Document:

Employment Agreement of Neil Swartz

 Exhibit 10.2 
 EMPLOYMENT AGREEMENT 
 EMPLOYMENT
AGREEMENT made effective as of the 25TH day of August, 2008 by and between ACTION PRODUCTS
INTERNATIONAL, INC., a Florida corporation, (the “Company”) and NEIL SWARTZ (the “Executive”). 
 WHEREAS, the Company wishes to employ the Executive and the Executive wishes to accept such employment, upon the terms and conditions hereinafter
set forth. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and intending to be
legally bound hereby, the Company and the Executive hereby agree as follows: 
 1. Employment. The Company agrees to employ the
Executive during the Term specified in Section 2, and the Executive agrees to accept such employment, upon the terms and conditions hereinafter set forth. 
 2. Term. Subject to the provisions contained in Sections 6 and 7, the Executive’s employment by the Company shall be for a term commencing on September 2, 2008 through December 31, 2009
(the “Initial Term”), and shall automatically renew for successive one (1) year terms thereafter (each a “Renewal Term”, and together with the Initial Term, the “Term”) unless either party
delivers written notice of termination (a “Notice of Termination”) to the other at least 120 days prior to the end of the Initial Term or any Renewal Term, as the case may be. The date on which the Executive ceases to be employed by
the Company, regardless of the reason therefore, is referred to in this Agreement as the “Date of Termination”. 
 3.
Duties and Responsibilities. 
 (a) During the Term, the Executive shall have the position of Chief Executive Officer and shall
report to the Board of Directors of the Company (the “Board”). 
 (b) The Executive shall perform such executive and
managerial duties and responsibilities customary to his position and as are reasonably necessary to the operations of the Company as may be assigned to him from time to time by or under authority of the Board, consistent with his position as
designated in or pursuant to Section 3(a). 
 (c) The Executive’s employment by the Company shall be full-time, and, during the
Term, the Executive agrees that he will (i) devote substantially all of his business time and attention, his best efforts, and all his skill and ability to promote the interests of the Company, (ii) carry out his duties in a competent and
professional manner and serve the Company faithfully and diligently under the direction of the Board, and (iii) work with other employees of the Company and its subsidiaries and affiliates in a competent and professional manner; provided,
however, that the Executive may pursue other business and personal activities not otherwise in material breach of the provisions herein and that do not materially interfere with the performance of his duties under this Agreement. 

 (d) During the Term, the Executive’s services hereunder shall be performed at the offices of the
Company located in the City of Orlando, State of Florida, which such offices shall not be relocated outside of the City of Orlando, State of Florida. The Executive’s duties shall include such travel as is necessary and consistent with his
position and duties hereunder. 
 (e) Simultaneous with the execution and delivery by the Executive of this Agreement the Executive shall
also execute and deliver the Company’s Proprietary Information and Inventions Agreement (the “Proprietary Information and Inventions Agreement”). 
 4. Compensation. 
 (a) As compensation for his services hereunder, and in consideration of his
covenants set forth in Section 8 below, the Company shall pay the Executive during the Term, in accordance with its normal payroll practices, an annualized base salary (“Base Salary”) of One Hundred Sixty Thousand Dollars
($160,000.00). The Base Salary may be increased upon the determination by the Compensation Committee of the Board, or if no such Committee exists, the Board. 
 (b) The Base Salary may also be increased prospectively up to a maximum of Two Hundred Fifty Thousand Dollars ($250,000.00) as follows: 
 (i) The Base Salary shall be increased by Thirty Thousand Dollars ($30,000) if the Company achieves net cash inflow of at least $750,000 per quarter (as set forth in the Company’s Form 10-Q or Form 10-K to be
filed with the Securities and Exchange Commission) for two consecutive quarters commencing with the quarter ending December 31, 2008. 
 (ii) The Base Salary shall be increased by Thirty Thousand Dollars ($30,000) if the Company achieves actual or pro forma annual revenue of at least $12,000,000 (such pro forma revenue as set forth in the Company’s Form 8-K (or similar)
filing with the Securities and Exchange Commission as a result of a material acquisition by the Company) commencing on the date hereof. 
 (iii) The Base Salary shall be increased by Thirty Thousand Dollars ($30,000) if the Company achieves actual or pro forma annual net profits of at least $500,000 (such pro forma profits as set forth in the Company’s Form 8-K (or
similar) filing with the Securities and Exchange Commission as a result of a material acquisition by the Company) commencing on the date hereof. 
 (c) In further consideration of the Executive’s services to the Company, the Compensation Committee of the Board, or if no such Committee exists, the Board may authorize the Company pay the Executive bonuses, whether in cash or equity,
at the sole and absolute discretion of the Compensation Committee or the Board. 
 (d) The Base Salary shall be accrued but not paid to the
Executive, unless and 

  

 2 

 
until the Company receives $1,000,000 cash inflow from any combination of (i) the sale of equity or equity derivative securities and (ii) net cash
flow from operations. The Company’s obligation to pay any Base Salary not paid in accordance with the foregoing sentence shall expire upon termination of Executive’s employment. 
 5. Expenses; Fringe Benefits. 
 (a) The Company agrees to pay or to reimburse the Executive for all reasonable, ordinary, necessary and documented business or entertainment expenses incurred during the Term in the performance of his services hereunder in accordance with
the policy of the Company as from time to time in effect. The Executive, as a condition precedent to obtaining such payment or reimbursement, shall provide to the Company any and all statements, bills or receipts evidencing the travel or
out-of-pocket expenses for which the Executive seeks payment or reimbursement, and any other information or materials, as the Company may from time to time reasonably require. 
 (b) During the Term, the Executive and his spouse and dependents shall be eligible to participate in and receive all benefits under any welfare benefit
plans and programs (including without limitation, medical, disability and group life insurance) provided by the Company to its employees generally, subject, however, to the generally applicable eligibility and other provisions of the various plans
and programs in effect from time to time; provided, however, that medical and dental benefits will be provided at no cost to the Executive. 
 (c) During the Term, the Executive shall be entitled to participate in all retirement plans and programs provided by the Company to its employees generally, subject, however, to the generally applicable eligibility and other provisions of
the various plans and programs in effect from time to time. The Executive shall be allowed to participate in the Company’s 401(k) plan as of the earliest date permitted by the plan, but in no event later than ninety (90) days after the
date hereof. 
 (d) The Executive shall be entitled to four weeks paid vacation annually to be taken at such times as shall not, in the
reasonable judgment of the Board, materially interfere with the Executive’s fulfillment of his duties hereunder. In addition, the Executive shall be entitled to as many paid holidays, sick days and personal days as are in accordance with the
Company’s policy then in effect generally for its employees, and shall be entitled to paid time-off for religious observances. 
 6.
Termination. 
 (a) The Company, by direction of the Board, shall be entitled to terminate the Executive’s employment and to
discharge the Executive with or without “cause,” in either case effective immediately upon the giving of written notice of such termination. The term “cause” shall be limited to the following grounds: 
 (i) the Executive’s willful failure to (A) materially perform his duties and responsibilities as set forth in Section 3 hereof or
(B) abide in all material respects by the reasonable directives of the Board in accordance with Section 3, in each case if such failure or refusal is not cured (if curable) within thirty (30) days after written notice thereof to the
Executive by the Board; 
  

