UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Carriage Services, Inc.

Delaware		1-11961		76-0423828
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)

3040 Post Oak Boulevard, Suite 300
Houston, Texas 77056
(Address of principal executive offices, including zip code)

(713) 332-8400
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Section 1 — Registrant’s Business and Operations

Item 1.01. Entry into a Material Definitive Agreement

     On May 4, 2009, Carriage Services, Inc. (“Carriage”) entered into a Sixth Amendment (“Sixth Amendment”) to its Credit Agreement dated April 27, 2005 with its lenders, Bank of America, N.A. (“BofA”) and Wells Fargo Bank, N.A. (“Wells Fargo”), BofA as its administrative agent, swing line lender, and L/C issuer, and Wells Fargo as its syndication agent. This Sixth Amendment shall be deemed effective on and as of March 31, 2009 (provided, however, Section 3 of this Sixth Amendment shall be effective as of May 4, 2009), subject to conditions set forth in Section 5 of this Sixth Amendment.

     The purpose of this Sixth Amendment was to: (1) amend the Maximum Leverage Ratio to permit the Leverage Ratio as of the end of any period of four consecutive fiscal quarters of Carriage to be greater than 3.75 to 1.00, (2) waive the Events of Default that occurred under the Credit Agreement as a result of the failure of Carriage to comply with the financial covenants set forth in Sections 7.11(a) and 7.11(b) of the Credit Agreement, as of March 31, 2009, and (3) amend the Maximum Aggregate Commitments under the Credit Agreement from $35.0 million to $20.0 million.

     Carriage expects to report full compliance with all of the financial covenants set forth in the Sixth Amendment and the Credit Agreement for its second fiscal quarter ending on June 30, 2009.

     Based upon projected cash flows from operations, Carriage determined to lower the Aggregate Commitment amount under the facility from $35.0 million to $20.0 million in an effort to reduce commitment fees. Management believes cash on hand, cash flows from operations and other sources of liquidity will be adequate for the remainder of the facility’s term, which ends in April 2010. As such, Carriage did not believe it was necessary to maintain a $35.0 million facility and incur the expenses associated therewith.

     In addition to historical information, this Current Report contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include any projections of cash balances and cash flows, expenses, debt levels or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the ability to negotiate a future credit facility; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may”, “will”, “estimate”, “intend”, “believe”, “expect”, “project”, “forecast”, “plan”, anticipate” and any other similar words.

     The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Sixth Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Section 9 — Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

     (d) Exhibits

Exhibit Number		Title of Document
10.1		Sixth Amendment to Credit Agreement, dated as of May 4, 2009 and effective as of March 31, 2009 (except Section 3 of the Credit Agreement, which is effective May 4, 2009), by and among Carriage, BofA, Wells Fargo, and the several banks listed on the signature pages thereof.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit Index

Exhibit Number		Title of Document
10.1		Sixth Amendment to Credit Agreement, dated as of May 4, 2009 and effective as of March 31, 2009 (except Section 3 of the Credit Agreement, which is effective May 4, 2009), by and among Carriage, BofA, Wells Fargo, and the several banks listed on the signature pages thereof.

Exhibit 10.1

SIXTH AMENDMENT TO CREDIT AGREEMENT

     THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Sixth Amendment”), dated as of May 4, 2009 (but effective as provided in Section 5 of this Sixth Amendment), by and among CARRIAGE SERVICES, INC., a Delaware corporation (the “Borrower”), the banks listed on the signature pages hereof (the “Lenders”), WELLS FARGO BANK, N.A., as Syndication Agent (in said capacity, the “Syndication Agent”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (in said capacity as Administrative Agent, the “Administrative Agent”).

BACKGROUND

     A. The Borrower, the Lenders, the Syndication Agent, and the Administrative Agent are parties to that certain Credit Agreement, dated as of April 27, 2005, as amended by that certain First Amendment to Credit Agreement, dated as of August 31, 2005, as modified by that certain Waiver and Consent, dated as of September 1, 2006, as amended by that certain Second Amendment to Credit Agreement, dated as of May 4, 2007, as amended by that certain Third Amendment to Credit Agreement, dated as of December 1, 2007, as amended by that certain Fourth Amendment to Credit Agreement, dated as of November 14, 2008, as amended by that certain Fifth Amendment to Credit Agreement, dated as of December 31, 2008, and as modified by that certain Waiver to Credit Agreement, dated as of March 19, 2009 (said Credit Agreement, as amended and modified, the “Credit Agreement”; the terms defined in the Credit Agreement and not otherwise defined herein shall be used herein as defined in the Credit Agreement).

     B. The Borrower has requested that the Lenders (i) amend the Credit Agreement, as more fully set forth herein, and (ii) waive certain Events of Default that have occurred under the Credit Agreement.

     C. The Lenders parties to this Sixth Amendment (which Lenders constitute the Required Lenders as required under the Credit Agreement) are willing to agree to such amendment and waiver, subject to the performance and observance in full of each of the covenants, terms and conditions, and in reliance upon all of the representations and warranties of the Borrower, set forth herein.

     NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, the parties hereto covenant and agree as follows:

     1. AMENDMENT. Section 7.11(a) of the Credit Agreement is hereby amended to read as follows:

     (a) Maximum Leverage Ratio. Permit the Leverage Ratio as of the end of any period of four consecutive fiscal quarters of the Borrower to be greater than 3.75 to 1.00.

