MEMBERSHIP INTEREST PURCHASE AGREEMENT

Exhibit 10.1

EXECUTION

MEMBERSHIP INTEREST PURCHASE AGREEMENT

- BY AND AMONG -

ACTION PRODUCTS INTERNATIONAL, INC.

(" Parent ")

ACTION HEALTHCARE PRODUCTS, INC.

(" Acquirer ")

B.E. OVERSEAS INVESTMENT GROUP, LLC

(" Target ")

AND

THE PERSONS LISTED AS TARGET MEMBERS ON SCHEDULE I

(" Target Members ")

AUGUST 25, 2008

TABLE OF CONTENTS

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MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT , dated as of August 25, 2008 (the " Agreement "), is by and among ACTION PRODUCTS INTERNATIONAL, INC. , a Florida corporation, (" Parent "), ACTION HEALTHCARE PRODUCTS, INC. , a newly-formed Florida corporation and wholly-owned subsidiary of Parent, (" Acquirer "), B.E. OVERSEAS INVESTMENT GROUP, LLC , a Florida limited liability company (" Target "), and members of Target listed in Schedule I of this Agreement (" Target Members ").

WHEREAS , Target Members own 100% of the membership interests (the " Target Membership Interests ") of Target, in the denominations as set forth opposite their respective names on Schedule I to this Agreement.

WHEREAS , Acquirer desires to acquire from Target Members, and Target Members desire to sell to Acquirer, all of Target Membership Interests for (a) an aggregate of Five Hundred Thousand (500,000) shares (" Consideration Shares ") of common stock (the " Common Stock ") of Parent.

NOW, THEREFORE , the parties hereto agree as follows:

ARTICLE I

PURCHASE OF MEMBERSHIP INTERESTS

1.1 Purchase of Membership Interest . Subject to the terms and conditions of this Agreement, on the Closing Date (as hereinafter defined):

(a) Parent shall issue and deliver to each of Target Members such Target Member’s portion of the Consideration Shares set forth opposite such Target Member’s name set forth on Schedule I hereto; and

(b) each Target Member shall deliver to Acquirer, Target Membership Interests set forth opposite such Target Member’s name on Schedule I hereto along with an appropriately executed power or endorsed in favor of Acquirer.

1.2 Time and Place of Closing . The closing of the transactions contemplated hereby (the " Closing ") shall take place at the offices of Tarter Krinsky & Drogin LLP, New York, New York, at 10:00 a.m., Eastern time, as soon as practicable following the satisfaction or waiver of all of the closing conditions set forth in Sections 6 and 7 (the " Closing Date "). Subject to the provisions of Section 8, failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place determined pursuant to this Section 1.2 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement.

1.3 Deliveries by Acquirer . At the Closing, Parent and Acquirer shall deliver or cause to be delivered to Target Members:

(a) certificates representing Consideration Shares, issued in the respective names of Target Members as set forth on Schedule I;

(b) a certificate executed by Parent and Acquirer (i) representing and warranting to Target Members that Parent’s and Acquirer’s representations and warranties in this Agreement were accurate in all material respects as of the date of this Agreement and is accurate in all respects as of the Closing Date as if made on the Closing Date; and (ii) certifying that Parent and Acquirer have complied in all material respects with all respective covenants of Parent and Acquirer under this Agreement; and

(c) any other document reasonably requested by Target Members on or prior to the Closing Date that they deem necessary for the consummation of the transactions contemplated hereby.

1.4 Deliveries by Target Members . At the Closing, Target Members shall deliver or cause to be delivered to Acquirer:

(a) certificates representing Target Membership Interests with powers or endorsed in blank;

(b) letters of resignation from Target’s current managers and officers to be effective on the Closing Date;

(c) an executed spousal consent from the spouse of each Target Member or a certificate from such Target Member that such Target Member is not married;

(d) a certificate executed by each Target Member (i) representing and warranting to Parent and Acquirer that each of Target Members’ representations and warranties in this Agreement were accurate in all respects as of the date of this Agreement and is accurate in all respects as of the Closing Date as if made on the Closing Date; and (ii) certifying that Target Members and Target have complied in all material respects with all covenants of Target Members and Target under this Agreement; and

(e) any other document reasonably requested by Parent or Acquirer on or prior to the Closing Date that it deems necessary for the consummation of this transaction.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUIRER

Except as specifically set forth in the Disclosure Schedule prepared by Parent and Acquirer and delivered to Target Members simultaneously with the execution hereof (" Acquirer Disclosure Schedule "), Parent and Acquirer make the following representations and warranties.

2.1 Organization and Qualification . Parent is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to own, lease and operate its business and properties and to carry on its business in the places and in the manner as presently conducted or proposed to be

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conducted. Acquirer is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to own, lease and operate its business and properties and to carry on its business in the places and in the manner as presently conducted or proposed to be conducted. Parent is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business conducted, by it requires such qualification except for any such failure, which, when taken together with all other failures, is not likely to have a material adverse effect on the business of Parent and its subsidiaries taken as a whole. Acquirer is, or as of the Closing Date will be, in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business conducted, by it requires such qualification except for any such failure, which, when taken together with all other failures, is not likely to have a material adverse effect on the business of Acquirer and its subsidiaries taken as a whole.

