AGREEMENT

THIS   AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of April 5, 2007, is entered into by and among AVP, Inc., a Delaware corporation (“ Company ”), AVP Holdings, Inc., a Delaware corporation (“ Parent ”), and AVP Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“ Acquisition Corp. ”).

A.   A special committee consisting solely of disinterested members (“ Special Committee ”) of the board of directors of Company (“ Company Board ”) has recommended to Company Board that it approve the transactions contemplated by this Agreement. Company Board and the board of directors of each of Parent and Acquisition Corp. have approved and deem it advisable and in the best interests of their respective stockholders to consummate the merger of Acquisition Corp. with and into Company on the terms set forth herein. Each of Special Committee and Company Board has resolved to recommend that the holders of Company Shares (as defined in Section 2.01(a) ) approve this Agreement, the Transactions (as defined in Section 3.01 ), including the Merger (as defined in Section 1.02 ) and the other transactions contemplated hereby, in each case upon the terms and subject to the conditions set forth herein.

B.   To induce Parent and Acquisition Corp. to enter into this Agreement and incur the obligations set forth herein, (i) pursuant to this Agreement, Company is making certain representations and warranties and entering into certain covenants and agreements in connection with the Merger and (ii) certain stockholders of Company (“ Certain Principal Stockholders ”) have entered into a voting agreement with Parent and Acquisition Corp. (together with this Agreement, the “ Transaction Agreements ”) pursuant to which Certain Principal Stockholders have agreed to take specific actions in furtherance of the Merger.

C.   Leonard Armato, the Chairman and Chief Executive Officer of Company, has entered into a subscription and contribution agreement with Parent pursuant to which, immediately prior to the Effective Time (as defined in Section 1.03 ), he will contribute to Parent all of the Company Shares (as defined in Section 2.01(a) ) that he owns and invest an additional amount of cash in Parent, in exchange for shares of capital stock of Parent. Leonard Armato has also entered into an employment agreement with Parent (which agreement will become effective upon the Effective Time), pursuant to which he will be entitled to receive, among other things, salary, bonus, benefits and a stock option award. In addition, certain other members of Company management are expected to enter into agreements to invest in Parent.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

1.01   Company Actions . Except as may otherwise be required in order to comply with its fiduciary obligations, as more thoroughly set forth in Section 5.08 , (a) Company Board has, at a meeting duly called and held, unanimously (i) approved each of the Transaction Agreements and the Transactions, including the Merger, (ii) recommended that the holders of Company Shares approve and adopt this Agreement and the Merger, (iii) determined that each of the Transaction Agreements and the Transactions, including the Merger, are fair to and in the best interests of the stockholders of Company, (iv) determined that the consideration to be paid for each Company Share in the Merger is fair to the stockholders of Company, (v) declared that each of the Transaction Agreements is advisable, and (vi) Financial Advisor (as defined in Section 3.19 ) has delivered to Company Board its written opinion that the consideration to be received by Company’s stockholders in respect of each share of Company’s common stock, par value $0.001 per share (the “ Common Shares ”) pursuant to the Merger is fair to such stockholders from a financial point of view.

1.02   The Merger . At the Effective Time (as defined in Section 1.03 ), subject to the terms and upon the conditions of this Agreement and in accordance with the provisions of the General Corporation Law of the State of Delaware (the “ DGCL ”), Acquisition Corp. shall be merged with and into Company (the “ Merger ”). Following the Merger, the separate corporate existence of Acquisition Corp. shall cease, and Company shall continue as surviving corporation (sometimes hereinafter referred to as “ Surviving Corporation ”) and shall continue to be governed by the DGCL.

1.03   Effective Time . As soon as practicable following the Closing (as defined in Section 1.08) , and provided that this Agreement has not been terminated or abandoned pursuant to Article 7 , Company and Acquisition Corp. will cause a certificate of merger substantially in the form attached hereto as Exhibit A (the “ Certificate of Merger ”) to be duly executed, acknowledged and filed, in the manner required by the DGCL, with the Secretary of State of the State of Delaware, and the parties shall take such other and further actions as may be required by law to make the Merger effective. The date and time the Merger becomes effective in accordance with applicable law is referred to herein as the “ Effective Time .”

1.04   Effects of the Merger . The Merger shall have the effects set forth herein, in the Certificate of Merger and   in the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of Company and Acquisition Corp. shall vest in Surviving Corporation, and all debts, liabilities and duties of Company and Acquisition Corp. shall become the debts, liabilities and duties of Surviving Corporation.

1.05   Certificate of Incorporation and Bylaws of Surviving Corporation .

(a)   The Certificate of Incorporation (as defined in Section 8.10(d) ) of Company as in effect immediately prior to the Effective Time shall be amended in its entirety substantially as provided in Exhibit B attached hereto, and, as so amended, shall be the Certificate of Incorporation of Surviving Corporation until duly amended.

(b)   The Bylaws (as defined in Section 8.10(c) ) of Company as in effect immediately prior to the Effective Time shall be amended in its entirety substantially as provided in Exhibit C attached hereto, and, as so amended, shall be the Bylaws of Surviving Corporation until duly amended.

1.06   Directors . The directors of Acquisition Corp. immediately prior to the Effective Time shall be the initial directors of Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal in accordance with applicable law and Surviving Corporation’s Certificate of Incorporation and Bylaws.

1.07   Officers . The officers designated by Acquisition Corp. immediately prior to the Effective Time shall be the initial officers of Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

1.08   Closing . Subject to the conditions contained in this Agreement, the closing of the Merger (the “ Closing ”) shall take place (i) at the offices of Kirkland & Ellis LLP, 777 S. Figueroa Street, Los Angeles, California 90017, as promptly as practicable but in no event later than the third (3 ^rd ) Business Day (as defined in Section 8.10(b) following the satisfaction (or waiver if permissible) of the conditions set forth in Article 6   that by their terms are not to be satisfied at the Closing   or (ii) at such other place and time and/or on such other date as Company and Acquisition Corp. may agree in writing. The date on which the Closing occurs is hereinafter referred to as the “ Closing Date .”

1.09   Additional Actions . If, at any time after the Effective Time, Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances in law or any other acts are necessary or desirable to vest, perfect or confirm, of record or otherwise, in Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of Company or Acquisition Corp., Company and its officers and directors shall be deemed to have granted to Surviving Corporation an irrevocable power of attorney to execute and deliver all such deeds, assignments and assurances in law and to take all acts necessary, proper or desirable to vest, perfect or confirm title to and possession of such rights, properties or assets in Surviving Corporation, and the officers and directors of Surviving Corporation are authorized in the name of Company to take any and all such action.

2.01   Effect on Shares of Capital Stock .

(a)   Preferred Shares of Company . As of the Effective Time, by virtue of the Merger and without any action on the part of any holder of shares of Company’s Series B convertible preferred stock, par value $0.001 per share (the “ Preferred Shares ”, and collectively with the Common Shares, the “ Company Shares ”), each Preferred Share that is issued and outstanding immediately prior to the Effective Time (excluding any Preferred Shares converted into Common Shares prior to the Effective Time) shall, in accordance with Section 3 of Company’s Certificate of Incorporation, be converted into the right to receive, in cash, Thirty-Three Dollars and Ninety-Three Cents ($33.93) (as adjusted for any stock dividends, combinations, splits, recapitalizations, etc.). Such amounts will be payable to the holder thereof, without interest or dividends   thereon, less any applicable withholding of taxes, in the manner provided in Section 2.04 . All Preferred Shares, when so converted, shall no longer be outstanding and shall automatically be canceled and each holder of a certificate or certificates representing any such Preferred Shares shall cease to have any rights with respect thereto, except the right to receive the consideration specified in the preceding sentence.

