Document:

Exhibit
      10.5

     

    EMPLOYMENT
      AGREEMENT

     

                   
      This EMPLOYMENT AGREEMENT
      (the
      "Agreement"), made as of December 1, 2005, by and between Sea Sun Capital Corp.,
      a Delaware corporation (together with its subsidiaries, the "Company"), and
      Gregory N. “Greg” Heller, a resident of Oakville Ontario (the
      "Employee").

     

    WITNESETH

     

    WHEREAS,
      Employee desires to serve the Company as its Senior Vice President and Chief
      Financial Officer. 

     

    WHEREAS,
      the parties desire to provide that the Employee be employed by the Company
      under
      the terms of this Agreement. 

     

    NOW
      THEREFORE in consideration of the mutual benefits to be derived from this
      Agreement, the Company and the Employee hereby agree as follows: 

    

    
      1.
        Term
        of Employment: Office and Duties:

    

     

    1.1. Employee’s
      term of employment under this Agreement shall commence as of the date hereof
      (the "Effective Date") and, subject to the terms hereof, shall terminate on
      such
      date (the "Termination Date") which is the earlier of (i) December 31, 2008
      or
      (ii) the termination of Employee’s employment pursuant to this Agreement (the
      period from the Effective Date until the Termination Date shall be the "Term").
      The Termination Date (and the Term) shall automatically be extended for an
      additional year on December 31, 2008 and on each subsequent last day of the
      Company's fiscal year thereafter unless (a) Employee’s employment has been
      terminated prior to such day, or (b) not later than sixty (60) days prior to
      such day, either party to this Agreement shall have given written notice to
      the
      other party that he or it does not wish to extend further the Termination Date
      (and the Term). 

     

    1.2. The
      Employee shall devote substantially all of his working time to the business
      and
      affairs of the Company other than during vacations of four weeks per year and
      periods of illness or incapacity; provided, however, that nothing in this
      Agreement shall preclude the Employee from devoting time required: (i)
      delivering lectures or fulfilling speaking engagements; or (ii) engaging in
      charitable and community activities; or (iii) from managing any passive
      investment made by him in publicly traded equity securities or other property
      (provided that no such  investment may exceed 5% of the equity of any
      publicly traded entity, without the prior approval of the Company's Chairman
      and
      Chief Executive Officer) or from serving, subject to the prior approval of
      the
      Company's Chairman and Chief Executive Officer, as a member of boards of
      directors or as a trustee of any other corporation, association or entity,
      provided, however, that such activities do not interfere with the performance
      of
      his duties hereunder. For purposes of the preceding sentence, any required
      approval shall not be unreasonably withheld. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        2.
          Compensation
          and Benefits

      

    

     

    2.1. Base
      Salary.
      The
      Company shall pay the Employee a base salary ("Base Salary") at the rate of
      US$150,000 per annum during the Term and shall commence when the company is
      adequately capitalized as determined by the Board of Directors; provided,
      however, that commencing on October 31, 2006, the Compensation Committee of
      the
      Company's Board of Directors (the "Compensation Committee") shall, and each
      year
      thereafter shall, review the Employee's annual Base Salary for potential
      increase; however, Employee’s right to annual increases shall not be
      unreasonably denied, and the Base Salary shall not be decreased at any time
      during the Term. Base Salary shall be payable in accordance with the ordinary
      payroll practices of the Company. Any increase in Base Salary shall constitute
      "Base Salary" hereunder. 

     

    2.2.
      Bonus.
      Employee will be entitled to receive an annual bonus (“the “Annual Bonus”),
      payable each year subsequent to the issuance of final audited financial
      statements, but in no case later than 120 days after the end of the Company’s
      most recently completed fiscal year. The final determination on the amount
      of
      the Annual Bonus will be made by the Compensation Committee of the Board of
      Directors, based primarily on mutually agreed upon criteria, established with
      respect to the ensuing fiscal year, within thirty (30) days of the end of each
      fiscal year. In the event that the applicable criteria cannot be mutually agreed
      upon by the Compensation Committee and the Employee, such criteria shall be
      established by majority vote of the entire Board of Directors. The Compensation
      Committee may also consider other more subjective factors in making its
      determination. The targeted amount of the Annual Bonus shall be 100% of the
      Employee’s base salary, which shall be deemed fully earned if Employee meets
      substantially all of the mutually agreed upon criteria specified above. The
      actual Annual Bonus for any given period may be higher or, if Employee fails
      to
      meet substantially all of the above-specified criteria, lower than 50%.
      Specifically, the Compensation Committee will give consideration to Earnings
      Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), to EBITDA less
      Capital Expenditures, and to other traditional criteria for determining
      operating performance. The Compensation Committee may also consider other more
      subjective factors in making its determination. Notwithstanding anything herein
      to the contrary, Employee shall be entitled to receive an Annual Bonus of 50%
      of
      the Employee’s base salary if in any fiscal year the Company receives net
      proceeds from a financing in the amount of at least $5,000,000, and Employee
      shall be entitled to receive an Annual Bonus of 100% of the Employee’s base
      salary if in any fiscal year the Company receives net proceeds from a financing
      in the amount of at least $10,000,000. 

     

    2.3.
      Stock
      Option Awards.
      As of
      the Effective Date of this agreement, Employee shall receive an option to
      purchase 200,000 shares of the Company’s common stock; par value $0.01 per share
      (the “Common Stock”) at an exercise price equal to $0.75 per share; the other
      terms and conditions of such award shall be governed by the terms of a
      stock option award agreement which will be drafted by the Company. On the first
      business day of each of the Company's 2007, and 2008 fiscal years (in each
      case
      so long as the Termination Date has not occurred), the Company shall award
      Employee an additional option to acquire 100,000 shares of Company Common Stock
      at an exercise price equal to the market price of Company Common Stock on the
      date of the grant; the other terms and conditions of such awards shall be
      governed by the terms of a stock option award agreement in a form substantially
      similar to that then used by the Company. The options awarded pursuant to this
      Section 2.3 shall be for a term of ten (10) years and shall vest in one-half
      increments beginning on the first anniversary of the date of the award and
      annually thereafter until fully vested. The vesting of the Employment Option
      shall accelerate upon a change in control of the Company as defined in Rule
      405
      of the Securities Act of 1933 or upon sale of substantially all of the assets
      of
      the Company or the merger out of existence of the Company provided that Employee
      is still in the employ of the Company or has not been terminated in
      contemplation of such transaction.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    2.4.
      Withholding
      and Employment Tax.
      Payment
      of all compensation hereunder shall be subject to customary withholding tax
      and
      other employment taxes as may be required with respect to compensation paid
      by
      an employer/corporation to an employee.

     

    2.5.
      Employee
      Medical, Health And Dental Plans.
      The
      Company shall provide the Employee and his family during the Term of his
      employment with full medical, health and dental coverage, which is commensurate
      with similar sized companies.

