Document:

THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
      STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
      OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
      SAID
      ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO SMALL WORLD KIDS, INC. THAT SUCH REGISTRATION IS NOT
      REQUIRED.

     

    Right
      to
      Purchase up to 685,185 Shares of Common Stock of

    Small
      World Kids, Inc.

    (subject
      to adjustment as provided herein)

     

    COMMON
      STOCK PURCHASE WARRANT

     

    
      	No.
              _________________	
              Issue
                Date: January 26,
                2007

            

    

     

    SMALL
      WORLD KIDS, INC., a corporation organized under the laws of the State of Nevada
      (the “Company”),
      hereby certifies that, for value received, LAURUS MASTER FUND, LTD., or assigns
      (the “Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company
      (as
      defined herein) from and after the Issue Date of this Warrant and at any time,
      up to 685,185 fully paid and nonassessable shares of Common Stock (as
      hereinafter defined), $0.001 par value per share, at the applicable Exercise
      Price per share (as defined below). The number and character of such shares
      of
      Common Stock and the applicable Exercise Price per share are subject to
      adjustment as provided herein.

     

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings: 

     

    (a)  The
      term
“Common
      Stock”
      includes (i) the Company’s Common Stock, par value $0.001 per share; and (ii)
      any other securities into which or for which any of the securities described
      in
      the preceding clause (i) may be converted or exchanged pursuant to a plan of
      recapitalization, reorganization, merger, sale of assets or
      otherwise.

     

    (b)  The
      term
“Company”
shall
      include Small World Kids, Inc. and any person or entity which shall succeed,
      or
      assume the obligations of, Small World Kids, Inc. hereunder. 

     

    (c)  The
      “Exercise
      Price”
      applicable under this Warrant shall be $0.01 per share.

     

    (d)  The
      term
“Other
      Securities”
refers
      to any stock (other than Common Stock) and other securities of the Company
      or
      any other person (corporate or otherwise) which the holder of the Warrant at
      any
      time shall be entitled to receive, or shall have received, on the exercise
      of
      the Warrant, in lieu of or in addition to Common Stock, or which at any time
      shall be issuable or shall have been issued in exchange for or in replacement
      of
      Common Stock or Other Securities pursuant to Section 4 or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)  The
      term
“Security
      Agreement”
means
      the Security Agreement dated as of February 28, 2006 among the Holder, the
      Company and various Subsidiaries of the Company party thereto, as amended,
      modified, restated and/or supplemented from time to time.

     

    1.  Exercise
      of Warrant.
      

     

    1.1  Number
      of Shares Issuable upon Exercise.
      From
      and after the date hereof, the Holder shall be entitled to receive, upon
      exercise of this Warrant in whole or in part, by delivery of an original or
      fax
      copy of an exercise notice in the form attached hereto as Exhibit A (the
“Exercise
      Notice”),
      shares of Common Stock of the Company, subject to adjustment pursuant to Section
      4.

     

    1.2  Fair
      Market Value.
      For
      purposes hereof, the “Fair Market Value” of a share of Common Stock as of a
      particular date (the “Determination
      Date”)
      shall
      mean: 

     

    (a)  If
      the
      Company’s Common Stock is traded on the American Stock Exchange or another
      national exchange or is quoted on the National or Capital Market of The Nasdaq
      Stock Market, Inc. (“Nasdaq”),
      then
      the closing or last sale price, respectively, reported for the last business
      day
      immediately preceding the Determination Date.

     

    (b)  If
      the
      Company’s Common Stock is not traded on the American Stock Exchange or another
      national exchange or on the Nasdaq but is traded on the NASD Over The Counter
      Bulletin Board, then the mean of the average of the closing bid and asked prices
      reported for the last business day immediately preceding the Determination
      Date.

     

    (c)  Except
      as
      provided in clause (d) below, if the Company’s Common Stock is not publicly
      traded, then as the Holder and the Company agree or in the absence of agreement
      by arbitration in accordance with the rules then in effect of the American
      Arbitration Association, before a single arbitrator to be chosen from a panel
      of
      persons qualified by education and training to pass on the matter to be
      decided.

     

    (d)  If
      the
      Determination Date is the date of a liquidation, dissolution or winding up,
      or
      any event deemed to be a liquidation, dissolution or winding up pursuant to
      the
      Company’s charter, then all amounts to be payable per share to holders of the
      Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then issuable
      upon exercise of the Warrant are outstanding at the Determination
      Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.3  Company
      Acknowledgment.
      The
      Company will, at the time of the exercise of this Warrant, upon the request
      of
      the holder hereof acknowledge in writing its continuing obligation to afford
      to
      such holder any rights to which such holder shall continue to be entitled after
      such exercise in accordance with the provisions of this Warrant. If the holder
      shall fail to make any such request, such failure shall not affect the
      continuing obligation of the Company to afford to such holder any such rights.
      

