Summary of KID BRANDS, INC

Entry into a Material Definitive Agreement, Termination of a Material Definitive

Item 1.01 Entry into a Material Definitive Agreement

Background

On December 21, 2012, the 2012 Credit Agreement (defined and described in Item 1.02) and all loan documents related thereto were terminated and the obligations thereunder were refinanced as described below (the "Refinancing"). In connection with the Refinancing, all outstanding obligations under the 2012 Credit Agreement (approximately $54.0 million) were repaid using proceeds from a new credit agreement executed by Kid Brands, Inc. (the "Company") with Salus Capital Partners, LLC. As a result of the Refinancing, the Company anticipates that it will write off, in the fourth quarter of 2012, approximately $1.0 million to $1.5 million in unamortized deferred financing costs originally incurred in connection with the 2012 Credit Agreement.

Salus Credit Agreement

On December 21, 2012, the Company, specified domestic subsidiaries consisting of Kids Line, LLC, Sassy, Inc., LaJobi, Inc., CoCaLo, Inc., I&J Holdco, Inc., and RB Trademark Holdco, LLC (such entities collectively with the Company, the "Borrowers"), executed a Credit Agreement (the "Salus Credit Agreement") with Salus Capital Partners, LLC, as Lender, Administrative Agent and Collateral Agent (the "Agent"), and the other lenders from time to time party thereto (the "Lenders"). As of the closing of the Salus Credit Agreement, Salus Capital Partners, LLC is the sole Lender. The obligations of the Borrowers under the Salus Credit Agreement are joint and several.

The Salus Credit Agreement provides for an aggregate maximum $80.0 million revolving credit facility, composed of: (i) a revolving $60.0 million tranche (the "Tranche A Revolver"), with a $5.0 million sublimit for letters of credit; and (ii) a $20.0 million first-in last-out tranche (the "Tranche A-1 Revolver"). The Borrowers may not request extensions of credit under the Tranche A Revolver unless they have borrowed the full amount available under the Tranche A-1 Revolver. Borrowers must cash collateralize all outstanding letters of credit.

Loans under the Salus Credit Agreement bear interest at a specified 30-day LIBOR rate (subject to a minimum LIBOR floor of 0.50%), plus a margin of 4.0% per annum with respect to the Tranche A Revolver and a margin of 11.25% per annum with respect to the Tranche A-1 Revolver. Interest is payable monthly in arrears and on the maturity date of the facility. During the continuance of any event of default, existing interest rates would increase by 3.50% per annum.

Subject to the borrowing base described below, the Borrowers may borrow, repay (without premium or penalty) and re-borrow advances under each of the Tranche A Revolver and the Tranche A-1 Revolver until December 21, 2016 (the "Maturity Date"), at which time all outstanding obligations under the Salus Credit Agreement are due and payable (subject to early termination provisions). Other than in connection with a permanent reduction of the Tranche A-1 Revolver as described below, repayments shall be first applied to the Tranche A Revolver, and upon repayment of the Tranche A Revolver in full, to the Tranche A-1 Revolver.

The Borrowers may in their discretion terminate or permanently reduce the commitments under the Tranche A Revolver or the Tranche A-1 Revolver, provided that the Borrowers may not reduce the commitments under the Tranche A-1 Revolver to less than $15.0 million while commitments under the Tranche A Revolver remain outstanding, and if the commitments under the Tranche A Revolver are terminated or reduced to zero, the commitments under the Tranche A-1 Revolver will be automatically terminated. In the event of such permanent reduction (or termination of the commitments prior to the Maturity Date), the Borrowers shall pay to the Agent for the benefit of the Lenders or as otherwise determined by the Agent, a termination fee in the amount of: (i) 2.0% of the amount of the commitments so reduced or outstanding at the time of termination, if reduced or terminated prior to the first anniversary of the closing date of the Salus Credit Agreement (the "First Anniversary"); (ii) 1.5% of the amount of the commitments so reduced or outstanding at the time of termination, if reduced or terminated on or after the First Anniversary but prior to the second anniversary of such closing date (the "Second Anniversary"); and (iii) 0.50% of the amount of the commitments so reduced or outstanding at the time of termination, if reduced or terminated on or after the Second Anniversary, provided that the Borrowers may permanently reduce the commitments under the Tranche A-1 Revolver from time to time to no less than $15.0 million without the incurrence of any premium, penalty or fee, so long as no event of default has occurred and is continuing.

The Tranche A Revolver is subject to borrowing base limitations based on 95% of the face amount of specified eligible accounts receivable, net of reserves established in the reasonable discretion of the Agent, including dilution reserves; plus the lesser of: (x) 68% of eligible inventory stated at the lower of cost or market value (in accordance with the Borrowers' accounting practices), net of reserves established in the reasonable discretion of the Agent; and (y) 100% of the appraised orderly liquidation value, net of costs and expenses, of eligible inventory stated at the lower of cost or market value, net of inventory reserves; minus an availability block of $4.0 million (or if an event of default exists, such other amount established by the Agent); minus customary availability reserves (without duplication).

