0001144204-07-010069.txt : 20070226 0001144204-07-010069.hdr.sgml : 20070226 20070226172120 ACCESSION NUMBER: 0001144204-07-010069 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20070226 DATE AS OF CHANGE: 20070226 GROUP MEMBERS: CITADEL EQUITY FUND LTD. GROUP MEMBERS: CITADEL INVESTMENT GROUP(HONG KONG) LIMITED GROUP MEMBERS: CITADEL INVESTMENT GROUP, L.L.C. GROUP MEMBERS: KENNETH GRIFFIN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC. CENTRAL INDEX KEY: 0001260625 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 000000000 STATE OF INCORPORATION: D8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-80530 FILM NUMBER: 07650175 BUSINESS ADDRESS: STREET 1: ROOMS 3505-06, 35TH FLOOR STREET 2: EDINBURGH TOWER, THE LANDMARK CITY: 15 QUEEN'S ROAD CENTRAL STATE: K3 ZIP: 00000 BUSINESS PHONE: 852 2736 2111 MAIL ADDRESS: STREET 1: ROOMS 3505-06, 35TH FLOOR STREET 2: EDINBURGH TOWER, THE LANDMARK CITY: 15 QUEEN'S ROAD CENTRAL STATE: K3 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: APEX WEALTH ENTERPRISES LTD DATE OF NAME CHANGE: 20030820 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CITADEL L P CENTRAL INDEX KEY: 0001027745 IRS NUMBER: 364111741 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 131 S. DEARBORN STREET, 32ND FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123952100 MAIL ADDRESS: STREET 1: 131 S. DEARBORN STREET, 32ND FLOOR CITY: CHICAGO STATE: IL ZIP: 60603 SC 13D 1 v066940_sc13d.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. _______)*

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

(Name of Issuer)

Common Stock, $0.0001 par value

(Title of Class of Securities)

G21161 10 7

(CUSIP Number)

Matthew B. Hinerfeld

Citadel Investment Group, L.L.C.

131 S. Dearborn Street, 32nd Floor

Chicago, Illinois 60603

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

February 16, 2007

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP NO. G21161 10 7		Page 2 of 12 Pages

1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
	Citadel Limited Partnership

2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x

3.	SEC Use Only

4.	Source of Funds (See Instructions) AF

5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

6.	Citizenship or Place of Organization Illinois

	7.	Sole Voting Power 0

	8.	Shared Voting Power 3,333,333 shares⁽¹⁾

	9.	Sole Dispositive Power 0

	10.	Shared Dispositive Power See Row 8 above.

11.	Aggregate Amount Beneficially Owned by Each Reporting Person See Row 8 above.

12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

13.	Percent of Class Represented by Amount in Row (11) 9.1%⁽²⁾

14.	Type of Reporting Person (See Instructions) PN; HC

(1)	Includes 3,333,333 shares of the common stock of Issuer that may be acquired upon conversion of $60,000,000 in principal amount of the Issuer’s Convertible Notes (as defined herein) beneficially owned by the Reporting Persons.

Mr. Tu Guo Shen (“Mr. Tu”), Ms. Li Zhi Qun (“Ms. Li”) and Whitehorse Technology Limited, a British Virgin Islands company wholly owned by Mr. Tu and Ms. Li (“Whitehorse” and collectively with Mr. Tu and Ms. Li, the “Controlling Shareholders”) collectively own 13,627,500 shares of the Issuer’s common stock, as set forth in the Investor Rights Agreement (as hereinafter defined). If the Reporting Persons and the Controlling Shareholders were deemed to be a group by virtue of the arrangements described in Item 4 and Item 6 of this Schedule 13D, such group would be deemed to beneficially own 16,960,833 shares of the Issuer’s common stock. The Reporting Persons expressly disclaim beneficial ownership of the shares of the Issuer’s common stock owned by the Controlling Shareholders.

(2)

Based on 33,292,971 outstanding shares of the common stock of Issuer, as set forth in the Purchase Agreement (as hereinafter defined). If the Reporting Persons and the Controlling Shareholders were deemed to be a group by virtue of the arrangements described in Item 4 and Item 6 of this Schedule 13D, such group would be deemed to beneficially own approximately 46.3% of the Issuer’s common stock.


CUSIP NO. G21161 10 7		Page 3 of 12 Pages

1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
	Citadel Investment Group, L.L.C.

2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x

3.	SEC Use Only

4.	Source of Funds (See Instructions) AF

5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

6.	Citizenship or Place of Organization Delaware

	7.	Sole Voting Power 0

	8.	Shared Voting Power 3,333,333 shares⁽³⁾

	9.	Sole Dispositive Power 0

	10.	Shared Dispositive Power See Row 8 above.

11.	Aggregate Amount Beneficially Owned by Each Reporting Person See Row 8 above.

12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

13.	Percent of Class Represented by Amount in Row (11) 9.1%⁽⁴⁾

14.	Type of Reporting Person (See Instructions) OO; HC

(3)	See footnote 1 above.

(4)	See footnote 2 above.


CUSIP NO. G21161 10 7		Page 4 of 12 Pages

1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
	Citadel Investment Group (Hong Kong) Limited

2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x

3.	SEC Use Only

4.	Source of Funds (See Instructions) AF

5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

6.	Citizenship or Place of Organization Hong Kong

	7.	Sole Voting Power 0

	8.	Shared Voting Power 3,333,333 shares⁽⁵⁾

	9.	Sole Dispositive Power 0

	10.	Shared Dispositive Power See Row 8 above.

11.	Aggregate Amount Beneficially Owned by Each Reporting Person See Row 8 above.

12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

13.	Percent of Class Represented by Amount in Row (11) 9.1%⁽⁶⁾

14.	Type of Reporting Person (See Instructions) CO

(5)	See footnote 1 above.

(6)	See footnote 2 above.


CUSIP NO. G21161 10 7		Page 5 of 12 Pages

1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
	Kenneth Griffin

2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x

3.	SEC Use Only

4.	Source of Funds (See Instructions) AF

5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

6.	Citizenship or Place of Organization United States

	7.	Sole Voting Power 0

	8.	Shared Voting Power 3,333,333 shares⁽⁷⁾

	9.	Sole Dispositive Power 0

	10.	Shared Dispositive Power See Row 8 above.

11.	Aggregate Amount Beneficially Owned by Each Reporting Person See Row 8 above.

12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

13.	Percent of Class Represented by Amount in Row (11) 9.1%⁽⁸⁾

14.	Type of Reporting Person (See Instructions) IN; HC

(7)	See footnote 1 above.

(8)	See footnote 2 above.


CUSIP NO. G21161 10 7		Page 6 of 12 Pages

1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
	Citadel Equity Fund Ltd.

