Issuing Bank or any Lender hereunder, all facility fees that otherwise would
have been payable to such Defaulting Lender (solely with respect to the portion of such
Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit
fees payable under Section 2.10(b) with respect to such Defaulting Lender’s LC
Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized
and/or reallocated; and

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          (d) so long as any Lender is a Defaulting Lender, the Issuing Bank shall not be required to
issue, amend or increase any Letter of Credit, unless it is reasonably satisfied that the related
exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash
collateral will be provided by the Borrower in accordance with Section 2.19(c), and
participating interests in any such newly issued or increased Letter of Credit shall be allocated
among non-Defaulting Lenders in a manner consistent with Section 2.19(c)(i) (and Defaulting
Lenders shall not participate therein).

          (e) In the event that the Administrative Agent, the Borrower and the Issuing Bank each agrees
that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a
Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion
of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of
the other Lenders as the Administrative Agent shall determine may be necessary in order for such
Lender to hold such Loans in accordance with its Applicable Percentage.

ARTICLE III

Representations and Warranties

          The Borrower represents and warrants to the Lenders that:

          Section 3.01 Organization; Powers. Except as otherwise set forth on Schedule 3.01, each of the Borrower and the
Subsidiaries is duly organized and validly existing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in, and is in good
standing in, its jurisdiction of organization and every jurisdiction where such qualification is
required.

          Section 3.02 Authorization; Enforceability. The Transactions are within the Borrower’s
corporate powers and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the Borrower and
constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

          Section 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not require
any consent or approval of, registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other organizational documents
of the Borrower or any Subsidiary or any order of any Governmental Authority, (c) will not violate
or result in a default under any indenture, agreement or other instrument binding upon the Borrower
or any Subsidiary or its assets, or give rise to a right thereunder to require any payment to be
made by the Borrower or any Subsidiary, and (d) will

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not result in the creation or imposition of
any Lien on any asset of the Borrower or any Subsidiary.

          Section 3.04 Financial Condition; No Material Adverse Change.

          (a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows as of and for the fiscal year ended
December 31, 2010, reported on by KPMG LLC, independent public accountants. Such financial
statements present fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP.

          (b) Since December 31, 2010, there has been no material adverse change in the business,
assets, operations, prospects or condition, financial or otherwise, of the Borrower and the
Subsidiaries, taken as a whole.

          Section 3.05 Properties.

          (a) Each of the Borrower and the Subsidiaries has good title to, or valid leasehold interests
in, all its real and personal property material to its business, except for minor defects in title
that do not interfere with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.

          (b) Each of the Borrower and the Subsidiaries owns, or is licensed to use, all trademarks,
trade names, copyrights, patents and other intellectual property material to its business, and the
use thereof by the Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

          Section 3.06 Litigation and Environmental Matters.

          (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the
Borrower or any Subsidiary (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve this Agreement or the Transactions.

          (b) Except with respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any
Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental Liability.

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          (c) Since the Effective Date, there has been no change in the status of the Disclosed Matters
that, individually or in the aggregate, has resulted in, or materially increased the likelihood of,
a Material Adverse Effect.

          Section 3.07 Compliance with Laws and Agreements. Each of the Borrower and the
Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other instruments binding upon
it or its property, except where any failure to comply, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.

          Section 3.08 Investment and Holding Company Status. Neither the Borrower nor any
Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment
Company Act of 1940.

          Section 3.09 Taxes. Each of the Borrower and the Subsidiaries has timely filed or caused to be filed all Tax
returns and reports required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside
on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably
be expected to result in a Material Adverse Effect.

          Section 3.10 ERISA. No ERISA Event has occurred that, when taken together with all
other such ERISA Events that have occurred would reasonably be expected to result in a Material
Adverse Effect. The aggregate actuarial present value of accumulated plan benefits of all Plans
(determined utilizing the assumptions used for purposes of ASC Topic 960, Defined Benefit Pension
Plans) did not, as of the most recent valuation dates reflected in Borrower’s annual financial
statements, exceed by more than $10,000,000 the aggregate fair market value of the assets of such
Plans as of the most recent valuation dates reflected in Borrower’s annual financial statements.

          Section 3.11 Disclosure. Other than the Disclosed Matters there are no agreements,
instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all
other matters known to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

          Section 3.12 Subsidiaries. Schedule 3.12 sets forth the name of, and the
ownership interest of the Borrower and any Subsidiary in, each Subsidiary and identifies which are
Foreign Subsidiaries as of the Effective Date. Except as set forth on Schedule 3.12, the

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shares of capital stock or other ownership interests of each Subsidiary are owned by the Borrower,
directly or indirectly, free and clear of all Liens.

          Section 3.13 Margin Stock. Neither the Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock (as defined in Registration U of the Board). The
proceeds of the Loans and the Letters of Credit will not be used in a way that will result in any
of the Loans or the Letters of Credit under this Agreement being violative of Regulation U or
Regulation X of the Board.

          Section 3.14 Use of Proceeds. The proceeds of the Loans shall be used to repay
existing Indebtedness, for working capital and for general corporate purposes (including, without
limitation, Permitted Acquisitions) of, in each case, the Borrower and the Subsidiaries. The
Borrower represents and warrants to the Lenders and the Administrative Agent that all Loans will be
for business, commercial, investment or other similar purpose and not primarily for personal,
family, household or agricultural use, as such terms are used in the Texas Finance Code.

          Section 3.15 Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurers and such insurance is in amounts and provides
coverage that are reasonable and customary for Persons engaged in businesses similar to those
conducted by the Borrower and its Subsidiaries.

          Section 3.16 Swap Agreements. Neither Borrower nor any of its Subsidiaries is a party
to any Swap Agreement as of the Effective Date except those listed on Schedule 3.16.

          Section 3.17 Solvency. The Borrower is, and the Borrower and its Subsidiaries on a
consolidated basis are, Solvent.

ARTICLE IV

Conditions

          Section 4.01 Effective Date. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on
which the Administrative Agent (or its counsel) shall have received from each Loan Party, in form
and substance satisfactory to it:

          (a) either (i) a counterpart of this Agreement signed by the Borrower or (ii) written evidence
satisfactory to the Administrative Agent (which may include electronic or telecopy transmission of
signed signature pages) that the Borrower has signed a counterpart of this Agreement;

          (b) a Note for each Lender requesting a Note;

          (c) fully executed Security Documents including the Guarantee Agreement (or electronic or
telecopy copy of a signed signature page thereof) from each Domestic Subsidiary;

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          (d) favorable written opinions (addressed to the Administrative Agent and the Lenders and
dated the Effective Date) of Fulbright & Jaworski L.L.P., counsel for the Loan Parties, and the
general counsel of the Borrower and covering such matters relating to the Loan Parties, this
Agreement or the Transactions as the Required Lenders shall reasonably request. The Borrower
hereby requests such counsel to deliver such opinion;

          (e) such documents and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to the Borrower, this
Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent
and its counsel;

          (f) a certificate, dated the Effective Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (i) and (ii) of Section 4.02;

          (g) (i) satisfactory audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows of the Borrower for the two most recent fiscal years ended
prior to the Effective Date as to which such financial statements are available and (ii)
satisfactory unaudited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows of the Borrower for each quarterly period ended subsequent to
the date of the latest financial statements delivered pursuant to clause (i) of this Section
4.01(g) as to which such financial statements are available;

          (h) For each Revolving Borrowing, a Borrowing Request (substantially in the form of
Exhibit 4.01(h) hereto);

          (i) evidence of liability and hazard insurance for each Loan Party in such amounts and on such
terms as are standard and customary in the industry in which said entities conduct their
operations;

          (j) all information regarding the Borrower and the Subsidiaries that it is required to collect
pursuant to the USA Patriot Act;

          (k) a copy of the organizational chart of Borrower and each of its Subsidiaries;

          (l) evidence reasonably satisfactory to the Administrative Agent of the release of all liens
on any of Borrower’s or its Subsidiaries’ non-real estate properties except for liens permitted
hereunder (including under Section 4.03).

          (m) all fees and other amounts due and payable on or prior to the Effective Date, including,
to the extent invoiced, reimbursement or payment of all out of pocket expenses required to be
reimbursed or paid by the Borrower hereunder; and

          (n) such other documents or items as the Administrative Agent may reasonably request.

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          Section 4.02 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of
Credit, is subject to the satisfaction of the following conditions:

     (i) The representations and warranties of the Borrower set forth in this Agreement
shall be true and correct on in all material respects and as of the date of such Borrowing
or the date of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable.

     (ii) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, (i) no
Default shall have occurred and be continuing and (ii) there shall have been no events that
have, or could reasonably be expected to cause, a Material Adverse Effect since the date of
the last such issuance or Borrowing.

     (iii) A Borrowing Request.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (i) and (ii) of this Section.

          Section 4.03 Condition Subsequent. Within 45 days after the Effective Date (or such
later date as may be acceptable to the Administrative Agent), evidence reasonably satisfactory to
the Administrative Agent of the release of all liens on any of the Borrower’s or its Subsidiaries’
real estate properties, except for liens permitted under or required by the Loan Documents.

ARTICLE V

Affirmative Covenants

          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:

          Section 5.01 Financial Statements; Ratings Change and Other Information. The Borrower
will furnish to the Administrative Agent (in electronic or hard copy form):

     (i) within 95 days after the end of each fiscal year of the Borrower, its audited
consolidated balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by
KPMG, LLP or other independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of operations of

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the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;

     (ii) within 50 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, its consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;

     (iii) concurrently with any delivery of financial statements under clause (i) or (ii)
above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.01, Section
6.10, Section 6.11 and Section 6.12 (in the form of compliance
certificate attached hereto as Exhibit 5.01) and (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying such
certificate;

     (iv) thirty (30) days prior to the end of its Fiscal Year, an annual forecast of the
Borrower and the Subsidiaries for the following fiscal year, including a separate line item
budget for Growth Capital Expenditures;

     (v) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Borrower or any Subsidiary with
the Securities and Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, as the case may be;

     (vi) promptly following the occurrence thereof, notice of any change in any rating of
the Borrower by Moody’s, S&P or Fitch, if applicable; and

     (vii) promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Borrower or any Subsidiary, or
compliance with the terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.

Documents required to be delivered pursuant to this Section 5.01 (to the extent included in
materials file with the SEC) may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date on which the Borrower posts such documents or provides a link
thereto on the Borrower’s website on the Internet at www.carriageservices.com, or becomes

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available at www.sec.gov. The Borrower shall notify the Administrative Agent and each Lender by
facsimile or electronic mail of the posting of any such documents and provide to the Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.

          Section 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent prompt written notice of the following:

     (i) the occurrence of any Default;

     (ii) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate
thereof that, if adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

     (iii) the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liabilities of the
Borrower and the Subsidiaries increasing after the Effective Date in an aggregate amount
exceeding $1,000,000; and

     (iv) any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.

          Section 5.03 Existence; Conduct of Business. The Borrower will, and will cause each
Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business unless the failure to do so could not reasonably be
expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section 6.04.

          Section 5.04 Payment of Obligations. The Borrower will, and will cause each Subsidiary
that is not an Unrestricted Subsidiary to pay its obligations, including Tax liabilities, and will
cause all Subsidiaries to pay their respective Tax Liabilities, which, in each case, if not paid,
could result in a Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the
validity or amount thereof is being contested in good faith by appropriate proceedings and (b)
the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto
in accordance with GAAP.

          Section 5.05 Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted.

     Section 5.06 Books and Records; Inspection Rights. The Borrower will, and will cause
each Subsidiary to, keep proper books of record and account in which full, true and

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correct entries
are made of all dealings and transactions in relation to its business and activities. The Borrower
will, and will cause each Subsidiary to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at such reasonable times
and as often as reasonably requested.

          Section 5.07 Compliance with Laws. The Borrower will, and will cause each Subsidiary
to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, including, without limitation, Environmental Laws, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

          Section 5.08 Use of Proceeds and Letters of Credit. The proceeds of the Loans shall be
used to repay existing Indebtedness, for working capital to pay fees and expenses in connection
with the Loans, and for general corporate purposes (including, without limitation, Permitted
Acquisitions) of, in each case, the Borrower and the Subsidiaries. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations T, U and X. Letters of Credit will be
issued only to support the general corporate purposes of the Borrower and the Subsidiaries.

          Section 5.09 Insurance. The Borrower will, and will cause each Subsidiary to,
maintain, with financially sound and reputable insurance companies, insurance in such amounts (with
no greater risk retention) and against such risks as are customary among companies of established
reputation engaged in the same or similar businesses and operating in the same or similar
locations. The Borrower will furnish to the Lenders, upon request of the Administrative Agent,
information in reasonable detail as to the insurance so maintained.

          Section 5.10 Required Guarantors. If any Domestic Subsidiary is formed or acquired after the Effective Date, the Borrower
will, within ten (10) Business Days, notify the Administrative Agent and the Lenders thereof and
promptly but in no event later than twenty (20) Business Days after such formation or acquisition
provide a Joinder Agreement or other satisfactory evidence of the execution of all applicable
Security Documents in respect of such subsidiary and cause such Subsidiary to execute a Guarantee
Agreement or a Joinder Agreement in respect thereof.

ARTICLE VI

Negative Covenants

          Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:

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          Section 6.01 Indebtedness Covenant. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

          (a) Indebtedness created under the Loan Documents;

          (b) Indebtedness existing on the Effective Date and set forth on Schedule 6.01(b)
hereto and extensions, renewals and replacements of any such Indebtedness including the Alternative
Financing or the issuance of the New Senior Notes that unless otherwise provided herein do not
increase the outstanding principal amount or change the parties directly or indirectly responsible
for payment thereof; provided that any such Alternative Financing or New Senior Notes
refinancing (A) shall be unsecured, (B) shall not mature before a date eight years from such new
issuance date, and (C) shall not be deemed to constitute Indebtedness;

          (c) Subordinated Indebtedness;

          (d) Indebtedness of the Borrower to any Domestic Subsidiary, other than Unrestricted
Subsidiaries, and of any Subsidiary, other than Unrestricted Subsidiaries to the Borrower or any
other Domestic Subsidiary;

          (e) Unless otherwise approved by the Administrative Agent, in addition to any other
Indebtedness permitted hereunder, Indebtedness of the Borrower or any Subsidiary incurred after the
Effective Date as consideration for Permitted Acquisitions up to a maximum of $15,000,000
outstanding at any one time;

          (f) Indebtedness of the Borrower or any Subsidiary incurred after the Effective Date to
finance the acquisition, construction or improvement of any fixed or capital assets, including
Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any
such assets, or secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that
do not increase the outstanding principal amount or change the parties directly or indirectly responsible for
the payment thereof up to a maximum of $15,000,000;

          (g) Indebtedness of any Subsidiary in existence (but not incurred or created in connection
with an acquisition) on the date on which such Subsidiary is acquired by the Borrower,
provided (i) neither the Borrower nor any of the Subsidiaries existing before giving effect
to such acquisition has any obligation with respect to such Indebtedness, (ii) none of the
properties of the Borrower or any of the Subsidiaries existing before giving effect to such
acquisition is bound with respect to such Indebtedness and (iii) the Borrower is in compliance with
the financial covenants after such acquisition;

          (h) Unsecured Indebtedness of the Borrower not permitted by any other clause of this
Section 6.01; provided that (i) no Default exists at the time, or is created as a
result of, the incurrence of such Indebtedness, and (ii) such Indebtedness does not exceed
$5,000,000; and

          (i) Indebtedness in respect of financing for the acquisition of businesses in Canada up to a
maximum of $75,000,000 on terms reasonably acceptable to the Administrative Agent.

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          Section 6.02 Lien Covenant. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned
or hereafter acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:

          (a) Permitted Encumbrances;

          (b) Any Lien on any property or asset of the Borrower or any Subsidiary existing on the
Effective Date and set forth on Schedule 6.02(b); provided that (i) such Lien shall
not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall
secure only those obligations which it secures on the Effective Date;

          (c) Any Lien existing on any property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the Effective Date pursuant to a Permitted Acquisition if such Lien exists prior
to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as
the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or
any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as the case may be;

          (d) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any
Subsidiary; provided that (i) such Liens secure Indebtedness permitted under Section
6.01(e), (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within
120 days (or such longer period if necessary solely to obtain any permits or licenses required in
connection with such acquisition, construction or improvement) after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness secured thereby does not
exceed the lessor of (A) a total of $5,000,000 outstanding at any one time or (B) the cost of
acquiring, constructing, or improving such fixed or capital assets and (iv) such Liens shall not
apply to any other property or assets of the Borrower or any Subsidiary; and

          (e) Liens granted under any of the Loan Documents.

          Section 6.03 Amendments to Other Indebtedness. The Borrower will not, and will not
permit any Subsidiary to amend, seek waivers or consents or otherwise modify the terms of any of
the Indebtedness permitted under Section 6.01(b), (d) or (e) in any manner
that would materially adversely affect the interests of any Lender hereunder.

          Section 6.04 Limitation on Fundamental Changes.

          (a) The Borrower will not, and will not permit any Subsidiary to, merge, dissolve, liquidate,
consolidate with or into another Person, except that so long as there exists no Default both before
and after giving effect to any such transaction any Subsidiary may merge or consolidate with or
into, or may dissolve or liquidate and thereupon transfer its assets to, (i) any one or more other
Subsidiaries, provided that when any Guarantor is merging with another Subsidiary, the
Guarantor shall be the continuing or surviving Person.

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          (b) The Borrower will not, and will not permit any Subsidiary to: (i) engage to any material
extent in any business other than businesses of the type conducted by the Borrower and the
Subsidiaries on the Effective Date and businesses reasonably related thereto or (ii) modify any of
its organizational or constituent documents in any manner, that would adversely affect any Lender’s
interest in any material respect.

          Section 6.05 Restrictions on Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any Subsidiary to, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary
prior to such merger) any capital stock, evidences of Indebtedness or securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, guarantee any obligations of, or make or permit to exist any investment or
any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business unit, except:

          (a) Permitted Investments;

          (b) investments, guarantees and loans existing on the Effective Date and set forth on
Schedule 6.05(b);

          (c) in addition to the investments described in (b) above, investments by the Borrower and the
Subsidiaries in their respective Domestic Subsidiaries, other than Unrestricted Subsidiaries;

          (d) in addition to the loans described in (b) above, loans or advances made by the Borrower to
any Domestic Subsidiary, other than Unrestricted Subsidiaries, or made by any Subsidiary to the
Borrower or any other Subsidiary, other than Unrestricted Subsidiaries;

          (e) in addition to the loans and investments described in (b) above, loans and investments by
the Borrower and the Subsidiaries in their respective Unrestricted Subsidiaries, in the aggregate
not to exceed Five Million Dollars ($5,000,000) at any time;

          (f) obligations of the Borrower to any Subsidiary, or of any Subsidiary to the Borrower or any
other Subsidiary, arising from the management and investment of cash on a pooled basis in the
ordinary course of business;

          (g) Guarantees constituting Indebtedness permitted under Section 6.01;

          (h) Guarantees by the Borrower of the obligations of Subsidiaries in the ordinary course of
business;

          (i) extensions of credit in the nature of accounts receivable or notes receivable, and
investments received in satisfaction or partial satisfaction of debts owed to the Borrower or any
of its Subsidiaries;

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          (j) investments received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary
course of business;

          (k) investments in perpetual care trusts, pre-need trusts, pre-construction trusts or similar
transactions made (a) in the ordinary course of such Person’s business and (b) subject to
applicable Federal, state or local regulations;

          (l) Equity Interests and debt obligations owned by the Borrower or any Subsidiary following
(i) sales of inventory (including parcels in developed cemetery properties), used or surplus
equipment and Permitted Investments in the ordinary course of business and (ii) sales, transfers
and dispositions of assets to the Borrower or a Subsidiary; and

          (m) Equity Interests in Persons owned by the Borrower or any Subsidiary following the sale of
Equity Interests in Subsidiaries in transactions constituting asset dispositions and other
investments in joint ventures engaged in businesses reasonably related to the business of the
Borrower as of the Effective Date; provided that no investment shall be permitted pursuant
to this clause (m) that, together with all other investments permitted under this clause (m), would
at any time have a book value exceeding $5,000,000 in the aggregate; and

          (n) Permitted Acquisitions.

          Section 6.06 Swap Agreements. The Borrower will not, and will not permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or
mitigate risks (including foreign exchange risks) to which the Borrower or any Subsidiary has
actual exposure (other than in respect of Equity Interests or Indebtedness of the Borrower or any
Subsidiary), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange
interest rates with respect to any interest-bearing liability or investment of the Borrower or any
Subsidiary.