     

    2.6.
      Disability.
      The
      Company shall, to the extent such benefits can be obtained at a reasonable
      cost,
      provide the Employee with disability insurance benefits at least as favorable
      to
      the Employee as those being provided to other senior executives of similar
      sized
      companies. In the event of the Employee’s Disability (as hereinafter defined),
      the Employee and his family shall continue to be covered by all of the Company’s
      life, medical, health and dental plans, at the Company’s expense, to the extent
      such benefits can be obtained at a reasonable cost, for the term of such
      Disability (as hereinafter defined) in accordance with the terms of such plans.
      

     

    2.7.
      Death.
      The
      Company shall, to the extent such benefits can be obtained at a reasonable
      cost,
      provide the Employee with life insurance benefits at least as favorable to
      the
      Employee as those being provided to other senior executives of similar sized
      companies, however the policy shall not be less than one million US dollars
      (US$1,000,000). In the event of the Employee’s death, the Employee’s family
      shall continue to be covered by all of the Company’s medical, health and dental
      plans, at the Company’s expense, to the extent such benefits can be obtained at
      a reasonable cost, for twenty-four (24) months following the Employee’s death in
      accordance with the terms of such plans. 

     

    2.8.
      Vacation.
      Employee shall receive four (4) weeks of vacation annually, administered in
      accordance with the Company’s vacation policy. 

    

    
      3.
        Business
        Expenses

    

     

    3.1. Expenses.
      Employee is authorized to incur reasonable expenses in carrying out his duties
      and responsibilities under this Agreement, including, without limitation,
      expenses for travel and similar items related to such duties and
      responsibilities. The Company will reimburse Employee for all such expenses
      upon
      presentation by Employee, from time to time, of accounts of such expenditures
      (appropriately itemized and approved consistent with the Company's
      policy).

     

    3.2. Automobile
      Expenses.
      Use of,
      and the payment of all reasonable expenses (including, without limitation,
      insurance, repairs, maintenance, fuel and oil) for, an automobile. The monthly
      lease payment or allowance for such automobile shall be a minimum of $750 per
      month and is to be reviewed by the Compensation Committee on an annual
      basis;

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    3.3. YPO
      Dues.
      The
      Company will reimburse the Employee for all dues, fees and expenses associated
      with his membership in YPO (Young President’s Association) and its affiliated
      associations.

     

    
      4.
        Termination
        of Employment.

    

     

    4.1. Termination
      by the Company Not for Cause or by Employee for Good Reason.

     

    (a) The
      Company may terminate Employee’s employment at any time for any reason. If
      Employee’s employment is terminated prior to the Termination Date, as that date
      may be extended from time to time under the terms of Section 1.1 hereof, (i)
      by
      the Company (other than for Cause (as defined in Section 4.2(c) hereof) or
      by
      reason of Employee’s death or Permanent Disability (as defined in Section 4.2(d)
      hereof)), or (ii) by the Employee for Good Reason (as defined in Section 4.1(c)
      hereof) prior to the Termination Date, Employee shall receive the following
      items and payments:

     

     (i)
      An amount (the "Termination Amount") in lieu of any Bonus in respect of all
      or
      any portion of the fiscal year in which such termination occurs and any other
      cash compensation, which Termination Amount shall be payable in a single lump
      sum within thirty (30) days following the date of such termination. The
      Termination Amount shall consist of an amount equal to the sum of (x) [two
      (2)
      times Employee’s Base Salary for the fiscal year immediately preceding the year
      in which such termination occurs] plus (y) [two (2) times Employee’s Bonus for
      the fiscal year immediately preceding the year in which such termination
      occurs];

     

    (ii)
      Employee shall be entitled to receive a cash lump sum payment in respect of
      accrued but unused vacation days (the "Vacation Payment") and to Base Salary
      earned but not yet paid (the "Compensation Payment");

     

    (iii)
      Any
      then unvested restricted stock and/or time-vesting stock option awards
      previously granted to Employee by the Company, including, without limitation,
      those grants set forth in Sections 2.3 hereof, shall become immediately
      one-hundred percent vested; and

     

    (iv)
      Any
      other benefits due to Employee pursuant to the terms of any employee benefit
      plan or policy maintained generally for employees or a group of management
      employees.

     

    (b) The
      Vacation Payment and the Compensation Payment shall be paid by the Company
      to
      Employee within 30 days after the termination of Employee’s employment by check
      payable to the order of Employee or by wire transfer to an account specified
      by
      Employee.

     

    (c)  For
      purposes of this Agreement, "Good Reason" shall mean any of the following
      (without Employee’s express prior written consent):

     

    (i) Any
      material breach by the Company of this Agreement, including any material
      reduction by the Company of Employee’s, title, duties or responsibilities
      (except in connection with the termination of Employee’s employment for Cause,
      as a result of Permanent Disability, as a result of Employee’s death or by
      Employee other than for Good Reason); or

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (ii) A
      reduction by the Company in Employee’s Base Salary, other than a reduction which
      is part of a general salary reduction program affecting senior Employees of
      the
      Company generally; or

     

    (iii) Any
      change by the Company of the Employee’s place of employment to a location more
      than fifty (50) miles from the Company's headquarters.

     

    4.2 Discharge
      for Cause; Voluntary Termination by Employee; Termination Because of Death
      or
      Permanent Disability.

     

    (a) The
      Company shall have the right to terminate the employment of Employee for Cause.
      In the event that Employee’s employment is terminated prior to the Termination
      Date (i) by the Company for Cause, or (ii) by Employee other than (A) for Good
      Reason or (B) as a result of the Employee’s Permanent Disability or death,
      Employee shall only be entitled to receive the Compensation Payment and the
      Vacation Payment. Employee shall not be entitled, among other things, to the
      payment of any Bonus in respect of all or any portion of the fiscal year in
      which such termination occurs, but shall be entitled to the payment of any
      unpaid bonus earned with respect to any prior fiscal year. After the termination
      of Employee’s employment under this Section 4.2, the obligations of the Company
      under this Agreement to make any further payments, or provide any benefits
      specified herein, to Employee shall thereupon cease and terminate. 