2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)	o
	(b)	x

3.	SEC Use Only

4.	Source of Funds (See Instructions) WC

5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

6.	Citizenship or Place of Organization Cayman Islands

	7.	Sole Voting Power 0

	8.	Shared Voting Power 3,333,333 shares⁽⁹⁾

	9.	Sole Dispositive Power 0

	10.	Shared Dispositive Power See Row 8 above.

11.	Aggregate Amount Beneficially Owned by Each Reporting Person See Row 8 above.

12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

13.	Percent of Class Represented by Amount in Row (11) 9.1%⁽¹⁰⁾

14.	Type of Reporting Person (See Instructions) CO

(9)	See footnote 1 above.

(10)	See footnote 2 above.


CUSIP NO. G21161 10 7		Page 7 of 12 Pages

Item 1.

Security and Issuer

This Schedule 13D relates to the Common Stock, par value $0.0001 (the “Common Stock”), of China Security & Surveillance Technology, Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at 13/F, Shenzhen Special Zone Press Tower, Shennan Road, Futian, Shenzhen, China 100020.

Item 2.

Identity and Background

The persons filing this Schedule 13D are Citadel Limited Partnership, an Illinois limited partnership (“CLP”), Citadel Investment Group, L.L.C., a Delaware limited liability company (“CIG”), Citadel Investment Group (Hong Kong) Limited, a Hong Kong company (“CIGHK”), Kenneth Griffin, a natural person (“Griffin”) and Citadel Equity Fund Ltd., a Cayman Islands company (“CEF,” and collectively, together with CLP, CIG, CIGHK and Griffin, the “Reporting Persons”).

CLP provides investment advisory services to investment funds. CLP is the investment advisor for CEF and, in such capacity, makes all of the investment decisions for CEF.

CIG provides administrative and management services to its affiliated entities. CIG is the general partner of CLP. The name, residence or business address, present principal occupation or employment and citizenship of each director and executive officer of CIG is set forth on Schedule A attached hereto.

CIGHK provides investment advisory services to CLP with respect to Hong Kong-based investment activities. CIG owns 100% of CIGHK. The name, residence or business address, present principal occupation or employment and citizenship of each director and executive officer of CIGHK is set forth on Schedule A attached hereto.

Griffin is the President and Chief Executive Officer of CIG and owns a controlling interest in CIG. Griffin is a United States citizen.

CEF purchases, holds and sells securities and other investment products. The name, residence or business address, present principal occupation or employment and citizenship of each director and executive officer of CEF is set forth on Schedule A attached hereto. Citadel Wellington LLC, a Delaware limited liability company (“CW”), and Citadel Kensington Global Strategies Fund Ltd., a Bermuda company (“CKGSF”), collectively own 100% of Citadel Holdings Ltd., a Cayman Island company (“CH”), which owns 100% of CEF; however, none of CW, CKGSF or CH has any control over the voting or disposition of securities held by CEF.

For CLP, CIG, Griffin and CEF, the principal business address is 131 S. Dearborn Street, 32nd Floor, Chicago, Illinois 60603. For CIGHK, the principal business address is Suites 1801-1810, Chater House, 8 Connaught Road Central, Hong Kong.

During the last five years, none of the Reporting Persons, nor, to the best of each of the Reporting Persons’ knowledge, any of the persons listed on Schedule A attached hereto, has been a party to a civil proceeding of any judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding of any violation with respect to such laws.


CUSIP NO. G21161 10 7		Page 8 of 12 Pages

The Reporting Persons have entered into a Joint Filing Agreement, dated as of February 26, 2007, a copy of which is attached hereto as Exhibit 99.1.

Item 3.

Source and Amount of Funds or Other Consideration

On February 8, 2007, CEF utilized available cash assets to acquire $60,000,000 in principal amount of Senior Notes (the “Senior Notes”), pursuant to a Notes Purchase Agreement, dated February 5, 2007, between the Issuer and CEF (the “February 5 Notes Purchase Agreement”). The maturity date of the Senior Notes was February 16, 2007, and the Senior Notes’ interest rate was 2.0% per annum. In connection with the February 5 Notes Purchase Agreement, on February 8, 2007, CEF, The Bank of New York, as co-secured party, and the Controlling Shareholders entered into a Share Pledge Agreement, pursuant to which the Controlling Shareholders agreed to secure the obligations under the Senior Notes by pledging certain shares of the Issuer’s common stock held by Whitehorse and Ms. Li, and, to the extent such shares are not sufficient, cash, as collateral.

On February 16, 2007, the Reporting Persons exchanged the Senior Notes for $60,000,000 in principal amount of the Issuer’s 1.0% Guaranteed Senior Unsecured Convertible Notes due 2012 (the “Convertible Notes”), plus accrued interest on the Senior Notes. Also on February 16, 2007, the Reporting Persons secured financing in the amount of $42,000,000 (the “Financing”) out of the Reporting Persons’ Prime Brokerage Account with Merrill Lynch International with respect the Convertible Notes.

The Reporting Persons may engage in additional borrowings or secured financing transactions in the future with respect to the Convertible Notes, including, without limitation, financing transactions effected in the ordinary course of business with prime brokers or other unaffiliated financial institutions, in accordance with applicable federal margin regulations, stock exchange rules and the lenders’ credit policies.

Item 4.

Purpose of Transaction

The Reporting Persons purchased the Convertible Notes, and may acquire shares of Common Stock of the Issuer upon exercise of the Convertible Notes, for investment purposes. See Item 6 below for a description of the terms of the Convertible Notes.

The Issuer; CEF; China Safetech Holdings Limited, a wholly owned subsidiary of the Issuer (“Safetech”); China Security & Surveillance Technology (HK) Ltd., a wholly-owned subsidiary of Safetech (“CSST HK”); Golden Group Corporation (Shenzhen) Limited, a wholly-owned subsidiary of Safetech (“Golden”); Shanghai Cheng Feng Digital Technology Co., Ltd., a wholly-owned subsidiary of CSST HK (“Cheng Feng”); China Security & Surveillance Technology (PRC), Inc., a wholly-owned subsidiary of the Issuer (“CSST PRC”); and the Controlling Shareholders, entered into an investor rights agreement, dated February 16, 2007 (the “Investor Rights Agreement”), pursuant to which the Reporting Persons are entitled, among other things, to designate up to one observer (the “Board Observer”) to participate in the meetings of the Issuer’s board of directors (the “Board”) for so long as CEF holds the Minimum Holdings (as such term is defined in the Investor Rights Agreement).

The Reporting Persons may exercise such right to designate a Board Observer by providing written notice to the Board of the name, address and telephone number of the individual selected by the Reporting Persons to serve as the Board Observer. The Board Observer’s rights will only be effective upon the Board Observer and the Issuer entering into a confidentiality agreement. Pursuant to the Investor Rights Agreement, CEF has the sole and absolute right to remove an individual acting as the Board Observer and replace such individual with another individual who will act as the Board Observer, upon notice to the Board of the contact information for the new Board Observer. A copy of the Investor Rights Agreement is attached as Exhibit 99.5 to this filing.