          Section 6.07 Restrictions on Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the ordinary course of
business at prices and on terms and conditions not materially less favorable to the Borrower or
such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b)
transactions between or among Loan Parties not involving any other Affiliate, and (c) any
investment, loan or advance involving a Domestic Subsidiary that is permitted hereunder.

          Section 6.08 Restrictions on Restrictive Agreements. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien in favor of
the Lenders or the Administrative Agent upon any of its properties or assets, or (b) the ability of
any Subsidiary to pay dividends or other distributions with respect to any shares of its capital
stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to guarantee
Indebtedness of the Borrower or any other Subsidiary that are, in each case in this

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clause (b),
more restrictive than that which exists as of the Effective Date; provided that the
foregoing shall not apply to (i) restrictions and conditions imposed by law or by any Loan
Document, (ii) restrictions and conditions existing on the Effective Date identified on
Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or commitment), and (iii) customary
restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder.

          Section 6.09 Change in Fiscal Year. The Borrower will not and will not allow any of
its Subsidiaries to, change the date of the end of its fiscal year.

          Section 6.10 Leverage Ratio. The Borrower will not permit the Leverage Ratio as of
the last day of each fiscal quarter to be greater than 4.25 to 1.00.

          Section 6.11 Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
Charge Coverage Ratio as of the last day of each fiscal quarter to be less than 1.25 to 1.00.

          Section 6.12 Shareholder Equity. Borrower shall not allow Shareholder Equity to be
less than $110,000,000 plus twenty-five percent (25%) of the positive after-tax Consolidated Net
Income of Borrower subsequent to the Effective Date measured as of the end of each fiscal quarter.

          Section 6.13 Dispositions. The Borrower will not, and will not permit any Subsidiary
to, make any Disposition or enter into any agreement to make any Disposition, except:

          (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business;

          (b) Dispositions of funeral merchandise, cemetery property, mausoleum spaces and related
merchandise and other inventory in the ordinary course of business;

          (c) so long as there exists no Default both before and after giving effect to an such
transaction, Dispositions of property by any Subsidiary to the Borrower or to a wholly-owned
Subsidiary, provided that if the transferor of such property is a Guarantor, the transferee
thereof must either be the Borrower or a Guarantor;

          (d) Dispositions of assets, including real property, in which the Net Cash Proceeds thereof
(if any) are used within 365 days of such Disposition to purchase assets useful in the business of
Borrower and its Subsidiaries; provided, that if such Net Cash Proceeds are not used within
such 365 days to purchase assets useful in the business of the Borrower and its Subsidiaries, then
such Net Cash Proceeds shall be applied as follows:

     (i) the Borrower shall prepay outstanding Revolving Loans in an aggregate
principal amount equal to the Pro Rata Percentage of 100% of the Net Cash Proceeds
(or, if appropriate, the Pro Rata Percentage of 100% of the Net Cash Proceeds that
remain after deducting any amounts reinvested by the

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Borrower or any of its
Subsidiaries in assets useful in the business of the Borrower and its Subsidiaries
within the 365 day period described in this Section);

     (ii) such mandatory prepayments shall occur once in the fiscal quarter
following the end of the 365 day period described in this Section;

     (iii) “Pro Rata Percentage” means the percentage obtained by dividing the
outstanding amount of all Revolving Loans by the sum of the outstanding principal
balance of the Senior Notes, New Senior Notes or Alternative Financing, as
applicable, plus the outstanding principal balance of all Revolving Loans, in each
case calculated as of the last day of the preceding fiscal quarter;

          (e) Dispositions of investments in the ordinary course of business; and

          (f) Dispositions of Equity Interest of any Subsidiary to employees of the Borrower or of such
Subsidiary where required by the applicable law of any jurisdiction (including specifically the
Commonwealth of Kentucky and the Commonwealth of Massachusetts) regarding the advertising of
registered licensed funeral directors and ownership of funeral establishments, provided that the
voting rights in respect of such Equity Interests has been irrevocably conveyed to the Borrower or
a Guarantor.

ARTICLE VII

Events of Default

          If any of the following events (“Events of Default”) shall occur:

          (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or
otherwise;

          (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this Agreement, when
and as the same shall become due and payable, and such failure shall continue unremedied for a
period of five Business Days;

          (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any
Subsidiary (other than an Unrestricted Subsidiary) in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, shall prove to have been incorrect in any
material respect when made or deemed made;

          (d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, Section 5.03 (with respect to the Borrower’s existence)
or Section 5.08, Section 5.10 or in Article VI;

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          (e) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article),
and such failure shall continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

          (f) the Borrower or any Subsidiary (other than an Unrestricted Subsidiary) shall fail to make
any payment (whether of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;

          (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any
Subsidiary (other than an Unrestricted Subsidiary) or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary (other than an Unrestricted
Subsidiary) or for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days, or an order or decree approving or ordering any of
the foregoing shall be entered;

          (i) the Borrower or any Subsidiary (other than an Unrestricted Subsidiary) shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary (other than an Unrestricted
Subsidiary) or for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

          (j) the Borrower or any Subsidiary (other than an Unrestricted Subsidiary) shall become
unable, admit in writing its inability or fail generally to pay its debts as they become due;

          (k) one or more judgments for the payment of money in an aggregate amount in excess of
$5,000,000 shall be rendered against the Borrower, any Subsidiary (other than an Unrestricted
Subsidiary) or any combination thereof and the same shall remain undischarged for

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a period of 30
consecutive days during which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any
Subsidiary to enforce any such judgment; or

          (l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events
that have occurred, results in or would reasonably be expected to result in, a Material Adverse
Effect; or

          (m) a Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be due and payable),
and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower
described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower, and (iii) take such other steps to collect the Loans and protect the
interest of the Lenders as shall be allowed by law or in equity.

ARTICLE VIII

The Administrative Agent

          Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.

          The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

          The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of

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whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to exercise in writing as
directed by the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except as expressly
set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or any of the
Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this Agreement, (ii) the
contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.

          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally, by telephone, by
facsimile, by electronic mail, or via the Agent’s proprietary electronic
transaction system, and believed by it to be made by the proper Person, and shall not incur
any liability for relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with the advice of any
such counsel, accountants or experts.

          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.

          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders

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shall have the
right, in consultation with the Borrower, to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent
which shall be a bank with an office in Houston, Texas, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting as Administrative
Agent.

          Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

ARTICLE IX

Miscellaneous

          Section 9.01 Notices.

          (a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and subject to paragraph (b) below), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy or electronic mail, as follows:

	 
	 
	 
	 
	 
	 	(i)	 	if to the Borrower, to:

Carriage Services, Inc.

Attention: Chief Financial Officer

3040 Post Oak Boulevard, Suite 300

Houston, Texas 77056

Telecopy 713 332 5399     

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	 	(ii)	 	with a copy to:

Fulbright & Jaworski, LLP
	 	 	 	Attention: Frank T. García, Esq.

1301 McKinney Avenue, Suite 5100

Houston, Texas 77010-3095

Telecopy (713) 651-5246
	 
	 	(iii)	 	if to the Administrative Agent and Issuing Bank, to:

Wells Fargo Bank, N.A.

1100 Louisiana, Third Floor

Houston, Texas 77002

Attention: Mr. Warren Ross

Telecopy (713) 739 1086
	 
	 	(iv)	 	with a copy to:
	 
	 	 	 	Andrews Kurth LLP

Attention: Mr. Thomas J. Perich

600 Travis, Suite 4200

Houston, Texas 77002

Telecopy (713) 238-7175

     (v) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II
unless otherwise specifically provided for herein or otherwise agreed by the Administrative Agent
and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be limited to
particular notices or communications.

          (c) Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.

          Section 9.02 Waivers; Amendments; Release of Guarantors.

          (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank
and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or

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consent to any departure by
the Borrower therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing
Bank may have had notice or knowledge of such Default at the time.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement
or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the
principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled
date of expiration of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.16(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each Lender, (v) permit an
Interest Period with a duration in excess of six (6) months, (vi) change any provisions of
Section 2.19 or the definition of “Defaulting Lender”, or (vii) change any of the
provisions of this Section or the definition of
“Required Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender; provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Issuing Bank hereunder without the prior written consent of the
Administrative Agent or the Issuing Bank.

          (c) Notwithstanding any contrary position in this Agreement or any other Loan Document, if (a)
a Guarantor is no longer a Subsidiary and (b) at the time such Guarantor ceased to be a Subsidiary,
no Event of Default then existed, then such Guarantor shall be automatically released from its
obligations under the Guarantee Agreement to which it is a party, without need for any formal
action by the Administrative Agent or any Lender; and the Administrative Agent will confirm such
release by a notice to the Borrower upon receipt of a request therefor.

          Section 9.03 Expenses; Indemnity; Damage Waiver.

          (a) The Borrower shall pay (i) all reasonable out of pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions hereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all customary and reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all

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reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any
Lender, including the reasonable fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all
such reasonable out-of pocket expenses incurred during any workout, restructuring or negotiations
in respect of such Loans or Letters of Credit.

          (b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds there from
(including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the Borrower or
any Subsidiary, or any Environmental Liability related in any way to the Borrower or any
Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of such
Indemnitee.

          (c) To the extent that the Borrower fails to pay any amount required to be paid by it to (i)
the Issuing Bank under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to
the Issuing Bank, such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the Administrative Agent
or the Issuing Bank in its capacity as such, and (ii) the Administrative Agent under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay its pro-rata share of such amount to
the Administrative Agent.

          (d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

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          (e) All amounts due under this Section shall be payable promptly after written demand therefor
together with reasonable supporting documentation and calculations in reasonable detail.

          WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH PERSON TO BE INDEMNIFIED HEREUNDER SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST
ANY AND ALL LOSSES, LIABILITIES, CLAIMS AND DAMAGES ARISING OUT OF OR RESULTING FROM THE ORDINARY,
SOLE AND CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.

          Section 9.04 Successors and Assigns.

          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with this Section.
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:

          (A) the Borrower, provided that no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender or, if an Event of Default has
occurred and is continuing, any other assignee, provided further that the
Borrower shall be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five Business Days after having
received written notice thereof;

          (B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment to an assignee that is a Lender or an Affiliate of
a Lender; and

          (C) the Issuing Bank, provided that no consent of the Issuing Bank shall be
required for an assignment to an assignee that is a Lender or an Affiliate of a Lender.

          (ii) Assignments shall be subject to the following additional conditions:

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          (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred and is
continuing;

          (B) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement;

          (C) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee of
$3,500; and

          (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire.

     (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned
by such Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of, Section 2.13, Section
2.14, Section 2.15 and Section 9.03; provided that such release
shall not affect any legal responsibility for such Lender’s actions and failures to act
occurring before the effective date of such Assignment and Assumption). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with paragraph (c) of
this Section.

     (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption delivered to
it and a register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank
and the Lenders may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register

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shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

     (v) Upon its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the Register;
provided that if either the Assigning Lender or the assignee shall have failed to
make any payment required to be made by it pursuant to Section 2.04(d), Section
2.04(e), Section 2.05(b), Section 2.16, Section 2.16(d), or
Section 9.03(c), the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register unless and
until such payment shall have been made in full, together with all accrued interest thereon.
No assignment shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.

          (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or the
Issuing Bank, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve
any amendment, modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section
2.13, Section 2.14, and Section 2.15 and to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled to the benefits of Section
9.08 as though it were a Lender, provided such Participant agrees to be subject to
Section 2.16(c) as though it were a Lender.

     (ii) A Participant shall not be entitled to receive any greater payment under
Section 2.14 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the participation
to such Participant is made with the Borrower’s express prior written consent. A
Participant shall not be entitled to the benefits of Section 2.15 unless the
Borrower is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.15(e) as though it
were a Lender.

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          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          Section 9.05 Survival. All covenants, agreements, representations and warranties made
by the Borrower herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender
may have had notice or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated. The provisions of, Section 2.13, Section
2.14, Section 2.15, Section 9.03, Section 9.12 and Article VIII
shall survive and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

          Section 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts), each of which may be
delivered by electronic or telecopy transmission and each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. The Loan Documents and
any separate letter agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and supersede any and
all previous agreements and understandings, oral or written, relating to the subject matter hereof.
Except as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy, electronic mail or the Administrative Agent’s designated
electronic transaction system shall be effective as delivery of a manually executed counterpart of
this Agreement.

          Section 9.07 Severability. Any provision of this Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

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          Section 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of setoff) which such
Lender may have.

          Section 9.09 Governing Law; Arbitration. This Agreement and the Loan Documents shall
be construed in accordance with and governed by the law of the State of Texas. The parties hereto
agree, upon demand by any party, to submit to binding arbitration all claims, disputes and
controversies between or among them (and their respective employees, officers, directors,
attorneys, and other agents), whether in tort, contract or otherwise arising out of or relating to
in any way (i) the Loan and related Loan Documents which are the subject of this Agreement and its
negotiation, execution, collateralization, administration, repayment, modification, extension,
substitution, formation, inducement, enforcement, default or termination; or (ii) requests for
additional credit under Section 2.18.

          (a) Any arbitration proceeding will proceed in Houston, Texas; be governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law
provision in any of the documents between the parties; and be conducted by the American Arbitration
Association (“AAA”), or such other administrator as the parties shall mutually agree upon,
in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or
counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in
which case the arbitration shall be conducted in accordance with the AAA’s optional procedures for
large, complex commercial disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as applicable, as the
“Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms
and procedures set forth herein shall control. Any party who fails or refuses to submit to
arbitration following a demand by any other party shall bear all costs and expenses incurred by
such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed
to be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. § 91
or any similar applicable state law.

          (b) The arbitration requirement does not limit the right of any party to foreclose against
real or personal property collateral; exercise self-help remedies relating to collateral or
proceeds of collateral such as setoff or repossession; or obtain provisional or ancillary remedies
such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or
after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of
the right or obligation of any party to submit any dispute to arbitration or reference hereunder,
including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii)
of this paragraph.

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          (c) Any arbitration proceeding in which the amount in controversy is $5,000,000 or less will
be decided by a single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000. Any dispute in which the amount in controversy exceeds $5,000,000
shall be decided by majority vote of a panel of three arbitrators; provided
however, that all three arbitrators must participate in all hearings and deliberations.
Each arbitrator will be a neutral attorney licensed in the State of Texas with a minimum of ten
years experience in the substantive law applicable to the subject matter of the dispute to be
arbitrated. The arbitrator will determine whether or not an issue is arbitratable and will give
effect to the statutes of limitation in determining any claim. In any arbitration proceeding the
arbitrator will decide (by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state a claim or
motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the
substantive law of Texas and may grant any remedy or relief that a court of such state could order
or grant within the scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs and fees, to impose
sanctions and to take such other action as the arbitrator deems necessary to the same extent a
judge could pursuant to the Federal Rules of Civil Procedure, the Texas Rules of Civil Procedure or
other applicable law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for judicial relief or
pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any
party, including the plaintiff, to submit the controversy or claim to arbitration if any other
party contests such action for judicial relief.

          (d) In any arbitration proceeding discovery will be permitted in accordance with the Rules.
All discovery shall be expressly limited to matters directly relevant to the dispute being
arbitrated and must be completed no later than 20 days before the hearing date and within 180 days
of the filing of the dispute with the AAA. Any requests for an extension of the discovery periods,
or any discovery disputes, will be subject to final determination by the arbitrator upon a showing
that the request for discovery is essential for the party’s presentation and that no alternative
means for obtaining information is available.

          (e) The resolution of any dispute arising pursuant to the terms of this Agreement shall be
determined by a separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.

          (f) The arbitrator(s) shall award all costs and expenses of the arbitration proceeding.

          (g) To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all
action required to conclude any arbitration proceeding within 180 days of the filing of the dispute
with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence,
content or results thereof, except for disclosures of information by a party required in the
ordinary course of its business or by applicable law or regulation. If more than one agreement for
arbitration by or between the parties potentially applies to a dispute, the arbitration provision
most directly related to the Loan Documents or the subject matter of the dispute shall control.
This arbitration provision shall survive termination, amendment or expiration of any of the Loan
Documents or any relationship between the parties.

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          Section 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

          Section 9.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.

          Section 9.12 Confidentiality. Each of the Administrative Agent, the Issuing Bank and
the Lenders agrees to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the extent requested by
any regulatory authority, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement,
(ii) any pledgee referred to in Section 9.04(d), or (iii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and
its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section, “Information”
means all information received from the Borrower relating to the Borrower or its business, other
than any such information that is available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in
the case of information received from the Borrower after the Effective Date, such information is
clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.

          Section 9.13 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, in no event whatsoever shall the amount contracted for, charged, paid or otherwise

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agreed
to be paid to or received by the Agent or any Lender for the use, forbearance or detention of money
under this Agreement or any
Loan Document or otherwise at any time or times exceed the maximum non usurious rate pursuant
to applicable law (the “Maximum Rate”), and if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the Maximum Rate, the
rate of interest payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Loan but were not payable as a result of
the operation of this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such Lender. Anything in this
Agreement or any other Loan Document to the contrary notwithstanding, the Borrower shall not be
required to pay unearned interest and shall never be required to pay interest at a rate in excess
of the Maximum Rate, and if the effective rate of interest which would otherwise be payable under
this Agreement and the other Loan Documents would exceed the Maximum Rate, or if the Agent or any
Lender shall receive any unearned interest or shall receive monies that are deemed to constitute
interest which would increase the effective rate of interest payable by the Borrower under this
Agreement or Loan Document to a rate in excess of the Maximum Rate, then (a) the amount of interest
which would otherwise be payable by the Borrower under this Agreement or any Loan Document shall be
reduced to the amount allowed under applicable law, and (b) any unearned interest paid by the
Borrower or any interest paid by the Borrower in excess of the Maximum Rate shall be credited on
the principal of (or, if the principal amount shall have been paid in full, refunded to the
Borrower). It is further agreed that, without limitation of the foregoing, all calculations of the
rate of interest contracted for, charged or received by any Lender under this Agreement or any Loan
Document, are made for the purpose of determining whether such rate exceeds the Maximum Rate, and
shall be made by amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Loans evidenced by said Notes all interest at any time contracted for, charged
or received by such Lender in connection therewith.

          Section 9.14 USA Patriot Act. Each Lender that is subject to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”) hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is
required to obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Patriot Act.

          Section 9.15 FINAL AGREEMENT OF THE PARTIES. THIS WRITTEN AGREEMENT (INCLUDING THE
EXHIBITS AND SCHEDULES HERETO) AND THE OTHER LOAN DOCUMENTS CONSTITUTE A “LOAN AGREEMENT” AS
DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. Any

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previous agreement among the
parties with respect to the subject matter hereof is superseded by this Agreement. Nothing in this
Agreement, expressed or implied, is intended to confer upon any party other than the parties hereto
any rights, remedies, obligations or liabilities under or by reason of this Agreement.

[END OF TEXT]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	CARRIAGE SERVICES, INC.

 	 
	 	By:  	/s/ Terry E. Sanford	 
	 	 	Terry E. Sanford, 	 
	 	 	Executive Vice President, Chief Financial

Officer, Chief Accounting Officer, Treasurer,

and Assistant Secretary 	 
	 

Signature Page to Revolving Credit Agreement

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	 	WELLS FARGO BANK, N.A., individually as a 

Lender and as Administrative Agent and Issuing Bank

 	 
	 	By:  	/s/ Warren R. Ross	 
	 	 	Warren R. Ross, 	 
	 	 	Vice President 	 
	 

Signature Page to Revolving Credit Agreement

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	 	[OTHER BANKS BY SEPARATE SIGNATURE PAGES]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Signature Page to Revolving Credit Agreement

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EXHIBIT 1.01A

FORM OF GUARANTEE AGREEMENT

     THIS GUARANTEE AGREEMENT (this “Guarantee”) dated as of _______________, 2011, made by
each of the undersigned Subsidiaries of the Borrower (as defined below) and such other Subsidiaries
of the Borrower which hereafter become parties to this Guarantee (each, a “Guarantor,” and
collectively, the “Guarantors”), in favor of _________________ as Administrative Agent (the
“Agent”) for the benefit of the Lenders pursuant to that certain Revolving Credit Agreement
dated _______________, 2011 (the “Credit Agreement”), by and among the Borrower, the Agent,
the Issuing Bank and the Lenders.

W I T N E S S E T H

     WHEREAS, pursuant to the Credit Agreement, the Lenders agreed to make Loans to
__________________, a ________________ (the “Borrower”) in a manner and upon the terms and
conditions set forth therein;

     WHEREAS, in accordance with the Credit Agreement, the Agent requires that the Guarantors
execute a guarantee agreement guaranteeing the Obligations of the Borrower under the Credit
Agreement;

     NOW, THEREFORE, in consideration of the premises and agreements herein and in order to induce
the Lenders to make the Loans pursuant to the Credit Agreement, the Guarantors hereby agree as
follows:

     Section 1. Definitions. Capitalized terms used herein and not otherwise defined shall have
the respective meanings assigned thereto in the Credit Agreement.