 3 

 (ii) the Executive’s willful misappropriation of material funds or property of the Company;

 (iii) the conviction of the Executive in a court of law of, or entering by the Executive to a plea of guilty or no contest to, any felony
or any crime involving moral turpitude, dishonesty or theft; or 
 (iv) any breach by the Executive of the Proprietary Information and
Inventions Agreement if such failure or refusal is not cured (if curable) within thirty (30) days after written notice thereof to the Executive by the Board. 
 Any notice required to be given by the Board pursuant to clause (i) or clause (iv) above shall specify the nature of the claimed breach and the manner in which the Company requires such breach to be cured (if curable). In the
event that the Executive is purportedly terminated for cause and the arbitrator appointed pursuant to Section 14 determines that “cause” as defined herein was not present, then such purported termination for cause shall be deemed a
termination “without cause” pursuant to Section 6(c) and the Executive’s rights and remedies will be governed by Section 6(c), in full satisfaction and in lieu of any and all other or further remedies the Executive may have.
For purposes of this Agreement, “willful” shall mean done, or omitted to be done, by the Executive, not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. 
 (b) In the event of the termination of the employment of the Executive by the Board for “cause”, the Executive shall be entitled to the
following payments and benefits: (i) unpaid salary and accrued vacation compensation through, and any unpaid reimbursable expenses outstanding as of, the Date of Termination; and (ii) all benefits, if any, that had accrued to the Executive
through the Date of Termination under the plans and programs described in Sections 5(b) and (c) above. 
 (c) In the event of a
termination of the employment of the Executive by the Board “without cause” or the Company delivers a Notice of Termination under Section 2, the Executive shall be entitled to the following payments and benefits: 
 (i) as severance, an amount equal to one hundred fifty percent (150%) of his annual Base Salary in effect as of the Date of Termination (any
employment or consulting income earned by the Executive during such period shall not reduce the Company’s obligations under this clause (i)); provided, however, that no severance shall be due under this Section 6(c)(i) if termination is on
or before the end of the Initial Term; 
 (ii) unpaid salary and accrued vacation compensation through the Date of Termination; 

(iii) any unpaid reimbursable expenses outstanding as of the Date of Termination; 
  

 4 

 (iv) all benefits, if any, that had accrued to the Executive through the Date of Termination under the
plans and programs described in Sections 5(b) and (c) above; and 
 (v) coverage under the “employee welfare benefit plans”
(as defined in Section 3(l) of ERISA) provided by the Company to comparable executives. In lieu of such coverage, the Company may reimburse the Employee on a net after-tax basis, for the cost of individual insurance coverage for the Executive
and the Executive’s dependents under a policy or policies that provide benefits not less favorable than the benefits provided under such employee welfare benefit plans through the date one (1) year after the Date of Termination, or the
Executive securing coverage of similar benefits by another employer or other source. 
 (d) The Executive shall have the right to terminate
this Agreement and his employment hereunder for “good reason”, if (i) the Executive shall have given the Company prior written notice of the reason therefor and (ii) a period of ten (10) business days following receipt by
the Company of such notice shall have lapsed and the matters which constitute or give rise to such “good reason” shall not have been cured or eliminated by the Company. In the event the Company shall not take such action within such
period, the Executive may send another notice to the Company electing to terminate his employment hereunder and, in such event, the Executive’s employment hereunder shall terminate and the effective date of such termination shall be the third
business day after the Company shall have received such notice. In the event of such termination, the Executive shall be entitled to receive the same payments and benefits as would be provided under Section 6(c) in the event of termination
without cause; provided, however, that no severance shall be due under this Section 6(d) if termination is on or before the end of the Initial Term. For the purpose of this Agreement, the term “good reason” shall only mean the
occurrence of any of the following without the Executive’s prior written consent: 
 (i) a material change by the Company in the nature
of Executive’s title, duties, authority and responsibilities set forth in this Agreement; provided, however, that a change in the Executive’s title shall not constitute good reason provided such change does not (A) materially
reduce the Executive’s authority or (B) require the Executive to report to anyone other than the Board; 
 (ii) a reduction in the
nature of the Executive’s compensation as established under this Agreement; 
 (iii) a material breach by the Company of any of its
obligations under this Agreement; 
 (iv) a requirement that the Executive engage in any act or requirement that the Executive not act which
is illegal or which would reasonably likely be materially damaging or detrimental to the Executive’s reputation; or 
 (v) a
“Change of Control”, as defined in Section 6(f) hereof, as a result of 

  

 5 

 
which the Executive is not offered the same or comparable position in the surviving company on substantially the same terms as in this Agreement, or is
offered such position but within twenty-four (24) months after the Executive accepts such position, the Executive’s employment is terminated either without cause or for good reason described in subsections (i), (ii) or (iv) of
this Section 6(d) or in subsection (iii) as to the employment agreement then applicable to the Executive. 
 (e) The Executive
shall be entitled to terminate this Agreement and his employment hereunder without good reason by giving the Company prior written notice to that effect. The termination of employment shall be effective on the date specified in such notice, or
earlier, at the determination of the Company, in which event such termination shall remain classified as a termination by the Executive without good reason. In the event that the Executive terminates this Agreement without good reason or delivers a
Notice of Termination under Section 2, the Executive shall be entitled to receive the same payments and benefits as would be provided under Section 6(b). 
 (f) The term “Change of Control” shall mean (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, (A) becomes the “beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (x) the outstanding shares of common stock of the Company or (y) the combined voting power of the Company’s
then-outstanding securities, and (B) became the beneficial owner of such securities other than with the affirmative vote by at least a majority of the Incumbent Directors, or (ii) the Company is party to a merger or consolidation, or
series of related merger or consolidation transactions, which results in the voting securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting
securities of the surviving or another entity) at least fifty (50%) percent of the combined voting power of the voting securities of the Company or such surviving or other entity outstanding immediately after such merger or consolidation, or
(iii) the sale or disposition of all or substantially all of the Company’s assets (or consummation of any transaction, or series of related transactions, having similar effect), or (iv) there occurs a change in the composition of the
Board within a two-year period, as a result of which fewer than a majority of the directors are “Incumbent Directors” as defined below, or (v) the dissolution or liquidation of the Company, or (vi) any transaction or series of
related transactions that has the substantial effect of any one or more of the foregoing. “Incumbent Directors” will mean directors who either (1) are directors of the Company as of the date hereof, or (2) are elected, or
nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the Board). 
 (g) In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Executive (i) constitute “parachute payments” within the meaning of Section 280G (as such section may be amended or replaced) of the Internal Revenue Code
of 1986, as amended or replaced (the “Code”) and (ii) but for this Section 6(g), would be subject to the excise tax imposed by Section 4999 (as such section may be amended or replaced) of 

  

