EXHIBIT 4-B


 


FIRST AMENDMENT
TO CREDIT AGREEMENT


 


THIS FIRST AMENDMENT
TO CREDIT AGREEMENT (this “Agreement”) is made and entered into as of April 10, 2013, by and among SHOE CARNIVAL,
INC., an Indiana corporation (the “Borrower”), the Banks (as defined herein) party hereto, and WELLS FARGO BANK,
N.A., a national banking association, as successor-by-merger to Wachovia Bank, National Association
(together with its successors and assigns, the “Agent”), as Agent on behalf of itself and the Banks.


 


WITNESSETH:


 


WHEREAS, Borrower,
the financial institutions from time to time party thereto (the “Banks”), and Agent have executed and delivered
that certain Credit Agreement dated as of January 20, 2010 (as the same may be amended, restated, supplemented, or otherwise modified
from time to time, the “Credit Agreement”); and


 


WHEREAS, the Borrower
has requested that the Agent and the Banks party hereto amend certain provisions of the Credit Agreement as set forth herein, and
the Agent and the Banks party hereto have agreed to such amendments, subject to the terms and conditions hereof.


 


NOW, THEREFORE, for
and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the parties hereto hereby covenant and agree as follows:


 


SECTION 1.    Definitions.
Unless otherwise specifically defined herein, each term used herein (and in the recitals above) which is defined in the Credit
Agreement shall have the meaning assigned to such term in the Credit Agreement. Each reference to “hereof,” “hereunder,”
“herein,” and “hereby” and each other similar reference and each reference to “this Agreement”
and each other similar reference contained in the Credit Agreement shall from and after the date hereof refer to the Credit Agreement
as amended hereby.


 


SECTION 2.     Amendments
to Credit Agreement.


 


(a)           The
definition of “Term” in Section 1.1 of the Credit Agreement is amended so that it reads, in its entirety, as follows:


 


“Term”
shall mean the period from the Effective Date up to and including April 10, 2018, except that (a) all, but not less than all, of
the Banks may, in their sole discretion, extend such Term for additional one year periods by notifying Borrower of each such extension
at least twelve (12) months prior to the expiration of the then current Term and of their intention to extend the Term by an additional
year; (b) Agent may terminate the Banks’ obligations hereunder at any time prior to stated maturity date or any extension
thereof pursuant to Article 6 herein; and (c) Borrower may terminate the facility as provided in Section 2.7.


 


(b)           The
following definitions are added to Section 1.1 of the Credit Agreement in appropriate alphabetical order:


 


“First
Amendment Effective Date” shall mean April 10, 2013.


 


“Fitch”
shall mean Fitch Ratings, Inc., and its successors.


 




    	 



    	 



    

 


“Moody’s”
shall mean Moody’s Investor Service, Inc., and its successors.


 


“Permitted
Distributions” shall mean Distributions by Borrower permitted to be made under Section 5.2(e) of this Agreement.


 


“Permitted
Distribution Conditions” shall mean, with respect to any Distribution, that (a) no Default or Event of Default exists before
and immediately after giving effect to such Distribution; (b) such Distribution is lawful; and (c) the Agent has received the financial
statements described in Section 5.1(a)(i) for the most recent fiscal year-end of Borrower.


 


“Permitted
Investments” shall mean:


 


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


 


(b)
        commercial paper having the highest rating,
at the time of acquisition thereof, of S&P or Moody’s and in either case maturing within six months from the date of
acquisition thereof;


 


(c)
        certificates of deposit, bankers’ acceptances
and time deposits maturing within 180 days of the date of acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United
States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000.00;


 


(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)
        investments in money market mutual funds
that are registered with the SEC and subject to Rule 2a-7 of the Investment Company Act of 1940 and have a net asset value of
at least $1,000,000,000;


 