     Section 2. Guarantee of Payment. Each Guarantor (not merely as a surety or guarantor of
collection) hereby jointly, severally, unconditionally and irrevocably, guarantees the punctual
payment and performance when due, whether at stated maturity, as an installment, by prepayment or
by demand, acceleration or otherwise, of all Obligations of the Borrower heretofore or hereafter
existing. If any or all of the Obligations become due and payable under the Credit Agreement, the
Guarantors jointly and severally and unconditionally promise to pay such Obligations, on demand,
together with any and all expenses (including reasonable counsel fees and expenses), which
reasonably may be incurred by the Agent in collecting any of the Obligations and in connection with
the protection, defense and enforcement of any rights under the Credit Agreement or under any other
Loan Document (the “Expenses”). The Guarantors guarantee that the Obligations shall be
paid strictly in accordance with the terms of the Credit Agreement. The Obligations include,
without limitation, interest accruing after the commencement of a proceeding under bankruptcy,
insolvency or similar laws of any jurisdiction at the rate or rates
provided in the Credit Agreement. The Agent shall not be required to exhaust any right or
remedy or take any action against the Borrower or any other person or entity or any collateral
prior to any demand or other action hereunder against the Guarantors. The Guarantors agree that,
as between the Guarantors and the Agent, the Obligations may be declared to be due

Exhibit 1.01A - Page 1

 

 

and payable for
the purposes of this Guarantee notwithstanding any stay, injunction or other prohibition which may
prevent, delay or vitiate any declaration as regards the Borrower and that in the event of such a
declaration or attempted declaration, the Obligations shall immediately become due and payable by
the Guarantors for the purposes of this Guarantee and each Guarantor shall forthwith pay the
Obligations specified by the Agent to be paid as provided in the Credit Agreement without further
notice or demand. Notwithstanding anything contained herein or in the Credit Agreement, any Loan
Document or any other document or any other agreement, security document or instrument relating
hereto or thereto to the contrary, the maximum liability of each Guarantor hereunder shall never
exceed the maximum amount that said Guarantor could pay without having such payment set aside as a
fraudulent transfer or fraudulent conveyance or similar action under the U.S. Bankruptcy Code or
applicable state or foreign law.

     Section 3. Guarantee Absolute. The liability of each Guarantor under this Guarantee is
absolute and unconditional irrespective of: (a) any change in the time, manner or place of payment
of, or in any other term of, the Credit Agreement or the Obligations, or any other amendment or
waiver of or any consent to departure from any of the terms of the Credit Agreement or the
Obligations, including any increase or decrease in the rate of interest thereon; (b) any release or
amendment or waiver of, or consent to departure from, any other guarantee or support document, or
any exchange, release or non-perfection of any collateral, for the Credit Agreement or the
Obligations; (c) any present or future law, regulation or order of any jurisdiction or of any
agency thereof purporting to reduce, amend, restructure or otherwise affect any term of the Credit
Agreement or the Obligations; (d) without being limited by the foregoing, any lack of validity or
enforceability of the Credit Agreement or the Obligations; (e) any other setoff, defense or
counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with
respect to the Credit Agreement or the transactions contemplated thereby (other than actual
payment) which might constitute a legal or equitable defense available to, or discharge of, the
Borrower or other Guarantors and (f) any claim or assertion that any payment by any Guarantor
hereunder should be set aside pursuant to Section 2 in connection with any stay, injunction
or other prohibition or event, in which case each Guarantor shall be unconditionally required to
pay all amounts demanded of it hereunder prior to any determination of the maximum liability of
each Guarantor hereunder in accordance with Section 2 and the recipient of such payment, if
so required by a final non-appealable court of competent jurisdiction by a final and non-appealable
judgment, shall then be liable for the refund of any excess amounts. If any such rebate or refund
is ever required, all other Guarantors shall be fully liable for the repayment thereof to the
maximum extent allowed by applicable law.

     Section 4.
Guarantee Irrevocable.
This Guarantee is a continuing guarantee of the payment of all Obligations now or hereafter
existing under the Credit Agreement and shall remain in full force and effect until payment in full
of all Obligations and other amounts payable under this Guarantee and until all Commitments of the
Lenders to make Loans under the Credit Agreement shall be terminated in accordance with the terms
thereof and the Credit Agreement is no longer in effect.

     Section 5. Reinstatement. This Guarantee shall continue to be effective, or be automatically
reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded
or must otherwise be returned by the Agent on the insolvency, bankruptcy,

Exhibit 1.01A - Page 2

 

 

dissolution, liquidation
or reorganization of any of the Borrower, any Guarantor, or any Person that is a party to the Loan
Documents, or upon or as a result of the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to any of the Borrower, any Guarantor or any other Person
that is a party to the Loan Documents, or otherwise, all as though the payment had not been made.

     Section 6. Subrogation. Each Guarantor hereby agrees that it shall not exercise any rights
which it may acquire by way of subrogation, by any payment made under this Guarantee or otherwise,
until all the Obligations have been paid in full and the Credit Agreement is no longer in effect.
Any amounts paid to a Guarantor on account of subrogation rights under this Guarantee at any time
when all the Obligations have not been paid in full, shall be held in trust for the benefit of the
Agent and shall promptly be paid to the Agent to be credited and applied to the Obligations,
whether matured or unmatured or absolute or contingent, in accordance with the terms of the Credit
Agreement. If a Guarantor has made a payment to the Agent hereunder of all or any part of the
Obligations and all the Obligations are paid in full and the Credit Agreement is no longer in
effect, the Agent shall, at such Guarantor’s request, execute and deliver to the Guarantor the
appropriate documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting
from the payment.

     Section 7. Subordination. Any liabilities owed by the Borrower to the Guarantors in
connection with any extension of credit or financial accommodation by the Guarantors to or for the
account of the Borrower, including but not limited to interest accruing at the agreed contract rate
after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the
Obligations, and such liabilities of the Borrower to the Guarantors, if the Agent so requests,
shall be collected, enforced and received by the Guarantors as trustee for the Agent and shall be
paid over to the Agent on account of the Obligations.

     Section 8. Certain Taxes. The Guarantors further agree that all payments to be made hereunder
shall be made without setoff or counterclaim and free and clear of, and without deduction for
Taxes. If any Taxes are required to be withheld from any amounts payable to the Agent hereunder,
the amounts so payable to the Agent shall be increased to the extent necessary to yield to the
Agent
(after payment of all Taxes) the amounts payable hereunder in the full amounts so to be paid.
Whenever any Tax is paid by a Guarantor, as promptly as possible thereafter, such Guarantor shall
send the Agent an official receipt showing payment thereof, together with such additional
documentary evidence as may be required from time to time by the Agent.

     Section 9. Representations and Warranties. Each of the Guarantors represents and warrants
that: (a) this Guarantee (i) has been authorized by all necessary action; (ii) does not violate
any agreement, instrument, law, regulation or order applicable to it; (iii) does not require the
consent or approval of any Person, or any filing or registration of any kind; and (iv) is the
legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency and other similar laws affecting creditors’ rights generally; and (b) in
executing and delivering this Guarantee, such Guarantor has not relied and will not rely upon any
representations or warranties of the Agent not embodied herein or any acts heretofore or

Exhibit 1.01A - Page 3

 

 

hereafter
taken by the Agent (including but not limited to any review by the Agent of the affairs of the
Borrower).

     Section 10. Remedies Generally. The remedies provided in this Guarantee are cumulative and
not exclusive of any remedies provided by law.

     Section 11. Setoff. Each Guarantor agrees that, in addition to (and without limitation of)
any right of setoff, banker’s lien or counterclaim the Agent or the Lenders may otherwise have, the
Agent and each of the Lenders shall be entitled, at their option, to offset balances (general or
special, time or demand, provisional or final) held by them for the accounts of the Guarantors at
any of the Agent’s or any Lender’s offices, in U.S. dollars or in any other currency, against any
amount payable by the Guarantors under this Guarantee which is not paid when due, in which case it
shall promptly notify the Guarantors thereof; provided that the Agent’s or any Lender’s
failure to give such notice shall not affect the validity thereof.

     Section 12. Formalities. Each Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations, the Credit Agreement and
this Guarantee and any liability to which the Credit Agreement and this Guarantee applies or may
apply, and waives presentment, demand of payment, notice of intent to accelerate, notice of
acceleration, notice of dishonor or nonpayment, and any requirement that the Agent institute suit,
collection proceedings or take any other action to collect the Obligations, including any
requirement that the Agent protect, secure, perfect or insure any security interest or Lien against
any Property subject thereto or exhaust any right or take any action against the Borrower or any
other Person (including the other Guarantors) or any Collateral (it being the intention of the
Agent and each Guarantor that the obligations of such Guarantor under this Guarantee are to be a
guarantee of payment and not of collection) or that the Borrower or any other Person (including the
other Guarantors) be joined in any action hereunder. Each Guarantor hereby waives marshaling of
assets and liabilities, notice by the Agent of the creation of any Indebtedness or liability
to which it applies or may apply, any amounts received by the Agent, notice of disposition or
substitution of Collateral and of the creation, advancement, increase, existence, extension,
renewal, rearrangement and/or modification of the Obligations.

     Section 13. Amendments and Waivers. No amendment or waiver of any provision of this
Guarantee, nor consent to any release by any Guarantor therefrom, shall be effective unless it is
in writing and signed by the Agent and such Guarantor, and then the waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given. No failure
on the part of the Agent to exercise, and no delay in exercising, any right under this Guarantee
shall operate as a waiver or preclude any other or further exercise thereof or the exercise of any
other right.

     Section 14. Expenses. The Guarantors shall reimburse the Agent on demand for all Expenses
without duplication of any reimbursements affected under the Credit Agreement. The obligations of
the Guarantors under this Section shall survive the termination of this Guarantee.

     Section 15. Assignment. This Guarantee shall be binding on, and shall inure to the benefit of
the Guarantors, the Agent and their respective successors and assigns; provided that the
Guarantors may not assign or transfer their respective rights or obligations under this

Exhibit 1.01A - Page 4

 

 

Guarantee.
Without limiting the generality of the foregoing: (a) the obligations of the Guarantors under this
Guarantee shall continue in full force and effect and shall be binding on any successor partnership
and on previous partners and their respective estates if any of the Guarantors is a partnership,
regardless of any change in the partnership as a result of death, retirement or otherwise; and (b)
the Agent may assign, or otherwise transfer its rights under the Credit Agreement to any other
person or entity in accordance with the terms and conditions thereof, and the other person or
entity shall then become vested with all the rights granted to the Agent in this Guarantee or
otherwise. Any Guarantor may merge into the Borrower or another Guarantor as provided in the
Credit Agreement.

     Section 16. Captions. The headings and captions in this Guarantee are for convenience only
and shall not affect the interpretation or construction of this Guarantee.

     Section 17. Governing Law, Etc. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS. EACH GUARANTOR CONSENTS TO THE NONEXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF HOUSTON. SERVICE OF
PROCESS BY THE AGENT IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON EACH GUARANTOR IF SENT
TO SUCH GUARANTOR BY REGISTERED MAIL AT THE
ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY SUCH GUARANTOR FROM TIME TO TIME. EACH
GUARANTOR WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTEE OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED
TO THIS GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION. TO THE EXTENT THAT
ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTEE.

     Section 18. Integration; Effectiveness. This Guarantee alone sets forth the entire
understanding of the Guarantors and the Agent relating to the guarantee of the Obligations and
constitutes the entire contract between the parties relating to the subject matter hereof and
supersedes any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. This Guarantee shall become effective when it shall have been executed and
delivered by the Guarantors to the Agent. Delivery of an executed signature page of this Guarantee
by telecopy shall be effective as delivery of a manually executed signature page of this Guarantee.

     Section 19. Automatic Release. As provided in Section 9.02(c) of the Credit Agreement, a
Guarantor shall be automatically released from its obligations under this Guarantee upon the
satisfaction of the conditions set forth therein.

END OF TEXT

Exhibit 1.01A - Page 5

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be duly executed by their
respective authorized officers as of the day and year first above written.

GUARANTORS:

	 	 	 	 	 
	 	_________________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit 1.01A - Page 6

 

 

EXHIBIT 1.01B

FORM OF ADDENDUM AND JOINDER TO

CREDIT AGREEMENT AND SECURITY AGREEMENT1[1]

     THIS ADDENDUM AND JOINDER TO CREDIT AGREEMENT AND SECURITY AGREEMENT (this “Addendum”)
dated as of ____________, 20__, is among ____________________, a ______________ (the “New
Obligor”) and _____________, a _____________ (“New Obligor Parent”) in favor of the
Lenders (as defined in the Credit Agreement) and _____________________, as Administrative Agent for
the Lenders (in such capacity, the “Administrative Agent”).

     WHEREAS, the New Obligor Parent, ___________________, a ______________ (the
“Borrower”)2[2], the Lenders and the Administrative Agent for the Lenders (collectively,
the “Original Parties”) are parties to that certain Credit Agreement dated ____________,
2011 (as the same has been or may be amended, modified or supplemented from time to time, the
“Credit Agreement”);

     WHEREAS, certain direct and indirect Subsidiaries of the Borrower are parties to that certain
Guarantee Agreement of even date with the Credit Agreement (as the same has been or may be amended,
modified or supplemented from time to time, the “Guarantee Agreement”), and, as such are
guarantors (the “Guarantors”) of the Obligations;

     WHEREAS, the New Obligor Parent [the Borrower]3[3] and the Guarantors are parties to that
certain Security and Pledge Agreement, of even date with the Credit Agreement (as the same has been
or may be amended, modified or supplemented from time to time, the “Security Agreement”);

     WHEREAS, the New Obligor Parent and the New Obligor are required to execute this Addendum
pursuant to Section 5.10 of the Credit Agreement;

     WHEREAS, the New Obligor desires to become a party to the Credit Agreement as a “Guarantor”
and the Security Agreement as a “Debtor” and to receive all of the benefits of and to become
subject to the obligations thereof as a Guarantor and Debtor, respectively;

     WHEREAS, as a condition to the New Obligor becoming a party to the Credit Agreement and
Security Agreement, the New Obligor Parent is required to pledge its ownership interest in the New
Obligor

     NOW THEREFORE, in consideration of the benefits to be derived by the New Obligor under the
Credit Agreement as a Guarantor and for Ten Dollars ($10.00) and other valuable

 

			
	1[1]	 	This form should be used for a new
Domestic Subsidiary.
	 
	2[2]	 	To be used if the New Obligor Parent is
not the Borrower.
	 
	3[3]	 	To be used if the New Obligor Parent is
not the Borrower.

Exhibit 1.01B - Page 1

 

 

consideration, the receipt and sufficiency of which is hereby acknowledged, the above-named
parties agree as follows:

     1. Terms. Capitalized terms used in the opening paragraph, the recitals and otherwise
herein and not defined have the same meaning assigned to such terms in the Credit Agreement.

     2. Joinder to and Ratification of Guarantee Agreement and Security Agreement.
By executing and delivering this Addendum, the New Obligor hereby (i) becomes a party to the
Guarantee Agreement as a Guarantor and the Security Agreement as a Debtor as if the New Obligor had
originally signed such Guarantee Agreement and Security Agreement and (ii) expressly assumes all
obligations and liabilities of a Guarantor or Debtor thereunder, as applicable. The New Obligor
hereby makes as of the date hereof each of the representations and warranties made by the
Guarantors in the Credit Agreement and the Security Agreement except (a) any such representations
and warranties that were made by the other Guarantors as of an earlier specific date and (b) any
such representations and warranties deemed to be made by the New Obligor are only made as to
information, disclosures and matters as it relates to such New Obligor, and (c) any such
representations and warranties made as to matters disclosed or set forth in a Schedule or an Annex
to such documents are deemed to be made as to the corresponding Schedule or Annex attached hereto.
After giving effect to this Addendum, the Security Agreement shall serve as security for the
obligations of each New Obligor contained in the Credit Agreement.

     3. Security Interest (New Obligor). As security for the Obligations, the New Obligor
hereby grants to the Administrative Agent, for the benefit of the Lenders, to the maximum extent
allowed by applicable law, a lien and security interest on all of the assets of the New Obligor
described as Collateral in the Security Agreement, subject to the exclusions contained in the
Security Agreement, whether now held or hereafter acquired, of any kind, pursuant to, and in
accordance with the terms of the Security Agreement.

     4. Security Interest (New Obligor Parent). As security for the Obligations, the New
Obligor Parent hereby grants to the Administrative Agent, for the benefit of the Lenders, to the
maximum extent allowed by applicable law, a lien and security interest on all of the Securities
Collateral (as defined in the Security Agreement) of the New Obligor, including, without
limitation, the Equity Interests of the New Obligor owned by the New Obligor Parent and identified
on Annex 3 (as updated pursuant to this Addendum) whether now held or hereafter acquired, pursuant
to, and in accordance with the terms of the Security Agreement.

     5. Authorization to Take Further Action. The New Obligor hereby authorizes the
Administrative Agent to file such financing statements and any amendments and extensions thereof as
may be necessary or desirable in order to perfect the Liens under the Security Agreement or any
modification, extension or ratification thereof.

     6. Reliance. All parties hereto acknowledge that the Administrative Agent and the
Lenders are relying on this Addendum, the accuracy of the statements herein contained and the
performance of the conditions placed upon the New Obligor hereunder.

Exhibit 1.01B - Page 2

 

 

     7. Delivery of Certificates; Further Assurances. Concurrently with the execution and
delivery of this Addendum, the New Obligor Parent shall deliver all membership or stock
certificates, as applicable, of the New Obligor as described on Annex 3 to the Security Agreement
(as updated pursuant to this Addendum) to the Administrative Agent together with related stock or
membership powers, as applicable, executed in blank by the New Obligor Parent. In addition to the
foregoing, the New Obligor Parent and New Obligor shall execute such further documents and
undertake any such measure as may be reasonably necessary to effect and carry out the terms of this
Addendum and the implementation thereof.

     8. Warranties. The New Obligor (a) represents and warrants that it is legally
authorized to enter into this Addendum, (b) confirms that it has received copies of the Credit
Agreement and the Security Agreement and all related documents, and that on the basis of its review
and analysis of this information has decided to enter into this Addendum and (c) confirms that it
is a Subsidiary of the Borrower that it is required to enter into this Addendum pursuant to
Section 5.10 of the Credit Agreement.

     9. Updated Information. Concurrently with this Addendum, the New Obligor is
delivering a completed New Obligor Information List, attached as Attachment A hereto. Borrower and
the New Obligor acknowledge and agree that Schedules 3.06, 3.12, 3.16,
6.01(b), 6.02(b), 6.06(b) and 6.11 of the Credit Agreement and
Annexes 1 through 10, inclusive, of the Security Agreement, have been updated with
respect to the New Obligor only by the information contained in Attachment A hereto, and, with
respect to the New Obligor only, are true, accurate and complete representations of the information
described and referenced in the corresponding sections of the Credit Agreement and Security
Agreement, as applicable, after giving effect to this Addendum.

     10. Choice of Law. This Addendum shall be governed by and construed under the laws of
the State of Texas.

     11. Ratification. Except as modified hereby, the Credit Agreement and the Security
Agreement remain in full force and effect according to their terms.

     12. Effectiveness. Upon execution of this Addendum by the New Obligor, this Addendum
shall become immediately effective and enforceable as to the New Obligor.

[Signatures on following pages]

Exhibit 1.01B - Page 3

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement and agreed to the provisions
contained herein effective as of ________________, 20_.