2.2 Authorization .

(a) Parent has all requisite power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby. Parent has taken all action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and no other action on the part of Parent is necessary to authorize the execution and delivery by Parent of this Agreement or the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by Parent, and, assuming due and valid authorization, execution and delivery hereof by Target and each Target Member, this Agreement constitutes the valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except as may be affected by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

(b) Acquirer has all requisite power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby. Acquirer has taken all action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and no other action on the part of Acquirer is necessary to authorize the execution and delivery by Acquirer of this Agreement or the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by Acquirer, and, assuming due and valid authorization, execution and delivery hereof by Target and each Target Member, this Agreement constitutes the valid and binding obligation of Acquirer, enforceable against Acquirer in accordance with its terms, except as may be affected by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

2.3 No Conflicts or Defaults .

(a) The execution and delivery of this Agreement by Parent and the consummation of the transactions contemplated hereby do not and shall not (a) contravene the

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articles of incorporation or by-laws of Parent or (b) with or without the giving of notice or the passage of time (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which Acquirer is a party or by which Parent is bound, or any judgment, order or decree, or any law, rule or regulation to which Acquirer is subject, (ii) result in the creation of, or give any party the right to create, any lien, mortgage, charge, restriction, pledge, security interest, option, lease or sublease, claim, right of any third party, easement, encroachment or encumbrance or any other right or adverse interest (" Liens ") upon any of the assets of Parent, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to perform, any material agreement, arrangement or commitment to which Parent is a party or by which Parent’s assets are bound, or (iv) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which, Parent is to perform any duties or obligations or receive any rights or benefits under any agreement, arrangement or commitment to which it is a party.

(b) The execution and delivery of this Agreement by Acquirer and the consummation of the transactions contemplated hereby do not and shall not (a) contravene the certificate of incorporation or by-laws of Acquirer or (b) with or without the giving of notice or the passage of time (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which Acquirer is a party or by which Acquirer is bound, or any judgment, order or decree, or any law, rule or regulation to which Acquirer is subject, (ii) result in the creation of, or give any party the right to create, any Lien upon any of the assets of Acquirer, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to perform, any material agreement, arrangement or commitment to which Acquirer is a party or by which Acquirer’s assets are bound, or (iv) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which, Acquirer is to perform any duties or obligations or receive any rights or benefits under any agreement, arrangement or commitment to which it is a party.

2.4 Consents and Approvals . None of the execution, delivery or performance of this Agreement by Parent or Acquirer, the consummation by Parent or Acquirer of any of the transactions contemplated or compliance by Parent or Acquirer with any of the provisions hereof will require any filing with, or permit, authorization, consent or approval of, any United States federal, state, local, municipal government or governmental agency or body or non-United States equivalent government or governmental agency or body, including any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency (a " Governmental Entity " and collectively " Governmental Entities ") or other Person or require any consent, approval or notice under any material agreement to which Parent or Acquirer is a party or Parent or Acquirer or any of their assets are bound.

2.5 Brokers . All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Parent and Acquirer directly with Target Members without the intervention of any individual, corporation, proprietorship, firm, partnership, limited partnership, trust, association or other entity, (each a " Person ") on behalf of Parent or Acquirer in such a manner as to give rise to any valid claim by any Person against any Target Members for a finder’s fee, brokerage commission or similar payment.

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2.6 SEC Documents; Financial Statements . Since January 1, 2004, Parent has filed all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (" SEC ") under the Securities Act of 1933, as amended (" 1933 Act ") and the Securities Exchange Act of 1934 (" 1934 Act ") (the " SEC Documents "). Parent has delivered to each Target Member or his 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 Parent 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 Parent 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).

2.7 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 were made, not misleading. No other information provided by or on behalf of Parent to any Target Member 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.

2.8 Investment Representations . Acquirer is acquiring Target Membership Interests for investment for Acquirer’s own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF TARGET MEMBERS

Except as specifically set forth in the Disclosure Schedule prepared by Target Members and delivered to Acquirer simultaneously with the execution hereof (" Target Members Disclosure Schedule "), Target Members make the following representations and warranties.

3.1 Organization and Qualification; Due Authorization .

(a) Target is a limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, with full power and authority to own, lease and operate its business and properties and to carry on its business in the places and in the manner as presently conducted or proposed to be conducted. Target is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business conducted, by it requires such qualification except for any such failure which is not likely to have a material adverse effect on the business of Target. Pursuant to Section 608.423 of the Florida Limited Liability Company Act, Target and Target Members have adopted the written limited liability company agreement, a true and correct copy of which is annexed hereto as Exhibit 3.1 (the " Operating Agreement ").

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(b) Except as set forth in Target Members Disclosure Schedule 3.1(b), Target does not own, directly or indirectly, any capital stock, equity or interest in any corporation, firm, partnership, joint venture or other entity.