     

    (b) If
      Employee’s employment is terminated as a result of Employee’s Permanent
      Disability or death:

     

    (i) Employee
      shall be entitled to receive the annual bonus described in Section 2.2 hereof
      prorated to the date of Employee’s Permanent Disability or death;

     

    (ii) Any
      then
      unvested restricted stock and/or time-vesting stock option awards previously
      granted to Employee by the Company, including, without limitation, those grants
      set forth in Section 2.3 hereof, shall become immediately one-hundred percent
      vested; provided, however that in the event of Employee’s death future option
      awards shall; and

     

    (iii) The
      Employee shall receive any other benefits due to Employee pursuant to the terms
      of any employee benefit plan or policy maintained generally for employees or
      a
      group of management employees

     

    (c) As
      used
      herein, the term "Cause" shall be limited to (i) willful malfeasance, willful
      misconduct or gross negligence by Employee in connection with his employment,
      (ii) willful and continuing refusal by Employee to perform his duties hereunder
      or any lawful direction of the Company's Board of Directors (the "Board"),
      after
      notice of any such refusal to perform such duties or direction was given to
      Employee and Employee is provided a reasonable opportunity to cure such
      deficiency, or (iii) any material breach of the provisions of Section 10 of
      this
      Agreement by Employee or any other material breach of this Agreement by Employee
      after notice of any such breach and an opportunity to cure such breach.
      Termination of Employee pursuant to this Section 4.2 shall be made by delivery
      to Employee of a copy of a resolution duly adopted by the affirmative vote
      of
      not less than a majority of the then members of the Board at a meeting of the
      Board called and held for the purpose (after 30 days prior written notice to
      Employee and reasonable opportunity for Employee to be heard before the Board
      prior to such vote), finding that in the reasonable judgment of the Board,
      Employee was guilty of conduct set forth in any of clauses (i) through (iii)
      above and specifying the particulars thereof.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (d) For
      purposes of this Agreement "Permanent Disability" shall have the same meaning
      ascribed thereto in the Company's Long-Term Disability Benefit Plan applicable
      to senior Employee officers as in effect on the date hereof. 

     

    
      5.
        Mitigation
        of Damages.
        Employee shall not be required to mitigate damages or the amount of any payment
        provided for under this Agreement by seeking other employment or otherwise
        after
        the termination of his employment  hereunder, and any amounts earned by
        Employee, whether from self-employment, as a common-law employee or otherwise,
        shall not reduce the amount of any Termination Amount otherwise payable to
        him.

    

     

    
      6.
        Notices.
        All
        notices or communications hereunder shall be in writing, addressed as
        follows:

    

     

    
      	
              To
                the Company:

            	
              Sea
                Sun Capital Corp.

            
	
               

            	
              424
                Brookmill Road

            
	
               

            	
              Oakville,
                ON Canada L6J 5K5

            
	
               

            	 
	
               

            	
              Attn:
                President and Chief Executive Officer

            
	
               

            	
               

            
	
              To
                Employee:

            	
              Gregory
                N Heller

            
	
               

            	
              2316
                Tesla Cres.

            
	
               

            	
              Oakville
                ON Canada L6H 7T5

            

    

     

    Any
      such
      notice or communication shall be delivered by hand or by courier or sent
      certified or registered mail, return receipt requested, postage prepaid,
      addressed as above (or to such other address as such party may designate in
      a
      notice duly delivered as described above), and the third business day after
      the
      actual date of mailing shall constitute the time at which notice was given.
      

     

    7. Separability;
      Legal Fees.
      If any
      provision of this Agreement shall be declared to be invalid or unenforceable,
      in
      whole or in part, such invalidity or unenforceability shall not affect the
      remaining provisions hereof which shall remain in full force and effect. Each
      party hereto shall be solely responsible for any and all legal fees incurred
      by
      him or it in connection with this Agreement, including the enforcement. In
      the
      event the Employee is required to bring any action to enforce rights or to
      collect monies due under this Agreement and is successful in such action, the
      Company shall reimburse the Employee for all of Employee’s reasonable attorneys'
      fees and expenses in preparing, investigating and pursuing such
      action.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    8. Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the heirs and
      representatives of Employee and the assigns and successors of the Company,
      but
      neither this Agreement nor any rights or obligations hereunder shall be
      assignable or otherwise subject to hypothecation by Employee (except by will
      or
      by operation of the laws of intestate succession) or by the Company, except
      that the Company may assign this Agreement to any successor (whether by merger,
      purchase or otherwise) to the stock, assets or business(es) of the Company.
      

     

    9. Amendment.
      This
      Agreement may only be amended by written agreement of the parties hereto.

     

    10. Nondisclosure
      of Confidential Information; Non-Competition;
      Non-Disparagement. 

     

    (a) Employee
      shall not, without the prior written consent of the Company, use, divulge,
      disclose or make accessible to any other person, firm, partnership, corporation
      or other entity any Confidential Information (as defined below) pertaining
      to
      the business of the Company or any of its affiliates, except (i) while
      employed by the Company, in the business of and for the benefit of the Company,
      or (ii) when required to do so by a court of competent jurisdiction, by any
      governmental agency having supervisory authority over the business of the
      Company, or by any administrative body or legislative body (including a
      committee thereof) with jurisdiction to order Employee to divulge, disclose
      or
      make accessible such information. For purposes of this Section 10(a),
      "Confidential Information" shall mean non-public information concerning the
      financial data, strategic business plans, product development (or other
      proprietary product data), customer lists, marketing plans and other non-public,
      proprietary and confidential information of the Company or its affiliates (the
      "Restricted Group") or customers, that, in any case, is not otherwise available
      to the public (other than by Employee’s breach of the terms
      hereof).

     

    (b) During
      the Term and for one (1) year thereafter, Employee agrees that, without the
      prior written consent of the Company, (A) he will not, directly or indirectly,
      in Canada and the United States, participate in any Position (as defined below)
      in any business which is in direct competition with any business of the
      Restricted Group and (B) he shall not, on his own behalf or on behalf of any
      person, firm or company, directly or indirectly, solicit or offer employment
      to
      any person who has been employed by the Restricted Group at any time during
      the
      12 months immediately preceding such solicitation, and (C) he shall not, on
      his
      own behalf or  on behalf of any person, firm or company, solicit, call
      upon, or otherwise communicate in any way with any client, customer, prospective
      client or prospective customer of the Company or of any member of the Restricted
      Group for the purposes of causing or of attempting to cause any such person
      to
      purchase products sold or services rendered by the Company or by any member
      of
      the Restricted Group from any person other than the Company or any member of
      the
      Restricted Group. The term "Position" shall include, without limitation, a
      partner, director, holder of more than 5% of the outstanding voting shares,
      principal, Employee, officer, manager or any employment or consulting position.
      It is acknowledged and agreed that the scope of the clause as set forth above
      is
      essential, because (i) a more restrictive definition of "Position" (e.g.
      limiting it to the "same" position with a competitor) will subject the Company
      to serious, irreparable harm by allowing competitors to describe positions
      in
      ways to evade the operation of this clause, and substantially restrict the
      protection sought by the Company, and (ii) by the allowing Employee to escape
      the application of this clause by accepting a position designated as a "lesser"
      or "different" position with a competitor, the Company is unable to restrict
      the
      Employee from providing valuable information to such competing company to the
      harm of the Company.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    (c) Employee
      agrees that he will not, directly or indirectly, individually or in concert
      with
      others, engage in any conduct or make any statement that is likely to have
      the
      effect of undermining or disparaging the reputation of the Company or any member
      of the Restricted Group, or their good will, products, or business
      opportunities, or that is likely to have the effect of undermining or
      disparaging the reputation of any officer, director, agent, representative
      or
      employee, past or present, of the Company or any member of the Restricted Group.
      Company agrees that it shall not, directly or indirectly, engage in any conduct
      or make any statement that is likely to have the effect of undermining or
      disparaging the reputation of Employee.