	 	 	 	 	 
	 	NEW OBLIGOR:

________________________________________________ ,

a ________________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	NEW OBLIGOR PARENT:

________________________________________________ ,

a ________________________

 	 
	 	By: 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 	 
	 
	 	ADMINISTRATIVE AGENT:

______________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit 1.01B - Page 4

 

 

ATTACHMENT
A

ADDITIONAL INFORMATION REGARDING THE NEW OBLIGOR

	1.	 	The following Schedules as described in the Credit Agreement:

	 	 	 

	Schedule 2.01

	 	Commitments
	Schedule 2.06(k)

	 	Existing Letters of Credit
	Schedule 3.06

	 	Disclosed Matters
	Schedule 3.12

	 	List of Subsidiaries
	Schedule 3.16

	 	Swap Agreements
	Schedule 6.01(b)

	 	Existing Indebtedness
	Schedule 6.02(b)

	 	Existing Liens
	Schedule 6.06(b)

	 	Existing Investments
	Schedule 6.11

	 	Restrictive Agreements

	2.	 	The following Annexes as described in the Security Agreement:

	 	 	 

	Annex 1

	 	Intellectual Property Licenses
	Annex 2

	 	Patent Collateral
	Annex 3

	 	Securities Collateral
	Annex 4

	 	Trademark Collateral
	Annex 5

	 	Intentionally Deleted
	Annex 6

	 	Debtor Information
	Annex 7

	 	Previous Names and Transactions
	Annex 8

	 	Offices and Locations of Records
	Annex 9

	 	Locations of Inventory and Equipment
	Annex 10

	 	Deposit Accounts
	Annex 11

	 	Securities Accounts and Commodity Accounts
	Annex 12

	 	Instruments and Tangible Chattel Paper
	Annex 13

	 	Electronic Chattel Paper
	Annex 14

	 	Letters of Credit
	Annex 15

	 	Commercial Tort Claims
	Annex 16

	 	Third Party Locations

Exhibit 1.01B - Page 5

 

 

Entity Documents

Provide a copy of all that apply:

	 	 	 

	Corporation:

	 	Filed Articles of Incorporation/Amendments and Bylaws/Resolutions
with Incumbency Certificate
	Partnership:

	 	Partnership Agreement and filed/recorded Certificate of
Partnership
	Limited Liability Company (LLC):

	 	Article of Organization and Operating Agreement/Member or Manager Consent with
Incumbency Certificate
	Limited Liability Partnership (LLP):

	 	Certificate of registered partnership and partnership agreement
	Fictitious Name Filing:

	 	Trade Name-Entities doing business under fictitious name; if applicable

Exhibit 1.01B - Page 6

 

 

EXHIBIT 1.01(C)

FORM OF REVOLVING PROMISSORY NOTE

			
	$_____________
	 	Date: ___________

     FOR VALUE RECEIVED, the undersigned, ________________., a ______________, the Borrower under
that certain Revolving Credit Agreement dated as of ____________, 20___ (as may be amended or
otherwise modified from time to time, the “Credit Agreement”) among the Borrower, the
Guarantors named therein, the Lenders named therein and ___________________, as Administrative
Agent for the Lenders, HEREBY PROMISES TO PAY to the order of _____________________
(“Lender”), the amount as may be advanced from time to time under the Credit Agreement by
the Lender in accordance with such Lender’s Commitment outstanding from time to time. All
capitalized terms used herein and not otherwise defined shall have the meanings as defined in the
Credit Agreement.

     The Borrower promises to pay interest on the unpaid principal amount of this Note outstanding
from time to time from the date hereof until the principal amount hereof has been paid in full and
the Commitments are terminated, at the place and at such times and at such interest rates as are
specified in the Credit Agreement. Payments made by the Borrower in respect of the amounts due
hereunder shall be allocated to the Lender by the Administrative Agent on the terms specified in
the Credit Agreement.

     This Note is one of the Notes in respect of the Loans referred to in, and this Note and all
provisions herein are entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (a) provides for the making of Loans by the Lender and other Lenders to the
Borrower from time to time, and (b) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events, for prepayments on account of principal hereof prior
to the maturity hereof upon the terms and conditions therein specified, and for limitations on the
amount of interest paid such that no provision of the Credit Agreement or this Note shall require
the payment or permit the collection of interest in excess of the Maximum Rate.

     The Borrower and any and all endorsers, guarantors and sureties severally waive grace (except
to the extent expressly provided in the Credit Agreement), demand, presentment for payment, notice
of dishonor or default, acceleration, intent to accelerate, protest and notice of protest and
diligence in collecting and bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of security herefor, in
whole or in part, with or without notice, before or after maturity.

     This Note shall be governed by and construed under the laws of the State of Texas and the
applicable laws of the United States of America.

Exhibit 1.01C - Page 1

 

 

     IN WITNESS WHEREOF, the undersigned has caused this Note to be duly executed and
delivered by its duly authorized officer as of the date first written above.

	 	 	 	 	 
	 	BORROWER:

___________________________,

a ___________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit 1.01C - Page 2

 

 

EXHIBIT 1.01D

FORM OF SECURITY AND PLEDGE AGREEMENT

dated as of

August 11, 2011

among

CARRIAGE SERVICES, INC.,

THE GUARANTORS PARTY HERETO

and

WELLS FARGO BANK, N.A.,

as Administrative Agent

Exhibit 1.01D - Page 1

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	5	 
	1.01 Definitions
	 	 	5	 
	1.02 Interpretation
	 	 	9	 
	ARTICLE II COLLATERAL
	 	 	9	 
	2.01 Grant of Security Interest
	 	 	9	 
	2.02 Termination of Security Interests
	 	 	10	 
	2.03 Partial Release of Collateral
	 	 	11	 
	2.04 Security Interest Absolute
	 	 	11	 
	2.05 Joinder of Additional Guarantors
	 	 	12	 
	2.06 Limit of Liability
	 	 	12	 
	2.07 Reinstatement
	 	 	12	 
	ARTICLE III PERFECTION OF SECURITY INTEREST
	 	 	13	 
	3.01 Perfection
	 	 	13	 
	3.02 Perfection of Additional Collateral
	 	 	14	 
	3.03 Intellectual Property Filings
	 	 	14	 
	3.04 Instruments
	 	 	14	 
	3.05 Further Assurances
	 	 	14	 
	3.06 Use of Collateral
	 	 	14	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	15	 
	4.01
Title
	 	 	15	 
	4.02 Chief Executive Office; Change of Name; Jurisdiction of Organization
	 	 	15	 
	4.03 Prior Transactions
	 	 	15	 
	4.04 Records
	 	 	15	 
	4.05 Changes in Circumstances
	 	 	15	 
	4.06 Inventory and Equipment
	 	 	15	 
	4.07 Title to Equity Interests
	 	 	15	 
	4.08 Financing Statements
	 	 	16	 
	4.09 Deposit Accounts
	 	 	16	 
	4.10 Investment Property
	 	 	16	 
	4.11 Delivery of Certificated Securities Collateral
	 	 	16	 
	4.12 Perfection of Uncertificated Securities Collateral
	 	 	16	 
	4.13 Instruments and Tangible Chattel Paper
	 	 	16	 
	4.14 Electronic Chattel Paper and Transferable Records
	 	 	16	 
	4.15 Letters of Credit
	 	 	17	 
	4.16 Commercial Tort Claims
	 	 	17	 
	ARTICLE V COVENANTS
	 	 	17	 
	5.01 Access to Records
	 	 	17	 
	5.02 Other Financing Statements and Liens
	 	 	17	 
	5.03 Reports
	 	 	17	 
	5.04 Adverse Claims
	 	 	17	 
	5.05 Prohibition of Certain Changes
	 	 	18	 
	5.06 Opinion of Counsel
	 	 	18	 
	5.07 Collateral Held by Others
	 	 	18	 
	5.08 Records
	 	 	18	 

Exhibit 1.01D - Page 2

 

 

	 	 	 	 	 
	 	 	Page	 
	5.09 Collection of Accounts
	 	 	18	 
	5.10 Disposition of Collateral
	 	 	19	 
	5.11 Protection of Intellectual Property
	 	 	19	 
	5.12 Special Provisions Relating to Certain Collateral
	 	 	19	 
	ARTICLE VI REMEDIES
	 	 	21	 
	6.01 Events of Default, Etc.
	 	 	21	 
	6.02 Deficiency
	 	 	24	 
	6.03 Private Sale
	 	 	24	 
	6.04 Application of Proceeds
	 	 	24	 
	6.05 Attorney-in-Fact
	 	 	25	 
	6.06 Expenses
	 	 	25	 
	6.07 Administrative Agent’s Right to Perform on Debtor’s Behalf
	 	 	26	 
	6.08 Custody and Preservation
	 	 	26	 
	6.09 Preservation of Rights
	 	 	26	 
	6.10 Rights of Secured Parties
	 	 	26	 
	6.11 No Marshalling
	 	 	26	 
	6.12 Remedies Cumulative
	 	 	27	 
	ARTICLE VII MISCELLANEOUS
	 	 	27	 
	7.01 Waivers of Rights Inhibiting Enforcement
	 	 	27	 
	7.02 Notices
	 	 	27	 
	7.03 Assignment
	 	 	28	 
	7.04 Successors and Assigns
	 	 	28	 
	7.05 Amendment and Waiver
	 	 	28	 
	7.06 No Implied Waiver
	 	 	28	 
	7.07 Severability
	 	 	28	 
	7.08 Entire Agreement
	 	 	28	 
	7.09 Execution in Counterparts
	 	 	29	 
	7.10 Governing Law
	 	 	29	 
	7.11 Headings
	 	 	29	 
	7.12 Interpretation
	 	 	29	 
	7.13 Waiver of Jury Trial
	 	 	29	 
	7.14 Survival, Etc.
	 	 	29	 
	7.15 Agents, Etc.
	 	 	29	 
	7.16 Limitation of Liability
	 	 	30	 
	7.17 Subrogation
	 	 	30	 
	7.18 Authority of the Administrative Agent
	 	 	30	 
	7.19 No Oral Agreements
	 	 	31	 

Exhibit 1.01D - Page 3

 

 

	 

	Annex 1 Intellectual Property Licenses

	Annex 2 Patent Collateral

	Annex 3 Equity Interest Collateral

	Annex 4 Trademark Collateral

	Annex 5 Filing Offices

	Annex 6 Debtor Information

	Annex 7 Prior Transactions

	Annex 8 Offices and Locations of Records

	Annex 9 Locations of Inventory and Equipment

	Annex 10 Deposit Accounts

	Annex 11 Securities Accounts and Commodity Accounts

	Annex 12 Instruments and Tangible Chattel Paper

	Annex 13 Electronic Chattel Paper

	Annex 14 Letters of Credit

	Annex 15 Commercial Tort Claims

	 

	Exhibit A            Deposit Account Control Agreement

	Exhibit B            Patent Security Agreement

	Exhibit C            Trademark Security Agreement

Exhibit 1.01D - Page 4

 

 

SECURITY AND PLEDGE AGREEMENT

     This SECURITY AND PLEDGE AGREEMENT (this “Agreement”) dated as of August 11, 2011, is
among Carriage Services, Inc., a Delaware corporation (“Borrower”), the Guarantors party
hereto (together with the Borrower, the “Debtors”), and Wells Fargo Bank, N.A., as
Administrative Agent under the Credit Agreement (as herein defined), as collateral agent for the
Lenders and other Secured Parties (as such terms are defined herein) (in such capacity, together
with its successors in such capacity, the “Administrative Agent”).

RECITALS:

     A. Pursuant to the Revolving Credit Agreement dated as of August 11, 2011 (as amended,
modified and supplemented from time to time, the “Credit Agreement”), among the Debtors,
the lenders from time to time party thereto (the “Lenders”) and the Administrative Agent,
the Lenders agreed to make loans to and other extensions of credit on behalf of the Borrower.

     B. It is a condition to the obligations of the Lenders and the Administrative Agent under the
Credit Agreement that Debtors shall have granted Liens (as defined in the Credit Agreement)
securing the Obligations (as defined in the Credit Agreement) and executed and delivered, and
granted the Liens provided for in this Agreement.

     C. To induce the Lenders and the Administrative Agent to enter into the Credit Agreement and
to induce the Secured Parties to make loans and/or extend other credit to the Borrower, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtors have agreed to grant (and do hereby grant) security interests in the
Collateral to the Administrative Agent as security for the Secured Obligations (as hereinafter
defined).

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE
I

DEFINITIONS

          1.01 Definitions. Capitalized terms not otherwise defined herein have the respective meanings
assigned to them in the Credit Agreement. All terms used herein that are not defined herein or in
the Credit Agreement and are defined in the UCC have the meanings therein stated. In addition, the
following terms have the following meanings under this Agreement:

     “Accounts” means all accounts (as defined in the UCC) of any Debtor constituting any
right to the payment of money, whether or not earned by performance, including all moneys due and
to become due to any Debtor in respect of any loans or advances or for Inventory or Equipment or
other goods sold or leased or for services rendered, tax refunds, insurance refund claims and other
insurance claims and proceeds, tort claims, securities and other investment

Exhibit 1.01D - Page 5

 

 

property, rights to proceeds of letters of credit, letter-of-credit rights, supporting
obligations of every nature and any guarantee of any of the foregoing.

     “Administrative Agent” has the meaning set forth in the introductory paragraph to this
Agreement.

     “Agreement” has the meaning set forth in the introductory paragraph to this Agreement.

     “Borrower” has the meaning set forth in the introductory paragraph to this Agreement.

     “Collateral” has the meaning assigned to such term in Section 2.01.

     “Contracts” means, collectively, with respect to each Debtor, all sale, service,
performance, equipment or property lease contracts, agreements and grants and all other contracts,
agreements or grants (in each case, whether written or oral, or third party or intercompany),
between such Debtor and third parties, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof.

     “Control” means (i) in the case of each Deposit Account, “control,” as such term is
defined in Section 9.104 of the UCC, and (ii) in the case of any certificated security,
uncertificated security or security entitlement, “control,” as such term is defined in Section
8.106 of the UCC and (iii) in the case of any commodity contract, “control,” as such term is
defined in Section 9.106 of the UCC.

     “Credit Agreement” has the meaning set forth in Recital A.

     “Deposit Account Control Agreement” means an agreement substantially in the form
annexed hereto as Exhibit A or any other form reasonably satisfactory to the Administrative
Agent.

     “Deposit Accounts” means, collectively, with respect to each Debtor, (i) all “deposit
accounts” as such term is defined in the UCC and (ii) all cash, funds, checks, notes and
instruments from time to time on deposit in any of the accounts described in clause (i) of this
definition.

     “Documents” means all “documents” (as defined in the UCC) or other receipts covering,
evidencing or representing Inventory or Equipment.

     “Equipment” means, with respect to each Debtor, all “equipment” (as defined in the
UCC) and all other goods of such Debtor that are used or acquired for use in its business,
including all spare parts and related supplies, all goods obtained by such Debtor in exchange for
any such goods, all substances, if any, commingled with or added to those goods and all upgrades
and other improvements to those goods, in each case to the extent not constituting Inventory.

     “General Intangibles” means all “general intangibles” (as defined in the UCC) now
owned or hereafter acquired by any Debtor, including (i) all obligations or indebtedness owing to
any Debtor (other than Accounts) from whatever source arising, (ii) all Intellectual Property and

Exhibit 1.01D - Page 6

 

 

goodwill associated therewith, (iii) all rights or claims in respect of refunds for
taxes paid, (iv) all Contracts and (v) to the extent permitted by applicable law, all rights in
respect of any pension plan or similar arrangement maintained for employees of any Debtor.

     “Instruments” means all “instruments”, “chattel paper” (whether tangible or
electronic) or “letters of credit” (each as defined in the UCC) of any Debtor evidencing,
representing, arising from or existing in respect of, relating to, securing or otherwise supporting
the payment of, any Account, including promissory notes, drafts, bills of exchange and trade
acceptances now owned or hereafter acquired and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or in exchange for
any of the Instruments.

     “Intellectual Property” means all Patent Collateral and all Trademark Collateral,
together with (a) all inventions, processes, production methods, proprietary information, know-how
and trade secrets; (b) all licenses or user or other agreements granted to any Debtor with respect
to any of the foregoing, in each case whether now or hereafter owned or used, including the Patent
Collateral or the Trademark Collateral listed in Annex 1; (c) all information, customer
lists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings,
recorded knowledge, surveys, engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and automatic machinery software
and programs; (d) all field repair data, sales data and other information relating to sales or
service of products now or hereafter manufactured; (e) all accounting information and all media in
which or on which any information or knowledge or data or records may be recorded or stored and all
computer programs used for the compilation or printout of such information, knowledge, records or
data; and (f) all causes of action, claims and warranties now or hereafter owned or acquired by any
Debtor in respect of any of the items listed above.

     “Intellectual Property Security Agreements” means the Patent Security Agreement and
the Trademark Security Agreement.

     “Inventory” means all inventory (as defined in the UCC) and all other goods of any
Debtor held for sale, lease or furnishing under a contract of service (including to its
Subsidiaries or Affiliates) or that constitute raw materials, work in process or material used or
consumed in its business, including all spare parts and related supplies, all goods obtained by any
Debtor in exchange for such goods, all products made or processed from such goods and all
substances, if any, commingled therewith or added to such goods.

     “Investment Property” means a security, whether certificated or uncertificated,
security entitlement, securities account, commodity contract or commodity account (in each case, as
defined in the UCC), excluding, however, the Securities Collateral.

     “Patent Collateral” means all Patents now owned or hereafter acquired by any Debtor,
including each Patent Collateral identified in
 Annex 2.

     “Patents” means, collectively, (i) all patents and patent applications, including the
inventions and improvements described and claimed therein, and all patentable inventions, (ii) all
reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof, (iii)
all

Exhibit 1.01D - Page 7

 

 

rights, (A) to all income, profits, royalties, damages and payments now or hereafter due
and/or payable under and with respect thereto, including damages and payments for past, present or
future infringements thereof, (B) to sue for past, present and future infringements thereof, and
(C) otherwise accruing under or pertaining to any of the foregoing throughout the world, and (iv)
all licenses or user or other agreements arising out of the foregoing, now existing or hereafter
coming into existence.

     “Patent Security Agreement” means an agreement substantially in the form annexed
hereto as Exhibit B.

     “Permitted Swap Agreement” means a Swap Agreement to which any Debtor is a
counterparty that is permitted pursuant to Sections 3.16 and 6.06 of the Credit Agreement.

     “Proceeds” has the meaning assigned to such term in the UCC, including all proceeds of
insurance and all condemnation awards and all other compensation for any casualty event with
respect to all or any part of the Collateral (together with all rights to recover and proceed with
respect to the same), and all accessions to, substitutions for and replacements of all or any part
of the other Collateral.

     “Records” has the meaning assigned to such term in Section 4.04.

     “Secured Obligations” means all Obligations now or hereafter existing, including any
extensions, modifications, substitutions, amendments and renewals thereof, whether for principal,
interest, fees, expenses, indemnification, or otherwise, including all costs and expenses
(including reasonable attorneys’ fees and expenses) incurred by the Administrative Agent or any
Secured Party in connection with any suit or proceeding in connection with the performance by such
Secured Party of any of the agreements contained in any of the Contracts, or in connection with any
exercise of its rights or remedies hereunder, pursuant to the terms of this Security Agreement.

     “Secured Parties” means, collectively, the Administrative Agent, the Lenders and each
party to a Permitted Swap Agreement relating to the Loans if at the date of entering into such
Permitted Swap Agreement such person is (i) a Lender or an Affiliate of a Lender and (ii) a party
to the Credit Agreement.

     “Securities Collateral” means each of the Equity Interests (whether such Equity
Interests are securities or general intangibles under the UCC) identified on Annex 3 hereto
and any Equity Interests subsequently pledged to the Administrative Agent pursuant to any Joinder
Agreement, and the certificates or other instruments representing any of the foregoing and any
interest of a Debtor in the entries on the books of any securities intermediary pertaining thereto
(the “Pledged Shares”), and all dividends, distributions, returns of capital, cash,
warrants, options, rights, instruments, rights to vote or manage the business of such Person
pursuant to organizational documents governing the rights and obligations of the stockholders,
partners, members or other owners thereof and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all of such
Pledged Shares; provided that notwithstanding anything contained in any Loan Document to the
contrary, the term

Exhibit 1.01D - Page 8

 

 

“Securities Collateral” shall not include any Equity Interest in any Unrestricted Subsidiary
of the Borrower.

     “Security Interest” means the security interest in the Collateral granted by Debtors
under this Agreement.

     “Trademark Collateral” means all Trademarks now owned or hereafter acquired by any
Debtor including each Trademark Collateral identified in Annex 4.

     “Trademarks” means, collectively, (i) all trade names, trademarks and service marks,
logos, trademark and service mark registrations, and applications for trademark and service mark
registrations, (ii) all renewals of trademark and service mark registrations, and (iii) all rights
(A) to all income, royalties, damages and other payments (including in respect of all past, present
and future infringements) with respect to any of the foregoing, (B) to sue for all past, present
and future infringements thereof, and (C) otherwise accruing under or pertaining to any of the
foregoing, together, in each case, with the product lines and goodwill of the business connected
with the use of, and symbolized by, each such trade name, trademark and service mark.

     “Trademark Security Agreement” means an agreement substantially in the form annexed
hereto as Exhibit C.

     “UCC” means the Uniform Commercial Code as now or hereafter adopted and in effect in
the State of Texas; provided that if, by reason of mandatory provisions of law, the
perfection or the effect of perfection or non-perfection of any Security Interest in any Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other than Texas, “UCC”
means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or the effect of perfection or non-perfection.