 6 

 
the Code (the “Excise Tax”), then the Executive’s benefits hereunder shall be either (i) provided to the Executive in full, or
(ii) provided to the Executive only as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable Federal, state and local
income taxes and the Excise Tax, results in the receipt by the Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax. Unless the Company and
the Executive otherwise agree in writing, any determination required under this Section 6(g) shall be made in writing in good faith by the Company’s independent public accountants (the “Accountants”). In the event of a
reduction in benefits hereunder, the Executive shall be given the choice of which benefits to reduce. For purposes of making the calculations required by this Section 6(g), the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code. The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section 6(g). The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6(g). 
 7. Disability; Death. 
 (a) In
the event the Executive shall be unable to perform his duties hereunder by virtue of illness or physical or mental incapacity or disability (from any cause or causes whatsoever) in substantially the manner and to the extent required hereunder prior
to the commencement of such disability (all such causes being herein referred to as “disability”) and the Executive shall fail to perform such duties for periods aggregating sixty (60) days, whether or not continuous, in any
continuous period of one hundred eighty (180) days, the Company shall have the right to terminate the Executive’s employment hereunder upon prior written notice to him. In the event of the Executive’s death, the Date of Termination
shall be the date of the Executive’s death. In the event the Company terminates the Executive pursuant to this Section 7, the Executive, or in the case of his death, his heirs, beneficiaries or estate, shall be entitled to receive the
entitlements set forth in Section 6(b) of this Agreement. 
 (b) In addition, in the event the Company terminates the Executive pursuant
to this Section 7 for disability, and the Executive elects to continue coverage under COBRA for the applicable statutory period under the employee healthcare benefit plan in which he participated in accordance with the terms thereof, then the
Company shall pay the same portion of the premium it would have paid had the Executive remained an employee, continuing for the period ending on the earlier of (i) the termination of the applicable statutory period, or (ii) the
first anniversary of the Date of Termination. In the event of the Executive’s death, if the Executive’s family members covered by the employee healthcare benefit plan on which the Executive participated elect to continue coverage under
COBRA for the applicable statutory period under such plan in accordance with the terms thereof, then the Company shall pay the same portion of the premium it would have paid had the Executive remained an employee, continuing for the period ending on
the earlier of (x) the termination of the applicable statutory period, or (y) one year from the Date of Termination. 
  

 7 

 8. Assignment. Subject to Section 6(d), the Company and the Executive agree that the
Company shall have the right to assign this Agreement, and, accordingly, this Agreement shall inure to the benefit of, and may be enforced by, any and all successors and assigns of the Company, including, without limitation, by asset assignment,
stock sale, merger, consolidation or other corporate reorganization; provided, however, that any assignment by the Company shall not relieve the Company of any of its obligations to the Executive under this Agreement. The Company and the
Executive agree that the Executive’s rights and obligations under this Agreement are personal to the Executive, and the Executive shall not have the right to assign or otherwise transfer his rights or obligations under this Agreement, and any
purported assignment or transfer shall be void and ineffective. The rights and obligations of the Company hereunder shall be binding upon and run in favor of the successors and assigns of the Company. 
 9. Modification. This Agreement may not be orally canceled, changed, modified or amended, and no cancellation, change, modification or
amendment shall be effective or binding, unless in writing and signed by the parties to this Agreement, and approved by the Board. 
 10.
Severability; Survival. In the event any provision or portion of this Agreement is determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall nevertheless be binding
upon the parties with the same effect as though the invalid or unenforceable part had been severed and deleted or reformed to be enforceable. The respective rights and obligations of the parties hereunder shall survive the termination of the
Executive’s employment to the extent necessary to the intended preservation of such rights and obligations. 
 11. Notice.
Any notice, request, instruction or other document to be given hereunder by any party hereto to another party shall be in writing and shall be deemed effective (a) upon personal delivery, if delivered by hand, or (b) three days after the
date of deposit in the mails, postage prepaid if mailed by certified or registered mail, or (c) on the next business day, if sent by prepaid overnight courier service, and in each case, addressed as follows: 
  

							
		 	If to the Executive:	 	If to the Company:	 	
		 	Neil Swartz	 	Action Products International, Inc.
		 	16699 Collins Avenue, #3204	 	Attention: Robert L. Burrows	 	
		 	Sunny Isles Beach, FL 33160	 	1101 N. Keller Rd., Suite E	 	
		 		 	Orlando, Florida 32810	 	

 Any party may change the address to which notices are to be sent by giving notice of such change of address to the
other party in the manner herein provided for giving notice. 
 12. Applicable Law. This Agreement shall be governed by,
enforced under, and construed in accordance with the laws of the State of Florida without application of conflict of law provisions applicable therein. 
 13. Entire Agreement. This Agreement represents the entire agreement between the Company and the Executive with respect to the employment of the Executive by the Company, and all prior agreements, plans
and arrangements relating to the employment of the Executive by the Company are nullified and superseded hereby. 
  

 8 

 14. Arbitration. 
 (a) The parties hereto agree that any dispute, controversy or claim arising out of, relating to, or in connection with this Agreement (including, without
limitation, any claim regarding or related to the interpretation, scope, effect, enforcement, termination, extension, breach, legality, remedies and other aspects of this Agreement or the conduct and communications of the parties regarding this
Agreement and the subject matter of this Agreement) shall be settled by arbitration at the offices of the American Arbitration Association or a successor organization for binding arbitration in City of Orlando, State of Florida by a single
arbitrator. The arbitrator may grant injunctions or other relief in such dispute or controversy. All awards of the arbitrator shall be binding and non-appealable. Judgment upon the award of the arbitrator may be entered in any court having
jurisdiction. The arbitrator shall apply Florida law to the merits of any dispute or claims, without reference to the rules of conflicts of law applicable therein. Suits to compel or enjoin arbitration or to determine the applicability or legality
of arbitration shall be brought in the United States District Court, in the City of Orlando, State of Florida, or if that court lacks jurisdiction, in a state court located within the geographic boundaries thereof. Notwithstanding the foregoing, no
party to this Agreement shall be precluded from applying to a proper court for injunctive relief by reason of the prior or subsequent commencement of an arbitration proceeding as herein provided. 
 (b) The Executive has read and understands this Section 14 which discusses arbitration. The Executive understands that by signing this Agreement,
the Executive agrees to submit any claims arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach or termination thereof, or his employment or the termination thereof, to
binding arbitration, and that this arbitration provision constitutes a waiver of the Executive’s right to a jury trial and relates to the resolution of all disputes relating to all aspects of the employer/employee relationship. 

15. Headings. The headings contained in this Agreement are for reference purposes only, and shall not affect the meaning or
interpretation of this Agreement. 
 16. Withholdings. The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 
 17. No Strict
Construction. The language used in this Agreement will be deemed to be the language chosen by the Company and the Executive to express their mutual intent, and no rule of law or contract interpretation that provides that in the case of
ambiguity or uncertainty a provision should be construed against the draftsman will be applied against any party hereto. 
 [remainder of
page intentionally left blank] 
  

 9 

 IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year
first above written. 
  

			
	 /s/ NEIL SWARTZ

	Neil Swartz
	
	ACTION PRODUCTS INTERNATIONAL, INC.
		
