Document:

China Security & Surveillance Technology Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

EXECUTION VERSION

LIMITED GUARANTY

     Limited Guaranty, dated as of
April 20, 2011 (this “Limited Guaranty”), by Mr. Guoshen Tu, People’s
Republic of China (the “Guarantor”), in favor of
China Security & Surveillance Technology, Inc., a Delaware corporation (the
“Guaranteed Party”). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Merger Agreement (as
defined below).

     1. LIMITED GUARANTY. (a)
To induce the Guaranteed Party to enter into an Agreement and Plan of Merger,
dated as of the date of this Limited Guaranty (as amended, restated,
supplemented or otherwise modified from time to time, the “Merger
Agreement”), by and among Rightmark Holdings Limited, a British Virgin
Islands company (“Parent”), Rightmark Merger Sub Limited, a Delaware
corporation (“Merger Sub”), the Guarantor (solely for purpose of Section
6.15 of the Merger Agreement) and the Guaranteed Party pursuant to which Merger
Sub will merge with and into the Guaranteed Party, with the Guaranteed Party
surviving the merger as a wholly owned subsidiary of Parent, the Guarantor,
intending to be legally bound, hereby absolutely, unconditionally and
irrevocably guarantees to the Guaranteed Party, as the primary obligor and not
merely as surety, on the terms and subject to the conditions herein, the due and
punctual payment, performance and discharge of an amount equal to the sum of (A)
the unpaid payment obligations of Parent to the Guaranteed Party under Section
8.3(c) of the Merger Agreement as and when due (the “Parent Fee
Obligations”), provided that in no event shall the Parent Fee
Obligations exceed US$20,000,000 and (B) the unpaid expense reimbursement
obligations of Parent to the Guaranteed Party under Section 8.3(e) of the Merger
Agreement as and when due (the “Expense Obligations,” and, together with
the Parent Fee Obligations and Expense Obligations, the “Guaranteed
Obligations”) (which, for the sake of clarity, do not include reimbursement
of expenses, if applicable, pursuant to Section 1(c) hereof). This guarantee may
be enforced for the payment of money only. All payments hereunder shall be made
in lawful money of the United States, in immediately available funds. The
Guarantor shall make all payments hereunder free and clear of any deduction,
offset, defense, claim or counterclaim of any kind, except as expressly provided
in this Limited Guaranty. The Guarantor acknowledges that the Guaranteed Party
entered into the transactions contemplated by the Merger Agreement in reliance
on this Limited Guaranty.

     (b) If Parent fails to fully and
timely discharge any of the Guaranteed Obligations when due, then all of the
Guarantor’s liabilities and obligations to the Guaranteed Party hereunder in
respect of the Guaranteed Obligations shall, on demand, become immediately due
and payable and the Guarantor hereby agrees to promptly fully perform and
discharge, or to cause to be promptly fully performed or discharged, any such
Guaranteed Obligations. In furtherance of the foregoing, the Guarantor
acknowledges that the Guaranteed Party may, in its sole discretion, bring and
prosecute a separate action or actions against the Guarantors for the Guaranteed
Obligations, regardless of whether any action is brought against Parent or
Merger Sub.

     (c) The Guarantor agrees to pay
on demand all reasonable and documented out-of-pocket expenses (including
reasonable fees and expenses of counsel) incurred by the Guaranteed Party in
connection with the enforcement of its rights hereunder if (i) the Guarantor
asserts in any arbitration, litigation or other proceeding that this Limited
Guaranty is illegal, invalid or unenforceable in accordance with its terms and
the Guaranteed Party prevails in such arbitration, litigation or other
proceeding or (ii) the Guarantor fails or refuses to make any payment to the
Guaranteed Party hereunder when due and payable and it is judicially determined
that the Guarantor is required to make such payment hereunder.

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     (d) The parties hereto
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Limited Guaranty were not performed in accordance with
its specific terms or were otherwise breached and further agree that the
Guaranteed Party shall be entitled to an injunction, specific performance and
other equitable relief against the Guarantor to prevent breaches of this Limited
Guaranty and to enforce specifically the terms and provisions hereof, in
addition to any other remedy to which it is entitled at law or in equity, and
shall not be required to provide any bond or other security in connection with
any such order or injunction. The Guarantor further agrees not to oppose the
granting of any such injunction, specific performance and other equitable relief
on the basis that (x) the Guaranteed Party has an adequate remedy at law or (y)
an award of an injunction, specific performance or other equitable relief is not
an appropriate remedy for any reason at law or equity (collectively, the
“Prohibited Defense”).