     2. WAIVER. Subject to satisfaction of the conditions of effectiveness to this Sixth Amendment set forth in Section 5 of this Sixth Amendment, the Administrative Agent and the Lenders hereby waive the Events of Default that occurred under the Credit Agreement as a result of the failure of the Borrower to comply with the financial covenants set forth in Sections 7.11(a) and 7.11(b) of the Credit Agreement for the period of four consecutive fiscal quarters ending on March 31, 2009 or at any time during such period. The waiver provided herein does not apply to (a) any covenants, terms or provisions of the Credit Agreement other than Sections 7.11(a) and (b) thereof or (b) the failure of the Borrower to comply with said Sections for any period of four consecutive fiscal quarters other than the period ending March 31, 2009.

     3. COMMITMENT REDUCTION. By signing below, the Administrative Agent and the Lenders (a) acknowledge the request by the Borrower to reduce the Aggregate Commitments to $20,000,000, (b) waive the requirement for five Business Days’ prior notice for such reduction of the Aggregate Commitments set forth in Section 2.06 of the Credit Agreement, and (c) agree that upon satisfaction of the conditions of effectiveness to this Sixth Amendment set forth in Section 5 of this Sixth Amendment, the Aggregate Commitments shall be $20,000,000.

     4. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its execution and delivery hereof, the Borrower represents and warrants that, as of the date hereof, and immediately after giving effect to this Sixth Amendment:

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

     (b) no event has occurred and is continuing which constitutes a Default or Event of Default;

     (c) (i) the Borrower has full power and authority to execute and deliver this Sixth Amendment, (ii) this Sixth Amendment has been duly executed and delivered by the Borrower, and (iii) this Sixth Amendment constitutes the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and except as rights to indemnity may be limited by federal or state securities laws;

     (d) neither the execution, delivery and performance of this Sixth Amendment, nor the consummation of any transactions contemplated herein, will conflict with (i) the certificate or

articles of incorporation or the applicable constituent documents or bylaws of the Borrower or its Subsidiaries, (ii) to Borrower’s knowledge, any provision or law, statute, rule or regulation applicable to the Borrower or its Subsidiaries or (iii) any indenture, agreement or other instrument to which the Borrower, the Subsidiaries or any of their properties are subject; and
no authorization, approval, consent, or other action by, notice to, or filing with, any Governmental Authority or other Person not previously obtained is required to be obtained or made by the Borrower pursuant to statutory law applicable to the Borrower as a condition to (i) the execution, delivery or performance by the Borrower of this Sixth Amendment or (ii) the acknowledgement by each Guarantor of this Sixth Amendment.

     5. CONDITIONS OF EFFECTIVENESS. This Sixth Amendment shall be effective on and as of March 31, 2009 (provided, however, Section 3 of this Sixth Amendment shall be effective as of May 4, 2009), subject to the following:

     (a) the representations and warranties set forth in Section 4 of this Sixth Amendment shall be true and correct;

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

     (c) the Administrative Agent shall have received from the Borrower for the account of each Lender, an amount in immediately available funds equal to the product of (i) 0.25% and (ii) each Lender’s Commitment, as reduced by the voluntary reduction of each Lender’s Commitment as provided in Section 3 of this Sixth Amendment and effective as of May 4, 2009; and

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

     6. GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor (a) acknowledges, consents and agrees to the execution, delivery and performance by the Borrower of this Sixth Amendment, (b) acknowledges and agrees that its obligations in respect of its Guaranty are not released, diminished, waived, modified, impaired or affected in any manner by this Sixth Amendment, or any of the provisions contemplated herein, (c) ratifies and confirms its obligations under its Guaranty and (d) acknowledges and agrees that it has no claim or offsets against, or defenses or counterclaims to, its Guaranty.

     7. REFERENCE TO THE CREDIT AGREEMENT.

     (a) Upon and during the effectiveness of this Sixth Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, or words of like import shall mean and be a reference to the Credit Agreement, as affected and amended by this Sixth Amendment.

     (b) Except as expressly set forth herein, this Sixth Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights or remedies of the Administrative Agent or the Lenders under the Credit Agreement or any of the other Loan Documents, and shall not alter, modify, amend, or in any way affect the terms, conditions, obligations, covenants, or agreements contained in the Credit Agreement or the other Loan

Documents, all of which are hereby ratified and affirmed in all respects and shall continue in full force and effect.

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

     9. EXECUTION IN COUNTERPARTS. This Sixth Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. For purposes of this Sixth Amendment, a counterpart hereof (or signature page thereto) signed and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an original. The signature of such Person thereon, for purposes hereof, is to be considered as an original signature, and the counterpart (or signature page thereto) so transmitted is to be considered to have the same binding effect as an original signature on an original document.

     10. GOVERNING LAW; BINDING EFFECT. This Sixth Amendment shall be governed by and construed in accordance with the laws of the State of Texas applicable to agreements made and to be performed entirely within such state; provided that the Administrative Agent and each Lender shall retain all rights arising under federal law. This Sixth Amendment shall be binding upon the parties hereto and each Lender and their respective successors and permitted assigns.

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

     12. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED AND AFFECTED BY THIS SIXTH AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

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