EXHIBIT 10(b)
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                              EMPLOYMENT AGREEMENT
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         AGREEMENT, dated as of January 1, 1998 by and between Colonial
Commercial Corp., a New York corporation with its principal office at 3601
Hempstead Turnpike, Ste 121-I, Levittown, New York 11756-1315 (the "Company")
and James W. Stewart, residing at 47 Richie Court, St. James, New York 11780
(the "Employee").

                                    ARTICLE I
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                            EMPLOYMENT; TERM; DUTIES
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         1.01. Employment. Upon the terms and conditions hereinafter set forth,
the Company hereby employs the Employee, and the Employee hereby accepts
employment, as Executive Vice President of the Company.

         1.02. Term. The Employee's employment hereunder shall be for a term
(the "Term") commencing as of this date (the "Commencement date") and
terminating at the close of business on the fourth anniversary of the
Commencement Date. A "Contract Year" shall commence on January 1 and terminate
on December 31.

         1.03. Duties. During the Term, the Employee shall perform such duties,
consistent with his position hereunder, as may be assigned to him from time to
time by the Board of Directors. The Employee shall devote his best efforts and
his entire time, attention and energies, during regular working hours, to the
performance of his duties hereunder and to the furtherance of the business and
interests of the Company, its subsidiary and affiliate companies.

                                   ARTICLE II
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                                  COMPENSATION
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         2.01. Compensation. For all services rendered by the Employee hereunder
and all covenants and conditions undertaken by him pursuant to this Agreement,
the Company shall pay, and the Employee shall accept (i) a salary at the rate of
$150,000 per annum from the date of this Agreement until December 31, 2001.
Compensation shall be payable not less frequently than in bi-weekly
installments. The Company may (but shall not be obligated to), at any time and
from time to time, grant to the Employee an increase or increases in the
compensation otherwise payable pursuant to this Section 2.01, but such increase
or increases, if any, shall not be deemed to alter, modify, waive or otherwise
affect any other term, covenant or condition of this Agreement.

         2.02. Deductions. The Company shall deduct from the compensation
described in Section 2.01 any federal, state or local withholding taxes, social
security contributions and any other amounts which may be required to be
deducted or withheld by the Company pursuant to any federal, state or city laws,
rules or regulations.

         2.03. Disability Adjustments. Any compensation otherwise payable to the
Employee pursuant to Section 2.01 during any Disability Period (as that term is
hereinafter defined) shall be reduced by any amounts payable to the Employee for
loss of earnings or the like under any insurance plan or policy the premiums for
which are paid for in their entirety by the Company.

                                   ARTICLE III
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                               BENEFITS; EXPENSES
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         3.01. Fringe Benefits. During the Term, the Employee shall be entitled
to participate, in amounts commensurate with the Employee's position hereunder,
in (a) such group life, health, accident, disability or hospitalization
insurance plans as the Company may make available to its other executive
employees, and (b) any incentive compensation, bonus, pension or similar plan of
the Company presently in effect or hereafter adopted for the benefit of its
executive employees as a group.

         3.02. Automobile. During the Term, the Company shall furnish the
Employee with an automobile (including the replacement thereof), of such make,
model and year as the Employee shall determine, for use by the Employee in
connection with the performance of his duties hereunder. Upon presentation of an
itemized account thereof, with such substantiation as the Company shall require,
the Company shall pay or reimburse the Employee for the reasonable and necessary
expenses of the maintenance and operation of such automobile in connection with
the performance of his duties hereunder.

         3.03. Services. During the Term, the Company shall furnish the Employee
with a private office, secretarial and such other services and facilities
sufficient to enable the Employee to perform his duties, and suitable to the
Employee's position hereunder.

         3.04. Expenses. Upon presentation of an itemized account thereof, with
such substantiation as the Company shall require, the Company shall pay or
reimburse the Employee for the reasonable and necessary expenses directly and
properly incurred by the Employee in connection with the performance of his
duties hereunder.