CUSIP NO. G21161 10 7		Page 9 of 12 Pages

The Reporting Persons may discuss their investment in the Issuer with other shareholders, management, the Board, other investors, industry analysts, existing or potential strategic partners or competitors and others. In addition, the Reporting Persons may acquire additional Issuer securities or may sell, trade, distribute to affiliates or otherwise dispose of all or some holdings in the Issuer or take any other lawful action they deem to be in their best interests. Subject to applicable law, the Reporting Persons may enter into derivative transactions, hedging transactions or alternative structures with respect to the Issuer’s securities.

There is no assurance that the Reporting Persons will develop any plans or proposals with respect to any of the matters discussed above, and the Reporting Persons may, at any time, review or reconsider their position with respect to the Issuer and reserve the right to develop such plans or proposals. Any courses of action that the Reporting Persons pursue will depend on a variety of factors, including, without limitation, current and anticipated future trading prices for the Issuer’s Common Stock, the financial condition, results of operation and prospects of the Issuer and general economic, financial market and industry conditions.

Except as set forth herein, none of the Reporting Persons, nor, to the knowledge of the Reporting Persons, any individuals listed in response to Item 2 hereof, has any present plans or proposals that would result in or relate to any of the transactions or changes listed in Items 4(a) through 4(j) of Schedule 13D.

Item 5.

Interest in Securities of the Issuer

(a)	Number of	Percentage
	Shares	of Shares
	3,333,333 shares⁽¹¹⁾	9.1%⁽¹²⁾

(b)	Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 3,333,333 shares⁽¹³⁾

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 3,333,333 shares⁽¹⁴⁾

(c)	Other than the transactions described in this Schedule 13D, the Reporting Persons have not engaged in any transactions with respect to the Issuer’s securities during the last sixty days.

(d)	Not applicable.

(e)	Not applicable.

_________________

⁽¹¹⁾	Includes 3,333,333 shares of the common stock of Issuer that may be acquired upon conversion of $60,000,000 in principal amount of the Issuer’s Convertible Notes (as defined herein) beneficially owned by the Reporting Persons.

The Controlling Shareholders collectively own 13,627,500 shares of the Issuer’s common stock, as set forth in the Investor Rights Agreement. If the Reporting Persons and the Controlling Shareholders were deemed to be a group by virtue of the arrangements described in Item 4 and Item 6 of this Schedule 13D, such group would be deemed to beneficially own 16,960,833 shares of the Issuer’s common stock. The Reporting Persons expressly disclaim beneficial ownership of the shares of the Issuer’s common stock owned by the Controlling Shareholders.

⁽¹²⁾

⁽¹³⁾	See footnote 11 above.

⁽¹⁴⁾	See footnote 11 above.


CUSIP NO. G21161 10 7		Page 10 of 12 Pages

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The matters set forth in Item 4 are incorporated into this Item 6 by reference as if fully set forth herein.

On February 16, 2007, the Issuer, Safetech, CSST HK, Golden, Cheng Feng, CSST PRC and CEF entered into a Notes Purchase Agreement (the “Notes Purchase Agreement”), pursuant to which the Issuer offered and sold, and CEF purchased, $60,000,000 of the principal amount of the Convertible Notes. Each $100,000 principal amount of the Convertible Notes is initially convertible into 5,555 shares of the Issuer’s Common Stock at an initial conversion rate of $18.00 per share, which rate shall be adjusted from time to time by the Issuer as set forth in the Indenture (as defined herein). The transaction closed on February 16, 2007.

The Convertible Notes were issued pursuant to an indenture, dated February 16, 2007 (the “Indenture”), among the Issuer, Safetech, as guarantor, CSST HK, as guarantor, and The Bank of New York, as trustee for the Convertible Notes. Pursuant to the Indenture, Safetech, CSST HK and all of the Issuer’s other existing and future subsidiaries are obligated (only to the extent such subsidiary is permitted under applicable laws to do so) to guarantee, on a senior unsecured basis, to the holders of the Convertible Notes and the trustee the payment and performance of the Issuer’s obligations thereunder. The terms of the Indenture prohibit the Issuer from, among other things, (i) incurring any Debt (as defined in the Indenture) unless the Issuer and such Debt meets certain guidelines outlined in the Indenture, (ii) making, directly or indirectly, certain Restricted Payments (as defined in the Indenture), (iii) incurring any liens other than Permitted Liens (as defined in the Indenture), (iv) consummating any asset sale unless the consideration received for such sale is at least equal to the fair market value of the sold assets and at least seventy five percent (75%) of the consideration paid in connection with such sale is in the form of cash or cash equivalents, (v) permitting any of the Issuer’s Subsidiaries (as defined in the Indenture) to, directly or indirectly, create or cause any consensual restriction on the right of any Subsidiary to make certain distributions, loans or advances or transfers, (vi) entering into any transaction or series of transactions with, or for the benefit of, any affiliate of the Issuer unless such transaction meets certain conditions, (vii) disposing of the capital stock of any of its Subsidiaries or permitting any of its Subsidiaries from issuing or selling or otherwise disposing of any shares of such Subsidiary’s capital stock other than under certain conditions, or (viii) permitting its Consolidated Tangible Net Worth (as defined in the Indenture) to be less than the Consolidated Tangible Net Worth Threshold (as defined in the Indenture). If a Change of Control, Asset Sales (as defined in the Indenture), or certain other designated events including de-listing occur, holders of the Convertible Notes may require the Issuer to repurchase all or a portion of the Convertible Notes for cash at the applicable redemption price.

The Investor Rights Agreement described in Item 4 above was also entered into in connection with the transaction. In addition to the Reporting Persons’ right to designate a Board Observer described in Item 4, the Investor Rights Agreement grants CEF, subject to certain conditions, a right to review and provide comments and suggestions on the legal structures contemplated by Potential Acquisitions (as defined in the Investor Rights Agreement) by the Issuer, a right of first refusal with respect to any issuance of securities sought by the Issuer and a right of first refusal and tag-along rights for proposed sales by the Controlling Shareholders to any third party.


CUSIP NO. G21161 10 7		Page 11 of 12 Pages

CEF and Mr. Tu also entered into a noncompetition covenant and agreement, dated February 16, 2007 (the “Non-Competition Agreement”), relating to Mr. Tu’s employment as the Issuer’s Chief Executive Officer and Chairman of the Board. Pursuant to the Non-Competition Agreement, Mr. Tu may not engage directly or indirectly in a business that is competitive with the Issuer’s business through the second anniversary of termination of Mr. Tu’s current employment agreement with the Issuer, including soliciting employees of the Issuer or its affiliates or otherwise materially and adversely interfering with the Issuer’s or any of its affiliates’ business, and keeping confidential any Issuer information and assigning to the Issuer all work product.