     2. NATURE OF GUARANTY. The
Guaranteed Party shall not be obligated to file any claim relating to any
Guaranteed Obligations in the event that Parent or Merger Sub becomes subject to
a bankruptcy, reorganization or similar proceeding, and the failure of the
Guaranteed Party to so file shall not affect the Guarantor’s obligations
hereunder. The Guarantor’s liability hereunder is absolute, unconditional,
irrevocable and continuing irrespective of any modification, amendment or waiver
of or any consent to departure from the Merger Agreement that may be agreed to
by Parent or Merger Sub. In the event that any payment to the Guaranteed Party
in respect of the Guaranteed Obligations is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantor shall remain liable hereunder
with respect to the Guaranteed Obligations as if such payment had not been made.
This Limited Guaranty is a guarantee of payment and not of collection and the
Guaranteed Party shall not be required to proceed against Parent or Merger Sub
first before proceeding against the Guarantor hereunder. 

     3. CHANGES IN GUARANTEED
OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that the Guaranteed Party
may, in its sole discretion, at any time and from time to time, without notice
to or further consent of the Guarantor, extend the time of performance of any of
the Guaranteed Obligations, and may also make any agreement with Parent, Merger
Sub or with any other Person interested in the transactions contemplated by the
Merger Agreement, for the extension, renewal, payment, compromise, discharge or
release thereof, in whole or in part, or for any modification of the terms
thereof or of any agreement between the Guaranteed Party and Parent, Merger Sub
or such other Person without in any way impairing or affecting the Guarantor’s
obligations under this Limited Guaranty or affecting the validity or
enforceability of this Limited Guaranty.  

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The Guarantor agrees that its obligations hereunder shall not
be released or discharged, in whole or in part, or otherwise affected by (a) the
failure or delay of the Guaranteed Party to assert any claim or demand or to
enforce any right or remedy against Parent, Merger Sub or any other Person
interested in the transactions contemplated by the Merger Agreement; (b) any
change in the time, place or manner of payment of any of the Guaranteed
Obligations or any rescission, waiver, compromise, consolidation or other
amendment or modification of any of the terms of the Merger Agreement or any
other agreement evidencing, securing or otherwise executed by Parent, Merger Sub
and the Guaranteed Party in connection with any of the Guaranteed Obligations;
(c) the addition, substitution, any legal or equitable discharge or release (in
the case of a discharge or release, other than a discharge or release of the
Guarantor with respect to the Guaranteed Obligations as a result of payment in
full of the Guaranteed Obligations in accordance with their terms, a discharge
or release of the Parent with respect to the Guaranteed Obligations under the
Merger Agreement, or as a result of defenses to the payment of the Guaranteed
Obligations that would be available to Parent under the Merger Agreement) of the
Guarantor or any Person now or hereafter liable with respect to the Guaranteed
Obligations or otherwise interested in the transactions contemplated by the
Merger Agreement other than any discharge or release arising from the bankruptcy
or insolvency of Parent or Merger Sub and other defenses expressly waived
hereby; (d) any change in the corporate existence, structure or ownership of
Parent, Merger Sub or any other Person now or hereafter liable with respect to
the Guaranteed Obligations or otherwise interested in the transactions
contemplated by the Merger Agreement; (e) the existence of any claim, set-off,
judgment or other right which the Guarantor may have at any time against Parent,
Merger Sub or the Guaranteed Party or any of their respective Affiliates,
whether in connection with the Guaranteed Obligations or otherwise; (f) the
adequacy of any other means the Guaranteed Party may have of obtaining payment
related to the Guaranteed Obligations; (g) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting Parent, Merger Sub or any
other Person now or hereafter liable with respect to the Guaranteed Obligations
or otherwise interested in the transactions contemplated by the Merger
Agreement; (h) the value, genuineness, validity, regularity, illegality or
enforceability of the Merger Agreement, in each case in accordance with its
terms (other than by reason of fraud by the Company); or (i) any other act or
omission that may in any manner or to any extent vary the risk of or to the
Guarantor or otherwise operate as a discharge of the Guarantor as a matter of
law or equity (other than a discharge of the Guarantor with respect to the
Guaranteed Obligations as a result of payment in full of the Guaranteed
Obligations in accordance with their terms, a discharge of the Parent with
respect to the Guaranteed Obligations under the Merger Agreement, or as a result
of defenses to the payment of the Guaranteed Obligations that would be available
to Parent under the Merger Agreement). To the fullest extent permitted by Law,
the Guarantor hereby expressly waives any and all rights or defenses arising by
reason of any Law which would otherwise require any election of remedies by the
Guaranteed Party. The Guarantor waives promptness, diligence, notice of the
acceptance of this Limited Guaranty and of the Guaranteed Obligations,
presentment, demand for payment, notice of non-performance, default, dishonor
and protest, notice of the incurrence of any Guaranteed Obligations and all
other notices of any kind (except for notices to be provided to Parent or Merger
Sub pursuant to the Merger Agreement or notices expressly provided pursuant to
this Limited Guaranty), all defenses which may be available by virtue of any
valuation, stay, moratorium Law or other similar Law now or hereafter in effect,
any right to require the marshalling of assets of Parent, Merger Sub or any
other Person now or hereafter liable with respect to the Guaranteed Obligations
or otherwise interested in the transactions contemplated by the Merger
Agreement, and all suretyship defenses generally (other than a breach by the
Guaranteed Party of this Limited Guaranty). The Guarantor acknowledges that it
will receive substantial direct and indirect benefits from the transactions
contemplated by the Merger Agreement and that the waivers set forth in this
Limited Guaranty are knowingly made in contemplation of such benefits. The
Guarantor hereby covenants and agrees that it shall not institute, directly or
indirectly, and shall cause its Affiliates not to institute, directly or
indirectly, any proceeding asserting or assert as a defense in any proceeding,
(i) the Prohibited Defenses or, (ii) subject to clause (ii) of the last sentence
of Section 5 (No Subrogation) hereof, that this Limited Guaranty is
illegal, invalid or unenforceable in accordance with its terms. 