(f)
        municipal obligations issued by any state
of the United States of America or any municipality or other political subdivision of any such state rated at least AAA by S&P,
Aaa by Moody’s or AAA by Fitch at the time of purchase; in each case maturing within one year from the date of acquisition
thereof;


 


(g)
        fixed income mutual funds that provide next
day liquidity and have a duration of one year or less; 


 


(h)
        FDIC insured demand deposits and certificate of deposits
with various banks not to exceed $250,000 with any one bank with funds availability of seven days to 90 days and with the deposit
program having the U.S. government sovereign credit rating as given by Standard & Poor’s Corporation or Moody’s
Investor Service, Inc.; and


 


(i)          Short-term
market accounts, of one year or less in duration, located at one or more Banks.


 




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“S&P”
shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.


 


(c)           The
definition of “LIBOR Margin” in Section 2.5(b) of the Credit Agreement is amended so that it reads, in its entirety,
as follows:


 


“LIBOR
Margin” shall mean (a) at any time of determination prior to the First Amendment Effective Date, the percentage determined
by reference to the table in this Section 5.2(b) as in effect prior to the First Amendment Effective Date and (b) at any time
of determination on and after the First Amendment Effective Date, the percentage determined by reference to the following table
as adjusted on a quarterly basis simultaneously with the delivery of the Compliance Certificate required by Section 5.1(a)(iii)
for any fiscal quarter and based on the ratio of Funded Debt to EBITDA determined as of the last day of the immediately preceding
fiscal quarter for the four fiscal quarters then ending:


 


	Level	 	Funded Debt to EBITDA	 	LIBOR Margin
	1	 	Greater than 1.50 to 1.00	 	3.00%
	2	 	Greater than 1.25 to 1.00 but less than or equal to 1.50 to 1.00	 	2.50%
	3	 	Greater than 1.00 to 1.00 but less than or equal to 1.25 to 1.00	 	2.00%
	4	 	Less than 1.00 to 1.00	 	1.50%



 


(d)          The
second sentence in Section 2.6 of the Credit Agreement is amended so that it reads, in its entirety, as follows:


 


(a) Prior to the First Amendment
Effective Date, the unused fee shall be calculated for each day based on the percentage per annum applicable to such day determined
by reference to the table in this Section 2.6 as in effect prior to the First Amendment Effective Date (as adjusted on a quarterly
basis simultaneously with the delivery of the Compliance Certificate required by Section 5.1(a)(iii) for any fiscal quarter based
on the ratio of Funded Debt to EBITDA determined as of the last day of the immediately preceding fiscal quarter for the four fiscal
quarters then ending), multiplied by the amount by which the Commitment exceeded the Working Capital Obligations on such day and
(b) on and after the First Amendment Effective Date, the unused fee shall be calculated for each day based on the percentage per
annum applicable to such day determined by reference to the following table (as adjusted on a quarterly basis simultaneously with
the delivery of the Compliance Certificate required by Section 5.1(a)(iii) for any fiscal quarter based on the ratio of Funded
Debt to EBITDA determined as of the last day of the immediately preceding fiscal quarter for the four fiscal quarters then ending),
multiplied by the amount by which the Commitment exceeded the Working Capital Obligations on such day:


 


	Level	 	Funded Debt to EBITDA	 	Unused Fee
	1	 	Greater than 1.50 to 1.00	 	0.40%
	2	 	Greater than 1.25 to 1.00 but less than or equal to 1.50 to 1.00	 	0.35%
	3	 	Greater than 1.00 to 1.00 but less than or equal to 1.25 to 1.00	 	0.30%
	4	 	Less than 1.00 to 1.00	 	0.25%



 


(e)           Section
5.1(a)(vi) of the Credit Agreement is amended to replace the reference to “30 days” with “60 days.”


