Document:

SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), is made and entered
into as of June 9, 2006 (the " Closing Date"), by and between AVP, Inc., a
Delaware corporation (the "Company"), and the undersigned prospective investor
(the "Investor").

                                    RECITALS

      A. The Company and the Investor are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended.

      B. The Investor is subscribing for shares (the "Shares") of the Company's
Common Stock (the "Common Stock"), par value $0.001 per share; and warrants to
purchase shares of the Common Stock substantially in the form attached hereto as
Exhibit A, as the same may be amended, modified or supplemented from time to
time in accordance with the terms thereof (the "Warrants", and collectively with
this Agreement, the "Transaction Documents"). Each Warrant entitles the holder
thereof to purchase Common Stock at an exercise price of $1.00 per share
(subject to adjustment as provided in the Warrant).

      C. For the purposes of this Agreement, a "Unit" shall consist of 5 Shares
and 1 Warrant.

                                    ARTICLE I

                       PURCHASE AND SALE OF UNITS; CLOSING

      1.1 Purchase and Sale of the Units. Subject to the terms and conditions of
this Agreement, the Investor agrees to purchase from the Company the number of
Units indicated on Schedule A hereto (the "Subscription Amount") at a purchase
price of $4.25 per Unit (the "Unit Price") for an aggregate purchase price
indicated on Schedule A hereto (the "Aggregate Purchase Price"), such
Subscription Amount indicated on Schedule A with respect to the Investor, the
"Actual Subscription Amount". Subject to the terms and conditions of this
Agreement, the Company shall issue and sell to the Investor the number of Units
having an Actual Purchase Price, as defined hereinafter, equal to the Actual
Subscription Amount.

      1.2 Aggregate Number of Units Offered. The Company has entered this same
form of Securities Purchase Agreement (the "Other Agreements") with certain
other investors (the "Other Investors", and together with the Investor, the
"Investors") to offer and sell (the "Offering") Units with an aggregate purchase
price that the parties hereto agree shall not to exceed $5,500,000 (the
"Offering Amount"). Notwithstanding anything herein to the contrary any Other
Agreement shall include terms and conditions that are not more favorable to such
Other Investor or less favorable to the Company than those set forth in this
Agreement. The Investor hereby acknowledges receipt of a copy of the
Confidential Private Placement Memorandum of the Company dated March 3, 2006
(the "Memorandum"), relating to the Offering.

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      1.3 Purchase Price. On the "Closing Date" (as defined below), the Investor
shall pay its Purchase Price to the Company for the Units to be issued and sold
to the Investor at such Closing, in United States dollars by wire transfer of
immediately available funds in accordance with the Company's written wire
instructions attached hereto as Exhibit B.

      1.4 Binding Effect of this Agreement. The Investor acknowledges and agrees
that this Agreement shall be binding upon the Investor upon the submission to
the Company or Oppenheimer & Co. Inc. (the "Placement Agent") of the Investor's
signed counterpart signature page to this Agreement (the "Subscription") and the
Investor's receipt of the signed counterpart signature of the Company; provided
that, in the event the Closing Date shall not have occurred on or prior to June
30, 2006 (the "Termination Date") this Agreement shall be terminated and be of
no force and effect.

      1.5   Delivery of Units at Closing.

            (a) The completion of the purchase and sale of the Units to the
Investor (the "Closing") shall occur, subject to the satisfaction or waiver of
the conditions set forth in Section 1.6 and Section 1.7 (other than those
intended to be satisfied at Closing), at 10 a.m. Eastern Standard Time on the
date hereof (the "Closing Date") at the offices of Loeb & Loeb, LLP, 345 Park
Avenue, New York, New York, or such other time, date or place is agreed to by
the parties.

            (b) At the Closing, (i) the Company shall authorize its transfer
agent to issue or transfer, as applicable, and the transfer agent shall issue or
transfer, as applicable, to the Investor one or more stock certificates
registered in the name of the Investor, or in such name of nominee(s) designated
by the Investor in writing, representing that number of shares of Common Stock
included in the Actual Subscription Amount and (ii) the Company shall issue the
number of related Warrants included in the Actual Subscription Amount against
payment of the Actual Purchase Price in accordance with Section 1.1. The "Actual
Purchase Price" shall mean an amount equal to the product of (A) the Actual
Subscription Amount for the Investor multiplied by (B) the Unit Price.

      1.6 Conditions to the Company's Obligation to Complete Purchase and Sale.
Upon acceptance of the Subscription, the Company's obligation to issue and sell
the Units to the Investor at Closing is subject to the satisfaction, on or
before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing the Investor with prior
written notice thereof:

            (a) Payment of Purchase Price. The Investor shall have delivered to
the Escrow Agent the Aggregate Purchase Price; and

            (b) Representations and Warranties; Covenants. The representations
and warranties of the Investor set forth in Article III hereof shall be true and
correct as of the date hereof and as of the Closing Date as though made at that
time (except for representations and warranties that speak as of a specific date
(which shall be true and correct as of such date)), and the Investor shall have
performed, satisfied and complied with in all material respects the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Investor on or prior to the Closing Date.

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      1.7 Conditions to the Investor's Obligation to Complete Purchase and Sale.
The obligation of the Investor hereunder to purchase the Units from the Company
at the Closing is subject to the satisfaction, on or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Investor's sole benefit and may be waived by the Investor at any time in its
sole discretion by providing the Company with prior written notice thereof:

            (a) Opinion of Counsel. Receipt by the Investor of an opinion letter
of Loeb & Loeb, LLP, counsel to the Company, dated the Closing Date, in
substantially the form attached hereto as Exhibit C;

            (b) Representations and Warranties; Covenants. The representations
and warranties of the Company set forth in Article II hereof shall be true and
correct in all material respects as of the date hereof and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date (which shall be true and correct in all material
respects as of such date)), and the Company shall have performed, satisfied and
complied with in all material respects the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company on or prior to the Closing Date;

            (c) Consents, etc. The Company shall have obtained any and all
consents, permits, approvals, registrations and waivers necessary or appropriate
for consummation of the purchase and sale of the Units and the consummation of
the other transactions contemplated by the Transaction Documents, all of which
shall be in full force and effect;

            (d) Officer's Certificate. The Company shall have delivered to the
Investor a certificate, dated the Closing Date, duly executed on behalf of the
Company by its Chief Executive Officer to the effect set forth in clauses (b),
(e), (f), and (g) of this Section 1.7;

            (e) Secretary's Certificate. The Company shall have delivered to the
Investor a certificate, dated the Closing Date, duly executed by its Secretary
or Assistant Secretary, certifying that the attached copies of the Certificate
of Incorporation, the by-laws and the resolutions of the Board of Directors of
the Company approving this Agreement and the other Transaction Documents and the
transactions contemplated hereby and thereby, are all true, complete and correct
and remain un-amended and in full force and effect;

            (f) Delivery of Warrants and Stock Certificates. The Company shall
have delivered to the Investor duly executed Warrants and a copy of the
Company's instruction to its transfer agent to issue certificates representing
the Shares being purchased by the Investor at the Closing;

            (g) No Litigation. On the Closing Date, no legal action, suit or
proceeding shall be pending or overtly threatened which seeks to restrain or
prohibit the transactions contemplated by this Agreement and the other
Transaction Documents;

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<PAGE>

            (h) No Suspension, Etc. Trading in the Common Stock shall not have
been suspended by any stock exchange or market on which the Common Stock is then
listed or admitted for trading or quotation, as applicable, or the Securities
and Exchange Commission (the "SEC"), except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing, and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg Financial Markets ("Bloomberg")
shall not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by Bloomberg, or on the OTC
Bulletin Board, nor shall a banking moratorium have been declared either by the
United States or New York State authorities;

            (i) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement and the other Transaction Documents; and

            (j) Material Adverse Effect. No material adverse effect on the
business, assets, financial condition or results of operations of the Company
and its Subsidiaries (defined below) and no event that would prohibit or
otherwise materially interfere with the ability of the Company to perform any of
its obligations under this Agreement and the other Transaction Documents in any
material respect shall have occurred at or before the Closing Date.

                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      Except as set forth on the schedule of exceptions attached hereto as
Schedule B (the "Schedule of Exceptions"), the Company hereby represents and
warrants to the Investor as follows:

      2.1 Subsidiaries; Organization. The Company has no subsidiaries as defined
by Rule 405 under the Securities Act of 1933, as amended (the "Securities Act")
except as set forth on the Schedule of Exceptions (the "Subsidiaries"). Each of
the Company and the Subsidiaries is duly organized and validly existing and is
in good standing under the laws of the jurisdiction of its incorporation or
organization. Each of the Company and the Subsidiaries has full corporate power
and authority to own, operate and occupy its properties and to conduct its
business as presently conducted and is registered or qualified to do business
and in good standing in each jurisdiction in which it owns or leases property or
transacts business and where the failure to be so qualified would have a
material adverse effect upon the business, assets, financial condition or
results of operations of the Company and its Subsidiaries (a "Material Adverse
Effect"), and to the Company's knowledge, no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification. Except as set forth
in Section 2.1 of the Schedule of Exceptions, the Company does not own, lease or
license any asset or property or conduct business outside the United States of
America.

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<PAGE>

      2.2 Due Authorization. The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Transaction
Documents. Each Transaction Document has been duly authorized and validly
executed and delivered by the Company and, assuming due authorization, execution
and delivery by the other parties hereto, constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) to the extent rights to indemnity and contribution
may be limited by state or federal securities laws or the public policy
underlying such laws, (ii) enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
(iii) enforceability may be limited by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

      2.3 Non-Contravention. The execution and delivery of this Agreement, the
issuance and sale of the Shares and Warrants to be sold by the Company under
this Agreement, the performance by the Company of its obligations under the
Transaction Documents and the consummation of the transactions contemplated
thereby will not (A) conflict with or constitute a violation of, or default
(with or without the giving of notice or the passage of time or both) under, (i)
any material bond, debenture, note or other evidence of indebtedness, or under
any material lease, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which the Company is a party or by
which it or its properties are bound, (ii) the charter, by-laws or other
organizational documents of the Company or any of its Subsidiaries, or (iii) any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, any of its
Subsidiaries or their respective properties, or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of the Company or any
of its Subsidiaries or an acceleration of indebtedness pursuant to any
obligation, agreement or condition contained in any material bond, debenture,
note or any other evidence of indebtedness or any material indenture, mortgage,
deed of trust or any other agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company
or any of its Subsidiaries is subject. No consent, approval, authorization or
other order of, or registration, qualification or filing with, any regulatory
body, administrative agency, self-regulatory organization, stock exchange or
market, or other governmental body in the United States is required for the
execution and delivery of the Transaction Documents and the valid issuance and
sale of the Units to be sold pursuant to the Transaction Documents, other than
such as have been made or obtained, and except for any securities filings
required to be made under federal or state securities laws.

      2.4 Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), during the 12 months preceding the
date of this Agreement (the "SEC Documents"). The SEC Documents complied as to
form in all material respects with the SEC's requirements as of their respective
filing dates, and the information contained therein as of the date thereof did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, except
to the extent that information contained in any such document has been revised
or superseded by a later filed SEC Document.

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<PAGE>

      2.5   Capitalization.

            (a) As of the date hereof, the authorized capital stock of the
Company consists of 82,000,000 shares of capital stock, of which 80,000,000
shares are designated Common Stock and 2,000,000 shares are designated preferred
stock. As of the date hereof, there were 13,067,919 shares of Common Stock
issued and outstanding and 74,708 shares of Series B Preferred Stock issued and
outstanding. As of the date hereof, 8,905,065 shares of Common Stock were
reserved for issuance upon exercise of outstanding stock options issued by the
Company to certain former and current employees, consultants and directors of
the Company. In addition to the shares of Common Stock reserved for issuance
upon exercise of the Warrants or the Agent's Warrants, an additional 9,593,028
shares of Common Stock have been reserved for issuance upon exercise of certain
warrants and the conversion of the Series B Preferred Stock outstanding as of
the date hereof.

            (b) All outstanding shares of Common Stock and Series B Preferred
Stock are duly authorized, validly issued, fully paid and nonassessable and were
issued in compliance with federal and U.S. state securities laws. Except as set
forth above, there are no outstanding rights, options, warrants, preemptive
rights, rights of first refusal, agreements, commitments or similar rights for
the purchase or acquisition from the Company or any of its Subsidiaries of any
securities of the Company or any of its Subsidiaries.

            (c) The Shares to be sold pursuant to this Agreement have been duly
authorized, and when issued and paid for in accordance with the terms of this
Agreement will be validly issued, fully paid and nonassessable and free and
clear of all pledges, liens and encumbrances arising through the Company. The
Warrants to be issued pursuant to this Agreement have been duly authorized. The
Common Stock issuable upon exercise of the Warrants (the "Warrant Shares") has
been duly authorized and reserved and, when issued upon exercise of the Warrants
in accordance with the terms of the Warrants, will be validly issued, fully paid
and non-assessable and free and clear of all pledges, liens and encumbrances
arising through the Company.

            (d) The Units, the Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the "Securities". No preemptive right,
co-sale right, right of first refusal or other similar right exists with respect
to the Securities or the issuance and sale thereof. No further approval or
authorization of any stockholder or the Board of Directors of the Company is
required for the issuance and sale of the Securities. Except as set forth in
Section 2.5(d) of the Schedule of Exceptions, no holder of any of the securities
of the Company has any rights ("demand," "piggyback" or otherwise) to have such
securities registered by reason of the intention to file, filing or
effectiveness of a Registration Statement (as defined in Section 5.1 hereof).

      2.6 Legal Proceedings. Except as disclosed in Section 2.6 of the Schedule
of Exceptions, there is no action, suit or proceeding before any court,
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Company or any of its Subsidiaries, overtly threatened against
the Company or its Subsidiaries wherein an unfavorable decision, ruling or
finding would reasonably be expected to adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under this Agreement and the other Transaction Documents.

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<PAGE>

      2.7 No Violations. Neither the Company nor any of its Subsidiaries: (i) is
in violation of its charter, bylaws, or other organizational document, or in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any of its Subsidiaries, which violation, individually or in the aggregate,
would be reasonably likely to have a Material Adverse Effect, or (ii) is in
default (and there exists no condition which, with or without the passage of
time or giving of notice or both, would constitute a default) in any material
respect in the performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound or by which
the properties of the Company are bound, which would be reasonably likely to
have a Material Adverse Effect or would prohibit or otherwise materially
interfere with the ability of the Company to perform any of its obligations
under this Agreement or any other Transaction Document in any material respect.

      2.8 Governmental Permits, Etc. The Company and its Subsidiaries possess
all necessary franchises, licenses, certificates and other authorizations from
any foreign, federal, state or local government or governmental agency,
department or body that are currently necessary for the operation of their
respective businesses as currently conducted, except where such failure to
possess could not reasonably be expected to have a Material Adverse Effect or
would not prohibit or otherwise materially interfere with the ability of the
Company to perform any of its obligations under this Agreement in any material
respect.

