Cubic And Keycorp To Join Forces In A Strategic Alliance.

Business Editors

SAN DIEGO--(BUSINESS WIRE)--July 6, 2000

Cubic Transportation Systems Inc., a subsidiary of San Diego based Cubic Corp. (AMEX:CUB), and Australian electronic commerce and smart card company, Keycorp Limited (ASX:KYC), are joining forces to deliver integrated payment solutions across Australia's transit and financial services markets, with the potential to expand joint service offerings to the broader global market.

In announcing the signing of a memorandum of understanding, Keycorp and Cubic executives were enthusiastic about the many domestic and international opportunities on the horizon. Keycorp is slated as a major supplier to Cubic for two large Australian programs currently in the procurement process in Sydney and Brisbane.

The Sydney Integrated Ticketing System (ITS) will link the region's rail, bus and ferry services to a common contactless smart card. Similarly in Brisbane, an integrated ticketing initiative is in progress which would include smart card based ticketing for rail, bus and ferry operators, as well as extensions into regional parking facilities.

Cubic is a co-principal in the SMARTPOS consortium, which also includes the Commonwealth Bank of Australia, EDS Australia, and Philips Electronics Australia, participating in the tender for these programs.

Commonwealth Bank is Keycorp's largest shareholder and has placed over 100,000 Keycorp terminals in merchant locations throughout the country. Cubic and Keycorp have, among other things, collaborated on a design which will introduce ticket sales functionality to the Keycorp terminal with the ticket digitally encoded on contact and contactless smart cards.

The companies envisage that their agreement will include the development of further advances in ticket functionality for mobile points of sale, the manufacture of transit devices for Cubic in Australia, and the integration of Cubic Web-based ticket sales facilities with Keycorp virtual payment networks, as well as collaboration on a "ticketing-enabled multi-application card platform."

Keycorp CEO Michael Thomes said, "This is an exciting alliance, bringing together Keycorp's expertise and leading solutions in the transaction payment services area with Cubic's success in providing automated transit ticketing systems infrastructure.

"Both companies have enviable market positions, with a large installed base of infrastructure and the most reliable and secure payment solutions. The alliance will enable both companies to leverage their expertise to offer highly innovative solutions and deliver significant payment infrastructures to existing and new customers."

The Cubic -- Keycorp alliance represents an important teaming of technological strengths in the delivery of payment infrastructure, which offers added value in terms of sales and distribution channels, and a built-in marketing platform.

"Together, Cubic and Keycorp can offer a complete products and services portfolio, including smart card solutions, retail and transit payment terminals, web access devices, virtual payment networks, and e-commerce transaction solutions," said David deKozan, Cubic Transportation Systems vice president, strategic planning. "The two companies have compiled extensive histories in integrating solutions for retail, Internet and transport payment networks, as well as the ability to support the stringent security requirements for multi-application, MULTOS-based projects."

While focusing initially on Australia, Keycorp and Cubic are eyeing opportunities to deliver their alliance-based solution on a global scale, including the United Kingdom, the United States, and the broader Asia Pacific region. In the United Kingdom, Cubic currently is teamed with members of the TranSys consortium to deliver the PRESTIGE project -- London Transport's smart card-based ticketing system which will unify to one card the London Underground and the city's 30 independent bus operating companies.

The "New Ticket Medium" as it is called will be rolled out in 2002, and the supporting system will likely evolve into a multi-application environment for which transport serves as the foundation.

BACKGROUND INFORMATION:

Cubic Corp.:

Cubic Corp. is the parent company of two major segments: Transportation Systems and Defense.

Cubic Transportation Systems is the world's leading supplier of automated ticketing systems for mass transit.

The company introduced the first contactless smart card ever used in mass transit in 1989. Since then the company has integrated various smart card technologies on several contracts in Europe, Asia, and North America, including the Washington Metro which is the first American system using smart card technology today.

Everyday, nearly a half billion people use Cubic systems in more than 40 major markets, including London, Washington, D.C., Hong Kong, Chicago, and New York. In addition, Cubic has installed turnkey ticketing systems in Kuala Lumpur, Guangzhou, Shanghai, Atlanta, and San Francisco.

Cubic's Defense Group provides instrumented training systems for military forces, avionics, data links, aerospace systems, and product logistical support. Companies within the Defense Group also provide battle command training, radio communications systems, and field service operations and maintenance.

Cubic Defense Systems also has projects underway in Australia. The company has been selected by the Australian Department of Defence to provide an air combat training system for Australia's Air Force. The system will provide tactical training along with the most advanced electronic warfare (EW) training. It will allow the Australian Defense Force to engage in a variety of realistic air-to-air, air-to-ground and ground-to-air mission scenarios without the use of live weapons. The system will merge the latest technologies to enable pilots to train at their home bases or at the realistic air combat training center at the RAAF Tindal/Delamere Range.

Cubic Web site: www.cubic.com

Keycorp Limited

Keycorp Limited designs, manufactures and markets complete electronic commerce solutions, incorporating smart cards, Internet commerce, and point-of-service transaction systems.

Keycorp is a founding member of the MULTOS consortium, which has responsibility for developing the MULTOS multi-application smart card operating system, and has developed a proprietary multi-application smart card operating system, OSSCA. Keycorp manufactures smart cards, including GSM SIM cards, through its associated company, Cardcorp.

Keycorp's electronic payment terminals include smart card capable on-line and off-line terminals capable of processing credit, charge, debit and stored value transactions. The terminals are designed for use at a retail point of sale, over the phone, in mobile environments or via the Internet, and can communicate with host systems via fixed or mobile communications.

Keycorp also offers branch delivery solutions integrating secure PIN Pads and KeyStations with the elegant Flat Screen LCD monitors.

Keycorp Web site: www.keycorp.net.