Each of the Notes Purchase Agreement, the Convertible Notes, the Indenture, the Investor Rights Agreement and the Non-Competition Agreement sets forth certain other rights and obligations of the parties. The foregoing summaries of the terms of the Notes Purchase Agreement, the Convertible Notes, the Indenture, the Investor Rights Agreement and the Non-Competition Agreement are qualified by reference to the full text of each of the Notes Purchase Agreement, the Convertible Notes, the Indenture, the Investor Rights Agreement and the Non-Competition Agreement, each of which is incorporated by reference in Item 7 below.

Other than as described above and elsewhere in this filing, the Reporting Persons have no understandings, arrangements, relationships or contracts relating to the Issuer’s Common Stock that are required to be described hereunder.

Item 7.

Material to Be Filed as Exhibits

99.1

Joint Filing Agreement, dated as of February 26, 2007, by and among Citadel Investment Group (Hong Kong) Limited, Citadel Equity Fund Ltd., Citadel Limited Partnership, Citadel Investment Group, L.L.C. and Kenneth Griffin.

99.2

Notes Purchase Agreement among the Issuer, Safetech, CSST HK, Golden, Cheng Feng, CSST PRC and CEF, dated February 16, 2007 (incorporated by reference to Exhibit 4.1 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on February 16, 2007).

99.3

1.0% Guaranteed Senior Unsecured Convertible Note due 2012.

99.4

Indenture among the Issuer, Safetech, CSST HK and The Bank of New York, dated February 16, 2007 (incorporated by reference to Exhibit 4.2 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on February 16, 2007).

99.5

Investor Rights Agreement among the Issuer, CEF, Safetech, CSST HK, Golden, Cheng Feng, CSST PRC, Mr. Tu, Ms. Li and Whitehorse, dated February 16, 2007 (incorporated by reference to Exhibit 4.3 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on February 16, 2007).

99.6

Non-Competition Covenant and Agreement among Mr. Tu and CEF, dated February 16, 2007.


CUSIP NO. G21161 10 7		Page 12 of 12 Pages

Signature

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Dated this 26^th day of February, 2007.

KENNETH GRIFFIN

By: /s/ John C. Nagel

John C. Nagel, attorney-in-fact*

CITADEL INVESTMENT GROUP, L.L.C.

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

CITADEL LIMITED PARTNERSHIP

By: Citadel Investment Group, L.L.C.,

its General Partner

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

CITADEL EQUITY FUND LTD.

By: Citadel Limited Partnership,

its Portfolio Manager

By: Citadel Investment Group, L.L.C.,

its General Partner

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

CITADEL INVESTMENT GROUP (HONG KONG) LIMITED

By: Citadel Investment Group, L.L.C.,

its Sole Shareholder

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

* John C. Nagel is signing on behalf of Kenneth Griffin as attorney-in-fact pursuant to a power of attorney previously filed with the Securities and Exchange Commission on February 24, 2006, and hereby incorporated by reference herein. The power of attorney was filed as an attachment to a filing by Citadel Limited Partnership on Schedule 13G for Morgans Hotel Group Co.

SCHEDULE A

Directors And Executive Officers Of Citadel Investment Group, L.L.C.

The name, business address, title, present principal occupation or employment and citizenship of the sole executive officer of Citadel Investment Group, L.L.C. (“CIG”) is set forth below. The business address of such officer is 131 S. Dearborn Street, 32ndFloor, Chicago, Illinois 60603. CIG has no directors.

Name	Title and Present Principal Occupation	Citizenship
Kenneth Griffin	President and Chief Executive Officer of CIG	United States

Directors And Executive Officers Of Citadel Equity Fund Ltd.

The name, title, present principal occupation or employment, residence or business address and citizenship of each of the directors and executive officers of Citadel Equity Fund Ltd. (“CEF”) are set forth below.

Name and Citizenship	Title at CEF	Present Principal Occupation and Residence or Business Address (Principal Business of Employer)
Austin John O’Connor	Director and Vice President	Company director
United Kingdom		4 rue de l’eglise
		Wormeldange, Luxembourg L-5481

Adam C. Cooper	Director and Assistant Secretary	Senior Managing Director and General Counsel
United States		Citadel Investment Group, L.L.C.
		135 South Dearborn
		Chicago, IL 60603

Robin Bedford United Kingdom	Director, President and Secretary	President Dundee Leeds Management Services Ltd.
		129 Front Street
		Hamilton HM 12
		Bermuda
		(business services)

Directors And Executive Officers Of Citadel Investment Group (Hong Kong) Limited

The name, title, present principal occupation or employment, residence or business address and citizenship of each of the directors and executive officers of Citadel Investment Group (Hong Kong) Limited (“CIGHK”) are set forth below.

Name and Citizenship	Title at CEF	Present Principal Occupation and Residence or Business Address (Principal Business of Employer)
Gerald A. Beeson United States	Director	Chief Financial Officer Citadel Investment Group, L.L.C. 135 South Dearborn Chicago, IL 60603

Adam C. Cooper	Director	Senior Managing Director and General Counsel
United States		Citadel Investment Group, L.L.C.
		135 South Dearborn
		Chicago, IL 60603

Tim Throsby Australia	Director	President of Citadel Investment Group (Asia) Ltd. and President of Citadel Investment Group (Hong Kong) Limited Citadel Investment Group (Hong Kong) Limited Chater House Suites 1801-10 18th Floor 8 Connaught Road Central, Hong Kong

Linklaters Company Secretarial Services Limited Hong Kong	Secretary	Law Firm 10th Floor, Alexandra House 18 Chater Road Hong Kong China

EX-99.1 2 v066940_ex99-1.htm

EXHIBIT 99.1 - JOINT FILING AGREEMENT

Joint Filing Agreement

The undersigned hereby agree that the Statement on Schedule 13D filed herewith (and any amendments thereto), relating to the common stock, par value $0.0001 per share, of China Security & Surveillance Technology, Inc., a Delaware corporation, is being filed jointly with the Securities and Exchange Commission pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, on behalf of each of the undersigned.

This Agreement may be executed in counterparts and each of such counterparts taken together shall constitute one and the same instrument.

February 26, 2007

KENNETH GRIFFIN

By: /s/ John C. Nagel

John C. Nagel, attorney-in-fact*

CITADEL INVESTMENT GROUP, L.L.C.

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

CITADEL LIMITED PARTNERSHIP

By: Citadel Investment Group, L.L.C.,

its General Partner

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

CITADEL EQUITY FUND LTD.

