S-3/A

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 2, 2005

REGISTRATION STATEMENT NO. 333-120970

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NUMBER TWO

to

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ACTION PRODUCTS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Florida	59-2095427
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1101 N. Keller Road, Suite E

Orlando, Florida 32810

(407) 481-8007

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Robert L. Burrows, CFO

Action Products International, Inc.

1101 N. Keller Road, Suite E

Orlando, Florida 32810

(407) 481-8007

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

James G. Smith, Esq.

Arthur Zagorsky, Esq.

Tarter Krinsky & Drogin LLP

470 Park Avenue South, 14th Floor

New York, New York 10016

(212) 481-8585

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If the only securities being registered on this form are being offered pursuant to dividend or reinvestment plans, please check the following box: ¨

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: x

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: ¨

THIS REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

This Pre-Effective Amendment Number Two to the Registration Statement on Form S-3 is being made solely to file additional exhibits and to amend Item 16(a) of the Registration Statement reflecting such additional exhibits.

PART II ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

Exhibit No.	Description
5.1	Legal Opinion of Raice Paykin Greenblatt Lesser & Krieg, LLP *
10.1	Warrant Agreement by and between Action Products International, Inc. and Registrar and Transfer Company *
10.2	Warrant Solicitation Agreement by and between Action Products International, Inc. and Brookstreet Securities Corporation *
23.1	Consent of Moore Stephens Lovelace, P.A. *
23.2	Consent of Raice Paykin Greenblatt Lesser & Krieg, LLP (included in Exhibit 5.1)

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on a Form S-3 and has duly caused this Registration Statement, Pre-Effective Amendment Number Two, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Orlando, State of Florida, on February 1, 2005.

ACTION PRODUCTS INTERNATIONAL, INC.
By:	/s/ RONALD S. KAPLAN
Name:	Ronald S. Kaplan
Title:	President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement, Pre-Effective Amendment Number Two, has been signed below by the following persons in the capacities indicated below on February 1, 2005.

By:	/s/ RONALD S. KAPLAN
	Ronald S. Kaplan
	President, Chief Executive Officer and Director
	(principal executive officer)
By:	/s/ ROBERT L. BURROWS
	Robert L. Burrows
	Chief Financial Officer (principal financial officer and principal accounting officer)
By:	/s/ WARREN KAPLAN*
	Warren Kaplan
	Chairperson of the Board
By:	/s/ JUDITH KAPLAN*
	Judith Kaplan
	Director
By:	/s/ NEIL SWARTZ*
	Neil Swartz
	Director
By:	/s/ SCOTT RUNKEL*
	Scott Runkel
	Director
By:	/s/ ANN E. W. STONE*
	Ann E. W. Stone
	Director

* Executed by Ronald S. Kaplan pursuant to power of attorney previously filed with the Registration Statement on Form S-3, File Number 333-120970, on December 3, 2004.

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EX-5.1

Exhibit 5.1

RAICE, PAYKIN, GREEBLATT, LESSER & KRIEG LLP

ATTORNEYS AT LAW

185 MADISON AVENUE, 10^TH FLOOR

NEW YORK, NEW YORK 10016

(212) 725-4423 • FAX (212) 684-9022

PINCHUS D. RAICE**	COUNSEL
JOSEPH N. PAYKIND
JUDAH D. GREENBL. ATT++	CLAUDIO H. BERGAMSCO**
ROBERT I. LESSER**	LESLIE A. MARTEY*
CHARLES D. KRIEG *	DAVID J. MINDER*
DAVID C. THOMAS*	PARSHHUERAM T. MISIR**
JAMES KLATSKY*	MARTIN MUSHKIN*
DAVID J. WOLKENSTEIN*	JOHN M. TANNENBAUM+
	• ADMITTED IN NY
	•• ADMITTED IN NY AND NJ
	D ADMITTED IN NY AND FL
	++ ADMITTED IN NY, NJ and CT
	+ ADMITTED IN NY, CT AND DC

January 25, 2005

Action Products International, Inc.

1101 N. Keller Road, Suite E

Orlando, Florida 32810

Re: Form S-3 Registration Statement No. 333-120970

Ladies and Gentlemen:

We have acted as counsel for Action Products International, Inc., a Florida corporation, (the “Corporation”), in connection with the referenced Registration Statement on Form S-3 (the “Registration Statement”) being filed by the Corporation with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and covering 5,000,000 shares of the Corporation’s common shares, $0.001 par value (the “Common Shares”), that may be issued pursuant to the warrants referenced in the Registration Statement (the “Warrants”).

We have examined the Articles of Incorporation of the Corporation, as amended, the Bylaws of the Corporation, as amended, records of proceedings of the Board of Directors of the Corporation deemed by us to be relevant to this opinion letter, and other documents and agreements we deemed necessary for purposes of expressing the opinion set forth herein. As to certain factual matters relevant to this opinion letter, we have relied upon certificates and statements of officers of the Corporation and certificates of public officials. We have made no independent investigation with regard thereto, and, accordingly, we do not express any opinion as to matters that might have been disclosed by independent verification.

This opinion letter is provided to the Corporation and the Commission for their use solely in connection with the transactions contemplated by the Registration Statement and may not be used, circulated, quoted or otherwise relied upon by any other person or for any other purpose without our express written consent. The only opinion rendered by us consists of those matters

NEW JERSEY OFFICE, TWO UNIVERSITY PLAZA, Hackensack, NJ 07601
Tel: (201) 342-6262	Fax: (201) 342-8848

RAICE, PAYKIN, GREEBLATT, LESSER & KRIEG LLP

Action Products International, Inc.

January 25, 2005

page 2

set forth in the sixth paragraph hereof, and no opinion may be implied or inferred beyond those expressly stated.

We render this opinion only with respect to, and express no opinion herein concerning the application or effect of the laws of any jurisdiction other than, the existing laws of the United States of America, of the State of New York and the Business Corporation Act of the State of Florida, and applicable case law thereunder.

Based on the foregoing, it is our opinion that the 5,000,000 Common Shares covered by the Registration Statement and to be issued pursuant to the Warrant, when issued in accordance with the terms and conditions of the Warrant, will be legally issued, fully paid and non-assessable.

We consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the use of our name wherever appearing in the Registration Statement. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Raice, Paykin, Greenblatt, Lesser & Krieg LLP

EX-10.1

Exhibit 10.1

WARRANT AGREEMENT

AGREEMENT, dated this 7^th day of January, 2005 by and between Action Products International, Inc., a Florida corporation (the “Company”), and Registrar and Transfer Company, as Warrant Agent (the “Warrant Agent”).

