Protective Products of America, Inc. Executes Forbearance Agreement with Its Existing Lender CIBC; Extends Maturity through June 30, 2009



    SUNRISE, FL, Feb. 3 /CNW/ - Protective Products of America, Inc.
(TSX:PPA), a leading manufacturer and distributor of advanced products in
ballistics protection, today announced that it has entered into a Forbearance
Agreement with its current lender, the Canadian Imperial Bank of Commerce
(CIBC), which extends the maturity on its line of credit through June 30,
2009. As part of the Forbearance Agreement, the Company also executed an
Amended and Restated Credit Agreement.
    Stephen Giordanella, Chief Executive Officer, said, "We are pleased to
have completed the new credit agreement with our lender, CIBC. The forbearance
period provides us with valuable time to execute on our business plan and
focus on future growth and financing opportunities. We were recently able to
bring down our credit line by US$3.0 million, with the proceeds from the sale
of our Delaware assets, and the Company's current balance on its line of
credit is approximately US$5.5 million. We look forward to providing our
shareholders with more updates on our progress."
    Under the Amended and Restated Credit Agreement, the Company's line of
credit has been reduced to CAD$9.0 million from approximately CAD$13.0 million
at the end of September 30, 2009. The interest rate on the line of credit was
increased by 200 basis points, effective immediately. The new rate will be the
prime rate plus 650 basis points, or a rate of 9.75% as of January 30, 2009.
The Company must also meet other financial obligations and payments required
by the Forbearance agreement through June 30, 2009.

    About Protective Products of America, Inc.

    Protective Products of America, Inc. ("PPA"), formerly known as Ceramic
Protection Corporation, is headquartered in Sunrise, Florida, with
manufacturing facilities in Sunrise, Florida and Granite Falls, North
Carolina. The Company, together with its subsidiaries, is engaged in the
design, manufacture and marketing of advanced products used to provide
ballistic protection for personnel and vehicles in the military and law
enforcement markets. The Company's product portfolio includes concealable soft
body armor products for law enforcement and the Modular Tactical Vest ("MTV"),
a ballistic system for military personnel.
    Management is of the opinion that the Company is an acknowledged industry
leader in the design and manufacture of high performance and high quality
products used for ballistic protection. Protective Products International
Corp, a wholly owned subsidiary of PPA, is an ISO 9001:2000 certified
manufacturer. Furthermore, PPA is one of a very few companies capable of
providing customers with an integrated personnel armoring system of ceramic
plates, soft ballistic material and vests for law enforcement and the
military.

    Safe Harbor Language

    This release may contain forward-looking statements including
expectations of future sales, cash flow, and earnings. These statements are
based on current expectations that involve a number of risks and uncertainties
that could cause actual results to differ from those anticipated. These risks
include, but are not limited to, uncertainties associated with the defense
industry, commodity prices, exchange rate fluctuations, and risks resulting
from potential delays, appeals or changes related to government orders in the
defense sector.
    PPA depends on reliable supplies of high quality source materials used in
the manufacture of armor products, including aramid fabrics and polyethylene
materials, and works actively with key suppliers to ensure that requirements
and demands for these materials are anticipated and properly met. The
foregoing is not exhaustive and other risks are detailed from time to time in
other disclosure filings of PPA. Should one or more of these risks or
uncertainties materialize, or should stated assumptions underlying the forward
looking statements prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated or expected. The
reader is also referred to other uncertainties and risks discussed in detail
in the MD&A section of the Company's December 31, 2007 Annual Report dated
March 31, 2008, and the Company's Annual Information Form dated March 31,
2008. These documents are available on SEDAR (www.SEDAR.com).
    In light of certain sensitive aspects in regard to customers and
products, PPA may choose not to disclose all information related to the
purchasers of its products, such as government agencies, countries or other
end-users. Products manufactured for export in the United States must first be
approved for export by the appropriate U.S. government agencies. Other armor
sales may be made to recognized domestic agencies such as the military and
those involved in local, provincial, or national law enforcement and homeland
security matters.

    %SEDAR: 00001737E




For further information:

For further information: Ms. Grimie Del Valle, Company Contact,
Protective Products of America, Inc., (954) 846-8222,
gdelvalle@body-armor.com; Ms. Shelley Young, Vice President, The Piacente
Group, Inc., Investor Relations, (212) 481-2050, shelley@tpg-ir.com

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PROTECTIVE PRODUCTS OF AMERICA, INC.

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