AMENDED AND RESTATED
                        EMPLOYMENT AGREEMENT


           This Amended and Restated Employment  Agreement is entered into as of
the 1st  day of  February,  1999,  by and  between  INTERSTATE  NATIONAL  DEALER
SERVICES, INC., a Delaware corporation (the "Company"), and LAWRENCE J.
ALTMAN (the "Executive").

                                    RECITALS:

           WHEREAS,  the Company and the  Executive are parties to an Employment
Agreement  entered into as of December 1, 1993,  as amended by the  Amendment to
the  Employment  Agreement,  dated as of May 1, 1996 and by the Amendment to the
Employment  Agreement,  dated as of February 13, 1998 (collectively,  the "Prior
Employment Agreement").

                                   AGREEMENT:

           NOW,  THEREFORE,  in  consideration  of the  mutual  promises  herein
contained, the parties hereby agree as follows:

1.  Position and Duties.  The Company  agrees to employ the  Executive,  and the
Executive  agrees to be  employed,  as Senior Vice  President,  Marketing of the
Company,  subject to the supervision  of, and reporting only to, The Board,  the
Chairman of the Board and/or the  President.  Executive  shall have such duties,
responsibilities,  titles and authority normally associated with the position of
senior vice  president of  marketing of a company the size and  structure of the
Company. The Executive agrees to devote his best talents,  efforts and abilities
on a full-time basis to the performance of such duties.

2.  Compensation.  For all services  rendered by the Executive  pursuant to this
Agreement,  the Company shall annually pay to the Executive the compensation set
forth in clauses 2(a), (b) and (c) below (each an  "Element"),  the sum of which
Elements shall be Executive's "Total Compensation" for any such year:

(1) Annual  Salary.  The  Company  shall pay  Executive  a salary at the rate of
$70,710 per year during the Term,  subject to future increases in the discretion
of the Company  (the  "Annual  Salary") and subject to  applicable  tax,  Social
Security and other  legally  required  withholding  ("Withholding").  The Annual
Salary shall be paid in accordance with the customary  payroll  practices of the
Company at regular intervals,  but in no event less frequently than every month,
as the  Company may  establish  from time to time for  employees  of the Company
generally.  The Company shall conduct an annual performance appraisal and salary
review on behalf of the Executive.

(2) Commissions.  The Executive shall receive  commissions in an amount equal to
2% of (i) all  administrative  fees for vehicle  service  contracts  and vehicle
warranties  paid to the  Company  during  each  calendar  month  minus  (ii) the
aggregate  selling  expenses  incurred by the Company for such month minus (iii)
$150,000.  Such commissions shall be paid to the Executive no later than 30 days
following  the end of each  calendar  month;  however,  nothing  herein shall be
deemed to make the Company obligated to sell any products or services.

(3)  Performance  Bonus. In addition to any other  compensation  provided for in
this Section 2, the Company may award to the  Executive a  performance  bonus at
any time in such amount as the Board or the Compensation  Committee of the Board
may determine (the "Performance  Bonus"),  in its sole discretion,  after taking
into  consideration  other  compensation  paid or payable to the Executive under
this  Agreement,  as well as the  financial  and  non-financial  progress of the
business of the  Company  and the  contributions  of the  Executive  toward that
progress.  Any  Performance  Bonus  shall be  subject  to  Withholding.  Nothing
contained  herein shall be deemed to make the Company  obligated to pay any such
Performance Bonus.

                (a) Elements  Earned Pro Rata.  Each Element of the  Executive's
Total Compensation shall be deemed to be earned by Executive on a pro rata basis
throughout each fiscal year,  based on the number of days elapsed in such fiscal
year,  for  purposes of  determining  amounts  accrued or owing but not yet paid
under this Agreement.  The pro rata portion of any Annual Bonus accrued or owing
as a result of an Early  Termination  (as  defined in Section 5 below)  shall be
paid to the Executive on or before the Bonus Payment Deadline.

3. Benefits.  The Executive shall be entitled to such medical and other benefits
as are customarily given to employees of the Company generally.

4. Term. The term of this Agreement  shall be for five (5) years,  commencing on
the date hereof and  terminating  February 1, 2004 (the "Term"),  unless sooner
terminated as herein  provided.  In the event that the  Executive  continues his
employment  after the Term,  his  employment  will be deemed "at will" under the
same terms as provided herein unless  otherwise  expressly  agreed to by further
written agreement between the Company and the Executive.