WHEREAS, each record holder of the Company’s common shares, $0.001 par value (the “Common Shares”), on the record date of January 7, 2005, or such other date as determined by the Company and the Warrant Agent (the “Record Date”), will receive one (1) warrant (a “Warrant”) to purchase an additional Common Share for each one (1) Common Share held on the Record Date at an exercise price as determined herein; and

WHEREAS, the Warrants shall be exercisable for a one (1) year period from January 7, 2005 (the “Effective Date”) unless earlier redeemed as provided herein; and

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer and exchange of certificates representing the Warrants and the exercise of the Warrants.

NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth and for the purpose of defining the terms and provisions of the Warrants and the certificates representing the Warrants and the respective rights and obligations thereunder of the Company, the holders of certificates representing the Warrants and the Warrant Agent, the parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined shall have the following meanings, unless the context shall otherwise require:

“Corporate Office” shall mean the office of the Warrant Agent (or its successor) at which at any particular time its principal business shall be administered, which office is located on the date hereof at 10 Commerce Drive, Cranford, New Jersey 07016.

“Exercise Date” shall mean as to any Warrant, the date on which the Warrant Agent shall have received both (a) the Warrant Certificate representing such Warrant, with the Exercise Form thereon duly executed by the Registered Holder hereof with such Registered Holder’s signature guaranteed, and (b) payment in cash or by bank or cashier’s check made payable to the Warrant Agent for the account of the Company, of the amount in lawful money of the United States of America equal to the applicable Exercise Price.

“Exercise Price” shall mean (a) $ 3.00 per Common Share, if the Exercise Date is after the Effective Date but on or before the date six (6) months after the Effective Date, and (b) $3.50 per Common Share, if the Exercise Date is after the date six (6) months after the Effective Date but on or before the Expiration Date, subject to modification and adjustment as provided in Section 8.

“Expiration Date” shall mean, unless the Warrants are redeemed as provided in Section 9 hereof prior to such date, 5:00 p.m. (Eastern time) on the date one (1) year after the Effective Date.

“Registered Holder” shall mean the person in whose name any certificate representing the Warrants shall be registered on the books maintained by the Warrant Agent pursuant to Section 6.

“Warrant Certificate” shall mean a certificate representing each of the Warrants substantially in the form annexed hereto as Exhibit A.

2. Warrants and Issuance of Warrant Certificates.

(a) Each Warrant shall entitle the Registered Holder of the Warrant Certificate representing such Warrant to purchase at the Exercise Price therefor from the Effective Date until the Expiration Date one (1) Common Share upon the exercise thereof, subject to modification and adjustment as provided in Section 8.

(b) From time to time, up to the Expiration Date, the Warrant Agent shall countersign and deliver Warrant Certificates in required denominations of one or whole number multiples thereof to the person entitled thereto in connection with any transfer or exchange permitted under this Agreement. No Warrant Certificates shall be issued except (i) Warrant Certificates initially issued hereunder, (ii) those issued on or after the Effective Date, upon the exercise of fewer than all Warrants represented by any Warrant Certificate, to evidence any unexercised Warrants held by the exercising Registered Holder, (iii) Warrant Certificates issued upon any transfer or exchange of Warrants, (iv) Warrant Certificates issued in replacement of lost, stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7, and (v) at the option of the Company, Warrant Certificates in such form as may be approved by its Board of Directors, to reflect any adjustment or change in the Exercise Price, the number of shares of Common Shares purchasable upon exercise of the Warrants or the redemption price therefor made pursuant to Section 9 hereof.

3. Form and Execution of Warrant Certificates. The Warrant Certificates shall be substantially in the form annexed hereto as Exhibit A and may have such letters, numbers or other marks of identification or designation and such legends, summaries or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or market on which the Warrants may be listed, or to conform to usage. The Warrant Certificates shall be dated the date of issuance thereof (whether upon initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen or destroyed Warrant Certificates). Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, President or any Vice President and by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary, by manual signatures or by facsimile signatures printed thereon, and shall have imprinted thereon a facsimile of the Company’s seal. Warrant Certificates shall be manually countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the Company before the date of issuance of the Warrant Certificates or before countersignature by the Warrant Agent and issue and delivery thereof, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificates had not ceased to be such officer of the Company.

4. Exercise.

(a) Warrants may be exercised commencing at any time on or after the Effective Date, but not after the Expiration Date, upon the terms and subject to the conditions set forth herein and in the applicable Warrant Certificate. A Warrant shall be deemed to have been exercised immediately prior to the close of business on the Exercise Date, provided that the Warrant Certificate representing such Warrant, with the Exercise Form thereon duly executed by the Registered Holder thereof with such Registered Holder’s signature guaranteed, together with payment in cash or by bank or cashier’s

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check made payable to the order of the Company, of an amount in lawful money, of the United States of America equal to the applicable Exercise Price, has been received in good funds by the Warrant Agent or the Company. If received by the Company, the Company shall deliver the original Warrant Certificate and Exercise Form to the Warrant Agent as soon as practicable. The person entitled to receive the securities deliverable upon such exercise shall be treated for all purposes as the holder of such securities as of the close of business on the Exercise Date. As soon as practicable on or after the Exercise Date and in any event within five business days after such date, the Warrant Agent on behalf of the Company shall cause to be issued to the person or persons entitled to receive the same a certificate or certificates for the Common Shares deliverable upon such exercise, and the Warrant Agent shall deliver the same to the person or persons entitled thereto. Upon the exercise of Warrants, the Warrant Agent shall promptly notify the Company in writing of such fact and of the number of securities delivered upon such exercise and shall cause all payments of an amount in cash or by check made payable to the order of the Company, equal to the Exercise Price, to be deposited promptly in the Company’s bank account.

(b) If any Warrants are exercised which exercise was solicited by a broker-dealer with whom the Company agreed in writing to pay a solicitation fee for exercise of the Warrant (a “Broker-Dealer”), then the soliciting Broker-Dealer shall be entitled to receive from the Company upon exercise of each of the Warrants so exercised, a fee of not less than six percent (6%) and not greater than ten percent (10%), the exact percentage to be determined by a separate agreement between the Company and the Broker-Dealer, of the aggregate price of the Warrants so exercised (the “Exercise Fee”); provided, that, at the time of exercise, (i) the market price of the Company’s Common Shares is equal to or greater than the Exercise Price, (ii) the Broker-Dealer is a member of the National Association of Securities Dealers, Inc., (iii) the Warrant is not held in a discretionary account, unless prior specific written approval for exercise has been received by the Broker-Dealer from its customer, (iv) disclosure of the compensation arrangement is made in documents provided to the holders of the Warrants, and (v) the solicitation of the Warrant is not in violation of Regulation M promulgated under the Securities Exchange Act of 1934, as amended. Within five (5) days after the end of each month, the Warrant Agent will notify the Company of each Warrant Certificate which has been properly completed for exercise by holders of Warrants during the last month. The Warrant Agent will provide the Company with such information, in connection with the exercise of each Warrant, as the Company shall reasonably request. In the event that an Exercise Fee is paid to a Broker-Dealer with respect to a Warrant which was not properly completed for exercise or in respect of which such Broker-Dealer is not entitled to an Exercise Fee, such Broker-Dealer will return such Exercise Fee to the Company.