(c) Target has all requisite power and authority, and each Target Member has the requisite capacity to execute and deliver this Agreement, and to consummate the transactions contemplated hereby. Target has taken all action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and no other action on the part of Target is necessary to authorize the execution and delivery by Target of this Agreement or the consummation by it of the transactions contemplated hereby.

(d) This Agreement has been duly executed and delivered by each of Target and each Target Member and, assuming due and valid authorization, execution and delivery thereof by Parent and Acquirer, this Agreement constitutes the valid and binding obligation of each of Target and each Target Member enforceable against each of them in accordance with its terms, except as may be affected by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

3.2 No Conflicts or Defaults . The execution and delivery of this Agreement by each of Target and each Target Member and the consummation of the transactions contemplated hereby do not and shall not: (a) contravene the governing documents of Target, or (b) with or without the giving of notice or the passage of time, (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which Target is a party or by which Target or any of its assets are bound, or any judgment, order or decree, or any law, rule or regulation to which Target or any of its assets are subject, (ii) result in the creation of, or give any party the right to create, any Lien upon any of the assets of Target, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to perform, any agreement, arrangement or commitment to which Target is a party or by which Target or any of its assets are bound, or (iv) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which Target is to perform any duties or obligations or receive any rights or benefits under any material agreement, arrangement or commitment to which it is a party.

3.3 Consents and Approvals . None of the execution, delivery or performance of this Agreement by Target or any Target Member, the consummation by Target or any Target Member of any of the transactions contemplated or compliance by Target or any Target Member with any of the provisions hereof will require any filing with, or permit, authorization, consent or approval of, any Governmental Entity or other Person or require any consent, approval or notice under any material agreement to which Target or any Target Member is a party or Target or any Target Member or any of their assets are bound.

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3.4 Capitalization . As of the date hereof, all of the equity and/or voting and/or membership interest (the " Membership Interests ") are owned and registered in the names of Target Members and in such amounts as set forth on Schedule I hereto. All of the outstanding Membership Interests are duly authorized, validly issued, fully paid and non-assessable. There is no voting debt of Target issued and outstanding. Except for Target Membership Interests, as of the date hereof, (i) there are no other Membership Interests issued or outstanding; (ii) there are no existing options, warrants, calls, pre-emptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued Membership Interests, obligating Target to issue, transfer or sell or cause to be issued, transferred or sold any Membership Interests of, or other equity or debt interest in, Target or securities convertible into or exchangeable for such Membership Interests or equity interests, or obligating Target to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment and (iii) there are no outstanding contractual obligations of Target to repurchase, redeem or otherwise acquire any Membership Interests of Target. There are no voting trusts or other agreements or understandings to which Target or any Target Member is a party with respect to the voting of the Membership Interests of Target. The Target Membership Interests are duly authorized, validly issued, fully paid, non-assessable and free and clear of any Liens. The assignments, endorsements, stock powers and other instruments of transfer delivered by each Target Member to Acquirer at the Closing will be sufficient to transfer such Target Member’s entire interest, legal and beneficial, in Target Membership Interests. Each Target Member has full power and authority to convey good and marketable title to all of Target Membership Interests, and upon transfer to Acquirer of the certificates representing such Target Membership Interests, Acquirer will receive good and marketable title to such Target Membership Interests, free and clear of all Liens.

3.5 Absence of Undisclosed Liabilities . Target has no direct or indirect liability, indebtedness, obligation, claim, loss, damage, deficiency, guaranty or endorsement of any nature, whether absolute or contingent, accrued or unaccrued, due or to become due or liquidated or unliquidated, except for those liabilities of Target specifically identified in the Target Members Disclosure Schedule.

3.6 No Contract Defaults . Neither Target nor, to any Target Member’s knowledge, any other person or entity is in breach in any material respect of, or in default in any material respect under, any material contract, agreement, arrangement, commitment or plan to which Target is a party, and no event or action has occurred, is pending or is threatened, which, after the giving of notice, passage of time or otherwise, would constitute or result in such a material breach or material default by Target or, to the knowledge of any Target Member, any other person or entity. Target has not received any notice of default under any contract, agreement, arrangement, commitment or plan to which it is a party, which default has not been cured to the satisfaction of, or duly waived by, the party claiming such default on or before the date hereof.

3.7 Compliance with Law . Target is not conducting its business or affairs in violation of any applicable federal, state or local law, ordinance, rule, regulation, court or administrative order, decree or process, or any requirement of Target’s insurance carriers. Target has not received any notice of violation or claimed violation of any such law, ordinance, rule, regulation, order, decree, process or requirement.

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3.8 No Conflict of Interest . No Target Member has or claims to have any direct or indirect interest in any tangible or intangible property used in the business of Target, except as a holder of Target Membership Interests. No Target Member has any direct or indirect interest in any other Person which conducts a business similar to, has any contract or arrangement with, or does business or is involved in any way with, Target, except for the ownership of less than 5% of any class of securities of any publicly held corporation.

3.9 Litigation . There is no claim, dispute, action, suit, proceeding or investigation pending or, to the knowledge of Target or any Target Member, threatened, against or affecting the business of Target, or challenging the validity or propriety of the transactions contemplated by this Agreement, at law or in equity or before any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, nor to the knowledge of