(b)   Common Shares of Company . As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any Common Shares, Company or Acquisition Corp., each Common Share that is issued and outstanding immediately prior to the Effective Time (other than those Company Shares to be canceled pursuant to Section 2.01(c) shall be canceled and extinguished and converted into the right to receive One Dollar and Twenty-Three Cents ($1.23) (the “ Merger Consideration ”), payable to the holder thereof, without interest or dividends   thereon, less any applicable withholding of taxes, in the manner provided in Section 2.04 . All such Common Shares, when so converted, shall no longer be outstanding and shall automatically be canceled and each holder of a certificate or certificates representing any such Common Shares shall cease to have any rights with respect thereto, except the right to receive the consideration specified in the preceding sentence.

(c)   Cancellation of Certain Company Shares . As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any Company Shares, Company or Acquisition Corp., each Company Share that is owned by Company or any wholly-owned AVP Subsidiary (as defined in Section 3.05 ) as treasury stock or otherwise or   owned by Acquisition Corp.   or Parent or any of their respective Subsidiaries (as defined in Section 8.10(j) ) immediately prior to the Effective Time shall automatically be canceled and shall cease to exist, and no cash or other consideration shall be delivered or deliverable in exchange therefor.

(d)   Capital Stock of Acquisition Corp. As of the Effective Time, each share of common stock, no par value per share, of Acquisition Corp. (“ Acquisition Corp. Common Stock ”) issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holders of Acquisition Corp. Common Stock,   Company or Acquisition Corp., be converted into one (1)   validly issued, fully paid and non - assessable share of common stock, no par value per share, of Surviving Corporation (“ Surviving Corporation Common Stock ”). Each certificate that, immediately prior to the Effective Time, represented issued and outstanding shares of Acquisition Corp. Common Stock shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent the shares of Surviving Corporation capital stock into which such shares have been converted pursuant to the terms hereof; provided , however , that the record holder thereof shall receive, upon surrender of any such certificate, a certificate representing the shares of Surviving Corporation Common Stock into which the shares of Acquisition Corp. Common Stock formerly represented thereby shall have been converted pursuant to the terms hereof.

(e)   Dissenting Shares . Notwithstanding anything in this Agreement to the contrary, any Common Shares issued and outstanding immediately prior to the Effective Time and held by a holder (a “ Dissenting Shareholder ”) who has not voted in favor of the Merger or consented thereto in writing and who has properly demanded appraisal for such Common Shares in accordance with the DGCL (“ Dissenting Shares ”) shall not be converted into a right to receive the Merger Consideration at the Effective Time in accordance with Section 2.01(b) , but shall represent and become the right to receive such consideration as may be determined to be due to such Dissenting Shareholder pursuant to the laws of the State of Delaware, unless and until such holder fails to perfect or withdraws or otherwise loses such holder’s right to appraisal and payment under the DGCL. If, after the Effective Time, such holder fails to perfect or withdraws or otherwise loses such holder’s right to appraisal, such former Dissenting Shares held by such holder shall be treated as if they had been converted as of the Effective Time into a right to receive, upon surrender as provided above, the Merger Consideration, without any interest or dividends thereon, in accordance with Section 2.01(b) . Company shall give Acquisition Corp. prompt notice of any demands received by Company for appraisal of Common Shares, withdrawals of such demands and any other instruments served pursuant to the DGCL and received by Company. Company shall not, except with the prior written consent of Acquisition Corp., make any payment with respect to, or settle or offer to settle, any such demands.

2.02   Options and Stock Plan .

(a)   For purposes of this Agreement, the term “ Option ” means each outstanding unexercised option to purchase Common Shares, whether or not then vested or fully exercisable, granted on or prior to the date hereof   to any current or former employee or director of Company or any AVP Subsidiary or any other person, whether under any stock option plan or otherwise (including, without limitation, under   the 2005 Stock Incentive Plan (the “ Stock Incentive Plan ”) and any other Company stock plan (collectively with the Stock Incentive Plan, the “ Stock Plan ”).

(b)   Prior to the Closing Date, Company shall take all actions necessary so that (A) immediately prior to the Effective Time, each outstanding Option granted under the Stock Plan which has vested or will vest in connection with the Transactions shall become immediately exercisable in full and (B) at the Effective Time, all Options   shall be canceled. In consideration of such cancellation, each holder of an Option granted under the Stock Plan which has vested or will vest in connection with the Transactions and canceled in accordance with this Section 2.02(b) and that has an exercise price per Common Share less than the Merger Consideration, will be entitled to receive in settlement of such Option as promptly as practicable following the Effective Time, but in no event later than ten (10) Business Days after the Effective Time, a cash payment from the Payment Fund (as defined in Section 2.04(a) ), subject to any required withholding of taxes, equal to the product of (i)  the total number of Common Shares otherwise issuable upon exercise of such Option and (ii)  the amount, if any, by which the Merger Consideration per Common Share exceeds the applicable exercise price per Common Share otherwise issuable upon exercise of such Option (the “ Option Consideration ”); provided , however , that with respect to any person subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), any such amount shall be paid as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act. Each Option that has an exercise price per Common Share equal to or in excess of the Merger Consideration shall be cancelled at the Effective Time for no consideration.

(c)   The Option Consideration described in Section 2.02(b) will satisfy in full the Company’s obligation to each Option holder pursuant to such Option and at the Effective Time all Options shall, without any action on the part of the Company or the holder, be deemed terminated, canceled, void and of no further force and effect as between the Company and the holder and neither party shall have any further rights or obligations with respect thereto.

(d)   Company shall take all actions (including, if appropriate, amending the terms of the relevant Stock Plan or   amending or waiving relevant agreements providing for vesting conditions on Company Shares or Options therefor) that are necessary to give effect to the transactions contemplated by this Section 2.02 .

(e)   Except as otherwise provided herein or agreed to in writing by Parent and Company, the Stock Plan shall terminate effective as of the Effective Time and no participant in the Stock Plan shall thereafter be granted any rights thereunder to acquire any equity securities of Company, Surviving Corporation,   Parent or any Subsidiary of any of the foregoing.

(f)   Company covenants that prior to the Effective Time it will take all actions necessary under that certain SEC no-action letter, dated January 12, 1999, to Skadden, Arps, Slate, Meagher & Flom, to provide that the cancellation, cash-out and conversion of Options, pursuant to this Section 2.02 , will qualify for exemption under Rule 16b-3(e) under the Exchange Act.

2.03   Warrants .

(a)   For purposes of this Agreement, the term “ Warrant ” means each outstanding unexercised warrant to purchase Company Shares granted by Company or an AVP Subsidiary to any Person (as defined in Section 8.10(i) ) on or prior to the date hereof.

