Ceramic Protection Corporation - Corporation Announces Issuance of US $3.4 Million Debenture

    Symbol: CEP
    Exchange: TSX

    SUNRISE, FL, Aug. 30 /CNW/ - Ceramic Protection Corporation ("CPC" or
"the Corporation"), a leading manufacturer and distributor of advanced
ballistic protective products, today announced that it has successfully
completed the placement of a non-convertible secured debenture in the amount
of US $3.4 million. The debenture was placed with certain Directors of the


    Mr. Steve Giordanella, CEO announced today that the Corporation has
successfully placed a non-convertible secured debenture in the amount of US
$3.4 million to be used for settlement of all amounts outstanding under the
previously announced mediated settlement reached with Armorworks LLP: "I am
very pleased to announce that the Corporation has turned the page in settling
a complex legal dispute. The settlement provides opportunities for the
Corporation to resume a mutually beneficial relationship with Armorworks LLP
and the Corporation can now move ahead with our agenda for growth." Mr.
Giordanella also noted that the financial impact of the settlement has been
accounted for in the Corporation's second quarter results.
    The debenture carries a 12% interest for a two year term with no
prepayment penalty. In addition, for each US $10 of face value of the
non-convertible debenture, the holder will be granted one share purchase
warrant with an exercise price of CAD $7.50 and an expiry date two years from
date of issuance. Issuance of the warrants is subject to TSX Exchange

    Business of the Corporation

    Ceramic Protection Corporation, headquartered in Sunrise, Florida, USA,
with offices in Newark, Delaware, USA, is a certified manufacturer and
distributor of advanced materials for use in the ballistic protection
marketplace. The Corporation manufactures a wide range of products used to
provide protection for personnel and vehicles, including a wide range of
ceramic armour products and multiple composite-based products. In conjunction
with its wholly owned subsidiary Ceramic Protection Corporation of America of
Newark, Delaware, the Corporation also manufactures a wide range of boron
carbide, silicon carbide and polyethylene products for use in personnel armour
systems. PPI of Sunrise, Florida, manufactures a growing range of soft armour
products for the law enforcement and military markets.

    Forward Looking Statements

    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. The Corporation depends on reliable supplies of high quality
source materials used in the manufacture of armour 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 the Corporation. 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
Corporation's December 31, 2006 Annual Report dated March 20, 2007 and also
the Corporation's Annual Information Form.
    In light of certain sensitive aspects in regard to customers and
products, the Corporation may choose not to disclose all information related
to the purchasers of its products, such as government agencies, countries or
other end-users. Armour products destined for export which are manufactured in
Canada must first be approved by the Canadian Department of Foreign Affairs
and International Trade. Products manufactured for export in the United States
must first be approved for export by the appropriate U.S. government agencies.
Other armour 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.

    Investor Relations

    Analyst and investor relations calls should be addressed to Ms. Grimie
Villarreal, Corporate Investor Relations, at (954) 846-8222. Interested
parties are also referred to the Corporation's website www.cerpro.com for
further information about the Corporation, its products and other recent

    Mr. Steve Giordanella                            Mr. Larry Moeller
    Chief Executive Officer                          Chairman
    %SEDAR: 00001737E

For further information:

For further information: Ms. Grimie Villarreal, Corporate Investor
Relations, (954) 846-8222

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