         3.05. Vacations. During the Term, the Employee shall be entitled to
paid holidays and paid vacations, in accordance with the policy of the Company
as determined by the Board of Directors; provided, however, that the Employee
shall be entitled to not less than four weeks paid vacation during each year of
the Term, to be taken at times determined by the Employee.

         3.06. Location. Notwithstanding anything which may be contained herein
to the contrary, the Employee's office shall be located in Nassau or Suffolk
Counties, New York, and the performance of this duties hereunder shall not
require his presence outside of such counties, if the Employee shall object
thereto.
                                   ARTICLE IV
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                                   TERMINATION
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         4.01. Termination. The employment of the Employee, and the obligations
of the Employee and the Company hereunder, shall cease and terminate (except as
otherwise specifically provided in this Agreement) upon the first to occur on
the following dates (the "Termination Date") described in this Section 4.01:

                  (a)   The date of expiration by its terms of the Term;

                  (b)   The date of death of the Employee; provided, however,
                        notwithstanding the foregoing:

                         (i)  the lump sum of Five Thousand ($5,000)
                              Dollars shall be paid to the Employee's
                              widow as tax-free death benefit (as
                              provided by the Internal Revenue Code);
                              and

                        (ii)  the Employee's compensation, as
                              determined in accordance with Section
                              2.01, shall be paid for a period of one
                              (1) year irrespective of whether such
                              one-year period exceeds the expiration
                              date of the Term) to the Employee's
                              widow.



                                    ARTICLE V
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<PAGE>


         5.01. Disability. In the event that the Employee shall have been
unable, by reason of illness or incapacity, to perform the duties required of
him pursuant to this Agreement, for a period of twelve (12) consecutive months
(the "Disability Period"), the Company may give notice (the "Disability Notice")
to the Employee of the discontinuance of his services as Executive Vice
President of the Company provided, however, notwithstanding the foregoing, this
Agreement shall continue in full force and effect except as follows:

                      (a)      Section 1.03 shall become inoperative on the date
                               on which the Disability Notice is given. In lieu
                               of his duties as Executive Vice President, the
                               duties of the Employee shall be, to the extent
                               permitted by his illness or incapacity, to advise
                               and counsel the officers and directors of the
                               Company with respect to the affairs and business
                               of the Company; and

                       (b)     The Company shall continue to pay and the
                               Employee shall accept, compensation in an amount
                               determined in accordance with Section 2.01 for
                               the Contract Year in which the Disability Notice
                               shall have been given such compensation to be
                               paid to the Employee for the remainder of such
                               Contract Years and for each of the succeeding
                               Contract Years of the Term, irrespective of the
                               amount or nature of the services rendered by the
                               Employee pursuant to Section 5.01 (a).

                       (c)     Notwithstanding anything herein contained to
                               the contrary, in the event that, prior to the
                               delivery of the notice specified in this Section
                               5.01, the Employee shall resume the full-time
                               performance of his duties hereunder for a period
                               of not less than ten (10) consecutive working
                               days, the Company may not give the Employee the
                               Disability Notice.

                                   ARTICLE VI
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                              RESTRICTIVE COVENANTS
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         6.01. Non-Disclosure. Subject to the Company fully performing all of
the terms and obligations required of it under this Agreement, including,
without limitation, the payment of compensation, the Employee shall not disclose
or furnish to any other person, firm or corporation (the "Entity") during his
employment and for three years thereafter, except in the course of the
performance of his duties hereunder, the following:

                      (a)      any information relating to any process,
                               technique or procedure used by the Company,
                               including, without limitation, computer programs
                               and methods of evaluation and pricing and
                               marketing techniques; or

                      (b)      any information relating to the operations or
                               financial status of the Company, including,
                               without limitation, all financial data and
                               sources of financing, which is not specifically a
                               matter of public record; or

                      (c)      any information of a confidential nature obtained
                               as a result of his prior, present or future
                               relationship with the Company, which is not
                               specifically a matter of public record; or

                      (d)      any trade secrets of the Company; or

                      (e)      the name, address or other information relating
                               to any customer or debtor of the Company.