By: Citadel Limited Partnership,

its Portfolio Manager

By: Citadel Investment Group, L.L.C.,

its General Partner

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

CITADEL INVESTMENT GROUP (HONG KONG) LIMITED

By: Citadel Investment Group, L.L.C.,

its Sole Shareholder

By: /s/ John C. Nagel

John C. Nagel, Director and Associate General Counsel

EX-99.3 3 v066940_ex99-3.htm

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR BANK S.A./N.V. (“EUROCLEAR”), OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME (“CLEARSTREAM”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF ITS AUTHORIZED NOMINEE OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM (AND ANY PAYMENT IS MADE TO ITS AUTHORIZED NOMINEE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, ITS AUTHORIZED NOMINEE, HAS AN INTEREST HEREIN.

THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR OTHER SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE, BY ACQUISITION HEREOF, THE HOLDER:

(1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT;

(2) AGREES THAT IT WILL NOT WITHIN THE PERIOD SET FORTH IN RULE 144 UNDER THE SECURITIES ACT (CURRENTLY TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY OTHER THAN WITH RESPECT TO AFFILIATES) (A) RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (I) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (II) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (III) TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, OR (V) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER OR (B) ENGAGE IN HEDGING TRANSACTIONS WITH RESPECT TO THIS SECURITY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY UNLESS IN COMPLIANCE WITH THE SECURITIES ACT; AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(A)(V) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

1.0% GUARANTEED SENIOR UNSECURED CONVERTIBLE NOTES DUE 2012

ISIN: XS0288207805

Common Code: 028820780

No. 1 $60,000,000

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC., a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to The Bank of New York Depositary (Nominees) Limited, or registered assigns, as common depositary for Clearstream Banking, société anonyme and/or Euroclear Bank S.A./N.V., at the office or agency of the Company maintained for that purpose in accordance with the terms of the Indenture, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, (i) the Repurchase Amount as set forth on Schedule I hereto on February 16, 2012, (ii) interest, semi-annually on February 16 and August 16 of each year, commencing August 16, 2007 on the outstanding principal sum of the Note at said office or agency, in like coin or currency, at the rate per annum of 1.0%, from and including February 16, 2007 or from the most recent Interest Payment Date to which interest has been paid or duly provided for to, but excluding the following Interest Payment Date and (iii) interest on overdue principal and (to the extent that payment of such interest is enforceable under applicable law) interest at the rate borne by the Notes, if any, at the rate of 5% per annum.

Except as otherwise provided in the Indenture, the interest payable on the Note pursuant to the Indenture on any February 16 or August 16 will be paid to the Person entitled thereto as it appears in the Security Register at the close of business on the record date, which shall be the February 2 or August 2 (whether or not a Business Day) next preceding such February 16 or August 16, as provided in the Indenture; provided that any such interest not punctually paid or duly provided for shall be payable as provided in the Indenture. The Company shall pay interest (i) on any Notes in certificated form by check mailed to the address of the Person entitled thereto as it appears in the Security Register (provided that the holder of Notes with an aggregate principal amount in excess of $1,000,000 shall, at the written election of such holder, be paid by wire transfer of immediately available funds) or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Common Depositary or its nominee.

Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the holder of this Note the right to convert this Note into Common Stock of the Company on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Note shall be governed by and construed in accordance with the laws of the State of New York.

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

By:

Name:

Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-named Indenture.

THE BANK OF NEW YORK,

a New York banking corporation,

as Trustee

By:

Authorized Signatory

Dated:

[REVERSE OF NOTE]

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

1.0% GUARANTEED SENIOR UNSECURED CONVERTIBLE NOTE DUE 2012

This Note is one of a duly authorized issue of Notes of the Company, designated as its 1.0% Guaranteed Senior Unsecured Convertible Notes due 2012 (herein called the “Notes”), in an initial aggregate principal amount of $60,000,000, issued and to be issued under and pursuant to an Indenture dated February 16, 2007 (herein called the “Indenture”), among the Company, China Safetech Holdings Limited and China Security & Surveillance Technology (HK) Ltd., as the Guarantors, and The Bank of New York, a New York banking corporation, as trustee (herein called the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Notes.

In case an Event of Default shall have occurred and be continuing, the principal of and accrued and unpaid Interest on all Notes may be declared by either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of a majority in aggregate principal amount of the Notes at the time outstanding, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Notes; provided that no such supplemental indenture shall (i) extend the fixed maturity of any Note, (ii) reduce the rate or extend the time of payment of Interest thereon, (iii) reduce the principal amount thereof or reduce any amount payable upon redemption or repurchase thereof, (iv) change the obligation of the Company to repurchase any Note upon the happening of a Termination of Trading in a manner adverse to the holders of Notes, (v) impair the right of any Noteholder to institute suit for the payment thereof, (vi) make the principal thereof or interest thereon payable in any coin or currency other than that provided in the Notes, (vii) impair the right to convert the Notes into Common Stock or reduce the number of shares of Common Stock or any other property receivable by a Noteholder upon conversion subject to the terms set forth in the Indenture, including Section 14.05 thereof, in each case, without the consent of the holder of each Note so affected, (viii) modify any of the provisions of Section 8.02 or Section 6.07 thereof, except to increase any such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the holder of each Note so affected, (ix) change any obligation of the Company to maintain an office or agency in the places and for the purposes set forth in Section 4.02 thereof, (x) reduce the quorum or voting requirements set forth in Article 13, (xi) subordinate the Notes or any Guarantee to any other obligation of the Company or the applicable Guarantor, (xii) release any security interest that may have been granted in favor of the holders of the Notes other than pursuant to the terms of such security interest, (xiii) at any time after a Change of Control has occurred, change the time at which the Change of Control Offer relating thereto must be made or at which the Notes must be repurchased pursuant to such Change of Control Offer, (xiv) at any time after the Company is obligated to make an Asset Sale Offer with the Excess Proceeds from Asset Sales, change the time at which such Asset Sale Offer must be made or at which the Notes must be repurchased pursuant thereto, (xv) make any change in any Guarantee that would adversely affect the holders or (xvi) reduce the aforesaid percentage of Notes, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Notes then outstanding. Subject to the provisions of the Indenture, the holders of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of the holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences except (A) a default in the payment of Interest on, or the principal of, any of the Notes, (B) a failure by the Company to convert any Notes into Common Stock of the Company, (C) a default in the payment of the purchase price pursuant to Section 3.02 of the Indenture or (D) a default in respect of a covenant or provisions of the Indenture which under Article 10 of the Indenture cannot be modified or amended without the consent of the holders of each or all Notes then outstanding or affected thereby. Any such consent or waiver by the holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes.

R-1

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and Interest on this Note at the place, at the respective times, at the rate and in the coin or currency herein prescribed.

Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

The Notes are issuable in fully registered form, without coupons, in denominations of $100,000 principal amount and any multiple of $100,000. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, without payment of any service charge but with payment of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in connection with any registration or exchange of Notes, Notes may be exchanged for a like aggregate principal amount of Notes of any other authorized denominations.

The Notes are not subject to redemption through the operation of any sinking fund.