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     4. NO WAIVER; CUMULATIVE
RIGHTS. No failure on the part of the Guaranteed Party to exercise, and no
delay in exercising, any right, remedy or power hereunder or under the Merger
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise by the Guaranteed Party of any right, remedy or power hereunder
preclude any other or future exercise of any right, remedy or power hereunder.
Each and every right, remedy and power hereby granted to the Guaranteed Party or
allowed it by Law or other contracts shall be cumulative and not exclusive of
any other, and may be exercised by the Guaranteed Party at any time or from time
to time subject to the terms and provisions hereof. The Guaranteed Party shall
not have any obligation to proceed at any time or in any manner against, or
exhaust any or all of the Guaranteed Party’s rights against Parent or Merger Sub
or any other Person now or hereafter liable for any Guaranteed Obligations or
interested in the transactions contemplated by the Merger Agreement prior to
proceeding against the Guarantor hereunder, and the failure by the Guaranteed
Party to pursue rights or remedies against Parent or Merger Sub shall not
relieve the Guarantor of any liability hereunder, and shall not impair or affect
the rights and remedies, whether express, implied or available as a matter of
law, of the Guaranteed Party. 

     5. NO SUBROGATION. The
Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against Parent or Merger Sub
with respect to any of the Guaranteed Obligations that arise from the existence,
payment, performance or enforcement of the Guarantor’s obligations under or in
respect of this Limited Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Company against Parent or
Merger Sub, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from Parent or Merger Sub, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until the Guaranteed
Obligations shall have been paid in full. If any amount shall be paid to the
Guarantor in violation of the immediately preceding sentence at any time prior
to the satisfaction in full of the Guaranteed Obligations, such amount shall be
received and held in trust for the benefit of the Guaranteed Party, shall be
segregated from other property and funds of the Guarantor and shall forthwith be
paid or delivered to the Guaranteed Party in the same form as so received (with
any necessary endorsement or assignment) to be credited and applied against all
amounts payable by the Guarantor under this Limited Guaranty. Notwithstanding
anything to the contrary contained in this Limited Guaranty or otherwise, the
Guaranteed Party hereby agrees that other than any discharge or release arising
from the bankruptcy or insolvency of Parent or Merger Sub and other defenses
expressly waived hereby: (i) to the extent Parent or Merger Sub is relieved of
any of the Guaranteed Obligations under the Merger Agreement, the Guarantor
shall be similarly relieved of its corresponding payment obligations under this
Limited Guaranty; (ii) the Guarantor shall have all defenses to the payment of
its obligations under this Limited Guaranty that would be available to Parent
and/or Merger Sub under the Merger Agreement with respect to the Guaranteed
Obligations, as well as any defenses in respect of any fraud or willful
misconduct of the Guaranteed Party hereunder or any breach by the Guaranteed
Party of any of the terms or provisions hereof.

     6. REPRESENTATIONS AND
WARRANTIES. The Guarantor hereby represents and warrants that: 

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     (a) he is a resident of the
People’s Republic of China (“PRC”) and he has all requisite power and
authority to execute, deliver and perform this Limited Guaranty;

     (b) except as is not,
individually or in the aggregate, reasonably likely to impair or delay the
Guarantor’s performance of its obligations in any material respect, all
consents, approvals, authorizations, permits of, filings with and notifications
to, any Governmental Entity necessary for the due execution, delivery and
performance of this Limited Guaranty by the Guarantor have been obtained or made
and all conditions thereof have been duly complied with, and no other action by,
and no notice to or filing with, any Governmental Entity is required in
connection with the execution, delivery or performance of this Limited Guaranty
by the Guarantor;

     (c) assuming the due execution
and delivery of the Merger Agreement by the Company, this Limited Guaranty
constitutes a legal, valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles; and

     (d) the Guarantor has the
financial capacity to pay and perform its obligations under this Limited
Guaranty, and all funds necessary for the Guarantor to fulfill its obligations
under this Limited Guaranty shall be available to the Guarantor for so long as
this Limited Guaranty shall remain in effect in accordance with Section 10
(Continuing Guaranty) hereof.