     

    1.4  Trustee
      for Warrant Holders.
      In the
      event that a bank or trust company shall have been appointed as trustee for
      the
      holders of this Warrant pursuant to Subsection 3.2, such bank or trust company
      shall have all the powers and duties of a warrant agent (as hereinafter
      described) and shall accept, in its own name for the account of the Company
      or
      such successor person as may be entitled thereto, all amounts otherwise payable
      to the Company or such successor, as the case may be, on exercise of this
      Warrant pursuant to this Section 1.

     

    2.  Procedure
      for Exercise.

     

    2.1  Delivery
      of Stock Certificates, Etc., on Exercise.
      The
      Company agrees that the shares of Common Stock purchased upon exercise of this
      Warrant shall be deemed to be issued to the Holder as the record owner of such
      shares as of the close of business on the date on which this Warrant shall
      have
      been surrendered and payment made for such shares in accordance herewith. As
      soon as practicable after the exercise of this Warrant in full or in part,
      and
      in any event within three (3) business days thereafter, the Company at its
      expense (including the payment by it of any applicable issue taxes) will cause
      to be issued in the name of and delivered to the Holder, or as such Holder
      (upon
      payment by such Holder of any applicable transfer taxes) may direct in
      compliance with applicable securities laws, a certificate or certificates for
      the number of duly and validly issued, fully paid and nonassessable shares
      of
      Common Stock (or Other Securities) to which such Holder shall be entitled on
      such exercise, plus, in lieu of any fractional share to which such holder would
      otherwise be entitled, cash equal to such fraction multiplied by the then Fair
      Market Value of one full share, together with any other stock or other
      securities and property (including cash, where applicable) to which such Holder
      is entitled upon such exercise pursuant to Section 1 or otherwise.

     

    2.2  Exercise.
      

     

    (a)  Payment
      may be made either (i) in cash of immediately available funds or by certified
      or
      official bank check payable to the order of the Company equal to the applicable
      aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of Common
      Stock and/or Common Stock receivable upon exercise of this Warrant in accordance
      with the formula set forth in subsection (b) below, or (iii) by a combination
      of
      any of the foregoing methods, for the number of Common Shares specified in
      such
      Exercise Notice (as such exercise number shall be adjusted to reflect any
      adjustment in the total number of shares of Common Stock issuable to the Holder
      per the terms of this Warrant) and the Holder shall thereupon be entitled to
      receive the number of duly authorized, validly issued, fully-paid and
      non-assessable shares of Common Stock (or Other Securities) determined as
      provided herein. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b)  Notwithstanding
      any provisions herein to the contrary, if the Fair Market Value of one share
      of
      Common Stock is greater than the Exercise Price (at the date of calculation
      as
      set forth below), in lieu of exercising this Warrant for cash, the Holder may
      elect to receive shares equal to the value (as determined below) of this Warrant
      (or the portion thereof being exercised) by surrender of this Warrant at the
      principal office of the Company together with the properly endorsed Exercise
      Notice in which event the Company shall issue to the Holder a number of shares
      of Common Stock computed using the following formula:

     

    
      
        	
                X=

              	
                Y(A-B)

              
	
                 

              	
                A

              
	 	 
	
                Where
                  X =

              	
                the
                  number of shares of Common Stock to be issued to the
                  Holder

              
	 	 
	
                Y
                  =

              	
                the
                  number of shares of Common Stock purchasable under this Warrant
                  or, if
                  only a portion of this Warrant is being exercised, the portion
                  of this
                  Warrant being exercised (at the date of such
                  calculation)

              
	 	 
	
                A
                  =

              	
                the
                  Fair Market Value of one share of the Company’s Common Stock (at the date
                  of such calculation)

              
	 	 
	
                B
                  =

              	
                the
                  Exercise Price per share (as adjusted to the date of such
                  calculation)

              

      

    

     

    3.  Effect
      of Reorganization, Etc.; Adjustment of Exercise Price.

     

    3.1  Reorganization,
      Consolidation, Merger, Etc.
      In case
      at any time or from time to time, the Company shall (a) effect a reorganization,
      (b) consolidate with or merge into any other person, or (c) transfer all or
      substantially all of its properties or assets to any other person under any
      plan
      or arrangement contemplating the dissolution of the Company, then, in each
      such
      case, as a condition to the consummation of such a transaction, proper and
      adequate provision shall be made by the Company whereby the Holder, on the
      exercise hereof as provided in Section 1 at any time after the consummation
      of
      such reorganization, consolidation or merger or the effective date of such
      dissolution, as the case may be, shall receive, in lieu of the Common Stock
      (or
      Other Securities) issuable on such exercise prior to such consummation or such
      effective date, the stock and other securities and property (including cash)
      to
      which such Holder would have been entitled upon such consummation or in
      connection with such dissolution, as the case may be, if such Holder had so
      exercised this Warrant, immediately prior thereto, all subject to further
      adjustment thereafter as provided in Section 4.