	By:	 	 /s/ RONALD S. KAPLAN

		 	Ronald S. Kaplan
		 	President

  

 10Securities Purchase Agreement

 Exhibit 10.3 
 EXECUTION 
  
  
 SECURITIES PURCHASE AGREEMENT 
 - BY
AND AMONG - 
 ACTION PRODUCTS INTERNATIONAL, INC. 
 (the “Company”) 
 AND 
 THE PERSONS LISTED AS INVESTORS IN EXHIBIT 2.1 
 (the “Investors”) 
 AUGUST 25, 2008 
  
  

 TABLE OF CONTENTS 
  

					
	 	    	 	  	Page
	 Article I Defined Terms
	  	1
	   1.1
	    	 Definitions
	  	1
	   1.2
	    	 Interpretation
	  	2
		
	 Article II Purchase and Sale Terms
	  	2
	   2.1
	    	 Purchase and Sale
	  	2
	   2.2
	    	 Payment
	  	3
	   2.3
	    	 Transfer Legends and Restrictions
	  	3
		
	 Article III Representations and Warranties of the Company
	  	3
	   3.1
	    	 SEC Documents; Financial Statements
	  	3
	   3.2
	    	 Misstatements and Omissions
	  	3
	   3.3
	    	 Organization and Authority
	  	4
		
	 Article IV Covenants of the Company
	  	4
	   4.1
	    	 Listing of Common Stock
	  	4
	   4.2
	    	 Exchange Act Registration
	  	4
	   4.3
	    	 Further Assurances
	  	4
	   4.4
	    	 Regulation D Filings
	  	4
	   4.5
	    	 Waiver
	  	4
	   4.6
	    	 Termination of Covenants
	  	4
		
	 Article V Representations and Warranties of the Investors
	  	5
	   5.1
	    	 Power and Authority
	  	5
	   5.2
	    	 Purchase for Investment
	  	5
	   5.3
	    	 Financial Matters
	  	5
	   5.4
	    	 Investigation
	  	5
	   5.5
	    	 Brokers
	  	5
	   5.6
	    	 Organization and Authorization
	  	6
	   5.7
	    	 Evaluation of Risks
	  	6
		
	 Article VI Covenants of Each Investor
	  	6
	   6.1
	    	 Regulation FD Confidentiality
	  	6
	   6.2
	    	 No Legal Advice from the Company
	  	6
	   6.3
	    	 Investment Purpose
	  	6
		
	 Article VII The Closing and Closing Conditions
	  	7
	   7.1
	    	 The Closing
	  	7
	   7.2
	    	 Closing Conditions
	  	7
		
	 Article VIII Termination
	  	8
	   8.1
	    	 Termination
	  	8
	   8.2
	    	 Effect of Termination
	  	8
		
	 Article IX Choice of Law; Venue
	  	8
	   9.1
	    	 Governing Law
	  	8
	   9.2
	    	 Venue of Disputes
	  	8
	   9.3
	    	 Waiver of Jury Trial
	  	9

  

 i 

					
	 Article X Miscellaneous
	  	9
	 10.1
	    	 Expenses
	  	9
	 10.2
	    	 Remedies Cumulative
	  	9
	 10.3
	    	 Brokerage
	  	9
	 10.4
	    	 Severability
	  	9
	 10.5
	    	 Parties in Interest
	  	9
	 10.6
	    	 Notices
	  	9
	 10.7
	    	 No Waiver
	  	10
	 10.8
	    	 Amendments and Waivers
	  	10
	 10.9
	    	 Rights of Investors
	  	10
	 10.10
	    	 Survival of Agreements
	  	10
	 10.11
	    	 Entire Understanding
	  	10
	 10.12
	    	 Assignment; No Third-Party Beneficiaries
	  	10
	 10.13
	    	 Time of Essences
	  	11
	 10.14
	    	 Counterparts; Signatures by Facsimile
	  	11

  

 ii 

 THIS SECURITIES PURCHASE AGREEMENT is dated August 25, 2008, by and among ACTION PRODUCTS
INTERNATIONAL, INC., a Florida corporation, (the “Company”) and each of the persons listed in Exhibit 2.1 (each and “Investor” and collectively the
“Investors”). 
 WHEREAS, the Company wishes to obtain equity financing and the Investors are
willing to purchase, and the Company is willing to sell on the terms contained in this Agreement, Series A Preferred Stock of the Company having the characteristics set forth in the Articles of Amendment attached as Exhibit 1.1. 
 NOW THEREFORE, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINED TERMS 
 1.1 Definitions. The following terms, when used in this Agreement, have the following meanings, unless the context otherwise indicates:

 “1933 Act” means the Securities Act of 1933, as amended. 
 “1934 Act” means the Securities Exchange Act of 1934, as amended. 
 “Affiliate” means, with respect to any specified Person, (a) any other Person who, directly or indirectly, owns or controls,
is under common ownership or control with, or is owned or controlled by, such specified Person, (b) any other Person who is a director, officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of
equity securities, of the specified Person or a Person described in clause (a) of this paragraph, (c) another Person of whom the specified Person is a director, officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, (d) another Person in whom the specified Person has a substantial beneficial interest or as to whom the specified Person serves as trustee or in a similar capacity, or (e) any relative or
spouse of the specified Person or any of the foregoing Persons, any relative of such spouse or any spouse of any such relative. 
 “Articles of Amendment” means the Articles of Amendment amending the Company’s Articles of Incorporation establishing the rights, privileges and preferences of the Series A Preferred Stock attached hereto as
Exhibit 1.1. 
 “Articles of Incorporation” means the articles of incorporation of Action Products International,
Inc., as originally filed with the Florida Secretary of State together with all amendments thereto. 
 “Bylaws” means
the bylaws of Action Products International, Inc., as amended. 
 “Closing” and “Closing
Date” mean the consummation of the Company’s sale and the Investors’ purchase of the Series A Preferred Stock, and the date on which the same occurs or occurred. 

 “Common Stock” means the $0.001 par value common stock of the Company.

 “Knowledge” shall mean and include (a) actual knowledge of the Person, including, the actual knowledge of any
of the officers or directors of the Company and the administrators of any of the facilities operated by the Company or any of its subsidiaries and (b) that knowledge which a prudent businessperson could have obtained in the management of his
business after making due inquiry, and after exercising due diligence, with respect thereto. 
 “Material Adverse
Effect” means, with respect to any Person, a material adverse effect on the (a) business, assets, liabilities, financial condition or results of operations of such Person and its Subsidiaries, taken as a whole, (b) ability of
such Person to conduct business in the manner in which such Person currently conducts business, and (c) the ability of such Person to consummate the transactions contemplated hereby. 
 “Person” means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental entity or other entity or organization. 
 “Required
Majority” means the Investors holding (or, if prior to the Closing, purchasing under this Agreement) 51% or more of the Series A Preferred Stock. 
 “SEC” means the United States Securities and Exchange Commission. 
 “Series A Preferred Stock” means the $0.001 par value convertible preferred stock, Series A of Action Products International, Inc. having the characteristics set forth in the Articles of Amendment. 
 “Subsidiary” or “Subsidiaries” of any Person means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries
of such Person. 
 Additional defined terms are found in the body of this Agreement. 
 1.2 Interpretation. The masculine form of words includes the feminine and the neuter and vice versa, and, unless the context otherwise
requires, the singular form of words includes the plural and vice versa. The words “herein,” “hereof,” “hereunder,” and other words of similar import when used in this Agreement refer to this Agreement as a whole, and
not to any particular section or subsection. Exhibits are incorporated by reference into this Agreement as though such exhibits were set forth at the point of such reference. 
 ARTICLE II 
 PURCHASE AND SALE TERMS 
 2.1 Purchase and Sale. Subject to the terms of this Agreement, the Company shall issue and sell to the Investors and each Investor shall
purchase from the Company at the Closing the number of shares of Series A Preferred Stock at the aggregate purchase price set forth opposite such Investor’s name in Exhibit 2.1. The obligation of each Investor to purchase is several and not
joint. 
  

