EXHIBIT 10.1
PROMISSORY NOTE
$ 1,068,416.62 March 31, 2000
FOR VALUE RECEIVED, the undersigned, RUSSELL W. ALLEN, whose address
is shown in Paragraph 9 hereof (the "Maker"), hereby promises to pay to the
order of CARRIAGE SERVICES, INC., a Delaware corporation (the "Payee"), at
Payee's address set forth in Paragraph 9 hereof, on or before March 31, 2001,
the principal sum of ONE MILLION SIXTY-EIGHT THOUSAND FOUR HUNDRED SIXTEEN AND
62/100 DOLLARS ($1,068,416.62), together with interest thereon, in cash or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts, all as is hereinafter
provided.
1. INTEREST AND PRINCIPAL PAYMENTS. Prior to maturity, interest
shall accrue and be payable on the outstanding principal balance under this Note
at a rate equal to the lesser of (x) the highest rate permitted by Applicable
Law (as hereinafter defined) or (y) six percent (6%) per annum.
The entire principal amount of, and all accrued and unpaid interest
on, this Note shall be due and payable in its entirety on or before March 31,
2001.
All past due principal and interest on this Note shall bear interest
from and after maturity until paid at a fixed rate per annum equal to the lesser
of twelve percent (12%) or the highest rate permitted by Applicable Law.
Regardless of any other provisions of this Note or in any documents
guaranteeing or securing payment hereof or otherwise relating hereto, neither
the Payee nor any other holder of this Note shall ever be entitled to receive,
collect or apply as interest on the principal of this Note any amount in excess
of the Maximum Rate of interest allowable under Applicable Law, and if the Payee
ever receives, collects or applies as interest hereon any such excess, such
amount that would be excessive interest shall be deemed a partial prepayment of
principal and shall be treated as such, and if the principal is paid in full,
any remaining excess shall forthwith be paid to the Maker. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Maximum Rate of interest allowable under Applicable Law, the Maker
and the Payee shall, to the maximum extent permitted under Applicable Law, (a)
characterize any nonprincipal payment as an expense, fee, or premium rather than
as interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
spread the total amount of interest throughout the entire contemplated term
hereof, provided that if the indebtedness evidenced hereby is paid and performed
in full prior to the end of the full contemplated term hereof, and if the
interest received for the actual period of existence hereof exceeds the Maximum
Rate of interest allowable under Applicable Law, the Payee shall either apply or
refund to the Maker the amount of such excess as herein provided, and in such
event, the Payee shall not be subject to any penalties provided by any laws for
contracting for, charging, or receiving interest in excess of the Maximum Rate
of interest allowable under Applicable Law.
2. PREPAYMENT. (a) If while this Note is outstanding, the Maker
ceases to be a full-time employee of the Payee or one or more of its affiliates
by reason of (i) the breach of his obligations under the Employment Agreement
dated effective November 8, 1999 between the Maker and the Payee (the
"Employment Agreement") or (ii) his discharge for Cause (as defined in the
Employment Agreement), then the Maker shall contemporaneously with such
cessation of employment, as a mandatory prepayment hereunder, pay all principal
and interest then due under this Note. In case of an Event of Default arising by
virtue of a mandatory prepayment hereunder resulting from the Maker's breach of
his obligations under the Employment Agreement or his discharge for Cause (as
\so defined), the Payee agrees first to exhaust its remedies under the Security
Agreement referred to in Paragraph 4 below before pursuing a claim for damages
or otherwise asserting personal liability against the Maker under this Note, it
being understood, however, that the Maker shall, under such circumstances,
remain liable for any deficiency arising after the exhaustion of such remedies.
(b) In addition to any mandatory prepayment under subparagraph (a)
above, this Note may be prepaid prior to maturity, at the option of the Maker,
as a whole at any time or in part from time to time, without premium or penalty.
(c) Any partial prepayment hereunder shall be applied first to
accrued and unpaid interest and then to principal.
3. DEFINITIONS. The terms set forth below shall have the meanings
assigned to such terms as used in this Note:
"APPLICABLE LAW" shall mean the law in effect from time to time and
applicable to the transactions between the Maker and the Payee pursuant to this
Note and the Security Agreement which lawfully permits the charging and
collection of the highest permissible lawful, non-usurious rate of interest on
such transactions, including laws of the State of Texas, and to the extent
providing for a higher lawful rate of interest, laws of the United States of
America. It is intended that Chapter 303 of the Texas Finance Code, as amended,
shall be included in the laws of the State of Texas in determining Applicable
Law; and for the purpose of applying said Chapter 303, the interest ceiling
applicable to such transactions under said Chapter 303 shall be the indicated
(weekly) rate ceiling from time to time in effect.