           1.   Early Termination.  The employment of the Executive by the
Company may be terminated prior to the end of the Term as set forth below:

                (a) Death.  If the  Executive  shall die  during  the Term,  the
employment  of the Executive by the Company shall  thereupon  terminate,  except
that the Company shall pay to the legal representative of the Executive's estate
an amount equal to: (i) all amounts accrued or owing but not yet paid under this
Agreement and any other benefits in accordance  with the terms of any applicable
plans and  programs  of the  Company;  and (ii) the Total  Compensation  paid or
payable  to the  Executive  hereunder  for the most  recent  fiscal  year of the
Company  immediately  prior the date of death.  Such amount shall be paid in six
equal monthly  installments  with the first payment due and payable on the first
day of the second calendar month following the date of death.

                 (b)  Disability.  The Company or the  Executive,  upon not less
than thirty (30) days  written  notice to the other  party,  may  terminate  the
employment  by the Company of the Executive if the  Executive  shall become,  by
reason of physical or mental  disability,  unable to render, for 135 consecutive
days or for shorter  periods  aggregating  180 days or more in any twelve  month
period, services of the character contemplated by this Agreement. As a result of
any such disability termination, the Company shall:

                     (i)  pay to the Executive, within thirty (30) days of
such disability  termination date, all amounts accrued or owing but not yet paid
under this Agreement and any other benefits in accordance  with the terms of any
applicable plans and programs of the Company;

                     (ii)  pay to the Executive annually, in installments at
least as frequent  as monthly,  an amount  equal to fifty  percent  (50%) of the
Total Compensation paid or payable to the Executive  hereunder for the Company's
most  recent  fiscal  year  immediately  prior  to  the  Executive's  disability
termination less the amount,  if any, of payments received by the Executive from
a Company funded  disability  insurance plan (the  "Disability  Benefit").  Such
Disability  Benefit shall be subject to Withholding and shall be payable for the
longer of two (2) years or the balance of the Term; and

                     (iii)  for the longer of two (2) years or the balance of
the Term,  provide Executive with the same level of health/medical  insurance or
coverage provided to him immediately prior to such disability termination,  with
the cost of such  continued  insurance  or coverage  being borne by the Company.
Alternatively,  the Executive  may elect to receive from the Company  instead of
such insurance or coverage, a monthly payment equal to the cost to the Executive
to obtain  comparable  health/medical  insurance  or  coverage  through  another
provider.

                Any payments due to the  Executive  hereunder may be paid to his
then current spouse or legal  representative  for  Executive's  benefit,  to the
extent warranted by Executive's incapacity.

(1) Proper Cause. The Company, by written notice to the Executive, may terminate
the Company's  employment  of the  Executive  for proper cause.  As used herein,
"proper  cause"  shall mean that the  Executive  has: (1)  willfully  refused or
failed to carry out specific  directions of the Board, the Chairman of the Board
and/or the President of the Company which directions are not  inconsistent  with
the duties and  responsibilities  set forth in  Section 1 hereof,  or  willfully
refused or failed to perform a material part of such duties and responsibilities
hereunder; (2) committed a breach of any of the provisions of Section 8, 9 or 10
of this Agreement;  (3) acted  fraudulently or dishonestly in his relations with
the Company; (4) been convicted of a felony involving an act of moral turpitude,
fraud or  misrepresentation;  (5)  engaged in the use of illegal  substances  or
alcohol,  which use has impaired the  Executive's  ability to perform his duties
and  responsibilities;  or (6) willfully  engaged in misconduct which materially
injured  the  reputation,  business or business  relationships  of the  Company,
monetarily or otherwise.  For purposes of this clause (c), no act, or failure to
act, on the part of the  Executive  shall be deemed  "willful"  unless done,  or
omitted  to be done,  by the  Executive  otherwise  than in good  faith and in a
manner that the Executive  reasonably believed was in or not opposed to the best
interests of the Company and its shareholders.

                  As a result of any such  termination  for  Proper  Cause,  the
Company  shall pay,  within  thirty (30) days of such  termination,  all amounts
accrued  or owing but not yet paid  under  this  Agreement  through  the date of
termination  and  any  other  benefits  in  accordance  with  the  terms  of any
applicable plans and programs of the Company.

                (c)  By  Executive  For  Good  Reason;  Other  Termination.  The
Executive may terminate the  employment by the Company of the Executive upon not
less than ten (10) days' written notice to the Company based upon his reasonable
determination  that one or more of the  following  events has  occurred  (each a
"Good Reason"):

                     (1) any of the Company's representations or warranties in
this Agreement is not materially true, accurate and/or complete;

                     (2) the Company intentionally and continually breached or
wrongfully failed to fulfill or perform its obligations, promises or
covenants under this Agreement without cure;

                     (3) the Company terminated the Executive's employment
hereunder, and such termination does not constitute Proper Cause (as defined
herein);

                     (4) the Company intentionally required the Executive to
commit or participate in any felony or other serious crime;

                     (5) there has been a Change in Control of the Company (as
defined  below); and/or

                     (6) the Company engaged in other conduct constituting
legal cause for termination.

