Warrant Agreement

Exhibit 10.16

WARRANT AGREEMENT

AGREEMENT, dated this 16 th day of June, 2006 by and between Action Products International, Inc. , a Florida corporation (the " Company" ), and Registrar and Transfer Company , as Warrant Agent (the " Warrant Agent" ).

WHEREAS, each record holder of the Company' s common shares, $0.001 par value (the " Common Shares" ), on the record date of January 18, 2006, or such other date as determined by the Company and the Placement Agreement (the " Record Date" ), will receive one (1) warrant (a " Warrant" ) to purchase an additional Common Share for each one (1) Common Share held on the Record Date at an exercise price as determined herein; and

WHEREAS, the Warrants shall be exercisable from the date the Securities and Exchange Commission declares effective a registration statement under the Securities Act of 1933, and amended (the " 1933 Act" ) covering the offer and sale of the Common Shares issuable upon exercise of the Warrants (the " Effective Date" ) until January 31, 2007 unless earlier redeemed as provided herein; and

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

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

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

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

" Exercise Date" shall mean as to any Warrant, the date on which the Warrant Agent shall have received both (a) the Warrant Certificate representing such Warrant, with the Exercise Form thereon duly executed by the Registered Holder hereof with such Registered Holder' s signature guaranteed, and (b) payment in cash or by bank or cashier' s check made payable to the Warrant Agent for the account of the Company, of the amount in lawful money of the United States of America equal to the applicable Exercise Price. " Exercise Price" shall mean (a) $ 3.25 per Common Share, if the Exercise Date is after the Effective Date but on or before the date six (6) months after the Effective Date, and (b) $3.75 per Common Share, if the Exercise Date is after the date six (6) months after the Effective Date but on or before the Expiration Date, subject to modification and adjustment as provided in Section 8.

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

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

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

2. Warrants and Issuance of Warrant Certificates . (a) Each Warrant shall entitle the Registered Holder of the Warrant Certificate representing such Warrant to purchase at the Exercise Price therefor from the Effective Date until the Expiration Date one (1) Common Share upon the exercise thereof, subject to modification and adjustment as provided in Section 8. (b) From time to time, up to the Expiration Date, the Warrant Agent shall countersign and deliver Warrant Certificates in required denominations of one or whole number multiples thereof to the person entitled thereto in connection with any transfer or exchange permitted under this Agreement. No Warrant Certificates shall be issued except (i) Warrant Certificates initially issued hereunder, (ii) those issued on or after the Effective Date, upon the exercise of fewer than all Warrants represented by any Warrant Certificate, to evidence any unexercised Warrants held by the exercising Registered Holder, (iii) Warrant Certificates issued upon any transfer or exchange of Warrants, (iv) Warrant Certificates issued in replacement of lost, stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7, and (v) at the option of the Company, Warrant Certificates in such form as may be approved by its Board of Directors, to reflect any adjustment or change in the Exercise Price, the number of shares of Common Shares purchasable upon exercise of the Warrants or the redemption price therefor made pursuant to Section 9 hereof.

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

4. Exercise . (a) Warrants may be exercised commencing at any time on or after the Effective Date, but not after the Expiration Date, upon the terms and subject to the conditions set forth herein and in the applicable Warrant Certificate. A Warrant shall be deemed to have been exercised immediately prior to the close of business on the Exercise Date, provided that the Warrant Certificate representing such Warrant, with the Exercise Form thereon duly executed by the Registered Holder thereof with such Registered Holder' s signature guaranteed, together with payment in cash or by bank or cashier' s check made payable to the order of the Company, of an amount in lawful money, of the United States of America equal to the applicable Exercise Price, has been received in good funds by the Warrant Agent or the Company. If received by the Company, the Company shall deliver the original Warrant Certificate and Exercise Form to the Warrant Agent as soon as practicable. The person entitled to receive the securities deliverable upon such exercise shall be treated for all purposes as the holder of such securities as of the close of business on the Exercise Date. As soon as practicable on or after the Exercise Date and in any event within five business days after such date, the Warrant Agent on behalf of the Company shall cause to be issued to the person or persons entitled to receive the same a certificate or certificates for the

Common Shares deliverable upon such exercise, and the Warrant Agent shall deliver the same to the person or persons entitled thereto. Upon the exercise of Warrants, the Warrant Agent shall promptly notify the Company in writing of such fact and of the number of securities delivered upon such exercise and shall cause all payments of an amount in cash or by check made payable to the order of the Company, equal to the Exercise Price, to be deposited promptly in the Company' s bank account.

(b) If any Warrants are exercised which exercise was solicited by a broker-dealer with whom the Company agreed in writing to pay a solicitation fee for exercise of the Warrant (a " Broker-Dealer" ), then the soliciting Broker-Dealer shall be entitled to receive from the Company upon exercise of each of the Warrants so exercised, a fee of not less than six percent (6%) and not greater than ten percent (10%), the exact percentage to be determined by a separate agreement between the Company and the Broker-Dealer, of the aggregate price of the Warrants so exercised (the " Exercise Fee" ); provided, that, at the time of exercise, (i) the market price of the Company' s Common Shares is equal to or greater than the Exercise Price, (ii) the Broker-Dealer is a member of the National Association of Securities Dealers, Inc., (iii) the Warrant is not held in a discretionary account, unless prior specific written approval for exercise has been received by the Broker-Dealer from its customer, (iv) disclosure of the compensation arrangement is made in documents provided to the holders of the Warrants, and (v) the solicitation of the Warrant is not in violation of Regulation M promulgated under the Securities Exchange Act of 1934, as amended. Within five (5) days after the end of each month, the Warrant Agent will notify the Company of each Warrant Certificate which has been properly completed for exercise by holders of Warrants during the last month. The Warrant Agent will provide the Company with such information, in connection with the exercise of each Warrant, as the Company shall reasonably request. In the event that an Exercise Fee is paid to a Broker-Dealer with respect to a Warrant which was not properly completed for exercise or in respect of which such Broker-Dealer is not entitled to an Exercise Fee, such Broker-Dealer will return such Exercise Fee to the Company. (c) The Company shall not be obligated to issue any fractional share interests or fractional warrant interests upon the exercise of any Warrant or Warrants, nor shall it be obligated to issue scrip or pay cash in lieu of fractional interests. Any fractional interest shall be rounded up to the nearest whole figure. (d) Anything in this Section 4 notwithstanding, no Warrant will be exercisable unless at the time of exercise the Company has filed with the Securities and Exchange Commission, and there shall be then effective, a registration statement under the 1933 Act covering the offer and sale of the Common Shares issuable upon exercise of such Warrant and such offer and sale of the Common Shares have been so registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of such Warrant.

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

5. Reservation of Shares; Payment of Taxes .

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

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

made unless the person requesting the same has paid to the Warrant Agent the amount of transfer taxes or charges incident thereto, if any. 6. Exchange and Registration of Transfer .

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

(b) The Warrant Agent shall keep, at its Corporate Office, books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and the transfer thereof. Upon due presentment for registration of transfer of any Warrant Certificate at such office, the Company shall execute and the Warrant Agent shall issue and deliver to the transferee or transferees a new Warrant Certificate or Certificates representing an equal aggregate number of Warrants. (c) With respect to any Warrant Certificates presented for registration of transfer, or for exchange or exercise, the Exercise Form or Assignment Form, as the case may be, on the reverse thereof shall be duly endorsed or be accompanied by a written instrument or instruments of transfer and subscription, in form satisfactory to the Company and the Warrant Agent, duly executed by the Registered Holder thereof with such Registered Holder' s signature guaranteed.

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

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

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

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