The Tranche A-1 Revolver is subject to borrowing base limitations based on the lesser of: (i) 50% of the fair market value (as determined by an independent appraiser engaged by the Agent from time to time) of specified registered eligible intellectual property, net of reserves established in the reasonable discretion of the Agent, and (ii) the aggregate commitments for the Tranche A-1 Revolver at such time ($20.0 million at the time of closing); provided that availability under the Tranche A-1 Revolver is capped at 40% of the combined borrowing bases of the Tranche A Revolver and Tranche A-1 Revolver.

Under the Salus Credit Agreement, the Company is subject to the following financial covenants (the "Salus Financial Covenants"):

(a) minimum monthly Adjusted EBITDA (defined below) for the trailing twelve-month period ending on the last day of each month as set forth below:

                                                   Minimum  Adjusted
            Trailing Twelve-Month Period Ending         EBITDA
            December 31, 2012                     $         8,538,000
. . .

Item 1.02 Termination of a Material Definitive Agreement

Reference is made to the Waiver and First Amendment to Credit Agreement and First Amendment to Security Agreement dated August 13, 2012 (as amended via Second Amendment to Credit Agreement, dated November 15, 2012, the "2012 Credit Agreement"), among the Company and specified domestic subsidiaries thereof as borrowers, and certain lenders party thereto, including Bank of America, N.A., among other things, as Administrative Agent. The 2012 Credit Agreement provided for: (i) an aggregate maximum $52.0 million revolving credit facility, subject to a $47.0 million availability cap, and borrowing base limitations based on 80% of eligible receivables, plus the lesser of $20.0 million and 55% of the value of eligible inventory (minus specified reserves); (ii) a $5.0 million sub-facility for letters of credit; (iii) a $5.0 million sub-facility for swing-line loans; and (iv) a $23.0 million term loan, all of which were scheduled to mature April 1, 2014. Loans under the 2012 Credit Agreement bore interest at either a specified base rate or Eurodollar rate, plus (in each case) applicable margins, for revolving loans, ranging from 1.75% to 3.00% on Eurodollar rate loans and from 0.75% to 2.00% on base rate loans, based on a defined consolidated leverage ratio for the applicable trailing twelve-month period, and with respect to the term loan, a margin of 8.0% on Eurodollar rate loans and 7.0% on base rate loans (the term loan was also subject to a 2% PIK interest rate under specified circumstances). Under the terms of the 2012 Credit Agreement, the Company was required to comply with a maximum consolidated leverage ratio covenant for the trailing twelve month period as of the end of each month, and a minimum consolidated fixed charge coverage ratio covenant for a specified trailing period as of the end of each month. The 2012 Credit Agreement amended and restated the Company's prior credit facility with the lenders party thereto and the Administrative Agent. A detailed description of the 2012 Credit Agreement is located in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2012 under the heading "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Debt Financings - 2012 Credit Agreement", and in Note 4 of the Notes to Unaudited Consolidated Financial Statements therein.

As described in Item 1.01 of this Current Report on Form 8-K, effective immediately upon the execution of the Salus Credit Agreement by the respective parties thereto, the 2012 Credit Agreement (and all related loan documents) were terminated.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibits are filed with this report:

10.49    Credit Agreement dated as of December 21, 2012, among Kid Brands, Inc.,
         specified domestic subsidiaries party thereto, Salus Capital Partners,
         LLC, as Administrative Agent and Collateral Agent, and the other lenders
         from time to time party thereto.

10.50    Security Agreement dated as of December 21, 2012, by Kid Brands, Inc. and
         the other Borrowers and Loan Parties party thereto from time to time in
         favor of Salus Capital Partners, LLC, as Collateral Agent.

Cautionary Note Regarding Forward-Looking Statements:

To the extent that statements in this Current Report on Form 8-K are not strictly historical, such statements are forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Additional written and oral forward-looking statements may be made by us from time to time in Securities and Exchange Commission (SEC) filings and otherwise. The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. These forward-looking statements include statements that are predictive in nature and depend upon or refer to future events or conditions, and include, but are not limited to, information regarding the status and progress of our operating activities, the plans and objectives of our management and assumptions regarding our future performance, operating expenses, working capital needs, liquidity and capital requirements, business trends and competitiveness. Forward-looking statements include, but are not limited to, words such as "believe," "plan," "anticipate," "estimate," "project", "may", "planned", "potential", "should", "will, "would", "could", "might", "possible", "contemplate", "continue", "expect," "intend," "seek" or the negative of or other variations on these and other similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects, and possible future actions, are also forward-looking statements. We caution readers that results predicted by forward-looking statements, including, without limitation, those relating to our future business prospects, revenues, working capital, liquidity, capital needs, interest costs and income are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Specific risks and uncertainties include, but are not limited to, those set forth under Item 1A, "Risk Factors", of our most recent Annual Report on Form 10-K, and subsequent Quarterly Reports on Form 10-Q,each as filed with the SEC. Forward-looking statements are also based on economic and market factors and the industry in which we do business, among other things. These statements are not guarantees of future performance. Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the SEC, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.