(b)   To the extent permitted pursuant to the terms of the respective agreement under which each Warrant was granted, prior to the Closing Date, Company shall take all actions necessary so that at the Effective Time, all Warrants shall be canceled. In consideration of such cancellation, and, in any event, upon the exercise of a Warrant by the holder thereof, each holder of a Warrant which was exercisable immediately prior to the Effective Time and canceled or exercised in accordance with this Section 2.03(b) and that has an exercise price per Common Share less than the Merger Consideration will be entitled to receive in settlement of such Warrant as promptly as practicable following the Effective Time, but in no event later than ten (10) Business Days after the Effective Time, a cash payment from the Payment Fund, subject to any required withholding of taxes, equal to, (i) with respect to the Warrants listed in Section 2.03(b) of the Company Disclosure Schedule, an amount calculated pursuant to the terms of such Warrants, or (ii) with respect to all other Warrants, the product of (A) the total number of Company Shares otherwise issuable upon exercise of such Warrant and (B) the amount, if any, by which the Merger Consideration per Common Share exceeds the applicable exercise price per Common Share otherwise issuable upon exercise of such Warrant (in either case, the “ Warrant Consideration ”); provided , however , that with respect to any person subject to Section 16 of the Exchange Act, any such amount shall be paid as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act.

(c)   The Warrant Consideration described in Section 2.03(b) will satisfy in full the Company’s obligation to each Warrant holder pursuant to such Warrant and at the Effective Time all Warrants shall, without any action on the part of the Company or the holder, be deemed to have become exercisable for the Warrant Consideration.

(d)   Prior to the consummation of the acquisition of Company Shares by Acquisition Corp., Company shall take all actions (including, if appropriate, amending the terms of the relevant Warrant agreement) that are necessary to give effect to the transactions contemplated by this Section 2.03 .

2.04   Payment for Preferred Shares, Common Shares, Options and Warrants in the Merger .

(a)   Prior to the Effective Time, Acquisition Corp. shall appoint a commercial bank or trust company reasonably acceptable to Company   to act as exchange and paying agent, registrar and transfer agent (“ Agent ”) for the purpose of (i) exchanging certificates representing, immediately prior to the Effective Time, Preferred Shares for consideration as described in Section 2.01(a) above, (ii) exchanging certificates representing, immediately prior to the Effective Time, Common Shares for the Merger Consideration, (iii) making payment of the aggregate Option Consideration   in exchange for the cancellation of all then-outstanding Options, and (iv) making payment of the aggregate Warrant Consideration in exchange for the cancellation of the then-outstanding Warrants. Subject to Company’s obligations to deposit cash in the Payment Fund described in this   Section 2.04(a) , at   or prior to the Effective Time, Acquisition Corp. shall deposit, or Acquisition Corp. shall otherwise take all steps necessary to cause to be deposited, in trust with Agent   for the benefit of the holders of Preferred Shares, Common Shares, Options, and Warrants as the case may be, cash in an aggregate amount equal to the sum of (i) the product of (A) the number of Preferred Shares issued and outstanding immediately prior to the Effective Time and entitled to receive consideration in accordance with Section 2.01(a ), and (B) the consideration payable per each Preferred Share pursuant to Section 2.01(a) , (ii) the product of (A) the number of Common Shares issued and outstanding immediately prior to the Effective Time and entitled to receive the Merger Consideration in accordance with Section 2.01(b) and (B) the Merger Consideration, (iii) the amount necessary for the payment in full of the Option Consideration in accordance with Section 2.02(b) and (iv) the amount necessary for payment in full of the Warrant Consideration in accordance with Section 2.03(b) (such aggregate amount described in (i), (ii), (iii) and (iv)   being hereinafter referred to as the “ Payment Fund ”). Company shall, as of the Closing Date, have sufficient unrestricted domestic cash on hand to pay any unpaid Expenses (as defined in Section 8.01(a) ) (contemplated by   Section 3.27   (including, without limitation, those incurred or which may be incurred by Financial Advisor and counsel to Company (including Expenses incurred in connection with any litigation with respect to, arising from or related to the Transactions)) and at the request of Acquisition Corp. or Parent, shall use reasonable best efforts to deposit all other available domestic cash of Company (taking into account the reasonable short-term working capital needs of Company) with Agent for deposit into the Payment Fund prior to the Effective Time. Agent shall, pursuant to instructions provided by Acquisition Corp., make the payments provided for in Section 2.01 , Section 2.02 and Section 2.03 of this Agreement out of the Payment Fund (it being understood that any and all interest earned on funds made available to Agent pursuant to this Agreement shall be turned over to the party depositing such funds with Agent). The Payment Fund shall   not be used for any other purpose except as provided in this Agreement.

(b)   Promptly after the Effective Time, but in no event later than ten (10) Business Days after the Effective Time,   Surviving Corporation shall cause Agent to mail to each record holder of certificates (the “ Certificates ”) that immediately prior to the Effective Time represented Preferred Shares and/or Company Shares (i) a notice of the effectiveness of the Merger, (ii) a form letter of transmittal, in form approved by Company’s counsel, which approval shall not be unreasonably withheld, delayed or conditioned, which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to Agent, and (iii) instructions for use in surrendering such Certificates and receiving consideration in accordance with Section 2.01(a) with respect to each Preferred Share and the Merger Consideration with respect to each Common Share.

(c)   Upon surrender to Agent of a Certificate, together with such letter of transmittal duly executed and completed in accordance with the instructions thereto, the holder of such Certificate shall be entitled to receive, within ten (10) Business Days after such surrender, in exchange therefor, (i) in the case of Preferred Shares (other than Preferred Shares to be canceled pursuant to Section 2.01(c) ), cash in an amount equal to the product of (A) the number of Preferred Shares formerly represented by such Certificate and (B) the consideration payable per Preferred Share in accordance with Section 2.01(a) and (ii) in the case of Common Shares (other than Common Shares to be canceled pursuant to Section 2.01(c) ), cash in an amount equal to the product of (A) the number of Common Shares formerly represented by such Certificate and (B) the Merger Consideration,   which amounts shall be paid by Agent by check or wire transfer in accordance with the instructions provided by such holder. No interest or dividends   will be paid or accrued on the consideration payable upon the surrender of any Certificate. If the consideration provided for herein is to be delivered in the name of a person other than the person in whose name the Certificate surrendered is registered, it shall be a condition of such delivery that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such delivery shall pay any transfer or other taxes required by reason of such delivery to a person other than the registered holder of the Certificate, or that such person shall establish to the satisfaction of Surviving Corporation that such tax has been paid or is not applicable. Until surrendered in accordance with the provisions of this Section 2.04 , each Certificate shall represent, for all purposes, (i) in the case of Certificates representing Preferred Shares (other than Preferred Shares to be canceled pursuant to Section 2.01(c) ), only the right to receive an amount in cash equal to the consideration payable per Preferred Share in accordance with Section 2.01(a) multiplied by the number of Preferred Shares formerly evidenced by such Certificate without any interest or dividends thereon and (ii) in the case of Certificates representing Common Shares (other than Common Shares to be canceled pursuant to Section 2.01(c) ), only the right to receive an amount in cash equal to the Merger Consideration multiplied by the number of Common Shares formerly evidenced by such Certificate without any interest or dividends thereon.

(d)   The consideration issued upon the surrender of Certificates in accordance with this Agreement shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Shares formerly represented thereby. After the Effective Time, there shall be no transfers on the stock transfer books of Surviving Corporation of any Company Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to Surviving Corporation, they shall be canceled and exchanged as provided in this Article 2 .

