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EXHIBIT 10.1 - WARRANT AGREEMENT

                                WARRANT AGREEMENT

         AGREEMENT,  dated  this  12th day of June  2003 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 stock,  $0.001
par value (the "Common Stock"), on the record date of June 12, 2003 (the "Record
Date"),  will receive one (1) warrant (a  "Warrant")  to purchase an  additional
share of the Company's  Common Stock for each one (1) share of Common Stock 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 the date hereof (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 $2.00 per share of Common Stock,  if
the  Exercise  Date is after the  Effective  Date but on or before June 11, 2004
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
June 11, 2004.

               "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.


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               "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) share of
Common Stock 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 Stock  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 Common Stock  certificate  or  certificates  for the shares of Common
Stock  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 Stock 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 Securities Act of 1933, as amended (the "Act")
covering the offer and sale of the shares of Common Stock issuable upon exercise
of such Warrant and such offer and sale of the 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 Securities Act,
as amended, 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 Stock,  solely for the purpose of
issuance  upon  exercise of  warrants,  such number of shares of Common Stock as
shall then be  issuable  upon the  exercise  of all  outstanding  Warrants.  The
Company  covenants  that all shares of Common Stock 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 shares of Common  Stock upon
exercise of the Warrants;  provided, however, that if shares of Common Stock 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) pay a dividend  in, or make a
distribution of, shares of capital stock on its outstanding  Common Stock,  (ii)
subdivide its  outstanding  shares of Common Stock into a greater number of such
shares or (iii)  combine its  outstanding  shares of Common Stock into a smaller
number of such shares,  the total  number of shares of Common Stock  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 stock
dividend or  distribution,  become effective as of the record date therefor and,
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)   In   the   event   of  a   capital   reorganization   or  a
reclassification  of the Common Stock (except as provided in subsection a. above
or subsection b. below), any Registered Holder, upon exercise of Warrants, shall
be entitled to receive, in substitution for the Common Stock to which they would
have become entitled upon exercise  immediately prior to such  reorganization or
reclassification,  the shares (of any class or classes) or other  securities  or
property of the Company (or cash) that he would have been entitled to receive at
the same aggregate Exercise Price upon such  reorganization or  reclassification
if such Warrants had been  exercised  immediately  prior to the record date with
respect  to  such  event;  and in  any  such  case,  appropriate  provision  (as
determined by the Board of Directors of the Company,  whose  determination shall
be conclusive and shall be evidenced by a certified Board  resolution filed with
the Warrant  Agent) shall be made for the  application of this  subsection  with
respect  to the  rights  and  interests  thereafter  of the  Registered  Holders
(including  but not limited to the  allocation of the Exercise  Price between or
among  shares of  classes  of capital  stock),  to the end that this  subsection
(including  the  adjustments  of the  number of shares of Common  Stock or other
securities  purchasable  and the Exercise  Price  thereof)  shall  thereafter be
reflected, as nearly as reasonably  practicable,  in all subsequent exercises of
the Warrants for any shares or securities or other property (or cash) thereafter
deliverable upon the exercise of the Warrants.



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               (c)  Whenever  the  number of  shares  of  Common  Stock 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.

               (d) 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  Stock),  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  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 shares
of Common Stock 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 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.

               (e)  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.

               (f)  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.

               (g) For the purpose of this  Section 8, the term  "Common  Stock"
shall mean (i) the Common Stock or (ii) any other class of stock  resulting from
successive changes or reclassifications of



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such Common Stock  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  other than shares of Common  Stock,
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  Stock  contained  in this  Section,  and all  other  provisions  of this
Agreement,  with respect to the Common  Stock,  shall apply on like terms to any
such other shares.

               (h)  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
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.

               (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 (21st)
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  except as to a
Registered  Holder (i) to whom  notice  was not mailed or (ii) whose  notice was
defective.  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.



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<PAGE>

               (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.

               (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 Chairman of the Board of Directors,  Vice-Chairman  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.



                                       8
<PAGE>

                  (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  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.

         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 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:



                                       9
<PAGE>

         Action Products International, Inc.
         390 North Orange Avenue, Suite 2185
         Orlando, Florida 32801
         Attn: Ronald S. Kaplan

         With a copy to:

         Raice Paykin & Krieg, LLP
         185 Madison Avenue, 10th Floor
         New York, New York 10016
         Attn: James G. Smith, Esq.

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 Orange,  State of Florida,  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 8 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]



                                       10
<PAGE>




         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
                                           -----------------------------------
                                           Name: William P. Tatler
                                           Title: Vice President



                                       11
<PAGE>




EXHIBIT A


No. _______                                 VOID AFTER 5:00 P M on June 11, 2004


_________ WARRANTS


                        REDEEMABLE WARRANT CERTIFICATE TO
                         PURCHASE SHARES OF COMMON STOCK

                       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  share of Common  Stock,  $0.001 par  value,  of Action
Products International, Inc., a Florida corporation (the "Company"), at any time
from June 12, 2003 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 below),
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 June 12, 2003,
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 shares of Common Stock 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 June
11,  2004.  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.



                                       12
<PAGE>

         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,  at any time commencing after June 12, 2003. Notice of redemption shall
be given not later  than the  twenty-first  (21st) 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



                                       13
<PAGE>


                                  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



                                       14
<PAGE>

                                 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.



                                       15
<PAGE>