Investment by Investcorp Technology Partners

1 February 2010

OPSEC SECURITY GROUP PLC

Investment by

 INVESTCORP TECHNOLOGY PARTNERS

comprising £0.6 million ordinary share placing,

proposed £7.0 million preferred share issue and proposed US$13.0 million loan

 and

Notice of General Meeting

OpSec Security Group plc ("OpSec" or the "Company"), the supplier of anti-counterfeiting technologies and services, is pleased to announce a proposed investment by Investcorp Technology Partners through Orca Holdings Limited, a company established for this purpose ("Investcorp"). The investment will, when fully implemented, raise approximately £15.7 million of new funding for the Company before expenses, comprising approximately £7.6 million of new share capital and a new US$13.0 million loan facility.

Highlights

·; Placing with Investcorp of 2,668,850 new ordinary shares at 24 pence per share (a 68% premium over the closing share price on 29 January 2010) to raise approximately £640,000 before expenses.

·; Conditional placing with Investcorp of 20 million new preferred shares at 35 pence per share to raise £7.0 million before expenses.

·; On issue, the new ordinary and preferred shares will comprise approximately 29.8% of OpSec's enlarged share capital.

·; Proposed new US$13.0 million debt facility with Investcorp.

·; New funding will enable OpSec to repay its existing facilities with RBS, improve its balance sheet position and cash flow and allow acquisitions and other investments to be considered.

·; Circular to shareholders to be sent shortly providing further details and convening a general meeting to approve the preferred share issue, to be held at 11.00 a.m. on 18 February 2010 at Weber Shandwick, Fox Court, 14 Grays Inn Road, London WC1X 8WS.

·; Irrevocable undertakings and a non-binding letter of intent to vote in favour of the special resolution to be proposed at the general meeting have been received from the directors and certain other shareholders which, when aggregated with the new ordinary shares to be issued to Investcorp, amount to approximately 25.9% of the shares capable of being voted at the general meeting.

·; Hazem Ben-Gacem and Anand Radhakrishnan, senior executives of Investcorp Technology Partners, to join the OpSec board upon completion.

David Mahony, Chairman of OpSec, commented:

"We are pleased to announce this proposed investment by Investcorp Technology Partners. OpSec continues to see significant growth, investment and acquisition opportunities in the industry which we believe will enhance shareholder value. The proposed fundraising will enable OpSec to take advantage of these opportunities as they arise."

For further information, please contact:

OpSec Security Group plc

Mark Turnage, Chief Executive / Mike Angus, Finance Director +1 720 394 2803

Weber Shandwick Financial

Nick Oborne / Stephanie Badjonat 020 7067 0700

Oriel Securities Limited

Michael Shaw / Neil Langford 020 7710 7600

Investcorp Technology Partners

Deborah Botwood Smith 020 7629 6600

Introduction

OpSec is pleased to announce a proposed investment by Investcorp Technology Partners through Orca Holdings Limited, a company established for this purpose ("Investcorp"). OpSec has:

·; agreed to issue 2,668,850 new ordinary shares of 5 pence each ("Ordinary Shares") to Investcorp at 24 pence per share to raise approximately £640,000 before expenses. The 24 pence issue price for such shares represents a premium of approximately 68% over the closing mid-market price of 14.25 pence per Ordinary Share on 29 January 2010, being the latest practicable date prior to the date of this announcement. The issue of the new Ordinary Shares is conditional only on Investcorp's obligation to subscribe for them not having been terminated prior to admission of the new Ordinary Shares to trading on AIM ("Admission"). Application has been made for Admission which is expected to become effective on 2 February 2010;

·; conditionally agreed to create and issue 20 million new 9.75% redeemable convertible preferred ordinary shares of 5 pence each ("Preferred Shares") to Investcorp at 35 pence per share to raise £7.0 million before expenses. The issue of the Preferred Shares (but not the issue of the new Ordinary Shares) is conditional, inter alia, on the passing of a special resolution to be proposed at a general meeting of the Company to be held on 18 February 2010 (the "General Meeting"); and

·; entered into a loan agreement with Investcorp under which Investcorp will provide a US$13.0 million secured dollar debt facility to the Company. Availability of the loan is subject to satisfaction of several conditions including the issue of the new Ordinary Shares and the Preferred Shares described above.

The Preferred Shares will, on issue and together with the new Ordinary Shares, comprise approximately 29.8% of OpSec's enlarged share capital.