(c) The Company shall not be obligated to issue any fractional share interests or fractional warrant interests upon the exercise of any Warrant or Warrants, nor shall it be obligated to issue scrip or pay cash in lieu of fractional interests. Any fractional interest shall be rounded up to the nearest whole figure.

(d) Anything in this Section 4 notwithstanding, no Warrant will be exercisable unless at the time of exercise the Company has filed with the Securities and Exchange Commission, and there shall be then effective, a registration statement under the 1933 Act covering the offer and sale of the Common Shares issuable upon exercise of such Warrant and such offer and sale of the Common Shares have been so registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of such Warrant.

(e) In addition, if it is required by law and upon instruction by the Company, the Warrant Agent will deliver to each Registered Holder a prospectus that complies with the provisions of Section 5 of the 1933 Act and the Company agrees to supply the Warrant Agent with a sufficient number of prospectuses to effectuate that purpose.

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5. Reservation of Shares; Payment of Taxes.

(a) The Company covenants that it will at all times reserve and keep available out of its authorized Common Shares, solely for the purpose of issuance upon exercise of warrants, such number of Common Shares as shall then be issuable upon the exercise of all outstanding Warrants. The Company covenants that all Common Shares which shall be issuable upon exercise of the Warrants shall, at the time of delivery thereof, be duly and validly issued and fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issuance thereof.

(b) The Company shall pay all documentary, stamp or similar taxes and other governmental charges that may be imposed with respect to the issuance of Warrants, or the issuance or delivery of any Common Shares upon exercise of the Warrants; provided, however, that if Common Shares are to be delivered in a name other than the name of the Registered Holder of the Warrant Certificate representing any Warrant being exercised, then no such delivery shall be made unless the person requesting the same has paid to the Warrant Agent the amount of transfer taxes or charges incident thereto, if any.

6. Exchange and Registration of Transfer.

(a) Warrant Certificates may be exchanged for other Warrant Certificates representing an equal aggregate number of Warrants or may be transferred in whole or in part. Warrant Certificates to be so exchanged shall be surrendered to the Warrant Agent at its Corporate Office, and, upon satisfaction of the terms and conditions hereof, the Company shall execute and the Warrant Agent shall countersign, issue and deliver in exchange therefor the Warrant Certificate or Certificates which the Registered Holder making the exchange shall be entitled to receive.

(b) The Warrant Agent shall keep, at its Corporate Office, books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and the transfer thereof. Upon due presentment for registration of transfer of any Warrant Certificate at such office, the Company shall execute and the Warrant Agent shall issue and deliver to the transferee or transferees a new Warrant Certificate or Certificates representing an equal aggregate number of Warrants.

(c) With respect to any Warrant Certificates presented for registration of transfer, or for exchange or exercise, the Exercise Form or Assignment Form, as the case may be, on the reverse thereof shall be duly endorsed or be accompanied by a written instrument or instruments of transfer and subscription, in form satisfactory to the Company and the Warrant Agent, duly executed by the Registered Holder thereof with such Registered Holder’s signature guaranteed.

(d) A service charge may be imposed by the Warrant Agent for any exchange, registration or transfer of Warrant Certificates.

(e) All Warrant Certificates surrendered for exercise or for exchange shall be promptly canceled by the Warrant Agent.

(f) Prior to due presentment for registration or transfer thereof, the Company and the Warrant Agent may deem and treat the Registered Holder of any Warrant Certificate as the absolute owner thereof of each Warrant represented thereby (notwithstanding any notations of ownership or writing thereon made by anyone other than the Company or the Warrant Agent) for all purposes and shall not be affected by any notice to the contrary.

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7. Loss or Mutilation. Upon receipt by the Company and the Warrant Agent of evidence satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and (in the case of loss, theft or destruction) of indemnity satisfactory to them, and (in case of mutilation) upon surrender and cancellation thereof, the Company shall execute and the Warrant Agent shall countersign and deliver in lieu thereof a new Warrant Certificate representing an equal aggregate number of Warrants. Applicants for a substitute Warrant Certificate shall also comply with such other reasonable requests and pay such other reasonable costs and expenses as the Warrant Agent may impose.

8. Adjustments of Number and Kind of Shares Purchasable and Exercise Price. The number and kind of securities or other property purchasable upon exercise of a Warrant shall be subject to adjustment from time to time upon the occurrence, after the date hereof, of any of the following events:

(a) In case the Company shall (i) subdivide its outstanding Common Shares into a greater number of such shares or (ii) combine its outstanding Common Shares into a smaller number of such shares, the total number of Common Shares purchasable upon the exercise of each Warrant outstanding immediately prior thereto shall be adjusted so that the holder of any Warrant Certificate thereafter surrendered for exercise shall be entitled to receive at the same aggregate Exercise Price the number of shares of capital stock (of one or more classes) which such holder would have owned or have been entitled to receive immediately following the happening of any of the events described above had such Warrant been exercised in full immediately prior to the record date with respect to such event. Any adjustment made pursuant to this subsection shall, in the case of a subdivision or combination, be made as of the effective date thereof. If, as a result of an adjustment made pursuant to this subsection, the holder of any Warrant Certificate thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company (whose determination shall be conclusive and shall be evidenced by a Board resolution filed with the Warrant Agent) shall determine the allocation of the adjusted Exercise Price between or among shares of such classes of capital stock.

(b) Whenever the number of Common Shares or other securities purchasable upon exercise of a Warrant is adjusted as provided in this Section, the Company will promptly file with the Warrant Agent a certificate signed by a Chairman or co-Chairman of the Board or the President or a Vice President of the Company and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company setting forth the number and kind of securities or other property purchasable upon exercise of a Warrant, as so adjusted, stating that such adjustments in the number or kind of shares or other securities or property conform to the requirements of this Section, and setting forth a brief statement of the facts accounting for such adjustments. Promptly after receipt of such certificate, the Company, or the Warrant Agent at the Company’s request, will deliver, by first-class, postage prepaid mail, a brief summary thereof (to be supplied by the Company) to the registered holders of the outstanding Warrant Certificates; provided, however, that failure to file or to give any notice required under this subsection, or any defect therein, shall not affect the legality or validity of any such adjustments under this Section.