      2.9   Intellectual Property.

            (a) All Intellectual Property of the Company and its Subsidiaries is
currently in compliance with all legal requirements (including timely filings,
proofs and payments of fees) and is valid and enforceable. No Intellectual
Property of the Company or its Subsidiaries which is necessary for the conduct
of Company's and each of its Subsidiaries' respective businesses as currently
conducted or as currently proposed to be conducted has been or is now involved
in any cancellation, dispute or litigation, and, to the Company's knowledge, no
such action is threatened. No patent of the Company or its Subsidiaries has been
or is now involved in any interference, reissue, re-examination or opposition
proceeding. For purposes of this Agreement, "Intellectual Property" shall mean
all of the following: (i) patents, patent applications, patent disclosures and
inventions (whether or not patentable and whether or not reduced to practice);
(ii) trademarks, service marks, trade dress, trade names, corporate names,
logos, slogans and Internet domain names, together with all goodwill associated
with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
registrations, applications and renewals for any of the foregoing; and (v)
proprietary computer software (including but not limited to data, data bases and
documentation).

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            (b) All of the licenses and sublicenses and consent, royalty or
other agreements concerning third-party Intellectual Property necessary for the
conduct of the Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted to which the
Company or any Subsidiary is a party or by which any of their assets are bound
(other than generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $10,000 per
license) (collectively, "License Agreements") are valid and binding obligations
of the Company or its Subsidiaries that are parties thereto and, to the
Company's knowledge, the other parties thereto, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
there exists no event or condition which will result in a material violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default by the Company or any of its Subsidiaries under any such License
Agreement.

            (c) The Company and its Subsidiaries own or, with respect to
third-party Intellectual Property, to the Company's knowledge, have the valid
right to use all of the Intellectual Property that is necessary for the conduct
of the Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted and for the
ownership, maintenance and operation of the Company's and its Subsidiaries'
properties and assets, free and clear of all liens, encumbrances, adverse claims
or obligations to license all such owned Intellectual Property, other than
licenses entered into in the ordinary course of the Company's and its
Subsidiaries' businesses.

            (d) To the Company's knowledge, the conduct of the Company's and its
Subsidiaries' businesses as currently conducted does not infringe or otherwise
impair or conflict with (collectively, "Infringe") any Intellectual Property
rights of any third party or any confidentiality obligation owed to a third
party, and, to the Company's knowledge, the Intellectual Property of the Company
and its Subsidiaries which are necessary for the conduct of Company's and each
of its Subsidiaries' respective businesses as currently conducted or as
currently proposed to be conducted are not being Infringed by any third party.
There is no litigation or order pending or outstanding or, to the Company's
knowledge, threatened or imminent, that seeks to limit or challenge or that
concerns the ownership, use, validity or enforceability of any Intellectual
Property of the Company and its Subsidiaries and the Company's and its
Subsidiaries' use of any Intellectual Property owned by a third party, and, to
the Company's knowledge, there is no valid basis for the same.

            (e) The consummation of the transactions contemplated by the
Transaction Documents will not result in the alteration, loss, impairment of or
restriction on the Company's or any of its Subsidiaries' ownership or right to
use any of the Intellectual Property which is necessary for the conduct of
Company's and each of its Subsidiaries' respective businesses as currently
conducted or as currently proposed to be conducted.

            (f) The Company and its Subsidiaries have taken reasonable steps
consistent with industry practice to protect the Company's and its Subsidiaries'
rights in their Intellectual Property and Confidential Information (as defined
below). Each employee, consultant and contractor who has had access to
Confidential Information which is necessary for the conduct of Company's and
each of its Subsidiaries' respective businesses as currently conducted or as
currently proposed to be conducted has executed an agreement to maintain the
confidentiality of such Confidential Information and has executed appropriate
agreements that are substantially consistent with the Company's standard forms
thereof. Except under confidentiality obligations, to the Company's knowledge,
there has been no material disclosure of any of the Company's or its
Subsidiaries' Confidential Information to any third party. For purposes hereof,
the term "Confidential Information" means trade secrets, confidential
information and know-how (including but not limited to ideas, formulae,
compositions, processes, procedures and techniques, research and development
information, computer program code, performance specifications, support
documentation, drawings, specifications, designs, business and marketing plans,
and customer and supplier lists and related information).

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      2.10 Financial Statements. The consolidated financial statements of the
Company and its Subsidiaries and the related notes thereto included in the SEC
Documents, as the same may be amended, present fairly, in all material respects,
the financial position of the Company as of the dates indicated and the results
of its operations and cash flows for the periods therein specified. Except as
set forth in the SEC Documents, such financial statements (including the related
notes) have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis throughout the periods
therein specified.

      2.11 No Material Adverse Change. There has not been (i) any material
adverse change in the business, assets, financial condition or results of
operations of the Company and its Subsidiaries, (ii) any obligation, direct or
contingent, that is material to the Company and its Subsidiaries, incurred by
the Company or any of its Subsidiaries, except obligations incurred in the
ordinary course of business, (iii) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, (iv) any loss,
destruction or damage (whether or not insured) to the physical property of the
Company or any of its Subsidiaries other than which has not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate, (v) any waiver, not in the ordinary course of business, by the
Company or any of its Subsidiaries of a material right or of a material debt
owed to it; (vi) any satisfaction or discharge of any lien, claim or encumbrance
or payment of any obligation by the Company or any of its Subsidiaries, except
in the ordinary course of business and which has not had and could not
reasonably be expected to have a Material Adverse Effect; (vi) any change or
amendment to the Company's Amended and Restated Certificate of Incorporation or
by-laws, or material change to any material contract or arrangement by which the
Company or any of its Subsidiaries is bound or to which any of their respective
assets or properties is subject; (vii) any material labor difficulties or labor
union organizing activities with respect to employees of the Company or any of
its Subsidiaries; (viii) the loss of the services of any key employee, or
material change in the composition or duties of the senior management of the
Company or any of its Subsidiaries; (ix) the loss or threatened loss of any
customer which has had or could reasonably be expected to have a Material
Adverse Effect; or ( x) any other event or condition of any character that has
had or could reasonably be expected to have a Material Adverse Effect.

      2.12 Compliance with the OTC Bulletin Board Continued Listing
Requirements. The Company's Common Stock is registered pursuant to Section 12(g)
of the Exchange Act and is listed on the OTC Bulletin Board (the "Bulletin
Board"), the Company is in compliance with applicable Bulletin Board continued
listing requirements and has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or the de-listing of the Common Stock from the Bulletin Board, nor to the
Company's knowledge is the Bulletin Board currently contemplating terminating
such listing. There are no proceedings pending or, to the Company's knowledge,
threatened against the Company relating to the continued listing of the
Company's Common Stock on the Bulletin Board and the Company has not received
any notice of, nor to the Company's knowledge is there any basis for, the
delisting of the Common Stock from the Bulletin Board.

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      2.13 No Manipulation of Stock. Neither the Company, nor the Subsidiaries,
nor any of its affiliates has taken or may take directly or indirectly, any
action in violation of applicable law or any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock or the preferred stock to facilitate the sale or
resale of the Units, the Shares or the Warrant Shares.

      2.14 Insurance. The Company and each of its Subsidiaries maintain and will
continue to maintain insurance against loss or damage by fire or other casualty
and such other insurance, including, but not limited to, general liability
insurance, in such amounts and covering such risks as is reasonably adequate
consistent with industry practice for the conduct of their respective businesses
and the value of their respective properties.

      2.15 Tax Matters. The Company and each of its Subsidiaries have timely
prepared and filed all federal, state, local and foreign income and franchise
and other tax returns required to be filed by any jurisdiction to which it is
subject and have paid all taxes due in accordance therewith, and no tax
deficiency has been determined adversely to the Company or any of its
Subsidiaries which has had (nor does the Company or any of its Subsidiaries have
any knowledge of any tax deficiency which, if determined adversely to the
Company or any of its Subsidiaries, would reasonably be expected to have) a
Material Adverse Effect. There are no tax liens or claims pending or, to the
Company's knowledge, threatened against the Company or any of its Subsidiaries
or any of their respective assets or property. There are no outstanding tax
sharing agreements or other such arrangements between the Company and any of its
Subsidiaries or other corporation or entity.

      2.16 Title to Properties. The Company and each of its Subsidiaries has
good and marketable title to all real properties and all other properties and
assets owned by it, in each case free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with the use
made or currently planned to be made thereof by them. The Company and each of
its Subsidiaries holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or currently planned to be made thereof by them.

      2.17 No Labor Disputes. No material labor dispute with the employees of
the Company or any of its Subsidiaries exists or, to the Company's knowledge, is
imminent.

      2.18 Investment Company. The Company is not an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and the rules
and regulations of the SEC thereunder.

                                       10
<PAGE>

      2.19 No Registration. Assuming compliance by the Placement Agent with
manner of offering rules and the accuracy of the representations and warranties
made by, and compliance with the covenants of, the Investor in Article III
hereof, no registration of the Securities under the Securities Act is required
in connection with the offer and sale of the Securities by the Company to the
Investor as contemplated by this Agreement and the Warrants.

      2.20 Disclosure. Neither this Agreement, the Schedule of Exceptions
hereto, the other Transaction Documents and or any of the SEC Documents nor any
other documents, certificates or instruments furnished to the Investor by or on
behalf of the Company in connection with the transactions contemplated by this
Agreement contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made herein or therein,
in the light of the circumstances under which they were made herein or therein,
not misleading. Except for the execution and performance of the Transaction
Documents, no material fact (within the meaning of the federal securities laws
of the United States and of applicable state securities laws) exists with
respect to the Company which has not been publicly disclosed.

      2.21 No Integrated Offering; No General Solicitation. Neither the Company
nor any of its affiliates, nor any person acting on its behalf or their behalf,
directly or indirectly has (i) sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Securities
in a manner that would require the registration under the Securities Act of the
sale of the Securities pursuant to this Agreement and the other Transaction
Documents; or (ii) offered, solicited offers to buy or sold Securities by any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act. The Company
does not have any registration statement pending before the SEC or currently
under the SEC's review.

      2.22 Compliance with Law. The business of the Company and the Subsidiaries
has been and is presently being conducted in accordance with all applicable
federal, state and local governmental laws, rules, regulations and ordinances,
except as set forth in the SEC Documents or such that, individually or in the
aggregate, the noncompliance therewith could not reasonably be expected to have
a Material Adverse Effect or would prohibit or otherwise materially interfere
with the ability of the Company to perform any of its obligations under the
Transaction Documents in any material respect. The Company and its Subsidiaries
have all franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals necessary for the conduct of its
business as now being conducted by it unless the failure to possess such
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect or would prohibit or
otherwise materially interfere with the ability of the Company to perform any of
its obligations under the Transaction Documents in any material respect.

      2.23 Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company's knowledge, any of their respective current or
former stockholders, directors, officers, employees, agents or other persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.

                                       11
<PAGE>

      2.24 Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial record keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines issued, administered or
enforced by any governmental agency (collectively, the "Money Laundering Laws")
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of it
subsidiaries with respect to the Money Laundering Laws is pending, or to the
best knowledge of the Company, threatened.

      2.25 Sarbanes-Oxley Act. The Company is in compliance with the applicable
provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and the
rules and regulations promulgated thereunder that are effective, and intends to
comply with other applicable provisions of the Sarbanes-Oxley Act, and the rules
and regulations promulgated thereunder, upon the effectiveness of such
provisions.

      2.26 Internal Controls. The Company and its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any difference. The Company maintains and will continue to maintain a
standard system of accounting established and administered in accordance with
GAAP and the applicable requirements of the Exchange Act. The Company's officers
certified to the Company's internal controls as of the filing of the Company's
Form 10-KSB for the year ending December 31, 2005 and since that date, that
there have been no significant changes in the Company's internal controls (as
such term is defined in Section 307(b) of Regulation S-K) or, to the Company's
knowledge, any other facts that would significantly affect the Company's
internal controls.

      2.27 No Broker. Other than the fee to be paid by the Company to the
Placement Agent, the Company has not incurred any liability for any finder's or
broker's fee, or agent's commission in connection with the execution and
delivery of this Agreement or any other Transaction Document or the consummation
of the transactions contemplated hereby and thereby.

      2.28 Forward-Looking Statements. The information contained in the SEC
Documents regarding the Company's expectations, plans and intentions, and any
other information that constitutes "forward-looking" information within the
meaning of the Securities Act and the Exchange Act were made by the Company on a
reasonable basis and reflected the Company's good faith belief and/or estimate
of the matters described therein, in each case as of the date of the SEC
Document containing such information.

                                       12
<PAGE>

      2.29 Use of Proceeds. The proceeds from the sale of the Securities will be
used to fund expansion of the Company's business, hire additional employees,
augment sales force, expand e-commerce and community building capabilities, grow
national membership organization for volleyball enthusiasts and participants,
acquire complementary businesses, and for working capital needs and general
corporate purposes.

      2.30 Non-Public Information. The Company confirms that neither it nor any
person acting on its behalf has provided the Investor with any information that
the Company believes constitutes material non-public information, except with
respect to the existence, terms and conditions of this offering or as otherwise
is disclosed in the Current Report on Form 8-K to be filed by the Company, and
the exhibits thereto, in conjunction with the press release referred to in
Section 4.2 hereto.

      2.31 Transactions With Affiliates and Employees. Except as disclosed in
Section 2.31 of the Schedule of Exceptions, none of the officers or directors of
the Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

      2.32 Environmental Matters. Neither the Company nor any of its
Subsidiaries is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "Environmental Laws"), owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to any claim relating to any
Environmental Laws; and there is no pending or, to the Company's knowledge,
threatened investigation that might lead to such a claim.

      2.33 Lock-Up Agreements. All executive officers and directors have
executed lock up agreements and delivered them to the Placement Agent in which,
without prior approval of the Placement Agent, they have agreed to not sell
shares of Common Stock held by them (including shares which may be issued to
them pursuant to the conversion of preferred stock or the exercise of
outstanding options or warrants) during the period ending 60 days after the
effective date of the Registration Statement.

      2.34 Sufficient Reserves. In addition to the shares of Common Stock
reserved for issuance upon exercise of the Warrants or the Agent's Warrants, an
additional 9,593,028 shares of Common Stock have been reserved for issuance upon
exercise of certain warrants and the conversion of the Series B Preferred Stock.

                                       13
<PAGE>

                                   ARTICLE III

            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR

      The Investor represents, warrants and covenants to the Company as follows:

      3.1   Securities Law Representations and Warranties.

            (a) The Investor is an "accredited investor" as defined in
Regulation D under the Securities Act and the Investor has the knowledge,
sophistication and experience necessary to make, and is qualified to make
decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Securities, including
investments in securities issued by the Company and investments in comparable
companies, can bear the economic risk of a total loss of its investment in the
Securities and has requested, received, reviewed and considered all information
it deemed relevant in making an informed decision to purchase the Securities.
The Investor is not a broker-dealer;

            (b) The Investor (i) is acquiring the Securities for its own account
for investment only and not with a view towards, or for resale in connection
with, the public sale or distribution thereof;

            (c) The Investor was not organized for the specific purpose of
acquiring the Securities;

            (d) The Investor will not, directly or indirectly, offer, sell,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Securities except in
compliance with the Securities Act, Exchange Act, applicable state securities
laws and the respective rules and regulations promulgated thereunder;

            (e) The Investor understands that the Securities are being offered
and sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and the Investor's compliance
with, representations, warranties, agreements, acknowledgements and
understandings of the Investor set forth herein and in the applicable Warrant in
order to determine the availability of such exemptions and the eligibility of
the Investor to acquire the Securities;

            (f) The Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of an investment in the Securities nor have such authorities passed upon or
endorsed the merits of the offering of the Securities; and

            (g) The Investor acknowledges that the Company has represented that
no action has been or will be taken in any jurisdiction outside the United
States by the Company that would permit an offering of the Securities, or
possession or distribution of offering materials in connection with the issue of
the Securities, in any jurisdiction outside the United States where action for
that purpose is required. If the Investor is located or domiciled outside the
United States it agrees to comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers
Securities or has in its possession or distributes any offering material, in all
cases at its own expense.