7. INVESTMENT REGISTRATION. 

     (a) The Guarantor shall comply
with all requirements under applicable Laws and administrative regulations of
the PRC with regard to his interests in the Company, Parent and Merger Sub and
any other Subsidiary not incorporated in the PRC (“Offshore
Companies”);

     (b) after the Guarantor has duly
registered his outbound investment in the Offshore Companies with competent
local counterparty of the State Administration of Foreign Exchange
(“SAFE”) as required under applicable laws and administrative regulations
of the PRC (“Outbound Investment Registration”), the Guarantor shall:

	 	i. 	
      complete all requisite filings or registrations with SAFE
      with regard to any change of his outbound investment in Offshore Companies
      as required under applicable laws, including but not limited to injection
      of assets or equity into Offshore Companies from the PRC, offshore equity
      financing, increase or deduction of investment, equity transfer or swap,
      merger or acquisition, long term equity investment, loan investment, or
      provision of security to an external party; and

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	 	ii. 	
      ensure that his foreign exchange income from the profits,
      dividends and bonuses and capital gain of Offshore Companies shall be
      repatriated to the PRC within one hundred eighty (180) days from the date
      of receipt; and

     (c) the Guarantor shall duly
register any change in his outbound investment in the Offshore Companies with
SAFE within thirty (30) days of the date of any such change as required by the
then-applicable laws and administrative regulations of the PRC.

     8. NO ASSIGNMENT. The
provisions of this Limited Guaranty shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Neither this Limited Guaranty nor any rights, interests or obligations
hereunder shall be assigned by either party hereto (whether by operation of Law
or otherwise) without the prior written consent of the other party (which
consent shall not be unreasonably withheld, conditioned or delayed); provided
that no assignment by either party shall relieve the assigning party of any
of its obligations hereunder. Any purported assignment in violation of this
Limited Guaranty will be null and void.

     9. NOTICES. Any notice,
request, instruction or other document to be given hereunder by any party to the
others shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid, by facsimile or overnight courier. 

	 	(a) 	
      If to the Guarantor:

Mr. Guoshen Tu
13/F, Shenzhen
Special Zone Press Tower,
Shennan Road, Futian, Shenzhen 518034,
PRC

with a copy to (which shall not constitute notice):
Skadden, Arps,
Slate, Meagher & Flom LLP
30th Floor, China World Office 2
1
Jianguomenwai Avenue
Beijing 100004,
PRC
Attention:      Peter
Huang
Facsimile:       +86 (10) 6535
5577
Email: peter.huang@skadden.com

	 	(b) 	If to the Guaranteed Party:

China Security & Surveillance
Technology, Inc.
13/F, Shenzhen Special Zone Press Tower,
Shennan Road,
Futian, Shenzhen 518034, PRC
Attention: General Counsel
Facsimile: +86 755
8351 0815

with a copy to (which copy shall not constitute
notice):
Shearman & Sterling LLP

6

12th Floor, Gloucester Tower
The
Landmark
15 Queen’s Road Central, Hong
Kong
Attention:     Gregory
Puff
Facsimile:     +852 2978
8082
E-mail:           
Gregory.puff@shearman.com

     10. CONTINUING GUARANTY.
This Limited Guaranty shall remain in full force and effect and shall be
binding on the Guarantor, its successors and assigns until all of the Guaranteed
Obligations have been fully performed. Notwithstanding the foregoing, this
Limited Guaranty shall terminate and the Guarantor shall have no further
obligations under this Limited Guaranty as of the earliest of: (i) the Effective
Time and (ii) the date falling six (6) months from the date of the termination
of the Merger Agreement in accordance with its terms by mutual consent of the
parties thereto or in circumstances where the Parent Termination Fee is not
payable and there are no unpaid Expense Obligations of Parent (unless, the
Guaranteed Party has made a claim under this Limited Guaranty prior to the date
of termination of the Merger Agreement, in which case the relevant date shall be
the date that such claim is finally satisfied or otherwise resolved by agreement
of the parties hereto or pursuant to Section 12 (Governing Law; Dispute
Resolution) hereof). 

     11. NO RECOURSE. The
Guarantor shall have no obligations under or in connection with this Limited
Guaranty except as expressly provided by this Limited Guaranty. No liability
shall attach to, and no recourse shall be had by the Guaranteed Party, any of
its Affiliates or any Person purporting to claim by or through any of them or
for the benefit of any of them, under any theory of liability (including without
limitation by attempting to pierce a corporate or other veil or by attempting to
compel any party to enforce any actual or purported right that they may have
against any Person) against any Person in any way under or in connection with
this Limited Guaranty, the Merger Agreement, any other agreement or instrument
executed or delivered in connection with this Limited Guarantee or the Merger
Agreement or the transactions contemplated hereby or thereby, except that,
notwithstanding the foregoing, the Guaranteed Party may assert claims against
the parties to any agreement in accordance with the terms of such agreement.