In the event that the Company shall be required to commence an Asset Sale Offer, a Change of Control Offer or a Termination of Trading Offer, the Company shall mail to all holders of record of the Notes a notice which states the terms of such Offer to Purchase, and, in the case of a Change of Control Offer or Termination of Trading Offer, the circumstances and relevant facts regarding such event. Each holder shall have the right to accept such offer and require the Company to repurchase all or any portion of such holder’s Notes in cash equal to the Repurchase Amount.

Holders electing to have a Note purchased pursuant to a Offer to Purchase shall deliver to the Company such Note with the form entitled “Purchase Notice” on the reverse thereof duly completed, together with the Note, duly endorsed for transfer, at any time prior to the close of business on the Business Day immediately preceding the Purchase Date, and shall deliver the Notes to the Trustee (or other paying agent appointed by the Company) as set forth in the Indenture.

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If the Purchase Date falls after a record date and on or prior the corresponding Interest Payment Date, then accrued and unpaid Interest to, but excluding, the Purchase Date shall be paid on such Interest Payment Date to the holders of record of such Notes on the applicable record date instead of to the holders surrendering such Notes for repurchase on such date. The Notes will be subject to repurchase in multiples of $100,000 principal amount.

Holders have the right to withdraw any Purchase Notice by delivering to the Trustee (or other paying agent appointed by the Company) a written notice of withdrawal up to the close of business on the Business Day immediately preceding the Purchase Date all as provided in the Indenture.

If money or cash, sufficient to pay the repurchase price of all Notes or portions thereof to be purchased as of the Purchase Date is deposited with the Trustee (or other paying agent appointed by the Company), on the Purchase Date, interest will cease to accrue on such Notes (or portions thereof) immediately after such Purchase Date, and the holder thereof shall have no other rights as such other than the right to receive the repurchase price upon surrender of such Note.

Subject to the occurrence of certain events and in compliance with the provisions of the Indenture, prior to the final maturity date of the Notes, the holder hereof has the right, at its option, to convert each $100,000 principal amount of the Notes into 5,555 shares of the Company’s Common Stock (a conversion price of approximately $18.00 per share), as such shares shall be constituted at the date of conversion and subject to adjustment from time to time as provided in the Indenture, upon surrender of this Note with the form entitled “Conversion Notice” on the reverse thereof duly completed, to the Company at the office or agency of the Company maintained for that purpose in accordance with the terms of the Indenture, or at the option of such holder, the Corporate Trust Office, and, unless the shares issuable on conversion are to be issued in the same name as this Note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder or by his duly authorized attorney. The Company will notify the holder thereof in writing of any event triggering the right to convert the Notes as specified above in accordance with the Indenture.

No adjustment in respect of interest on any Note converted or dividends on any shares issued upon conversion of such Note will be made upon any conversion except as set forth in the next sentence. If this Note (or portion hereof) is surrendered for conversion during the period from the close of business on any record date for the payment of interest to the close of business on the Business Day preceding the following Interest Payment Date, this Note (or portion hereof being converted) must be accompanied by payment, in immediately available funds or other funds acceptable to the Company, of an amount equal to the interest otherwise payable on such Interest Payment Date on the principal amount being converted; provided that no such payment shall be required (1) if the Company has specified a Purchase Date that is during such period or (2) to the extent of any overdue Interest, if any overdue interest exists at the time of conversion with respect to such Note.

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No fractional shares will be issued upon any conversion, but an adjustment and payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Note or Notes for conversion.

A Note in respect of which a holder is exercising its right to require repurchase upon a Asset Sale Offer, Change of Control Offer or Termination of Trading Offer on a Purchase Date may be converted only if such holder withdraws its election to exercise either such right in accordance with the terms of the Indenture.

Upon due presentment for registration of transfer of this Note at the office or agency of the Company maintained for that purpose in accordance with the terms of the Indenture, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange thereof, subject to the limitations provided in the Indenture, without charge except for any tax, assessment or other governmental charge imposed in connection therewith.

The Company, the Trustee, any authenticating agent, any paying agent, any conversion agent and any Registrar may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon made by anyone other than the Company or any Registrar) for the purpose of receiving payment hereof, or on account hereof, for the conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any other authenticating agent nor any paying agent nor other conversion agent nor any Registrar shall be affected by any notice to the contrary. All payments made to or upon the order of such registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for monies payable on this Note.

No recourse for the payment of the principal of or Interest on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any supplemental indenture or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, shareholder, employee, agent, officer or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

For purposes of sections 1272, 1273 and 1275 of the Internal Revenue Code of 1986, as amended, this Note is being issued with Tax Original Issue Discount and the issue date of this Note is February 16, 2007.

This Note shall be governed by and construed in accordance with the laws of New York.

Terms used in this Note and defined in the Indenture are used herein as therein defined.

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ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	-	as tenants in common	UNIF GIFT MIN ACT	-	Custodian
TEN ENT	-	as tenant by the entireties	(Cust) (Minor)
JT TEN	-	as joint tenants with right of survivorship under Uniform Gifts to Minors
		Act and not as tenants in common

(State)

Additional abbreviations may also be used though not in the above list.

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SCHEDULE I

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

1.0% Guaranteed Senior Unsecured Convertible Notes due 2012

No. 1

The original Principal Amount of this Note is SIXTY MILLION DOLLARS ($60,000,000). The Company will pay the Repurchase Amount as defined below.

“Repurchase Amount” means, with respect to any Note, the Redemption Price plus any accrued and unpaid Interest on such Note (including post-petition interest in any proceeding under any Bankruptcy Law) and interest accrued on overdue principal (and, to the extent lawful, on overdue installments of interest) and premium, if any, at a rate that is 5% per annum in excess of the rate of Interest then in effect.

“Redemption Price” means the amount calculated in accordance with the following formula, rounded (if necessary) to two decimal places with 0.005 being rounded upwards:


		Redemption Price = I x (1 + r/4)^d/90
Where:
I	=	Issue price (100% of Principal Amount) of the Notes;
r	=	15.0% expressed as a decimal; and
d	=	number of days from and including the Issue Date to but excluding, the date for redemption, calculated on the basis of a 360-day year consisting of 12 months of 30 days each, and in the case of an incomplete month, the actual number of days elapsed.

For purposes thereof, the Principal Amount has been adjusted in accordance with the terms of the Indenture as set forth below:

Date

Principal Amount

Notation Explaining Principal

Amount Recorded

Authorized Signature of Trustee or Custodian

CONVERSION NOTICE

TO: CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

_______

The undersigned registered owner of this Note hereby irrevocably exercises the option to convert this Note, or the portion thereof (which is $100,000 or a multiple thereof) below designated, into shares of Common Stock of China Security & Surveillance Technology, Inc. in accordance with the terms of the Indenture referred to in this Note, and directs that the shares issuable and deliverable upon such conversion, together with any check in payment for fractional shares and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture. If shares or any portion of this Note not converted are to be issued in the name of a person other than the undersigned, the undersigned will provide the appropriate information below and pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest, including additional interest, if any, accompanies this Note.

