EXHIBIT 10.16
**ASSUMPTION AGREEMENT**
               This Assumption Agreement (this “Agreement”) is entered into as of the15th day of November, 2002, by and among Invest Linc Equity Fund II, a Nevadalimited partnership (“Equity Fund”), Invest Linc Emerging Growth Equity Fund I,L.L.C., a Nevada limited liability company (“Growth Fund” and together withEquity Fund referred to jointly as “Lenders”) and SinoFresh HealthCare, Inc., aDelaware corporation (“New Borrower”). In addition, the party defined as the“Original Borrower” in the first Recital paragraph hereof has joined in thisAgreement for purposes of evidencing its consent hereto and agreement with thematters set forth herein.
**RECITALS**
               WHEREAS, Lenders previously entered into two certain Security Agreements(the “Loan Agreements”), dated as of February 1, 2001, the first by and betweenGrowth Fund and SinoFresh Laboratories, Inc., an Alabama corporation (herein,the “Original Borrower”) and the second by and between Equity Fund and OriginalBorrower. Original Borrower also executed two notes in the aggregate amount ofFive Hundred Thousand Dollars ($500,000) dated as of February 1, 2001 (the“Notes”). Terms used herein with initial capital letters, to the extent nototherwise defined herein, shall have the meanings set forth in the Notes andLoan Agreements;
               WHEREAS, New Borrower will acquire all or substantially all of the assetsof Original Borrower (herein, the “Acquisition”) as of November 15, 2002subject to an Asset Purchase Agreement (the “Acquisition Agreement”); and
               WHEREAS, prior to the consummation of the Acquisition, Lenders havenotified Original Borrower of the existence of certain Events of Default, andLenders and Original Borrower have negotiated the terms and conditions uponwhich Lenders would forbear from exercising their rights and remedies under theLoan Agreements and the Notes; and
               WHEREAS, New Borrower has agreed to assume the obligations of the Notessubject to amending certain terms and conditions of repayment through executionof allonges (the “Allonges”).
               WHEREAS, New Borrower, in consideration of Lenders agreeing to certainterms in this Agreement and the Allonges, is issuing shares of its common stockto Lenders pursuant to a Stock Purchase Agreement of even date herewith (the“Stock Purchase Agreement”);
               WHEREAS, Lenders’ consent to the Acquisition is necessary in order toavoid giving rise to an additional Event of Default under the Loan Agreements,and Original Borrower and New Borrower have requested that Lenders consent tothe Acquisition; and
               WHEREAS, Lenders have agreed to consent to the Acquisition, subject to NewBorrower joining in and assuming all obligations of Original Borrower under theAllonges and Loan Agreements; and
 

 

               WHEREAS, in order to satisfy the requirements of Lenders, New Borrowerdesires to join in the Allonges and Loan Agreements as an additional Debtorthereunder.
               NOW, THEREFORE, in consideration of the foregoing premises and the mutualcovenants hereinafter expressed, and for good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties hereto dohereby agree as follows:
**AGREEMENT**
               **1. Assumption of Obligations.**New Borrower hereby (a) adopts the termsand conditions of (i) the Loan Agreements, as the same are amended hereby, asit may hereafter be amended, modified, renewed, restated or replaced, and (b)assumes all of the obligations under the Loan Agreements and Notes, as amendedby the Allonges, (the “Obligations”) to the fullest extent. Without limitingthe generality of the foregoing, New Borrower hereby joins in each and everygrant of a security interest pursuant to the Loan Agreements and the Notes infavor of Lenders to the extent of the assets being transferred in theAcquisition and certain other intellectual property of New Borrower (the“Assets of New Borrower”), and hereby restates all representations andwarranties of Debtor, as set forth in the Loan Agreements and the Notes, asamended by the Allonges, with respect to the validity, priority, perfection,and enforceability of all liens and security interests granted hereby. For allpurposes under the Loan Agreements and the Notes, New Borrower shall beobligated as a “Debtor” thereunder, to the same extent as if New Borrower hadbeen an original party to the Loan Agreements and the Notes, as amended and asif no default had occurred. Lenders shall be entitled to enforce allobligations to which the Original Borrower is subject against New Borrower inall respects. For all purposes under the Loan Agreements, the Notes and thisAgreement, all references hereinafter made to Debtor shall mean and includeeach of the Original Borrower and New Borrower.
