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Letter to the Editor

EDS Terminates Strategic Partnership Agreement with driversshield.com

PLAINVIEW, N.Y. -- EDS has unilaterally terminated its strategic partnership agreement with driversshield.com CRM Corp., a wholly owned subsidiary of driversshield.com Corp. Barry Siegel, Chairman and Chief Executive Officer of driversshield.com Corp. stated: "A number of disputes have arisen in the past several months which have brought this relationship to the breaking point. Most likely, the matters in dispute including, but not limited to; billing disputes, the failure of EDS to assist us in marketing the website to their insurance clients and any potential loss of business due to their actions, will be resolved through litigation. Requests for EDS to keep the site up were denied by EDS, contrary to the provisions in the agreement. It is unfortunate, but this break-up may cause a material delay in the development of our Internet insurance business model. Now that the agreement has been terminated, we will no longer be obligated to share 40 percent of our revenues with EDS, making our potential profitability that much greater."

"We are immediately taking control of our 'URL,' transitioning the site and adding functionality to it," Siegel said. "And we expect to be back online early next week with an informational website with an enhanced look and feel to the site, although the interactive features will not be functional for a while. Despite the absence of any marketing efforts from EDS, we were still able to secure clients on our own and we are still working towards the kick-off of a pilot program with one of the country's largest insurers. Another large insurer has notified us that it is still preparing for a full rollout in the spring. We are continuing our discussions with a number of other insurance companies that have expressed interest in the driversshield.com solution, which increases sales, builds customer loyalty and reduces loss-adjusted expenses. I am hopeful -- but not certain -- that we will not lose any of these clients as a result of EDS' actions, particularly since EDS played no role in bringing them aboard.

"Meanwhile, our other two businesses -- driversshield.com FS (fleet services) and driversshield.com ADS (automotive discounts and services), which recently began an Internet Affiliate program to market its services directly to consumers -- are growing and are profitable. In fact, driversshield.com's preliminary 2000 year-end revenues are expected to be in record territory. We have excellent partners and clients in those businesses," Siegel said. "Although the setback in launching our insurance business will have an impact on our growth plans for the year, we anticipate revenues to begin for this business unit in the second half of 2001."

According to driversshield.com the company currently has signed agreements with two (unnamed as of yet) insurance companies. One is for a pilot program with one of the nation's largest insurers. The other is with a large Midwest insurer, which has concluded a successful pilot program and is planning a full roll-out of the program early this spring.

It is interesting to note that driversshield is eleven days away from being de-listed from the NASDAQ Small Cap Board.

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