     12. GOVERNING LAW; DISPUTE
RESOLUTION.

     (a) This Limited Guaranty shall
be interpreted, construed and governed by and in accordance with the laws of the
State of Delaware applicable to contracts made and performed entirely within
such state, without regard to any applicable conflicts of law principles.

     (b) Any dispute arising out of or
in connection with this Limited Guaranty, including any question regarding its
existence, validity or termination, shall be referred to and finally resolved by
arbitration in Hong Kong in accordance with the Arbitration Rules of the
Singapore International Arbitration Centre (the "SIAC") in force at the
date of commencement of the arbitration, which rules are deemed to be
incorporated by reference in this Limited Guaranty. There arbitration shall be
conducted in English. 

7

     (c) There shall be three
arbitrators. The party commencing arbitration shall nominate one arbitrator in
its Notice of Arbitration. The other party shall nominate one arbitrator within
14 days after receipt of the opposing party’s nomination of an arbitrator,
failing which, the Chairman of the SIAC shall appoint the arbitrator on that
party’s behalf. Within 14 days after confirmation by the SIAC of the appointment
of the second arbitrator, the two arbitrators shall jointly nominate a third
arbitrator, who shall act as the presiding arbitrator. If the two arbitrators
are unable to agree such a joint nomination within 14 days, the Chairman of the
SIAC shall appoint the presiding arbitrator.

     (d) The award of the arbitral
tribunal shall be final and binding upon the disputing parties, and any party
hereto may apply to a court of competent jurisdiction for enforcement of such
award. The award of the arbitral tribunal shall be provisionally enforceable
pending the final resolution of any action to challenge or set aside the
award.

     13. COUNTERPARTS. This
Limited Guaranty shall not be effective until it has been executed and delivered
by both parties hereto. This Limited Guaranty may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
but all such counterparts shall together constitute one and the same agreement.
This Limited Guaranty may be executed and delivered by facsimile transmission or
by e-mail delivery of a “.pdf” format data file, and in the event this Limited
Guaranty is so executed and delivered, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

     14. SEVERABILITY. The
provisions of this Limited Guaranty shall be deemed severable and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this Limited
Guaranty or the application thereof to any Person or any circumstance is
determined to be invalid, illegal, void or unenforceable, the remaining
provisions hereof shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any provision or the
application thereof is invalid, illegal, void or unenforceable, the parties
hereto shall negotiate in good faith to modify this Limited Guaranty so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner so that the transactions contemplated hereby are consummated
as originally contemplated to the fullest extent permitted by applicable
Law.

     15. WAIVER OF JURY TRIAL.
EACH OF THE GUARANTOR AND THE GUARANTEED PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LIMITED
GUARANTY OR ANY DOCUMENTS OR INSTRUMENTS REFERRED TO IN THIS LIMITED GUARANTY,
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR THE ACTIONS OF GUARANTOR AND
THE GUARANTEED PARTY IN NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
OF THIS LIMITED GUARANTY 

8

     16. NO THIRD PARTY
BENEFICIARIES. This Limited Guaranty shall be binding upon and inure solely
to the benefit of the parties hereto and their respective successors and
permitted assigns, and nothing express or implied in this Limited Guaranty is
intended to, or shall, confer upon any other Person any benefits, rights or
remedies under or by reason of, or any rights to enforce or cause the Guaranteed
Party to enforce, the obligations set forth herein; except that as a material
aspect of this Limited Guaranty the parties intend that all Recourse Parties
other than the Guarantor and all Non-Recourse Parties shall be, and such
Recourse Parties and Non-Recourse Parties are, intended third party
beneficiaries of this Limited Guaranty who may rely on and enforce the
provisions of this Limited Guaranty that bar the liability, or otherwise protect
the interests, of such Recourse Parties and Non-Recourse Parties.

     17. CONFIDENTIALITY. This
Limited Guaranty shall be treated as confidential and is being provided to the
Guaranteed Party solely in connection with the Merger. This Limited Guaranty may
not be used, circulated, quoted or otherwise referred to in any document, except
with the written consent of the Guarantor; provided, that no such written
consent is required for any disclosure of the existence of this Limited Guaranty
by the Guaranteed Party (i) to the extent required by applicable Law, (ii) to
the extent that the information is already publicly available other than as a
result of a breach of this Limited Guaranty by the Guaranteed Party or any other
Person, (iii) pursuant to any litigation relating to the Merger, the Merger
Agreement or the transactions contemplated thereby as permitted by or provided
in the Merger Agreement or (iv) to the Guaranteed Party’s Representatives and
Affiliates who need to know of the existence of this Limited Guaranty and are
subject to confidentiality obligations.