          1.02 Interpretation. The principles of interpretation set out in Sections 1.03 and 1.04 of
the Credit Agreement shall apply equally to this Agreement mutatis mutandis.

ARTICLE
II

COLLATERAL

          2.01 Grant of Security Interest. As collateral security for the prompt payment in full when
due (whether at stated maturity, by acceleration or otherwise) and performance of the Secured
Obligations, each Debtor hereby grants to the Administrative Agent for the benefit of the Secured
Parties a security interest in all of such Debtor’s right, title and interest in, to and under the
following property, whether now owned or hereafter acquired by such Debtor and whether now existing
or hereafter coming into existence and wherever located (collectively, the “Collateral”):

     (a) all Accounts;

     (b) all Deposit Accounts;

     (c) all Documents;

Exhibit 1.01D - Page 9

 

 

     (d) all Equipment;

     (e) all General Intangibles;

     (f) all Instruments;

     (g) all Inventory;

     (h) all Investment Property;

     (i) all Securities Collateral;

     (j) the commercial tort claim described on Annex 15 hereto;

     (k) all rights, claims and benefits of such Debtor against any Person arising out of,
relating to or in connection with Inventory or Equipment purchased by such Debtor, including
any such rights, claims or benefits against any Person storing or transporting such
Inventory or Equipment;

     (l) all other tangible and intangible personal property of such Debtor, including all
cash, products, rents, revenues, issues, profits, royalties, income, benefits, commercial
tort claims, letter-of-credit rights, supporting obligations, accessions to, substitutions
and replacements for any and all of the foregoing, any indemnity, warranty or guarantee
payable by any reason of loss or damage to or otherwise with respect to any of the
foregoing, and all causes of action, claims and warranties now or hereafter held by such
Debtor in respect of any of the items listed above;

     (m) all books, correspondence, credit files, records, invoices and other papers,
including all tapes, cards, computer runs and other papers and documents in the possession
or under the control of such Debtor or any computer bureau or service company from time to
time acting for such Debtor; and

     (n) all Proceeds of the collateral described in the foregoing clauses (a) through (m).

Notwithstanding anything herein to the contrary, in no event shall the Collateral include, and a
Debtor shall not be deemed to have granted a security interest in, any of such Debtor’s rights or
interests in any license, contract or agreement to which such Debtor is a party or any of its
rights or interests thereunder to the extent, but only to the extent, that such a grant would,
under the terms of such license, contract or agreement or otherwise, result in a breach of the
terms of, or constitute a default under, any license, contract or agreement to which such Debtor is
a party; provided, that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Collateral shall include, and such Debtor shall be deemed to have granted a
security interest in, all such rights and interests as if such provision had never been in effect.

          2.02
Termination of Security Interests. This Agreement and the Security Interests shall
terminate and all rights to the Collateral shall revert to the applicable Debtors when (i) all
outstanding Secured Obligations shall have been paid in full, (ii) all Commitments

Exhibit 1.01D - Page 10

 

 

under the Credit Agreement shall have expired or been terminated and (iii) the LC
Exposure has been reduced to zero or fully cash collateralized as provided in the Credit Agreement.
Upon such termination, the Administrative Agent shall (at the written request and expense of the
Borrower) promptly cause to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and money received in
respect thereof, to or on the order of the applicable Debtors and to be released and cancelled all
licenses and rights referred to in Section 5.12(b)(i). The Administrative Agent shall also
(at the written request and expense of the Borrower) promptly execute and deliver to the Borrower
upon such termination such UCC termination statements and such other documentation as shall be
reasonably requested by the Borrower to effect the termination and release of the Security
Interests on the Collateral.

          2.03 Partial Release of Collateral. Upon the disposition of any Collateral in accordance with
the Credit Agreement, the Administrative Agent shall, upon the written request of (and at the sole
cost and expense of) the Borrower, promptly execute and deliver to the Borrower such UCC
termination statements and such other documentation as the Borrower may reasonably request to
effect the termination and release of the Liens on such Collateral.

          2.04 Security Interest Absolute. To the maximum extent permitted by applicable law, the
rights and remedies of the Administrative Agent hereunder, the Liens created hereby, and the
obligations of the Debtors under this Agreement are absolute, irrevocable and unconditional and
will remain in full force and effect without regard to, and will not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other
than termination pursuant to Section 2.02 or partial release pursuant to Section
2.03), including:

     (a) any renewal, extension, amendment, or modification of, or addition or supplement to
or deletion from, any of the Loan Documents or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof;

     (b) any waiver of, consent to or departure from, extension, indulgence or other action
or inaction under or in respect of any of the Secured Obligations, this Agreement, any other
Loan Document or other instrument or agreement relating thereto, or any exercise or
non-exercise of any right, remedy, power or privilege under or in respect of the Secured
Obligations, this Agreement, any other Loan Document or any such other instrument or
agreement relating thereto;

     (c) any furnishing of any additional security for the Secured Obligations or any part
thereof to the Administrative Agent or any other Person or any acceptance thereof by the
Administrative Agent or any other Person or any substitution, sale, exchange, release,
surrender or realization of or upon any such security by the Administrative Agent or any
other person or the failure to create, preserve, validate, perfect or protect any other Lien
granted to, or purported to be granted to, or in favor of, the Administrative Agent or any
other Secured Party;

Exhibit 1.01D - Page 11

 

 

     (d) any invalidity, irregularity or unenforceability of all or any part of the
Secured Obligations, any Loan Document or any other agreement or instrument relating thereto
or any security therefor;

     (e) the acceleration of the maturity of any of the Secured Obligations or any other
modification of the time of payment thereof; or

     (f) any other event or circumstance whatsoever that might otherwise constitute a legal
or equitable discharge of a surety or a guarantor, it being the intent of this Section
2.04 that the granting of the Liens by the Debtors hereunder shall be absolute,
irrevocable and unconditional under any and all circumstances.

          2.05 Joinder of Additional Guarantors. Upon the acquisition or formation of a new Subsidiary
that is a Domestic Subsidiary pursuant to Section 5.10 of the Credit Agreement, such new Domestic
Subsidiary shall execute such documents as Administrative Agent may reasonably require to become a
party hereto and to the Guaranty and thereafter shall constitute a “Guarantor” and a “Debtor” for
all purposes hereunder with the same force and effect as if originally named as a Guarantor and
Debtor herein. The execution and delivery of such documents shall not require the consent of any
Debtor hereunder. The rights and obligations of each Debtor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor and Debtor as a party to this
Agreement.

          2.06 Limit of Liability. Notwithstanding the foregoing, the Security Interest granted by each
Debtor hereunder shall be limited to the extent necessary so that its obligations hereunder would
not be subject to avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.

          2.07 Reinstatement. THIS AGREEMENT AND THE LIENS CREATED HEREUNDER SHALL AUTOMATICALLY BE
REINSTATED IF AND TO THE EXTENT THAT FOR ANY REASON ANY PAYMENT BY OR ON BEHALF OF ANY DEBTOR IN
RESPECT OF THE SECURED OBLIGATIONS IS RESCINDED OR MUST OTHERWISE BE RESTORED BY ANY HOLDER OF THE
SECURED OBLIGATIONS, WHETHER AS A RESULT OF ANY FRAUDULENT CONVEYANCE, PROCEEDINGS IN BANKRUPTCY OR
REORGANIZATION OR OTHERWISE. EACH DEBTOR SHALL DEFEND AND INDEMNIFY EACH SECURED PARTY FROM AND
AGAINST ANY CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE UNDER THIS SECTION 2.07
(INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES) IN THE DEFENSE OF ANY SUCH ACTION OR SUIT,
INCLUDING SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE ARISING AS A RESULT OF THE
INDEMNIFIED SECURED PARTY’S OWN NEGLIGENCE OR STRICT LIABILITY BUT EXCLUDING SUCH CLAIM, DAMAGE,
LOSS, LIABILITY, COST, OR EXPENSE THAT IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF
COMPETENT JURISDICTION TO HAVE
RESULTED FROM SUCH INDEMNIFIED SECURED PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR BAD
FAITH.

Exhibit 1.01D - Page 12

 

 

ARTICLE III

PERFECTION OF SECURITY INTEREST

          3.01
Perfection. (a) Prior to or concurrently with the execution and delivery of this
Agreement, Debtors shall file or cause to be filed such financing statements and other documents in
such offices as shall be necessary to perfect and establish the priority (subject only to Permitted
Liens) of the Security Interest and take all such other actions as shall be necessary or as the
Administrative Agent may reasonably request to perfect and establish the priority (subject only to
Permitted Liens) of the Security Interests, subject to paragraph (b), below; and

     (a) Upon request of the Administrative Agent following the occurrence and continuance
of a Default or Event of Default; the Borrower shall:

     (i) subject to Section 3.04, deliver to the Administrative Agent any and all
Instruments, endorsed or accompanied by such instruments of assignment and transfer in such
form and substance as the Administrative Agent may reasonably request;

     (ii) deliver to the Administrative Agent any and all certificates in any Debtor’s
physical possession evidencing Investment Property included in the Collateral or any
Securities Collateral, endorsed or accompanied by such instruments of assignment and
transfer in such form and substance as the Administrative Agent may reasonably request;

     (iii) cause the Administrative Agent to be listed as the lienholder on all certificates
of title or ownership relating to Equipment owned by Debtors with a fair market value, as
determined in good faith by the Borrower, in excess of $150,000 and deliver to the
Administrative Agent originals of all such certificates of title or ownership for the
Equipment;

     (iv) deliver to the Administrative Agent a Deposit Account Control Agreement with
respect to each Deposit Account included in the Collateral other than any Deposit Account
maintained with Wells Fargo, executed by the applicable Debtor and the financial institution
maintaining such Deposit Account; and

     (v) with respect to any uncertificated security included in the Collateral, cause the
Security Interest to be recorded on the equityholder register or on the books for the issuer
of such uncertificated security and cause such issuer to execute and deliver to the
Administrative Agent an acknowledgement of the Security Interest pursuant to which the
issuer agrees to comply with instructions originated by the Administrative Agent without
further consent by such Debtor when the Administrative Agent advises such issuer of the
existence of an Event of Default.

Additionally, each Debtor hereby authorizes the Administrative Agent to prepare, execute, deliver,
file and/or record (without the signature of such Debtor to the extent permitted by applicable law)
any such financing statement, continuation statement, amendment or other
document that may be necessary: (i) to create, preserve, perfect or validate the Security
Interest; or (ii) or to enable the Administrative Agent to exercise and enforce its rights
hereunder with

Exhibit 1.01D - Page 13

 

 

respect to such Security Interest. The Debtors shall pay the costs of, or incidental to, any
recording or filing of any such financing or continuation statement, amendment or other document or
otherwise arising out of or in connection with the execution and delivery of this Agreement.

          3.02
Perfection of Additional Collateral. Each Debtor shall, subject to Section 3.04,
upon the acquisition after the date hereof by such Debtor of any additional Collateral, comply with
the requirements of Section 3.01, above.

          3.03
Intellectual Property Filings. On the date hereof, each Debtor will execute and deliver to
the Administrative Agent the Intellectual Property Security Agreements with respect to all
Intellectual Property then owned by it. Upon the request of the Administrative Agent, each Debtor
will sign and deliver to the Administrative Agent any Intellectual Property Security Agreement
necessary to grant Security Interests in any Intellectual Property owned by it at such time that is
not covered by the Security Interests granted in any previous Intellectual Property Security
Agreements so executed and delivered by it. In each case, such Debtor shall promptly make all
Intellectual Property filings necessary to record the Security Interests in such Intellectual
Property. Each Debtor hereby appoints the Administrative Agent as its attorney-in-fact to execute
and file all Intellectual Property filings required or so requested for the foregoing purposes, all
acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an
interest, shall be irrevocable until the Collateral is released pursuant to Section 2.02 or
Section 2.03.

          3.04
Instruments. So long as no Event of Default shall have occurred and be continuing, each
Debtor may retain for collection in the ordinary course any Instruments received by it in the
ordinary course of business, and the Administrative Agent shall, promptly upon request and at the
expense of any Debtor, make appropriate arrangements for making any Instrument pledged by such
Debtor and held by the Administrative Agent available to such Debtor for purposes of presentation,
collection or renewal (any such arrangement to be effected, to the extent deemed appropriate by the
Administrative Agent, against trust receipt or like document).

          3.05
Further Assurances. Each Debtor shall, from time to time, at its sole expense, promptly
execute, deliver, file and record all further agreements, assignments, instruments, documents and
certificates and take all further action that may be reasonably necessary in order to create,
preserve, perfect, confirm or validate the Security Interest in the Collateral or to enable the
Administrative Agent to obtain the full benefits of the Security Documents (including the delivery
of possession of any Collateral that hereafter comes into existence or is acquired in the future by
the Administrative Agent as pledgee for the benefit of the Secured Parties), or to enable the
Administrative Agent to exercise and enforce any of its rights, powers and remedies thereunder with
respect to any of such Collateral.

          3.06
Use of Collateral. So long as no Event of Default shall have occurred and be continuing,
except as otherwise provided herein or in the Credit Agreement, each Debtor shall be entitled to
use and possess the Collateral and to exercise its rights, title and interest in all Collateral
subject to the rights, remedies, powers and privileges of the Administrative Agent

Exhibit 1.01D - Page 14

 

 

under Article VI and to such use, possession or exercise not otherwise constituting an
Event of Default.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     Each Debtor represents and warrants to the Secured Parties as follows:

          4.01
Title. Each Debtor is the sole legal and beneficial owner of all Collateral in which it
purports to grant a Lien pursuant to this Agreement, and such Collateral is free and clear of all
Liens other than Permitted Liens. No currently effective financing statement or other instrument
similar in effect is on file in any recording office covering all or any part of the Collateral,
except such as may have been filed evidencing Permitted Liens or except as will be released
concurrently with the closing of the transactions contemplated in the Credit Agreement. No Person
other than the Administrative Agent has Control or possession of all or any part of the Collateral
except as permitted by the Credit Agreement or other Loan Documents or except as will be released
concurrently with the closing of the transactions contemplated in the Credit Agreement.

          4.02 Chief Executive Office; Change of Name; Jurisdiction of Organization. The exact legal
name, type of organization, jurisdiction of organization, Federal Taxpayer Identification Number,
organizational identification number and chief executive office of each Debtor is indicated next to
its name in Annex 6.

          4.03 Prior Transactions. Each Debtor has not, during the past five years, been a party to any
merger or consolidation, or acquired all or substantially all of the assets of any person, or
acquired any of its property or assets out of the ordinary course of business, except as set forth
in Annex 7.

          4.04
Records. The principal place of business and chief executive office of each Debtor and
the office where each Debtor keeps its books and records concerning the Collateral (hereinafter,
collectively called the “Records”) is located at the address set out on Annex 8.

          4.05
Changes in Circumstances. No Debtor has, within the period of four months prior to the
date hereof: (a) changed its location (as defined in Section 9-307 of the UCC); (b) changed its
name; or (c) become a “new debtor” (as defined in Section 9-102(a)(56) of the UCC) with respect to
a security agreement previously entered into by any other Person.

          4.06
Inventory and Equipment. All Inventory and Equipment of the Debtors other than such
Inventory which is in-transit to the applicable purchaser thereof: (a) is located at one of the
locations identified in Annex 9 under its name or in transit from one of such location to
another; and (b) is in the exclusive Control of a Debtor on the date hereof. [Is this something we
can do?]

          4.07
Title to Equity Interests. As of the Effective Date, the applicable Debtor listed on
Annex 3 hereto owns the Equity Interests listed as being owned by it in Annex 3
hereto,

Exhibit 1.01D - Page 15

 

 

free and clear of any Lien other than the Permitted Liens or except as will be released
concurrently with the closing of the transactions contemplated in the Credit Agreement. All shares
of capital stock identified in such Annex as being beneficially owned by each Debtor have been duly
authorized and validly issued, are fully paid and non-assessable and are not subject to any option
to purchase or similar right of any Person. Except as permitted by the Credit Agreement, each
Debtor is not and will not become a party to or otherwise bound by any agreement, other than the
Loan Documents, which restricts in any manner the rights of any present or future holder of any
such Equity Interest with respect thereto.

          4.08 Financing Statements. The only filings, registrations and recordings necessary and
appropriate to create, preserve, protect, publish notice of and perfect the security interest
granted by each Debtor to the Administrative Agent (for the benefit of the Secured Parties)
pursuant to this Agreement in respect of the Collateral are listed in Annex 5. All such
filings, registrations and recordings have been delivered to the Administrative Agent or its
counsel in completed and, to the extent necessary or appropriate, duly executed form for filing in
each governmental, municipal or other office specified in Annex 5.

          4.09 Deposit Accounts. As of the Effective Date, no Debtor has opened nor does it maintain
any Deposit Accounts other than the accounts listed in Annex 10.

          4.10 Investment Property. As of the Effective Date, each Debtor (i) has no Securities
Accounts or Commodity Accounts other than those listed in Annex 11, and the Administrative
Agent has a perfected first priority security interest in such Securities Accounts and Commodity
Accounts as a result of filing the applicable UCC financing statements, in each case subject to
Permitted Liens, and (ii) does not hold, own or have any interest in any Investment Property other
than those maintained in Securities Accounts or Commodity Accounts listed in Annex 11.

          4.11 Delivery of Certificated Securities Collateral. All certificates, agreements or
instruments representing or evidencing the Securities Collateral in existence on the date hereof
have been delivered to the Administrative Agent in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank, and the Administrative
Agent has a perfected first priority security interest therein.

          4.12 Perfection of Uncertificated Securities Collateral. The Administrative Agent has a
perfected first priority security interest in all uncertificated Securities Collateral pledged by
it hereunder that is in existence on the date hereof.

          4.13 Instruments and Tangible Chattel Paper. As of the Effective Date, no principal amount payable under or in connection with any of
the Collateral is evidenced by any Instrument or tangible chattel paper other than such Instruments
and tangible chattel paper listed in Annex 12.

          4.14
Electronic Chattel Paper and Transferable Records. As of the Effective Date no principal
amount payable, individually or in the aggregate, in excess of $150,000 under or in connection with
any of the Collateral is evidenced by any electronic chattel paper or any “transferable record” (as
that term is defined in Section 201 of the Federal Electronic Signatures

Exhibit 1.01D - Page 16

 

 

in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction) other than such electronic chattel paper and
transferable records listed in Annex 13.

          4.15 Letters of Credit. As of the Effective Date, no Debtor is a beneficiary under any
Letter of Credit issued in favor of such Debtor except as listed in Annex 14.

          4.16 Commercial Tort Claims. As of the Effective Date, such Debtor holds no commercial tort
claims other than those listed in
 Annex 15.

ARTICLE V

COVENANTS

     In furtherance of the grant of the Security Interests pursuant to Article II, each
Debtor hereby agrees with the Administrative Agent as follows:

          5.01 Access to Records. Each Debtor shall upon reasonable notice, at any time during normal
business hours, permit representatives of the Administrative Agent to inspect and make copies of
the Records, and to be present at such Debtor’s place of business to receive copies of all
communications and remittances relating to the Collateral, and forward to the Administrative Agent
copies of any notices or communications received by such Debtor relevant to the Administrative
Agent’s Security Interest in the Collateral. Upon the occurrence and during the continuation of
any Event of Default, at the Administrative Agent’s request, each Debtor shall promptly deliver
copies of any and all such Records to the Administrative Agent.

          5.02 Other Financing Statements and Liens. Without the prior written consent of the
Administrative Agent, each Debtor shall not file or suffer to be on file, or authorize or permit to
be filed or to be on file, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Administrative Agent is not named as the sole secured party
for the benefit of the Secured Parties except to the extent such filing or like instrument pertains
to a Permitted Lien.

          5.03 Reports. Each Debtor shall furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Collateral and such other reports
in connection with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail; provided, however, absent the existence of an Event of Default, the
Debtors
shall only be required to deliver such information quarterly. Promptly upon request of the
Administrative Agent, following receipt by the Administrative Agent of any reports pursuant to the
preceding sentence, the Borrower shall deliver to the Administrative Agent revised Annexes
2 and 4 to include Trademarks and Patents that become part of the Collateral under this
Agreement.

          5.04 Adverse Claims. Each Debtor shall defend, all at its own expense, such Debtor’s title
and the existence, perfection and first priority of the Administrative Agent’s security interest in
the Collateral against all adverse claims (other than Permitted Liens).