Dated:

Signature(s)

Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP.

Fill in the registration of shares of Common Stock if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder:

(Name)

(Street Address)

(City, State and Zip Code)

Please print name and address

Principal amount to be converted

(if less than all):

Social Security or Other Taxpayer

Identification Number:

PURCHASE NOTICE

TO: CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

_______

The undersigned registered owner of this Note hereby irrevocably acknowledges receipt of a notice from China Security & Surveillance Technology, Inc. (the “Company”) regarding the right of holders to elect to require the Company to repurchase the Notes upon the occurrence of either an Asset Sale Offer, a Change of Control Offer or a Termination of Trading Offer and requests and instructs the Company to repay the entire principal amount of this Note, or the portion thereof (which is $100,000 or an integral multiple thereof) below designated, in accordance with the terms of the Indenture at the price of the Repurchase Amount, to the registered holder hereof.

Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture. The Notes shall be purchased by the Company as of the Purchase Date pursuant to the terms and conditions specified in the Indenture.

$ principal amount of the Notes to which this Purchase Notice relates (if less than entire principal amount) pursuant to 4.12, 4.17 or 4.23 of the Indenture, check the box below:

o Section 4.12 Purchase Date:_______________

o Section 4.17

o Section 4.23

Dated:

Signature(s):

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

Note Certificate Number (if applicable):

Principal amount to be repurchased (if less than all):

Social Security or Other Taxpayer Identification Number:

Assignment Form

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to

(Insert assignee’s social security or other tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

as agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date: ______________

Your Signature:

(Sign exactly as your name appears on the face of this Note)

Signature Guarantee:

EX-99.6 4 v066940_ex99-6.htm

EXECUTION COPY

NON-COMPETITION COVENANT AND AGREEMENT

THIS NON-COMPETITION COVENANT AND AGREEMENT (this “Agreement”) is made and entered into as of February 16, 2007, by and among Mr. Tu Guo Shen (PRC ID No. 360102196509275814), an individual residing in the People’s Republic of China (“PRC”) (the “Executive”), and Citadel Equity Fund Ltd. (the “Purchaser”).

RECITALS

WHEREAS, the Executive serves as the Chief Executive Officer and the Chairman of the Board of Directors of China Security & Surveillance Technology, Inc., a Delaware corporation (the “Company”);

WHEREAS, the Executive is a shareholder of the Company, beneficially owning 40.93% of the outstanding common stock of the Company as of the date hereof (33.04% through Whitehorse Technology Limited, a British Virgin Islands company wholly owned by the Executive, and 7.89% through Ms. Li Zhi Qun, the spouse of the Executive);

WHEREAS, pursuant to a notes purchase agreement dated as of February 16, 2007 between the Company, the Purchaser and the other parties thereto, and other related documents pertaining thereto, the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase, US$60,000,000 guaranteed senior unsecured convertible notes due 2012 of the Company to be issued pursuant to that certain Indenture dated as of the date hereof by and among the Company, The Bank of New York, as trustee, and the other parties thereto (the “Notes” and together with the other documents referred to in this paragraph and this Agreement, the “Transaction Documents”);

WHEREAS, in consideration of the Purchaser purchasing the Notes and entering into the transactions contemplated under the Transaction Documents, and to preserve for the Purchaser its valuable rights procured by it pursuant to the Transaction Documents, the Executive agrees to the covenants for the benefit of the Purchaser regarding the future activities and actions by the Executive as set forth in this Agreement; and

WHEREAS, it is a condition to the closing of the issuance and sale of the Notes under the Notes Purchase Agreement that the parties hereto shall have executed this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1. Definitions. Capitalized terms used in this Agreement shall have the meanings set forth below.

1.1 Affiliate” shall refer to: (1) any Person directly or indirectly controlling, controlled by or under common control with another Person, (2) any Person owning or controlling 50% or more of the outstanding voting securities of such other Person, (3) any officer, director or partner of such Person, or (4) a trust for the benefit of such Person referred to in the foregoing clause (2) of this definition

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1.2 “Business” shall mean the business of manufacturing, distributing, installing and maintaining security, surveillance, fire and alarm products and systems, and other products or systems in the similar nature.

1.3 “Company Affiliate” shall mean any entity engaged in the Business which is controlled by or under common control with the Company or the Executive.

1.4 “Competitive Business” shall mean any business that (1) currently competes with or is reasonably likely to compete with the Business in the future or (2) is engaged in an undertaking or enterprise which is substantially similar to the Business (whether in the United States, the PRC or any other country).

1.5 “Person” means any individual, corporation, company (including any limited liability company), association, partnership, joint venture, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

1.6 “Trade Secret” shall mean any information, including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans, actual or future services, or lists of actual or potential customers or suppliers that (1) derive economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use, and (2) are the subject of efforts that are reasonable under the circumstances to maintain their secrecy.

1.7 “Work Product” shall mean all intellectual property rights, including all Trade Secrets, U.S., PRC and international copyrights, patentable inventions, discoveries and improvements, and other intellectual property rights, in any documentation, programming, technology, or other work that relates to the business and interests of the Company and that was or is conceived or developed by the Executive, or delivered by the Executive to the Company at any time during the term of the Executive’s employment with the Company.

Section 2. Covenants.

2.1 Noncompetition and Nonsolicitation. During the Term (as defined in Section 2.4), the Executive hereby agrees that the Executive will not, directly or indirectly, engage in, or have any interest in, any person, firm, corporation, undertaking or business (whether as an executive, officer, director, employee, agent, security holder, consultant, investor or similar position) that engages in a Competitive Business. In addition, during the Term, the Executive agrees that he will not:

(a) either on the Executive’s own behalf or on behalf of any other person, solicit Competitive Business from any customer, supplier, distributor of, or a person in a similar commercial relationship with, the Company or the Company Affiliates;

(b) either on the Executive’s own behalf or on behalf of any other person, solicit, employ or otherwise engage as an employee, independent contractor, or otherwise any person who is and was, at any time during one year prior to such solicitation, employment or engagement, an employee of the Company or any Company Affiliate, or in any manner induce any employee of the Company or any Company Affiliate to terminate his or her employment therewith (except, in each case, as a result of general solicitations for employment not directed specifically at employees of the Company or any Company Affiliate); or

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Notwithstanding the foregoing paragraphs of this Section 2.1:

(i) the Executive may own, as an investor, holdings as part of a portfolio investment through mutual funds or other funds pooling investments in different corporations (the stock of which is publicly traded) some of which may be engaging in a Competitive Business, in each case when any and all the investment and voting decisions with respect to such voting stock are made by an unaffiliated third party fund manager; and

(ii) the Executive may serve as a shareholder, director, employee or officer of any entity that is not engaged in a Competitive Business.