 2 

 2.2 Payment. Each of the Investors shall pay the purchase price of the Series A Preferred
Stock purchased by it in full at the Closing in readily available funds. 
 2.3 Transfer Legends and Restrictions. The transfer
of the shares of Series A Preferred Stock and the Common Stock issuable upon conversion of the Series A Preferred Stock will be “restricted securities” as such term is defined under Rule 144 of the 1933 Act. Each certificate evidencing the
shares of Series A Preferred Stock and the Common Stock issuable upon conversion of the Series A Preferred Stock, including any certificate issued to any transferee thereof, shall be imprinted with legends in substantially the following form (unless
otherwise permitted under this Section or unless the offer and sale of such securities shall have been registered under the 1933 Act and the applicable state securities laws): 
 “THE OFFER AND SALE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITES ACT OF 1933, AS AMENDED, (THE
“1933 ACT”) AND MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION STATEMENT FOR THE OFFER AND SALE OF SUCH SECURITIES UNDER THE 1933 ACT IS IN EFFECT OR (II) THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT.” 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 The Company represents and warrants to the Investors, at and as of the Closing that: 
 3.1 SEC Documents; Financial Statements. Since January 1, 2004, the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC under the 1933 Act and 1934 Act (the “SEC Documents”). The Company has delivered to each Investor or its representatives, or made available through the SEC’s
website at http://www.sec.gov, true and complete copies of the SEC Documents. As of their respective dates, the financial statements of the Company disclosed in the SEC Documents (the “Financial Statements”) complied as to
form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto, or (b) in the case of unaudited interim statements, to the extent they may exclude footnotes or
may be condensed or summary statements) and, fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). 
 3.2 Misstatements and Omissions. The SEC Documents do not
include any untrue statements of material fact, nor do they omit to state any material fact required to be stated therein necessary to make the statements made, in light of the circumstances under which they 

  

 3 

 
were made, not misleading. No other information provided by or on behalf of the Company to any Investor which is not included in the SEC Documents contains
any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
 3.3 Organization and Authorization. The Company is duly incorporated and validly existing in the jurisdiction of its incorporation and has
all requisite corporate power and authority to issue the securities issuable hereunder. The execution and delivery of this Agreement by the Company, the performance by the Company of its obligations hereunder and the consummation by the Company of
the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of the Company. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments on behalf
of the Company. This Agreement has been duly executed and delivered by the Company and, assuming the execution and delivery hereof and acceptance thereof by the Investors, will constitute the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. 
 ARTICLE IV 
 COVENANTS OF THE COMPANY 
 4.1 Listing of Common Stock. The
Company shall use its best efforts to maintain the Common Stock’s listing on the NASDAQ Capital Market. 
 4.2 Exchange Act
Registration. The Company will cause its Common Stock to continue to be registered under Section 12(b) of the 1934 Act, will file in a timely manner all reports and other documents required of it as a reporting company under the 1934
Act and will not take any action or file any document (whether or not permitted by 1934 Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under said 1934 Act.

 4.3 Further Assurances. The Company will cure promptly any defects in the creation and issuance of the Shares, and in the
execution and delivery of this Agreement. The Company, at its expense, will promptly execute and deliver promptly to each Investor upon request all such other and further documents, agreements and instruments in compliance with or pursuant to its
covenants and agreements herein, and will make any recordings, file any notices, and obtain any consents as may be necessary or appropriate in connection therewith. 
 4.4 Regulation D Filings. The Company will file on a timely basis all notices of sale required to be filed with the SEC pursuant to Regulation D under the 1933 Act with respect to the transactions
contemplated by this Agreement and simultaneously furnish copies of each report of sale to each Investor. 
 4.5 Waiver. Any
violation of an affirmative or negative covenant of the Company may be waived prospectively or retrospectively in a given instance by a vote of Required Majority, but such waiver shall operate only with respect to the particular violation specified
in the waiver. 
 4.6 Termination of Covenants. The covenants of the Company contained in this Article IV shall terminate, and
be of no further force or effect, when less than 250,000 shares of Series A Preferred Stock are outstanding. 
  

 4 

 ARTICLE V 
 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS 
 Each of the Investors represents and warrants, as
to itself only, to the Company, at and as of the Closing that: 
 5.1 Power and Authority. Such Investor has full power and
authority and, if not an individual, has taken all required corporate (or trust or partnership, as the case may be) and other action necessary to permit it to execute and deliver this Agreement, and all other documents or instruments required by
this Agreement, and to carry out the terms of this Agreement and of all such other documents or instruments. 
 5.2 Purchase for
Investment. Such Investor is purchasing the Series A Preferred Stock and any Common Stock into which such Series A Preferred Stock may be converted for investment, for its own account and not with a view to distribution thereof. Such
Investor understands that the Series A Preferred Stock and any Common Stock received upon conversion of the Series A Preferred Stock must be held indefinitely unless it is registered under the 1933 Act or an exemption from such registration becomes
available. 
 5.3 Financial Matters. Such Investor represents and warrants to the Company that it understands that the purchase
of the Series A Preferred Stock and any Common Stock received upon conversion of the Series A Preferred Stock involves substantial risk and that its financial condition and investments are such that it is in a financial position to hold the Series A
Preferred Stock and any Common Stock received upon conversion of the Series A Preferred Stock for an indefinite period of time and to bear the economic risk of, and withstand a complete loss of, such investment in the Series A Preferred Stock. In
addition, by virtue of its expertise, the advice available to it and previous investment experience, such Investor has extensive knowledge and experience in financial and business matters, investments, securities and private placements and the
capability to evaluate the merits and risks of the transactions contemplated by this Agreement. Such Investor represents that it is an “accredited investor” as that term is defined in Regulation D promulgated under the 1933 Act.

 5.4 Investigation. During the negotiation of the transactions contemplated herein, the Investor and its representatives have
been afforded full and free access to corporate books, financial statements, records, contracts, documents, and other information concerning the Company and to its offices and facilities, have been afforded an opportunity to ask such questions of
the Company’s officers and employees concerning the Company’s business, operations, financial condition, assets, liabilities and other relevant matters as they have deemed necessary or desirable, and have been given all such information as
has been requested, in order to evaluate the merits and risks of the prospective investment contemplated herein. 
 5.5
Brokers. Such Investor has dealt with no broker, finder, commission agent, or other similar person in connection with the offer or sale of the Series A Preferred Stock and the transactions contemplated by this Agreement, and is under no
obligation to pay any broker’s fee, finder’s fee, or commission in connection with such transactions. 
  