(e)   Any portion of the Payment Fund (including any amounts that may be payable to the former stockholders of Company in accordance with the terms of this Agreement) which remains unclaimed by the former stockholders of Company upon   the expiration of one hundred and eighty (180) days after the Closing Date shall be returned to Surviving Corporation, upon demand, and any former stockholders of Company who have not theretofore complied with this Article 2 shall, subject to Section 2.04(f) , thereafter look to Surviving Corporation only as general unsecured creditors thereof for payment of any Merger Consideration, without any interest or dividends thereon, that may be payable in respect of each Common Share held by such stockholder. Following the Closing, Agent shall retain the right to invest and reinvest the Payment Fund on behalf of Surviving Corporation in securities listed or guaranteed by the United States government or certificates of deposit of commercial banks that have, or are members of a group of commercial banks that has, consolidated total assets of not less than $100,000,000   and Surviving Corporation shall receive the interest earned thereon.

(f)   None of Acquisition Corp., Company or Agent shall be liable to a holder of Certificates or any other person in respect of any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. If any Certificates shall not have been surrendered upon the second anniversary of the Closing Date (or immediately prior to such earlier date on which any consideration including, but not limited to, consideration in accordance with Section 2.01(a) , the Merger Consideration, dividends (whether in cash, stock or property) or other distributions with respect to Company Shares in respect of such Certificate would otherwise escheat to or become the property of any Governmental Authority (as defined in Section 3.06(b) ), any such shares, cash, dividends or distributions in respect of such Certificate shall, to the extent permitted by applicable law, become the property of Surviving Corporation, free and clear of all claims or interests of any person previously entitled thereto.

(g)   In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit (in form and substance acceptable to Surviving Corporation) of that fact by the person (who shall be the record owner of such Certificate) claiming such Certificate to be lost, stolen or destroyed and the agreement to indemnify Surviving Corporation against any claim that may be made against it with respect to such Certificate (and, at the reasonable request of Surviving Corporation, the posting by such person of a bond as indemnity against any claim that may be made against it with respect to such Certificate), Agent will issue in exchange for such lost, stolen or destroyed Certificate the consideration deliverable in respect thereof pursuant to this Agreement.

(h)   Each of Agent, Surviving Corporation   and Parent shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of Company Shares or Options pursuant to this Agreement such amounts as may be required to be deducted or withheld with respect to the making of such payment or any other payment in connection with the transactions contemplated by this Agreement under the Internal Revenue Code of 1986, as amended (the “ Code ”), or any applicable provision of state, local or foreign tax law. To the extent that amounts are so deducted or withheld   and paid over to the appropriate taxing authority by Agent, Surviving Corporation or Parent, such amounts shall be treated for all purposes of this Agreement as having been paid to the person to whom such amounts would otherwise have been paid.

Company represents and warrants to each of Acquisition Corp. and Parent that:

3.01   Organization and Qualification . Company and each AVP Subsidiary is a corporation duly organized, validly existing and in good standing (to the extent applicable)   under the laws of its state of incorporation, and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted , except where the failure to be in good standing (to the extent applicable) or to have such governmental approvals would not, individually or in the aggregate, have a Company Material Adverse Effect (as defined below in this Section 3.01 ). Except as set forth in Section 3.01 of the Company Disclosure Schedule, Company and each of AVP Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good standing   (to the extent applicable), in each jurisdiction where the nature of its business makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing (to the extent applicable)   would not, individually or in the aggregate, have a Company Material Adverse Effect. As used in this Agreement, the term “ Company Material Adverse Effect ” means any effect, event, or change that individually or in the aggregate (i) is, or is reasonably likely to be, materially adverse to the business, financial condition   or results of operations of Company and AVP Subsidiaries, taken as a whole,   or   (ii) prevents or materially delays, or is reasonably likely to prevent or materially delay, the ability of Company and AVP Subsidiaries to perform in all material respects their obligations under this Agreement or to consummate the transactions contemplated hereby (the “ Transactions ”) in accordance with the terms hereof, except for any effect, event or change (x) that is generally applicable to the industry or markets in which Company and AVP Subsidiaries operate and not affecting Company or any AVP Subsidiary in any materially more adverse manner or degree therefrom, (y) that is generally applicable to the United States economy or securities markets or the world economy or international securities markets, or (z) the public announcement or existence of this Agreement and the transactions contemplated hereby.

3.02   Certificate of Incorporation Documents and Bylaws . The Certificate of Incorporation attached as Exhibit 3.02-A and the Bylaws attached as Exhibit 3.02-B to Company Disclosure Schedule are, respectively, true, complete and correct copies of Company’s Certificate of Incorporation and Bylaws, each in full force and effect as of the date hereof. Company is not in violation of any of the provisions of its Certificate of Incorporation or Bylaws. Company has heretofore made available to Acquisition Corp. a complete and correct copy of the Certificate of Incorporation and the Bylaws of each AVP Subsidiary, as in full force and effect as of the date hereof. No AVP Subsidiary is in violation of any of the provisions of its Certificate of Incorporation or Bylaws.

3.03   Capitalization .

(a)   The authorized capital stock of Company consists of 80,000,000 Common Shares and 2,000,000 Preferred Shares. Except for Common Shares issued after the date hereof upon exercise of Options and Warrants outstanding as of the date hereof, (i) 19,824,539 Common Shares are issued and outstanding, (ii) 69,256 Preferred Shares are issued and outstanding, and (iii) no Company Shares are held by Company in its treasury. Company has 30,000,000 Common Shares reserved for issuance pursuant to the Stock Incentive Plan, of which 8,879,883 Common Shares are subject to outstanding Options, and the weighted average exercise price for such Options is $0.32 (except for any changes caused by the exercise of Options after the date hereof which were outstanding on the date hereof). Company has issued Warrants exercisable for 9,947,337 Common Shares, and weighted average exercise price for such Warrants is $1.70. There are not now, and at the Effective Time there will not be, any options, warrants, calls, subscriptions, or other rights, or other agreements or commitments of any character relating to   the issued or unissued capital stock of Company or obligating Company to issue, transfer or sell any shares of capital stock of, or other equity interests in, Company or any AVP Subsidiary. Section 3.03(a) of the Company Disclosure Schedule sets forth the name of each holder of an Option, together with the grant date, exercise price, number of Common Shares issuable upon exercise of each such Option, vesting schedule of each such Option and the number of vested and unvested Options of each Option holder, except with respect to any unintentional misstatement which would not affect the number of Common Shares issuable upon exercise of the Options or the aggregate Option Consideration with respect to all Options. All of the Options were granted pursuant to the Stock Incentive Plan. Section 3.03(a) of the Company Disclosure Schedule sets forth the name of each holder of a Warrant, together with the issuance date, exercise price, number of Common Shares issuable upon the exercise of such Warrant and the vesting schedule of such Warrant. All issued and outstanding Company Shares are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. All of the outstanding shares of capital stock of, or other equity interests in, each AVP Subsidiary have been duly authorized and validly issued and are fully paid and non - assessable, are owned by either Company or an AVP Subsidiary , free and clear of all Liens (as defined in Section 3.06(a) ), other than Permitted Liens (as defined in Section 3.24(d) ). There are no outstanding options, warrants, calls, subscriptions, convertible securities or other rights, or other agreements or commitments, obligating any AVP Subsidiary to issue, transfer or sell any shares of its capital stock or other equity interests. There are no outstanding obligations of Company or any AVP Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity interests in, Company or any AVP Subsidiary.

