Unican Security Systems Ltd. ("Unican") Announces That Swiss Kaba Holding AG Has Agreed, Subject To Certain Conditions, To Make An Offer For All The Issued And Outstanding Shares In The Capital Stock Of Unican

The agreement with Kaba follows the announcement by Unican, on September 8, 2000, that it had "formed an Independent Committee of Directors to solicit and consider offers to purchase all the issued and outstanding shares in the capital stock of the Company". Since that time, the Company, acting through the Independent Committee and its financial advisors, with the active participation of its Chairman and CEO, Aaron Fish, has executed the mandate received from the Board of Directors. Following discussions with a number of potential purchasers, the Board of Directors of Unican decided to support the Kaba proposal.

Unican emphasizes the fact that the major individual shareholders, namely, Aaron Fish, Massimo Bianchi, David Stendel and Morty Fruchter, fully support the transaction and have entered into Lock-Up Agreements pursuant to which they will tender their shares at the appropriate time. Furthermore, Unican, following a resolution of its Board of Directors, has signed a Support Agreement, which contains provisions usual in transactions of this kind, including a break-fee of $25 million.

In view of the need for Kaba to obtain the necessary financing, and the fact of regulatory approvals being required, both Unican and Kaba anticipate that the transaction will be completed towards the end of the first quarter of 2001.

Unican's Chairman and CEO, Aaron Fish, commented as follows. "I have known Kaba and its senior people for many years. This transaction is ideal for Unican's shareholders, customers and employees. It is hard to imagine a better combination of product range, technical capability and marketing strength. There is virtually no overlap in any of these areas and the potential synergies are significant. Although both companies are strong, their combined strength will be greater than simple addition. I have no hesitation in fully supporting the Kaba proposal and will commit myself to ensuring that it is completed at the earliest possible date."

Unican Security Systems Ltd., with sales in fiscal 2000 surpassing Cdn. $475 million, is a leading global supplier of access control products for both the hospitality and commercial sectors, as well as mechanical and electronic security products of the safe and vault industry. Unican is also the world's leading supplier of key blanks, key cutting equipment, and mechanical pushbutton locks. Further information on Unican can be found on the company's web site at www.unicangroup.com. Further information on Kaba can be found on its web site at www.kaba.com.Unican Security Systems Ltd. is traded on the Toronto Stock Exchange under the UCS.A and UCS.B symbols.

The attached News Release does not mean that we have a done deal but rather that contracts have been signed. The intention is to complete the sale of the Unican Group to Kaba Switzerland.

The acquisition by Kaba of the Unican Group represents an enormous opportunity for Kaba but is also extremely beneficial for Unican customers and employees.

As I see this combination of product, capability and geographical outreach, the most significant aspect is "THERE IS NO OVERLAP".

The synergies will come from the availability of a broader range of product for Kaba and Unican customers.

On the manufacturing side, Kaba brings to Unican their expertise in proximity, RF ID, an area which we have been exploring for a long time. Other capabilities within the Unican Group such as Capitol Division will also benefit by having a larger inter-company base using their production capabilities.

This is a wonderful opportunity for all. I, Aaron Fish, will be going on the Board of Kaba and will continue in a capacity which ensures that the synergies between the companies are exploited smoothly and as quickly as possible.

You will be updated on a regular basis as more news develops.

I take this opportunity to once again wish you and your families a good holiday and a healthy, happy New Year.

Sincerely,
Aaron M. Fish