China Security & Surveillance Technology, Inc. [[CSR]], a leading provider of digital surveillance technology in the PRC, today announced it has signed the Notes Purchase Agreement with Citadel Equity Fund Ltd. (“Citadel”) under which the parties will restructure the Company’s two existing Guaranteed Senior Unsecured Convertible Notes due 2012 (the “Existing Notes”) into two new tranches of notes.

The new tranches of notes (“New Notes”) will consist of the Tranche A Zero Coupon Guaranteed Senior Unsecured Convertible Notes (the “Tranche A Notes”) and the Tranche B Zero Coupon Guaranteed Senior Unsecured Notes (the “Tranche B Notes”). As an inducement to the restructuring of the Existing Notes, the Company will pay to Citadel $5.0 million cash and 2.9 million restricted shares. The restructuring is expected to close, subject to the satisfaction of customary closing conditions, on or about August 31, 2009.

The Tranche A Notes will have a principal amount of $50,000,000, zero coupon interest, and mature in three years from the closing date. The Company will repay the principal amount in six consecutive semi-annual installments, starting six months from the closing date, with 25%, 25% and 50% of the principal amount to be repaid in the first, second and third year, respectively. The conversion price will be $10.00 per share initially, subject to customary conversion price adjustments, anti-dilution protections and a one-time price reset on the date that is eighteen months following the Closing Date (the “Reset Date”) based on the volume weighted average price of the Company’s shares during the 45 trading days immediately preceding the Reset Date, provided that the conversion price shall be adjusted to no lower than $6.00 per share. Citadel will be subject to certain short selling restrictions.

The Tranche B Notes, which are not convertible, will have a principal amount of $84,000,000, zero coupon interest, and mature in three years from the closing date. The Company will repay the principal amount in six consecutive semi-annual installments, starting six months from the closing date, with 46%, 46% and 8% of the principal amount to be repaid in the first, second and third year, respectively.

Mr. Guo Shen Tu, Chief Executive Officer of CSST, commented, “I am pleased that we have reached a favorable agreement with Citadel on the restructuring of our existing notes. We believe the restructured terms will lower CSST’s overall cost of capital, provide greater flexibility to our capital structure, and allow us greater agility to pursue additional strategic opportunities. Though the cash and stock payments may reduce our EPS in the near-term, the restructured notes should provide us with significant cost savings in the long run. We are also delighted that the new terms include the removal of certain covenants in the existing notes that impose restrictions on CSST’s ability to conduct strategic transactions and financing transactions. Throughout this process, we are highly appreciative of our shareholders’ continued support, and we are confident this restructuring will ultimately be beneficial to all stakeholders, as the new terms should enable CSST to further strengthen its balance sheet and capital structure, and to further augment its strategic expansions and long term growth.”

Additional New Notes Details:

The Company will be entitled to redeem the New Notes at any time with no premium or penalty at a redemption price equal to 100% of the principal amount of the New Notes to be redeemed, plus default interest, if any. On the closing date, the Company is also expected to enter into a new indenture for Tranche A Notes and a new indenture for the Tranche B Notes (the “New Indentures”) and a Second Amended and Stated Investor Rights Agreement. The New Indentures will contain customary negative covenants similar to those in the indentures governing the Existing Notes. The Second Amended and Stated Investor Rights Agreement is expected to remove certain covenants in the existing Investor Rights Agreement that impose restrictions on the Company’s ability to conduct strategic transactions and financing transactions, including, among other things, the limitation on the total number of shares of common stock outstanding, the right of first refusal, and restrictions on the per share price of securities issued or sold by the Company.

Existing Notes Details:

In February 2007 and April 2007, the Company raised $60.0 million and $50.0 million, respectively, through two guaranteed senior unsecured convertible note financings with Citadel. These notes bear interest at a rate of 1% per annum and are due in 2012. Under the indentures, if the notes are not converted before their respective maturities, the notes are to be redeemed by the Company on the maturity date at a redemption price equal to 100% of the principal amount of the notes then outstanding plus an additional amount of 15% per annum, calculated on a quarterly compounded basis, plus any accrued and unpaid interest.

As of June 30, 2009, the Company accrued $44.3 million as a redemption amount payable under the notes. Unlike the annual interest rate of 1% that the Company is actually paying out to the note holders under the notes on a semi- annual basis, the Company would only pay the accrued redemption amount under the notes if the notes are not converted into the Company’s common stock before their respective maturity dates and are redeemed in accordance with their terms.

About China Security & Surveillance Technology, Inc.

Based in Shenzhen, China, CSST manufactures, distributes, installs and services surveillance and safety products and systems as well as develops surveillance and safety related software in China. Its customers are mainly comprised of commercial and government entities and non-profit organizations. CSST has built a diversified customer base through its extensive sales and service network that includes over 150 branch offices and distribution points throughout China. To learn more about the Company visit http://www.csst.com.

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