                                       14
<PAGE>

      3.2   Legends.

            (a) The Investor understands that certificates evidencing the
Securities may bear the following or any similar legend:

A.    "THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (1) SUCH
      SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF
      1933, AS AMENDED, (2) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K),
      OR (3) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT
      REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER
      APPLICABLE STATE SECURITIES LAWS.

B.    THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
      THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION
      THEREFROM."

      If required by the authorities of any state in connection with the
      issuance of sale of the Securities, the legend required by such state
      authority.

            (b) Removal of Legends. The legend set forth in Section 3.2 shall be
removed and the Company shall issue a certificate without such legend to the
holder of the Securities upon which it is stamped, upon (x) the written request
of the holder of such Securities to the Company and (y) the surrender of such
Securities to the Company (collectively, the "Legend Removal Delivery
Documents", and the date such documents are received by the Company the "Legend
Removal Request Date"), if, unless otherwise required by state securities laws,
(i) such Securities are registered for resale under the 1933 Act, or (ii)
following a sale or transfer of such Securities pursuant to Rule 144 (assuming
the transferor is not an affiliate of the Company), (iii) while such Securities
are eligible for sale under Rule 144(k), or (iv) if such legend is not required
under applicable requirements of the 1933 Act (including judicial
interpretations and pronouncements issued by the Staff of the SEC). If the
Company shall fail for any reason or for no reason to issue such a certificate
to the holder within three (3) Business Days of the Legend Removal Request Date,
and, after such third Business Day, the holder is required to purchase (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Investor of shares of Common Stock represented by
such certificate (a "Buy-In"), then the Company shall, within three (3) Business
Days after the holder's request, reimburse the holder for its expenses incurred
in connection with such Buy-In, including brokerage commissions.

                                       15
<PAGE>

      3.3 Authorization; Enforcement; Validity. The Investor has full right,
power, authority and capacity to enter into each Transaction Document to which
it is a party to and to consummate the transactions contemplated thereby and has
taken all necessary action to authorize the execution, delivery and performance
of such Transaction Documents. Each Transaction Document to which the Investor
is a party constitutes a valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms, except (i) to the
extent rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, (ii) enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and (iii) enforceability may be limited by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

      3.4 Certain Trading Limitations. The Investor (i) represents that on and
from the date the Investor first became aware of the Offering until the date
hereof he, she or it has not and (ii) covenants that for the period commencing
on the date hereof and ending 30 calendar days after the Company publicly
announces the Offering he, she or it will not, engage in any hedging or other
transaction which is designed to or could reasonably be expected to lead to or
result in, or be characterized as, a sale, an offer to sell, a solicitation of
offers to buy, disposition of, loan, pledge or grant of any right with respect
to (collectively, a "Disposition") Common Stock of the Company by the Investor
or any other person or entity in violation of the Securities Act. Such
prohibited hedging or other transactions would include without limitation
effecting any short sale or having in effect any short position (whether or not
such sale or position is against the box and regardless of when such position
was entered into) or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to the Common Stock of the
Company or with respect to any security (other than a broad-based market basket
or index) that includes, relates to or derives any significant part of its value
from the Common Stock of the Company.

      3.5 No Sale of Securities. The Investor hereby covenants with the Company
not to make any sale of the Securities without (i) complying with the provisions
of this Agreement, including Section 5.4 hereof or (ii) without satisfying the
requirements of the Securities Act and the rules and regulations promulgated
thereunder, including, without limitation, causing the prospectus delivery
requirement under the Securities Act to be satisfied, if applicable. The
Investor acknowledges that there may occasionally be times when the Company,
based on the advice of its counsel, determines that, subject to the limitations
of Section 5.4, it must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the SEC or
until the Company has amended or supplemented such prospectus.

      3.6 Registration Questionnaire. The Investor has completed or caused to be
completed the Registration Questionnaire attached hereto as Exhibit D and on the
signature page for use in preparation of the Registration Statement and the
answers to the Questionnaire and on such signature page are true and correct in
all material respects as of the date of this Agreement and will be true and
correct as of the effective date of the Registration Statement; provided that
the Investor shall be entitled to update such information by providing written
notice thereof to the Company prior to the effective date of the Registration
Statement.

                                       16
<PAGE>

      3.7 Investor Suitability Questionnaire. The information contained in the
Investor Suitability Questionnaire in the form attached as Exhibit E delivered
by the Investor in connection with this Agreement is complete and accurate in
all respects.

      3.8 No Advice. The Investor understands that nothing in this Agreement or
any other materials presented to the Investor in connection with the purchase
and sale of the Units constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of the Units.

      3.9 Independent Investment. The Investor has not agreed to act with any
other investor for the purpose of acquiring, holding, voting or disposing of the
Securities purchased hereunder for purposes of Section 13(d) under the Exchange
Act, and the Investor is acting independently with respect to its investment in
the Securities.

                                   ARTICLE IV

                            COVENANTS OF THE COMPANY

      4.1 Form D. The Company agrees to file one or more Forms D with respect to
the Securities with the SEC as required under Regulation D under the Securities
Act to perfect its claim to the exemption provided by Rule 506 of Regulation D
and to provide a copy thereof to the Investor within fifteen (15) days after the
Closing Date.

      4.2 Form 8-K; Press Release. The Company shall (i) as soon as practicable
after the Closing Date, but in no event later than one business day after the
Closing Date, issue a press release and file with the SEC a Current Report on
Form 8-K disclosing the Transaction Documents and the transactions contemplated
thereby, which press release and Current Report shall be subject to prior review
and comment by the Placement Agent, and (ii) make such other filings and notices
in the manner and within the time required by the SEC. Upon the issuance of such
press release and filing of such Current Report, to the knowledge of the
Company, the Investor will not be in possession of any material, nonpublic
information regarding the Company or its Common Stock. The Company and the
Investor shall consult with each other in connection with issuing any other
press releases with respect to the transactions contemplated hereby, and the
Company shall not issue any such press release or otherwise make any such public
statement without the prior consent of the Investor, which consent shall not
unreasonably be withheld, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party with prior
notice of such public statement or communication

      4.3   Additional Issuances of Securities; Right of First Offer.

                                       17
<PAGE>

                  (a) For purposes of this Section 4.10, the following
definitions shall apply.

                        (i) "Convertible Securities" means any stock or
      securities (other than Options) convertible into or exercisable or
      exchangeable for shares of Common Stock.

                        (ii) "Options" means any rights, warrants or options to
      subscribe for or purchase shares of Common Stock or Convertible
      Securities.

                        (iii) "Common Stock Equivalents" means, collectively,
      Common Stock, Options and Convertible Securities.

                  (b) Commencing on the Closing Date and for a period of sixty
(60) days following the effective date of the Registration Statement (as defined
in Section 5.1(a) hereof), (the "Trigger Date"), the Company will not, directly
or indirectly, offer, sell, grant any option to purchase, or otherwise dispose
of (or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries' equity or equity equivalent
securities, including, without limitation, any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock Equivalents (any such offer, sale, grant, disposition or
announcement being referred to as a "Subsequent Placement").

                  (c) As long as the Warrants remain outstanding, the Company
will not, directly or indirectly, propose to offer or effect any Subsequent
Placement unless the Company shall have first complied with this Section
4.10(c).

                        (i) If the Company wishes to issue any Common Stock
      Equivalent, it shall so notify the Investor (each, a "Negotiation
      Notice"), and, so long as the Investor wishes to negotiate the purchase of
      Common Stock Equivalents, the Company shall for a period not exceeding
      twenty (20) Business Days following such notice (the "Letter of Intent
      Drafting Period"), in good faith negotiate with the Investor to issue
      Common Stock Equivalents to the Investor on such terms as they might
      agree. In the event the Company receives an unsolicited offer and desires
      to purchase securities under the terms and conditions of such unsolicited
      offer, the Company shall deliver written notice (the "Unsolicited Offer
      Notice") to the Investor of the terms and conditions of such offer and the
      Investor shall have three (3) Business Days following receipt of the
      Unsolicited Offer Notice to execute a letter of intent with respect to
      such unsolicited offer with the Company, which shall constitute a Letter
      of Intent as defined below. If (x) the Investor at any time after
      receiving a Negotiation Notice or Unsolicited Offer Notice advises that it
      does not wish to purchase Common Stock Equivalents (such date, the "Right
      of Offer Refusal Date"), (y) the Company and Investor do not sign a letter
      of intent (the "Letter of Intent") regarding the sale and purchase thereof
      before the end of the Letter of Intent Drafting Period, or (z) such
      definitive agreements are not executed within the time period set forth in
      the Letter of Intent executed by the Company and the Investor (the
      "Documentation Drafting Period"), then the Company shall have one hundred
      and twenty (120) Business Days (the "Third Party Sale Period") from the
      earliest to occur of the foregoing events in which to consummate a sale (a
      "Third Party Sale") of Common Stock Equivalents to one ore more third
      parties (collectively, the "Third Party").

                                       18
<PAGE>

                        (ii) If (x) on or prior to the last Business Day of the
Letter of Intent Drafting Period, a Letter of Intent is not executed, (y) on or
prior to the last Business Day of the Documentation Drafting Period, if
definitive agreements are not completed and the transaction consummated, or (z)
on the Right of Offer Refusal Date, the Investor delivers notice to the Company
that the Investor intends in good faith to exercise its Maintenance Rights (as
defined below) even if Company issues Common Stock Equivalents consistent with
the terms last proposed by Company to Investor, during the Third Party Sale
Period, the Investor shall have the right to purchase in such Third Party Sale
(on the same terms and conditions as such Third Party and using documentation in
the same form as used in such Third Party Sale) an amount of Common Stock
Equivalents (the "Maintenance Securities") necessary for the Investor to
maintain the Investor's fully diluted equity interest in the Company (such
rights, the "Maintenance Rights"). If the Investor has elected to exercise its
Maintenance Rights, the Company shall notify the Investor within five (5)
Business Days prior to the consummation of any Third Party Sale, such notice to
include all relevant documentation with respect to such Third Party Sale and
signature pages for such Investor to execute (the "Third Party Sale Notice"), of
such Third Party Sale. The Investor's election to purchase the Maintenance
Securities will be timely made if Company receives actual written notice of the
Investor's election on or prior to the third Business Day after the Investor's
receipt of the Third Party Sale Notice.

                        (iii) Notwithstanding subsection (i), if, pursuant to
      such subsection, the Company shall agree to sell to a third party Common
      Stock Equivalents on economic terms materially more favorable to the third
      party than set forth in the Investor's last written offer or the Letter of
      Intent, then the Company shall give the Investors a three-Business-Day
      right of first refusal to purchase, on the same terms and conditions as
      such Third Party and using documentation in the same form as used in such
      Third Party Sale, the Maintenance Securities with respect to such Third
      Party Sale. "Economic terms" shall mean solely the unit purchase price,
      and, if applicable, dividend or coupon rate, exercise, exchange, or
      conversion price, term of instrument, liquidity (but without detailed
      comparisons of transfer restrictions or registration rights, if
      applicable), and other such factors and exclude information rights, board
      representation, drag-along and tag-along rights, and the like.

                        (iv) Investor's fully diluted equity interest in the
      Company shall be determined by dividing (x) the amount of all Common Stock
      Equivalents held by the Investor by (y) the amount of all outstanding
      Common Stock Equivalents, in each case, as of close of business on the
      Business Day immediately preceding the closing date of the Third Party
      Sale. The amount of Common Stock Equivalents in a particular case shall
      equal the sum of (A) the amount of Common Stock held, outstanding, or to
      be sold, plus (B) the amount of Common Stock underlying other Common Stock
      Equivalents held, outstanding, or to be sold, respectively, in each case,
      as of close of business on the Business Day immediately preceding the
      closing date of the Third Party Sale.

                                       19
<PAGE>

            (d) The restrictions contained in subsections (b) and (c) of this
Section 4.10 shall not apply in connection with the issuance of any Excluded
Securities (as defined in the Warrant).

      4.4 Reporting Status. So long as the Investor beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination.

      4.5 Reservation of Common Stock. The Company has currently 10,534,228
shares of Common Stock duly authorized and reserved for issuance pursuant to the
exercise of the Warrants, the exercise of certain warrants and the conversion of
the Series B Preferred Stock. Such shares, as well as any additional shares of
Common Stock subsequently authorized by the Company's stockholders and Board of
Directors for issuance upon the exercise of the Warrants in accordance with the
terms thereof, as applicable, shall be reserved by the Company, and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Warrant Shares.

      4.6 Listing of Common Stock. The Company hereby agrees to use commercially
reasonable efforts to comply with all the requirements of the Bulletin Board
with respect to the issuance and listing of the Shares and Warrant Shares.
Further, if the Company applies to have its Common Stock or other securities
traded on any other principal stock exchange or market, it shall include in such
application the Shares and the Warrant Shares and will take such other action as
is necessary to cause such Common Stock to be so listed. The Company will use
commercially reasonable efforts to continue the listing and trading of its
Common Stock on the Bulletin Board and, in accordance therewith, will use
commercially reasonable efforts to comply in all respects with the Company's
reporting, filing and other obligations under the rules and regulations of such
market.

      4.7 Corporate Existence. So long as the Investor beneficially owns any
Securities, the Company shall maintain its corporate existence, except in the
event of a merger, consolidation or sale of all or substantially all of the
Company's assets, as long as the surviving or successor entity in such
transaction assumes the Company's obligations hereunder and under the agreements
and instruments entered into in connection herewith.

      4.8 No Conflicting Agreements. The Company will not take any action, enter
into any agreement or make any commitment that would conflict or interfere in
any material respect with the Company's obligations to the Investor under the
Transaction Documents.

      4.9 Information. The Company agrees to promptly provide to the Investor
any information with respect to the Company, its properties, or its business or
Investor's investment as the Investor may reasonably request; provided, however,
that the Company shall not be required to give the Investor any material
nonpublic information. If any information requested by the Investor from the
Company contains material nonpublic information, the Company shall inform the
Investor in writing that the information requested contains material nonpublic
information and shall in no event provide such information to the Investor
without the express written consent of the Investor after being so informed.