Exhibit 1.01D - Page 17

 

 

          5.05 Prohibition of Certain Changes. Except to the extent permitted by the Credit
Agreement, no Debtor shall change its (i) name, identity, corporate structure or the jurisdiction
under which it is organized, (ii) chief executive office or chief place of business or (iii) the
locations where it keeps or holds any Collateral (except Inventory in transit from one such
location to another) or any records relating thereto from the applicable locations described in
Annexes 8 and 9 hereof, unless such Debtor shall have given the Administrative
Agent 30 days’ prior notice thereof and, if requested by the Administrative Agent upon the
direction of the Required Lenders, delivered an opinion of counsel with respect thereto in
accordance with Section 5.06. It will not in any event change the location of any
Collateral owned by it if such change would cause the Security Interest in such Collateral to lapse
or cease to be perfected.

          5.06 Opinion of Counsel. If requested by the Administrative Agent upon the direction of the
Required Lenders, at least 20 days before it takes any action contemplated by Section 5.05,
a Debtor shall, at its expense, cause to be delivered to the Administrative Agent an opinion of
counsel, in form and substance reasonably satisfactory to the Administrative Agent, to the effect
that all financing statements and amendments or supplements thereto, continuation statements and
other documents required to be recorded or filed in order to maintain the perfection of the
Security Interests after the taking of such action against all creditors of and purchasers from
such Debtor (except any continuation statements specified in such opinion of counsel that are to be
filed more than six months after the date thereof) have been filed in each filing office necessary
for such purpose and that all filing fees and taxes, if any, payable in connection with such
filings have been paid in full.

          5.07 Collateral Held by Others. If any of its Collateral is at any time in the possession or
control of any warehouseman, bailee or agent, in each instance upon the request of the
Administrative Agent, each Debtor shall notify such warehouseman, bailee or agent of the Security
Interests and instruct it to hold all such Collateral for the Administrative Agent’s account
subject to the Administrative Agent’s instructions (which shall permit such Collateral to be
removed by such Debtor in the ordinary course of business until the Administrative Agent notifies
such warehouseman, bailee or agent that an Event of Default has occurred and is continuing).
Notwithstanding the foregoing, the Debtors shall not be required to take any action under this
Section 5.07 with respect to any Inventory in-transit to the applicable purchaser thereof.

          5.08 Records. Each Debtor shall (i) keep accurate Records and (ii) give the Administrative
Agent at least 30 days’ notice before it changes the location of any office where such Debtor keeps
the Records.

          5.09 Collection of Accounts. Each Debtor shall use commercially reasonable efforts to cause to be collected from its
account debtors, as and when due, any and all amounts owing under or on account of each of its
Accounts (including Accounts that are delinquent, such Accounts to be collected in accordance with
lawful collection procedures) and shall apply forthwith upon receipt thereof all such amounts as
are so collected to the outstanding balance of such Accounts. The costs and expenses (including
attorney’s fees) of collection, whether incurred by a Debtor or the Administrative Agent, shall be
borne by such Debtor.

Exhibit 1.01D - Page 18

 

 

          5.10 Disposition of Collateral. No Debtor shall sell, lease, exchange, assign or
otherwise dispose of, or grant any option with respect to, any of its Collateral except as
permitted by the Credit Agreement.

          5.11 Protection of Intellectual Property. Each Debtor shall timely pay all fees (including
maintenance fees), file all documents or declarations (including applications, applications for
renewal, affidavits of use and affidavits of incontestability) and take all other action necessary
to obtain, maintain and renew each Patent and Trademark included in the Collateral. Each Debtor
shall notify the Administrative Agent at the end of each calendar quarter if it knows that any
application or registration relating to any Intellectual Property owned or licensed by it may
become abandoned or dedicated, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in the United States
Patent and Trademark Office or any court) regarding such Debtor’s ownership of such Intellectual
Property, its right to register or patent the same, or its right to keep and maintain the same. If
any Debtor’s rights to any Intellectual Property are infringed, misappropriated or diluted by a
third party, such Debtor shall notify the Administrative Agent at the end of such calendar quarter
in which such Debtor learned of such infringement, misappropriation or dilution and such Debtor
shall take all actions as such Debtor shall reasonably deem appropriate under the circumstances to
protect such Intellectual Property. Nothing contained in this Section 5.11 shall require
any Debtor to defend, maintain, renew or otherwise continue any Intellectual Property Collateral
which is no longer required or useful in the operation of such Debtor’s business.

          5.12 Special Provisions Relating to Certain Collateral.

     (a) Contracts.

     (i) Anything herein to the contrary notwithstanding, each Debtor shall remain liable to
perform all of its duties and obligations under each of the Contracts included in the
Collateral to the same extent as if this Agreement had not been executed. The exercise by
the Administrative Agent or any other Secured Party of any of the rights and remedies
hereunder shall not release any Debtor from any of its duties or obligations under the
Contracts. Neither the Administrative Agent nor any other Secured Party shall have any
duty, obligation or liability under such Contracts included in the Collateral or otherwise
in respect of the Collateral by reason of this Agreement or be obligated to perform any of
the obligations or duties of any Debtor under the Contracts or otherwise in respect of the
Collateral or to take any action to collect or enforce any claim for payment or any other
right assigned hereunder.

     (ii) During the existence of an Event of Default, if Debtor fails to perform any
agreement contained herein or in any of the Contracts, the Administrative Agent may (but
shall not be obligated to) itself perform, or cause the performance of, such agreement,
and the reasonable fees, costs and expenses of the Administrative Agent incurred in
connection therewith shall be payable by or on behalf of Debtors and shall be Secured
Obligations to the Administrative Agent.

Exhibit 1.01D - Page 19

 

 

     (b) Intellectual Property.

     (i) For the purpose of enabling the Administrative Agent to exercise rights and
remedies under Article VI at such time as the Administrative Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each Debtor hereby
grants to the Administrative Agent, to the extent licensable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to any Debtor) to use,
license or sublicense any of the Intellectual Property now owned or hereafter acquired by
such Debtor, wherever the same may be located, including in such license reasonable access
to all media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof; provided, however, such
license shall only be effective during the existence of an Event of Default.

     (ii) Notwithstanding anything contained herein to the contrary, but subject to the
provisions of Section 6.05 of the Credit Agreement, so long as no Event of Default shall
have occurred and be continuing, each Debtor will be permitted to exploit, use, enjoy,
protect, license, sublicense, assign, sell, dispose of or take other actions with respect to
the Intellectual Property in the ordinary course of the business of such Debtor. In
furtherance of the foregoing, unless an Event of Default shall have occurred and be
continuing, the Administrative Agent shall, from time to time, upon the request of any
Debtor, execute and deliver any instruments, certificates or other documents, in the form so
requested, that such Debtor shall have certified are appropriate (in its judgment) to allow
such Debtor to take any action permitted above (including relinquishment of the license
provided pursuant to clause (i) immediately above as to any specific Intellectual Property).
Further, upon satisfaction of the conditions to termination of this Agreement described in
Section 2.02, the Administrative Agent shall grant back to Debtor the license
granted pursuant to clause (i) immediately above. The exercise of rights and remedies under
Article VI by the Administrative Agent shall not terminate the rights of the holders
of any licenses or sublicenses theretofore granted by any Debtor in accordance with the
first sentence of this clause (ii).

     (c) Securities Collateral.

     (i) No Debtor shall take any action that would result in (A) the revocation of any
election to treat any Securities Collateral as certificated securities, and (B) an election
to treat as certificated securities any Securities Collateral that constitute uncertificated
securities.

     (ii) So long as Administrative Agent has not exercised remedies with respect to the
Collateral under this Agreement or any other Loan Document upon the occurrence and during
the continuation of an Event of Default, Debtors reserve the right to exercise all voting
and other rights, title and interest with respect to the Collateral (except as limited by
the Loan Documents) and to receive all income, gains, profits, dividends and other
distributions from the Collateral whether non-cash dividends, cash, options,
warrants, stock splits, reclassifications, rights, instruments or other investment
property or other property or proceeds from time to time received, receivable or otherwise

Exhibit 1.01D - Page 20

 

 

distributed in respect of or in exchange for any or all of such rights and
interests (except as limited by the Loan Documents); provided that no vote shall be
cast, right exercised or other action taken which could reasonably be expected to result in
a Material Adverse Effect.

     (iii) In furtherance of the right of the Administrative Agent to exercise voting rights
following an Event of Default, each Debtor (during the occurrence and continuance of an
Event of Default) shall execute and deliver to the Administrative Agent a proxy in a form
acceptable to the Administrative Agent with respect to each item of Securities Collateral
owned by it. No Debtor shall grant a proxy that would conflict with any proxy granted to
the Administrative Agent pursuant to the preceding sentence so long as the Security
Interests remain in effect.

ARTICLE VI

REMEDIES

          6.01 Events of Default, Etc. If any Event of Default shall have occurred and be continuing:

     (a) the Administrative Agent shall have, and in its discretion may exercise, the rights
and remedies with respect to this Agreement as more particularly provided herein or in the
Credit Agreement;

     (b) each Debtor shall, upon the reasonable request of the Administrative Agent,
assemble Collateral owned by it (and not otherwise in the possession of the Administrative
Agent) at such place or places, reasonably convenient to both the Administrative Agent and
such Debtor, designated in such request;

     (c) the Administrative Agent may (but shall not be obligated to), without notice to any
Debtor and at such times as the Administrative Agent in its sole discretion may determine,
exercise any or all of Debtors’ rights in, to and under, or in any way connected to, the
Collateral and the Administrative Agent shall otherwise have and may (but shall not be
obligated to) exercise all of the rights, powers, privileges and remedies with respect to
the Collateral of a secured party under the UCC (whether or not said UCC is in effect in the
jurisdiction where the rights, powers, privileges and remedies are asserted) and such
additional rights, powers, privileges and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights, powers, privileges and
remedies hereunder may be asserted, including the right, to the maximum extent permitted by
applicable law, to exercise all voting, consensual and other powers of ownership pertaining
to the Collateral as if the Administrative Agent were the sole and absolute owner thereof
(and the Debtors agree to take all such action as may be appropriate to give effect to such
right);

     (d) the Administrative Agent may (but shall not be obligated to) make any reasonable
compromise or settlement it deems desirable with respect to any of the Collateral and may
(but shall not be obligated to) extend the time of payment, arrange for

Exhibit 1.01D - Page 21

 

 

payment in installments, or otherwise modify the terms, of all or any part of the
Collateral;

     (e) the Administrative Agent may (but shall not be obligated to), in its name or in the
name of any Debtor or otherwise, demand, sue for, collect or receive any money or property
at any time payable or receivable on account of or in exchange for any of the Collateral;

     (f) the Administrative Agent may (but shall not be obligated to) sell, lease, assign or
dispose of all or any part of the Collateral which shall then be or shall thereafter come
into the possession, custody or control of the Administrative Agent, any other Secured Party
or any of their respective agents at such place or places as the Administrative Agent deems
best, and for cash or for credit or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of performance or notice of intention to
effect any such disposition or of the time or place thereof except such notice as is
required by applicable law and cannot be waived. If, pursuant to applicable law, prior
notice of sale of the Collateral under this Section is required to be given to any Debtor,
each Debtor hereby acknowledges that the minimum time required by such applicable law, or if
no minimum time is specified, 10 days, shall be deemed a reasonable notice period. The
Administrative Agent or any other Secured Party or anyone else may be the purchaser, lessee,
assignee or recipient of any or all of the Collateral so disposed of at any public sale (or,
to the maximum extent permitted by applicable law, at any private sale) and thereafter hold
the same absolutely, free from any claim or right of whatsoever kind, including any right or
equity of redemption (statutory or otherwise), of Debtors, any such demand, notice and right
or equity being hereby expressly waived and released to the maximum extent permitted by
applicable law. The Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time or place to
which the sale may be so adjourned. The Collateral may be sold in one or more sales, at
public or private sale, conducted by any officer or agent of, or auctioneer or attorney for,
the Administrative Agent, at the Administrative Agent’s place of business or elsewhere, for
cash, upon credit or for other property, for immediate or future delivery, and at such price
or prices and on such terms as the Administrative Agent shall deem appropriate in its
reasonable discretion. The Administrative Agent may, in its reasonable discretion, at any
such sale restrict the prospective bidders or purchasers as to their number, nature of
business and investment intention to the extent necessary to comply with applicable law.
Upon any public or private sale the Administrative Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels. The Administrative
Agent shall not be obligated to make any sale pursuant to any such notice. In case of any
sale of all of any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Administrative Agent until the full selling price is paid by
the purchaser thereof, but neither the Administrative Agent nor any Secured Party shall
incur any liability in case of the failure of such purchaser to take up and pay for the
Collateral
so sold, and, in case of any such failure, such Collateral may again be sold pursuant
to the provisions hereof. All cash proceeds of any such sale, and any other realization
upon all

Exhibit 1.01D - Page 22

 

 

or any part of the Collateral may, in the sole discretion of the Administrative
Agent, be held by the Administrative Agent as collateral for or applied then or at any time
thereafter, in whole or in part, by the Administrative Agent for the benefit of the Secured
Parties to the payment and satisfaction of the Secured Obligations in accordance with
Section 6.04;

     (g) upon request of the Administrative Agent, each Debtor shall promptly notify (and
each Debtor hereby authorizes the Administrative Agent so to notify) each account debtor in
respect of any Accounts or Instruments that such Collateral has been assigned to the
Administrative Agent hereunder, and that any payments due or to become due in respect of
such Collateral are to be made directly to the Administrative Agent;

     (h) the Administrative Agent shall have the right to endorse, assign or otherwise
transfer to or to register in the name of the Administrative Agent or any of its nominees or
endorse for negotiation any or all of the Securities Collateral, without any indication that
such Securities Collateral is subject to the Security Interests hereunder. In addition, the
Administrative Agent shall have the right at any time to exchange certificates representing
or evidencing Securities Collateral for certificates of smaller or larger denominations;

     (i) the Administrative Agent may vote or exercise any and all of the Debtors’ rights or
powers incident to their ownership of the Securities Collateral, including any rights or
powers to manage or control the Guarantors;

     (j) the Administrative Agent may cause any action at law or suit in equity or other
proceeding to be instituted and prosecuted to enforce any rights vested in it by this
Agreement or by law or included in the Collateral, subject to the provisions and
requirements hereof and thereof, or to aid in the exercise of any power herein or therein
granted, or for any foreclosure hereunder and sale under a judgment or decree in any
judicial proceeding;

     (k) in connection with any acceleration and foreclosure, the Administrative Agent may
lawfully and peacefully take possession of the Collateral and lawfully and peacefully render
it usable and repair and renovate the same, without, however, any obligation to do so, and
lawfully and peacefully enter upon any location where the Collateral may be located for that
purpose, control, manage, operate, rent and lease the Collateral, collect all rents and
income from the Collateral and apply the same to reimburse the Secured Parties for any cost
or expenses incurred hereunder or under any of the Loan Documents and to the payment or
performance of any Debtor’s obligations hereunder or under any of the Loan Documents, and
apply the balance to the other Secured Obligations and any remaining excess balance to
whomsoever is legally entitled thereto;

     (l) the Administrative Agent may secure the appointment of a receiver for the
Collateral or any part thereof;

Exhibit 1.01D - Page 23

 

 

     (m) the Administrative Agent may lawfully and peacefully occupy any premises owned
or leased by any Debtor where the Collateral or any part thereof is assembled for a
reasonable period in order to effectuate its rights and remedies hereunder or under law,
without obligation to any Debtor in respect of such occupation;

     (n) the Administrative Agent may give instructions to the issuer of any Securities
Collateral that is an uncertificated security with respect to such uncertificated security.

     Each Debtor recognizes that, by reason of certain prohibitions contained in the Securities Act
of 1933, as amended, and applicable state securities laws, the Administrative Agent may be
compelled, subject to the notice provision provided for in paragraph (f) of this Section
6.01, with respect to any sale of all or any part of the Collateral constituting a security (as
such term is defined in the Securities Act of 1933), to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for investment and not with a
view to the distribution or resale thereof. Each Debtor acknowledges that any such private sale
may be at prices and on terms less favorable to the Administrative Agent than those obtainable
through a public sale without such restrictions, and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially reasonable manner
and that the Administrative Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of time necessary to permit any
Debtor or the issuer thereof to register it for public sale.

          6.02 Deficiency. If the proceeds of sale, collection or other realization of or upon the
Collateral by virtue of the exercise of remedies under Section 6.01 are insufficient to
cover the costs and expenses of such exercise and the payment in full of the Secured Obligations,
the Administrative Agent shall retain all rights and remedies under the Loan Documents, and each
Debtor shall remain liable, with respect to any deficiency.

          6.03 Private Sale. The Administrative Agent and the other Secured Parties shall incur no
liability as a result of the sale, lease or other disposition of all or any part of the Collateral,
at any private sale pursuant to Section 6.01 conducted in a commercially reasonable manner.
Subject to and without limitation of the preceding sentence, Debtor hereby waives any claims
against the Administrative Agent or any other Secured Party arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less than the price
that might have been obtained at a public sale or was less than the aggregate amount of the Secured
Obligations, even if the Administrative Agent accepts the first offer received and does not offer
the Collateral to more than one offeree.

          6.04 Application of Proceeds. Except as otherwise herein expressly provided, the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant hereto, and any other cash at the time
held by the Administrative Agent under this Article VI, shall be applied by the
Administrative Agent as follows:

          First, to the payment of the costs and expenses of such exercise of remedies,
including reasonable out of pocket costs and expenses of the Administrative Agent, the

Exhibit 1.01D - Page 24

 

 

reasonable fees and expenses of its agents and counsel and all other reasonable expenses
incurred and advances made by the Administrative Agent in that connection;

          Second, to the payment in full of the remaining Secured Obligations equally and
ratably in accordance with their respective amounts then due and owing in respect of the Loan
Documents and the Permitted Swap Agreements with Secured Parties, or as the Secured Parties holding
the same may otherwise agree; and

          Finally, to the pay to the Borrower, or its successors or assigns, or as a court of
competent jurisdiction may direct, any surplus then remaining.

          6.05 Attorney-in-Fact. Without limiting any rights or powers granted by this Agreement to the
Administrative Agent while no Event of Default has occurred and is continuing, upon the occurrence
and during the continuance of any Event of Default, each Debtor hereby appoints the Administrative
Agent as the attorney-in-fact of such Debtor for the purpose of carrying out the provisions of this
Article VI and taking any action and executing any instruments that the Administrative Agent may
deem necessary or desirable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, so long as the Administrative Agent shall be entitled under this Article VI to make
collections in respect of the Collateral, the Administrative Agent shall have the right and power:

     (a) to receive, endorse and collect all checks made payable to the order of any Debtor
representing any dividend, payment or other distribution in respect of the Collateral or any
part thereof and to give full discharge for the same;

     (b) to file any claims or take any action or institute any proceedings in connection
therewith which the Secured Party may deem to be necessary or advisable;

     (c) to pay, settle or compromise all bills and claims which may be or become liens or
security interests against any or all of the Collateral, or any part thereof, unless a bond
or other security satisfactory to the Secured Party has been provided; and

     (d) upon foreclosure, to do any and every act which any Debtor may do on its behalf
with respect to the Collateral or any part thereof and to exercise any or all of such
Debtor’s rights and remedies under any or all of the Collateral;

provided, however, that the Secured Party shall not exercise any such rights except
upon the occurrence and continuation of an Event of Default. This power of attorney is a power
coupled with an interest and shall be irrevocable.

          6.06 Expenses.

     (a) Pursuant to Section 9.03 of the Credit Agreement, the Administrative Agent may
incur, and Debtors shall pay to the Administrative Agent, all reasonable fees and
out-of-pocket expenses (including reasonable fees and expenses for legal services) of, or
incident to, the enforcement of any of the provisions of this Article VI, or
exercise by experts, agents or attorneys selected by the Administrative Agent in good faith
of any

Exhibit 1.01D - Page 25

 

 

rights or privileges of Debtors in respect of the Collateral, or any actual or
attempted sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the Collateral and defending or
asserting rights and claims of the Administrative Agent and the other Secured Parties in
respect thereof, by litigation or otherwise, and all such fees and expenses and, to the
extent such amounts are not timely paid, together with interest thereon at the applicable
rates provided for in Sections 2.11 and 2.12 of the Credit Agreement, shall be Secured
Obligations of the Administrative Agent secured under Article II. All amounts payable by
the Debtors under this Section 6.06(a) shall be payable within ten (10) Business
Days of demand thereof, setting forth an itemization of such charges in reasonable detail.

     (b) The terms, conditions, covenants and agreements to be observed or performed by each
Debtor under this Agreement shall be observed or performed by it at its or the Borrower’s
sole cost and expense.

          6.07 Administrative Agent’s Right to Perform on Debtor’s Behalf. If any Debtor fails to
perform any of its obligations under this Agreement, the Administrative Agent may (but shall not be
obligated to), upon reasonable notice to such Debtor, unless such Debtor is diligently pursuing a
cure for such failure that cannot be obtained more quickly by the Administrative Agent’s
performance as specified herein, itself perform or cause to be performed such obligations at the
expense of such Debtor, either in its name or in the name and on behalf of such Debtor.