     

    (d) For
      purposes of this Section 10, a business shall be deemed to be in competition
      with the Restricted Group if it is principally involved in the purchase, sale
      or
      other dealing in any property or the rendering of any service purchased, sold,
      dealt in or rendered by the Restricted Group as a material part of the business
      of the Restricted Group within the same geographic area in which the Restricted
      Group effects such purchases, sales or dealings or renders such services.
      Nothing in this Section 10 shall be construed so as to preclude Employee from
      investing in any company pursuant to the provisions of Section 1.2
      hereof.

     

    (e) Employee
      and the Company agree that this covenant not to compete is a reasonable covenant
      under the circumstances, and further agree that if in the opinion of any court
      of competent jurisdiction such restraint is not reasonable in any respect,
      such
      court shall have the right, power and authority to excise or modify such
      provision or provisions of this covenant as to the court shall appear not
      reasonable and to enforce the remainder of the covenant as so modified. Employee
      agrees that any breach of the covenants contained in this Section 10 would
      irreparably injure the Company. Accordingly, Employee agrees that the Company
      may, in addition to pursuing any other remedies it or they may have in law
      or in
      equity, cease making any payments otherwise required by this Agreement and
      obtain an injunction against Employee from any court having jurisdiction over
      the matter restraining any further violation of this Agreement by
      Employee.

     

    11. 
      Beneficiaries; References.
      Employee shall be entitled to select (and change, to the extent permitted under
      any applicable law) a beneficiary or beneficiaries to receive any compensation
      or benefit payable hereunder following Employee’s death, and may change such
      election, in either case by giving the Company written notice thereof. In the
      event of Employee’s death or a judicial determination of his incompetence,
      reference in this Agreement to Employee shall be deemed, where appropriate,
      to
      refer to his beneficiary, estate or other legal representative. Any reference
      to
      the masculine gender in this Agreement shall include, where appropriate, the
      feminine.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    12. Survivorship.
      The
      respective rights and obligations of the parties hereunder shall survive any
      termination of this Agreement to the extent necessary to the intended
      preservation of such rights and obligations. In particular, the provisions
      of
      Section 10 hereunder shall remain in effect as long as is necessary to give
      effect thereto. 

     

    13. Governing
      Law.
      This
      Agreement shall be construed, interpreted and governed in accordance with the
      laws of Ontario, without reference to rules relating to conflicts of
      law.

     

    14. Effect
      on Prior Agreements.
      This
      Agreement contains the entire understanding among the parties hereto and
      supersedes in all respects any prior or other agreement or understanding among
      the parties or any affiliate or predecessor of the Company and Employee with
      respect to Employee’s employment, including but not limited to any severance
      arrangements. Under no circumstances shall Employee be entitled to any other
      severance payments or benefits of any kind, except for the payments and benefits
      described herein.

     

    15. Withholding.
      The
      Company shall be entitled to withhold from payment any amount of withholding
      required by law.

     

    16. Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which will be
      deemed an original.

     

          IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement on the day and year first above
      written.

    
      	 	 	 
	 	
              SEA
                SUN CAPITAL CORP.

            
	 
 	 
 	 
 
	
            	By:  	
	 	
              

              Name:
                Graham Millington

            
	 	
              Title:
                President and Chief Executive Officer

            
	 	
               

               

            
	 	
              
Greg
              Heller

    

     

    
      
        
        

      

      
        -9-Unassociated Document

    Exhibit
      10.1

     

    

      November
        27, 2006

      

      

      JLF
        Asset
        Management, L.L.C.

      153
        EAST
        53RD ST

      51ST
        FLOOR

      NEW
        YORK
        NY 10022 

      

      

      This
        letter constitutes an agreement (this “Agreement”), subject to the terms and
        conditions contained herein, between the purchasers listed on the signature
        page
        hereto (the “Purchasers”) and China Security & Surveillance Technology,
        Inc., a Delaware corporation (the “Company”), pursuant to which the Purchasers
        will buy and the Company will sell, common stock to the Purchasers.

      

      1.
        Purchasers shall buy from the Company, and the Company shall sell to Purchasers
        the number of unissued shares of the Company’s common stock, par value $0.0001
        per share listed next to Purchasers’ names on Schedule
        1
        attached
        hereto (the “Shares”) payable in cash at closing by wire transfer to an account
        designated by the Company.

      

      2.
        The
        Purchasers represent and warrant to the Company as follows:

      

      (a)
        The
        Purchasers are “accredited investors” within the meaning of Rule 501(a) under
        the Securities Act, of 1933 as amended (the “Securities Act”) or “qualified
        institutional buyers” within the meaning of Rule 144A under the Securities Act
        as indicated on Schedule
        1
        attached
        hereto. The Purchasers, either alone or together with their representatives,
        have such knowledge, sophistication and experience in business and financial
        matters so as to be capable of evaluating the merits and risks of the
        prospective investment in the Shares, and have so evaluated the merits and
        risks
        of such investment to their satisfaction. The Purchasers are able to bear
        the
        economic risk of an investment in the Shares. 

      

      (b)
        The
        Purchasers (i) are acquiring the Shares for their own account for investment
        only and (ii) not with a view towards, or for resale in connection with,
        the
        public sale or distribution thereof. 

      

      (c)
        The
        Company has made available to such Purchasers all materials relating to the
        business, finances and operations of the Company and materials relating to
        the
        offer and sale of the Shares which have been requested by such Purchasers.
        Such
        Purchasers and its advisors have been afforded the opportunity to ask questions
        of the Company. Such Purchasers have sought such accounting, legal and tax
        advice as it has considered necessary to make an informed investment decision
        with respect to its acquisition of the Shares. 

      

      (d)
        Such
        Purchasers understand that no United States federal or state agency or any
        other
        government or governmental agency has passed on or made any recommendation
        or
        endorsement of the Shares or the fairness or suitability of the investment
        in
        the Shares nor have such authorities passed upon or endorsed the merits of
        the
        offering of the Shares. 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (e)
        Such
        Purchasers understand that (i) the Shares have not been and are not being
        registered under the Securities Act or any state securities laws, and may
        not be
        offered for sale, sold, assigned or transferred unless subsequently registered
        thereunder or there is an exemption from registration; (ii) any sale of the
        Shares made in reliance on Rule 144 promulgated under the Securities Act,
        as
        amended, or any successor rule thereto (“Rule
        144”)
        may be
        made only in accordance with the terms of Rule 144 and further, if Rule 144
        is
        not applicable, any resale of the Shares under circumstances in which the
        seller
        (or the person through whom the sale is made) may be deemed to be an underwriter
        (as that term is defined in the Securities Act) may require compliance with
        some
        other exemption under the Securities Act or the rules and regulations of
        the
        Securities and Exchange Commission (the “Commission”) thereunder; and (iii)
        neither the Company nor any other person is under any obligation to register
        such securities under the Securities Act or any state securities laws or
        to
        comply with the terms and conditions of any exemption thereunder. 

      

      (f)
        Such
        Purchasers understand that the certificates or other instruments representing
        the Shares, shall bear a restrictive legend referring to the transferability
        restrictions applicable under the Federal Securities laws (and a stop-transfer
        order may be placed against transfer of such stock certificates).