Upon full implementation, these proposals will raise approximately £15.7 million of new funding for the Company before expenses (£14.2 million after expenses), comprising approximately £7.6 million of new share capital and the US$13.0 million loan facility. It is expected that these proposals will be fully implemented, and funds available to the Company, by 10 March 2010 ("Completion").

Strategic and commercial benefits

In the Company's interim results, published on 2 December 2009, the directors stated that during the second half of the Company's current financial year they believed significant improvements would be seen as compared to the mixed trading conditions experienced by OpSec in the first six months. This continues to be the directors' view and since 2 December 2009 OpSec's business has continued to perform broadly in line with the directors' expectations.

The directors believe that the world economy generally appears to be emerging from recession and are aware of opportunities both to make selective acquisitions and other investments on attractive terms which, if implemented, they would expect to enhance shareholder value. The proposed fundraising will enable OpSec to take advantage of such opportunities as they arise and will provide the following benefits:

·; £7.6 million before expenses raised through the issue of new share capital;

·; the proposed new US$13.0 million loan, together with the proceeds of the new share issue, will enable the Company to repay its borrowings with Royal Bank of Scotland, thereby removing OpSec's existing financial covenant restrictions which are not replicated in the terms of the new loan;

·; taken together, the issue of the new shares and the changes to OpSec's borrowings will improve both OpSec's balance sheet position and cash flow and will allow acquisitions and other investments to be considered; and

·; the introduction, in the form of Investcorp Technology Partners, of a new experienced investor prepared to assist in growing OpSec's business.

Information relating to Investcorp

Investcorp Technology Partners is the technology private equity investment business of the Investcorp Group whose ultimate parent company is Investcorp Bank B.S.C. From offices in New York and London, Investcorp Technology Partners undertakes growth buyouts, corporate carve-outs and investments in public and private companies in Western Europe and North America. Investcorp Technology Partners' current investment portfolio includes Moneybookers, Sophos and TDX Group in the United Kingdom and several software and hardware companies in North America. Orca Holdings Limited is a company incorporated for the purpose of holding Investcorp Technology Partners' investment in OpSec.

Investcorp Bank B.S.C., the ultimate parent of Investcorp, is an alternative asset management firm established in 1982. Since then it had, by 31 December 2009, completed transactions with a total acquisition value of approximately US$43 billion. Investcorp Bank B.S.C. is listed and traded on the Bahrain Stock Exchange and, via global depositary receipts, on the London Stock Exchange. The total assets under management of Investcorp Bank B.S.C. and its affiliates as at 31 December 2009 were approximately US$12.4 billion.

Preferred Share and loan terms

Each Preferred Share will, upon issue:

·; carry one vote at general meetings of the Company;

·; be entitled to a preferred dividend of 9.75% per annum of the aggregate of its issue price and any accrued but unpaid annual dividend, with dividends payable at the Company's election either annually or to be rolled up and payable on the fifth anniversary of issue and every five years thereafter;

·; be convertible at any time by Investcorp and (in limited circumstances) by the Company, in each case into one Ordinary Share, and be redeemable upon a change of control of the Company; and

·; rank ahead of the Ordinary Shares on a change of control, liquidation, dissolution or winding-up of the Company.

The principal terms of the proposed new US$13.0 million loan are as follows:

·; the loan is to be drawn in one instalment and is repayable in a single bullet payment after five years;

·; the loan will carry interest at 9% per annum, with the interest to be rolled up until and payable on the fifth anniversary of its advance or upon earlier repayment; and

·; no premium is payable by the Company if the loan is repaid on or before 30 June 2011. A repayment premium is payable by the Company if the loan is repaid after 30 June 2011, rising from 10% of the principal amount repaid with effect from 1 July 2011 to 40% of the principal amount repaid after the fourth anniversary of the loan's advance.

Further details

Upon Completion, a 12 month lock-in arrangement will come into effect during which, subject to customary exceptions, Investcorp will not be permitted to dispose of any of its shareholding in the Company without the directors' consent. Additionally, a 12 month standstill arrangement will come into effect during which time Investcorp will agree, subject to customary exceptions, not to acquire any further shares in the Company without the directors' consent.

New directors

Upon Completion, and for so long as Investcorp holds 20% or more of OpSec's voting shares, Investcorp will be entitled to have two of its representatives appointed as non-executive directors of the Company and it is proposed that Hazem Ben-Gacem and Anand Radhakrishnan will join the OpSec board. If Investcorp's shareholding in the Company reduces to less than 20%, it will be entitled to nominate only one non-executive director of the Company, and its right to appoint any of its representatives to the board will cease if its shareholding reduces below 10%. Further details relating to Hazem Ben-Gacem and Anand Radhakrishnan are set out in the appendix to this announcement.