     18. MISCELLANEOUS. 

     (a) This Limited Guaranty,
together with the Merger Agreement (including any schedules, exhibits and
annexes thereto and any other documents and instruments referred to thereunder),
the Confidentiality Agreement, the Disclosure Letter, the Rollover Agreement and
the Financing Commitments, contains the entire agreement with respect to the
subject matter hereof and supersedes all prior discussions, negotiations,
proposals, understandings, agreements and undertakings, whether written or oral,
among the Guarantor or any of its Affiliates, on the one hand, and the
Guaranteed Party or any of its Affiliates, on the other hand. No amendment,
modification or waiver of any provision hereof shall be enforceable unless
approved by the Guaranteed Party and the Guarantor in writing.

     (b) The descriptive headings
contained in this Limited Guaranty are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Limited Guaranty. 

     (c) All parties acknowledge that
each party and its counsel have reviewed this Limited Guaranty and that any rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this Limited
Guaranty.

[The remainder of this page is left blank intentionally]

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     IN WITNESS WHEREOF, the
Guaranteed Party has caused this Limited Guaranty to be executed and delivered
as of the date first written above by its officer thereunto duly authorized.

	 	CHINA SECURITY & SURVEILLANCE  
	 	TECHNOLOGY, INC. 
	 	  	 
	 	  	 
	 	  	 
	 	By: 	/s/ Peter Mak
	 	          	Name: Peter Mak
	 	         	Title: Director

     IN WITNESS WHEREOF, the Guarantor
has executed and delivered this Limited Guaranty as of the date first written
above. 

	 	/s/
    Guoshen Tu
	 	GUOSHEN
      TUSilver Dragon Resources Inc.: Exhibit 4.1 - Filed by newsfilecorp.com

Exhibit 4.1

CONVERTIBLE PROMISSORY NOTE 
$1,050,000 PLUS
INTEREST DUE & PAYABLE 
DOCUMENT A-04192011 

THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE
AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION. 

FOR VALUE RECEIVED, on the Effective Date, as defined below on
the signature page, Silver Dragon Resources Inc. as Obligor ("Borrower,”
or “Obligor”), hereby promises to pay to the Lender (“Lender” or “ Holder”), as
defined below on the signature page, the Principal Sum, as defined below, along
with the Interest Rate, as defined below, according to the terms herein. 

	
    The
      "Lender" shall be: 
	
    JMJ Financial / Its Principal, or Its Assignees 

	
    The "Principal Sum" shall be: 
	
      $1,050,000 (one million fifty thousand US Dollars)
      Subject to the following: accrued, unpaid interest shall be added to the
      Principal Sum. 

	
    The “Consideration” shall be: 
	
      $1,000,000 (one million US dollars) in the form of cash
      payment by wire or check as set forth in the attached funding schedule.
      

	
    The "Interest Rate" shall be: 
	
      5% one-time interest charge on the Principal Sum. No
      interest or principal payments are required until the Maturity Date, but
      both principal and interest may be included in conversion prior to
      maturity date. 

	
    The "Conversion Price" shall be the following price: 
	
      As applied to the Conversion Formula set forth in 2.2,
      75% (seventy-five percent) of the average of the three lowest closing
      prices in the 20 trading days previous to the conversion; as applies to
      Silver Dragon Resources Inc. voting common stock. 

	
    The "Maturity Date" is the date upon which the Principal
      Sum of this Note, as well as any unpaid interest shall be due and payable,
      and that date shall be: 
	
      April 19, 2014 

	
    Registration Rights shall be: 
	
      Registration of the common shares underlying this note
      which this note is convertible into is mandatory, as set forth in the
      corresponding Registration Rights Agreement. 

	
    The “Prepayment Terms” shall be: 
	
      Prepayment is not permitted.

 DOCUMENT A-04192011 

ARTICLE 1 PAYMENT-RELATED PROVISIONS 

1.1 Interest Rate. Subject to the Holder's right to convert,
interest payable on this Note will accrue interest at the Interest Rate and
shall be applied to the Principal Sum. 

ARTICLE 2 CONVERSION RIGHTS 

The Holder will have the right to convert the Principal Sum and
accrued interest under this Note into Shares of the Borrower's Common Stock as
set forth below. 

2.1 Conversion Rights and Cashless Exercise. Subject to the
terms set forth in Section 2.7, the Holder will have the right at its election
from and after the Effective Date, and then at any time, to convert all or part
of the outstanding and unpaid Principal Sum and accrued interest into shares of
fully paid and nonassessable shares of common stock of Silver Dragon Resources
Inc.(as such stock exists on the date of issuance of this Note, or any shares of
capital stock of Silver Dragon Resources Inc. into which such stock is hereafter
changed or reclassified, the "Common Stock") as per the Conversion Formula set
forth in Section 2.2. Any such conversion shall be cashless, and shall not
require further payment from Holder. Unless otherwise agreed in writing by both
the Borrower and the Holder, at no time will the Holder convert any amount of
the Note into common stock that would result in the Holder owning more than
4.99% of the common stock outstanding of Silver Dragon Resources Inc. Shares
from any such conversion will be delivered to Holder by 2:30pm EST within 2
(two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST”
electronic transfer (see “Share Delivery” attachment). 