                                       20
<PAGE>

                                    ARTICLE V

           REGISTRATION OF SHARES; COMPLIANCE WITH THE SECURITIES ACT

      5.1   Registration Procedures and Expenses.  The Company shall:

            (a) Subject to receipt of the Registration Statement Questionnaires
from the Investor, use best efforts to prepare and file with the SEC, within 10
business days after the Closing Date, a registration statement (the
"Registration Statement") to enable the resale of the Registrable Shares by the
Investor. "Registrable Shares" means (a) all Shares; (b) all Warrant Shares, and
(c) all shares of Common Stock issued or issuable in respect of the Warrant
Shares by virtue of any stock split, stock dividend, recapitalization or similar
event, until the earlier of: (1) the date on which such share has been resold or
otherwise transferred pursuant to the Registration Statement; (2) the date on
which such share is transferred in compliance with Rule 144(k) under the
Securities Act or may be sold or transferred by a person who is not an affiliate
of the Company pursuant to Rule 144(k) under the Securities Act (or any other
similar provisions then in force) without any volume or manner of sale
restrictions thereunder; and (3) the date on which such share ceases to be
outstanding (whether as a result of redemption, repurchase and cancellation or
otherwise).

            (b) use best efforts, subject to receipt of necessary information
from the Investor, including the Registration Statement Questionnaires, to cause
the Registration Statement to become effective within 120 days of the Closing
Date;

            (c) use best efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the Prospectus (as
defined in Section 5.5 below) used in connection therewith and take all such
other actions as may be necessary to keep the Registration Statement current and
effective for a period (the "Registration Period") not exceeding, with respect
to the Registrable Shares, the earliest of (i) the date on which all Registrable
Shares then held by the Investor may be sold or transferred in compliance with
Rule 144(k) under the Securities Act or may be sold or transferred by a person
who is not an affiliate of the Company pursuant to Rule 144(k) of the Securities
Act (or any other similar provisions then in force) without any volume or manner
of sale restrictions thereunder, or (ii) such time as all Registrable Shares
held by the Investor have been sold (A) pursuant to a registration statement,
(B) to or through a broker or dealer or underwriter in a public distribution or
a public securities transaction, or (C) in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect thereto, if any, are removed upon the consummation of such sale;

            (d) promptly furnish to the Investor with respect to the Registrable
Shares registered under the Registration Statement such reasonable number of
copies of the Registration Statement and Prospectus, including any supplements
to or amendments of the Prospectus or Registration Statement, in order to
facilitate the public sale or other disposition of all or any of the Registrable
Shares by the Investor;

                                       21
<PAGE>

            (e) promptly take such action as may be necessary to qualify, or
obtain, an exemption for the Registrable Shares under such of the state
securities laws of United States jurisdictions as shall be necessary to qualify,
or obtain an exemption for, the sale of the Registrable Shares in states
specified in writing by the Investor; provided, however, that the Company shall
not be required to qualify to do business or consent to service of process in
any jurisdiction in which it is not now so qualified or has not so consented;

            (f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) and (g) of this Section 5.1 and the registration of
the Registrable Shares pursuant to the Registration Statement, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including filings
made with the Bulletin Board or any other applicable stock exchange); (ii) fees
and expenses of compliance with federal securities and state "blue sky" or
securities laws; (iii) expenses of printing (including printing certificates for
the Registrable Shares and Prospectuses); (iv) all application and filing fees
in connection with listing the Registrable Shares on the Bulletin Board; and (v)
all fees and disbursements of counsel of the Company and independent certified
public accountants of the Company; provided, however, that the Investor shall be
responsible for paying the underwriting commissions or brokerage fees, and taxes
of any kind (including, without limitation, transfer taxes) applicable to any
disposition, sale or transfer of the Investor's Registrable Shares. The Company
shall, in any event, bear its internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties);

            (g) advise the Investor, within two business days by e-mail, fax or
other type of communication, and, if requested by such person, confirm such
advice in writing: (i) after it shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of the Registration Statement or of the initiation or threat of any proceeding
for that purpose, or any other order issued by any state securities commission
or other regulatory authority suspending the qualification or exemption from
qualification of such Registrable Shares under state securities or "blue sky"
laws; and it will promptly use its reasonable best efforts to prevent the
issuance of any stop order or other order or to obtain its withdrawal at the
earliest possible moment if such stop order or other order should be issued;
(ii) when the Prospectus or any supplements to or amendments of the Prospectus
have been filed, and, with respect to the Registration Statement or any
post-effective amendment thereto, when the same has become effective, and (iii)
when the SEC notifies the Company whether there will be a "review" of such
Registration Statement and whenever the SEC comments in writing on such
Registration Statement;

            (h) not, prior to the date on which the Registration Statement is
declared effective, prepare and file with the SEC a registration statement
relating to an offering for its own account or the account of others (other than
as contemplated in this Agreement) under the Securities Act of any of its equity
securities;

                                       22
<PAGE>

            (i) not, for a period of 60 days after the date on which the
Registration Statement is declared effective, without the prior consent of the
Placement Agent, issue or sell any equity securities of the Company, unless the
issuance or sale is related to outstanding options or warrants, is in lieu of
cash payment in an arm's-length transaction for goods or services that the
Company acquires in the ordinary course of its business, or is required pursuant
to the stock retainer plan for non-employee directors;

            (j) unless otherwise agreed to by holders of no less than 50.1% of
the Registrable Shares, neither the Company nor any of its securities holders
(other than the Investor and the Placement Agent (and/or its designees)) may
include securities of the Company in any Registration Statement filed pursuant
to this Agreement other than the Registrable Shares and shares of Common Stock
issued or issuable to the Placement Agent and/or the Placement Agent's
designees, and the Company shall not after the date hereof enter into any
agreement in contravention of the foregoing; except that Common Stock referred
to in Section 2.5(d) of Schedule B (including Schedule 2.5(d) thereto will be
included in the Registration Statement;

            (k) if at any time during the Registration Period, there is not one
or more effective Registration Statements covering the resale of all Registrable
Shares and the Company shall determine to prepare and file with the SEC a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than of Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, then the Company shall send to the Investor written notice of such
determination and if, within 20 days after receipt of such notice, the Investor
shall so request in writing, the Company shall include in such registration
statement those Registrable Shares requested by the Investor to be so included
and which are not otherwise covered by one or more effective Registration
Statements;

            (l) respond as promptly as reasonably possible to any comments
received from the SEC with respect to each Registration Statement or any
amendment thereto and, as promptly as reasonably possible provide the Investor
true and complete copies of all correspondence from and to the SEC relating to
such Registration Statement that would not result in the disclosure to the
Investor of material and non-public information concerning the Company;

            (m) comply in all material respects with the provisions of the
Securities Act, the Exchange Act and all rules of the SEC promulgated thereunder
with respect to the Registration Statements and the disposition of all
Registrable Shares covered by each Registration Statement;

            (n) cooperate with the Investor to facilitate the timely preparation
and delivery of certificates representing Registrable Shares to be delivered to
a transferee pursuant to the Registration Statements, which certificates shall
be free of all restrictive legends, and to enable such Registrable Shares to be
in such denominations and registered in such names as the Investor may request;
provided, that, the delivery of such certificates shall be subject to the
payment by the Investor of any transfer taxes, if applicable; and

                                       23
<PAGE>

            (o) cooperate with any due diligence investigation undertaken by the
Investor in connection with the sale of the Registrable Shares, including,
without limitation and subject to Section 4.8 hereof, by making available any
documents and information.

      5.2 Delay in Effectiveness of Registration Statement. The Company further
agrees that, in the event the Registration Statement has not been filed with the
SEC within 30 days after the Closing Date, the Company shall pay to the Investor
liquidated damages, for each day thereafter by which the Registration Statement
shall not have been filed, at a rate equal to 1.0% of the Actual Purchase Price
for each 30 days of delinquency (the "LD Rate"), the Company shall pay to the
Investor liquidated damages at the LD Rate for each day after 90 days from the
Closing Date by which the Registration Statement has not been declared effective
by the SEC, or 120 days from the Closing Date, if the SEC shall comment on the
Registration Statement. The Company shall deliver the cash payments described in
clauses (i) and (ii) to the Investor by the fifth business day after the
occurrence of the event described in (i) or (ii), as applicable.

      5.3 Piggyback Registrations. If the Company at any time proposes to file a
registration statement (other than a registration on Form S-4, Form S-8 or Form
S-3 (solely with respect to dividend reinvestment plans and similar plans) or
any successor forms thereto) (a "Company Registration Statement") with respect
to securities, whether for its own account or for the account of other holders
of the Company's securities ("Other Holders") that have requested such
registration (a "Requesting Holder"), the Company shall, in each case, give
written notice of such proposed filing to the Investor at least twenty (20) days
before the anticipated filing date of the Company Registration Statement, and
such notice shall offer to the Investor the opportunity to have any or all of
the Registrable Shares held by the Investor included in the Company Registration
Statement. If the Investor desires to have its Registrable Shares registered
under this Section 5.3, it shall so advise the Company in writing within ten
(10) days after the date of receipt of such notice (which request shall set
forth the amount of Registrable Shares for which registration is requested), and
the Company shall use its commercially reasonable efforts to include in the
Company Registration Statement all such Registrable Shares so requested to be
included therein. Notwithstanding the foregoing, if such proposed offering is an
underwritten offering and the managing underwriter or underwriters of the
offering advises the Company that the total amount of Registrable Shares which
the Investor, the Company and any Other Holders intended to be included in such
proposed public offering is sufficiently large to adversely affect the success
of such proposed public offering, then the amount of securities to be offered
for the account of the Investor and the Other Holders shall be reduced pro rata,
based upon the aggregate number of securities to be offered for the accounts of
the Investor and all Other Holders (except the Company) intended to be included
in such offering, to the extent necessary to reduce the total amount of
securities to be included in such proposed public offering to the amount
recommended by such managing underwriter or underwriters before the securities
offered by the Company are so reduced. Anything to the contrary in this
Agreement notwithstanding, the Company may withdraw or postpone any Company
Registration Statement referred to in this Section 5.3 at any time before it
becomes effective or withdraw, postpone or terminate the offering after it
becomes effective without any liability or obligation to the Investor. The
obligations of the Company under this Section 5.3 shall terminate with respect
to the Investor: (1) on the date that a Registration Statement filed by the
Company in accordance with Section 5.1 is declared effective or (2) on the date
on which the Investor can sell all of its remaining Registrable Shares in any
three (3) month period pursuant to Rule 144 as promulgated under the Securities
Act without the need for any registration or qualification.

                                       24
<PAGE>

      5.4   Transfer of Shares; Suspension.

            (a) The Investor agrees that it will not effect any Disposition of
the Registrable Shares or its right to purchase the Registrable Shares that
would constitute a sale within the meaning of the Securities Act, except as
contemplated in the Registration Statement referred to in Section 5.1, any
Company Registration Statement referred to in 6.3 or in accordance with the
Securities Act, and that it will promptly notify the Company of any changes in
the information set forth in such registration statement regarding the Investor
or its plan of distribution.

            (b) Except in the event that paragraph (c) below applies, the
Company shall, at all times during the Registration Period, promptly (i) prepare
and file from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading, and so that, as thereafter delivered to
purchasers of the Registrable Shares being sold thereunder, such Prospectus will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; (ii)
provide the Investor copies of any documents filed pursuant to Section
5.3(b)(i); and (iii) inform the Investor that the Company has complied with its
obligations in Section 5.3(b)(i) (or that, if the Company has filed a
post-effective amendment to the Registration Statement which has not yet been
declared effective, the Company will notify the Investor to that effect, will
use its best efforts to secure the effectiveness of such post-effective
amendment as promptly as possible and will promptly notify the Investor pursuant
to Section 5.3(b)(iii) hereof when the amendment has become effective).

            (c) Subject to paragraph (d) below, in the event of (i) any request
by the SEC or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information; (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; or (iv) any event or circumstance which
necessitates the making of any changes in the Registration Statement or
Prospectus, or any document incorporated or deemed to be incorporated therein by
reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, then the Company shall deliver a notice in
writing to the Investor (the "Suspension Notice") to the effect of the foregoing
and, upon receipt of such Suspension Notice, the Investor will refrain from
selling any Registrable Shares pursuant to the Registration Statement (a
"Suspension") until the Investor's receipt of copies of a supplemented or
amended Prospectus prepared and filed by the Company, or until it is advised in
writing by the Company that the current Prospectus may be used. In the event of
any Suspension, the Company will use its commercially reasonable efforts,
consistent with the best interests of the Company and its stockholders, to cause
the use of the Prospectus so suspended to be resumed as soon as reasonably
practicable after the delivery of a Suspension Notice to the Investor. The
Company shall pay to the Investor liquidated damages for each Unit held during
each day of Suspension at a rate equal to 1.0% of the Unit Price for each 30
days of Suspension; provided, however, that the foregoing liquidated damages
shall not be payable unless one or more Suspensions, as applicable, continue for
at least (i) thirty (30) consecutive days or (ii) sixty (60) non-consecutive
days in any twelve (12) month period.

                                       25
<PAGE>

            (d) Notwithstanding anything else herein, the Company shall not be
required to pay liquidated damages under Sections 5.4 and 5.2 exceeding 15% of
the Actual Purchase Price.

      5.5 Indemnification. For the purpose of this Section 5.5, the term
"Registration Statement" shall include any preliminary or final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 5.1 or any Company Registration Statement
referred to in Section 5.3, and the term "Rules and Regulations" means the rules
and regulations promulgated under the Securities Act.

            (a) Indemnification by the Company. The Company agrees to indemnify,
defend and hold harmless the Investor, its officers, directors, agents,
investment advisors, partners, members, managers, stockholders, trustees and
employees, and each person, if any, who controls the Investor (or any of such
other persons) within the meaning of the Securities Act, against any losses,
claims, damages, liabilities or expenses to which the Investor or such
controlling person may become subject (including, without limitation, reasonable
legal and other costs and expenses of preparing, investigating, defending,
settling, compromising or paying such losses, claims, damages, liabilities,
costs or expenses) (collectively, "Losses"), as incurred, under the Securities
Act, the Exchange Act, or any other federal or state statutory law or regulation
insofar as such Losses (or actions in respect thereof as contemplated below)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement,
including the Prospectus, financial statements and schedules, and all other
documents filed as a part thereof, as amended at the time of effectiveness of
the Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A,
or pursuant to Rule 434 of the Rules and Regulations, or the Prospectus, in the
form first filed with the SEC pursuant to Rule 424(b) of the Regulations, or
filed as part of the Registration Statement at the time of effectiveness if no
Rule 424(b) filing is required (the "Prospectus"), or any amendment or
supplement thereto (ii) the omission or alleged omission to state in any of them
a material fact required to be stated therein or necessary to make the
statements in any of them, in light of the circumstances under which they were
made, not misleading, (iii) any inaccuracy in the representations and warranties
of the Company contained in the Transaction Documents or any failure of the
Company to perform its obligations under the Transaction Documents, or (iv) any
violation or alleged violation by the Company of the Securities Act, the
Securities and Exchange Act of 1934, as amended, state ("blue sky") securities
laws or any rule or regulation promulgated thereunder; provided, however, that
the Company will not be liable in any such case to the extent that any such Loss
arises out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
the Prospectus or any amendment or supplement of the Registration Statement or
Prospectus in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Investor expressly for use in the
Registration Statement or the Prospectus, or (ii) the failure of the Investor to
comply with the covenants and agreements contained in Sections 3.5 or 5.4 of
this Agreement respecting resale of Registrable Shares, or (iii) the inaccuracy
of any representations made by the Investor in each Transaction Document to
which it is a party to, or (iv) any untrue statement or omission of a material
fact in any Prospectus that is corrected in any subsequent Prospectus that was
delivered to the Investor before the pertinent sale or sales by such Investor.