"MAXIMUM RATE" shall mean the maximum lawful non-usurious rate of
interest, if any, which under Applicable Law Payee is permitted to charge Maker
on the loan evidenced by this Note. If, however, during any period interest
accruing on this Note is not limited to any maximum lawful non-usurious rate of
interest under Applicable Law, then during each such period the "Maximum Rate"
shall be equal to a per annum rate of 18%.
4. SECURITY AGREEMENT-PLEDGE. This Note is the "Consolidated Note"
referred to in that certain Security Agreement dated as of even date herewith
and that certain Amended and Restated Security Agreement-Pledge dated as of even
date herewith, between Maker and Payee (together with any and all amendments and
supplements thereto and/or restatements and modifications thereof, respectively
the "SECURITY AGREEMENT" or the "PLEDGE AGREEMENT", as
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applicable). Reference is hereby made to the Security Agreement and the Pledge
Agreement for a description of certain rights of Maker, the Events of Default
and the rights of Payee to accelerate the maturity of this Note upon the
occurrence of an Event of Default. The Security Agreement and the Pledge
Agreement are incorporated herein for all intents and purposes. Each capitalized
term used in this Note and not otherwise expressly defined herein shall have the
meaning assigned to such terms in the Security Agreement.
5. PAYEE RECORDS. The records of the Payee shall constitute
rebuttably presumptive evidence of the principal and earned, accrued and unpaid
interest remaining outstanding on this Note.
6. WAIVERS. The Maker and all sureties, endorsers and guarantors of
this Note waive demand, presentment for payment, notice of nonpayment, protest,
notice of protest, notice of intent to accelerate, notice of acceleration, all
other notices, filing of suit and diligence in collecting this Note or enforcing
any security given therefor, and agree to any substitution, exchange, or release
of any security, with or without consideration, now or hereafter given for this
Note or the release of any party primarily or secondarily liable hereon. The
Maker and all sureties, endorsers or guarantors of this Note further agree that
it will not be necessary for any holder hereof, in order to enforce payment of
this Note, to first institute or exhaust its remedies against any maker or any
other party liable therefor or to enforce its rights against any security for
this Note and consent to any one or more extensions or postponements of time of
payment of this Note on any terms or any other indulgences with respect hereto,
without notice thereof to any of them.
7. COSTS OF COLLECTION. If an Event of Default shall occur or exist
and this Note is placed in the hands of an attorney for collection, or suit is
filed herein, or proceedings are had in bankruptcy, probate, receivership,
reorganization or other judicial proceedings for the establishment or collection
of any amount called for hereunder or any amount payable or to be payable
hereunder is collected through any such proceedings, the Maker agrees to pay to
the holder hereof all costs, including reasonable attorney's or collection fees,
incurred in the collection or attempted collection of this Note.
8. PRIOR INDEBTEDNESS. This Note is executed and delivered in
renewal, modification, extension, rearrangement, replacement and restatement of
(but not in extinguishment of) the indebtedness (including principal, interest
and other charges) evidenced by the following promissory notes:
(i) Payable to Payee in the original principal amount of
$316,714.00, dated July 9, 1996.
(ii) Payable to Payee in the original principal amount of
$16,156.75, dated March 31, 1997.
(iii) Payable to Payee in the original principal amount of
$23,301.00, dated March 31, 1998.
(iv) Originally payable to Provident Credit Corp. in the original
principal amount of $507,255.03, dated April 1, 1999, and
assigned to Payee pursuant to the Assignment of Note and Liens
dated November 30, 1999.
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(v) Originally payable to Provident Credit Corp. in the original
principal amount of $50,000.00, dated April 1, 1999, and
assigned to Payee pursuant to the Assignment of Note and Liens
dated November 30, 1999.
(vi) Payable to Payee in the original principal amount of
$100,000.00, dated October 19, 1999.
9. NOTICES, MISCELLANEOUS. All notices, requests, consents and other
communications required or permitted under this Note shall be in writing and
shall be deemed to have been delivered on the date mailed, postage prepaid, by
certified mail, return receipt requested, or on the date personally delivered,
as follows:
1. If to the Payee, to:
Carriage Services, Inc.
1300 Post Oak Boulevard, Suite 1500
Houston, Texas 77056
Attn: President
2. If to the Maker, to:
Mr. Russell W. Allen
11301 Lake Forest Drive
Conroe, Texas 77384
3. If to any other holder other than the Payee, to such
address as may have been designated by notice given the
Maker by such holder.
The Maker, the Payee or any other holder hereof may designate a
different address by notice given in accordance with the foregoing.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS OF
THE UNITED STATES OF AMERICA. THIS NOTE HAS BEEN DELIVERED AND ACCEPTED AND IS
PAYABLE AT HOUSTON, HARRIS COUNTY, TEXAS.
IN WITNESS WHEREOF, the undersigned has executed this Note effective
as of the 31st day of March, 2000.
MAKER:
____________________________________________
____________________________________________
RUSSELL W. ALLEN
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