               **2. Consent of Lenders.**Upon satisfaction of all conditions to closing setforth in Section 4 below and payment of fees and costs set forth in Section *5,*Lenders hereby consent to the acquisition by New Borrower of substantially allof the assets of Original Borrower and waive the default of Original Borrowerunder the Loan Agreements and the Notes.
               **3. Amendments and Conforming Changes to Loan Agreements.**Upon satisfactionof the conditions precedent to closing set forth in Section 4 below, the LoanAgreements and the Notes shall be deemed amended in the following respects:
          (a) All references to Borrower shall mean and include each of theOriginal Borrower and New Borrower. All references to the Collateral shallinclude the assets owned by New Borrower as listed on Schedule I hereto;
          (b) Those particularized items of Borrower information set forth inthe Loan Agreements, are intended to apply only to Original Borrower. Thecomparable information applicable to New Borrower is set forth on ScheduleII attached hereto;
          (c) New Borrower hereby restates all representations and warrantiesof Original Borrower as set forth in the Loan Agreements and the covenantsset forth in the Notes,
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as amended by the Allonges, effective as of the date of thisAgreement, except to the extent that such representations orwarranties specifically related to (i) jurisdiction of organizationto which New Borrower represents and warrants to being organized andin good standing in the State of Delaware rather than the State ofAlabama and (ii) Pledgor’s ownership interest of the Debtor to whichNew Borrower makes no representation or warranty; and
          (d) The parties have entered into this Agreement at this time inorder to accommodate the target closing schedule with respect to theAcquisition. Notwithstanding that fact, the parties have agreed that eachshall have the opportunity to identify additional provisions of the LoanAgreements as to which clarification, in a manner similar to Section 3(b)above, is appropriate, and shall reasonably cooperate with each other insetting forth such clarification in a subsequent side letter.
               **4. Conditions to Closing.**The effectiveness of this Agreement and ofLenders’ consent to the Acquisition is conditioned upon the satisfaction ofeach of the following conditions precedent, in form and substance reasonablysatisfactory to Lenders and their counsel, on or before the date hereof (unlesssome later date is specified, in which event New Borrower shall be permitted todeliver or cause such item to be delivered on or before such later date):
          (a) New Borrower shall have delivered or caused to be delivered toLenders the following documents, all of which shall be properly completed,fully executed, and otherwise satisfactory to Lenders in all materialrespects:
(i) this Agreement; (ii) the Stock PurchaseAgreement; (iii) a Consulting Agreementbetween New Borrower and The Invest Linc Group,LLC; (iv) the Acquisition Agreement; (v) an Allonge to each of theNotes, to evidence the assumption of allObligations thereunder by New Borrower and theamendment of the payment and conversion termstherein; (vi) UCC-1 Financing Statementsrelative to New Borrower, for filing in suchjurisdictions as Lenders deem necessary in order toperfect Lenders’ liens on the assets of NewBorrower;(vii) proper resolutions of NewBorrower approving the transactions contemplatedhereby to which it is a party (“Consent”); and (vii) proper resolutions of NewBorrower approving the transactions contemplatedhereby to which it is a party (“Consent”); and
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(viii) such additional documents or instruments asLenders deem reasonably necessary in connectionwith the closing of the Acquisition.
          (b) New Borrower shall provide to Lenders’ counsel opinions relativeto New Borrower, addressing such matters as Lenders deem appropriate,including without limitation the organizational status of New Borrower,its power and authority to assume all Obligations under the LoanAgreements as a Debtor thereunder, and the proper authorization for NewBorrower to execute and deliver this Agreement and the other documentsreferred to herein; provided however, that counsel will not be required toopine as to title of the Assets of New Borrower or the perfection of anysecurity interest. The opinions to be delivered by New Borrower’s legalcounsel shall be comparable in scope to those opinions delivered bycounsel to Original Borrower at the time of the original Closing of theLoan on or about February 1, 2001.
          (c) Lenders shall have received evidence that all approvals and/orconsents of or other actions by, any entity or person whose approval orconsent is necessary or required to enable New Borrower to perform itsobligations under this Agreement, have been obtained.
