Loss Absorption Agreement

Exhibit 10.26

Loss Absorption Agreement

This Loss Absorption Agreement (hereinafter referred to as this “Agreement”) is entered into among the following parties in Beijing as of March 3, 2010:

Party A:		Beijing Dehaier Medical Technology Company Limited
Party B:		Beijing Dehaier Technology Company Limited
Party C:		Xxxx Xxxx
Party D:		Bao Xian
Party E:		Xxxxxxx Xxxx
Party F:		Xxxx Xxx
Party G:		Xxxxx Xxx
Party H:		Xxxx Xxxx

WHEREAS:

1. Party A is a wholly foreign-owned enterprise duly incorporated and validly existing under the People’s Republic of China (the “PRC”) law;

2. Party B is a limited liability company duly incorporated and validly existing under the PRC law;

3. Party C, Party D, Party E, Party F, Party G, and Party H are shareholders of Party B, who collectively own 100% of the equity interests of Party B (collectively, the “Shareholders”); and

4. The Parties desire to enter into this Agreement to provide for Party A’s guarantee of expenses and losses of Party B and clarify matters in connection with Party B’s operation.

NOW THEREFORE, all parties of this Agreement hereby agree as follows through mutual negotiations:

1. Party A agrees, subject to the satisfaction of the relevant provisions by Party B herein, to serve as guarantor for Party B in the contracts, agreements or transactions in connection with Party B’s operation between Party B and any other third party, to provide full guarantee for the performance of such contracts, agreements or transactions by Party B. Party B agrees, as the counter-guarantee, to pledge the receivable account in its operation and the whole assets of its company to Party A. According to the aforesaid guarantee arrangement, Party A wishes to enter into written guarantee contracts with Party B’s counter-parties thereof to assume the guarantee liability as the guarantor when it needs; therefore, Party B, and the Shareholders shall take all necessary actions (including but not limited to execute relevant documents and transact relevant registrations) to carry out the arrangement of counter-guarantee to Party A.

2. In consideration of the requirement of Article 1 herein and the payment of the payables accounts by Party B to Party A, Party B together with the Shareholders, hereby jointly agrees that Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or operation (excluding business contracts entered into in the ordinary course of Party B’s regular operations and the lien obtained by relevant counter parties due to such agreements) unless Party A provides its prior written consent. Such transactions shall include, but not be limited to, the following matters:

2.1 borrowing money from any third party or assume any debt;

2.2 selling to or acquiring from any third party any asset or right, including but not limited to any intellectual property right;

2.3 providing any real guarantee for any third party with its assets or intellectual property rights; or

2.4 assigning to any third party its business agreements.

3. Party B together with the Shareholders hereby jointly agree and confirm that Party B shall seek the guarantee from Party A first if it needs any guarantee for its performance of any contract or loan of flow capital in the course of operation. In such case, Party A shall have the right but not the obligation to provide the appropriate guarantee to Party B on its own discretion. If Party A decides not to provide such guarantee, Party A shall issue a written notice to Party B immediately and Party B shall seek a guarantee from other third party.

4. Any amendment and supplement of this Agreement shall be made in writing. The amendment and supplement duly executed by all parties shall be deemed as a part of this Agreement and shall have the same legal effect as this Agreement.

5. If any clause hereof is judged as invalid or non-enforceable according to relevant laws, such clause shall be deemed invalid only within the applicable area of the Laws and without affecting other clauses hereof in any way.

6. Party B shall not assign its rights and obligations under this Agreement to any third party without the prior written consent of Party A. Party B hereby agrees that Party A may assign its rights and obligations under this Agreement as it needs and such transfer shall only be subject to a written notice sent to Party B by Party A, and no any further consent from Party B will be required.

7. All parties acknowledge and confirm that any oral or written materials communicated pursuant to this Agreement are confidential documents. All parties shall keep secret of all such documents and not disclose any such documents to any third party without prior written consent from other parties except under the following conditions: (a) such documents are known or shall be known by the public (other than when the receiving party discloses such documents to the public without authorization); (b) any documents disclosed in accordance with applicable laws or rules or regulations of a stock exchange with jurisdiction; (c) any documents required to be disclosed by any party to its legal counsel or financial consultant for the purpose of the transaction of this Agreement by any party, provided such legal counsel or financial consultant shall also comply with the confidentiality as stated hereof. Any disclosure by employees or agencies employed by any party shall be deemed the disclosure of such party and such party shall assume the liabilities for its breach of contract pursuant to this Agreement. This Article shall survive the termination of, amendment of, cancellation of or inability to perform this Agreement.

8. This Agreement shall be governed by and construed in accordance with PRC law.

9. The parties shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation. In case no settlement can be reached through consultation, each party can submit such matter to China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in accordance with its rules of CIETAC. The arbitration proceedings shall take place in Beijing and shall be conducted in Chinese. The arbitration award shall be final and conclusive and binding upon all the parties.

10. This Agreement shall be executed by a duly authorized representative of each party as of the date first written above and become effective simultaneously.

11. The parties confirm that this Agreement shall constitute the entire agreement of the Parties with respect to the subject matters therein.

12. The term of this agreement is twenty-five (25) years unless early termination occurs in accordance with relevant provisions herein or in any other relevant agreements reached by all parties. This Agreement may be extended at Party A’s written request prior to the expiration of this Agreement for additional terms of twenty-five (25) years each. During the aforesaid term, if Party A or Party B is terminated at expiration of the operation term (including any extension of such term) or by any other reason, this Agreement shall be terminated upon such termination of such party, unless such party has already assigned its rights and obligations in accordance with Article 6 hereof.

13. This Agreement shall be terminated on the expiring date unless it is renewed in accordance with the relevant provision herein. During the term of this Agreement, Party B shall not terminate this Agreement. Notwithstanding the above stipulation, Party A shall have the right to terminate this Agreement at any time by issuing a thirty (30) days prior written notice to Party B.

14. This Agreement may be signed in one or more original or facsimile copies.

[Signature Page Follows]

[Signature Page]

IN WITNESS THEREOF each party hereto has caused this Agreement to be duly executed by itself or a duly authorized representative on its behalf as of the date first written above.

Party A: Beijing Dehaier Medical Technology Company Limited
Authorized Representative:		/s/ Xxxx Xxxx
Party B: Beijing Dehaier Technology Company Limited
Authorized Representative:		/s/ Xxxx Xxxx
Seal:
Party C: Xxxx Xxxx
Signature:		/s/ Xxxx Xxxx
Party D: Bao Xian
Signature:		/s/ Bao Xian
Party E: Xxxxxxx Xxxx
Signature:		/s/ Xxxxxxx Xxxx
Party F: Xxxx Xxx
Signature:		/s/ Xxxx Xxx
Party G: Xxxxx Xxx
Signature:		/s/ Xxxxx Xxx
Party H: Xxxx Xxxx
Signature:		/s/ Xxxx Xxxx