(c) In case of any consolidation of the Company with, or merger of the Company into, another corporation or entity (other than a consolidation or merger which does not result in any reclassification or change of the outstanding Common Shares), or in case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety, the corporation or entity formed by such consolidation or merger or the corporation or entity which shall have acquired such assets, as the case may be, shall execute and deliver to the Warrant Agent a supplemental warrant agreement providing that the holder of each Warrant then outstanding

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shall have the right thereafter (until the expiration of such Warrant) to receive, upon exercise of such Warrant, solely the kind and amount of shares of stock and other securities and property (or cash) receivable upon such consolidation, merger, sale or transfer by a holder of the number of Common Shares of the Company for which such Warrant might have been exercised immediately prior to such consolidation, merger, sale or transfer. Such supplemental warrant agreement shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided in this Section. The above provision of this subsection shall similarly apply to successive consolidations, mergers, sales or transfers. The Warrant Agent shall not be under any responsibility to determine the correctness of any provision contained in any such supplemental warrant agreement relating to either the kind or amount of shares of capital stock or securities or property (or cash) purchasable by holders of Warrant Certificates upon the exercise of their Warrants after any such consolidation, merger, sale or transfer or of any adjustment to be made with respect thereto, but may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, a certificate of a firm of independent certified public accountants (who may be the accountants regularly employed by the Company) with respect thereto.

(d) Irrespective of any adjustments in the number or kind of shares issuable upon exercise of Warrants, Warrant Certificates theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the similar Warrant Certificates initially issuable pursuant to this Agreement.

(e) The Company may retain a firm of independent public accountants of recognized standing, which may be the firm regularly retained by the Company, selected by the Board of Directors of the Company or the Audit Committee of said Board, and not disapproved by the Warrant Agent, to make any computation required under this Section, and a certificate signed by such firm shall, in the absence of fraud or gross negligence, be conclusive evidence of the correctness of any computation made under this Section.

(f) For the purpose of this Section 8, the term “Common Shares” shall mean (i) the Common Shares or (ii) any other class of stock resulting from successive changes or reclassifications of such Common Shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value. In the event that at any time as a result of an adjustment made pursuant to this Section, the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of capital stock of the Company, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Shares contained in this Section, and all other provisions of this Agreement, with respect to the Common Shares, shall apply on like terms to any such other shares.

(g) Before taking any action that would cause an adjustment pursuant to Section 8 hereof reducing the portion of the Exercise Price required to purchase one share of capital stock below the then par value (if any) of a share of such capital stock, the Company will use its best efforts to take any corporate action which, in the opinion of its counsel, may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of such capital stock.

9. Redemption.

(a) Commencing on the Effective Date, the Company may, on not less than twenty-one (21) days’ prior written notice redeem all the Warrants at $0.001 per Warrant. All Warrants must be redeemed if any are redeemed.

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(b) In the event the Company exercises its right to redeem all of the Warrants, it shall give or cause to be given notice to the Registered Holders of the Warrants, by mailing to such Registered Holders a notice of redemption, first class, postage prepaid, not later than the twenty-first (21^st) day before the date fixed for redemption, at their last address as shall appear on the records of the Warrant Agent. Any notice mailed in the manner provided herein shall be conclusively presumed to have been duly given whether or not the Registered Holder receives such notice.

(c) The notice of redemption shall specify (i) the redemption price, (ii) the date fixed for redemption, (iii) the place where the Warrant Certificate shall be delivered and the redemption price shall be paid, and (iv) that the right to exercise the Warrant shall terminate at 5:00 p.m. (New York time) on the business day immediately preceding the date fixed for redemption. The date fixed for the redemption of the Warrants shall be the Redemption Date. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for such redemption. An affidavit of the Warrant Agent or the Secretary or Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

(d) From and after the Redemption Date, all rights of the Registered Holders (except the right to receive the redemption price) shall terminate, but only if (i) no later than one day prior to the redemption date the Company shall have irrevocably deposited with the Warrant Agent as paying agent a sufficient amount to pay on the Redemption Date the redemption price for all Warrants called for redemption and (ii) the notice of redemption shall have stated the name and address of the Warrant Agent and the intention of the Company to deposit such amount with the Warrant Agent no later than one day prior to the Redemption Date.

(e) The Warrant Agent shall pay to the holders of record of redeemed Warrants all monies received by the Warrant Agent for the redemption of Warrants to which the holders of record of such redeemed Warrants who shall have surrendered their Warrants are entitled.

(f) Any amounts deposited with the Warrant Agent that are not required for redemption of Warrants may be withdrawn by the Company. Any amounts deposited with the Warrant Agent that shall be unclaimed after three (3) months after the redemption date may be withdrawn by the Company, and thereafter the holders of the Warrants called for redemption for which such funds were deposited shall look solely to the Company for payment. The Company shall be entitled to the interest, if any, on funds deposited with the Warrant Agent and the holders of redeemed Warrants shall have no right to any such interest.

(g) Any right to exercise a warrant shall terminate at 5:00 p.m. (New York time) on the business day immediately preceding the Redemption Date. The redemption price payable to the Registered Holders shall be mailed to such persons at their addresses of record.

10. Concerning the Warrant Agent.

(a) The Warrant Agent acts hereunder as agent and in a ministerial capacity for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not, by issuing and delivering Warrant Certificates or by any other act hereunder, be deemed to make any representations as to the validity or value or authorization of the Warrant Certificates or the Warrants represented thereby or of any securities or other property delivered upon exercise of any Warrant or whether any stock issued upon exercise of any Warrant is fully paid and nonassessable.

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(b) The Warrant Agent shall not at any time be under any duty or responsibility to any holder of Warrant Certificates to make or cause to be made any adjustment to the Warrant provided in this Agreement, or to determine whether any fact exists which may require any such adjustment, or with respect to the nature or extent of any such adjustment, when made, or with respect to the method employed in making the same, it shall not (i) be liable for any recital or statement of fact contained herein or for any action taken, suffered or omitted by it in reliance on any Warrant Certificate or other document or instrument believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties, (ii) be responsible for any failure on the part of the Company to comply with any of its covenants and obligations contained in this Agreement or in any Warrant Certificate, or (iii) be liable for any act or omission in connection with this Agreement except for its own gross negligence or willful misconduct.

(c) The Warrant Agent may at any time consult with counsel satisfactory to it (who may be counsel for the Company) and shall incur no liability or responsibility for any action taken, suffered or omitted by it in good faith in accordance with the opinion or advice of such counsel.

(d) Any notice, statement, instruction, request, direction, order or demand of the Company shall be sufficiently evidenced by an instrument signed by the Chairperson of the Board of Directors, Vice-Chairperson or Secretary (unless other evidence in respect thereof is herein specifically prescribed). The Warrant Agent shall not be liable for any action taken, suffered or omitted by it in accordance with such notice, statement, instruction, request, direction, order or demand.

(e) The Company agrees to pay the Warrant Agent reasonable compensation for its services hereunder and to reimburse it for its reasonable expenses hereunder; the Company further agrees to indemnify the Warrant Agent and save it harmless against any and all losses, expenses and liabilities, including judgments, costs and counsel fees, for anything done or omitted by the Warrant Agent in the execution of its duties and powers hereunder except losses, expenses and liabilities arising as a result of the Warrant Agent’s gross negligence or willful misconduct.

