**SMALL
WORLD KIDS, INC.**
  **CODE
OF ETHICS AND CONDUCT**
  Dear
Officer, Director or Employee:
  Small
World Kids, Inc.’s reputation for ethical, moral and legal business conduct is one of its most
valuable assets. We have built this reputation by conducting our business with
honesty and integrity. To reaffirm this long-standing practice, we have adopted
this Code of Ethics and Conduct, which applies to our officers, directors and
employees.
  Every one
of us is responsible for adhering to these guidelines in our daily lives as
directors, officers or employees of Small World Kids, Inc. and/or its
subsidiaries (“Corporation”) and for making every effort to ensure that our
rules of conduct are respected by all. Ultimately, we rely on you to use good
judgment and care in the performance of your job responsibilities. In exercising
your judgment, you should consider the Code's guidelines as well as its intent
and spirit. It goes without saying that conduct contrary to these rules is
punishable by disciplinary action up to and including termination.
  If you
have questions about the Code or its application to a specific situation, you
should contact your supervisor, your Human Resources Representative or the
Corporation’s Chief Financial Officer.
   Debra L.
Fine
 Chief
Executive Officer
  **We
Comply with the Law**
 As
officers, directors and/or employees of a global Corporation, each of us must
comply with the letter and spirit of every applicable local, state, federal and
foreign law or regulation. Violations of these laws can be extremely costly to
us and can subject us to criminal penalties. Each of us is responsible for
understanding the laws and regulations that relate to our job. Certain laws
demand the attention of all employees, officer and directors. These include the
following.
  ·
    **Securities
      Laws**-
      You may not buy, sell or recommend to others Small World Kids, Inc. stock
      or any other Corporation's stock if you have "material inside
      information". Engaging in securities trading while in possession of such
      information is a violation of both civil and criminal law. Material inside
      information is any information that, if it were made public, could affect
      any investor's decision to buy or sell the stock of a Corporation. All
      such information should be kept strictly confidential.  ·
    **Antitrust
      Laws**-
      Antitrust laws generally prohibit agreements with competitors, suppliers
      or customers that constitute unlawful restraint of trade, as well as price
      discrimination. This is a complex area, and officers, directors and
      employees whose activities cause them to confront these issues must
      familiarize themselves with the antitrust laws.   i
  ·
    **Laws
      Governing Group Activities**-
      If you are involved in international activities, you must be familiar with
      the Foreign Corrupt Practices Act. This Act generally prohibits payments
      to foreign officials to induce actions by them and requires us to maintain
      accurate books and records and a system of internal controls. We are
      prohibited from taking any action in support of an international boycott
      not sanctioned by the U.S. government.  ·
    **Employment
      Laws**-
      We are committed to providing a work environment that is free from all
      forms of discrimination, including sexual harassment and harassment based
      on race, color, religion, sex, national origin, age, disability or other
      protected status. We provide equal opportunity in all of our employment
      practices and seek to ensure that each one of us is treated with fairness
      and dignity.  ·
    **Occupational
      Health and Safety and Environmental Laws**-
      We are committed to providing a healthy and safe work environment. Each of
      us must abide by Corporation standards in safety matters, do our part to
      maintain a healthy and safe work environment and take the necessary steps
      to ensure our own safety and the safety of others. We do not condone, and
      we will not tolerate, illegal drug use or abuse of alcohol by our
      employees. We also respect and protect the environment. Therefore, each of
      us must adhere to environmental laws and
regulations.  **We
Avoid Conflicts of Interest**
 A
conflict of interest exists when an individual's duty of undivided commercial
loyalty to the
Corporation **** is or is
perceived to be prejudiced by actual or potential personal benefit from
another **** source.
Conflicts of interest may result directly through your activities or indirectly
through the activities of a family member, a person sharing your household or a
person with whom you are associated. Generally, you may not solicit or accept
salaries, fees, commissions or any other type of compensation from any
individual or organization that conducts or seeks to conduct business with the
Corporation or one of our competitors, and you may not have a financial or other
interest in those who deal with the Corporation. You may not make a loan or
extend credit to or receive a loan or credit from those who deal with the
Corporation. You must not directly or indirectly attempt to influence any
decision of the Corporation in order to derive a personal or financial benefit.
In case of doubt, ask your supervisor, your Human Resources Representative or
the Corporation’s Chief Financial Officer.
 