          6.08 Custody and Preservation. The Administrative Agent’s obligation to use reasonable care
in the custody and preservation of Collateral shall be satisfied if it uses the same care as it
uses in the custody and preservation of its own property.

          6.09 Preservation of Rights. Neither the Administrative Agent nor any Secured Party shall be
required to take any steps to preserve any rights against prior parties to any of the Collateral.

          6.10 Rights of Secured Parties. The Administrative Agent or any other Secured Party may (but
shall not be obligated to) pay or secure payment of any Tax or other claim that may be secured by
or result in a Lien on any Collateral other than a Permitted Lien. The Administrative Agent or any
other Secured Party may (but shall not be obligated to) do any other thing that it in good faith
believes is necessary or desirable to preserve, protect or maintain the Collateral or, during the
existence of an Event of Default, to enhance its value. Debtors shall immediately reimburse the
Administrative Agent or any other Secured Party for any reasonable payment or expense (including
reasonable attorneys’ fees and expenses) that the Administrative Agent or such other Secured Party
may incur pursuant to this Section 6.10.

          6.11 No Marshalling. Neither the Administrative Agent nor any other Secured Party shall be required to marshal
any present or future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order.

Exhibit 1.01D - Page 26

 

 

          6.12 Remedies Cumulative. No right, power or remedy herein conferred upon or reserved to the
Administrative Agent or any Secured Party is intended to be exclusive of any other right, power or
remedy, and every such right, power and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right, power and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder or
otherwise shall not prevent the concurrent assertion or employment of any other appropriate right
or remedy. Resort to any or all security now or hereafter held by the Administrative Agent may be
taken concurrently or successively and in one or several consolidated or independent judicial
actions or lawfully taken nonjudicial proceedings, or both.

ARTICLE VII

MISCELLANEOUS

          7.01 Waivers of Rights Inhibiting Enforcement. Each Debtor waives, for itself and all who may
claim under it, to the maximum extent permitted by applicable law:

     (a) any claim that, as to any part of the Collateral, a public sale, should the
Administrative Agent elect so to proceed, is, in and of itself, not a commercially
reasonable method of sale for the Collateral;

     (b) the right to assert in any action or proceeding between it and the Administrative
Agent any offsets or counterclaims that it may have;

     (c) except as otherwise provided in this Agreement, NOTICE OR JUDICIAL HEARING IN
CONNECTION WITH THE ADMINISTRATIVE AGENT’S TAKING POSSESSION OR DISPOSITION OF ANY OF THE
COLLATERAL DURING THE EXISTENCE OF AN EVENT OF DEFAULT, INCLUDING ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT ANY DEBTOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE,
AND ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS
WITH RESPECT TO THE ENFORCEMENT OF THE ADMINISTRATIVE AGENT’S RIGHTS HEREUNDER;

     (d) all rights of redemption, appraisement, valuation, stay, extension or moratorium;
and

     (e) the right to invoke any law requiring marshalling of collateral and all other
rights the exercise of which would, directly or indirectly, prevent, delay or inhibit the
enforcement of any of the rights or remedies of the Administrative Agent and the other
Secured Parties under this Agreement or the absolute sale of the Collateral, now or
hereafter in force under any applicable law.

          7.02 Notices. The Administrative Agent or any Debtor shall give any notice, request, demand
or other communication (a “Notice”) pursuant to this Agreement in accordance

Exhibit 1.01D - Page 27

 

 

with Section 9.01 of the Credit Agreement. Any Notice to the Debtor shall be sent to the
address of the Borrower set forth in the Credit Agreement or to such other address provided by such
Debtor to the Administrative Agent in writing. Any Notice sent as hereinabove provided shall be
deemed delivered upon receipt or refusal of delivery.

          7.03 Assignment. No Debtor may assign any of its rights or delegate any performance under
this Agreement (whether voluntarily or involuntarily, by merger, consolidation, dissolution,
operation of law or any other manner) except as permitted under the Credit Agreement or with the
prior written consent of the Administrative Agent, which consent may be withheld in the
Administrative Agent’s sole discretion. Any purported assignment without such consent is void.
When any Lender assigns or otherwise transfers any interest held by it under the Credit Agreement
or other Loan Document to any other Person pursuant to the terms of the Credit Agreement or such
other Loan Document, that other Person shall thereupon become vested with all the benefits held by
such Lender under this Security Agreement.

          7.04 Successors and Assigns. This Agreement binds the Debtors and their respective successors
and assigns and inures to the benefit of the Administrative Agent, the Secured Parties and their
respective successors and assigns.

          7.05 Amendment and Waiver. No amendment or waiver of any provision of this Agreement, nor
consent to any departure by any Debtor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, the Borrower and the other Debtors;
provided that any amendment, waiver, or consent shall be signed by all the Lenders to the
extent required by Section 9.02 of the Credit Agreement. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.

          7.06 No Implied Waiver. No failure or delay in exercising any right, power or privilege or
requiring the satisfaction of any condition hereunder, and no course of dealing between the Debtors
and the Administrative Agent operates as a waiver or estoppel of any right, remedy or condition.
No single or partial exercise of any right or remedy under this Agreement precludes any
simultaneous or subsequent exercise of any other right, power or privilege. The rights and
remedies set forth in this Agreement are not exclusive of, but are cumulative to, any rights or
remedies now or subsequently existing at law, in equity or by statute.

          7.07 Severability. In case one or more provisions of this Agreement shall be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality, and enforceability of the
remaining provisions contained herein or therein shall not be affected or impaired thereby.

          7.08 Entire Agreement. This Agreement and the other Loan Documents contain the entire
agreement between the parties relating to the subject matter hereof and supersede all prior or
contemporaneous oral or written negotiations and agreements relating to the subject matter hereof.
The provisions of this Agreement may not be explained, supplemented or qualified through evidence
or trade usage or a prior course of dealing. In entering into this Agreement, the Debtors have not
relied upon any statement, representation, warranty or agreement of the Administrative Agent except
as set forth in the Loan Documents. There are no

Exhibit 1.01D - Page 28

 

 

conditions precedent to the effectiveness of this Agreement. In the event of any
conflict between the terms of this Agreement and the terms of the Credit Agreement, the terms of
the Credit Agreement shall control.

          7.09 Execution in Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
agreement.

          7.10 Governing Law. The laws of the State of Texas (without giving effect to its conflicts of
law principles) govern all matters arising out of or relating to this Agreement and all of the
transactions it contemplates, including without limitation its validity, interpretation,
construction, performance (including the details of performance) and enforcement, except to the
extent that the validity or perfection of the security interests hereunder, or remedies hereunder,
in respect of any particular Collateral are governed by the laws of a jurisdiction other than the
state of Texas.

          7.11 Headings. The descriptive headings of the articles, sections and subsections of this
Agreement are for convenience only and do not constitute a part of this Agreement.

          7.12 Interpretation. This Agreement has been reviewed and negotiated by counsel for both the
Debtors and the Administrative Agent and, consequently, this Agreement shall not be construed
against the drafter.

          7.13 Waiver of Jury Trial. THE DEBTORS AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
AND AGREE THAT SECTION 9.09 OF THE CREDIT AGREEMENT SHALL BE APPLICABLE IN THE EVENT OF ANY DISPUTE
AMONG THE PARTIES HERETO.

          7.14 Survival, Etc. The provisions of Sections 2.07, 6.03, 6.06,
6.08, 6.09, 6.10, 7.01, 7.16, 7.17 and 7.19
shall survive the termination of this Agreement. In addition, the representations, warranties and
covenants of the Debtors set out in this Agreement or contained in any documents delivered to the
Administrative Agent or any other Secured Party pursuant to this Agreement shall survive the
execution and delivery of this Agreement.

          7.15 Agents, Etc. The Administrative Agent may employ agents, experts and attorneys-in-fact
in connection herewith and shall not be responsible for the negligence or misconduct of any such
agents, experts or attorneys-in-fact selected by it in good faith.

Exhibit 1.01D - Page 29

 

 

          7.16 Limitation of Liability. NEITHER THE ADMINISTRATIVE AGENT NOR ANY OTHER SECURED
PARTY SHALL HAVE LIABILITY WITH RESPECT TO, AND DEBTORS HEREBY WAIVE, RELEASE AND AGREE NOT TO SUE
FOR:

     (a) ANY LOSS OR DAMAGE SUSTAINED BY ANY DEBTOR, OR ANY LOSS, DAMAGE, DEPRECIATION OR
OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL, THAT MAY OCCUR AS A RESULT OF, IN
CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO, ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER
THIS AGREEMENT EXCEPT FOR ANY SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE EXTENT
THAT THE SAME IS THE RESULT OF ACTS OR OMISSIONS ON THE PART OF SUCH SECURED PARTY
CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE (AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION); OR

     (b) ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES
SUFFERED BY ANY DEBTOR IN CONNECTION WITH ANY CLAIM RELATED TO THIS AGREEMENT.

          7.17 Subrogation. Each Debtor shall not exercise, and hereby irrevocably waives, any claim,
right or remedy that it may now have or may hereafter acquire against any other Debtor arising
under or in connection with this Agreement, including, without limitation, any claim, right or
remedy of subrogation, contribution, reimbursement, exoneration, indemnification or participation
arising under contract, by applicable law or otherwise in any claim, right or remedy of the
Administrative Agent or the other Secured Parties against such Debtor or any other Person or any
Collateral which the Administrative Agent or any other Secured Party may now have or may hereafter
acquire, until the indefeasible payment and satisfaction in full of all Secured Obligations and the
expiration and termination of the Commitments. If, notwithstanding the preceding sentence, any
amount shall be paid to any Debtor on account of such subrogation rights at any time when any of
the Secured Obligations shall not have been paid in full, such amount shall be held by such Debtor
in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of
such Debtor and be turned over to the Administrative Agent in the exact form received by such
Debtor (duly endorsed by such Debtor to the Administrative Agent, if required), to be applied
against the Secured Obligations, whether matured or unmatured, in accordance with the Loan
Documents. Notwithstanding the foregoing, the Debtors shall be expressly permitted hereunder to
make payments to each other to the extent not prohibited by the Credit Agreement.

          7.18 Authority of the Administrative Agent. The rights and responsibilities of the
Administrative Agent under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-
exercise by the Administrative Agent of any power, right or remedy provided for or resulting
or arising out of this Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Administrative Agent and Debtors, the
Administrative Agent shall be conclusively presumed to be acting as the Administrative Agent for
the Secured Parties with full and valid

Exhibit 1.01D - Page 30

 

 

authority so to act or refrain from acting, and Debtors shall be under no obligation or
entitlement to make any inquiry respecting such authority.

          7.19 No Oral Agreements. PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, A LOAN
AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE LOAN AGREEMENT EXCEEDS $50,000.00 IN VALUE IS NOT
ENFORCEABLE UNLESS THE LOAN AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT
PARTY’S AUTHORIZED REPRESENTATIVE.

          THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO THE PRECEDING PARAGRAPH
SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN
THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE
LOAN DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES WITH
RESPECT TO THE SUBJECT MATTERS SET FORTH HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

          THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signatures on following page]

Exhibit 1.01D - Page 31

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered as of the day and year first above written.

	 	 	 	 	 
	 	BORROWER:

________________________________________,

a _____________________

 	 
	 	By:	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SUBSIDIARIES:

____________________________________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit 1.01D - Page 32

 

 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:

__________________________________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit 1.01D - Page 33

 

 

EXHIBIT A

DEPOSIT ACCOUNT CONTROL AGREEMENT

     This DEPOSIT ACCOUNT CONTROL AGREEMENT (this “Agreement”), dated as of
[_______________], 20__, is among [___________________], a [_____________] (“Debtor”);
Wells Fargo Bank, N.A., as administrative agent pursuant to the Security Agreement referred to
below (in such capacity, the “Administrative Agent”); and [____________________], a
[___________________] (“Depositary Bank”).

RECITALS

     A. Depositary Bank and Debtor have entered into a depository agreement, a copy of which is
attached to this Agreement as Annex 1 (the “Customer Agreement”), pursuant to which
Depositary Bank has established its deposit account numbers in the name of Debtor (the
“Accounts”) as listed on Annex 2.

     B. Debtor and certain of its affiliates have entered into a Security and Pledge Agreement,
dated as of August 11, 2011 (as amended, modified and supplemented from time to time, the
“Security Agreement”), in favor of the Administrative Agent, pursuant to which, among other
things, Debtor granted to the Administrative Agent a security interest in the Accounts.

     C. The Administrative Agent, Debtor and Depositary Bank are entering into this Agreement to
provide for the control of the Accounts and to perfect the security interest of the Administrative
Agent in the Accounts.

     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

     Section 1. The Accounts. Depositary Bank confirms to the Administrative Agent and
Debtor that (i) the Accounts have been established in the name of Debtor as recited above, (ii)
Annex 2 attached to this Agreement is a complete and accurate statement of the Accounts and
any free credit balance thereunder as of the date of this Agreement, and (iii) except for the
claims and interest of the Administrative Agent and of Debtor in the Accounts, Depositary Bank does
not know of any claim to or interest in the Accounts or in any financial asset carried therein.
Depositary Bank will treat all property held by Depositary Bank in the Accounts as deposit accounts
under Article 9 of the Uniform Commercial Code of the State of Texas.

     Section 2. Control. Except as otherwise provided in Section 3, Depositary
Bank shall comply with entitlement orders concerning the Accounts from Debtor, or its authorized
representatives, until such time as the Administrative Agent delivers a written notice to
Depositary Bank that states that an Event of Default (as such term is used in the Security
Agreement) has occurred and is continuing and that the Administrative Agent is thereby exercising
exclusive control over the Accounts. Such notice is referred to in this Agreement as the
“Notice of Exclusive Control”. After Depositary Bank receives the Notice of Exclusive

A-1

 

Control, Depositary Bank will immediately cease complying with instructions concerning the
Accounts originated by Debtor or its representatives and shall comply with instructions originated
by the Administrative Agent concerning the Accounts without further consent by Debtor, unless
otherwise advised in writing by Administrative Agent.

     Section 3. Priority of Lien. Depositary Bank consents to and recognizes the security
interest in the Accounts granted to the Administrative Agent by Debtor pursuant to the Security
Agreement. Depositary Bank waives and releases all liens, encumbrances, claims and rights of
setoff Depositary Bank may have against the Accounts or any funds carried in the Accounts except
for payment of Depositary Bank’s customary fees pursuant to the Customer Agreement, and shall not
assert any such lien, encumbrance, claim or right against the Accounts or any funds carried in the
Accounts except for payment of customary fees when due and payable. Depositary Bank will not agree
with any third party to comply with instructions concerning the Accounts originated by such third
party without the prior written consent of the Administrative Agent and Debtor.

     Section 4. Statements, Confirmations and Notices of Adverse Claims. Depositary Bank
shall send copies of all statements and other correspondence concerning the Accounts simultaneously
to Debtor and the Administrative Agent at the respective addresses set forth in Section 14.
If any person asserts any lien, encumbrance or adverse claim, through a garnishment proceeding or
otherwise, against the Accounts or in any funds carried in the Accounts, Depositary Bank shall
promptly notify the Administrative Agent and Debtor thereof.

     Section 5. Responsibility of Depositary Bank. Except for permitting a withdrawal or
payment in violation of Section 2, Depositary Bank shall have no responsibility or
liability to the Administrative Agent for complying with instructions concerning the Accounts from
Debtor, or its authorized representatives, that are received by Depositary Bank before Depositary
Bank receives a Notice of Exclusive Control. Depositary Bank shall have no responsibility or
liability to Debtor for complying with a Notice of Exclusive Control or complying with instructions
concerning the Accounts originated by the Administrative Agent. Depositary Bank shall have no duty
to investigate or make any determination as to whether an Event of Default exists and shall comply
with a Notice of Exclusive Control even if Depositary Bank believes that an Event of Default does
not exist. Neither this Agreement nor the Security Agreement imposes or creates any obligation or
duty of Depositary Bank other than those expressly set forth in this Agreement.

     Section 6. Tax Reporting. All items of income, gain, expense and loss recognized in
the Accounts shall be reported to the Internal Revenue Service and all state and local taxing
authorities under the name and taxpayer identification number of Debtor.

     Section 7. Customer Agreement. This Agreement supplements the Customer Agreement. In
the event of a conflict between this Agreement and the Customer Agreement, the terms of this
Agreement shall prevail. Regardless of any provision in the Customer Agreement, Texas is
Depositary Bank’s jurisdiction for the purposes of this Agreement and of Article 9 of the Uniform
Commercial Code as in effect in the State of Texas.

     Section 8. Termination. The rights and powers granted in this Agreement to the
Administrative Agent have been granted in order to perfect the Administrative Agent’s security

A-2

 

interest in the Accounts, are powers coupled with an interest and will neither be affected by
the dissolution, liquidation or bankruptcy of Debtor nor by the lapse of time. The obligations of
Depositary Bank under Sections 2, 3 and 4 shall continue in effect until
the security interest of the Administrative Agent in the Accounts has been terminated pursuant to
the terms of the Security Agreement and the Administrative Agent has notified Depositary Bank in
writing of such termination. Upon receipt of such notice the obligations of Depositary Bank under
Sections 2, 3 and 4 with respect to the operation and maintenance of the
Accounts after the receipt of such notice shall terminate, the Administrative Agent shall have no
further right to originate instructions concerning the Accounts, and Depositary Bank may take such
steps as Debtor may request to vest full ownership and control of the Accounts in Debtor,
including, but not limited to, removing the name of the Administrative Agent from the Accounts or
transferring all of the funds in the Accounts to other accounts in the name of any Debtor or
Debtor’s designee.

     Section 9. This Agreement. THIS AGREEMENT AND ANNEXES TO THIS AGREEMENT, AND THE
AGREEMENTS AND INSTRUMENTS REQUIRED TO BE EXECUTED AND DELIVERED UNDER THIS AGREEMENT, SET FORTH
THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND
SUPERSEDE AND DISCHARGE ALL PRIOR AGREEMENTS (WRITTEN OR ORAL), NEGOTIATIONS AND CONTEMPORANEOUS
ORAL AGREEMENTS CONCERNING SUCH SUBJECT MATTER AND NEGOTIATIONS. THERE ARE NO ORAL CONDITIONS
PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT AND THERE ARE NO OTHER ORAL AGREEMENTS OF THE
PARTIES.

     Section 10. Amendments. No amendment, modification or termination of this Agreement
or waiver of any right under this Agreement shall be binding on any party to this Agreement unless
the amendment, modification or termination is in writing and is signed by Debtor, the
Administrative Agent and Depositary Bank.

     Section 11. Severability. If any term or provision set forth in this Agreement shall
be invalid or unenforceable, the remainder of this Agreement, or the application of the remaining
terms or provisions of this Agreement to persons or circumstances, other than the term or provision
held invalid or unenforceable, shall be construed in all respects as if such invalid or
unenforceable term or provision were omitted.

     Section 12. Successors. The terms of this Agreement shall be binding upon, and shall
inure to the benefit of, the parties to this Agreement and their respective successors and assigns.

     Section 13. Rules of Construction. In this Agreement, words in the singular number
include the plural, and in the plural include the singular; and words of the masculine gender
include the feminine and the neuter, and when the sense so indicates words of the neuter gender may
refer to any gender. The captions and section numbers appearing in this Agreement are inserted
only as a matter of convenience and do not define, limit or describe the scope or intent of the
provisions of this Agreement.

     Section 14. Notices. Any notice, request or other communication required or permitted
to be given under this Agreement shall be in writing (including by telecopy) and shall be delivered
to the intended recipient at its address set forth below.

A-3

 

If to Debtor:

[Name and address]

                                                            

                                                            

                                                            

Attention:                                         

Telephone:                                       

Telecopy:                                         

If to the Administrative Agent:

Wells Fargo Bank, N.A.

                                                            

                                                            

Attention:                                         

Telephone:                                       

Telecopy:                                         

If to Depositary Bank:

[Name and address]

                                                            

                                                            

                                                            

Attention:                                         

Telephone:                                       

Telecopy:                                         

Any party may change its address for notices in the manner set forth above. All such
communications shall be effective upon delivery; provided, however, that if such
delivery does not occur by 4:00 p.m. recipient’s time on a Business Day, then such transmission or
delivery shall be deemed to occur on the next Business Day.

     Section 16. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any party hereto may
execute this Agreement by signing and delivering one or more such counterparts.