     

    3.2  Dissolution.
      In the
      event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, concurrently with
      any distributions made to holders of its Common Stock, shall at its expense
      deliver or cause to be delivered to the Holder the stock and other securities
      and property (including cash, where applicable) receivable by the Holder
      pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to
      a
      bank or trust company specified by the Holder and having its principal office
      in
      New York, NY as trustee for the Holder.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.3  Continuation
      of Terms.
      Upon
      any reorganization, consolidation, merger or transfer (and any dissolution
      following any transfer) referred to in this Section 3, this Warrant shall
      continue in full force and effect and the terms hereof shall be applicable
      to
      the shares of stock and other securities and property receivable on the exercise
      of this Warrant after the consummation of such reorganization, consolidation
      or
      merger or the effective date of dissolution following any such transfer, as
      the
      case may be, and shall be binding upon the issuer of any such stock or other
      securities, including, in the case of any such transfer, the person acquiring
      all or substantially all of the properties or assets of the Company, whether
      or
      not such person shall have expressly assumed the terms of this Warrant as
      provided in Section 4. In the event this Warrant does not continue in full
      force
      and effect after the consummation of the transactions described in this Section
      3, then the Company’s securities and property (including cash, where applicable)
      receivable by the Holder will be delivered to the Holder or the Trustee as
      contemplated by Section 3.2.

     

    4.  Extraordinary
      Events Regarding Common Stock.
      In the
      event that the Company shall (a) issue additional shares of the Common Stock
      as
      a dividend or other distribution on outstanding Common Stock or any preferred
      stock issued by the Company, (b) subdivide its outstanding shares of Common
      Stock, (c) combine its outstanding shares of the Common Stock into a smaller
      number of shares of the Common Stock, then, in each such event, the Exercise
      Price shall, simultaneously with the happening of such event, be adjusted by
      multiplying the then Exercise Price by a fraction, the numerator of which shall
      be the number of shares of Common Stock outstanding immediately prior to such
      event and the denominator of which shall be the number of shares of Common
      Stock
      outstanding immediately after such event, and the product so obtained shall
      thereafter be the Exercise Price then in effect. The Exercise Price, as so
      adjusted, shall be readjusted in the same manner upon the happening of any
      successive event or events described herein in this Section 4. The number of
      shares of Common Stock that the holder shall thereafter, on the exercise hereof
      as provided in Section 1, be entitled to receive shall be adjusted to a number
      determined by multiplying the number of shares of Common Stock that would
      otherwise (but for the provisions of this Section 4) be issuable on such
      exercise by a fraction of which (a) the numerator is the Exercise Price that
      would otherwise (but for the provisions of this Section 4) be in effect, and
      (b)
      the denominator is the Exercise Price in effect on the date of such exercise
      (taking into account the provisions of this Section 4). Notwithstanding the
      foregoing, in no event shall the Exercise Price be less than the par value
      of
      the Common Stock.

     

    5.  Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the shares of Common Stock (or Other
      Securities) issuable on the exercise of this Warrant, the Company at its expense
      will promptly cause its Chief Financial Officer or other appropriate designee
      to
      compute such adjustment or readjustment in accordance with the terms of this
      Warrant and prepare a certificate setting forth such adjustment or readjustment
      and showing in detail the facts upon which such adjustment or readjustment
      is
      based, including a statement of (a) the consideration received or receivable
      by
      the Company for any additional shares of Common Stock (or Other Securities)
      issued or sold or deemed to have been issued or sold, (b) the number of shares
      of Common Stock (or Other Securities) outstanding or deemed to be outstanding,
      and (c) the Exercise Price and the number of shares of Common Stock to be
      received upon exercise of this Warrant, in effect immediately prior to such
      adjustment or readjustment and as adjusted or readjusted as provided in this
      Warrant. The Company will forthwith mail a copy of each such certificate to
      the
      holder and any warrant agent of the Company (appointed pursuant to Section
      11
      hereof).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    6.  Reservation
      of Stock, Etc., Issuable on Exercise of Warrant.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery on the exercise of this Warrant, shares of Common Stock (or Other
      Securities) from time to time issuable on the exercise of this
      Warrant.