2.2 Continued Employment. The Executive agrees that during the Term, (a) except in the event of an involuntary termination, the Executive shall continue to serve as the Chief Executive Officer and the Chairman of the Board of Directors of the Company; and (b) the Executive shall not voluntarily resign as a director of the Company, unless continuance of his services as a director would, in the reasonable judgment of the Executive based on advice of counsel, result in a violation by the Executive of his fiduciary duties under applicable laws, provided that in such case, the Executive shall provide the Purchaser with written notice of his intent to resign reasonably in advance of taking any action towards resignation and shall consult with the Purchaser with respect to the rationale for the proposed resignation prior to taking any such action.

2.3 Confidentiality and Other Covenants. The Executive agrees that:

(a) the Executive shall keep confidential any information, including Trade Secrets, relating to the Company, any Company Affiliate and the Business (unless such disclosure is permitted in writing by the Purchaser, required under law or by order of any governmental or regulatory authority, or relates to information already in the public domain, or is rightfully obtained from a third party without breach of any confidentiality obligation);

(b) all Work Product of the Executive conceived (whether solely or jointly with others) within the scope of the Executive’s employment with the Company belongs to the Company and any and all of the Executive’s rights to such Work Product, to the extent not yet assigned, are hereby assigned to the Company;

(c) upon the termination of the Executive’s employment with the Company, at the request of the Company, the Executive shall return to the Company all of the Company’s proprietary items in the Executive’s possession or under the Executive’s control and shall not retain any copies or other physical embodiment of any of such items; and

(d) upon the termination of the Executive’s employment with the Company, the Executive shall not hold the Executive out as an employee, agent or representative of the Company.

2.4 Term. The parties agree that the term of this Agreement (the “Term”) shall be from the date hereof until the second anniversary of the expiration or termination of the current employment agreement between the Executive and the Company under which the Executive is serving as the Chief Executive Officer of the Company.

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2.5 Specific Enforcement. Upon a breach by the Executive of Section 2.1, 2.2 or 2.3, in addition to such damages as the Purchaser may demonstrate they have sustained, directly or indirectly, by reason of said breach, the Purchaser shall be entitled to injunctive relief against the Executive if such relief is applicable and available, as a remedy at law would be inadequate and insufficient. Nothing in this Agreement shall be construed as limiting the Purchaser’s remedies or rights in any way.

Section 3. Miscellaneous.

3.1 Severability. In the event that a court of competent jurisdiction concludes that the scope of the covenants contained herein is unenforceable, the parties agree to be bound by those restrictions which the court determines in fact to be enforceable under the circumstances. Any other provision hereof prohibited by, or unlawful or unenforceable under, any applicable law of any jurisdiction shall as to such jurisdiction and to such extent be ineffective, without affecting any other provision of this Agreement or its effectiveness under any other laws, to the extent permitted by applicable law. To the full extent, however, that any provision of such applicable law may be waived, it is hereby waived, such that this Agreement shall be deemed to be a valid and binding agreement enforceable in accordance with its terms.

3.2 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and all such counterparts together shall constitute one and the same instrument.

3.3 Governing Law; Arbitration. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Any controversy or claim arising out of or relating to this Agreement, or any breach of this Agreement, shall be initiated, maintained and finally determined by binding arbitration under the rules of conciliation and arbitration of the International Chamber of Commerce (the “ICC”). The arbitral tribunal shall be appointed within thirty (30) days of the notice of dispute, and shall consist of three arbitrators appointed as follows: one arbitrator shall be appointed by the Executive, one arbitrator shall be appointed by the Purchaser, and the third arbitrator shall be appointed jointly by such two arbitrators; provided, however, that if the two arbitrators shall be unable to select the third arbitrator within such thirty (30)-day period, such third arbitrator shall be chosen by the International Court of Arbitration of the ICC. The place of arbitration shall be in Hong Kong SAR, PRC. The arbitration shall be conducted in English. The arbitrators shall be experienced and have knowledge in the subject matter of the dispute. Judgment upon any award rendered may be entered in any court having jurisdiction thereof, or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. Any award pursuant to such proceeding shall be granted in U.S. Dollars. The arbitration awards shall be non-appealable, final, binding and conclusive upon parties. Each of the parties hereby irrevocably agrees that any service of process made with respect to a dispute under this Agreement may be made pursuant to the notice procedures set forth in this Agreement.

3.4 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the parties hereto; it being understood that the Purchaser shall be permitted to assign its rights under this Agreement to any Affiliate of the Purchaser who purchases the Notes or common shares into which the Notes were converted, provided that such Affiliate shall be subject to the same terms as those set forth in this Agreement and provided that notice of such assignment is given to the Executive. The Executive shall not be entitled to assign or otherwise transfer any of their rights or obligations under this Agreement or any other party.

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3.5 Notice. Any notices to be given hereunder by either party to the other shall be in writing and may be effectuated either by personal delivery, by facsimile or by mail, postage prepaid, with return receipt requested. Notices shall be addressed to the parties as follows:

If to the Purchaser:

Citadel Equity Fund Ltd.

c/o 131 South Dearborn Street

Chicago, Illinois 60609

USA

Fax: (1-312) 267 7300

Attention: Mr. Adam C. Cooper

with a copy to:

Citadel Equity Fund Ltd.

c/o Citadel Investment Group (Hong Kong) Limited

Chater House, 18^th Floor

8 Connaught Road

Central, Hong Kong

Fax: (1-312) 267 7300

Attention: Mr. Andrew Fong and Mr. Max Liu

If to the Executive:

c/o 13/F, Shenzhen Special Zone Press Tower

Shennan Road, Futian

Shenzhen

People’s Republic of China

Fax: (86) 755-83510815

or to such other address as either the parties may designate by written notice to each other. Notices delivered personally shall be deemed duly given on the date of actual receipt; mailed notices shall be deemed duly given as of the fifth day after the date so mailed. Notices hereunder may be delivered by electronic facsimile transmission (fax) if confirmation by sender is made within three business days by mail or personal delivery.

3.6 Third Party Beneficiary Rights. This Agreement has been made and is made solely for the benefit of, and shall be binding upon, the Purchaser and the Executive, and no other person shall acquire or have any rights under or by virtue of this Agreement.

3.7 Attorney’s Fees. If any party shall bring an action to enforce this Agreement, the prevailing party shall be entitled to recover the reasonable attorneys’ fees and costs incurred by such party from the unsuccessful party.

[Signature page(s) to follow.]

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IN WITNESS WHEREOF, the parties hereto have executed this Non-Competition Covenant and Agreement as of the date first set forth above.

PURCHASER:

CITADEL EQUITY FUND LTD.

By: Citadel Limited Partnership, Portfolio Manager

By: Citadel Investment Group, L.L.C., its General Partner

By:

Name:

Title: Authorized Signatory

EXECUTIVE:

Tu Guo Shen