      

      (g)
        Such
        Purchasers have full right, power, authority and capacity to enter into this
        Agreement and to consummate the transactions contemplated hereby. This Agreement
        has been duly and validly authorized, executed and delivered on behalf of
        such
        Purchasers and is a valid and binding agreement of such Purchasers enforceable
        against such Purchasers in accordance with its terms, subject as to
        enforceability to general principles of equity and to applicable bankruptcy,
        insolvency, reorganization, moratorium, liquidation and other similar laws
        relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies. 

      

      (h)
        Such
        Purchasers are organized in the state and at the address specified on
Schedule
        1
        hereto.

      

      (i)
        The
        Company will not incur, directly or indirectly, as a result of any action
        taken
        by the Purchasers, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Agreement or any
        transactions contemplated hereby. 

      

      3.
        The
        Company represents and warrants that, except as otherwise disclosed in the
        Commission Documents:

       

      (a)
        it is
        duly organized, validly existing and in good standing under the laws of its
        jurisdiction of organization, and is duly qualified to do business and is
        in
        good standing in each jurisdiction in which such qualification is required
        by
        law except where the failure to so qualify would not result in a material
        adverse effect. As used in this agreement, “material adverse effect” means any
        material adverse effect on the business, properties, assets, operations,
        results
        of operations, financial condition or prospects of the Company and its
        subsidiaries, if any, taken as a whole;

       

      (b)
        it
        has the corporate power and authority to own or hold under lease the properties
        it purports to own or hold under lease and to transact the business it
        transacts, except where the failure to so own or hold under lease its properties
        would not result in a material adverse effect;

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (c)
        it
        has the full right, power and authority to enter into this agreement and
        perform
        the transactions contemplated hereunder;

       

      (d)
        this
        agreement has been duly authorized, executed and delivered on behalf of the
        Company and constitutes the valid and binding obligation of the Company,
        enforceable in accordance with its terms, subject as to enforceability to
        general principles of equity and to applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation and other similar laws relating to,
        or
        affecting generally, the enforcement of applicable creditors’ rights and
        remedies;

       

      (e)
        the
        execution, delivery and performance of this agreement, the sale and delivery
        of
        the Shares, and compliance with the provisions hereof by the Company, do
        not and
        will not, with or without the passage of time or the giving of notice or
        both,
        (i) violate any provision of law, statute, ordinance, rule or regulation
        or any
        ruling, writ, injunction, order, judgment or decree of any court, administrative
        agency or other governmental body, (ii) result in any breach of any of the
        terms, conditions or provisions of, or constitute a default (or give rise
        to any
        right of termination, cancellation or acceleration) under any note, indenture,
        mortgage or lease, or any other material contract that is filed as an exhibit
        to
        any of the Company’s Commission Documents; or (iii) result in any breach in any
        of the Company’s organizational documents;

       

      (f)
        The
        Company is not a party to, subject to or bound by any agreement or any judgment,
        order, writ, prohibition, injunction or decree of any court or other
        governmental body which would prevent the execution or delivery of this
        agreement or the issuance, conveyance and sale of the Shares to the Purchasers
        pursuant to the terms hereof;

       

      (g)
        all
        consents, approvals or authorizations of, or registrations, filings or
        declarations with, any governmental authority, stock exchange or market,
        the
        Company’s board of directors and shareholders, or any other person, required in
        connection with the execution, delivery and performance of this agreement
        or the
        transactions contemplated hereby have been or by the Closing Date (as defined
        below) will have been obtained by the Company and will be in full force and
        effect;

       

      (h)
        there
        are no actions, investigations, demands, suits or proceedings pending or
        threatened against or affecting the Company, or affecting the rights of the
        Company to enter into this agreement or consummate the transactions contemplated
        hereby;

       

      (i)
        The
        Company has complied with all applicable laws, statutes, codes, acts,
        ordinances, orders, judgments, decrees, injunctions, rules, regulations,
        permits, licenses, authorizations, directions and requirements of governmental
        entities, except for such non-compliance which would not reasonably be expected
        to have a material adverse effect on the Company or its
        subsidiaries;

      

      (j)
        The
        Company has correctly prepared and filed all tax returns or reports that
        are
        required to have been filed in any jurisdiction, and has timely paid in full
        all
        taxes due and payable with respect thereto, except where the failure to so
        file
        would not have a material adverse effect on the Company or its
        subsidiaries;

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (k)
        upon
        consummation of the purchase contemplated hereby, the Shares shall have been
        duly and validly authorized and issued, fully paid and non-assessable and
        free
        and clear of all liens, pledges, security interests and
        encumbrances;

      

      (l)
        in
        reliance on the investment representations made by the Purchasers contained
        herein, the offer, issuance, sale and delivery of the Shares, are exempt
        from
        the registration requirements of the Securities Act and all applicable state
        securities laws;

      

      (m)
        a
        copy of the Company’s Annual Report on Form 20-F for the year ended December 31,
        2005 (the “2005 20-F”) and each report, schedule and effective registration
        statement and filed by the Commission since December 31, 2005, (as the documents
        may have been amended since the time of their filing, the “Commission
        Documents”) has been made available to the Purchasers either by physical
        delivery or via the Commission's EDGAR System. As of their respective filing
        dates, each Commission Document complied in all material respects with the
        requirements of the Securities Act or the Securities Exchange Act of 1934,
        as
        amended (the “Exchange Act”), as applicable, and the rules and regulations of
        the Commission thereunder applicable to the Commission Documents, and no
        Commission Document contained any untrue statement of a material fact or
        omitted
        to state any material fact required to be stated therein or necessary to
        make
        the statements therein, in light of the circumstances under which they were
        made, not misleading. The financial statements included in the Commission
        Documents were prepared in accordance with United States generally accepted
        accounting principles (“GAAP”), applied consistently with the past practices of
        the Company (except as may be indicated in the notes thereto), and as of
        their
        respective dates, fairly present, in all material respects, the consolidated
        financial position of the Company and the results of its operations as of
        the
        time and for the periods indicated therein and complied as to form in all
        material respects with then applicable accounting requirements and with the
        published rules and regulations of the Commission with respect
        thereto;

      

      (n)
        since
        September 30, 2006, except as disclosed in the Commission Documents filed
        subsequent to that date, there has not been any material adverse change in
        the
        business, financial condition or operating results of the Company or its
        subsidiaries;

      

      (o)
        The
        Company has not since December 31, 2005, received notice (written or oral)
        from any stock exchange or market on which its common stock is or has been
        listed (or on which it has been quoted) to the effect that it is not in
        compliance with the continuing listing or maintenance requirements of such
        exchange or market; and

      