                                       26
<PAGE>

            (b) Indemnification by the Investor. The Investor will indemnify and
hold harmless the Company, each of its directors, each of its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of the Securities Act, against any Losses to which the
Company, each of its directors, each of its officers who sign the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation
insofar as such Losses (or actions in respect thereof as contemplated below)
arise out of or are based upon (i) any failure on the part of the Investor to
comply with the covenants and agreements contained in Sections 3.5 or 5.4 of
this Agreement respecting the sale of the Registrable Shares or (ii) the
inaccuracy of any representation or warranty made by the Investor in each
Transaction Document to which it is a party to, or (iii) any untrue statement of
any material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement to the Registration Statement or Prospectus, or the
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission was made
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Investor expressly for use therein;
provided, however, that the Investor shall not be liable for any such untrue
statement or omission of which the Investor has delivered to the Company in
writing a correction at least five business days before the occurrence of the
transaction from which such loss was incurred, and the Investor will reimburse
the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such Loss for
which such person is entitled to be indemnified in accordance with this Section
5.5(b). Notwithstanding anything to the contrary contained herein, the Investor
shall not be liable for any indemnification obligation under this Agreement in
excess of the amount of net proceeds received by the Investor from the sale of
the Registrable Shares, unless such obligation has resulted from the gross
negligence or willful misconduct of the Investor.

            (c) Indemnification Procedure.

                  (i) Promptly after receipt by an indemnified party under this
Section 5.5 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 5.5, promptly notify the indemnifying
party in writing of the claim; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 5.5 or to the extent it is not materially prejudiced
as a result of such failure.

                  (ii) In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action, the indemnifying
party will not be liable to such indemnified party under this Section 5.5 for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless:

                        (1) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in accordance with
the proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by such indemnifying party (such approval not to be
unreasonably withheld) representing all of the indemnified parties who are
parties to such action), or

                        (2) the indemnifying party shall not have counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party. Notwithstanding the provisions of this
Section 5.5, the Investor shall not be liable for any indemnification obligation
under this Agreement in excess of the amount of net proceeds received by the
Investor from the sale of the Registrable Shares, unless such obligation has
resulted from the gross negligence or willful misconduct of the Investor.

            (d) Contribution. If a claim for indemnification under this Section
5.5 is unavailable to an indemnified party (by reason of public policy or
otherwise), then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of any losses, claims, damages, liabilities or
expenses referred to in this Agreement, in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified party in
connection with the actions, statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such indemnifying party
or indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any losses,
claims, damages, liabilities or expenses shall be deemed to include, subject to
the limitations set forth in this Section 5.5, any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection with any
proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

                                       27
<PAGE>

      The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.5 were determined by pro rata allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5.5, the Investor shall not be
required to contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds from the sale of Registrable Shares by the Investor
exceeds the amount of any damages that the Investor has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No party to this Agreement guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any other party to this Agreement who was
not guilty of such fraudulent misrepresentation.

      5.6 Termination of Conditions and Obligations. The restrictions imposed by
this Agreement upon the transferability of the Registrable Shares shall cease
and terminate as to any particular number of the Registrable Shares when such
Registrable Shares may be sold under Rule 144(k) by such holder of Registrable
Shares or at such time as an opinion of counsel satisfactory in form and
substance to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.

      5.7 Rule 144. For a period of two years following the Closing Date
(provided, however, that with respect to Registrable Shares that are Warrant
Shares, the foregoing period shall be two years following the date the related
Warrant was exercised), the Company agrees with each holder of Registrable
Shares to:

            (a) comply with the requirements of Rule 144(c) under the Securities
Act with respect to current public information about the Company;

            (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time it is subject to such reporting requirements); and

                                       28
<PAGE>

            (c) furnish to any holder of Registrable Shares promptly after
receipt of a written request therefor (i) a written statement by the Company as
to its compliance with the requirements of said Rule 144(c), and the reporting
requirements of the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents of the Company as such holder may reasonably request to avail
itself of any similar rule or regulation of the SEC allowing it to sell any such
securities without registration.

                                   ARTICLE VI

                                  MISCELLANEOUS

      6.1 Notices. Except as specifically permitted by Section 5.1(g), all
notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed (A) if within United States by first-class registered
or certified airmail, or nationally recognized overnight express courier,
postage prepaid, or by facsimile, or (B) if delivered from outside the United
States, by International Federal Express or facsimile, and shall be deemed given
(i) if delivered by first-class registered or certified mail domestic, three
business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed, and (iv) if
delivered by facsimile, upon electric confirmation of receipt, and shall be
delivered as addressed as follows:

      if to the Company, to:

            Mr. Andrew Reif
            Chief Operating Officer and Chief Financial Officer
            AVP, Inc.
            6100 Center Drive
            Suite 900
            Los Angeles, CA 90045
            (310) 426-8000 (direct dial)
            (310) 426-8010 (facsimile)

      with a copy to:

            Loeb & Loeb, LLP
            345 Park Avenue
            New York, New York 10154
            Attn: David C. Fischer, Esq.
            (212) 407-4000 (direct dial)
            (212) 407-4990 (facsimile)

if to the Investor, at its address on the signature page hereto, with a copy
(for informational purposes only) to

            Jan Loeb
            c/o AmTrust International
            10451 Mill Run Circle
            Owings Mills, Maryland  21117

                                       29
<PAGE>

or at such other address or addresses as may have been furnished to the other
parties hereto in writing.

      6.2 Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and Investors holding a
majority of Registrable Shares held by Investors.

      6.3 Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.

      6.4 Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

      6.5 Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Units being purchased and the payment therefor.

      6.6 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.

      6.7 Entire Agreement. This Agreement and the other Transaction Documents
and the documents referenced herein and therein constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. The Transaction Documents
supersede all prior agreements and understandings among the parties.

      6.8 Finders Fees. Neither the Company nor the Investor nor any affiliate
thereof has incurred any obligation which will result in the obligation of the
other party to pay any finder's fee or commission in connection with this
transaction, except for fees payable by the Company to the Placement Agent.

      6.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party.

      6.10 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, heirs, executors and administrators and
permitted assigns of the parties hereto. With respect to transfers that are not
made pursuant to the Registration Statement, but are otherwise made in
accordance with all applicable laws and the terms of this Agreement, the rights
and obligations of the Investor under this Agreement shall be automatically
assigned by the Investor to any transferee of all or any portion of the
Investor's Securities who is a Permitted Transferee (as defined below);
provided, however, that within two business days prior to the transfer, (i) the
Company is provided written notice of the transfer including the name and
address of the transferee and the number of Securities transferred; and (ii)
that such transferee agrees in writing to be bound by the terms of this
Agreement as if such transferee was the Investor. For purposes of this
Agreement, a "Permitted Transferee" shall mean any Person who (a) is an
"accredited investor," as that term is defined in Rule 501(a) of Regulation D
under the Securities Act and (b) is a transferee of at least 50,000 Shares,
Warrants and/or Warrant Shares. Upon any transfer permitted by this Section
6.10, the Company shall be obligated to such transferee to perform all of its
covenants under this Agreement as if such transferee was the Investor.

                                       30
<PAGE>

      6.11 Expenses. Each party hereto shall bear its own expenses in connection
with the preparation and negotiation of the Agreement.

      6.12 Exculpation. Each party to this Agreement acknowledges that Archer &
Greiner, P.C., represented the Placement Agent in the Offering contemplated by
this Agreement and has not represented either the Company or the Investor or any
other investor who purchases Units in the Offering pursuant to a Securities
Purchase Agreement in substantially the form hereof.

      6.13 Third Party Rights. Except as explicitly set forth in this Agreement,
nothing in this Agreement shall create or be deemed to create any rights in any
person or entity not a party to this Agreement.

      6.14 No Waiver. It is agreed that a waiver by any party of a breach of any
provision of this Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.

      6.15 Further Assurances. The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.

                            [SIGNATURE PAGES FOLLOW]

                                       31
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Securities Purchase
Agreement to be duly executed as of the date first written above.

                                          AVP, INC.

                                          By: ______________________________

                    [Signature of Investor on Following Page]

                                       32
<PAGE>

                        "INVESTOR"

                                         ---------------------------------------
                                          (print full legal name of Investor)

                                       By:
                                                --------------------------------
                                                (signature of authorized
                                                    representative)

                                         Name:
                                                  ------------------------------
                                                  ------------------------------

                                         Its:
                                                  ------------------------------

                                         Address:
                                                    ----------------------------

                                         Telephone:
                                                      --------------------------

                                         Fax:
                                                --------------------------------

                                         Email:
                                                  ------------------------------

                                         Tax I.D. or SSN:
                                                          ----------------------

                                         Address where Units should be sent
                                         (if different from above)

                                         ---------------------------------------

                                         ---------------------------------------

                                         ---------------------------------------

                [signature page to Securities Purchase Agreement]

                                       33
<PAGE>

10128077.5

                                   Schedule A

                                 Units Purchased

       Shares of        Common Stock     Total Number
     Common Stock         Warrants         of Units*      Purchase Price
    3,529,410          705,882           705,882          $2,999,998.50
    ----------------   ----------------  --------------   ---------------
* Each Unit represents 5 shares of Common Stock and a Warrant to buy one share
of Common Stock.

<PAGE>

                                   Schedule B

                           Company Disclosure Schedule

Section 2.1       Subsidiaries; Organization; International

    The Company has the following subsidiaries:

    AVP Pro Beach Volleyball Tour, Inc.

    Pamtv.com, Inc. (inactive)

    The Company has engaged SFX, Inc. to license its television programming
    internationally in 2006.

Section 2.5(d)          Registration Rights

      National Sports Programming (FOX):  666,667 shares of common stock

      Warrant representing 4,424,260 shares of common stock, for the holders set
      forth on Schedule 2.5(d) attached hereto

      A. Michael Storiazzi: 4,465 shares of common stock

      James D. Sullivan:  1,122 shares of common stock

      MacAllister Smith:  667 shares of common stock

      Michael Miller:  warrant representing 12,702 shares of common stock

      Quantum Fund:  warrant representing 13,464 shares of common stock

      Crocs, Inc.:  warrant representing 1,000,000 shares of common stock
      (vesting 200,000 per year)

      Wall Street Communications, Inc.:  250,000 shares of common stock

      Wall Street Communications, Inc.:  warrant representing 200,000 shares of
      common stock (vesting 100,000 per year)

<PAGE>

Section 2.6       Legal Matters

      A complaint was filed by Carl Schneider and Schneider Productions, LLC on
      October 24, 2005 in the United States District Court, Central District of
      California, in which the plaintiffs seek damages for copyright
      infringement in connection with the allegedly unauthorized use of a still
      photograph in a television commercial that was broadcast on NBC and Fox
      Sports Net in 2005.

Section 2.31            Affiliate Transactions

      None.

<PAGE>

                                    Schedule 2.5(d)

AVP

<TABLE>
<CAPTION>
15% Warrant Pool
                                                                              Post-Split Reversal          Grant          Exercise
                                                                                  AVP Warrants              Date           Price
                                                                           --------------------------- --------------- ------------
<S>                                                                               <C>                       <C>         <C>
Leonard Armato                                                                    1,502,157                 6/24/2005   $    2.20

Bruce Binkow                                                                        346,868                 6/24/2005   $    2.20

Andy Reif                                                                           193,424                 6/24/2005   $    2.20

Gabby Roe                                                                            50,000                 6/24/2005   $    2.20

Phil Guaracio                                                                        39,380                 6/24/2005   $    2.20

Tom Torii                                                                            25,000                 6/24/2005   $    2.20

Roger Werner                                                                         25,000                 6/24/2005   $    2.20

Misty May                                                                            29,588                 6/24/2005   $    2.20

Scott Painter                                                                       654,024                 6/24/2005   $    2.20

Jeff Wattenberg                                                                     334,557                 6/25/2005   $    2.20

Gary Ackerman                                                                        7,500                  6/24/2005   $    2.20

George Prussin                                                                       10,000                 6/24/2005   $    2.20

Loren Kleinman                                                                        2,500                 6/24/2005   $    2.20

Wall Street Communications Group Inc.                                                40,000                 6/24/2005   $    2.20

Randall Chafetz                                                                      20,000                 6/24/2005   $    2.20

Corwin Corpuz                                                                       300,000                 6/24/2005   $    2.20

David M. Kaye                                                                        10,000                 6/24/2005   $    2.20

Gene D'Ovidio                                                                        10,000                 6/24/2005   $    2.20

Anthony Rafel                                                                        10,000                 6/24/2005   $    2.20

Robert Brown                                                                         10,000                 6/24/2005   $    2.20

Marconsult Limited                                                                  334,557                 6/24/2005   $    2.20

Leonard Schutzman Trust                                                             135,000                 6/24/2005   $    2.20

James Goldberg                                                                      125,000                 6/24/2005   $    2.20

Steflind                                                                             15,000                 6/24/2005   $    2.20

Ascent Int'l Corporation                                                              5,000                 6/24/2005   $    2.20

Robert Woodworth                                                                     10,000                 6/24/2005   $    2.20

Coconut Capital LLC                                                                  99,705                 6/24/2005   $    2.20

John Mason                                                                           10,000                 6/24/2005   $    2.20

Cadogan, Ltd.                                                                        70,000                 6/24/2005   $    2.20

                                                                           ---------------------------
                                                                                   4,424,260
                                                                           ===========================
</TABLE>

<PAGE>

                                    Exhibit A

                                 FORM OF WARRANT

<PAGE>

                                    Exhibit B

                       COMPANY WIRE TRANSFER INSTRUCTIONS

                Bank:                          City National
                                               Bank
                                               -------------------

                ABA No.                        122-016-066
                                               -------------------

                Customer Account #:            101817423
                                               -------------------

                Account Name:                  AVP Pro Beach Volleyball
                                               Tour

<PAGE>

                                    Exhibit C

                    FORM OF OPINION OF COUNSEL TO THE COMPANY

      1. The Company and its Subsidiaries is each a corporation, duly
 incorporated, validly existing and in good standing under the laws of the
 jurisdiction of its incorporation, with the requisite corporate power and
 authority to own and use its properties and assets and to carry on its business
 as currently conducted. Each of the Company and its Subsidiaries is duly
 qualified to do business and is in good standing as a foreign corporation in
 each jurisdiction in which the nature of the business conducted or property
 owned by it makes such qualification necessary, except where the failure to be
 so qualified would not have a material adverse effect on the business, assets
 or financial condition of the Company and the Subsidiaries, taken as a whole.
 Each of the Company and its Subsidiaries has full corporate power and authority
 to own or lease its properties and assets and conduct its business as
 presently, and as proposed to be, conducted as described in the Private
 Placement Memorandum.

