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Letter to the Editor

driversshield.com Announces Sale of Fleet Services Unit, Equity Investment And Strategic Alliance With PHH Arval

PLAINVIEW, N.Y. -- driversshield.com Corp. has entered into a definitive agreement with PHH Arval, a major provider of comprehensive fleet management services and a subsidiary of Cendant Corporation, whereby PHH will purchase driversshield.com's FS (Fleet Services) subsidiary for $6.3 million. PHH will also make a $1 million strategic investment in driversshield.com Corp. The transaction is expected to close before the end of February 2002, subject to shareholder approval and certain other conditions.

In addition, driversshield.com Corp. and PHH Arval will enter into a strategic alliance, under which PHH will provide services to both of driversshield.com Corp.'s other business units -- CRM (customer relationship management for auto insurance companies) and ADS (auto discounts and services membership programs) -- supplying information technology development and hosting, operations support and supplier network management. The two companies intend to cross-market their services and share their nationwide repair networks.

Said Barry Siegel, Chairman and CEO of driversshield.com Corp. "With considerable consolidation now occurring in the fleet services industry, PHH's overture to us was both appropriate and timely. The sale of our fleet unit will give us a unique opportunity to re-deploy that capital into those higher growth areas, particularly our CRM unit. That business is now developing real traction and has signed several important long-term exclusive contracts with insurance companies that have very strong revenue potential for us."

"A strategic alliance with PHH will boost our businesses and dramatically enhance our ability to scale up our rapidly growing, Internet-based CRM business to meet the demands of our existing and new customers," Siegel said. "PHH's extensive claims management infrastructure, experience and impeccable reputation make it an especially valuable partner. PHH's plan to make a $1 million strategic investment in driversshield.com Corp., on top of its purchase of our fleet unit, is a strong vote of confidence in our management, our business plan, and the prospects of our businesses going forward."

George Kilroy, President and CEO of PHH Arval, commented: "PHH has set its sights on growth through strategic alliances and acquisition of businesses that are complementary or adjacent to our core business. For that reason, we approached driversshield.com Corp., whose fleet unit is a Top 10 provider of collision management services for risk managers and corporate fleets. This transaction dramatically strengthens our presence in this expanding market. driversshield.com FS will retain its own brand identity in the marketplace. In addition, PHH's strategic alliance with driversshield.com Corp. opens up new revenue streams as we leverage our core capabilities. We're excited about our future and intend to seek other acquisitions and alliances to expand and better serve our growing client base while creating more career opportunities for our employees."

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