 5 

 5.6 Organization and Authorization. Such Investor, if an entity, is duly incorporated or
organized and validly existing in the jurisdiction of its incorporation or organization and has all requisite power and authority to purchase and hold the securities issuable hereunder. The decision to invest and the execution and delivery of this
Agreement by such Investor, the performance by such Investor of its obligations hereunder and the consummation by such Investor of the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of such
Investor. Such Investor has the right, power and authority to execute and deliver this Agreement and all other instruments, on behalf of such Investor. This Agreement has been duly executed and delivered by such Investor and, assuming the execution
and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of such Investor, enforceable against such Investor in accordance with its terms. 
 5.7 Evaluation of Risks. Such Investor has such knowledge and experience in financial tax and business matters as to be capable of
evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with this transaction. It recognizes that its investment in the Company involves a high degree
of risk. 
 ARTICLE VI 
 COVENANTS OF EACH INVESTOR 
 6.1 Regulation FD Confidentiality. Each Investor and its advisors and
representatives who receive material nonpublic information acknowledge and agree that the Company is specifically relying upon Rule 100(b)(2)(ii) of Regulation FD in providing such information to such Investor or its advisors or representatives and
that the Investor, on behalf of itself and its advisors and representatives, will not use such information in violation of United States securities laws, purchase or sell any of the Company’s securities, and keep such information in confidence,
until such time as the Company makes public such material nonpublic information in accordance with the United States securities laws. 
 6.2 No Legal Advice From the Company. Each Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax
advisors. Each Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any jurisdiction. 
 6.3 Investment Purpose. The
securities are being purchased by the Investor for its own account, for investment and without any view to the distribution, assignment or resale to others or fractionalization in whole or in part. The Investor agrees not to assign or in any way
transfer the Investor’s rights to the securities or any interest therein and acknowledges that the Company will not recognize any purported assignment or transfer except in accordance with applicable Federal and state securities laws. Each
Investor agrees not to sell, hypothecate or otherwise transfer such Investor’s securities unless the securities are registered under Federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company,
an exemption from such laws is available. 
  

 6 

 ARTICLE VII 
 THE CLOSING AND CLOSING CONDITIONS 
 7.1 The Closing. The purchase and sale of the
Series A Preferred Stock shall take place at the Closing to be held at the offices of Tarter Krinsky & Drogin LLP, New York, New York. The Closing shall occur as soon as practicable upon satisfaction or waiver of each of the closing
conditions set forth in Section 7.2 herein. 
 7.2 Closing Conditions. The obligation of each Investor to purchase the
Series A Preferred Stock at the Closing shall be subject to satisfaction of the following conditions at and as of the Closing: 
 (a)
Issuance of Series A Preferred Stock. The Company shall have duly issued and delivered certificates to each of the Investors for the number shares of the Series A Preferred Stock purchased by such Investor as provided in Exhibit 2.1.

 (b) Representations and Warranties to be True and Correct. The representations and warranties contained in Article III shall be
true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of such date (except to the extent that any representations and warranties of the Company specifically apply to
conditions existing at a particular date), and the Company shall have certified to such effect to the Investors in writing. 
 (c)
Performance. The Company shall have performed and complied with all agreements and conditions contained herein required to be performed or complied with by it prior to or at the Closing Date, and the Company shall have certified to such
effect to the Investors in writing. 
 (d) All Proceedings to Be Satisfactory. All corporate and other proceedings to be taken by the
Company in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in form and substance to the Investors and their counsel, and the Investors and said counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may reasonably request. 
 (e) Investment by Other
Investors. On the Closing Date, concurrently with the purchase by such Investor, each other Investor shall have purchased and paid for the Preferred Series A Preferred Stock being purchased by it hereunder. 
 (f) Acquisition. The Company shall have completed, on or before the Closing, the acquisition of 100% of the issued and outstanding equity interest
of B.E. OVERSEAS INVESTMENT GROUP, LLC, a Florida limited liability company, pursuant to that Membership Interest Purchase Agreement in substantially the form of which is annexed hereto as Exhibit 7.2. 
 (g) Supporting Documents. On or prior to the Closing Date the Investors and their counsel shall have received copies of the following supporting
documents: 
 (i) a copy of the Articles of Incorporation of the Company, and all amendments thereto, certified as of a recent date by the
Secretary of State of the State of Florida; 
  

 7 

 (ii) a certificate of good standing certified by the Secretary of State of the State of Florida; and

 (iii) a certificate of the Secretary of the Company, dated the Closing Date and certifying: (A) that attached thereto is a true and
complete copy of the Bylaws of the Company as in effect on the date of such certification; (B) that attached thereto is a true and complete copy of resolutions adopted by the Board of Directors of the Company authorizing the execution, delivery
and performance of this Agreement and the issuance, sale, and delivery of the Series A Preferred Stock, and that all such resolutions are still in full force and effect and are all the resolutions adopted in connection with the transactions
contemplated by this Agreement; (3) that the Articles of Incorporation of the Company have not been amended since the date of the last amendment referred to in the certificate delivered pursuant to clause (i) above; and (4) the
incumbency and specimen signature of each officer of the Company executing this Agreement, the stock certificate or certificates representing the Series A Preferred Stock and any certificate or instrument furnished pursuant hereto. 
 ARTICLE VIII 
 TERMINATION

 8.1 Termination. This Agreement may be terminated at any time prior to the Closing: 
 (a) by mutual consent of the Required Majority and the Company; or 
 (b) by the Company if an aggregate of at least $500,000 is not received by Tarter Krinsky & Drogin LLP by September 22, 2008 for the Closing of the purchase of the Series A Preferred Stock. 

8.2 Effect of Termination. Except for the obligations of Section 6.1 hereof, if this Agreement shall be terminated pursuant to
Section 8.1, all obligations, representations and warranties of the parties hereto under the Agreement shall terminate and there shall be no liability, except for any breach of this Agreement prior to such termination, of any party to another
party. 
 ARTICLE IX 
 CHOICE OF LAW; VENUE 
 9.1 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York without giving effect to the principles of conflicts of law thereof. 
 9.2
Venue of Disputes. In the event any party to this Agreement commences any litigation, proceeding or other legal action in connection with or relating to this Agreement or any matters described or contemplated herein, with respect to any
of the matters described or contemplated herein, the parties to this Agreement 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 City, County and State of New York, whether a state or federal court; 
  

 8 

 (b) agree that in the event of any such litigation, proceeding or action, such parties will consent and
submit to personal jurisdiction in any such court described in clause (a) of this Section and to service of process upon them in accordance with the rules and statutes governing service of process (it being understood that nothing in this
Section shall be deemed to prevent any party from seeking to remove any action to a federal court in and located in the City, County, and State of New York; 
 (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. 
 9.3 Waiver of Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER. 
 ARTICLE X 
 MISCELLANEOUS

 10.1 Expenses. The Company and the Investors will each bear their own expenses, including legal fees, in connection with
this Agreement. 
 10.2 Remedies Cumulative. Except as herein provided, the remedies provided herein shall be cumulative and
shall not preclude assertion by any party hereto of any other rights or the seeking of any other remedies against the other party hereto. 
 10.3 Brokerage. Each party hereto will indemnify and hold harmless the others against and in respect of any claim for brokerage or other commission relative to this Agreement or to the transaction contemplated hereby, based in
any way on agreements, arrangements or understandings made or claimed to have been made by such party with any third party. 
 10.4
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
 10.5 Parties in Interest. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective legal representatives, successors and assigns of the parties hereto whether so expressed or not. 
 10.6 Notices. Notices required under this Agreement shall be deemed to have been 

  