      2. The Company has the requisite corporate power and authority to enter
 into, execute and deliver, and to consummate the transactions contemplated by,
 each of the Securities Purchase Agreement, the Warrants and the Agent's
 Warrants and otherwise to carry out its obligations thereunder. The execution
 and delivery of each of the Transaction Documents by the Company and the
 consummation by it of the transactions contemplated thereby have been duly
 authorized by all necessary action on the part of the Company. Each of the
 Transaction Documents has been duly executed and delivered by the Company and
 constitutes the legal, valid and binding obligation of the Company enforceable
 against the Company in accordance with its terms. No approval, authorization,
 waiver, consent, registration, filing, qualification, license or permit of or
 with any court, regulatory, administrative or other governmental body is
 required for the execution and delivery of the Transaction Documents or the
 consummation of the transactions contemplated thereby, except such as have been
 obtained and are in full force and effect under the Securities Act, and such as
 may be required under applicable "Blue Sky" laws in connection with the
 issuance of the Securities.

      3. The authorized capital stock of the Company consists of 80,000,000
 shares of Common Stock, and 2,000,000 shares of preferred stock. Except as
 specifically disclosed in Schedule B to the Securities Purchase Agreement or as
 a result of the purchase and sale of the Securities and the issuance of the
 Agent's Warrants, to our knowledge there are no outstanding options, warrants,
 script rights to subscribe to, calls or commitments of any character whatsoever
 relating to, securities, rights or obligations convertible into or exchangeable
 for, or giving any person any right to subscribe for or acquire any shares of
 Common Stock, or contracts, commitments, understandings, or arrangements by
 which the Company is or may become bound to issue additional shares of Common
 Stock, or securities or rights convertible or exchangeable into shares of
 Common Stock.

      4. The Securities and the Agent's Warrants have been duly authorized and,
 when paid for and issued, shall have been validly issued, fully paid and
 nonassessable. The certificates evidencing the Securities, and the Common Stock
 issuable upon proper exercise of the Agent's Warrants are in due and proper
 form under Delaware law.
<PAGE>

      5. The Company has duly authorized and reserved for issuance such number
 of Common Stock as are issuable upon exercise of the Warrants and the Agent's
 Warrants as required pursuant to the terms of the Warrants and the Agent's
 Warrants, as applicable. When issued by the Company in accordance with the
 terms of the Warrants and the Agent's Warrants, the underlying common shares
 will be validly issued, fully paid and nonassessable.

      6. The execution, delivery and performance of the Transaction Documents by
 the Company and the consummation by the Company of the transactions
 contemplated by such agreements do not and will not, either by itself or upon
 notice or the passage of time or both (i) conflict with or violate any
 provision of its or its Subsidiaries' certificate of incorporation or bylaws,
 (ii) conflict with, or constitute a default (or an event which with notice or
 lapse of time or both would become a default) under, or give to others any
 rights of termination, amendment, acceleration or cancellation of, (A) any
 agreement, license, credit facility, debt or other instrument (evidencing a
 Company or Subsidiary debt or otherwise) to which the Company or its
 Subsidiaries is a party which is attached as an exhibit to the SEC Documents
 and (B) to our knowledge, any other agreement, credit facility or other
 instrument relating to indebtedness of the Company or its Subsidiaries or
 instrument to which the Company or its Subsidiaries is a party, (iii) result in
 a violation of any law, rule or regulation, order of any governmental
 authority, regulatory body, stock market or trading facility to which the
 Company is subject, or by which any property or asset of the Company is bound
 or affected, or (iv) result in any violation of any order, judgment,
 injunction, decree or other restriction of any court or governmental authority.

      7. None of the Company or its Subsidiaries is required to obtain any
 consent, waiver, authorization or order of, or make any filing or registration
 with, any court or other Federal, state, local or other governmental authority
 or other person in connection with the execution, delivery and performance by
 the Company of the Transaction Documents, except for such filings as have been
 made pursuant to Regulation D of the Securities Act or with the OTC Bulletin
 Board, and such as may be required under applicable "Blue Sky" laws in
 connection with the issuance of the Securities.

      8. To our knowledge, the Company has filed all reports required to be
 filed by it under the Exchange Act, including pursuant to Section 13(a) or
 15(d) thereof, for the two years preceding the date hereof on a timely basis,
 or has received a valid extension of such time of filing and made such filing
 within the applicable grace period. As of their respective dates, the SEC
 Documents complied in all material respects as to form with the requirements of
 the Securities Act and the Exchange Act and the rules and regulations of the
 Securities and Exchange Commission promulgated thereunder.

      9. Assuming the accuracy of the representations and warranties of the
 Company set forth in Article II of the Securities Purchase Agreement and of the
 Investors set forth in Article III of the Securities Purchase Agreement, the
 offer, issuance and sale of the Securities are exempt from the registration
 requirements of the Securities Act.

      10. Except as set forth in the SEC Documents or Schedule B to the
 Securities Purchase Agreement, to our knowledge, the Company is not (i) subject
 to any unsatisfied judgment, order, decree, stipulation or injunction or (ii) a
 party to or threatened to be made a party to any complaint, acting, suit,
 proceeding, hearing or investigation of or in any court or administrative
 agency of any federal, state, local or foreign jurisdiction or before any
 arbitrator.
<PAGE>

      We have participated in conferences with directors, officers and other
 representatives of the Company of which the contents of the Private Placement
 Memorandum and related matters were discussed. We have also examined the
 Transaction Documents. We advise you that no facts have come to our attention
 which lead us to believe that the Private Placement Memorandum (other than the
 financial statements contained therein, as to which do not opine) contains an
 untrue statement of a material fact or omits to state a material fact required
 to be stated therein or necessary to make the statements contained therein not
 misleading.

<PAGE>

                                    Exhibit D

                      REGISTRATION STATEMENT QUESTIONNAIRE

      In connection with the preparation of the Registration Statement, please
      provide us with the following information:

1.    For use in the "Selling Stockholder" section of the Registration
      Statement, please state your or your organization's name exactly as it
      should appear in the Registration Statement (the "Holder"):

      ---------------------------------------------------------------------

2.    Please provide the type and amount of securities of the Company that the
      Holder will own immediately after Closing, including those securities
      purchased by the Holder pursuant to the Securities Purchase Agreement and
      those Securities purchased by the Holder through other transactions:

      Securities purchased pursuant to the Securities Purchase Agreement:

      ---------------------------------------------------------------------

     Other securities beneficially owned through other transactions:

      ---------------------------------------------------------------------

3.    Has the Holder had any position, office or other material relationship
      within the past three years with the Company or its affiliates?

                    Yes                      No
      --------------          ---------------

      If yes, please indicate the nature of any such relationships below:

      ---------------------------------------------------------

      ---------------------------------------------------------

      ---------------------------------------------------------

      ---------------------------------------------------------

4.    If the Holder is an entity, identify the individual or individuals who
      have sole or shared voting or investment power over the Company's
      securities owned by such entity:

      ---------------------------------------------------------

5.    Is the Holder a broker-dealer? (indicate "Yes" or "No")

      Is the Holder an affiliate of a broker-dealer?  (indicate "Yes" or "No")

<PAGE>

      If the answer is yes, except as set forth below, the Holder purchased the
      shares in the ordinary course of business, and at the time of the purchase
      of the securities to be resold, the seller had no agreements or
      understandings, directly or indirectly, with any person to distribute
      them.

      State any exceptions here:

      ---------------------------------------------------------------------

      ---------------------------------------------------------------------

      The undersigned has reviewed the answers to the above questions and
affirms that the same are true, complete and accurate. The undersigned agrees to
notify the Company of any changes in the foregoing information.

Dated: ______________, 2006          _________________________________

                                     _________________________________
                                     (Please sign your name in exactly the same
                                     manner as the certificate(s) for the
                                     shares being registered)

<PAGE>

                                    Exhibit E

                       INVESTOR SUITABILITY QUESTIONNAIRE

     Before any sale of Common  Stock or  Warrants by AVP,  Inc.  can be made to
     you, this  Questionnaire  must be completed  and returned to  Oppenheimer &
     Co. Inc. Attn: Investment Banking Department, 125 Broad Street, 16th
     Floor, New York, NY 10004.

1.    IF YOU ARE AN INDIVIDUAL PLEASE FILL IN THE IDENTIFICATION QUESTIONS IN
      (A) IF YOU ARE AN ENTITY PLEASE FILL IN THE IDENTIFICATION QUESTIONS IN
      (B)

      A.    INDIVIDUAL INDENTIFICATION QUESTIONS

      Name
              ------------------------------------------------
               (Exact name as it should appear on stock
               certificate)

      Residence Address
                         -------------------------------------

      Home Telephone Number
                              --------------------------------

      Fax Number
                   -------------------------------------------

      Date of Birth
                     -----------------------------------------

      Social Security Number
                             ---------------------------------

      B.    INDENTIFICATION QUESTIONS FOR ENTITIES

      Name
              ------------------------------------------------
              (Exact name as it will appear on stock
              certificate)
              ------------------------------------------------

      Address of
      Principal
        Place of Business
                          ------------------------------------

      State (or Country) of
      Formation
        or
      Incorporation
                       ---------------------------------------

      Contact
      Person
                      ----------------------------------------

      Telephone Number   (     )
                         -------------------------------------

      Type of Entity
        (corporation,
      partnership,
        trust,
      etc.)
                   -------------------------------------------

      Was entity formed for the purpose of this investment?
      Yes        No
          -----     -----

<PAGE>

DESCRIPTION OF INVESTOR

The following information is required to ascertain whether you would be deemed
an "accredited investor" as defined in Rule 501 of Regulation D under the
Securities Act. Please check whether you are any of the following:

             a corporation or partnership with total assets in excess of
             $5,000,000, not organized for the purpose of this particular
             investment

             private business development company as defined in Section
             202(a)(22) of the Investment Advisers Act of 1940 [a U.S. venture
             capital fund which invests primarily through private placements in
             non-publicly traded securities and makes available (either directly
             or through co-investors) to the portfolio companies significant
             guidance concerning management, operations or business objectives

             a Small Business Investment Company licensed by the U.S. Small
             Business Administration under Section 301(c) or (d) of the Small
             Business Investment Act of 1958

             an investment company registered under the Investment Company Act
             of 1940 or a business development company as defined in Section
             2(a)(48) of that Act

             a trust not organized to make this particular investment, with
             total assets in excess of $5,000,000 whose purchase is directed by
             a sophisticated person as described in Rule 506(b)(2)(ii) of the
             Securities Act of 1933 and who completed item 4 below of this
             questionnaire

             a bank as defined in Section 3(a)(2) or a savings and loan
             association or other institution defined in Section 3(a)(5)(A) of
             the Securities Act of 1933 acting in either an individual or
             fiduciary capacity

             an insurance company as defined in Section 2(13) of the
             Securities Act of 1933

             an employee benefit plan within the meaning of Title I of the
             Employee Retirement Income Security Act of 1974 (i) whose
             investment decision is made by a fiduciary which is either a bank,
             savings and loan association, insurance company, or registered
             investment advisor, or (ii) whose total assets exceed $5,000,000,
             or (iii) if a self-directed plan, whose investment decisions are
             made solely by a person who is an accredited investor and who
             completed Part I of this questionnaire;

             a charitable, religious, educational or other organization
             described in Section 501(c)(3) of the Internal Revenue Code, not
             formed for the purpose of this investment, with total assets in
             excess of $5,000,000

             an entity not located in the U.S. none of whose equity owners are
             U.S. citizens or U.S. residents

             a broker or dealer registered under Section 15 of the Securities
             Exchange Act of 1934

             a plan having assets exceeding $5,000,000 established and
             maintained by a government agency for its employees an individual
             who had individual income from all sources during each of the last
             two years in excess of $200,000 or the joint income of you and your
             spouse (if married) from all sources during each of such years in
             excess of $300,000
<PAGE>

             an individual who reasonably expects that either your own income
             from all sources during the current year to exceed $200,000 or the
             joint income of you and your spouse (if married) from all sources
             during the current year to exceed $300,000

             an individual whose net worth as of the date you purchase the
             securities offered, together with the net worth of your spouse, be
             in excess of $1,000,000

             an entity in which all of the equity owners are accredited
             investors

3. SIGNATURE

      The above information is true and correct. The undersigned recognizes that
the Company and its counsel are relying on the truth and accuracy of such
information in reliance on the exemption contained in Subsection 4(2) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The
undersigned agrees to notify the Company promptly of any changes in the
foregoing information which may occur prior to the investment.

 Executed  at ___________________, on  [_________ ___], 2006

                                          ------------------------------------
                                          (Signature)
                                          ------------------------------------
                                          (Title if for Entity)THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR OTHERWISE DISPOSED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR AN APPLICABLE EXEMPTION THEREFROM.

                                    AVP, INC.

                 WARRANT TO PURCHASE 705,882 SHARES OF COMMON STOCK

Warrant No.: 06

Date of Issuance:  June 9, 2006

      AVP, Inc., a Delaware corporation (the "Company"), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, AmTrust International, the registered holder hereof or its
permitted assigns, is entitled, subject to the terms and conditions of this
Warrant and of that certain Securities Purchase Agreement, dated June 9, 2006 by
and between the Company and the holder (as such agreement may be amended,
supplemented and modified from time to time, the "Purchase Agreement"), to
purchase from the Company, upon surrender of this Warrant at its principal
office at 6100 Center Drive, Suite 900, Los Angeles, California 90045 (or such
other location as the Company may advise the holder hereof in writing), at any
time or times not before 9:00 a.m., Pacific Standard Time, on the Commencement
Date (as defined below) and not after 5:00 p.m., Pacific Standard Time, on the
Expiration Date (as defined below) (the "Exercise Period"), 705,882 fully paid
nonassessable shares of Common Stock (as defined below) of the Company at the
Exercise Price per share provided in Section 1(d) of this Warrant, such Exercise
Price and such number of shares of Common Stock to be delivered upon exercise of
this Warrant being subject to adjustment as provided in Section 8 of this
Warrant. Capitalized terms used herein but not defined shall have the same
meanings assigned to them in the Purchase Agreement.

Section 1.  Definitions.  The following terms as used in this Warrant shall have
the following meanings:

      "Bloomberg" means Bloomberg Financial Markets.

      "Business Day" means any day other than Saturday, Sunday or other day on
which commercial banks in the City of Los Angeles, California are required by
law to remain closed.

      "Commencement Date" means June 9, 2006 or, if such date does not fall on a
Business Day, then the next Business Day.
<PAGE>

      "Closing Bid Price" and "Closing Sale Price" means, for any security as of
any date, the last closing bid price and last closing trade price, respectively,
for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not
designate the closing bid price or the closing trade price, as the case may be,
then the last bid price or last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or trading market for
such security, the last closing bid price or last trade price, respectively, of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the
case may be, of such security on such date shall be the fair market value as
mutually determined by the Company and the holder. If the Company and the holder
are unable to agree upon the fair market value of such security, then such
dispute shall be resolved pursuant to Section 12. All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.