          **5. Fees and Expenses.**New Borrower shall pay as a condition precedent toclosing, all costs and expenses arising from the preparation of this Agreement,including Lenders’ reasonable attorneys’ fees and all of Lenders’ and itsattorneys’ out-of-pocket costs and expenses incurred in connection with thenegotiation and documentation of this Agreement, and any other costs, expensesor charges that may be imposed on or incurred by Lenders as a result of thisAgreement up to an amount not to exceed Ten Thousand Dollars ($10,000).
          **6. Confirmation of Security Interests**. New Borrower hereby confirms andagrees that Lenders’ security interest in and to the Collateral, as it existedimmediately prior to this Agreement, shall remain in full force and effectuntil the Notes have been paid in full to Lenders and further acknowledges thata new security interest has been attached to the additional Collateral listedon Schedule I and filed with the State of Delaware as of the filing of theUCC-l Financing Statements relative to New Borrower with the Secretary of Stateof the State of Delaware.
          **7. No Waiver of Defaults.**Other than to the extent provided in Section 2above, this Agreement in no way acts as a waiver of any future default ofDebtor except as specifically agreed upon herein or as a release orrelinquishment of any of the liens, security interests, rights or remediessecuring payment of the Loans or for the enforcement thereof, including,without limitation, the liens created by the Notes. Such liens, securityinterests, rights and remedies are hereby ratified, confirmed, preserved,renewed and extended by Debtor in all respects.
          **8**. **Benefit of this Agreement.**The terms and provisions of this Agreementand the Notes shall be binding upon and inure to the benefit of Lenders andeach Debtor and their respective successors and assigns, except that neitherDebtor shall have any right to assign its rights under this Agreement or any ofthe Notes or any interest therein without the prior written consent of Lenders.
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          **9. Choice of Law.**This Agreement shall be performed and construed inaccordance with the laws of the State of Arizona.
          **10. Entire Agreement.**Except as modified by this Agreement, the Notesremain in full force and effect. The Loan Agreements, as modified by thisAgreement and the Notes, as modified by the Allonges and the Stock PurchaseAgreement, embody the entire agreement and understanding among Debtor andLenders and supersede all prior agreements and understandings between saidparties relating to the subject matter thereof.
          **11. Counterparts; Telecopy Execution.**This Agreement (including theConsent)may be executed in any number of separate counterparts, each of which, whentaken together, shall constitute one and the same agreement, admissible intoevidence, notwithstanding the fact that all parties have not signed the samecounterpart. Delivery of an executed counterpart of this Agreement by facsimileshall be equally as effective as delivery of a manually executed counterpart ofthis Agreement. Any party delivering an executed counterpart of this Agreementby facsimile shall also deliver a manually executed counterpart of thisAgreement, but the failure to deliver a manually executed counterpart shall notaffect the validity, enforceability, and binding effect of this Agreement.
          **12. Right to Participate.**For so long as the Notes are outstanding, andNew Borrower proposes to raise additional capital through an offering orplacement of its equity or debt, Lenders shall be granted the right toparticipate in such offering upon the terms and subject to the same conditionsas are being proposed by New Borrower; provided however, if, as a condition toany such offering or placement New Borrower must grant exclusive underwritingor placement agent rights to a third party, Lenders agree that it shall notparticipate in such offering or placement.
          **13. Agreement to be Bound.**Lenders agree that should they convert theNotes into equity of New Borrower such equity of New Borrower shall be subjectto the 2002 Stockholders Agreement of New Borrower, as amended to the date ofconversion.
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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as ofthe day, month, and year first above written.       **SinoFresh HealthCare, Inc.** **SinoFresh Laboratories, Inc.**a Delaware corporation    an Alabama corporation       By: /s/ Andrew Badolato By: /s/ Charles Fust       Name: Andrew Badolato   Name: Charles Fust Title: President   Title: President       **Invest Linc Equity Fund II,** **Invest Linc Emerging Growth Equity Fund I,**a Nevada limited partnership **L.L.C.,**    a Nevada limited liability company       By: /s/ Craig Terrill By: /s/ Craig Terrill       Name: Craig Terrill