                     If any event of Good Reason occurs, and such event is
reasonably  susceptible  of being  cured,  the Company  shall be entitled to one
period of thirty  (30) days  during  which to cure  such  event,  following  the
receipt of written notice of such event from Executive.  As a result of any such
termination for Good Reason, or if the Company  terminates the employment of the
Executive for any reason other than as set forth in Sections 5(a), 5(b) or 5(c),
the Company shall:

                          (i)  within thirty (30) days of such termination,
pay to the  Executive  all amounts  accrued or owing but not yet paid under this
Agreement and any other benefits in accordance  with the terms of any applicable
plans and programs of the Company;

                          (ii)  pay Executive an amount equal to the dollar
amount of the Total Compensation paid or payable to the Executive  hereunder for
the  Company's  most recent  fiscal year  immediately  prior to the  Executive's
termination  multiplied by a factor of two (2) (the "Severance  Benefit").  Such
Severance  Benefit shall be paid in one lump sum within  forty-five (45) days of
the Executive's termination date and shall be subject to Withholding; and

                          (iii)  for the longer of two (2) years or the
balance of the Term,  provide  Executive  with the same level of  health/medical
insurance or coverage  provided to him  immediately  prior to such  termination,
with  the  cost of such  continued  insurance  or  coverage  being  borne by the
Company;  alternatively,  the  Executive  may elect to receive from the Company,
instead of such  insurance or coverage,  a monthly  payment equal to the monthly
cost to the Executive to obtain comparable  health/medical insurance or coverage
through another provider;  however, the Company shall in no event be required to
provide  any such  coverage  or monthly  payment  after  such time as  Executive
becomes  entitled  to  receive  (without  regard to any  individual  waivers  of
coverage or other similar arrangements)  comparable  health/medical  benefits of
the same type from another employer or recipient of Executive's services.

5.  Other  Activities.  The  Executive  shall  devote  his full  business  time,
attention and energies to the performance of his duties hereunder, and will not,
during the term of this  Agreement,  be engaged in any other  business  activity
without the prior written consent of the Company.

           2. Change Of Control.  In the event that the Executive is an employee
of the  Company  at the moment  immediately  prior to a Change in Control of the
Company  (as  defined  below),  the  Executive  shall be entitled to receive all
benefits described in this Section 7.

                (a) For purposes of this Agreement,  a "Change in Control of the
Company" shall be deemed to occur if:

                     (i)  there shall have occurred a change in control of a
nature  that  would be  required  to be  reported  in  response  to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities  Exchange Act of
1934, as amended, as in effect on the date hereof, whether or not the Company is
then subject to such reporting requirement,  provided, however, that there shall
not be deemed to be a Change in Control of the Company if: (A) immediately prior
to the occurrence of what would otherwise be a Change in Control of the Company,
the Executive is the other party to the  transaction  (a "Control of the Company
Event"); or (B) immediately prior to the occurrence of what would otherwise be a
Change in  Control  of the  Company,  the  Executive  is an  executive  officer,
trustee,  director  or more than 25%  equity  holder  of the other  party to the
Control  of  the  Company  Event  or of  any  entity,  directly  or  indirectly,
controlling such other party;

                     (ii) the Company merges or consolidates with, or sells
all  or   substantially   all  of  its  assets  to,  another  company  (each,  a
"Transaction"),  provided,  however,  that a Transaction  shall not be deemed to
result in a Change in Control of the Company if (A)  immediately  prior  thereto
the  circumstances  in  (a)(i)(A)  or  (a)(i)(B)  above  exist,  or (B)  (1) the
shareholders of the Company,  immediately  before such Transaction own, directly
or indirectly, immediately following such Transaction in excess of fifty percent
(50%) of the combined voting power of the outstanding  voting  securities of the
corporation or other entity  resulting  from such  Transaction  (the  "Surviving
Corporation")  in  substantially  the same  proportion as their ownership of the
voting securities of the Company immediately before such Transaction  ("Shares")
and (2) the  individuals  who were members of the  Company's  Board of Directors
immediately  prior  to  the  execution  of  the  agreement  providing  for  such
Transaction  constitute  at least a  majority  of the  members  of the  board of
directors of the  Surviving  Corporation,  or of a  corporation  or other entity
beneficially  directly or indirectly owning a majority of the outstanding voting
securities of the Surviving Corporation; or