(b)   Except as set forth in Section 3.03(b) of the Company Disclosure Schedule, neither Company nor any AVP Subsidiary is a party to, and to Company’s Knowledge (as defined in Section 8.10(f) ), without having made inquiry of any of its stockholders, except for estate planning and similar trust agreements, no stockholders of Company are party to, any stockholders agreements, voting trusts or other agreements or understandings relating to voting or disposition of any shares of capital stock of Company or granting to any person or group of persons the right to elect, or to designate or nominate for election, a director to Company Board. Company is not party to any such agreement or to any agreement granting registration rights to any Person.

3.04   Authority Relative to this Agreement . Company has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder, subject to the approval of this Agreement and the Merger by the holders of a majority of the outstanding Company Shares entitled to vote thereon with respect to the Merger, and to consummate the Transactions. The execution and delivery of this Agreement and the consummation of the Merger and the other Transactions have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of Company are necessary to authorize Company’s execution and delivery of this Agreement or to consummate the Transactions (other than the approval of this Agreement and the Merger by the holders of a majority of the outstanding Company Shares entitled to vote thereon and the filing or recordation of the Certificate of Merger).   This Agreement have been duly and validly executed and delivered by Company, and (assuming this Agreement constitutes a valid and binding obligation of Acquisition Corp. and Parent) constitutes the valid and binding obligation of Company, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights generally and to general principles of equity. Upon consummation of the Transactions, (i) Parent will own all of the outstanding capital stock of the Company, including all of the outstanding Company Shares, (ii) all Options shall have been cancelled and be of no further force or effect, and (iii) all Warrants that have an exercise price per Common Share less than the Merger Consideration shall have become exercisable for the Warrant Consideration.

3.05   Company Subsidiaries . Section 3.05 of the Company Disclosure Schedule contains a correct and complete list of each Subsidiary of Company (each, “ AVP Subsidiary ” and collectively, “ AVP Subsidiaries ”) and the jurisdiction in which each such AVP Subsidiary is incorporated. Section 3.05 of the Company Disclosure Schedule sets forth for each AVP Subsidiary: (i) its authorized capital stock or share capital; (ii) the number of issued and outstanding shares of capital stock or share capital; and (iii) Company’s direct or indirect equity interest therein. Except for (A) investments in marketable securities set forth in Section 3.05 of the Company Disclosure Schedule and (B) equity interests in AVP Subsidiaries, Company does not own, directly or indirectly, any capital stock or other ownership interest in any Person. No AVP Subsidiary owns, directly or indirectly, any capital stock or other ownership interest in any Person, except for the capital stock and/or other ownership interest in another AVP Subsidiary. Each AVP Subsidiary is directly or indirectly wholly-owned by Company.

3.06   No Violation and Required Filings and Consents .

(a)   The execution and delivery by Company of this Agreement does not, and the performance of this Agreement by Company and the consummation of the Transactions will not, (i) conflict with or violate any provision of Company’s Certificate of Incorporation or Bylaws or conflict with or violate any provision of the Certificate of Incorporation or Bylaws of any AVP Subsidiary, (ii) assuming that all consents, approvals, authorizations and other actions described in Section 3.06(b) have been obtained and all filings and obligations described in Section 3.06(b) have been made or complied with, conflict with or violate in any material respect any foreign or domestic (federal, state or local) law, statute, ordinance, rule, regulation, permit, license, injunction, writ, judgment, decree or order (each, a “ Law ” and, collectively, “ Laws ”) applicable to Company or any AVP Subsidiary or by which any asset of Company or any AVP Subsidiary is bound or affected, (iii) except as set forth in Section 3.06(a) of the Company Disclosure Schedule, materially conflict with, result in any breach of or constitute a material default (or an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, require any notice, or require any payment under, or give rise to a loss of any benefit to which Company or any AVP Subsidiary is entitled under any provision of any Material Contract (as defined in Section 3.17(a) ) or (iv) result in the creation or imposition of a material lien, claim, security interest or other charge, title imperfection or encumbrance (each, a “ Lien ” and, collectively, “ Liens ”) on any asset of Company or any AVP Subsidiary.

(b)   The execution and delivery by Company of this Agreement does not, and the performance of this Agreement and the consummation by Company of the Transactions will not, require any material consent, approval, authorization or permit of, or filing with or notification to, any domestic (federal, state or local) or foreign government or governmental, regulatory or administrative authority, agency, commission, board, bureau, court or instrumentality or arbitrator of any kind (“ Governmental Authority ”), except for applicable requirements, if any, of the Exchange Act, the Securities Act of 1933, as amended (the “ Securities Act ”), the Hart - Scott - Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), and the rules and regulations thereunder and filing and recordation of the Certificate of Merger.

3.07   SEC Reports and Financial Statements .

(a)   Company has filed all forms, reports, statements and schedules and made all other filings (the “ SEC Reports ”) with the United States Securities and Exchange Commission (the “ SEC ”) required to be filed by it pursuant to the federal securities laws and the SEC rules and regulations thereunder since February 28, 2005. The SEC Reports, as well as all forms, reports, statements, schedules and other documents to be filed by Company with the SEC after the date hereof and prior to the Effective Time (the “ Future SEC Reports ”) (i) were prepared in all material respects in accordance with the requirements of the Securities Act, the Exchange Act and the published rules and regulations of the SEC thereunder, as applicable to such SEC Reports and such later filed Future SEC Reports and (ii) did not and will not as of the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were and will be made, not misleading. No AVP Subsidiary is subject to the periodic reporting requirements of the Exchange Act.

(b)   Set forth in Section 3.07(b) of the Company Disclosure Schedule are copies of Company’s audited, consolidated balance sheet as of December 31, 2006 and statements of income and cash flows for the twelve (12) month period ended December 31, 2006 (collectively, the “ Financial Statements ”). Each of the Financial Statements and the consolidated financial statements (including, in each case, any notes thereto) of Company included in the SEC Reports or any Future SEC Report has been, and in the case of any Future SEC Report will be, prepared in all material respects in accordance with the published rules and regulations of the SEC (including Regulation S - X) and in accordance with United States generally accepted accounting principles applied on a consistent basis throughout the periods indicated (“ GAAP ”) (except as otherwise stated in such financial statements, including the related notes, or, in the case of unaudited interim financial statements, as may be permitted by the SEC under Forms 10-QSB, 8-K or any successor forms under the Exchange Act), except as otherwise specifically set forth in Section 3.07(b) of the Company Disclosure Schedule, and each fairly presents the consolidated financial position, results of operations and cash flows of Company and its consolidated Subsidiaries as at the respective dates thereof and for the respective periods indicated therein, except as otherwise set forth in the notes thereto (subject, in the case of unaudited statements, to the absence of complete footnote disclosure and to   normal and recurring quarterly and year - end adjustments , none of which, individually or in the aggregate is, or is reasonably expected to be, material). Except as set forth in Section 3.07(b) of the Company Disclosure Schedule, neither Company nor any AVP Subsidiary have any outstanding Indebtedness (as defined in the following sentence). For purposes of this Agreement, “ Indebtedness ” shall mean,   with respect to any Person at a particular time and, in each case, except between or among Company and any AVP Subsidiary, (i) any obligation for borrowed money or issued in substitution for or exchange of indebtedness for borrowed money, (ii) any obligation evidenced by any note, bond, debenture or other debt security, (iii) any obligation for the deferred purchase price of property or services with respect to which such Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and other current Liabilities (incurred in the ordinary course of business consistent with past practice), (iv) any commitment by which such Person assures a creditor against loss (including, without limitation, contingent reimbursement obligations with respect to letters of credit), (v) any obligation guaranteed in any manner by such Person (including, without limitation, guarantees in the form of an agreement to repurchase or reimburse), (vi) any obligations under capitalized or synthetic leases with respect to which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or with respect to which obligations such Person assures a creditor against loss, (vii) any obligation secured by a Lien (other than a Permitted Lien) on such Person’s assets, (viii) any Liability under any deferred compensation plans, which Liability is payable or becomes due as a result of the transactions contemplated herein, and (ix) any fees, penalties, premiums or accrued and unpaid interest with respect to the foregoing (in the case of prepayments or otherwise) that would become due or payable as a result of the consummation of the Transactions. There are no obligations under any letters of credit in effect as of the date hereof in excess of the amounts set forth in Section 3.07(b) of the Company Disclosure Schedule and any such obligations subsequent to the date hereof were entered into in the ordinary course of business in compliance with Article 5 .