(f) The Warrant Agent may resign its duties and be discharged from all further duties and liabilities hereunder (except liabilities arising as a result of the Warrant Agent’s own negligence or willful misconduct), after giving 60 days prior written notice to the Company. At least 15 days prior to the date such resignation is to become effective, the Warrant Agent shall cause a copy of such notice of resignation to be mailed to the Registered Holder of each Warrant Certificate at the Company’s expense. Upon such resignation the Company shall appoint in writing a new warrant agent. After acceptance in writing of such appointment by the new warrant agent is received by the Company, such new warrant agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as the warrant agent, without any further assurance, conveyance, act or deed; but if for any reason it shall be necessary or expedient to execute and deliver any further assurance, conveyance, act or deed, the same shall be done at the expense of the Company and shall be legally and validly executed and delivered by the resigning Warrant Agent. Not later than the effective date of any such appointment the Company shall file notice thereof with the resigning Warrant Agent and shall forthwith cause a copy of such notice to be mailed to the Registered Holder of each Warrant Certificate.

(g) Any corporation into which the Warrant Agent or any new warrant agent may be converted or merged, any corporation resulting from any consolidation to which the Warrant Agent or any new warrant agent shall be a party, or any corporation succeeding to the corporate trust business of the Warrant Agent or any new warrant agent shall be a successor warrant agent under this Agreement without any further act, provided that such corporation is eligible for appointment as successor to the Warrant Agent under the provisions of the preceding paragraph. Any such successor

8

warrant agent shall promptly cause notice of its succession as warrant agent to be mailed to the Company and to the Registered Holders of each Warrant Certificate, at the Warrant Agent’s expense.

(h) Except as otherwise provided in this Agreement, if any act or event which is required under this Agreement to otherwise occur on a Saturday, Sunday or any other day the Warrant Agent is not open for business, then such act or event shall occur on the next successive day that is not a Saturday, Sunday or day in which the Warrant Agent is not open for business.

11. Rights of Registered Holders. No Registered Holder, as such, shall have any rights of a shareholder of the Company, either at law or equity, and the rights of the Registered Holders, as such, are limited to those rights expressly provided in this Agreement or in the Warrant Certificates. The Company and the Warrant Agent may treat the registered Registered Holder in respect of any Warrant Certificates as the absolute owner thereof for all purposes notwithstanding any notice to the contrary.

12. Modification of Agreement. The Warrant Agent and the Company may by supplemental agreement make any changes or corrections in this Agreement without the approval of any holders of Warrants (i) that they shall deem appropriate to cure any ambiguity or to correct any defective or inconsistent provision or manifest mistake or error herein contained; (ii) that they may deem necessary or desirable and which shall not adversely affect the interests of the holders of Warrant Certificates; or (iii) which may be required by law; provided, however, that this Agreement shall not otherwise be modified, supplemented or altered except with the consent in writing of the Registered Holders representing not less than 50% of the Warrants then outstanding; provided, further, that no change in the number of the securities purchasable upon the exercise of any Warrant, or an increase in the Exercise Price therefor, shall be, made without the consent in writing of the Registered Holder of the Warrant Certificate, other than such changes as are specifically permitted or prescribed by this Agreement as originally executed.

13. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been made when delivered, with confirmation received, or one business day after deposited with a nationally recognized overnight courier, or five days after mailed first-class postage prepaid, or upon receipt when sent by facsimile, with confirmation received, if to the Registered Holder of a Warrant Certificate, at the address of such holder as shown on the registry books maintained by the Warrant Agent; if to the Company at:

Action Products International, Inc.

1101 North Keller Road, Suite E

Orlando, Florida 32810

Attn: Ronald S. Kaplan

Phone: (407) 481-8007

Facsimile: (407) 481-2781

With a copy to:

Tarter Krinsky & Drogin LLP

470 Park Avenue South, 14^th Floor

New York, NY 10016

Attn: James G. Smith, Esq.

Phone: (212) 481-8585

Facsimile (212) 481-9062

9

or at such other address as may have been furnished to the Warrant Agent in writing by the Company, and if to the Warrant Agent, at its Corporate Office.

14. Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without giving effect to conflicts of laws. In the event the Company, the Warrant Agent or any Registered Holder commences any litigation, proceeding or other legal action in connection with or relating to this Agreement or any matters described or contemplated herein, the Company, the Warrant Agent and the Registered Holders hereby (a) agree under all circumstances absolutely and irrevocably to institute any litigation, proceeding or other legal action in a court of competent jurisdiction located within the County of New York, State of New York, whether a state or federal court; (b) agree that in the event of any such litigation, proceeding or action, such parties will consent and submit to personal jurisdiction in such court; and (c) agree to waive to the full extent permitted by law any objection that they may now or hereafter have to the venue of any such litigation, proceeding or action in any such court or that any such litigation, proceeding or action was brought in an inconvenient forum.

15. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company, the Warrant Agent and their respective successors and assigns and the holders from time to time of Warrant Certificates or any of them. Except as hereinafter stated, nothing in this Agreement is intended or shall be construed to confer upon any other person any right, remedy or claim or to impose upon any other person any duty, liability or obligation.

16. Termination. This Agreement shall terminate at the Expiration Time or such earlier date upon which all Warrants have been exercised or surrendered, except that the Warrant Agent shall account to the Corporation for cash held by it and the provisions of Section 10 hereof shall survive such termination.

17. Integration. As of the date hereof, this Agreement contains the entire and only agreement, understanding, representation, condition, warranty or covenant between the parties hereto with respect to the matters herein, supersedes any and all other agreements between the parties hereto relating to such matters, and may be modified or amended only by a written agreement signed by both parties hereto.

18. Counterparts. This Agreement may be executed in several counterparts, which taken together shall constitute a single document.

[remainder of page intentionally left blank]

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

ACTION PRODUCTS INTERNATIONAL, INC.
By:	/s/ RONALD S. KAPLAN
	Ronald S. Kaplan
	Chief Executive Officer
REGISTRAR AND TRANSFER COMPANY
By:	/s/ WILLIAM P. TATLER
	William P. Tatler
	Vice President

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Exhibit A

No.              VOID AFTER 5:00 P M on January 6, 2006

                 WARRANTS

REDEEMABLE WARRANT CERTIFICATE TO

PURCHASE COMMON SHARES

ACTION PRODUCTS INTERNATIONAL, INC.

NO.              CUSIP:

THIS CERTIFIES THAT, FOR VALUE RECEIVED                              or registered assigns (the “Registered Holder”) is the owner of the number of Warrants (the “Warrants”) specified above. Each Warrant initially entitles the Registered Holder to purchase, subject to the terms and conditions set forth in this Certificate and the Warrant Agreement (as hereinafter defined), one fully paid and non-assessable Common Share, $0.001 par value, of Action Products International, Inc., a Florida corporation (the “Company”), at any time from January 7, 2005 and prior to the Expiration Date (as hereinafter defined) upon the presentation and surrender of this Warrant Certificate with the Exercise Form on the reverse hereof duly executed, at the corporate office of Registrar and Transfer Company, as Warrant Agent, or its successor (the “Warrant Agent”), or the Company, accompanied by the Exercise Price (as defined in the Warrant Agreement), in lawful-money of the United States of America in cash or by check made payable to the Warrant Agent for the account of the Company.