     

    7.  Assignment;
      Exchange of Warrant.
      Subject
      to compliance with applicable securities laws, this Warrant, and the rights
      evidenced hereby, may be transferred by any registered holder hereof (a
“Transferor”)
      in
      whole or in part. On the surrender for exchange of this Warrant, with the
      Transferor’s endorsement in the form of Exhibit B attached hereto (the
“Transferor
      Endorsement Form”)
      and
      together with evidence reasonably satisfactory to the Company demonstrating
      compliance with applicable securities laws, which shall include, without
      limitation, a legal opinion from the Transferor’s counsel (at the Company’s
      expense) that such transfer is exempt from the registration requirements of
      applicable securities laws, the Company at its expense (but with payment by
      the
      Transferor of any applicable transfer taxes) will issue and deliver to or on
      the
      order of the Transferor thereof a new Warrant of like tenor, in the name of
      the
      Transferor and/or the transferee(s) specified in such Transferor Endorsement
      Form (each a “Transferee”),
      calling in the aggregate on the face or faces thereof for the number of shares
      of Common Stock called for on the face or faces of the Warrant so surrendered
      by
      the Transferor.

     

    8.  Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, on delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation, on surrender and cancellation of this Warrant,
      the
      Company at its expense will execute and deliver, in lieu thereof, a new Warrant
      of like tenor.

     

    9.  Registration
      Rights.
      The
      Holder has been granted certain registration rights by the Company. These
      registration rights are set forth in a Registration Rights Agreement entered
      into by the Company and Holder dated as of February 28, 2006, as amended by
      the
      Second Amendment to Registration Rights Agreement dated as of and the date
      hereof and as the same may be further amended, modified and/or supplemented
      from
      time to time.

     

    10.  Maximum
      Exercise.
      Notwithstanding anything herein to the contrary, in no event shall the Holder
      be
      entitled to exercise any portion of this Warrant in excess of that portion
      of
      this Warrant upon exercise of which the sum of (1) the number of shares of
      Common Stock beneficially owned by the Holder and its Affiliates (other than
      shares of Common Stock which may be deemed beneficially owned through the
      ownership of the unexercised portion of the Warrant or the unexercised or
      unconverted portion of any other security of the Holder subject to a limitation
      on conversion analogous to the limitations contained herein) and (2) the number
      of shares of Common Stock issuable upon the exercise of the portion of this
      Warrant with respect to which the determination of this proviso is being made,
      would result in beneficial ownership by the Holder and its Affiliates of any
      amount greater than 9.99% of the then outstanding shares of Common Stock
      (whether or not, at the time of such exercise, the Holder and its Affiliates
      beneficially own more than 9.99% of the then outstanding shares of Common
      Stock). As used herein, the term “Affiliate”
means
      any person or entity that, directly or indirectly through one or more
      intermediaries, controls or is controlled by or is under common control with
      a
      person or entity, as such terms are used in and construed under Rule 144 under
      the Securities Act.   For purposes of the second preceding sentence,
      beneficial ownership shall be determined in accordance with Section 13(d) of
      the
      Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
      except as otherwise provided in clause (1) of such sentence.  For any
      reason at any time, upon written or oral request of the Holder, the Company
      shall within one (1) business day confirm orally and in writing to the Holder
      the number of shares of Common Stock outstanding as of any given date. The
      limitations set forth herein (x) may be waived by the Holder upon provision
      of
      no less than sixty-one (61) days prior notice to the Company and (y) shall
      automatically become null and void following notice to the Company upon the
      occurrence and during the continuance of an Event of Default (as defined in
      the
      Security Agreement).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    11.  Warrant
      Agent.
      The
      Company may, by written notice to the each Holder of the Warrant, appoint an
      agent for the purpose of issuing Common Stock (or Other Securities) on the
      exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant
      to Section 7, and replacing this Warrant pursuant to Section 8, or any of the
      foregoing, and thereafter any such issuance, exchange or replacement, as the
      case may be, shall be made at such office by such agent.

     

    12.  Transfer
      on the Company’s Books.
      Until
      this Warrant is transferred on the books of the Company, the Company may treat
      the registered holder hereof as the absolute owner hereof for all purposes,
      notwithstanding any notice to the contrary.

     

    13.  Rights
      of Shareholders.
      No
      Holder shall be entitled to vote or receive dividends or be deemed the holder
      of
      the shares of Common Stock or any other securities of the Company which may
      at
      any time be issuable upon exercise of this Warrant for any purpose (the
“Warrant
      Shares”),
      nor
      shall anything contained herein be construed to confer upon the Holder, as
      such,
      any of the rights of a shareholder of the Company or any right to vote for
      the
      election of directors or upon any matter submitted to shareholders at any
      meeting thereof, or to give or withhold consent to any corporate action (whether
      upon the recapitalization, issuance of shares, reclassification of shares,
      change of nominal value, consolidation, merger, conveyance or otherwise) or
      to
      receive notice of meetings, or to receive dividends or subscription rights
      or
      otherwise, in each case, until the earlier to occur of (x) the date of actual
      delivery to Holder (or its designee) of the Warrant Shares issuable upon the
      exercise hereof or (y) the third business day following the date such Warrant
      Shares first become deliverable to Holder, as provided herein.