      (p)
        the
        authorized capital stock of the company consists of 100,000,000 shares of
        common
        stock (“Common Stock”). As of the date hereof, there are issued and outstanding
        29,209,259 shares of Common Stock. All such issued and outstanding shares
        have
        been duly authorized and validly issued and are fully paid and nonassessable,
        including the Shares which will be issued hereunder. Except as disclosed
        in the
        Commission Documents, there are no outstanding rights, options, warrants,
        conversion rights, preemptive rights, rights of first refusal or similar
        rights
        for the purchase or acquisition from the company of any securities of the
        company. All outstanding shares have been issued in compliance with state
        and
        federal securities laws. There are no agreements to which the company is
        a party
        or, to the knowledge of the company, to which any stockholder of the company
        is
        a party, with respect to the voting or transfer of the capital stock of the
        company. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      4.
        The
        Company covenants and agrees as follows:

      

      (a)
        to
        file a registration statement on or before April 30, 2007 (the “Filing Date”) on
        Form S-1, or such other form that is appropriate, covering the resale of
        the
        Shares (the “Registrable Securities”). The Company will use its best efforts to
        cause the registration statement to become effective on or before December
        31,
        2007 (the “Effectiveness Date”); provided
        that,
        if (1)
        the registration statement is not filed by the Filing Date, (2) the registration
        statement is not declared effective by the Effectiveness Date, or (3) prior
        to
        the time that the Registrable Securities Shares may be resold pursuant to
        Rule
        144, the registration statement shall cease to be available for use by the
        Purchasers (including, without limitation, by reason of a stop order, a material
        misstatement or omission in such registration statement or the information
        contained in such registration statement having become outdated), then the
        Company shall pay to the Purchasers an amount equal to one percent (1%) per
        month of the purchase price paid for the Shares purchased by the Purchasers.
        Thereafter, for every 30 days that pass during which any of the events described
        in clauses (1), (2), and (3) above occurs and is continuing (the “Blackout
        Period”), the Company shall pay to the Purchasers an additional amount equal to
        one percent (1%) of the purchase price paid for the Shares purchased by the
        Purchasers. Each such payment shall be due within five (5) days of the end
        of
        each calendar month of the Blackout Period until the termination of the Blackout
        Period and within five (5) days after such termination. Such payments shall
        be
        in partial compensation to the Purchasers, and shall not constitute the
        Purchasers’ exclusive remedy for such events. The Blackout Period shall
        terminate upon (x) the filing of the registration statement in the case of
        clause (1) above; or (y) the effectiveness of the registration statement
        in the
        case of clauses (2) and (3) above. 

      

      (b)
        if at
        any time prior to the two year anniversary of the date the Purchasers acquires
        the Registrable Securities, the Company or any shareholder of the Company
        proposes to register any of its common stock or any securities convertible
        into
        common stock under the Securities Act (other than pursuant to an offering
        of
        securities in connection with an employee benefit, share dividend, share
        ownership or dividend reinvestment plan or registration of securities in
        connection with a business combination transaction) and the registration
        form to
        be used may be used by the Company for the registration of the Registrable
        Securities, the Company shall give prompt written notice to the Purchasers
        of
        its intention to effect such a registration (each a “Piggyback Notice”) and,
        shall include in such registration all Registrable Securities with respect
        to
        which the Company has received written request from the Purchasers for inclusion
        therein within ten (10) days after the date of sending the Piggyback Notice
        (the
“Piggyback Registration”) to the Purchasers. 

      

      (c)
        in
        connection with any registration, the Company will, as expeditiously as
        possible:

       

      (i)
        prepare and file with the Commission a registration statement with respect
        to
        such securities and use its best efforts to cause such registration statement
        to
        become and remain effective for a period of time required for the disposition
        of
        such securities by the Purchasers;

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (ii)
        prepare and file with the Commission such amendments and supplements to such
        registration statement and the prospectus used in connection therewith as
        may be
        necessary to keep such registration statement effective and to comply with
        the
        provisions of the Securities Act with respect to the sale or other disposition
        of all securities covered by such registration statement until the such time
        as
        all of such securities have been disposed of in a public offering;

       

      (iii)
        furnish to the Purchasers such number of copies of a summary prospectus or
        other
        prospectus, including a preliminary prospectus, in conformity with the
        requirements of the Securities Act, and such other documents, as the Purchasers
        may reasonably request;

       

      (iv)
        register or qualify the securities covered by such registration statement
        under
        such other securities or blue sky laws of such jurisdictions within the United
        States and Puerto Rico as the Purchasers shall request (provided,
        however,
        that it
        shall not be obligated to qualify as a foreign corporation to do business
        under
        the laws of any jurisdiction in which it is not then qualified or to file
        any
        general consent to service or process), and do such other reasonable acts
        and
        things as may be required of it to enable the Purchasers to consummate the
        disposition in such jurisdiction of the securities covered by such registration
        statement;

       

      (v)
        furnish, at the request of the Purchasers (1) an opinion of the counsel
        representing the company for the purposes of such registration, addressed
        to the
        underwriters, if any, and if such Registrable Securities are not being sold
        through underwriters, then to the Purchasers, in customary form and covering
        matters of the type customarily covered in such legal opinions; and (2) a
        comfort letter from the independent certified public accountants of the company,
        addressed to the underwriters, if any, and if such Registrable Securities
        are
        not being sold through underwriters, then to the Purchasers, and if such
        accountants refuse to deliver such letter to the Purchasers, then to the
        company, in a customary form and covering matters of the type customarily
        covered by such comfort letters and as the underwriters or the Purchasers
        shall
        reasonably request;

       

      (vi)
        enter into customary agreements (including an underwriting agreement in
        customary form, it being understood that any underwriting agreement entered
        into
        by the Purchasers with respect to an underwritten offering of Registrable
        Securities will impose customary indemnification obligations on the
        underwriter(s)) and take such other actions as are reasonably required in
        order
        to expedite or facilitate the disposition of such Registrable
        Securities;

       

      (vii)
        otherwise use its best efforts to comply with all applicable rules and
        regulations of the Commission, and make available to its security holders,
        as
        soon as reasonably practicable, but not later than eighteen (18) months after
        the effective date of the Registration Statement, an earnings statement covering
        the period of at least twelve (12) months beginning with the first full month
        after the effective date of such registration statement, which earnings
        statement shall satisfy the provisions of Section 11(a) of the Securities
        Act;

       

      (viii)
        cooperate reasonably with any managing underwriter to effect the sale of
        Registrable Securities, including but not limited to attendance of the company’s
        executive officers at any planned “road show” presentations to the extent that
        such attendance does not unduly impact the performance of such officer’s
        duties;

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (ix)
        notify the Purchasers and the underwriter(s), if any, at any time when the
        offering documents include an untrue statement of a material fact or omit
        to
        state a material fact required to be stated therein or necessary to make
        the
        statements therein not misleading in light of the circumstances then existing,
        and at the request of the Purchasers or any underwriter, prepare and furnish
        to
        such person(s) such reasonable number of copies of any amendment or supplement
        to the offering documents as may be necessary so that, as thereafter delivered
        to the purchasers of such shares, such offering documents shall not include
        any
        untrue statement of a material fact or omit to state a material fact required
        to
        be stated therein or necessary to make the statements therein not misleading
        in
        light of the circumstances then existing, and to deliver to purchasers of
        any
        other securities of the company included in the offering copies of such offering
        documents as so amended or supplemented;