This Warrant Certificate and each Warrant represented hereby are issued pursuant to and are subject in all respects to the terms and conditions set forth in the Warrant Agreement (the “Warrant Agreement”), dated January 7, 2005, by and between the Company and the Warrant Agent.

In the event of certain contingencies provided for in the Warrant Agreement, the Exercise Price and the number of Common Shares subject to purchase upon the exercise of each Warrant represented hereby are subject to modification or adjustment.

Each Warrant represented hereby is exercisable at the option of the Registered Holder, but no fractional interests will be issued. In the case of the exercise of less than all the warrants represented hereby, the Company shall cancel this Warrant Certificate upon the surrender hereof and shall execute and deliver a new Warrant Certificate or Warrant Certificates of like tenor, which the Warrant Agent shall countersign, for the balance of such Warrants.

The term “Expiration Date” shall mean 5:00 P.M. (New York time) on January 6, 2006. If such date shall in the State of New York be a holiday or a day on which the banks are authorized to close, then the Expiration Date shall mean 5:00 P.M. (New York time) the next following day which in the State of New York is not a holiday or a day on which banks are authorized to close.

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Prior to the exercise of any Warrant represented hereby, the Registered Holder shall not be entitled to any rights of a shareholder of the Company, including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided in the Warrant Agreement.

Subject to the provisions of the Warrant Agreement, this Warrant may be redeemed at the option of the Company, at a redemption price of $0.001 per Warrant. Notice of redemption shall be given not later than the twenty-first (21^st) day before the date fixed for redemption, all as provided in the Warrant Agreement. On and after the date fixed for redemption, the Registered Holder shall have no rights with respect to this Warrant except to receive the $0.001 per Warrant upon surrender of this Certificate.

Prior to due presentment for registration or transfer hereof, the Company and the Warrant Agent may deem and treat the Registered Holder as the absolute owner hereof and of each Warrant represented hereby (notwithstanding any notations of ownership or writing hereon made by anyone other than a duly authorized officer of the Company or the Warrant Agent) for all purposes and shall not be affected by any notice to the contrary, except as provided in the Warrant Agreement.

This Warrant Certificate shall be governed by and construed in accordance with the laws of the State of Florida without giving effect to conflicts of laws.

This Warrant Certificate is not, valid unless countersigned by the Warrant Agent.

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed, manually or in facsimile by two of its officers thereunto duly authorized.

Dated:

ACTION PRODUCTS INTERNATIONAL, INC.
By:
	Ronald S. Kaplan
	Chief Executive Officer

By:
	Robert L. Burrows
	Secretary

COUNTERSIGNED:

REGISTRAR AND TRANSFER COMPANY as Warrant Agent
By:
	Authorized Officer

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EXERCISE FORM

To Be Executed by the Registered Holder in Order to Exercise Warrant

The undersigned Registered Holder hereby irrevocably elects to exercise                      Warrants represented by this Warrant Certificate, and to purchase the securities issuable upon the exercise of such Warrants, and requests that certificates for such securities shall be issued in name of

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

(please print or type name and address)

and be delivered to:

(please print or type name and address)

and if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder at the address stated below.

IMPORTANT: PLEASE CHECK WHICH IS APPLICABLE:

¨ The exercise of this Warrant was solicited by:

(name of individual broker)

(name of firm)

¨ The exercise of this Warrant was not solicited.

Dated:	________________, 200__	x
			Signature
			Name
		x
			Signature Guaranteed

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ASSIGNMENT FORM

To Be Executed by the Registered Holder in Order to Assign Warrants

FOR VALUE RECEIVED,                                                      , hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

(please print or type name and address)

                                          of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints                                  Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.

Dated:	________________, 200__	x
			Signature
		x
			Signature Guaranteed

THE SIGNATURE TO THE ASSIGNMENT OR THE EXERCISE FORM MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE MEDALLION GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE, MIDWEST STOCK EXCHANGE OR BOSTON STOCK EXCHANGE, WHO IS A MEMBER OF THE MEDALLION PROGRAM.

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EX-10.2

Exhibit 10.2

WARRANT SOLICITATION AGREEMENT

THIS WARRANT SOLICITATION AGREEMENT (“Agreement”) is dated as of January 24, 2005, by and between Action Products International, Inc. (the “Company”) and Brookstreet Securities Corporation (“Broker”).

RECITALS

WHEREAS, the Company desires to retain Broker to act as a nonexclusive Warrant Solicitation Agent in connection with the solicitation of the exercise of the Company’s publicly traded warrants; and

WHEREAS, as of January 7, 2005, the Company had outstanding 4,571,625 redeemable common share purchase warrants (the “Public Warrants”) issued pursuant to that Warrant Agreement by and between the Company and Registrar and Transfer Company dated January 7, 2005 (the “Warrant Agreement”); and

WHEREAS, each Public Warrant entitles the holder to purchase one share of the Company’s Common Shares for $3.00 per share; and

WHEREAS, the Company desires Broker to act on behalf of the Company, and Broker is willing to do so in connection with the exercise of the Public Warrants;

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto agree as follows:

1. Appointment of the Solicitation Agent. The Company hereby appoints Broker to act as a nonexclusive Solicitation Agent for the Company in connection with the exercise of the Public Warrants and Broker hereby accepts such appointment. The Broker shall, consistent with its obligations under applicable laws and the rules and regulations of the National Association of Securities Dealers (“NASD”), use its reasonable best efforts to maximize the number of Public Warrants which are exercised, including appropriate communications with the record owners and beneficial owners of the Public Warrants, as well as with said owners’ brokers, agents or other representatives.

2. Warrant Solicitation Fee.

(a) Amount of Solicitation Fee. The Company shall pay Broker a fee consisting of a cash payment equal to ten (10%) percent of the total proceeds received from the exercise of those Public Warrants for whom Broker was properly designated as the soliciting broker on the Exercise Form of the Warrant Certificate evidencing the Public Warrants exercised (the “Solicitation Fee”).

(b) Conditions to Payment of Solicitation Fee. The Company shall only be obligated to pay the Solicitation Fee to Broker if all of the following conditions are met: (i) the exercise of the Public Warrants are in accordance with the Warrant Agreement, (ii) the actions of Broker in soliciting the exercise of the Public Warrants have been consistent with applicable federal and state securities laws, the guidelines of the NASD and applicable SEC rules and regulations, including Regulation M; and (iii) disclosure of the Company’s compensation arrangement with Broker is made by the Broker in documents provided to the holders of the Public Warrants.