(c)   Except as disclosed in Section 3.07(c) of the Company Disclosure Schedule, all accounts receivable of Company and AVP Subsidiaries, whether reflected in the Interim Financial Statements or otherwise, represent sales actually made in the ordinary course of business, and, to Company’s Knowledge, are current and collectible net of any reserves shown in the Interim Financial Statements.

(d)   The management of Company has (i) designed disclosure controls and procedures (as defined under the Exchange Act) to ensure that material information relating to Company, including its consolidated subsidiaries, is made known to the management of Company by others within those entities, and (ii) disclosed, based on its most recent evaluation, to Company’s auditors and the audit committee of Company Board (A) all significant deficiencies in the design or operation of internal control over financial reporting (as defined under the Exchange Act) which are reasonably likely to adversely affect Company’s ability to record, process, summarize and report financial data and have identified for Company’s auditors any material weaknesses in internal control over financial reporting (as defined under the Exchange Act) and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Company’s internal control over financial reporting (as defined under the Exchange Act). A summary of such disclosure made by management to the Company’s auditors and audit committee is set forth in Section 3.07(d) of Company Disclosure Schedule.

(e)   Except as set forth in Section 3.07(e) of the Company Disclosure Schedule, neither Company nor any AVP Subsidiary is subject to any liabilities or obligations of any kind or nature (whether accrued, absolute, contingent, determinable or otherwise) (each, a “ Liability ” and collectively, “ Liabilities ”), except (i) Liabilities set forth on the face of the December 31, 2006 balance sheet included in Company’s Annual Report on Form 10-KSB for the year ended December 31, 2006 or the footnotes thereto, (ii) Liabilities that have arisen after December 31, 2006   in the ordinary course of business and consistent with past practice (none of which is a liability for breach of contract, breach of warranty, tort, infringement, violation of law, claim or lawsuit), (iii) Liabilities under Contracts (as defined in Section 8.10(e) ) identified in Section 3.17(a) of the Company Disclosure Schedule or under Contracts not required to be identified on the Company Disclosure Schedule pursuant to Section 3.17 below which were entered into in the ordinary course of business consistent with past practice (but not Liabilities for any breach of any such Contract occurring on or prior to the Closing Date), or (iv) Liabilities not required by GAAP to be reflected on the consolidated balance sheet or notes thereto which would not reasonably be expected to have a Company Material Adverse Effect. Except as set forth in Section 3.07(d) of the Company Disclosure Schedule, neither Company nor any AVP Subsidiary is a guarantor or otherwise liable for any Liability (including Indebtedness) of any Person other than the following bonds to the extent disclosed in Section 3.07(d) of the Company Disclosure Schedule: (x) indemnity bonds entered into the ordinary course of business (e.g., workers compensation), (y) utility bonds or (z) bonds entered into in connection with certain promotional activities and any similar Liabilities, in each case other than bonds which do not have a Liability exceeding $250,000 in the aggregate. No such bonds require any collateral.

(f)   Except as set forth in Section 3.07(f) of the Company Disclosure Schedule and other than as disclosed in Company’s annual report on Form 10-KSB for the fiscal year ended December 31, 2006, neither Company nor any AVP Subsidiary is indebted to any director or officer of Company or any AVP Subsidiary (except for amounts due as normal salaries and bonuses   or in reimbursement of ordinary business expenses and directors’ fees) and no such person is indebted to Company or any AVP Subsidiary and, since January 1, 2007, there have been no other transactions of the type required to be disclosed pursuant to Items 402 or 404 of Regulation S-K promulgated by the SEC.

(g)   The Company does not have any unresolved comments from the staff of the SEC with respect to any SEC Report covered by Section 3.07.

(h)   Company has no plans to file any amendments or modifications to any previously filed SEC Reports.

3.08   Compliance with Applicable Laws . Except as set forth in Section 3.08 of the Company Disclosure Schedule, (i) neither Company nor any AVP Subsidiary is in violation of any Order (as defined in Article 6 ) of any Governmental Authority or any Law of any Governmental Authority applicable to Company or any AVP Subsidiary or any of their respective properties or assets and (ii) since February 28, 2005, the business operations of Company and the AVP Subsidiaries have been conducted in material compliance with all Laws of each Governmental Authority.

3.09   Absence of Certain Changes or Events . Except as set forth in Section 3.09 of the Company Disclosure Schedule or as contemplated by this Agreement, since January 1, 2007, Company and AVP Subsidiaries have conducted their businesses only in the ordinary course of business   and in a manner consistent with past practice and there has not been:

(a)   any   material change in any method of accounting or accounting practice by Company or any AVP Subsidiary nor have either Company or any AVP Subsidiary made any material write-down in the value of their respective inventory or accounts receivable or reversed any material accruals;

(b)   any transaction or commitment made, or any Contract entered into, by Company or any AVP Subsidiary relating to its assets or business (including, without limitation, the acquisition, disposition, leasing or licensing of any tangible or intangible assets) or any relinquishment by Company or any AVP Subsidiary of any contract or other right, in either case, material to Company and the AVP Subsidiaries taken as a whole, other than transactions and commitments in the ordinary course of business consistent with past practice;

(c)   any declaration of any dividend scheduled to be paid after the date hereof or, other than regular quarterly dividends and distributions from any AVP Subsidiary to Company or another AVP Subsidiary, any declaration, setting aside or payment of any dividend (whether in cash, stock or other property) or other distribution in respect of Company ’ s securities or any redemption, purchase or other acquisition of any of Company’s securities;

(d)   any split, combination or reclassification of any of the Company’s capital stock or any issuance or the authorization of any issuance of any securities in respect of, in lieu of or in substitution for shares of its capital stock, except for (i) the granting of Options or Warrants set forth in Section 3.03(a) of the Company Disclosure Schedule and (ii) the issuance of any Company Shares pursuant to the exercise of any Options or Warrants set forth in Section 3.03(a) of the Company Disclosure Schedule;