 


(f)            Section
5.1(e)(i) of the Credit Agreement is amended so that it reads, in its entirety, as follows:


 




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(i)          Have,
as of the end of each fiscal quarter, an Adjusted Net Worth (as defined below) of not less than the amount shown as Borrower’s
Net Worth on its most recent fiscal year-end financial statements delivered pursuant to Section 5.1(a)(i) (“Actual Net Worth”),
provided that Adjusted Net Worth for any fiscal year end shall not in any event be less than the Actual Net Worth for the previous
fiscal year end. “Adjusted Net Worth” shall mean, at any time of determination, the sum of (1) Net Worth at such time
and (2) the aggregate amount of Permitted Distributions made after the most recent fiscal year-end.


 


(g)          Section
5.2(e) of the Credit Agreement is amended so that it reads, in its entirety, as follows:


 


(e)          Stock
Redemptions and Distributions. No Subsidiary shall make any Distribution except to Borrower or to a Subsidiary wholly owned
by Borrower. With respect to its common Equity Interests, Borrower will not declare or make any Distribution to its shareholders
(excluding any stock split or stock dividend) except, so long as the Permitted Distribution Conditions are satisfied before and
immediately after giving effect to such proposed Distributions, Borrower may declare and make the following Distributions:


 


(i)          during
any fiscal year, Distributions in an aggregate amount not to exceed 30% of Borrower’s consolidated net income for the immediately
preceding fiscal year; and


 


(ii)         Distributions
made solely with Borrower’s cash on hand so long as before and immediately after such Distributions there are no Revolving
Loans outstanding;


 


provided that in no event
shall the amount of all Distributions made pursuant to clauses (i) and (ii) above in any fiscal year of Borrower exceed 25% of
the amount shown as Borrower’s Net Worth on its most recent fiscal year-end financial statements delivered pursuant to Section
5.1(a)(i).


 


(h)          Section
5.2(h)(ii) of the Credit Agreement is amended so that it reads, in its entirety, as follows:


 


(ii)         Borrower
or such Subsidiary may make investments in Permitted Investments,


 


(i)           Sections
5.2(h)(iv), (v), (vi), (vii), (viii), and (x) of the Credit Agreement are each amended so that they read, in their entirety, respectively,
as follows:


 


(iv)       [Reserved.]


 


(v)        [Reserved.]


 


(vi)       [Reserved.]


 


(vii)      [Reserved.]


 


(viii)     [Reserved.]


 


(x)        [Reserved.]


 


SECTION 3.     Conditions
Precedent. This Agreement shall become effective only upon satisfaction of the following conditions precedent:


 


(a)           execution
and delivery of this Agreement by Borrower, Agent, and each of the Banks;


 




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(b)           execution
and delivery of the Consent, Reaffirmation, and Agreement of the Guarantors at the end hereof by each of the Guarantors;


 


(c)           execution
and delivery of the Florida Out-of-State Affidavit in the form of Exhibit A, attached hereto and made a part hereof,
by the Borrower; and


 


(d)           Borrower
shall have paid (or the Agent shall be satisfied with the arrangements made for the payment of) (i) an upfront fee to each of the
Banks in an amount equal to 0.20% of each such Bank’s Commitment on the date hereof and (ii) all other costs, fees, and expense
owed by Borrower to the Banks and Agent as of the date hereof (with the Borrower hereby authorizing the Agent to debit its applicable
deposit account maintained with the Agent and to apply the proceeds thereof to the payment of the foregoing items).


 


SECTION 4.     Miscellaneous
Terms.


 


(a)           Effect
of Agreement. Except as set forth expressly hereinabove, all terms of the Credit Agreement and the other Loan Documents shall
be and remain in full force and effect, and shall constitute the legal, valid, binding, and enforceable obligations of Borrower.
Except to the extent otherwise expressly set forth herein, the amendments set forth herein shall have prospective application only
from and after the date of this Agreement.