     

    14.  Notices,
      Etc.
      All
      notices and other communications from the Company to the Holder shall be mailed
      by first class registered or certified mail, postage prepaid, at such address
      as
      may have been furnished to the Company in writing by such Holder or, until
      any
      such Holder furnishes to the Company an address, then to, and at the address
      of,
      the last Holder who has so furnished an address to the Company.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    15.  Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL
      BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
      YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT
      CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY
      IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF
      NEW
      YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION
      AND
      BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The individuals executing this
      Warrant on behalf of the Company agree to submit to the jurisdiction of such
      courts and waive trial by jury. The prevailing party shall be entitled to
      recover from the other party its reasonable attorneys’ fees and costs. In the
      event that any provision of this Warrant is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any such provision which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision of this Warrant. The headings in this
      Warrant are for purposes of reference only, and shall not limit or otherwise
      affect any of the terms hereof. The invalidity or unenforceability of any
      provision hereof shall in no way affect the validity or enforceability of any
      other provision hereof. The Company acknowledges that legal counsel participated
      in the preparation of this Warrant and, therefore, stipulates that the rule
      of
      construction that ambiguities are to be resolved against the drafting party
      shall not be applied in the interpretation of this Warrant to favor any party
      against the other party.

     

    

     

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    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above. 

     

    
      	 	 	SMALL
              WORLD KIDS, INC.
	
              WITNESS:

            	 	 	 
	 	 	By:	
               

            
	 	 	Name:	
               

            
	 	 	Title:	
               

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    FORM
      OF SUBSCRIPTION

    (To
      Be
      Signed Only On Exercise Of Warrant)

     

    
      	
              TO:

            	
              Small
                Work Kids, Inc.

            

      	 	5711
              Buckingham Parkway 

      	 	Culver
              City, CA 90230

    

     

    Attention: Chief
      Financial Officer

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.____), hereby irrevocably elects to purchase (check applicable
      box):

    

      
        	
                ________

              	
                ________
                  shares of the common stock covered by such warrant; or 

              
	 	 
	
                ________

              	
                the
                  maximum number of shares of common stock covered by such warrant
                  pursuant
                  to the cashless exercise procedure set forth in Section
                  2.

              

      

       

      The
        undersigned herewith makes payment of the full Exercise Price for such shares
        at
        the price per share provided for in such Warrant, which is $___________.
        Such
        payment takes the form of (check applicable box or boxes):

       

      
        	
                ________

              	
                $__________
                  in lawful money of the United States; and/or

              
	 	 
	
                ________

              	
                the
                  cancellation of such portion of the attached Warrant as is exercisable
                  for
                  a total of _______ shares of Common Stock (using a Fair Market
                  Value of
                  $_______ per share for purposes of this calculation);
                  and/or

              
	 	 
	
                ________

              	
                the
                  cancellation of such number of shares of Common Stock as is necessary,
                  in
                  accordance with the formula set forth in Section 2.2, to exercise
                  this
                  Warrant with respect to the maximum number of shares of Common
                  Stock
                  purchasable pursuant to the cashless exercise procedure set forth
                  in
                  Section 2.

              

      

    

     

    
      The
        undersigned requests that the certificates for such shares be issued in the
        name
        of, and delivered to______________ whose address is
        _____________________________________________________.

    

     

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the “Securities
      Act”)
      or
      pursuant to an exemption from registration under the Securities
      Act.

     

    
      	Dated:	 	 	 	 
	 	 	 	(Signature
              must conform to name of holder as specified on the face of the
              Warrant)
	 	 	 	Address:	 
	 	 	 	 	 

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF TRANSFEROR ENDORSEMENT

    (To
      Be
      Signed Only On Transfer Of Warrant)

     

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading “Transferees” the right represented by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of Small World Kids, Inc. into which the within Warrant relates specified
      under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
      person Attorney to transfer its respective right on the books of Small World
      Kids, Inc. with full power of substitution in the premises.