 9 

 
adequately given if delivered in person or sent by certified mail, return receipt requested, to the recipient at its address set forth in Exhibit 2.1 or such
other address as such party may from time to time designate in writing. 
 10.7 No Waiver. No failure to exercise and no delay
in exercising any right, power or privilege granted under this Agreement shall operate as a waiver of such right, power or privilege. No single or partial exercise of any right, power or privilege granted under this Agreement shall preclude any
other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law. 
 10.8 Amendments and Waivers. Except as herein provided, this Agreement may be modified or amended only by a writing signed by the Company
and by a Required Majority. Each Investor acknowledges that by the operation of this Section, the holders of fifty-one percent 51% of the outstanding Series A Preferred Stock will have the right and power to diminish or eliminate all rights of such
Investor under this Agreement. 
 10.9 Rights of Investors. Each holder of Series A Preferred Stock (and Common Stock issued
upon conversion thereof) shall have the absolute right to exercise or refrain from exercising any right or rights that such holder may have by reason of this Agreement or any Series A Preferred Stock, including without limitation the right to
consent to the waiver of any obligation of the Company under this Agreement and to enter into an agreement with the Company for the purpose of modifying this Agreement or any agreement effecting any such modification, and such holder shall not incur
any liability to any other holder or holders of Series A Preferred Stock with respect to exercising or refraining from exercising any such right or rights. 
 10.10 Survival of Agreements. All agreements, representations and warranties contained in this Agreement or made in writing by or on behalf of the Company or the Investors in connection with the
transactions contemplated by this Agreement shall survive the execution and delivery of this Agreement, the Closing, and any investigation at any time made by or on behalf of any Investor. Notwithstanding the preceding sentence, however, all such
representations (other than intentional misrepresentations) and warranties, but no such agreements, shall expire three years after the date of this Agreement. 
 10.11 Entire Understanding. This Agreement expresses the entire understanding of the parties and supersedes all prior and contemporaneous agreements and undertakings of the parties with respect to the
subject matter of this Agreement. 
 10.12 Assignment; No Third-Party Beneficiaries. This Agreement and the rights hereunder
shall not be assignable or transferable by the Investors or the Company except in the case of an Investor, in accordance with the restrictions on transfer set out in this Agreement, or in the case of the Company by operation of law in connection
with a merger, consolidation or sale of substantially all the assets of the Company without the prior written consent of the other parties hereto. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective successors and assigns. The assignment by any Investor on a nonexclusive basis of any rights under this Agreement to any such transferee shall not affect or diminish the rights or obligations
of such 

  

 10 

 
Investor under this Agreement and in no event shall any assignment relieve any Investor of its obligations hereunder. Except as provided in this Section,
this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such assigns, any legal or equitable
rights hereunder. 
 10.13 Time of Essence. Each of the parties hereto hereby agrees that, with regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence. 
 10.14 Counterparts; Signatures by Facsimile.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to the other parties. In the event that any signature is delivered by facsimile transmission, PDF, electronic signature or other similar electronic means, such signature shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof. 
 IN
WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent thereunto duly authorized, this Agreement as of the date first above written. 
  

			
	The Company:
	
	ACTION PRODUCTS INTERNATIONAL, INC.
		
	By:	 	 /s/ RONALD S. KAPLAN

		 	Ronald S. Kaplan
		 	Chief Executive Officer

 [Signatures continue on following page] 
  

 11 

 SIGNATURE TO SECURITIES PURCHASE AGREEMENT: 
  

			
		 	The Investors:
		
		 	 Sizer Capital Partners LP

		
	By:	 	 /s/ CRAIG SIZER

		
	Name:	 	 Craig Sizer

		
	Title:	 	 Managing Partner

		
	Address:	 	 2500 Citywest Blvd #300

		
		 	 Houston, TX 77048

		
	FEIN:	 	  

  

 12 

 EXHIBIT 1.1 
 ARTICLES OF AMENDMENT 
 ATTACHMENT TO ARTICLES OF AMENDMENT 
 TO 
 ARTICLES OF INCORPORATION 
 OF 
 ACTION PRODUCTS INTERNATIONAL, INC.

 C. SERIES A PREFERRED STOCK. Pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of the
Corporation, and pursuant to the provisions of Section 607.0602 of the Florida Business Corporation Act, said Board of Directors, [pursuant to a meeting held on] [pursuant to unanimous written consent dated] August
    , 2008, adopted a resolution establishing the rights, preferences, privileges and restrictions of, and the number of shares comprising, the Corporation’s Series A Preferred Stock, which resolution is as follows:

 RESOLVED, that a series of Preferred Stock in the Corporation, having the rights, preferences, privileges and restrictions, and the number
of shares constituting such series of Preferred Stock and the designation of such series, set forth below be, and it hereby is, authorized by the Board of Directors of the Corporation pursuant to authority given by the Corporation’s Articles of
Incorporation. 
 NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the determinations of, the number
of shares constituting, and the rights, preferences, privileges and restrictions relating to, a new series of Preferred Stock as follows: 
 (a) Determination. The series of Preferred Stock is hereby designated Series A Preferred Stock (the “Series A Preferred Stock”). 
 (b) Authorized Shares. The number of authorized shares constituting the Series A Preferred Stock shall be Five Hundred Thousand (500,000) shares of such series. 
 (c) Dividends. The holders of the Series A Preferred Stock shall be entitled to receive dividends, if and when declared by the Board of
Directors for distribution to its holders of Common Stock, which shall be distributed ratably among the holders of the Series A Preferred Stock, such other series of Preferred Stock as are constituted as similarly participating, and the Common
Stock, with each share of Series A Preferred Stock being deemed, for such purpose, to be equal to the number of shares of Common Stock, including fractions of a share, into which such share of Series A Preferred Stock is convertible immediately
prior to the close of business on the business day fixed for such distribution. 
 (d) Liquidation Preference. After the
payment of all preferential amounts required to be paid to the holders of any class or series of stock ranking senior to the Series A Preferred Stock in respect of liquidation that may be authorized from time to time, (the “Senior
Liquidation Stock”), upon the dissolution, liquidation, or winding up of the Corporation, all of the remaining assets and funds of the Corporation available for distribution to its holders of Common Stock shall be distributed ratably among
the holders of the Series A Preferred Stock, such other series of Preferred Stock as are constituted as similarly participating, and the 

  