 


(b)           No
Novation or Mutual Departure. Borrower expressly acknowledges and agrees that (i) there has not been, and this Agreement does
not constitute or establish, a novation with respect to the Credit Agreement or any of the other Loan Documents, or a mutual departure
from the strict terms, provisions, and conditions thereof, other than with respect to the amendments contained in Section 2
above; (ii) nothing in this Agreement shall affect or limit Agent’s and Banks’ right to demand payment of liabilities
owing from Borrower to Agent and Banks under, or to demand strict performance of, the terms, provisions, and conditions of the
Credit Agreement and the other Loan Documents, to exercise any and all rights, powers, and remedies under the Credit Agreement
or the other Loan Documents or at law or in equity, or to do any and all of the foregoing, immediately at any time after the occurrence
and continuance of a Default or an Event of Default under the Credit Agreement or the other Loan Documents; and (iii) the amendments
in Section 2 above shall not apply to any other past, present, or future noncompliance with any provision of the Credit
Agreement or any of the other Loan Documents and do not constitute any course of dealing between Agent, Banks, and Borrower.


 


(c)          Ratification.
Borrower (i) hereby restates, ratifies, and reaffirms each and every term, covenant, and condition set forth in the Credit Agreement
and the other Loan Documents to which it is a party effective as of the date hereof and (ii) restates and renews each and every
representation and warranty heretofore made by it in the Credit Agreement and the other Loan Documents as fully as if made on the
date hereof and with specific reference to this Agreement and any other Loan Documents executed or delivered in connection herewith
(except with respect to representations and warranties made as of an expressed date, in which case such representations and warranties
shall be true and correct as of such date).


 




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(d)           No
Default. To induce Agent and the Banks a party hereto to enter into this Agreement and to continue to make advances pursuant
to the Credit Agreement (subject to the terms and conditions hereof and thereof), Borrower hereby acknowledges and agrees that,
as of the date hereof, and after giving effect to the terms hereof, there exists (i) no Default or Event of Default and (ii) no
right of offset, defense, counterclaim, claim, or objection in favor of Borrower or arising out of or with respect to any of the
Loans or other obligations of Borrower owed to the Agent and the Banks under the Credit Agreement or any other Loan Document.


 


(e)           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 and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute
but one and the same instrument. This Agreement may be executed by each party on separate copies, which copies, when combined so
as to include the signatures of all parties, shall constitute a single counterpart of the Agreement.


 


(f)           Fax
or Other Transmission. Delivery by one or more parties hereto of an executed counterpart of this Agreement via facsimile, telecopy,
or other electronic method of transmission pursuant to which the signature of such party can be seen (including, without limitation,
Adobe Corporation’s Portable Document Format) shall have the same force and effect as the delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by facsimile or other electronic
method of 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 Agreement.


 


(g)          Section
References. Section titles and references used in this Agreement shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.


 


(h)          Further
Assurances. Borrower agrees to take, at Borrower’s expense, such further actions as Agent shall reasonably request from
time to time to evidence the amendments set forth herein and the transactions contemplated hereby.


 


(i)            Severability.
Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability
of such provision in any other jurisdiction.


 


(j)            Governing
Law. This Agreement shall be governed by and construed and interpreted in accordance with 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.


 


[SIGNATURES ON FOLLOWING PAGES.]


 




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IN WITNESS WHEREOF,
each of the Borrower, the Agent, and the Banks a party hereto has caused this Agreement to be duly executed by its duly authorized
officer as of the day and year first above written.


 


	 	BORROWER:
	 	 
	 	SHOE CARNIVAL, INC., 
	 	an Indiana corporation
	 	 
	 	By:  	/s/ W. Kerry Jackson
	 	 
	 	Name:  W. Kerry Jackson
	 	 
	 	Title:  SEVP – COO & CFO


 




    	 



    	 



    

 


	 	AGENT AND BANKS:
	 	 
	 	WELLS FARGO BANK, N.A., as successor-by- 
	 	merger to Wachovia Bank, National Association, as
	 	Agent and a Bank
	 	 
	 	By:  	/s/ Charles N. Kauffman
	 	 
	 	Name:  Charles N. Kauffman
	 	 
	 	Title:  Senior Vice President


 