(e)   any amendment of any material term of any outstanding security of Company or any AVP Subsidiary;

(f)   any issuance by Company or any AVP Subsidiary of any notes, bonds or other debt securities or any capital stock or other equity securities or any securities convertible, exchangeable or exercisable into any capital stock or other equity securities, except for (i) the granting of Options   or Warrants set forth in Section   3.03(a)   of the Company Disclosure Schedule and (ii)   the issuance of any Company Shares pursuant to the exercise of any Options or Warrants set forth in Section 3.03(a) of the Company Disclosure Schedule;

(g)   any incurrence, assumption or guarantee by Company or any AVP Subsidiary of any indebtedness for borrowed money other than the issuance of letters of credit in the ordinary course of business consistent with past practices of Company and AVP Subsidiaries;

(h)   any creation or assumption by Company or any AVP Subsidiary of any Lien on any assets other than Permitted Liens;

(i)   any making of any loans, advances or capital contributions to or investment in any entity or person, other than loans, advances or capital contributions to or investments in Company or AVP Subsidiaries;

(j)   any entry into any Contract related to the acquisition or disposition of any business or any material assets other than inventory in the ordinary course of business;

(k)   any effect, event   or change that has had   or is reasonably likely to have a Company Material Adverse Effect;

(l)   any material increase in the benefits under, or the establishment, material amendment or termination of, any Benefit Plan (as defined in Section 3.13(a) ) covering current or former employees, officers or directors of Company or any AVP Subsidiary, or any material increase in the compensation payable or to become payable to or any other material change in the employment terms for any directors or executives with a title of vice president or higher of Company or any AVP Subsidiary or, other than as required by an existing employment agreement disclosed to Parent prior to execution of this Agreement, any material increase in the compensation payable or to become payable to any other employee of Company or any AVP Subsidiary;

(m)   any entry by Company or any AVP Subsidiary into any employment, consulting, severance, termination, change-of-control or indemnification agreement with any director or executive of Company or any AVP Subsidiary or entry into any such agreement with director or executive with a title of vice president or higher for a non-contingent cash amount in excess of $25,000 per year or outside the ordinary course of business;

(n)   any entry into or termination of a collective bargaining agreement or any other agreement with a labor organization, written or oral, or amendment of the material terms of any such agreement;

(o)   any implementation of a plant closing or layoff that could implicate the WARN Act (as defined in Section 3.25(c) );

(p)   any settlement or compromise of any material litigation or other dispute affecting Company or any AVP Subsidiary;

(q)   any capital expenditures that amount in the aggregate to more than $100,000 or any commitments with respect to capital expenditures and other planned capital expenditures through the Closing Date in the ordinary course of business that amount in the aggregate to more than $100,000;

(r)   any authorization of, or agreement by Company or any AVP Subsidiary to take, any of the actions described in this Section 3.09 , except as expressly contemplated by this Agreement; or

(s)   any material elections relating to Taxes (as defined in Section 8.10(k) ) or revocation of such elections, any material change in any tax accounting practices, procedures, or methods relating to any material amount of Taxes of Company or any AVP Subsidiary, or settling or compromising of any legal proceeding or controversy relating to any material increase or decrease in the amount of Taxes of Company or any AVP Subsidiary.

3.10   Change of Control . Section 3.10 of the Company Disclosure Schedule sets forth (i) all Contracts with Company or any AVP Subsidiary, including but not limited to, severance plans, bonus plans, employment agreements, or any other plan, agreement or arrangement with any Person, pursuant to which a Liability is due or would become payable, in whole or in part, directly as a result of the consummation of any of the Transactions, (ii) all Contracts with Company or any AVP Subsidiary, that require the consent from or the giving of notice to a third party pursuant to, permit a third party to terminate or accelerate vesting or repurchase rights and (iii) the amount of any compensation, remuneration or other amounts which are or may be due or payable by Company or any AVP Subsidiary as a result of the Transactions under such Contracts (including any such Liabilities which are or may be due or payable by Company or any AVP Subsidiary assuming that each employee of Company that is a party to a Contract is terminated without cause immediately following the consummation of the Merger).

3.11   Litigation . Section 3.11 of the Company Disclosure Schedule sets forth each suit, claim, charge, complaint, action, grievance, arbitration, proceeding or investigation pending or, to Company’s Knowledge, threatened against Company or any AVP Subsidiary, at law or in equity other than workers’ compensation claims or general liability claims which individually do not exceed $10,000. Except as set forth in Section 3.11 of the Company Disclosure Schedule neither Company nor any AVP Subsidiary is subject to any outstanding material order, writ, injunction or decree. All workers’ compensation claims and general liability claims taken in the aggregate have not had and would not reasonably be expected to have a Company Material Adverse Effect.

3.12   Information in Proxy Statement . The representations and warranties contained in this Section 3.12 will not apply to statements or omissions included in the Company Disclosure Documents (as defined in Section 3.12(a) ) based upon information furnished to Company in writing by Parent, Acquisition Corp. or any of their respective representatives   specifically for use therein.

(a)   Each document required to be filed by Company with the SEC in connection with the Transactions (the “ Company Disclosure Documents ”), including, without limitation, the proxy or information statement of Company containing information required by Regulation 14A under the Exchange Act (together with all amendments and supplements thereto, the “ Proxy Statement ”), to be filed with the SEC in connection with the Merger, will, when filed, comply as to form in all material respects with the applicable requirements of the Exchange Act.

(b)   At the time the Proxy Statement, if any, or any amendment or supplement thereto is first mailed to stockholders of Company and at the time such stockholders vote on adoption of this Agreement and the Merger, the Proxy Statement, as supplemented or amended, if applicable, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. At the time of the filing of any Company Disclosure Document other than the Proxy Statement and at the time of any distribution thereof, such Company Disclosure Document will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

3.13   Benefit Plans .

(a)   Section 3.13(a) of the Company Disclosure Schedule contains a complete and correct list of each “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) and each other material benefit plan, program, agreement or arrangement maintained, sponsored, contributed or required to be contributed to by Company or any AVP Subsidiary or with respect to which Company or any AVP Subsidiary has any current or potential obligation or liability (collectively, the “ Benefit Plans ”). Company has provided to Parent or Acquisition Corp. correct and complete copies of (i) each Benefit Plan document, (ii) the three most recent annual reports on Form 5500 as filed with respect to each Benefit Plan (and all attachments thereto), (iii) the most recent summary plan description for each Benefit Plan for which such summary plan description is required, (iv) the most recent determination letter received from the Internal Revenue Service, if applicable, and (v) each trust agreement, insurance contract, group annuity contract or funding arrangement relating to any Benefit Plan.

(b)   Each Benefit Plan intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service and nothing has occurred that could reasonably be expected to adversely affect the qualification of such Benefit Plan.

(c)   None of Company, any AVP Subsidiary or any ERISA Affiliate (as defined below in this paragraph) maintains, sponsors, contributes to, has any obligation to contribute to, or has any current or potential liability or obligation under or with respect to (i) a “defined benefit plan” (as defined in Section 3(35) of ERISA), (ii) a “multiple employer plan” (as such term is defined in Section 210 of ERISA or Section 413(c) of the Code), (iii) a “multiemployer plan” as defined in Section 3(37) of ERISA, or (iv) a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA. Neither Company nor any AVP Subsidiary has any obligation or liability to provide post-employment or post-termination welfare or welfare-type benefits to any Person, and Company, AVP Subsidiaries and the ERISA Affiliates have complied and are in compliance with the requirements of Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code and any similar state law. For purposes of this Agreement, an “ ERISA Affiliate ” means each Person that at any relevant time is or was treated as a single employer with Company or any AVP Subsidiary under Section 414 of the Code.