     

    
      	Transferees	Address	
              Percentage

               Transferred

            	
              Number

               Transferred

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

     

     

      	Dated:	 	 	 	 
	 	 	 	(Signature
              must conform to name of holder as specified on the face of the
              Warrant)
	 	 	 	Address:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	SIGNED
              IN THE PRESENCE OF:
	 	 	 	 	 
	 	 	 	
              (Name)

            
	 	 	 	 
	ACCEPTED AND AGREED:	 	 
	
              [TRANSFEREE]

            	 	 
	 	 	 
	
              (Name)

            	 	 

    

    

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

     

    IRREVOCABLE
      PROXY

     

    For
      good
      and valuable consideration, receipt of which is hereby acknowledged, Laurus
      Master Fund, Ltd. (“Laurus”), hereby appoints Small World Kids, Inc. (the “Proxy
      Holder” or the “Company”), with a mailing address at 5711
      Buckingham Parkway Culver
      City, CA 90230,
      with
      full power of substitution, as proxy, to vote all shares of Common Stock of
      the
      Company, now or in the future owned by Laurus to the extent such shares are
      issued to Laurus upon its exercise of (a) the Common Stock Purchase Warrant
      (the
“Warrant”), issued by the Company to Laurus as of the date hereof and (b) all
      other warrants and/or options issued by the Company in favor of Laurus with
      an
      exercise price equal to or less than the greater of $0.01 and the par value
      of
      the Company’s common stock (the “Other Options and Warrants”) (collectively, the
“Shares”).

     

    This
      proxy is irrevocable and coupled with an interest. Upon the sale or other
      transfer of the Shares, in whole or in part, or the assignment of the
Warrant
      or any of the Other Options and Warrants,
      this
      proxy shall automatically terminate (x) with respect to such sold or transferred
      Shares at the time of such sale and/or transfer, and (y) in the case of an
      assignment of the Warrant and/or Other Options and Warrants, at the time of
      such
      assignment in respect of the Shares issuable upon exercise of such assigned
      Warrant and/or Other Options and Warrants, in each case, without any further
      action required by any person.

     

    Laurus
      shall use its best efforts to forward to Proxy Holder within two (2) business
      days following Laurus’ receipt thereof, at the address for Proxy Holder set
      forth above, copies of all materials received by Laurus relating, in each case,
      to the solicitation of the vote of shareholders of the Company.

     

    This
      proxy shall remain in effect with respect to the Shares of the Company during
      the period commencing on the date hereof and continuing until the payment in
      full of all obligations and liabilities owing by the Company to Laurus (as
      the
      same may be amended, restated, extended or modified from time to
      time).

     

    IN
      WITNESS WHEREOF, the undersigned has executed this irrevocable proxy as of
      the
      26th
      day of
      January 2007.

     

    
      	 	 	 
	 	
              LAURUS
                MASTER FUND, LTD.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	Title:

    

     

    
      
        
        

      

      
        12EXHIBIT
      10.57

    

      TRULITE,
        INC.

    

    3
      Riverway, Ste. 1700

    Houston,
      Texas 77056

    

    Mr.
      Ken
      Pearson 

    2188
      Sleepy Hollow Dr.

    Shingle
      Springs, CA 95682

     

    Dear
      Ken:

     

    Trulite,
      Inc., a Delaware corporation (“Trulite”), is pleased to offer you employment
      beginning January 1, 2007, on the terms described below. 

     

    1. Duties
      of Employee.
      You
      will serve as Chief
      Operating Officer and Vice
      President of Product Development,
      with
      the duties and responsibilities customary to that position including product
      development, regulatory and governmental relations, strategic product and
      technology alliances and acquisitions, supply
      chain management
      and
      alliances, research and development (both external and internal), intellectual
      property management and intellectual strategy formulation, operational
      responsibilities for the above as well as manufacturing. This position reports
      to the President and Chief Executive Officer (“CEO”) of Trulite. You will be
      required to perform faithfully and diligently the services and functions
      relating to such position or otherwise reasonably incident to such position
      as
      may be designated from time to time by Trulite. You must devote time, attention,
      energies and business efforts to your duties as are reasonably necessary to
      carry out your duties. By signing this letter, you confirm that you are under
      no
      contractual or other legal obligations that would prohibit you from performing
      your duties with Trulite starting January 1, 2007.

     

    2. Location.
      You
      will work out of the Trulite facility located at 14807 Heritagecrest Way, Suite
      A, Bluffdale, Utah. Trulite may change your work location from time to time
      as
      it deems necessary. If the location of the Company is changed, you will have
      reasonable expenses paid for a maximum of six (6) months after becoming an
      employee of Trulite, Inc. to find suitable housing. The reasonableness of the
      expenses will be decided solely by the Company.

     

    3.
      Compensation
      and Employee Benefits.
      As
      compensation for the services rendered by you as described above, you shall
      be
      entitled to receive the following:

     

    (a)  Salary.
      Your
      initial base salary for the 2007 calendar year will One Hundred Fifty-Five  Thousand
      and 00/100 Dollars ($155,000.00)
      per
      year ($12,917 per month), payable on a pro-rata basis on  Trulite’s
      regular payroll dates.