Shareholder approval, irrevocable undertakings and letter of intent

The General Meeting is to be held at 11.00 a.m. on 18 February 2010 at the offices of Weber Shandwick, Fox Court, 14 Grays Inn Road, London WC1X 8WS at which a special resolution of the Company will be proposed to facilitate the issue of the new Preferred Shares (the "Resolution"). A circular including the notice of the General Meeting will be posted to shareholders shortly.

The directors, who unanimously recommend shareholders to vote in favour of the resolution to be proposed at the General Meeting, and The OpSec Employee Trustee Company Limited have entered into irrevocable undertakings with Investcorp under which they have, inter alia, undertaken to vote in favour of the Resolution in respect of 4,939,499 Ordinary Shares, representing approximately 8.8% of the shares which will then be in issue (the "GM Voting Shares"). In addition, a non-binding letter of intent to vote in favour of the Resolution has been received from Herald Investment Trust plc in respect of 6,903,924 Ordinary Shares, representing approximately 12.3% of the GM Voting Shares.

When aggregated with the 2,668,850 New Ordinary Shares which will be held by Investcorp by the date of the General Meeting, the Ordinary Shares in respect of which irrevocable undertakings or a letter of intent have been received amount to approximately 25.9% of the GM Voting Shares.

Appendix

At Completion it is proposed that Hazem Ben-Gacem and Anand Radhakrishnan will join the OpSec board as Investcorp's nominated non-executive directors and that Glenn Luk will be appointed as an alternate director for each of them.

1. Hazem Ben-Gacem, aged 39, is a Managing Director and Co-Head of Investcorp Technology Partners, based in its London office, having joined from Credit Suisse First Boston in 1994. Hazem holds a BA (Hons) in Economics from Harvard University. Hazem is a director of the following companies: Wireless Telecommunication Group Inc and kgb Inc (U.S.), Sophos Plc, Moneybookers Ltd, MB Acquisitions Ltd, MB Employee Nominees Limited and KF Capital Advisors LLP (U.K.), TDX Holdings Ltd (Guernsey) and Utimaco Safeware AG (Germany). Wireless Telecommunication Group Inc and Utimaco Safeware AG are listed on the American Stock Exchange and Frankfurt Stock Exchange, respectively. During the five year period up to the date of this announcement Mr Ben-Gacem has also served as a director of the following companies of which he is no longer a director: Antares Advanced Test Technologies Inc (U.S.), Objectstar International Ltd (Ireland), Infonxx Global Ltd, Next Generations Payments Ltd and Objectstar International (UK) Ltd (U.K.), Willtek Communications GmbH and Mania Technologie AG (Germany), and Trema Holding N.V. (The Netherlands). Mr Ben-Gacem was a director (or was within the twelve months immediately preceding the relevant process a director) of the following companies which entered into the following insolvency processes: HTTPrint Europe Ltd (compulsory liquidation, March 2004) and Mania Technologie AG (liquidation arrangement with creditors, April 2008).

2. Anand Ramaswamy Radhakrishnan, aged 35, is a Principal of Investcorp Technology Partners based in its New York office, having joined from The Carlyle Group in 2002. Anand holds a BS in Electrical Engineering and Computer Science from Massachusetts Institute of Technology and an MBA with Distinction from the Harvard Business School. Anand is a director of Kentrox, Inc., Dialogic Corporation and Zeta Interactive Corporation (U.S.) and Zeta Interactive Systems India Pvt Ltd (India). During the five year period up to the date of this announcement Mr Radhakrishnan has also served as a director of the following companies of which he is no longer a director: Dotcast, Inc. and Platform Solutions, Inc. (U.S.).

3. Glenn John Luk, aged 31, will be appointed as an alternate director for each of Hazem Ben-Gacem and Anand Radhakrishnan in accordance with the Company's articles of association and shall be entitled to attend and vote at meetings of the Board at which his appointor is not present. He is a director of Kentrox, Inc. and Zeta Interactive Corporation (U.S.).

Save as set out in this Appendix there are no further matters to be disclosed under paragraph (g) of schedule 2 or Rule 17 of the AIM Rules for Companies in respect of Messrs Ben-Gacem, Radhakrishnan and Luk.

A copy of this announcement and the circular will be available at the Company's website at www.opsecsecurity.com