 **We
Protect Confidential Information**
 Data,
information and documents pertaining to the Corporation  may be
used only in the performance of your duties and may be disclosed or communicated
to persons outside of the Corporation  only to
the extent that the information is needed by them in connection with their
business relations with the Corporation. Each of you is required to keep this
information confidential during our employment with the Corporation  and after
our employment terminates. This information includes our design technology,
other intellectual property we use, business and financial information
pertaining to sales, earnings, balance sheet items, business forecasts, business
plans, acquisition strategies and other information of a confidential nature.
Any contact from the media should be referred to the Corporation’s Chief
Executive Officer, and none of you should speak with the media.
   ii
  **We
Do Not Make or Accept Improper Payments or Gifts**
 Improper
payments include anything of more than nominal value given to any person to
obtain preferential treatment for either the Corporation  or an
officer, director or employee. You may not solicit or accept gifts or favors of
more than nominal value from persons who deal or seek to deal with the
Corporation. Likewise, you may not give such gifts or favors to these persons.
  **We
Do Not Use** **Corporation** **** **Assets
or Funds for Political Contributions**
 No person
may use funds or assets of the Corporation  to
support a political party, committee or candidate. We will not reimburse
officers, directors or employees for political contributions, and the
Corporation  does not
make political contributions. If you wish to participate in political
activities, you must do so during non-work hours and away from the
Corporation  property.
  **We
Respect the Corporation**  **and
Each Other**
 Respect
for the Corporation  means not
only avoiding misuse of Corporation funds and property, it includes identifying
misuse and waste by others, creating and maintaining accurate books and records,
safeguarding all types of information about the Corporation, complying with our
document retention policy, complying with internal controls and procedures and
avoiding conduct that interferes with our functioning in our position to the
best of our ability. Respect for others means respecting their property, their
self-esteem and their contributions to the overall success of the
Corporation .
  **We
Acknowledge Special Ethical Obligations for Financial
Reporting**
 As a
public Corporation, it is of critical importance that the
Corporation’s  filings
with the Securities and Exchange Commission be accurate and timely and be
prepared in accordance with generally accepted accounting principles. Depending
on their position with the Corporation, employees, officers or directors may be
called upon to provide information to assure that the Corporation’s public
reports and other public communications are complete, fair and
understandable.  The
Corporation expects all of its personnel to take this responsibility seriously
and to provide prompt and accurate answers to inquiries related to its public
disclosure requirements. The Chief Executive Officer, Chief Financial Officer
and finance department personnel have a special role both to adhere to these
principles themselves and also to insure that a culture exists throughout the
Corporation as a whole that insures the fair and timely reporting of our
financial results and condition. The Chief Executive Officer and finance
department personnel, in addition to adhering to all other provisions of this
Code of Ethics and Conduct, are responsible for promptly bringing to the
attention of the Audit Committee any material information of which he or she may
become aware that affects the disclosures made by the Corporation  in its
public filings or otherwise assisting the Audit Committee in fulfilling its
responsibilities as specified in its Charter.
  **Implementation
and Reporting Obligations**
 Adherence
to the Code of Ethics and Conduct is the obligation of each officer,
director and employee.
The Corporation **** will
consistently enforce this Code of Ethics and Conduct through appropriate
disciplinary means. Any failure to comply with the Code will not be tolerated
and will result in disciplinary action, which may include termination of
employment.
   iii
  In the
event any officer, director or employee believes that the Corporation has
engaged or is about to engage in any activity which violates any foreign,
federal, state, or local law, rule or regulations, such officer, director or
employee shall promptly advise the Audit Committee.
  Pursuant
to procedures adopted by it, the Audit Committee will determine whether
violations of the Code have occurred and, if so, will determine the disciplinary
measures to be taken against any director, officer, employee or agent of the
Corporation who has violated the Code. Disciplinary measures, which may be
invoked at the discretion of the Audit Committee include, but are not limited
to, counseling, oral or written reprimands, warnings, probation or suspension
without pay, demotions, reductions in salary, termination of employment and
restitution.
  The
Corporation will not permit retaliation of any kind on or on behalf of the
Corporation against an officer, director or employee, as a result of good faith
reporting or an actual or suspected violation of this Code of Ethics and Conduct
or any standard of ethical and lawful conduct. Retaliation is itself a violation
of this Code. Any such retaliation shall be reported using the reporting
procedures outlined above.
  Persons
subject to disciplinary measures include, in addition to each actual violator,
others involved in the wrongdoing such as (i) individuals who fail to use
reasonable care to detect a violation, (ii) individuals who, if requested to
divulge information, withhold material information regarding a violation, and
(iii) supervisors who approve or condone violations or attempt to retaliate
against those reporting violations or violators.
  If you
have any questions about the Code or how it applies to a particular situation or
transaction, you should contact your supervisor, your Human Resources
representative or the Corporation’s Chief Financial Officer.
  If you
become aware of a situation that you believe may be in conflict with the Code,
you should immediately contact your supervisor, your Human Resources
representative or the Corporation’s Chief Financial Officer. We will keep the
information that you provide during an investigation confidential to the
greatest extent possible.
 
 **Amendment
and Waiver**
 The Code
of Ethics and Conduct may not be waived or amended with respect to a director or
executive officer, except by the Board of Directors.
 
 
 iv