2.2. Conversion Formula. The number of shares issued through
conversion is the conversion amount divided by the conversion price. 

# Shares = Conversion
Amount 
                     Conversion
Price 

2.3. This section 2.3 intentionally left blank. 

2.4. This section 2.4 intentionally left blank. 

2.5 Reservation of Shares. As of the issuance date of this Note
and for the remaining period during which the conversion right exists, the
Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of Common Stock upon the full
conversion of this Note. The Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-assessable. The Borrower
agrees that its issuance of this Note constitutes full authority to its
officers, agents and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates
for shares of Common Stock upon the conversion of this Note. 

2.6. Delivery of Conversion Shares. Shares from any such
conversion will be delivered to Holder by 2:30pm EST within 2 (two) business
days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer
(see “Share Delivery” attachment). If those shares are not delivered in
accordance with this timeframe stated in this Section 2.6, at any time for any
reason prior to offering those shares for sale in a private
transaction or in the public market through its broker, Holder may rescind that
particular conversion to have the conversion amount returned to the note balance
with the conversion shares returned to the Borrower. The Company will make
its best efforts to deliver shares to Holder same day / next day. 

DOCUMENT A-04192011 

2.6.1. Conversion Delay Penalties.
Holder may assess penalties or liquidated damages (both referred to herein as
“penalties”) as follows. 

2.6.1. A. For each conversion,
Borrower agrees to deliver share issuance instructions to its transfer agent
same day or next day. In the event that the share issuance instructions are not
delivered to the Borrower’s transfer agent by the next day, a penalty of $2,000
per day will be assessed for each day until share issuance instructions are
delivered to the transfer agent ($2,000 per day inclusive of the day of the
conversion); and such penalty will be added to the principal balance of the Note
(under Holder and Borrower’s expectation that any penalty amounts will tack back
to the original date of the note). 

2.6.1. B. For each conversion, in the
event that shares are not delivered by the third business day (inclusive of the
day of the conversion), a penalty of $2,000 per day will be assessed for each
day after the third business day (inclusive of the day of the conversion) until
share delivery is made; and such penalty will be added to the principal balance
of the Note (under Holder and Borrower’s expectation that any penalty amounts
will tack back to the original date of the note). Borrower will not be
subjected to any penalties once its transfer agent processes the shares to the
DWAC system. 

2.7. This section 2.7 intentionally left blank. 

ARTICLE 3 MISCELLANEOUS 

3.1. Notices. Any notice required or permitted hereunder must
be in writing and either personally served, sent by facsimile or email
transmission, or sent by overnight courier. Notices will be deemed effectively
delivered at the time of transmission if by facsimile or email, and if by
overnight courier the business day after such notice is deposited with the
courier service for delivery. 

3.2. Amendment Provision. The term "Note" and all reference
thereto, as used throughout this instrument, means this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented. 

3.3. Assignability. This Note will be binding upon the Borrower
and its successors and permitted assigns, and will inure to the benefit of the
Holder and its successors and permitted assigns, and may be assigned by the
Holder. 

3.4. Governing Law. This Note will be governed by, and
construed and enforced in accordance, with the laws of the State of Florida,
without regard to the conflict of laws principles thereof. Any action brought by
either party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of Florida or in the
federal courts located in Miami-Dade County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts. 

DOCUMENT A-04192011 

3.5. Delivery of Process By Holder To Borrower. In the event of any action or proceeding by Holder against Borrower, and only by Holder against Borrower, service of copies of summons and/or complaint and/or any other process which may be served in
any such action or proceeding may be made by Holder via U.S. Mail, overnight delivery service such as FedEx or UPS, email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Borrower at its last known address
or to its last known attorney as set forth in its most recent SEC filing. 

3.6. Maximum Payments. Nothing contained herein may be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid
or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum will be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 

3.7. Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys' fees and other costs and expenses
incurred, in addition to any other relief to which the prevailing party may be entitled. 

3.8. No Public Announcement. Except as required by securities law, no public announcement may be made regarding this Note, payments, or conversions without written permission by both Borrower and Holder. 

3.9. Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Holder has the right to have any such opinion provided by its counsel. Holder also has the right to have any such opinion provided by
Borrower’s counsel. 

3.10. Director’s Resolution. Once effective, Borrower will execute and deliver to Holder a copy of a Board of Director’s resolution resolving that this note is validly issued, paid, and effective. 

3.11. No Shorting. Holder agrees that so long as any Notes from Borrower to Holder remain outstanding, Holder will not enter into or effect any “short sales” of the common stock or hedging transaction which establishes a net short
position with respect to the common stock of Silver Dragon Resources Inc. Borrower acknowledges and agrees that upon submission of conversion notice as set forth in Section 3.1 (up to the amount of cash paid in under the Notes), Holder immediately
owns the common shares described in the conversion notice and any sale of those shares issuable under such conversion notice would not be considered short sales. 