(c) Timing of Payment of Solicitation Fee. Within fifteen (15) days after the end of each month, the Company will deliver a notice to Broker setting forth the number of Public Warrant certificates which have been properly completed for exercise by holders of the Public Warrants for which Broker has solicited in accordance with this Agreement and the Warrant Agreement, together with payment of the Solicitation Fee with respect to the Public Warrants so exercised and any documentation requested by Broker.

(d) Entire Solicitation Fee. The amounts to be paid to Broker under Section 2(a) above represent the entire amount payable by the Company to Broker, its agents, brokers or representatives in connection with the services described under Section 1 of this Agreement and shall also include any amounts which are adjudicated to be owed to any third parties as a result of Broker’s commitments to such third parties.

(e) Broker shall be responsible for compliance with applicable state securities and “blue sky” laws in connection with the solicitation of the Public Warrants. Broker shall notify the Company of the states of residence of holders of the Public Warrants in which Broker intends to solicit the exercise of the Public Warrants.

3. Representations and Warranties of the Company. The Company represents and warrants as follows:

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding agreement and obligation of the Company, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting creditors’ rights generally, including, without limitation laws regarding fraudulent or preferential transfers, or by the principles governing the availability of equitable remedies.

(b) The Company’s Registration Statement (“Registration Statement”) on Form S-3 (File No. 333-120970), registering the sale of the Common Shares issuable upon exercise of the Public Warrants (the “Warrant Shares”), was declared effective by the Securities and Exchange Commission (the “Commission”) on [date]. The Commission has not issued any orders preventing or suspending the use of the Prospectus contained in the Registration Statement and the Prospectus (as modified or supplemented by information incorporated by reference into such Prospectus) as well as the Company’s other public filings (the “SEC filings”) conforms, and during the effectiveness of this Agreement will conform, in all material respects with the requirements of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and do not, and during the effectiveness of this Agreement will not, include any untrue statement of material fact or omit to state any 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.

(c) The Warrant Shares have been duly authorized, have been duly reserved for issuance and upon exercise of the Public Warrants and payment to the Company of the exercise price therefor, the Warrant Shares will be validly issued, fully paid and non-assessable.

(d) Neither the execution and delivery of this Agreement by the Company nor the consummation of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the Articles of Incorporation or Bylaws of the Company, each as

2

amended to date; (ii) require any consent, approval, authorization or permit from, or filing with or notification to, any United States or foreign governmental or regulatory authority or other third party, except for any such consents, approvals, authorizations, permits, filings or notifications, the absence of which would not have a material adverse effect on the Company or the Public Warrants; (iii) result in a breach of the terms, conditions or provisions of, constitute a default (or an event which, upon notice or lapse of time or both, would constitute a default) under or cause, permit or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any material agreement or other material instrument or obligation to which the Company is a party or by which the Company is bound; or (iv) conflict with or result in a violation of any provision of (A) any statute, rule, regulation or ordinance which conflict or violation might have a material adverse impact on the Company or the Public Warrants, or (B) any material order, writ, injunction, judgment, award, decree, permit or license applicable to the Company or any of the Company’s properties or assets.

4. Representations and Warranties of Broker. Broker represents and warrants as follows:

(a) Broker is a corporation or other entity duly organized, validly existing and in good standing under the laws of the state of its organization or incorporation and has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. All proceedings on the part of Broker necessary to authorize this Agreement and the transactions contemplated hereby have been duly and validly taken. This Agreement has been duly and validly authorized, executed and delivered by Broker, constitutes the legal, valid and binding agreement and obligation of Broker, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting creditors’ rights generally, including, without limitation laws regarding fraudulent or preferential transfers, or by the principles governing the availability of equitable remedies.

(b) Neither the execution and delivery of this Agreement by Broker nor the consummation of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the governing instruments of Broker, each as amended to date; (ii) require any consent, approval, authorization or permit from, or filing with or notification to, any United States or foreign governmental or regulatory authority or other third party, including the Securities and Exchange Commission, and the National Association of Securities Dealers by Broker; (iii) result in a breach of the terms, conditions or provisions of, constitute a default (or an event which, upon notice or lapse of time or both, would constitute a default) under or cause, permit or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any material agreement or other material instrument or obligation to which Broker is a party or by which Broker is bound; or (iv) conflict with or result in a violation of any provision of (A) any statute, rule, regulation or ordinance which conflict or violation might have a material adverse impact on Broker, including the Rules of the National Association of Securities Dealers and the Rules and Regulations of the Commission or (B) any material order, writ, injunction, judgment, award, decree, permit or license applicable to Broker or any of Broker’s properties or assets.

(c) Broker is familiar with the terms of the Warrant Agreement.

5. Indemnification.

(a) The Company agrees to indemnify and hold harmless Broker and each person who controls Broker within the meaning of Section 15 of the Securities Act from and against any

3

and all losses, claims, damages or liabilities, joint or several, to which such indemnified parties or any of them may become subject under the Securities Act, the Exchange Act, or the common law or otherwise, and the Company agrees to reimburse Broker and controlling person for any legal or other expenses incurred by the respective indemnified parties in connection with defending against such losses, claims or liabilities or in connection with any investigation or inquiry of, or other proceeding which may be brought against, the respective indemnified parties, in each case arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (including the Prospectus as part thereof) or any post-effective amendment thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the indemnity agreements of the Company contained in this paragraph (a) shall not apply to any such losses, claims, damages, liabilities or expenses if such statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of Broker.

(b) Broker agrees to indemnify and hold harmless the Company, each of its officers and directors, and each person who controls the Company within the meaning of Section 15 of the Securities Act, from and against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified parties or any of them may become subject under the Securities Act, the Exchange Act, or the common law or otherwise and to reimburse each of them for any legal or other expenses incurred by the respective indemnified parties in connection with defending against any such losses, claims, damages or liabilities or in connection with any investigation of inquiry of, or other proceeding which may be brought against, the respective indemnified parties, in each case arising out of or based upon any untrue statement or alleged untrue statement of a material fact or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made by or on behalf of Broker other than as provided in the Registration Statement and Prospectus.