     

    (b) Benefits.
      As long
      as they are kept in force by Trulite, you shall be entitled to participate
      in
      and  receive
      company benefits as set out in the Trulite Human Resource’s Guidelines. Trulite
      reserves the right to  amend,
      modify or otherwise change the terms and conditions of such benefits upon notice
      to you.

     

    (c) Bonus.
      You
      will be eligible for a Fifteen Thousand and 00/100 Dollars ($15,000.00)
 performance
      bonus payable
      on
      or
      before May 31, 2007. Performance goals applicable to the bonus will be
 established
      by the Company’s Chairman of the Board and CEO and you no later than November
2006
      and
      will  reflect
      performance through May 31, 2007.
      Such
      bonus will be payable, if at all, at the discretion of the  Compensation
      Committee of the Company’s Board of Directors.
      The
      bonus
      will be based upon performance  goals
      and
      is not contingent upon signing another employment agreement. 

     

    (d) Stock
      Incentive Bonus.
      You
      will
      be eligible to be considered for an incentive
      bonus option
       grant
      with
      a
      target amount of 40,000
      shares
      of
      the Company’s Common Stock
      on the
      date of grant.
      Such
      bonus (if any) shall be awarded based on objective and/or subjective criteria
      established in advance by the Compensation
      Committee of the Company’s Board of Directors.
      The
      exercise price per share for such grant shall be the fair market value per
      share
      of the Company’s Common Stock on the date of grant. The
      determinations
      of the
      Board or its Compensation Committee with respect to such bonus shall be final
      and binding. The stock incentive bonus option grant is payable on or before
      May
      31, 2007 and you will not be entitled to receive the incentive bonus if you
      are
      not employed by the Company on that date. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) Vacation
      and Holidays.
      You will
      be eligible for additional vacation and holidays upon signing  the
      Employment Agreement as per the Trulite Human Resource’s Guidelines. Vacation
      days will be accrued beginning on January 1, 2007. Eligibility for additional
      vacation days is at the discretion of the CEO of Trulite. 

     

    4. Term.
      The
      initial term of employment shall be for five (5) months beginning January 1,
      2007 and ending May 31, 2007. If Trulite elects not to renew your contract
      after
      the five month term, you will receive your base salary in effect at that time
      for a period of one hundred twenty (120) days as a severance package. Either
      you
      or Trulite may terminate your employment at any time and for any reason during
      the employment term. However, Paragraph 5 of this Agreement governs the terms
      and conditions that apply upon termination.  

     

    5. Termination.
      If the
      employment relationship is ended prior to the conclusion of the term, the
      following terms and conditions apply: 

     

    (a)
      Termination
      with Cause.
      In the
      event of termination for Cause by Trulite, you will be entitled to  receive
      the base salary then in effect for a period of one (1) month from the
      termination date. You shall also  have
      ninety (90) days to exercise stock options vested if terminated for cause.
      A
“Cause” event within this section means any of the following: (i) the wrongful
      appropriation for your own use or benefit of property or money entrusted to
      you
      by Trulite; (ii) your conviction for fraud, misappropriation or embezzlement,
      or
      any felony of moral turpitude; (iii) your continued willful disregard of your
      duties and responsibilities after written notice from the CEO of such disregard
      and your failure to cure within thirty (30) days of such written notice; (iv)
      your continued violation and failure to cure within thirty (30) days of such
      written notice (other than policies as to drug or alcohol abuse for which no
      notice and cure period shall be required); or (v) your material breach of any
      of
      the terms set out in this offer letter and failure to cure such breach within
      thirty (30) days of written notice from the CEO of such material breach.

     

    (b)
      Termination
      Without Cause or Voluntary Resignation by You for Good
      Reason.
      Trulite
      may terminate without cause or you may voluntarily resign your position with
      Trulite for Good Reason, at any time  on
      thirty
      (30) days advance written notice. Your employment will terminate at the end
      of
      the thirty (30) day  period.
      In the event of such termination by Trulite or Good Reason resignation by you,
      you will be entitled to receive the base salary then in effect for a period
      of
      six (6) months from the termination date. Stock options previously granted
      and
      not yet exercised will continue to vest for twelve (12) months following such
      termination or Good Reason resignation per the appropriate vesting schedule.
      Options will expire if not exercised within twelve (12) months after such
      termination date. You will be deemed to have resigned for Good Reason in the
      following circumstances: (i) Trulite’s material breach of any terms set out in
      this offer letter and failure of Trulite to cure such breach within thirty
      (30)
      days after receiving written notice from you of such breach; (ii) your base
      salary is reduced below your base salary in effect from time to time pursuant
      to
      this offer letter; (iii) any material adverse change in your fringe benefits,
      unless such change applies similarly to all participants of such fringe benefit
      plans/policies or applies equally to all similarly situated executives; (iv)
      your  position
      and/or duties are materially modified or you no longer report to the CEO. If
      you
      are terminated without cause or voluntarily resign for Good Reason, you will
      be
      reimbursed for any and all reasonable relocation expenses. 