DOCUMENT A-04192011 

Signature page to follow... 

Agreed, this 19th day of April, 2011. 

BORROWER[S]: 

/s/ Marc Hazout                                      

Marc Hazout 
President &
CEO 
Silver Dragon Resources Inc. 

LENDER/HOLDER: 

/s/ JMJ Financial                                    

JMJ Financial / Its Principal

FUNDING SCHEDULE 

	
  $210,000 paid to Borrower within 5 business days of execution and closing
  of this agreement, and $40,000 paid to Borrower’s counsel (Thomas Rose, Esq.,
  of Sichenzia Ross Friedman Ference LLP).
  

	
  $150,000 paid to Borrower within 10 business days of filing of an S-1
  registration statement, and that registration statement must be filed no later
  than 21 days from the date of this agreement.
  

	
  $100,000 paid to Borrower within 10 business days of notice of effective
  registration statement, and that registration must be effective no later than
  120 days from the date of this agreement.
  

	
  $250,000 paid to Borrower within 120 days of notice of effective
  registration statement.
  

	
  $250,000 paid to Borrower within 180 days of notice of effective
  registration statement. 

Conditions to Funding Each Payment: 

	
  At the time of each payment interval, the Conversion Price calculation on
  Borrower’s common stock must yield a Conversion Price equal to or greater than
  $0.0919 per share (based on the Conversion Price calculation, regardless of
  whether a conversion is actually completed or not).
  

	
  At the time of each payment interval, there must be an adequate number of
  shares remaining in the registration statement to cover any unconverted
  amounts previously paid in, as well as the payment being contemplated (based
  on the current Conversion Price calculation, among other factors).
  

	
  At the time of each payment interval, the total dollar trading volume of
  Borrower’s common stock for the previous 23 trading days must be equal to or
  greater than $750,000 (seven hundred fifty thousand). The total dollar volume
  will be calculated by removing the three highest dollar volume days and
  summing the dollar volume for the remaining 20 trading days.
  

	
  At the time of each payment interval, there shall not exist an event of
  default as described within any of the agreements between Borrower and Holder.
  

DOCUMENT A-04192011 

REGISTRATION RIGHTS AGREEMENT 

Silver Dragon Resources Inc. (the “Company” or “Borrower”),
agrees to provide JMJ Financial (the “Holder” or “Investor”) the following
registration rights with respect to Convertible Promissory Note Document
A-04192011 (the “Note”). 

1. Inducement to Enter Into Transactions. To induce JMJ
Financial to enter into and fund the Note, the Borrower has agreed to provide
registration rights for common shares underlying that note. The Borrower agrees
and acknowledges that registration rights are a material inducement for the
Holder to enter into this transaction, and that the Holder would not have
entered into the transaction if registration of the underlying shares was not
provided. 

2. Mandatory Registration. No later than 21 days from the date
of this agreement (the “Registration Date”), the Borrower agrees to file an S-1
Registration Statement with the SEC at its own expenses to register
12,000,000 shares of common stock underlying the note, as follows. The
Borrower will thereafter use its best efforts to cause such Registration
Statement to become effective as soon as possible after such filing but in no
event later than one hundred and twenty (120) days from the date of this
agreement. 

Convertible Promissory Note A-04192011 – 12,000,000
shares 

Total Note – $1,050,000 plus fees and interest 

Total Shares to Be Registered – 12,000,000 

3. Correspondence and Information. Within two days of
distribution or receipt of any information or correspondence between the
Borrower and the SEC, the Borrower shall furnish to Holder copies of all
correspondence as related to the registration statement. 

4. Assignment of Registration Rights. The rights under this
Agreement shall be automatically assignable by the Holder to any transferee of
all or any portion of the note or underlying registered shares. 

5. No Filing of Other Registration Statements and No Piggy-back
Registrations. Unless otherwise approved by Holder in Writing, the Borrower
shall not file any other registration statements (except for S-8 registration)
until the registration statement described herein is declared effective by the
SEC; and the Borrower will not include in this registration statement any
securities other than those described herein. 

7. Governing Law. This Note will be governed by, and construed
and enforced in accordance, with the laws of the State of Florida, without
regard to the conflict of laws principles thereof. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of Florida or in the federal
courts located in Miami-Dade County, in the State of Florida. Both parties and
the individuals signing this Agreement agree to submit to the jurisdiction of
such courts. 

DOCUMENT A-04192011 

Agreed, this 19th day of April, 2011. 

BORROWER[S]: 

/s/ Marc Hazout                   

Marc Hazout 
President
& CEO 
Silver Dragon Resources Inc. 

LENDER/HOLDER: 

/s/ JMJ Financial                 

JMJ Financial / Its
Principal

DOCUMENT A-04192011

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