(c) Each party indemnified under the provision of paragraphs (a) and (b) of this Section 5 agrees that, upon its receipt of written notification of the commencement of any investigation or inquiry of, or proceeding against, it in respect of which indemnity may be sought on account of any indemnity agreement contained in such paragraphs, it will promptly give written notice (the “Notice”) of such notification to the party or parties from whom indemnification may be sought hereunder. No indemnification provided for in such paragraphs shall be available to any party who shall fail so to give the Notice if the party to whom such Notice was not given was unaware of the action, suit, investigation, inquiry or proceeding to which the Notice would have related and was prejudiced by the failure to give the Notice. Any indemnifying party shall be entitled at its own expense to participate in the defense of any action, suit or proceeding against, or investigation or inquiry of, an indemnified party. Any indemnifying party shall be entitled, if it so elects within a reasonable amount of time after receipt of the Notice by giving written notice (herein called the Notice of Defense) to the indemnified party, to assume (alone or in conjunction with any other indemnifying party or parties) the entire defense of such action, suit, investigation, inquiry or proceeding, in which event such defense shall be conducted, at the expense of the indemnifying party or parties, by counsel chosen by such indemnifying party or parties reasonably satisfactory to the indemnified party or parties; provided, however, that (i) if the indemnified party or parties reasonably determine that there may be a conflict between the positions of the indemnifying party or parties and of the indemnified party or parties in conducting the defense of such action, suit, investigation, inquiry or proceeding or that there may be legal defenses available to such indemnified party or parties different from or in addition to those available to the indemnifying party or parties, then counsel for the indemnified party or

4

parties shall be entitled to conduct the defense to the extent reasonably determined by such counsel to be necessary to protect the interests of the indemnified party or parties and (ii) in any event, the indemnified party or parties shall be entitled to have counsel chosen by such indemnified party or parties participate in, but not conduct, the defense. If, within a reasonable time after receipt of the Notice, an indemnifying party gives a Notice of Defense and the counsel chosen by the indemnifying party or parties is reasonably satisfactory to the indemnified party or parties, the indemnifying party or parties will not be liable under paragraphs (a) and (b) of this Section 5 for any legal or other expenses subsequently incurred by the indemnified party or parties in connection with the defense of the action, suit, investigation, inquiry or proceeding, except that (A) the indemnifying party or parties shall bear the legal and other expenses incurred in connection with the conduct of the defense as referred to in clause (i) of the proviso to the preceding sentence and (B) the indemnifying party or parties shall bear such other expenses as it or they have authorized to be incurred by the indemnified party or parties. If, within a reasonable time after receipt of the Notice, no Notice of Defense has been given, the indemnifying party or parties shall be responsible for any legal or other expenses incurred by the indemnified party or parties in connection with the defense of the action, suit, investigation, inquiry or proceeding.

(d) No indemnifying party will, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not such indemnified party or any person who controls such indemnified party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is a party to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of such indemnified party and each controlling person from all liability arising out of such claim, action, suit or proceeding.

6. Termination. Notwithstanding anything in this Agreement to the contrary, this Agreement may be terminated by the Company at any time and for any reason effective the close of the Company’s next business day after delivery of written notice of termination to Broker in accordance with Section 7(e) herein. If this Agreement is terminated pursuant to this Section 6, this Agreement shall thereafter have no effect except for (i) the Company’s obligation to pay the Solicitation Fee for exercises of Public Warrants prior to the effectiveness of said termination and (ii) both parties’ indemnification obligations under Section 5 above, all of which shall survive the termination of this Agreement.

7. Miscellaneous.

(a) Survival of Representations and Warranties. The parties’ respective representations and warranties contained in this Agreement shall survive until three years after the termination of this Agreement at which time they shall expire and be deemed terminated and thereafter neither party may claim any damage for breach thereof.

(b) Amendment and Waiver. Any term or provision of this Agreement may be waived at any time by the party which is entitled to the benefits thereof, but only in a writing signed by such party, and this Agreement may be amended or supplemented at any time, but only by written agreement of the Company and Broker. Any such waiver with respect to a failure to observe any such provision shall not operate as a waiver of any subsequent failure to observe such provision unless otherwise expressly provided in such waiver.

(c) Expenses. Except as otherwise provided in this Agreement, the Company and Broker shall pay their respective fees, commissions, costs, and other expenses, separately

5

incurred in connection with the preparation and execution of this Agreement and the consummation of the transactions contemplated hereby.

(d) Entire Agreement. This Agreement contains the entire agreement between the Company and Broker with respect to the solicitation of the exercise of the Public Warrants and the related transactions and supersedes all prior arrangements or understandings with respect thereto.

(e) Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein shall be validly given, made or served, if in writing and delivered personally or sent by fax (except for legal process) or certified mail, postage prepaid, to:

	Company:
	Action Products International, Inc.
	1101 No. Keller Rd., Suite E
	Orlando, FL 32810
	Attn: Robert L. Burrows, Chief Financial Officer
	Fax No: (419) 781-3805
	With copies to:
	Tarter Krinsky & Drogin LLP
	470 Park Avenue South, 14th Floor
	New York, NY 10016
	Attn: James G. Smith, Esq.
	Fax No: (212) 481-9062
Broker:	Brookstreet Securities Corporation
	2361 Campus Drive, Suite 210
	Irvine, CA 92612
	Attn: Kathleen McPherson
	Fax No: (949) 852-6826

or to such other address or fax number as any party hereto may, from time to time, designate in a written notice given in a like manner. Notice given by fax shall be deemed delivered on the day the sender receives confirmation that such notice was received at the fax number of the addressee, provided that if the faxed notice is transmitted by the sender after 5:00 p.m. (Eastern time), it shall be deemed to have been delivered the following day. Notice given by mail as set out above shall be deemed delivered three calendar days after the date the same is postmarked.

(f) Assignment. Except as provided in the following sentence, this Agreement may not be assigned, by operation of law or otherwise, and any attempt to do so shall be void. This Agreement shall be binding upon and inure to the benefit of successors and assigns of the parties hereto.

(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflicts of laws.

(h) Arbitration. The parties agree that any controversy, claim or dispute arising out of or relating to this Agreement shall be settled by arbitration before a single arbitrator to be in the City of New York, State of New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. Judgment may be entered on the

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Arbitrator’s award in any court having jurisdiction, and the parties consent to the jurisdiction of the courts of New York for this purpose.

(i) Construction of Agreement. Each of the parties hereto acknowledges and agrees that no provision in this Agreement is to be interpreted for or against any party because that party or that party’s legal representative drafted the provision.

(j) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

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

ACTION PRODUCTS INTERNATIONAL, INC.
By:	/s/ ROBERT L. BURROWS
Name:	Robert L. Burrows
Title:	CFO

Brookstreet Securities Corporation
By:	/s/ STANLEY C. BROOKS
Name:	Stanley C. Brooks
Title:	President

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the reference to our firm under the caption “Experts” in the Registration Statement, Pre-Effective Amendment Number Two, of Action Products International, Inc., on Form S-3, for the registration of 5,000,000 of its common shares and to the incorporation by reference therein, and in the related prospectus, of our report dated January 26, 2004, with respect to the consolidated financial statements of Action Products International, Inc. and subsidiary included in its Annual Report on Form 10-KSB for the year ended December 31, 2003, filed with the Securities and Exchange Commission.

/s/ MOORE STEPHENS LOVELACE, P.A.

Moore Stephens Lovelace, P.A.

Certified Public Accountants

Orlando, Florida

February 2, 2005