      "Common Stock" means (i) the common stock, par value $0.001 per share, of
the Company, and (ii) any capital stock into which such Common Stock shall have
been changed or any capital stock resulting from a reclassification of such
Common Stock.

      "Common Stock Deemed Outstanding" means, at any given time, the number of
shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to Section 8 hereof
regardless of whether any options or convertible securities are actually
exercisable at such time, but excluding any shares of Common Stock owned or held
by or for the account of the Company or issuable upon exercise of the Warrants.

      "Eligible Market" means the Principal Market, the American Stock Exchange,
The New York Stock Exchange, Inc., the Nasdaq National Market or the Nasdaq
Capital Market.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended and
the rules and regulations promulgated thereunder.

      "Exercise Delivery Documents" shall have the meaning specified in Section
      2(e) hereof.

      "Exercise Price" shall be equal to $1.00 per share subject to further
adjustment as hereinafter provided.

      "Expiration Date" means June 9, 2011 or, if such date does not fall on a
Business Day, then the next Business Day.

                                       2
<PAGE>

      "Fundamental Transaction" means that the Company shall, directly or
indirectly, in one or more related transactions, (i) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of the Company to another Person, or (ii) consummate a stock purchase
agreement, merger or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination).

      "Parent Entity" of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose Common Stock or equivalent equity
security is quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity, the Person or Parent Entity with the largest
public market capitalization as of the date of consummation of the Fundamental
Transaction.

      "Person" means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization or
association and a government or any department or agency thereof.

      "Principal Market" means the OTC Bulletin Board, or if the Common Stock is
not traded on the OTC Bulletin Board, then the principal securities exchange or
trading market for the Common Stock.

      "Required Holders" means the holders of the Warrants issued pursuant to
the Purchase Agreement representing at least a majority of Common Stock
underlying such Warrants then outstanding.

      "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

      "Successor Entity" means the Person (or, if so elected by the Required
Holders, the Parent Entity) formed by, resulting from or surviving any
Fundamental Transaction or the Person (or, if so elected by the Required
Holders, the Parent Entity) with which such Fundamental Transaction shall have
been entered into.

      "Trading Day" shall mean (x) a day on which the Principal Market is open
for business or (y) if the applicable security is not so listed on a Principal
Market or admitted for trading or quotation, a Business Day.

      "Trading Price" of a security on any date of determination means:

      (1) the closing sales price as reported by the Principal Market on such
date;

      (2) if such security is not listed for trading on the Principal Market on
any such date, the closing sales price as reported in the composite transactions
for the principal U.S. securities exchange on which such security is so listed;

                                       3
<PAGE>

      (3) if such security is not listed on a U.S. national or regional
securities exchange, the last price quoted by Interactive Data Corporation for
such security on such date or, if Interactive Data Corporation is not quoting
such price, a similar quotation service selected by the Company;

      (4) if such security is not so quoted, the average of the mid-point of the
last bid and ask prices for such security on such date from at least two dealers
recognized as market-makers for such security selected by the Company for this
purpose; or

      (5) if such security is not so quoted, the average of that last bid and
ask prices for such security on such date from a dealer engaged in the trading
of securities selected by the Company for this purpose.

      "Transfer Agent" has the meaning specified in Section 2(a) hereof.

      "Warrant" means this Warrant and the other warrants to purchase shares of
Common Stock issued pursuant to the Purchase Agreement and all warrants issued
in exchange, transfer or replacement thereof.

      "Warrant Date" has the meaning specified in Section 3 hereof.

      "Warrant Delivery Date" has the meaning specified in Section 2(b) hereof.

      "Warrant Share Delivery Date" has the meaning specified in Section 2(a)
hereof.

      "Warrant Shares" means all shares of Common Stock issuable upon exercise
of this Warrant.

The definition of certain other terms are specified in Section 8 hereof.

Section 2.  Exercise of Warrant.

      (a) Subject to the terms and conditions hereof, including, without
limitation, Section 2(c), this Warrant may be exercised by the holder hereof
then registered as such on the books of the Company, in whole or in part, at any
time on any Business Day during the Exercise Period by: (i) delivery of a
written notice, in the form of the subscription notice attached as Exhibit A
hereto or a reasonable facsimile thereof (the "Exercise Notice"), to the Company
and the Company's designated transfer agent (the "Transfer Agent"), of such
holder's election to exercise all or a portion of this Warrant; (ii) the
surrender of this Warrant to the Company; and (iii) the payment of the aggregate
Exercise Price to the Company by wire transfer or by certified bank check
payable to the order of the Company in United States dollars (the items to be
delivered pursuant to clauses (i), (ii) and (iii) above collectively are
referred to herein as the "Exercise Delivery Documents"); provided, however,
that if such Warrant Shares are to be issued in any name other than that of the
registered holder of this Warrant, such issuance shall be deemed a transfer and
the provisions of Section 7 of this Warrant shall be applicable. In the event of
any exercise of the rights represented by this Warrant in compliance with this
Section 2(a) and Section 2(c), on or before the third (3rd) Trading Day
following the date on which the Company has received all of the Exercise
Delivery Documents (the "Share Delivery Date"), the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust Company ("DTC")
Fast Automated Securities Transfer Program, upon the request of the holder,
credit such aggregate number of shares of Common Stock to which the holder is
entitled pursuant to such exercise to the holder's or its designee's balance
account with DTC through its Deposit Withdrawal Agent Commission system, or (Y)
if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Company's
share register in the name of the holder or its designee, for the number of
shares of Common Stock to which the holder is entitled pursuant to such
exercise. Upon delivery of the Exercise Delivery Documents, the holder of this
Warrant shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Shares. Unless the rights represented by this Warrant shall not
have taken effect, shall have expired or shall have been fully exercised, the
Company shall, within 5 Business Days after receipt of the Exercise Delivery
Documents, and at its own expense, issue a new Warrant identical in all respects
to this Warrant exercised except it shall represent rights to purchase the
number of Warrant Shares purchasable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to which this
Warrant is exercised.

                                       4
<PAGE>

      (b) Notwithstanding anything contained in this Warrant to the contrary,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of this Warrant or to distribute certificates evidencing such
fractional shares. If more than one Warrant shall be presented for exercise in
full at the same time by the same holder, the number of full shares of Common
Stock shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of shares of Common Stock purchasable on exercise of all
Warrants so presented. In lieu of any fractional shares, there shall be paid to
the holder an amount of cash equal to the same fraction of the current market
value of a share of Common Stock. For purposes of this Section 2(d), the current
market value of a share of Common Stock shall be the Trading Price of a share of
Common Stock for the Trading Day immediately prior to the date of such exercise.

      (c) In addition to the foregoing, if on or prior to the Share Delivery
Date the Company shall fail to issue and deliver a certificate to the holder and
register such shares of Common Stock on the Company's share register or credit
the holder's balance account with DTC for the number of shares of Common Stock
to which the holder is entitled upon the holder's exercise hereunder, and if
after such Trading Day the holder shall be required to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the holder of shares of Common Stock issuable upon
such exercise that the holder anticipated receiving from the Company (a
"Buy-In"), then the Company shall, within three (3) Trading Days after the
holder's request and in the holder's discretion, either (i) pay cash to the
holder in an amount equal to the holder's total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased (the
"Buy-In Price"), at which point the Company's obligation to deliver such
certificate (and to issue such shares of Common Stock) shall terminate, or (ii)
promptly honor its obligation to deliver to the holder a certificate or
certificates representing such shares of Common Stock and pay cash to the holder
in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on
the date of exercise.

                                       5
<PAGE>

Section 3. Date; Duration. The issue date of this Warrant is June 9, 2006 (the
"Warrant Date"). This Warrant, in all events, shall be wholly void and of no
effect at 5:00 pm Pacific Standard Time on and after the Expiration Date.

Section 4.  Taxes.

      (a) The Company shall pay any and all documentary, stamp, transfer and
other similar taxes that may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.

      (b) Notwithstanding any other provision of this Warrant, for income tax
purposes, the holder or any assignee or transferee shall agree that the Company
and the Transfer Agent shall be permitted to withhold from any amounts payable
to such assignee or transferee any taxes required by law to be withheld from
such amounts. Unless exempt from the obligation to do so, each assignee or
transferee shall execute and deliver to the Company or the Transfer Agent, as
applicable, a properly completed Form W-8 or W-9, indicating that such assignee
or transferee is not subject to back-up withholding for United States federal
income tax purposes. Each assignee or transferee that does not deliver such a
form pursuant to the preceding sentence shall have the burden of proving to the
Company's reasonable satisfaction that it is exempt from such requirement.

      (c) The issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder hereof, and the Company shall not be required to
issue or deliver such certificates or other securities unless and until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

Section 5. Warrant Holder Not Deemed a Shareholder. Except as otherwise
specifically provided herein, prior to the exercise of this Warrant, the holder
of this Warrant shall not be entitled, as such, to any rights of a shareholder
of the Company, including, without limitation, the right to vote or to consent
to any action of the shareholders of the Company, to receive dividends or other
distributions, to exercise any preemptive right or to receive any notice of
meetings of shareholders of the Company, and shall not be entitled to receive
any notice of any proceedings of the Company. In addition, nothing contained in
this Warrant shall be construed as imposing any liabilities on such holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a
shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.

Section 6.  Compliance with Securities Laws.

      (a) The holder of this Warrant, by the acceptance hereof, represents and
warrants that it is acquiring this Warrant and the Warrant Shares issuable upon
exercise of this Warrant for its own account for investment only and not with a
view towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, the holder
does not agree to hold this Warrant or any of the Warrant Shares for any minimum
or other specific term and reserves the right to dispose of this Warrant and
Warrant Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. The holder of this Warrant
further represents, by acceptance or exercise hereof, that, as of such date,
such holder is an "accredited investor" as such term is defined in Rule 501(a)
of Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act and was not organized for the specific purpose of acquiring this
Warrant or the Warrant Shares.

                                       6
<PAGE>

      (b) The holder of this Warrant understands that, until the end of the
holding period under Rule 144(k) of the Securities Act (or any successor
provision) this Warrant (and all securities issued in exchange therefor or in
substitution thereof, other than Warrant Shares, which shall bear the legend set
forth in Section 6(c) of this Warrant, if applicable) shall bear a legend in
substantially the following form:

      THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
      THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION
      THEREFROM.

      The legend set forth above shall be removed and the Company shall issue a
new certificate evidencing a new Warrant of like tenor and aggregate number of
shares and which shall not bear the restrictive legends required by this Section
6(b): (i)
 if, in connection with a sale transaction, such holder provides the Company
with an opinion of counsel reasonably acceptable to the Company to the effect
that a public sale, assignment, pledge or transfer of this Warrant, as
appropriate, may be made without registration under the Securities Act, or (ii)
upon expiration of the two-year holding period under Rule 144(k) of the
Securities Act (or any successor rule); provided that the Investor is not and
has not been within three (3) months prior to such date, an "affiliate" of the
Company (as such term is defined in Rule 144 of the Securities Act). The Company
shall not require such opinion of counsel for the sale of this Warrant in
accordance with Rule 144 of the Securities Act in the event that the holder
provides such representations that the Company shall reasonably request
confirming compliance with the requirements of Rule 144.

      (c) The holder of this Warrant understands that, until the end of the
applicable holding period under Rule 144(k) of the Securities Act (or any
successor provision) with respect to the Warrant Shares, any certificate
representing the Warrant Shares shall bear a legend in substantially the
following form:

      THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
      THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION
      THEREFROM.

                                       7
<PAGE>

      The legend set forth above shall be removed and the Company shall issue
the Warrant Shares without such legend to the holder of the Warrant Shares upon
which it is stamped, (i) if the Warrant Shares have been resold or transferred
pursuant to a registration statement that was effective at the time of such
transfer, (ii) if, in connection with a sale transaction, such holder provides
the Company with an opinion of counsel reasonably acceptable to the Company to
the effect that a public sale, assignment, pledge or transfer of the Warrant
Shares may be made without registration under the Securities Act, or (iii) upon
expiration of the applicable two-year holding period under Rule 144(k) of the
Securities Act (or any successor rule); provided that the holder of the Warrant
Shares is not and has not been within three (3) months prior to such date, an
"affiliate" of the Company (as such term is defined in Rule 144 of the
Securities Act). The Company shall not require such opinion of counsel for the
sale of the Warrant Shares in accordance with Rule 144 of the Securities Act,
provided that the holder provides such representations that the Company shall
reasonably request confirming compliance with the requirements of Rule 144.

Section 7.  Ownership and Transfer.

      (a) The Company shall maintain at its principal executive offices or such
other office or agency of the Company as it may designate by notice to the
holder hereof (a "Designated Office"), a register for this Warrant (the "Warrant
Register"), in which the Company shall record the name and address of the person
in whose name this Warrant has been issued. Upon the transfer of this Warrant in
accordance with the provisions of clause (b) below, the Company shall record the
name and address of such new holder(s) as well as the name and address of each
transferee. The Company may treat the person in whose name this Warrant is
registered on the Warrant Register as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary, but in all events
recognizing any transfers made in accordance with the terms of this Warrant.

      (b) The holder of the Warrants agrees that it will not (i) transfer the
Warrant prior to delivery to the Company of the opinion of counsel referred to
in, and to the effect described in, Section 7(c) hereof, or until registration
hereof under the Securities Act and any applicable state securities or blue sky
laws has become effective, or (ii) transfer the Warrant Shares prior to delivery
to the Company of the opinion of counsel referred to in, and to the effect
described in, Section 7(c) hereof, or until registration of such Warrant Shares
under the Securities Act and any applicable state securities or blue sky laws
has become effective.

      (c) Except as otherwise expressly provided herein, by its acceptance
hereof the holder of the Warrant agrees that, prior to any transfer of the
Warrant or any transfer of the Warrant Shares, such holder will deliver to the
Company a statement setting forth the intention of such holder's prospective
transferee with respect to its retention or disposition of the Warrant or of
such Warrant Shares (whichever is involved in such transfer), in either such
case together with a signed copy of the opinion of such holder's counsel,
concurred in by counsel to the Company, to the effect that the proposed transfer
of the Warrant or the proposed transfer of the Warrant Shares may be effected
without registration under the Securities Act and any applicable state
securities or blue sky laws. The holder of the Warrant shall then be entitled to
transfer the Warrant or to transfer such Warrant Shares in accordance with the
statement of intention delivered by such holder to the Company.

                                       8
<PAGE>

      (d) Notwithstanding any provisions contained in this Warrant to the
contrary, this Warrant may be transferred, in whole or in part, by the holder
hereof without regard to the requirements and conditions set forth in Sections
7(b) and 7(c) above if any such transfer is made to any entity that is
wholly-owned by such holder.

Section 8.  Adjustment of Exercise Price and Number of Shares Issuable Upon
Exercise Upon Certain Corporate Events.

      The Exercise Price and the number of Warrant Shares issuable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 8.

      (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Exercise Price in effect at the opening of business on the date
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the record date
of this Warrant fixed for such determination and (ii) the denominator shall be
the sum of such number of shares of Common Stock referred to in (i) above plus
the total number of shares constituting such dividend or other distribution.
Such reduction in the Exercise Price shall become effective immediately after
the opening of business on the day following the record date. If any dividend or
distribution of the type described in this Section 8(a) of this Warrant is
declared but not so paid or made, the Exercise Price shall again be adjusted to
the Exercise Price that otherwise then be in effect if such dividend or
distribution had not been declared.

