SOURCE: Nestor, Inc.

October 25, 2007 16:58 ET

Nestor Traffic Systems, Inc. Awarded Renewal Contract for Germantown, TN

PROVIDENCE, RI--(Marketwire - October 25, 2007) - Nestor, Inc. (NASDAQ: NEST) is pleased to announce that after a competitive bid process, the City of Germantown, Tennessee has selected Nestor Traffic Systems, Inc. to continue to provide its CrossingGuard® red light enforcement system to the City. Nestor installed four approaches in 2002. Pursuant to the award, Nestor will install its new digital video solution at the existing approaches and at three new approaches in the City. Nestor expects that the final contract will provide for a three-year term plus two one-year renewal options.

The City has reported positive traffic safety results since the program was initiated in 2002. At one intersection, crashes decreased from 58 in 2000 to 28 in 2006. At the other installed intersection, crashes decreased from a high of 32 in 2001 to a low of 15 in 2005. With Nestor's enhanced digital video solution, the Company expects an even more effective enforcement system.

Clarence Davis, CEO of Nestor Traffic Systems, Inc., stated: "We are extremely pleased to continue our relationship with the City of Germantown. The City has adopted a very professional approach to traffic safety and was the pioneer for automated enforcement in Tennessee, implementing the State's first program in 2002. We look forward to working with Germantown to enhance its safety initiatives."

Statements in this press release about future expectations, plans and prospects for Nestor, including statements containing the words "expects," "will," and similar expressions, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. We may not meet the expectations disclosed in our forward-looking statements and investors should not place undue reliance on those statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including: market acceptance of our products, competition, legal and legislative challenges to automated traffic enforcement, and other factors discussed in Risk Factors in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the SEC. Investors are advised to read Nestor's Annual Report, quarterly reports on Form 10-Q and current reports on Form 8-K filed after our most recent annual or quarterly report. The forward-looking statements in this letter represent our current views and we disclaim any obligation to update these forward-looking statements.

For more information, call (401) 274-5658 or visit www.nestor.com.