(d)   Each Benefit Plan has been maintained, funded and administered in accordance with its terms and in compliance with the applicable provisions of ERISA, the Code and other applicable laws. All contributions and premium payments with respect to the Benefit Plans that have been required to be made in accordance with the terms of the Benefit Plans and applicable laws have been timely made, and all contributions and premium payments with respect to the Benefit Plans for any period ending on or before the Closing Date that are not yet due shall have been made or properly accrued.

(e)   None of Company, any AVP Subsidiary or any other “disqualified person” (within the meaning of Section 4975 of the Code) or any “party in interest” (with in the meaning of Section 3(14) of ERISA) has engaged in a “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) with respect to any Benefit Plan. No “fiduciary” (within the meaning of Section 3(21) of ERISA) of any Benefit Plan has any current or potential obligation or liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any Benefit Plan. There is no action, suit, investigation, proceeding, audit, inquiry or claim pending or threatened with respect to any Benefit Plan, other than routine claims for benefits under any Benefit Plan.

(f)   The transactions contemplated by this Agreement will not cause the acceleration of vesting in, or payment of, any benefits under any Benefit Plan and will not otherwise accelerate or increase any current or potential liability or obligation thereunder.

(g)   Neither Company nor any AVP Subsidiary has any current or potential obligation or liability with respect to any “employee benefit plan” (as defined in Section 3(3) of ERISA) by reason of being treated as a single employer under Section 414 of the Code with any other entity.

(h)   Each Benefit Plan which is a nonqualified deferred compensation plan is in “good faith compliance” in all material respects, in both form and operation, with Section 409A of the Code and the guidance promulgated thereunder. No payment to be made under any Benefit Plan is, or will be, subject to the penalties of Section 409A(a)(1) of the Code.

3.14   Taxes .

(a)   All Tax Returns (as defined in Section 8.10(l) ) required to have been filed by Company and AVP Subsidiaries have been filed prior to the due date for such Tax Returns, and each such Tax Return is true, correct, accurate and prepared in accordance with applicable law. Except as set forth in Section 3.14(a) of the Company Disclosure Schedule, all Taxes of Company and AVP Subsidiaries have been paid whether or not shown on any Tax Return. Company and AVP Subsidiaries have timely withheld and paid to the appropriate taxing authority all amounts required to have been withheld and paid in connection with amounts paid or owing to any third-party. There are no Liens on any assets of Company or any AVP Subsidiary that arose in connection with any failure (or alleged failure) to pay any Tax other than Liens for Taxes not yet due and payable or Taxes that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP.

(b)   Except as set forth in Section 3.14(b) of the Company Disclosure Schedule, there is no audit, claim, action, suit, proceeding or investigation pending against Company or any AVP Subsidiary in respect of any Taxes, nor has Company or any AVP Subsidiary been informed of the commencement or anticipated commencement of any such activity. No written claims have been made by any taxing authority in a jurisdiction where Company and AVP Subsidiaries do not file Tax Returns that Company or any AVP Subsidiary is or may be subject to taxation in that jurisdiction. Neither Company nor any AVP Subsidiary (nor any member of any affiliated, consolidated, combined or unitary group of which Company or any AVP Subsidiary is a member) has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which period (after giving effect to such extension or waiver) has not expired.

(c)   The unpaid Taxes of Company and AVP Subsidiaries do not exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on Company’s Interim Financial Statements and the most recent balance sheet of any AVP Subsidiaries that are not consolidated with Company for balance sheet purposes, nor do the unpaid Taxes of Company or any AVP Subsidiary exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Company and AVP Subsidiaries in filing their Tax Returns. Since the date of the Interim Financial Statements, neither Company nor any AVP Subsidiary has incurred any liability for Taxes arising from extraordinary gains or losses, as that term is used in GAAP, except in the ordinary course of business consistent with past custom and practice.

(d)   Company has made available to Parent or its legal counsel or accountants copies of all Tax Returns for Company and AVP Subsidiaries filed for all periods since December 31, 2003, and all private letter rulings, determination letters, closing agreements and other correspondence issued by or received from any taxing authority since the same date or that may apply to Company or any AVP Subsidiary after the Closing Date. Section 3.14(d) of the Company Disclosure Schedule contains a list of all jurisdictions (whether foreign or domestic) in which Company and AVP Subsidiaries file Tax Returns. Section 3.14(d) of the Company Disclosure Schedule lists Company and each AVP Subsidiary and whether each such entity is treated for Tax purposes as a corporation, association, partnership or other entity, or whether such entity is disregarded for Tax purposes.

(e)   Neither Company nor any AVP Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of (i) any change in method of accounting for a taxable period ending on or prior to the Closing Date, (ii) any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign Tax law) executed on or prior to the Closing Date, (iii) any intercompany transactions or any excess loss account described in the Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign Tax law), (iv) any installment sale or open transaction disposition made on or prior to the Closing Date or (v) any prepaid amounts received on or prior to the Closing Date.

(f)   Neither Company nor any AVP Subsidiary (i) is currently subject to a limitation under Section 383 or 384 of the Code (or any corresponding provision of state, local or foreign Tax law), (ii) is a party to any “reportable transaction” within the meaning of Section 1.6011-4 of the Treasury Regulations, (iii) has distributed stock of another Person, or had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code, (iv) is or has ever been a “United States Real Property Holding Company” within the meaning of Section 897 of the Code, (v) is a party to any contract, agreement, plan or arrangement including, without limitation, this Agreement, which could give rise to the payment of any amount that would not be deductible or on which a penalty or excise tax could be imposed pursuant to Sections 162(m), 280G, 404, 409A or 4999 of the Code, (vi) has taken any position on a federal income tax return that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code without disclosing such position as provided in the applicable Treasury Regulations, (vii) is subject to the dual consolidated loss provisions of Section 1503(d) of the Code, (viii) is subject to the overall foreign loss provisions of Section 904(f) of the Code, (ix) is subject to the recharacterization provisions of Section 952(c)(2) of the Code, (x) is or has ever been subject to the international boycott provisions of Section 999 of the Code or (xi) has ever been a party to any transaction or arrangement which may have caused an extension of any statute of limitations related to Taxes, including an extension because the transaction or arrangement was required to be, but was not, reported to any taxing authority.

(g)   Neither Company nor any AVP Subsidiary (i) has any liability for the Taxes of any Person under Section 1.1502-6 of the Treasury Regulations or any similar provision of state, local or foreign law, (ii) has any liability for the Taxes of any Person as transferee or successor, by contract or otherwise or (iii) is a party to any Tax allocation or Tax sharing agreement.

3.15   Intellectual Property .

(a)   Section 3.15(a) of the Company Disclosure Schedule contains a complete and accurate list of all (a) patented or registered Intellectual Property (as defined in Section 3.15(b) ) owned by Company and each AVP Subsidiary, (b) pending pat