      (b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Exercise Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Exercise Price in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately increased, such reduction or increase, as applicable, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.

      (c) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the Company
or evidences of its indebtedness or other property (including cash or assets or
securities, but excluding (i) dividends or distributions to which Section 8(a)
applies, (ii) any dividend or distribution paid exclusively in cash, or (iii)
any consideration distributed in connection with reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
to which Section 9 of this Warrant applies (the foregoing hereinafter in this
Section 8(c) called the "Distributed Assets")), the Exercise Price shall be
reduced so that the same shall be equal to the price determined by multiplying
the Exercise Price in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction of which (i) the
numerator shall be the Closing Sale Price (as defined in Section 8(e) of this
Warrant) on such date less the fair market value (as determined in good faith by
the Company's Board of Directors, whose determination shall be conclusive and
set forth in a board resolution) on such date of the portion of the Distributed
Assets so distributed applicable to one share of Common Stock (determined on the
basis of the number of shares of Common Stock outstanding on the Record Date (as
defined in Section 8(e) of this Warrant)), and (ii) the denominator shall be
such Closing Sale Price, such reduction to become effective immediately prior to
the opening of business on the day following the Record Date.

                                       9
<PAGE>

      Such reduction in the Exercise Price shall become effective immediately
prior to the opening of business on the day following the Record Date. However,
in the event the then fair market value (as so determined) of the portion of the
Distributed Assets so distributed applicable to one share of Common Stock is
equal to or greater than the Closing Sale Price on the Record Date, in lieu of
the foregoing adjustment, adequate provision shall be made so that the holder of
this Warrant shall have the right to receive upon exercise of this Warrant (or
any portion thereof) the amount of Distributed Assets such holder would have
received had such holder converted this Warrant (or portion thereof) immediately
prior to such Record Date. In the event that such dividend or distribution is
not so paid or made, the Exercise Price shall again be adjusted to be the
Exercise Price which would then be in effect if such dividend or distribution
had not been declared.

      With respect to any rights that may be issued or distributed pursuant to
any rights plan that the Company implements after the earliest date of issuance
of this Warrant or any predecessor Warrant (a "Rights Plan"), upon exercise of
this Warrant into Common Stock, to the extent such Rights Plan is in effect upon
such exercise, the holder of this Warrant will receive, in addition to the
Common Stock, the rights described therein (whether or not the rights have
separated from the Common Stock prior to the time of exercise), subject to the
limitations set forth in any such Rights Plan. In the event the holder receives
such rights, there will be no adjustment to the Exercise Price or the number of
shares issuable upon exercise of this Warrant pursuant to this Section 8(c). In
the event the holder does not receive such rights upon exercise of this Warrant
for any reason, then an adjustment shall be made to the Exercise Price to the
extent provided for in the other provisions of this Section 8(c).

            For purposes of this Section 8(c) and Section 8(a) of this Warrant,
any dividend or distribution to which this Section 8(c) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 8(a) of this Warrant apply (or
both), shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets, shares of capital stock, rights or warrants
immediately followed by (2) a dividend or distribution of such shares of Common
Stock or such rights or warrants, and any further Exercise Price reduction
required by Section 8(a) of this Warrant with respect to such dividend or
distribution shall then be made, except (A) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution," "Record
Date fixed for such determination" and "Record Date" within the meaning of
Section 8(a) of this Warrant, and (B) any shares of Common Stock included in
such dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of Section
8(a) of this Warrant and any reduction or increase in the number of shares of
Common Stock resulting from such subdivision or combination shall be disregarded
in connection with such dividend or distribution.

                                       10
<PAGE>

      (d) If, after the date hereof, the Company shall issue or sell or, in
accordance with this Section 8(d), shall be deemed to have issued or sold, any
of Common Stock (including the issuance or sale of shares of Common Stock owned
or held by or for the account of the Company) other than any Excluded Securities
(as defined below) for a consideration per share (the "New Issuance Price") less
than a price (the "Applicable Price") equal to the Exercise Price in effect
immediately prior to such issue or sale or deemed issuance or sale (the
foregoing a "Dilutive Issuance"), then immediately after such Dilutive Issuance,
the Exercise Price then in effect shall be reduced to an amount equal to the
product of (A) the Exercise Price in effect immediately prior to such Dilutive
Issuance and (B) the quotient determined by dividing (1) the sum of (I) the
product derived by multiplying the Exercise Price in effect immediately prior to
such Dilutive Issuance and the number of shares of Common Stock Deemed
Outstanding immediately prior to such Dilutive Issuance plus (II) the
consideration, if any, received by the Company upon such Dilutive Issuance by
(2) the product derived by multiplying (I) the Exercise Price in effect
immediately prior to such Dilutive Issuance by (II) the number of shares of
Common Stock Deemed Outstanding immediately after such Dilutive Issuance. Upon
each such adjustment of the Exercise Price hereunder, the number of Warrant
Shares shall be adjusted to the number of shares of Common Stock determined by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares acquirable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment. The following shall apply for
purposes of the foregoing:

            (1) The New Issuance Price shall be determined as the sum per share
of Common Stock of amounts paid or payable for the acquisition of (x) such share
of Common Stock and (y) any right or security directly or indirectly exercisable
or exchangeable for or convertible into such share of Common Stock. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon
the actual exercise or exchange of a right or security for Common Stock or
conversion thereof into Common Stock or for or into such other right or
security.

            (2) If a right or security exercisable or exchangeable for or
convertible into a Company security is issued in connection with the issue or
sale of other Company securities, together comprising one integrated transaction
in which no specific consideration is allocated, the exercisable, exchangeable,
or convertible security will be deemed to have been issued for a consideration
of $0.01. The price of any cash sale of any Company security shall be the gross
selling price. The price of any Company security issued or sold other than for
cash shall be the fair value of such consideration received, as determined by
the Board of Directors, whose good faith determination shall be conclusive and
set forth in a board resolution.

            (3) Upon expiration, not fully exercised, exchanged, or converted,
of any right or security as to which an Exercise Price adjustment shall have
been made pursuant to this Section 8(d), the Exercise Price shall be
recalculated to equal what the Exercise Price would have been, had the
adjustment been based on the amount of Common Stock as to which such right or
security shall actually have been exercised, converted, or exchanged (giving
appropriate effect to any adjustment made after the adjustment being
recalculated).

                                       11
<PAGE>

      (e) For purposes of this Section 8, the following terms shall have the
meaning indicated:

            (1) "Excluded Securities" shall mean (a) shares of Common Stock
issued upon conversion of Series B Convertible Preferred Stock; (b) shares of
Common Stock and/or options, warrants or other Common Stock purchase rights (as
adjusted for any stock dividends, combinations, splits, recapitalizations and
the like) issued to employees, officers or directors of, or consultants,
advisors, or members of boards or committees advisory to, the Company pursuant
to stock purchase or stock option plans or other arrangements that are approved
by the Board (whether now or hereafter existing); (c) in connection with any
acquisition by the Company, whether through an acquisition of stock or a merger
of any business, assets or technologies the primary purpose of which is not to
raise equity capital and (d) securities issued pursuant to a strategic
partnership or alliance agreement, equipment lease or similar commercial
agreement (including licensing and similar arrangements) or any other similar
transaction on terms approved by the Board of Directors of the Company and the
primary purpose of which is not to raise equity capital;.

            (2) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).

      (f) The Company may make such reductions in the Exercise Price, in
addition to those required by Sections 8(a) or (b) of this Warrant, as the Board
of Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes.

      (g) No adjustment in the Exercise Price shall be required under this
Section 8 unless such adjustment would require an increase or decrease of at
least 1% in the Exercise Price; provided, however, that any adjustments which by
reason of this Section 8(f) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 8 shall be made by the Company and shall be made to the nearest cent or
to the nearest one hundredth of a share, as the case may be. No adjustment need
be made for a change in the no par value of the Common Stock.

      (h) Notice to Holders of Warrants Prior to Certain Actions. In case:

            (1) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Exercise Price
pursuant to this Section 8;

                                       12
<PAGE>

            (2) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock, a
change in par value, a change from par value to no par value or a change from no
par value to par value), or any merger, consolidation, statutory share exchange
or combination to which the Company is a party and for which approval of any
shareholders of the Company is required, or the sale, transfer or conveyance of
all or substantially all of the assets of the Company; or

            (3) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,

the Company shall cause to be provided to the holder of this Warrant at such
address appearing in the Warrant Register at least ten (10) days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of shares of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, or (y) the
date on which such reclassification, merger, consolidation, statutory share
exchange, combination, sale, transfer, conveyance, dissolution, liquidation or
winding-up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, merger, consolidation, statutory share exchange,
combination, sale, transfer, dissolution, liquidation or winding-up. Failure to
give such notice, or any defect therein, shall not affect the legality or
validity of the proceedings or actions described in clauses (1) through (3) of
this Section 8(g). In addition, whenever the Exercise Price is adjusted as
provided in this Section 8, the Company shall prepare a notice of such
adjustment of the Exercise Price setting forth the adjusted Exercise Price and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Exercise Price to the holder of this Warrant at his
last address in the Warrant Register within twenty (20) days of the effective
date of such adjustment. Failure to deliver such notice nor any defect therein
shall not effect the legality or validity of any such adjustment.

      (h) In any case in which this Section 8 provides that an adjustment shall
become effective immediately after a record date for an event, the Company may
defer until the occurrence of such event (i) issuing to the holder of this
Warrant exercised after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such exercise by reason of
the adjustment required by such event over and above the Common Stock issuable
upon such exercise before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction pursuant to Section 2(d)
of this Warrant.

      (i) Upon each adjustment of the Exercise Price pursuant to this Section 8,
this Warrant shall thereupon evidence the right to purchase that number of
Warrant Shares (calculated to the nearest hundredth of a share) obtained by
multiplying the number of Warrant Shares purchasable immediately prior to such
adjustment upon exercise of this Warrant by the Exercise Price in effect
immediately prior to such adjustment and dividing the product so obtained by the
Exercise Price in effect immediately after such adjustment. The adjustment
pursuant to this Section 8(i) to the number of Warrant Shares purchasable upon
exercise of this Warrant shall be made each time an adjustment of the Exercise
Price is made pursuant to this Section 8 (or would be made but for Section 8 of
this Warrant).

                                       13
<PAGE>

Section 9. Fundamental Transactions. The Company shall not enter into or be
party to a Fundamental Transaction unless the holder shall receive,
simultaneously with the consummation of the Fundamental Transaction, in exchange
for this Warrant, cash in an amount equal to the value of the remaining
unexercised portion of this Warrant on the date of such consummation, which
value shall be determined by use of the Black and Scholes Option Pricing Model
reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of this Warrant as of such date of
request and (ii) an expected volatility equal to the greater of 50% and the 100
day volatility obtained from the HVT function on Bloomberg.

Section 10. Lost, Stolen, Mutilated or Destroyed Warrants. If this Warrant is
lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt of
an indemnification undertaking or other form of security reasonably acceptable
to the Company (or in the case of a mutilated Warrant, the Warrant), issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen,
mutilated or destroyed.

Section 11. Notice. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile, or (B) if delivered from
outside the United States, by International Federal Express or facsimile, and
shall be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed, (iii)
if delivered by International Federal Express, two business days after so
mailed, and (iv) if delivered by facsimile, upon electric confirmation of
receipt, and shall be delivered as addressed as follows:

                  If to the Company:

                        Mr. Andrew Reif
                        Chief Operating Officer and Chief Financial Officer
                        AVP, Inc.
                        6100 Center Drive - Suite 900
                        Los Angeles, California  90045
                        Facsimile: (310) 426-8010
                        with a copy to:

                        David C. Fischer, Esquire
                        Loeb & Loeb, LLP
                        345 Park Avenue
                        New York, New York  10154
                        Facsimile: (312) 407-4990

                                       14
<PAGE>

                   If to the Transfer Agent:

                        US Stock Transfer Corporation
                        1745 Gardena Avenue,
                        Suite 200
                        Glendale, CA  91204-2991
                        TEL  818-502-1404
                        FAX 818-502-0674
                        ATTN:  Richard Brown

      If to a holder of this Warrant, to it at the address and facsimile number
set forth on the signature page to the Purchase Agreement or at such other
address and facsimile as shall be delivered to the Company upon the issuance or
transfer of this Warrant, with a copy (for informational purposes only) to:

                        Jan Loeb
                        c/o AmTrust International
                        10451 Mill Run Circle
                        Owings Mills, MD  21117

Section 12. Amendments. This Warrant and any term hereof may be amended,
changed, waived, discharged, or terminated only by an instrument in writing
signed by the Company and the holders of Warrants exercisable for a majority of
shares then underlying the Warrants. Such amendment, change, waiver, discharge
or termination shall be binding on the Company and all of the Warrant holder's
assignees and transferees. No waivers of any term, condition or provision of
this Warrant in any one or more instances shall be deemed to be or construed as
a further or continuing waiver of any such term, condition or provision.

Section 13. Obligations Binding on Successors. This Warrant will be binding upon
any entity succeeding to the Company in one or a series of transactions by
merger, consolidation or acquisition of all or substantially all of the
Company's assets or other similar transactions.

Section 14. Governing Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware

Section 15. Descriptive Headings. The headings of this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                                       15
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of day and year first above written.

                           AVP, INC.

                           By:
                               -----------------------------------
                           Its:

                                       16
<PAGE>

                              EXHIBIT A TO WARRANT

                             FORM OF EXERCISE NOTICE

      The undersigned holder hereby exercises the right to purchase
______________ of the shares of Common Stock ("Warrant Shares") of AVP, Inc., a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

      The undersigned holder hereby represents and warrants to the Company as
follows:

      (a) The undersigned holder is an "accredited investor," as that term is
defined in Rule 501(a) of Regulation D under the Securities Act; and

      (b) The undersigned holder has sold or will sell the shares of common
stock issuable pursuant to this Notice pursuant to a registration statement or
an exemption from registration under the Securities Act.

      The undersigned holder acknowledges that, unless the holder otherwise
directs below, the Warrant Shares will be issued in a single certificate
delivered to holder's registered address.

      The undersigned directs the Warrant Shares to be issued as follows:

      |_|  Credit to account number: ___________________

      |_|  By certificates in the following denominations:

      |_|  By certificate(s) registered and delivered as follows:

            Name:  ________________________________   Tax ID No.________________

            Address:  ______________________________

                     -------------------------------

Date: _______________, ____

------------------------------------      -----------------------------------
Name of Registered Holder

By:
    --------------------------------

Its:
    --------------------------------

<PAGE>

                                 ACKNOWLEDGMENT

      The Company hereby acknowledges this Exercise Notice and hereby directs
Corporate Stock Transfer to issue the above-indicated number of shares of Common
Stock issuable upon exercise of the Warrant to the designated holder.

                                   AVP, INC.

                                   By:
                                       -----------------------------------
                                   Its:

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