 13 

 
Common Stock, with each share of Series A Preferred Stock being deemed, for such purpose, to be equal to the number of shares of Common Stock, including
fractions of a share, into which such share of Series A Preferred Stock is convertible immediately prior to the close of business on the business day fixed for such distribution. 
 (e) Voting Rights. Except as otherwise required by law, the holder of shares of Series A Preferred Stock shall not have the right to vote
on matters that come before the shareholders. 
 (f) Conversion Rights. Subject to and in compliance with the provisions of
this paragraph (f), the holders of the Series A Preferred Stock shall have conversion rights as follows (the “Conversion Rights”): 
 (i) Right to Convert. 
 (A) Each share of Series A Preferred Stock shall be convertible, at the option of the holder
thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into one (1) (the “Conversion Rate”) fully paid and nonassessable share of Common Stock. Such Conversion
Rate shall be subject to adjustment as provided herein. 
 (B) In no event, at any
time that the Corporation has any class of its securities registered under Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), shall a holder of shares of Series A
Preferred Stock be entitled to convert any shares of Series A Preferred Stock in excess of that number upon conversion of which the sum of (i) the number of shares of Common Stock beneficially owned by such holder (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the unconverted shares of Series A Preferred Stock owned by the holder and the unexercised or unconverted portion of any other securities of the Corporation subject to a
limitation on exercise or conversion analogous to the limitation contained herein) and (ii) the number of shares of Common Stock issuable upon conversion of shares of Series A Preferred Stock with respect to which the determination described
herein is being made, would result in the beneficial ownership by such holder of more than 9.99% of the outstanding shares of Common Stock of the Corporation. For purposes of this paragraph, beneficial ownership shall be determined in accordance
with Section 13(d) of Exchange Act and Regulation 13D-G thereunder, except as otherwise provided in the parenthetical of clause (i) of the preceding sentence. Such holder may waive the limitations provisions of this paragraph upon not less
than 61 days’ prior notice to the Corporation, and the provisions of this paragraph shall continue to apply until such 61st day (or such later
date as may be specified in such notice of waiver). No conversion in violation of this paragraph, but otherwise in accordance herewith, shall affect the status of the Common Stock issued upon such conversion as validly issued, fully-paid and
nonassessable. 
 (ii) Mechanics of Conversion. In order to convert shares of Series A Preferred Stock into shares of Common Stock,
the holder shall surrender the certificate or certificates for such shares of Series A Preferred Stock at the office of the transfer agent (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together
with written notice that such holder elects to convert all or any number of the shares represented by such certificate or certificates. Such notice shall state such holder’s name or the names of the 

  

 14 

 
nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or its attorney duly authorized in writing.
The close of business on the date of receipt by the transfer agent of such certificates and notice (or by the Corporation if the Corporation serves as its own transfer agent) shall be the time of conversion (the “Conversion Time”),
and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time, but not later
than five (5) business days after the Conversion Time, issue and deliver at such office to such holder, or to its nominees, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled.

 (iii) No Impairment. The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but
will at all times in good faith assist in the carrying out of all the provisions of this paragraph (f) and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the
Series A Preferred Stock against impairment. 
 (iv) Adjustment for Stock Splits and Combinations. If the Corporation shall at any
time, or from time to time after the date this Certificate was filed with the Florida Secretary of State (the “Original Issue Date”), effect a subdivision of the outstanding Common Stock, the Conversion Rate in effect immediately
prior thereto shall be proportionately decreased, and conversely, if the Corporation shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Conversion Rate then in effect immediately
before the combination shall be proportionately increased. Any adjustment under this paragraph (f)(iv) shall become effective at the close of business on the date the subdivision or combination becomes effective. 
 (v) Adjustment for Reclassification Exchange or Substitution. If the Common Stock issuable upon the conversion of the Series A Preferred Stock
shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this paragraph (f)), then and in each such event the holder of each share of Series A Preferred Stock shall have the right thereafter to convert such share
into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, by holders of the number of shares of Common Stock into which such shares of Series A Preferred
Stock might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein. 
 (vi) Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time there shall be a capital reorganization of the Common Stock (other than a subdivision, combination,
reclassification or exchange of shares provided for elsewhere in this paragraph (f)) or a merger or consolidation of the Corporation with or into another corporation, 

  

 15 

 
or the sale of all or substantially all of the Corporation’s properties and assets to any other person, then, as a part of such reorganization, merger,
consolidation or sale, provision shall be made so that the holders of the Series A Preferred Stock shall thereafter be entitled to receive upon conversion of such Series A Preferred Stock, the number of shares of stock or other securities or
property of the Corporation or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled upon such capital reorganization, merger,
consolidation or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of this paragraph (f) with respect to the rights of the holders of the Series A Preferred Stock after the reorganization, merger,
consolidation or sale to the end that the provisions of this paragraph (f) (including adjustment of the Conversion Rate then in effect and the number of shares purchasable upon conversion of the Series A Preferred Stock) shall be applicable
after that event as nearly equivalent as may be practicable. 
 (vii) Notices of Record Date. In the event of (A) any taking by
the Corporation of a record of the holders of any class or series of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution or (B) any reclassification or recapitalization of
the capital stock of the Corporation, any merger or consolidation of the Corporation or any transfer of all or substantially all of the assets of the Corporation to any other corporation, entity or person, or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, the Corporation shall mail to each holder of Series A Preferred Stock at least ten (10) business days prior to the record date specified therein, a notice specifying (1) the date
on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (2) the date on which any such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up is expected to become effective and (3) the time, if any is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares, of Common Stock
(or other securities) for securities or other property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up. 
 (viii) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the Corporation shall round up to the nearest whole number. 
 (ix)
Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the
Series A Preferred Stock, Five Hundred Thousand (500,000) shares of Common Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all the then outstanding
shares of Series A Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose. 
 (x) Notices. Any notice required by the provisions of this paragraph (f) to be given to the holders of
shares of Series A Preferred Stock shall be deemed given (A) if deposited in the United States mail, postage prepaid, or (B) if given by any other reliable or generally accepted means (including by facsimile or by a nationally recognized
overnight courier service), in each case addressed to each holder of record at his address (or facsimile number) appearing on the books of the Corporation. 
  

 16 

 (xi) Payment of Taxes. The Corporation will pay all transfer taxes and other governmental charges
that may be imposed in respect of the issue or delivery of shares of Common Stock upon conversion of shares of Series A Preferred Stock. 
 (xii) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Rate pursuant to this paragraph (f), the Corporation at its expense shall, as promptly as reasonably practicable but in any
event not later than ten (10) business days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or readjustment is based and shall file a copy of such certificate with its corporate records. The Corporation shall, as promptly as reasonably practicable after the written
request at any time by any holder of Series A Preferred Stock (but in any event not later than ten (10) business days thereafter), furnish or cause to be furnished to such holder a similar certificate setting forth (A) such adjustments and
readjustments, (B) the Conversion Rate then in effect, and (C) the number of shares of Common Stock and the amount, if any, of other property which then would be received upon the conversion of Series A Preferred Stock. 
 (g) No Re-issuance of Preferred Stock. Any shares of Series A Preferred Stock acquired by the Corporation by reason of purchase, conversion
or otherwise shall be canceled, retired and eliminated from the shares of Series A Preferred Stock that the Corporation shall be authorized to issue. All such shares shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth in the Articles of Incorporation or in any amendment thereto creating a series of Preferred Stock or any similar
stock or as otherwise required by law. 
 (h) Severability. If any right, preference or limitation of the Series A Preferred
Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule, law or public policy, all other rights, preferences and limitations set forth herein that can be given effect without the invalid, unlawful or
unenforceable right, preference or limitation shall nevertheless remain in full force and effect, and no right, preference or limitation herein shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

 [remainder of page intentionally left blank] 
  

 17 

 EXHIBIT 2.1 
 INVESTORS: 
  

					
	 Investor’s Name and Address
	 	 Shares of Series A Preferred Stock
	 	 Purchase Price

	Sizer Capital Partners LP  	 	500,000	 	$500,000
	 2500 Citywest Blvd. #300
 Houston TX 77048            
	 		 	

 COMPANY: 
 Action Products International, Inc. 
 Attn: Ronald S. Kaplan, President 
 1101 N. Keller Road, Suite E 
 Orlando, Florida 32810 
  

 18 

 EXHIBIT 7.2 
 MEMBERSHIP INTEREST PURCHASE AGREEMENT 
 B.E. OVERSEAS INVESTMENT GROUP, LLC 
 [omitted] 
  

 19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]