    	 



    	 



    

 


	 	FIFTH THIRD BANK, as a Bank
	 	 
	 	By:  	/s/ Richard A. Clements
	 	 
	 	Name:  Richard A. Clements
	 	 
	 	Title:  Assistant Vice President


 




    	 



    	 



    

 


CONSENT, REAFFIRMATION, AND AGREEMENT
OF GUARANTORS


 


Each of the undersigned
(i) acknowledges receipt of the foregoing First Amendment to Credit Agreement (the “Agreement”), (ii) consents
to the execution and delivery of the Agreement by the parties thereto, and (iii) reaffirms all of its respective obligations and
covenants under that certain Subsidiary Guaranty dated as of January 20, 2010 (as amended, restated, supplemented, or otherwise
modified from time to time) and, in each case, agrees that none of its respective obligations and covenants thereunder shall be
reduced or limited by the execution and delivery of the Agreement.


 


This Consent, Reaffirmation,
and Agreement of Guarantors (this “Consent”) 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 counterparts, taken together, shall constitute but one and the same instrument. This Consent may be executed by each party
on separate copies, which copies, when combined so as to include the signatures of all parties, shall constitute a single counterpart
of the Consent.


 


Dated April 10, 2013.


 


	 	SCLC, INC., a Delaware corporation
	 	 
	 	By:  	/s/ Darryl E. Smith
	 	 
	 	Name:  Darryl E. Smith
	 	 
	 	Title:  Secretary & Treasurer
	 	 
	 	SCHC, INC., a Delaware corporation
	 	 
	 	By:  	/s/ John J. Koach
	 	 
	 	Name:  John J. Koach
	 	 
	 	Title:  President


 




    	 



    	 



    

 


EXHIBIT A 


TO FIRST AMENDMENT TO CREDIT AGREEMENT


 


form
of Florida Out-of-State Affidavit of BORROWER


 




    	 



    	 



    

 


 


Florida
Out-of-State Affidavit of BORROWER


 


STATE OF INDIANA


 


COUNTY OF VANDERBURGH


 


I, W. Kerry Jackson, after being duly sworn,
depose and say:


 


(1)         I
am the SEVP – COO & CFO of Shoe Carnival, Inc., an Indiana corporation (the “Borrower”).


 


(2)         On
the date hereof, I, on behalf of the Borrower and with full authorization, executed that certain First Amendment to Credit Agreement
(the “Amendment”) dated as of April 10, 2013, by and among the Borrower, the financial institutions party thereto,
and Wells Fargo Bank, N.A.., as successor-by-merger to Wachovia Bank, National Association (together
with its successors and assigns, the “Agent”), in Evansville, Indiana.


 


(3)         On
the date hereof, I, on behalf of Borrower, delivered the executed Consent to Christopher Dillon, Esq.,
via overnight courier (to Jones Day, 1420 Peachtree Street, NE, Suite 800, Atlanta, GA 30309-3053, Attn: Christopher Dillon), in
Atlanta, Georgia.


 


(4)         This
Affidavit is made for the benefit of Agent for compliance with the laws of the State of Florida relating to documentary stamp taxes.


 


[CONTINUED ON FOLLOWING PAGE]


 




    	 



    	 



    

 


	FURTHER AFFIANTS SAYETH NOT:	 	 
	 	 	 
	Signature of Borrower:	 	Dated:  April 9, 2013
	 	 	 
	shoe Carnival, Inc.	 	 
	 	 	 
	By:  	/s/ W. Kerry Jackson	 	 
	Name:  W. Kerry Jackson	 	 
	Title:  SEVP – COO & CFO	 	 


 


The foregoing affidavit was sworn to before
me this 9th day of April, 2013, at Evansville, Indiana.


 


	 	/s/ Kelly Koch
	 	Notary Public, State of Indiana
	 	 
	 	My commission expires: April 17, 2014