     

    6. Confidentiality.
      You
      will be required, as a condition of your employment with Trulite, to strictly
      maintain the confidentiality of any business matters pertaining to Trulite.
      You
      agree not to use any confidential information acquired during your employment
      for your own personal benefit or for the benefit of persons other than Trulite.
      You agree that your obligations under this paragraph shall continue in effect
      after termination of your employment, regardless of the reason or reasons for
      termination, and whether such termination is voluntary or involuntary on your
      part. 

     

    7. Non-Compete
      Agreement.
      At the
      inception of your employment with Trulite, you will be required to sign a
      non-compete agreement related to the Trulite chemical hydride and fuel cell
      technology as it relates to current Trulite products which will remain in effect
      for twelve (12) months after termination of employment. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8. No
      Conflicting Obligations.
      By
      accepting this offer, you represent and warrant that your acceptance of
      employment with Trulite does not and will not breach any agreement to keep
      in
      confidence any trade secrets or other confidential data, knowledge or
      information, which you previously acquired in trust or confidence. 

     

    9. Withholding
      Taxes.
      All
      forms of compensation in this letter are subject to applicable withholding
      and
      payroll taxes. 

     

    10. Choice
      of Law, Venue and Forum.
      This
      agreement, the entire relationship of the parties hereto, and any litigation
      between the parties (whether grounded in contract, tort, statute, law or equity)
      shall be governed by, construed in accordance with, and interpreted pursuant
      to
      the laws of the State of Texas, without giving effect to its choice of laws
      principles. Exclusive venue for any litigation between the parties hereto shall
      be in Harris County, Texas, and shall be brought in the State District Courts
      of
      Harris County, Texas, or in the United States District Court for the Southern
      District of Texas, Houston Division. The parties hereto waive any challenge
      to
      personal jurisdiction or venue (including without limitation a challenge based
      on inconvenience) in Harris County, Texas, and specifically consent to the
      jurisdiction of the State District Courts of Harris County and the United States
      District Court for the Southern District of Texas, Houston Division.
      The
      Company will reimburse your reasonable and actual travel expenses related to
      support their choice of venue in
      connection with attending any litigation between the parties instituted by
      the
      Company. 

     

    11. Headings.
      The
      headings used in this Agreement have been included only in order to make it
      easier to locate the subject covered by each provision and are not to be used
      in
      construing this Agreement. 

     

    12. Entire
      Agreement.
      This
      letter supersedes and replaces any prior understandings or agreements, whether
      oral, written or implied, between you and Trulite regarding the matters
      described in this letter. 

     

    13. Invalid
      Provisions.
      Should
      any portion of this letter be adjudged or held to be invalid, unenforceable
      or
      void, such holding shall not have the effect or invalidating or voiding the
      remainder of this agreement and the parties hereby agree that the portion so
      held invalid, unenforceable or void shall, if possible, be deemed amended or
      reduced in scope, or otherwise be stricken from this letter to the extent
      required for the purposes of validity and enforcement thereof. 

     

    14.
      Employee has entered into a Consulting Agreement with the Company in which
      he
      agreed to perform services for the Company as a Consultant for the period June
      1, 2006 through December 31, 2006. Employee
      understand and agrees that if the Consulting Agreement is terminated prior
      to
      the end of its seven (7) month term, this Employment Offer Agreement is revoked
      and the Company has no obligations other than those specified in the Consulting
      Agreement. 

     

    If
      you
      wish to accept this offer, please sign and date one of the enclosed copies
      of
      this letter and return it to John Sifonis, CEO of Trulite. As required by law,
      your employment with Trulite is also contingent upon your providing legal proof
      of your identity and authorization to work in the United States.

     

    If
      you
      have any questions related to this offer of employment, please feel free to
      call
      me.

     

    
      	 	 	 
	 	Sincerely,
	 	 
	 	
              TRULITE,
                INC.

            
	 	
              (a
                Delaware Corporation)

            
	 
 	 
 	 
 
	
            	By:  	/s/
              John Sifonis
	 	
              
John
              Sifonis, President and CEO
	 	Date: June 12, 2006

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    I
      have
      read and accept this employment offer. I understand my start date is January
      1,
      2007. I understand that either I or Trulite may terminate the employment
      relationship at any time, subject to the terms of this offer
      letter.

     

    
      	 	 	 	 
	/s/ Ken Pearson	 	 	
            
	
              

              Ken
                Pearson

              Date:
                June 12, 2006

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