Pacific Safety Products Inc (PSP:CDNX) announced today that it has signed a letter of intent to acquire all outstanding shares of Aegis Engineered Textile Products Inc (Aegis). At this time, discussions are continuing to complete the acquisition by August 31, 2000.

Aegis' annual revenues for the year ended December 31, 1999 were approximately $4,000,000 and it currently employs 60 workers at the Arnprior facility.

Ontario-based Aegis is a manufacturer and supplier of protective clothing such as body armor for the Royal Canadian Mounted Police (RCMP) and the Canadian Department of National Defence (DND), bomb and mine clearance suits, Nomex fire resistant clothing for the industrial workforce and various filtration products for the mining and forestry industries.

Sherrie Dontigny, Kevin Fanjoy and Peter Graham are the sole shareholders and directors of Aegis and will join the management team of PSP to facilitate the two companies' integration and continued growth.

Total consideration of $1,370,000 will be paid by way of a $500,000 initial cash payment with an additional $375,000 to be paid in quarterly installments of $31,250 over three years. The balance will be paid out to the shareholders of Aegis with 900,000 PSP common shares issued from treasury and valued at $0.55 per share.

The acquisition is subject to the negotiation and execution of a definitive agreement and regulatory and other customary approvals and requirements. PSP will also be applying to reserve 150,000 shares at an exercise price of $0.50 per share for issuance as
stock options to the shareholders of Aegis. The exercise price will be based on the current market price of PSP's common shares. The granting of stock options is subject to regulatory approval and filing of a formal application to the Canadian Venture Exchange.

"I am delighted about the joining of PSP and Aegis and I am confident that the acquisition will bring together complementary business philosophies, manufacturing techniques and marketing strategies giving PSP unrivaled expertise in the Canadian protective products industry," said Mel Kotler, chairman of the board, PSP.

Kevin Fanjoy, chief executive officer of Aegis, said: "Aegis' experience in the Canadian market and reputation for quality products combined with PSP's organization and positioning for future growth provides an excellent opportunity for both companies. We are all excited about the prospect of joining the PSP team."

"With the addition of Aegis, PSP holds more than 75 per cent of the Canadian armor industry market share and is well positioned for increased penetration of US and global markets," adds Bradley Field, chief executive officer of PSP.

"Aegis is one of the companies PSP has been partnering with on the Canadian Military fragmentation vest and load-carriage vest bids. The increased manufacturing capabilities Aegis brings to PSP should increase the company's chances of winning these sizable contracts. Also, the fact that PSP will now have a facility in the Ottawa area will be an additional benefit to the company for ongoing work with the RCMP, DND and business partners in the greater Ottawa area."

Pacific Safety Products Inc is an established industry leader in the production, distribution and sales of specialized safety products which emergency services personnel worldwide depend on in crisis situations. Founded in 1984, PSP has grown to more than 130 employees at two production facilities in Kelowna, British Columbia and Brampton, Ontario. These facilities are equipped with complete design, production and research capabilities and the Kelowna facility has one of the most advanced ballistic research labs in North America. PSP is made up of three distinct business units, Emergency Medical Products, Military & Government Products and Law Enforcement Products. These business units sell a wide range of products from emergency medical kits to protective armor for military and police forces. Pacific Safety Products is a publicly traded company under the symbol PSP on the Canadian Venture Exchange. The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.