     SECTION 17. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

[Signatures on following page]

A-4

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 
	 	[Name of Debtor]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WELLS FARGO BANK, N.A.,

as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[Name of Depositary Bank]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A-5

 

	 	 	 	 	 

ANNEX 1

CUSTOMER AGREEMENT

A-6

 

ANNEX 2

STATEMENT OF ACCOUNTS

A-7

 

EXHIBIT B

GRANT OF PATENT SECURITY INTEREST

     WHEREAS, [_______________], a [_________________] (“Grantor”), owns and uses in its
business, and will in the future adopt and so use, various intangible assets, including the Patent
Collateral (as defined below); and

     WHEREAS, pursuant to a Credit Agreement dated as of _____________, 2011 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among
Carriage Services, Inc., a Delaware corporation (the “Borrower”), the Guarantors party
thereto (the “Guarantors”), the Lenders party thereto (the “Lenders”) and Wells
Fargo Bank, N.A., as Administrative Agent, the Lenders have agreed to make Loans to and make other
extensions of credit on behalf of the Borrower (capitalized terms used but not defined herein have
the respective meanings assigned to them in the Credit Agreement); and

     WHEREAS, pursuant to the terms of the Security and Pledge Agreement dated as of _____________,
2011 (as amended, supplemented or otherwise modified from time to time, the “Security
Agreement”), among the Borrower, the Guarantors and Wells Fargo Bank, N.A., as collateral agent
for each of the Secured Parties (as defined in the Security Agreement) (in such capacity, the
“Administrative Agent”), Grantor has agreed to grant in favor of the Administrative Agent a
perfected security interest in, and the Administrative Agent has agreed to become a secured
creditor with respect to, Patent Collateral;

     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, subject to the terms and conditions of the Security Agreement, Grantor hereby
grants to the Administrative Agent a security interest in all of Grantor’s right, title and
interest in and to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be located (the
“Patent Collateral”):

     (i) all patents and patent applications, the inventions and improvements described and
claimed therein, and all patentable inventions, including but not limited to the patents and
patent applications listed on Schedule A;

     (ii) all reissues, divisions, continuations, renewals, extensions and
continuations-in-part of the foregoing;

     (iii) all rights (A) to all income, profits, royalties, damages and payments now or
hereafter due and/or payable under and with respect thereto, including damages and payments
for past, present or future infringements thereof, (B) to sue for past, present and future
infringements thereof, and (C) otherwise accruing under or pertaining to any of the
foregoing throughout the world;

     (iv) all licenses or user or other agreements granted to Grantor with respect to any of
the foregoing, in each case whether now or hereafter owned or used; and

B-1

 

     (v) all causes of action, claims and warranties now or hereafter owned or acquired by
Grantor in respect of any of the items listed above.

     Notwithstanding anything herein to the contrary, in no event shall the Patent Collateral
include, and Grantor shall not be deemed to have granted a security interest in, any of Grantor’s
rights or interests in any license, contract or agreement to which Grantor is a party or any of its
rights or interests thereunder to the extent, but only to the extent, that such a grant would,
under the terms of such license, contract or agreement or otherwise, result in a breach of the
terms of, or constitute a default under any license, contract or agreement to which Grantor is a
party; provided, that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Patent Collateral shall include, and Grantor shall be deemed to have granted a
security interest in, all such rights and interests as if such provision had never been in effect.

     Grantor further acknowledges and affirms that the rights and remedies of the Administrative
Agent with respect to the security interest in the Patent Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.

[Remainder of page intentionally left blank]

B-2

 

     IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to be duly
executed and delivered by its duly authorized officer as of the ___ day of ____________, ____.

	 	 	 	 	 
	 	[__________________________________________]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-3

 

	 	 	 	 	 

SCHEDULE A

TO

GRANT OF PATENT SECURITY INTEREST

Patents Issued:

	 	 	 	 	 	 	 
	Patent No.	 	Issue Date	 	Invention	 	Inventor
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 

Patents Pending:

	 	 	 	 	 	 	 	 	 
	Applicant’s	 	Date	 	Application	 	 	 	 
	Name	 	Filed	 	Number	 	Invention	 	Inventor
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

B-4

 

EXHIBIT C

GRANT OF TRADEMARK SECURITY INTEREST

     WHEREAS, [_______________], a [_________________] (“Grantor”), owns and uses in its
business, and will in the future adopt and so use, various intangible assets, including the
Trademark Collateral (as defined below); and

     WHEREAS, pursuant to a Credit Agreement dated as of __________, 2011, (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among
Carriage Services, Inc., a Delaware corporation (the “Borrower”), the Guarantors party
thereto (the “Guarantors”), the Lenders party thereto (the “Lenders”) and Wells
Fargo Bank, N.A., as Administrative Agent, the Lenders have agreed to make Loans to and make other
extensions of credit on behalf of the Borrower (capitalized terms used but not defined herein have
the respective meanings assigned to them in the Credit Agreement); and

     WHEREAS, pursuant to the terms of the Security and Pledge Agreement dated as of ___________,
2011 (as amended, supplemented or otherwise modified from time to time, the “Security
Agreement”), among the Borrower, the Guarantors and Wells Fargo Bank, N.A., as collateral agent
for each of the Secured Parties (as defined in the Security Agreement) (in such capacity, the
“Administrative Agent”), Grantor has agreed to grant in favor of the Administrative Agent a
perfected security interest in, and the Administrative Agent has agreed to become a secured
creditor with respect to, Trademark Collateral;

     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, subject to the terms and conditions of the Security Agreement, Grantor hereby
grants to the Administrative Agent a security interest in all of Grantor’s right, title and
interest in and to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be located (the
“Trademark Collateral”):

     (i) all trade names, trademarks and service marks, logos, trademark and service mark
registrations, and applications for trademark and service mark registrations, including but
not limited to those registrations and applications listed on Schedule A, and all goodwill
associated therewith;

     (ii) all renewals of trademark and service mark registrations;

     (iii) all rights (A) to all income, royalties, damages and other payments (including in
respect of all past, present and future infringements) with respect to any of the foregoing,
(B) to sue for all past, present and future infringements thereof, and (C) otherwise
accruing under or pertaining to any of the foregoing, together, in each case, with the
product lines and goodwill of the business connected with the use of, and symbolized by,
each such trade name, trademark and service mark;

     (iv) all licenses or user or other agreements granted to Grantor with respect to any of
the foregoing, in each case whether now or hereafter owned or used; and

C-1

 

     (v) all causes of action, claims and warranties now or hereafter owned or acquired by
Grantor in respect of any of the items listed above.

     Notwithstanding anything herein to the contrary, in no event shall the Trademark Collateral
include, and Grantor shall not be deemed to have granted a security interest in, any of Grantor’s
rights or interests in (i) any intent to use trademark application, or (ii) any license, contract
or agreement to which Grantor is a party or any of its rights or interests thereunder to the
extent, but only to the extent, that such a grant would, under the terms of such license, contract
or agreement or otherwise, result in a breach of the terms of, or constitute a default under any
license, contract or agreement to which Grantor is a party; provided, that immediately upon
the ineffectiveness, lapse or termination of any such provision, the Trademark Collateral shall
include, and Grantor shall be deemed to have granted a security interest in, all such rights and
interests as if such provision had never been in effect.

     Grantor further acknowledges that the rights and remedies of the Administrative Agent with
respect to the security interest in the Trademark Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

[Remainder of page intentionally left blank.]

C-2

 

     IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest to be duly
executed and delivered by its duly authorized officer as of the __ day of _______, ____.

	 	 	 	 	 
	 	[________________________________________________]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

C-3

 

	 	 	 	 	 

SCHEDULE A

TO

GRANT OF TRADEMARK SECURITY INTEREST

	 	 	 	 	 	 	 
	 	 	United States	 	Registration or	 	Registration
	Registered Owner	 	Trademark/Service Mark	 	Serial Number	 	or Filing Date
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 

C-4

 

ANNEX 1

Intellectual Property Licenses

None

 

 

ANNEX 2

Patent Collateral

 

 

ANNEX 3

Equity Interest Collateral

 

 

ANNEX 4

Trademark Collateral

 

 

ANNEX 5

Filing Offices

 

 

ANNEX 6

Debtor Information

 

 

ANNEX 7

Prior Transactions

 

 

ANNEX 8

Offices and Locations of Records

 

 

ANNEX 9

Locations of Inventory and Equipment

 

 

ANNEX 10

Deposit Accounts

 

 

ANNEX 11

Securities Accounts and Commodity Accounts

 

 

ANNEX 12

Instruments and Tangible Chattel Paper

 

 

ANNEX 13

Electronic Chattel Paper

 

 

ANNEX 14

Letters of Credit

 

 

ANNEX 15

Commercial Tort Claims

 

 

EXHIBIT 4.01(h)

FORM OF BORROWING REQUEST

_________________

_________________

_________________

	 	 	Attention: _________________
	 
	 	 	Telecopy: (713) ________

	 	 	 	Re: Revolving Credit Agreement dated as of ____________, 2011, by and among
_________________ (the “Borrower”), _________________, as Administrative Agent
and the Lenders party to the Credit Agreement

Ladies and Gentlemen:

     Pursuant to the Credit Agreement, the Borrower hereby makes the requests indicated below:

	 	 	 

	(a)

	 	Amount of Loan: $_________
	 
	(b)

	 	Requested funding date: ___________________
	 
	(c)

	 	Type of Loan:
	 
	 	 
	 

	 	_________ Loan; or
	 
	 	 
	 

	 	_________ Eurodollar Loan
	 
	 	 
	(d)

	 	Requested Interest Period for Eurodollar Loan: ______________
	 
	(e)

	 	Location and number of the Borrower’s account to which funds are to be
disbursed:
	 
	 	 
	 

	 	________________
	 
	 	 
	 

	 	________________

     The undersigned certifies that [s]he is an authorized officer of the Borrower and as such
[s]he is authorized to execute this request on behalf of the Borrower. The Borrower represents and
warrants that (i) the Borrower is entitled to receive the requested Borrowing under the terms and
conditions of the Credit Agreement and that no Default or Event of Default shall exist or will
occur as a result of the making of such requested Borrowing; and (ii) the representations and

Exhibit 4.01(h) - Page 1

 

warranties contained in Article III of the Credit Agreement are correct as of the date of the
Borrowing requested hereby, after giving effect to such Borrowing.

     Each capitalized term used but not defined herein shall have the meaning assigned to such term
in the Credit Agreement.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	  	 	,
	 	 	a _________________ 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT 5.01

FORM OF COMPLIANCE CERTIFICATE

     The undersigned hereby certifies that [s]he is the [chief financial officer/principal
accounting officer/treasurer/controller] of _________________, a _________________ (the
“Borrower”) and that as such [s]he is authorized to execute this certificate on behalf of
the Company. With reference to the Revolving Credit Agreement dated as of ____________, 20__
(together with all amendments or supplements thereto being the “Credit Agreement”), among
the Borrower, ______________________, as Administrative Agent and the Lenders (as defined in the
Credit Agreement), the undersigned represents and warrants as follows (each capitalized term used
herein having the same meaning given to it in the Credit Agreement unless otherwise specified):

	 	(a)	 	The representations and warranties of the Borrower and its Subsidiaries
contained in Article III of the Credit Agreement and in the Loan Documents were
true and correct in all material respects when made, and are repeated at and as of the
time of delivery hereof and to the best of the undersigned’s knowledge are true and
correct in all material respects at and as of the time of such delivery, except for
such representations and warranties as are by their express terms limited to a specific
date.
	 
	 	(b)	 	The worksheet attached hereto as Exhibit A sets forth all permitted
Indebtedness, which is subject to dollar limitations, of the Borrower and its
Subsidiaries pursuant to Section 6.01.
	 
	 	(c)	 	The Borrower hereby certifies that no Event of Default or Default has occurred
or is continuing.
	 
	 	(d)	 	Calculations for all financial covenants contained in the Credit Agreement are
set forth in the worksheet attached hereto as Exhibit B.
	 
	 	(e)	 	Except as set forth on Exhibit C attached hereto, there have been no
changes in GAAP or in the application thereof, as used in the preparation of the
Borrower’s consolidated financial statements, since the date of the audited financial
statements referred to in Section 3.04 of the Credit Agreement.

Exhibit 5.01 - Page 1

 

EXECUTED AND DELIVERED this _____ day of _______________, 20______.

	 	 	 	 	 
	 	BORROWER:

_________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

Exhibit 5.01 - Page 2

 

	 	 	 	 	 

EXHIBIT A to

EXHIBIT 5.01

INDEBTEDNESS

As of the date of the attached financial statements:

	 	 	 	 	 
	Indebtedness of the Type	 	 	 	 
	Described in the Credit Agreement	 	Actual Amount	 	Covenant Amount
	Section 6.01(e) (purchase money,
etc.)

	 	$__________________
	 	≤ $15,000,000
	 
	 	 	 	 
	Section 6.01(f) (CAPEX)

	 	$__________________
	 	≤ $15,000,000
	 
	 	 	 	 
	Section 6.01(h) (Unsecured)

	 	$__________________
	 	≤ $5,000,000
	 
	 	 	 	 
	Section 6.01(i) (Canadian
Acquisition Basket)

	 	$__________________
	 	≤ $75,000,000

Exhibit
5.01 - Exhibit B-i

 

EXHIBIT B to

EXHIBIT 5.01

FINANCIAL COVENANT CALCULATION WORKSHEET

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Pro Forma	 	 
	 	 	 	 	Calculation	 	Covenant Requirement
	1.

	 	Fixed Charge Coverage Ratio:	 	 
	 

	 	(i)      EBITDA	 	 
	 

	 	Minus:      non-financed Maintenance Capital Expenditures	 	 
	 

	 	Minus:      cash income taxes paid	 	 
	 

	 	Plus:      income tax refunds received	 	 
	 

	 	To	 	 
	 

	 	(ii)      Interest Expense	 	 
	 

	 	Plus:      scheduled and required
principal payments in respect
of                Indebtedness actually paid	 	 
	 

	 	Plus:      cash dividends paid	 	 
	2.

	 	Leverage Ratio:	 	 
	 

	 	(i)      Senior Debt	 	 
	 

	 	To	 	 
	 

	 	(ii)      Consolidated EBITDA	 	 
	3.

	 	Shareholder Equity	 	 
	 

	 	Prior Shareholder Equity of
$__________, plus _____ of
positive after          tax consolidated
Net Income since previous
calculation	 	 

Calculation of Consolidated EBITDA

	A.	 	Consolidated Net Income       $________________

     (i) plus Consolidated Interest Expense

$________________

     (ii) plus provisions for federal, state, local or foreign income tax

$________________

     (iii) plus depreciation and amortization (to the extent included in operating expenses

$________________

     (iv) plus EBITDA of any Permitted Acquisition calculated on an historic basis for such
Permitted Acquisition as if same had occurred on the first day of the period for which such

Exhibit
5.01 - Exhibit B-1

 

EBITDA is measured, with such pro-forma adjustments as the Administrative Agent, in its sole
discretion, shall approve

$________________

     (v) plus other non-cash expenses

$________________

     (vi) plus non-recurring expenses and minus non-recurring income items (in each case, to the
extent said items are used to calculate Consolidated Net Income), so long as said items, in each
case, remain non-cash items

$__________________

               Equals Consolidated EBITDA                 $_________________

	B.	 	Calculation of Senior Debt

     With respect to the Borrower and its Subsidiaries, other than Unrestricted Subsidiaries:

     (i) unpaid principal balance for borrowed money of any kind

$___________________

     (ii) unpaid principal balance of obligations evidenced by bonds, debentures, notes or similar
instruments

$___________________

     (iii) unpaid principal amount of obligations upon which interest charges are customarily paid

$___________________

     (iv) deferred purchase price arrangements, including obligations under conditional sale or
other title retention agreements relating to property acquired (excluding current accounts payable
incurred in the ordinary course of business)

$________________

     (v) Indebtedness secured by any Lien on property owned or acquired, whether or not the
Indebtedness secured thereby has been assumed

$________________

     (vi) Guarantees of Indebtedness of others

$________________

Exhibit
5.01 - Exhibit B-2

 

     (vii) Capital Lease Obligations existing on the Effective Date or newly created thereafter,
but excluding any such obligations which become Capital Lease Obligations as a result of changes in
GAAP occurring after the Effective Date

$________________

     (viii) all obligations, contingent or otherwise, as an account party in respect of letters of
credit and letters of guaranty and

$________________

     (ix) all obligations, contingent or otherwise, in respect of bankers’ acceptances

$________________

               Equals Senior Debt            $________________

Exhibit
5.01 - Exhibit B-3

 

EXHIBIT 9.04

FORM OF ASSIGNMENT AND ASSUMPTION

          This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit Agreement identified
below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.

          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including any letters of credit, and
guarantees included in such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and assignment is
without recourse to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

	 	 	 	 	 

	1.

	 	Assignor:
	 	____________________
	 
	 	 	 	 
	2.

	 	Assignee:
	 	____________________
	 

	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]4]
	 
	 	 	 	 
	3.

	 	Borrower:
	 	_________________
	 
	 	 	 	 
	4.

	 	Administrative Agent:
	 	_________________, as the administrative agent under the Credit Agreement

 

			
	4	 	Select as applicable.

Exhibit
9.04 - Page 1

 

	 	 	 	 	 

	5.

	 	Credit Agreement:
	 	The $_________ Credit Agreement dated as of __________, 20__ among _________________, the
Lenders parties thereto, _________________, as Administrative Agent, and the other agents
parties thereto
	6.

	 	Assigned Interest:	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	AGGREGATE	 	 	 	 
	 	 	AMOUNT OF	 	AMOUNT OF	 	 
	FACILITY	 	COMMITMENT/ LOANS	 	COMMITMENT/ LOANS	 	PERCENTAGE ASSIGNED OF
	ASSIGNED	 	FOR ALL LENDERS	 	ASSIGNED	 	COMMITMENT/LOANS5
	 

	 	 	$	 	 	 	$	 	 	 	%	 
	 

	 	 	$	 	 	 	$	 	 	 	%	 
	 

	 	 	$	 	 	 	$	 	 	 	%	 
	 

	 	 	$	 	 	 	$	 	 	 	%	 

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 

 

			
	5	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.

Exhibit 9.04 - Page 2

 

	 	 	 	 	 
	Consented to and Accepted:

_________________,

as [Administrative Agent,]6 and Issuing Bank

 	 
	By 	 	 
	 	Name:	 	 
	 	Title:	 	 

	 	 	 	 	 
	[Consented to:]7

[_________________]

	 
	By 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

			
	6	 	To be added only if the consent of the
Administrative Agent is required by the terms of the Credit Agreement.
	 
	7	 	To be added only if the consent of the
Borrower is required by the terms of the Credit Agreement.

Exhibit 9.04 - Page 3

 

ANNEX 1

[__________________]8

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

          1. Representations and Warranties.

          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document,9 (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the
financial condition of the Borrower, any of the Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower,
any of the Subsidiaries or Affiliates or any other Person of any of their respective obligations
under any Loan Document.

          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 5.01
thereof, as applicable, and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Administrative Agent or any other Lender, and (v) if it
is a Foreign Lender10, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and
executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on
the Administrative Agent, the Assignor or any other Lender, and based on such documents and

 

			
	8	 	Describe Credit Agreement at option of
Administrative Agent.
	 
	9	 	The term “Loan Document” should be conformed
to that used in the Credit Agreement.
	 
	10	 	The concept of “Foreign Lender” should be
conformed to the section in the Credit Agreement governing withholding taxes
and gross-up.

Annex 1 - 1

 

information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

          2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.

          3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Texas.

Annex I - 2

 

SCHEDULE 2.01

COMMITMENTS

	 	 	 	 	 
	             LENDER	 	COMMITMENT	 
	Wells Fargo Bank, N.A.
	 	$	60,000,000	 

Schedule 2.01 - Page 1

 

SCHEDULE 3.01

QUALIFICATION EXCEPTIONS

Schedule 2.01 - Page 1

 

SCHEDULE 3.06

DISCLOSED MATTERS

[Leathermon Matter only]

Schedule 3.06 - Page 1

 

SCHEDULE 3.12

LIST OF SUBSIDIARIES

See attached.

Schedule 3.12 - Page 1

 

SCHEDULE 3.16

SWAP AGREEMENTS

None.

Schedule 3.16 - Page 1

 

SCHEDULE 6.01(b)

EXISTING INDEBTEDNESS

See attached.

Schedule 6.01(b) - Page 1

 

SCHEDULE 6.02(b)

EXISTING LIENS

Schedule 6.01(b) - Page 2

 

SCHEDULE 6.06(b)

EXISTING INVESTMENTS

Schedule 6.06(b) - Page 1

 

SCHEDULE 6.08

RESTRICTIVE AGREEMENTS

None other than Senior Notes.

Schedule 6.08 - Page 1

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