Interstate National Dealer Services, Inc. Announces Filing Of Lawsuit

    UNIONDALE, N.Y.--Oct. 25, 2002--Interstate National Dealer Services, Inc. announced today that Interstate and its directors have been named as defendants in a purported class action filed in Delaware.
    The complaint generally alleges breach of fiduciary duty in connection with a going private transaction approved by the Board of Directors in September 2002. The lawsuit seeks, among other things, to enjoin the proposed transaction and seeks payment of plaintiff's attorney's and expert's fees. Interstate believes that the lawsuit is without merit, and intends to vigorously defend the suit. Interstate has filed preliminary proxy materials with the Securities and Exchange Commission relating to the going private transaction and expects to mail definitive proxy materials to its stockholders promptly after the SEC completes its review.

    Interstate is a leading nationwide provider of service contracts and extended warranties, primarily for new and used cars and recreational vehicles, as well as watercraft, manufactured housing, motorcycles and other power sport vehicles. For additional information please visit our websites: http://www.inds.com and http://www.warrantydirect.com.

    This press release contains forward-looking statements, which are subject to risks and uncertainties. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements. A number of these risks and other factors that might cause differences, some of which could be material, along with additional discussion of forward-looking statements, are set forth in the Company's Report on Form 8-K filed with the Securities and Exchange Commission on December 23, 1996.