                     (iii) the Company acquires assets of another company or
a subsidiary of the Company merges or  consolidates  with another company (each,
an "Other  Transaction")  and (A) the  shareholders of the Company,  immediately
before such Other Transaction own, directly or indirectly, immediately following
such  Other  Transaction,  50% or  less  of the  combined  voting  power  of the
outstanding  voting securities of the corporation or other entity resulting from
such  Other   Transaction  (the  "Other  Surviving   Corporation")  or  (B)  the
individuals  who were members of the  Company's  Board of Directors  immediately
prior to the  execution of the agreement  providing  for such Other  Transaction
constitute  less than a majority of the members of the board of directors of the
Other Surviving  Corporation,  or of a corporation or other entity  beneficially
directly or indirectly owning a majority of the outstanding voting securities of
the Other Surviving  Corporation,  provided,  however, that an Other Transaction
shall  not be  deemed  to  result  in a Change  in  Control  of the  Company  if
immediately  prior  thereto the  circumstances  in (a)(i)(A) or (a)(i)(B)  above
exist.

                (b) In the  event  that  the  Executive  is an  employee  of the
Company at the moment immediately prior to a Change of Control of the Company:

                     (i) the Company shall pay to the Executive additional
compensation in the form of cash equal to, on the date of a Change in Control of
the  Company  and with  respect to each  option to  purchase  Shares held by the
Executive  whether or not such option has vested or is  exercisable on such date
(an "Option"),  the number of Shares  underlying  the Option,  multiplied by the
amount, if any, that the exercise price of the Option or the Closing Share Value
(as defined  below),  whichever  is less,  exceeds  the Initial  Share Value (as
defined below).

                     (ii) with respect to each Option, in the event that the
Closing Share Value is greater than the exercise price of such Option,  then the
Executive  can (A) retain the Option or (B) exercise the Option,  or (C) forfeit
the Option and receive, in exchange therefor, a cash payment equal to the number
of Shares  underlying the Option multiplied by the amount that the Closing Share
Value exceeds the exercise price of the Option.

                     (iii) upon the occurrence of a Change of Control, all
Options  then  held  by  the  Executive  shall   immediately   vest  and  become
exercisable.

                     (iv) for purposes of this subsection, the "Initial Share
Value" of an Option  shall mean the average of the Closing  Prices of the Shares
for the  period  commencing  on the 180th day prior to the date of the Change in
Control  of the  Company  and  ending  on the 150th day prior to the date of the
Change in Control of the Company,  and the "Closing  Share Value" shall mean the
Closing Price of the Shares on the date of the Change in Control of the Company.
For  purposes of this  subsection,  the  "Closing  Price" of a Share on any date
shall  mean the last sale  price,  regular  way,  or, in case no such sale takes
place on such date,  the average of the closing  bid and asked  prices,  regular
way,  in either  case as  reported  in the  principal  consolidated  transaction
reporting  system with respect to securities  listed on the  principal  national
securities exchange on which the Shares are listed or admitted to trading or, if
the Shares  are not listed or  admitted  to trading on any  national  securities
exchange, the last quoted price, or if not so quoted, the average of the highest
bid and lowest ask prices in the  over-the-counter  market,  as  reported by the
National Association of Securities Dealers,  Inc. Automated Quotation System or,
if such system is no longer used, the principal other automated quotation system
that  may  then  be in  use  or,  if the  Shares  are  not  quoted  by any  such
organization,  the average of the closing bid and asked prices as furnished by a
professional  market  maker  making the  market in the Shares as such  person is
selected from time to time by the Board of Directors of the Company or, if there
are no professional  market makers making a market in the Shares, then the value
as determined in good faith judgement of the Board of Directors of the Company.

6.  Non-Competition.  In order to induce the  Company to enter into and  perform
this  Agreement  and, as additional  consideration  for the payment of the Total
Compensation  provided  herein,  so long as the  Executive  is  employed  by the
Company  and for the  two (2)  year  period  following  the  termination  of the
Executive's  employment  pursuant to Section 5(b)  (pertaining  to  disability),
Section 5(c)  (pertaining  to proper cause) or by the  Executive  other than for
Good Reason,  the Executive will not, either  separately or in association  with
others, directly or indirectly, in the continental United States, (i) establish,
engage in or become interested in, as an employee,  consultant,  advisor, agent,
owner, partner, co-venturer,  principal, stockholder, director or otherwise, any
company the primary business of which is the  administration  of vehicle service
contracts and warranties, or (ii) solicit, interfere with, or endeavor to entice
away from the Company any dealers,  independent agents or insurance underwriters
party to an agreement with the Company as of the date of Executive's termination
of employment. Mere passive ownership of stock representing five percent (5%) or
less of the  capital  stock of a  publicly  held  company  shall not be deemed a
breach of this Section 8.