       

      (x)
        keep
        the Purchasers informed of the company’s best estimate of the earliest date on
        which the offering documents will become effective, and promptly notify the
        Purchasers of (A) the effectiveness of such offering documents, (B) a request
        by
        the Commission for an amendment or supplement to such offering documents,
        (C)
        the issuance by the Commission of an order suspending the effectiveness of
        the
        offering documents, or of the threat of any proceeding for that purpose,
        and (D)
        the suspension of the qualification of any securities to be included in the
        offering documents for sale in any jurisdiction or the initiation or threat
        of
        any proceeding for that purpose;

       

      (xi)
        cause all Registrable Securities registered hereunder to be listed on each
        securities exchange on which similar securities issued by the company are
        then
        listed; 

       

      (xii)
        provide a transfer agent, registrar and CUSIP number for all Registrable
        Securities registered hereunder not later than the effective date of such
        registration; and

       

      (xiii)
        before filing any offering documents (including any documents incorporated
        by
        reference therein), the company shall furnish to one counsel designated by
        the
        Purchasers and to the underwriter(s), if any, copies of all such offering
        documents, which offering documents shall be subject to the review of such
        counsel and the underwriter(s), if any, and, where feasible, the company
        shall
        make such changes in the offering documents as are reasonably requested by
        such
        counsel or underwriter(s).

      

      (d)
        all
        registrations (piggyback or otherwise) made by the Purchasers will be made
        solely at the Company’s expense, other than (x) if an underwritten offering is
        consented to by the Company, the underwriters’, broker-dealers’ and placement
        agents’ selling discounts, commissions and fees relating to the sale of the
        Purchasers’ securities, (y) any costs and expenses of counsel, accountants or
        other advisors retained by the Purchasers and (z) all transfer, franchise,
        capital stock and other taxes, if any, applicable to the Purchasers’ securities
        (collectively, “Purchasers’ Expenses”) which shall be paid by the
        Purchasers.

      

      (e)
        In
        the event of any registration of any Registrable Securities under the Securities
        Act pursuant to this agreement, the company shall indemnify and hold harmless
        the holder of such Registrable Securities, such holder's directors and officers,
        and each other person (including each underwriter) who participated in the
        offering of such Registrable Securities and each other person, if any, who
        controls such holder or such participating person within the meaning of the
        Securities Act, against any losses, claims, damages or liabilities, joint
        or
        several, to which such holder or any such director or officer or participating
        person or controlling person may become subject under the Securities Act
        or any
        other statute or at common law, insofar as such losses, claims, damages or
        liabilities (or actions in respect thereof) arise out of or are based upon
        (i) any untrue statement or any alleged untrue statement of any material
        fact contained, on the effective date thereof, in any registration statement
        under which such securities were registered under the Securities Act, any
        preliminary prospectus or final prospectus contained therein, or any amendment
        or supplement thereto, (ii) any omission or any alleged omission to state
        therein a material fact required to be stated therein or necessary to make
        the
        statements therein not misleading, or (iii) any other violation of any
        applicable securities laws, and in each of the foregoing circumstances shall
        reimburse such holder or such director, officer or participating person or
        controlling person for any legal or any other expenses reasonably incurred
        by
        such holder or such director, officer or participating person or controlling
        person in connection with investigating or defending any such loss, claim,
        damage, liability or action; provided,
        however,
        that
        the company shall not be liable in any such case to the extent that any such
        loss, claim, damage or liability arises out of or is based upon any actual
        or
        alleged untrue statement or actual or alleged omission made in such registration
        statement, preliminary prospectus, prospectus or amendment or supplement
        in
        reliance upon and in conformity with written information furnished to the
        company by such holder specifically for use therein. Such indemnity shall
        remain
        in full force and effect regardless of any investigation made by or on behalf
        of
        such holder or such director, officer or participating person or controlling
        person, and shall survive the transfer of such securities by such
        holder.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (f)
        In
        the event of any registration of any Registrable Securities under the Securities
        Act pursuant to this Agreement, each holder of Registrable Securities, by
        acceptance hereof, agrees to indemnify and hold harmless the company, its
        directors and officers and each other person, if any, who controls the company
        within the meaning of the Securities Act and any other holder against any
        losses, claims, damages or liabilities, joint or several, to which the company
        or any such director or officer or any such person may become subject under
        the
        Securities Act or any other statute or at common law, insofar as such losses,
        claims, damages or liabilities (or actions in respect thereof) arise out
        of or
        are based upon (i) any untrue statement or any alleged untrue statement of
        any material fact contained, on the effective date thereof, in any registration
        statement under which such securities were registered under the Securities
        Act,
        any preliminary prospectus or final prospectus contained therein, or any
        amendment or supplement thereto, or (ii) any omission or any alleged
        omission to state therein a material fact required to be stated therein or
        necessary to make the statements therein not misleading, but in either case
        only
        to the extent that such untrue statement or omission is (A) made in reliance
        on
        and in conformity with any information furnished in writing by such holder
        to
        the company concerning such holder specifically for inclusion in the offering
        documents relating to such offering, and (B) is not corrected by such holder
        and
        distributed to the purchasers of shares within a reasonable period of time.
        Notwithstanding the provisions of this paragraph, no holder shall be required
        to
        indemnify any person pursuant to this paragraph or to contribute pursuant
        to
        paragraph (g) below in an amount in excess of the amount of the aggregate
        net
        proceeds received by such holder in connection with any such registration
        under
        the Securities Act.

       

      (g)
        If
        the indemnification provided for above from the indemnifying party is
        unavailable to an indemnified party hereunder in respect of any losses, claims,
        damages, liabilities or expenses referred to therein, then the indemnifying
        party, in lieu of indemnifying such indemnified party, shall contribute to
        the
        amount paid or payable by such indemnified party as a result of such losses,
        claims, damages, liabilities or expenses in such proportion as is appropriate
        to
        reflect the relative fault of the indemnifying party and indemnified parties
        in
        connection with the actions which resulted in such losses, claims, damages,
        liabilities or expenses, as well as any other relevant equitable considerations.
        The relative fault of such indemnifying party and indemnified parties shall
        be
        determined by reference to, among other things, whether any action in question,
        including any untrue or alleged untrue statement of a material fact or omission
        or alleged omission to state a material fact, has been made by, or relates
        to
        information supplied by, such indemnifying party or indemnified parties,
        and the
        parties' relative intent, knowledge, access to information and opportunity
        to
        correct or prevent such action. The amount paid or payable by a party as
        a
        result of the losses, claims, damages, liabilities and expenses referred
        to
        above shall be deemed to include any legal or other fees or expenses reasonably
        incurred by such party in connection with any investigation or proceeding.
        The
        parties hereto agree that it would not be just and equitable if contribution
        pursuant to this paragraph were determined by pro rata allocation or by any
        other method of allocation which does not take account of the equitable
        considerations referred to above. No person guilty of fraudulent
        misrepresentation (within the meaning of Section 11(f) of the Securities
        Act)
        shall be entitled to contribution from any person who was not guilty of such
        fraudulent misrepresentation.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (h)
        In
        order to permit the Purchasers to sell the Registrable Securities, if it
        so
        desires, pursuant to any applicable resale exemption under applicable securities
        laws and regulations, the Company shall:

       

      (i)
        comply with all rules and regulations of the Commission in connection with
        use
        of any such resale exemption;

       

      (ii)
        make
        and keep available adequate and current public information regarding the
        company;

       

      (iii)
        file with the Commission in a timely manner, all reports and other documents
        required to be filed under the Securities Act, the Exchange Act, or other
        applicable securities laws and regulations; 

       

      (iv)
        furnish to the Purchasers copies of annual reports required to be filed under
        the Exchange Act and other applicable securities laws and regulations;
        and

       

      (v)
        furnish to the Purchasers, upon written request (i) a copy of the most recent
        quarterly report of the company and such other reports and documents filed
        by
        the company with the Commission and (ii) such other information as may be
        reasonably required to permit the Purchasers to sell pursuant to any applicable
        resale exemption under the Securities Act or other applicable securities
        law and
        regulations, if any.

       

      (i)
        All
        rights of the Purchasers under this paragraph 4 shall inure to the benefit
        of
        the Purchasers’ successors and assigns, including any transferee who obtains
        Registrable Securities.

      

      5.
        The
        Purchasers agree as follows:

      

      (a)
        The
        Purchasers shall not, directly or indirectly, sell, offer to sell, assign,
        pledge, hypothecate, encumber or otherwise transfer, or enter into any contract,
        option or other arrangement or understanding with respect to the sale,
        assignment, pledge or other disposition of (collectively, “Transfer”) any rights
        with respect to the Shares for a period commencing on the date hereof and
        ending
        on the first anniversary of the date hereof (such period being referred to
        herein as the “Lock Up Period”). 

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (b)
        The
        Transfer restriction contained in Section 5(a) precludes the Purchasers from
        engaging in any hedging or other transaction during the Lock-up Period that
        is
        designed to or reasonably expected to lead to or result in a Transfer of
        the
        Shares. Such prohibited hedging or other transaction would include, without
        limitation, any short sale (whether or not against the box) or any purchase,
        sale, or grant of any right (including, without limitation, any put or call
        option) with respect to the Shares or with respect to any security (other
        than a
        broad-based market basket or index) that includes, relates to or derives
        any
        significant part of its value from the Common Stock of the Company.

      

      (c) The
        Purchasers agree and consent to the entry of stop transfer instructions with
        the
        Company's transfer agent and registrar against the Transfer of the Shares
        except
        in compliance with the terms and conditions of this Agreement. 

      

      (d)
        Any
        purported Transfer of Shares that is not in accordance with this Agreement
        shall
        be null and void, and shall not operate to Transfer any right, title or interest
        in such Shares to the purported transferee.

      

      6.
        The
        representations and warranties of each party contained herein shall survive
        the
        execution and delivery of this agreement for a period of one year following
        the
        Closing. Each party shall indemnify, defend and hold harmless the other party
        from and against all liabilities, losses, and damages, together with all
        reasonable costs and expenses related thereto (including, without limitation,
        reasonable legal fees and expenses) based upon or arising out of any inaccuracy
        or breach of any representation and warranty or covenant contained
        herein.

       

      7.
        Each
        party hereto agrees to take, or cause to be taken, from and after the Closing
        Date, such further actions to execute, deliver and file, or cause to be
        executed, delivered and filed, such further documents and instruments as
        may be
        necessary in order to fully effectuate the purposes, terms and conditions
        of
        this agreement.

       

      8.
        This
        agreement shall be governed by the laws of the State of New York without
        giving
        effect to choice of law principles. Any provision of this agreement which
        is
        illegal, invalid, prohibited or unenforceable in any jurisdiction shall,
        as to
        such jurisdiction, be ineffective to the extent of such illegality, invalidity,
        prohibition or unenforceability without invalidating or impairing the remaining
        provisions hereof or affecting the validity or enforceability of such provision
        in any other jurisdiction. This agreement shall bind each party and his or
        her
        successors and assigns. This agreement may be modified only with the written
        consent of all of the parties hereto. This agreement may be executed in any
        number of counterparts and all counterparts shall be construed together and
        shall constitute one and the same instrument.

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      9.
        The
        parties agree that the closing of the transactions contemplated hereby shall
        occur on November 27, 2006 (the “Closing Date”); provided, however, that such
        closing is conditioned upon the Company’s representations and warranties
        contained in Section 3 being true and accurate as of the Closing Date. At
        the
        Closing, the Purchasers shall deliver the amount set forth opposite their
        respective names on Schedule
        1
        hereto
        to the Company by wire transfer of immediately available funds to the following
        account:

      

      SHANGHAI
        PUDONG DEVELOPMENT BANK, OFFSHORE BANKING UNIT

       

      The
        Company shall deliver to the respective Purchasers the number of Shares
        specified opposite their respective names on Schedule
        1
        attached
        hereto within five business days following the Closing Date.

       

      [SIGNATURE
        PAGE FOLLOWS]

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      This
        letter constitutes a binding agreement between the Purchasers and the
        Company.

      

      JLF
        Partners I, LP 

      

      By:
        /s/
        Hien Tran

      Name:
        Hien Tran

      Position:
        CFO

      

      JLF
        Partners II, LP

      

      By:
        /s/
        Hien Tran

      Name:
        Hien Tran

      Position:
        CFO

      

      JLF
        Offshore Fund, Ltd

      

      By:
        /s/
        Hien Tran 

      Name:
        Hien Tran

      Position:
        CFO

      

      China
        Security & Surveillance Technology, Inc.

      

      By:
        /s/
        Guoshen Tu

      Name:
        Guoshen Tu

      Position:
        CEO

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1

      

      

      

      
        	
                Fund

              	
                 

                Status

              	
                Shares

              	
                @

              	 	
                 

                Purchase
                  Price

              	
                Jurisdiction
                  of 

                Formation

              
	 	 	 	 	 	 	 
	
                JLF
                  Partners I, LP

              	
                Qualified
                  Institutional Buyer

              	
                630,820

              	
                $6.50

              	 	
                $4,100,330.00

              	
                Delaware

              
	
                JLF
                  Partners II, LP

              	
                Accredited
                  Investor

              	
                49,205

              	
                $6.50

              	 	
                $319,831.00

              	
                Delaware

              
	
                JLF
                  Offshore Fund, Ltd

              	
                Qualified
                  Institutional Buyer

              	
                858,437

              	
                $6.50

              	 	
                $5,579,839.00

              	
                Cayman
                  Islands

              
	
                Total
                  Purchase Price

              	 	
                1,538,462

              	 	 	
                $10,000,000.00

              	 

      

      

      
        
          
          

        

        
          13

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