7.  Confidential  Information.  During the Term and at any time thereafter,  the
Executive  shall  not  divulge,  furnish  or make  accessible  to any  person or
business  entity any of the Company's  trade secrets or other  information  of a
confidential  nature  including,  but not  limited  to, the  Company's  business
methods,  operational  procedures  and cost and price  information,  without the
prior written consent of the Company.

8.  Non-Interference.  The  Executive,  during the time  period  referred  to in
Section 8 hereof,  will not  cause or  influence  any  employee,  consultant  or
advisor now employed or in the future to be employed by the Company,  to work in
any way for the Executive or in any  enterprise  in which the  Executive  owns a
participation, directly or indirectly.

9.  Unenforceability.  If any  provision  of  Sections  8, 9 or 10 is held to be
unenforceable because of the scope, duration or area of its applicability,  such
scope, duration or area, or all of them, shall be modified to the minimum extent
possible to make such provision(s) enforceable, and such provision(s) shall then
be applicable in such modified form.

10. Return of Property.  Upon termination of his employment with the Company, or
at any time the Company may so request,  the Executive will promptly  deliver to
the  Company  all  memoranda,   notes,  records,  reports,  manuals,   drawings,
blueprints  and other  documents  (and all copies  thereof),  in  whatever  form
(including  files and data in electronic  form)  relating to the business of the
Company,  and all property  associated  therewith,  which he may then possess or
have under his control.

11. Injunctive  Relief. The Executive agrees that the restrictions and covenants
contained in Sections 8, 9, 10 and 12 hereof are necessary for the protection of
the Company and any breach  thereof will cause the Company  irreparable  damages
for which there is no adequate remedy at law. The Executive further agrees that,
in the event of a breach of his obligations  thereunder,  the Company shall have
the absolute  right,  in addition to any other remedy that might be available to
it, to obtain from any court having jurisdiction, such equitable relief as might
be appropriate,  including temporary,  interlocutory,  preliminary and permanent
decrees or injunctions enjoining any further breach of such provisions.

12.   Miscellaneous.

(1) Severability. If any provision of this Agreement is determined to be invalid
or  unenforceable,  it shall not affect the validity or enforceability of any of
the other remaining provisions hereof.

(2) Notices. Any and all notices or other  communications  required or permitted
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
delivered by hand or if mailed,  first class,  postage  prepaid,  registered  or
certified  mail,  return  receipt  requested to the addresses of the parties set
forth below or, as to each party,  at such other  address as shall be designated
in a written notice to the other party.

                     To the Company:
                     Interstate National Dealer Services, Inc.
                     The Omni, Suite 700
                     333 Earle Ovington Boulevard
                     Mitchel Field, NY, 11553


                     To the Executive:
                     Mr. Lawrence J. Altman
                     57 Orbach Avenue
                     Malverne, NY 11565


(3) Waiver.  No waiver by either party hereto of any breach of any  provision of
this Agreement shall be deemed a waiver of any preceding or succeeding breach of
such provision or any other provision herein contained.

(4)  Governing  Law.  This  Agreement  shall be governed  by, and  construed  in
accordance with, the laws of the State of New York, without giving effect to the
conflict of law principles thereof.

(5) Entire  Agreement.  This  Agreement  sets forth the entire  agreement of the
parties  hereto with respect to the subject  matter  hereof,  and is intended to
supersede all prior employment negotiations,  understandings and agreements.  No
provision of this Agreement may be waived or changed, except by a writing signed
by the party to be charged with such waiver or change.

(6) Binding Effect. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their  respective  personal  representatives,
successors and assigns.

(7) Counterparts.  This Agreement may be executed in counterparts, each of which
shall be an original, but together shall constitute one and the same instrument.



   [Signatures appear on next page; balance of this page left intentionally
                                    blank.]


<PAGE>


           IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement
as of the date first above written.

--------------------------------------------------------------------

                                    INTERSTATE NATIONAL DEALER
                                    SERVICES, INC.

                                      BBy:
                                    NName: Chester J. Luby
                                    TTitle: Chairman and Chief
                                    Executive
                                                Officer


                                    Lawrence J. Altman