         6.02. Non-Competition. Subject to the Company fully performing all of
the terms and obligations required of it under this Agreement, including,
without limitation, the payment of compensation, the Employee shall not, from
the date hereof and until one year after the termination of his employment with
the Company (the "Restriction Period"):


                      (a)      in any manner, directly or indirectly, be
                               interested in, employed by, engaged in or
                               participate in the ownership, management,
                               operation or control of or act in any advisory or
                               other capacity for any Entity which, directly or
                               indirectly, competes with the Company throughout
                               the Territory (as that term is hereinafter
                               defined); provided, however, that Employee may
                               invest in any Entity which may be deemed to be in
                               competition with the Company hereunder, the
                               Common Stock of which Entity is "publicly held",
                               provided that the Employee shall not own or
                               control securities which constitute more than one
                               (1) percent of the voting rights or equity
                               ownership of such Entity, or five (5) percent of
                               the outstanding principal balance of any class of
                               debt securities of such Entity. The Employee or
                               any Entity shall be deemed to compete with the
                               Company if at any time during the Restriction
                               Period the Employee or such Entity engages in
                               consumer financial services.

                      (b)      in any manner, directly or indirectly, attempt to
                               seek to cause any Entity to refrain from dealing
                               or doing business with the Company or assist any
                               Entity in doing so or attempting to do so.

         6.03 Definitions. As used in this Article VI: (a) the term "Company"
shall include any parent, subsidiary or affiliate of, or successor to, the
Company and (b) the term "Territory" shall mean any state (including the
District of Columbia), territory or possession of the United States within which
the Company presently or hereafter does business.

         6.04. Breach of Provisions. In the event that the Employee shall breach
any of the provisions of this Article VI, or in the event that any such breach
is threatened by the Employee, in addition to and without limiting or waiving
any other remedies available to the Company at law or in equity, the Company
shall be entitled to immediate injunctive relief in any court, domestic or
foreign, having the capacity to grant such relief, to restrain any such breach
or threatened breach and to enforce the provisions of this Article VI. The
Employee agrees and acknowledges that there is no adequate remedy at law for any
such breach or threatened breach and, in the event that any action or proceeding
is brought seeking injunctive relief, the Employee shall not use a defense
thereto that there is an adequate remedy at law.

         6.05. Reasonable Restrictions. The parties acknowledge that the
foregoing restrictions, the duration and territorial scope thereof as set forth
in this Article VI, are under all of the circumstances reasonable and necessary
for the protection of the Company and its business.

                                   ARTICLE VII
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                                CERTAIN REMEDIES
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         7.01. Lump Sum Payment. From and after any breach by the Company of its
obligations under this Agreement which is not cured within 10 days after the
Employee gives notice thereof to the Company, the Employee shall be entitled at
any time by notice to the Company to terminate his obligations to the Company
hereunder and forthwith to receive from the Company in a lump sum, and without
present value discount, the entire aggregate amount which would have been
payable by the Company to Employee under Section 2.01 had Employee been employed
hereunder for the entire Term. Interest shall accrue on such lump sum obligation
at the annual rate of 10% per annum, and shall be payable on demand.

         7.02. Litigation Costs. Should Employee prevail in any litigation
relating to his employment or this Agreement, the Company shall forthwith
reimburse Employee for all of his legal fees and costs. Should Employee prevail
only in part in any such litigation, the Company shall forthwith reimburse him
for a pro rata portion of his legal fees and costs.

                                  ARTICLE VIII
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                                  MISCELLANEOUS
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<PAGE>

         8.01. Assignment. This Agreement shall not be assigned by either party,
except that the Company shall have the right to assign its rights hereunder to
any parent, subsidiary and affiliate of, or successor to, the Company.

         8.02. Binding Effect. This Agreement shall extend to and be binding
upon the Employee, his legal representatives, heirs and distributees, and upon
the Company, its successors and assigns.

         8.03. Notices. Any notice required or permitted to be given under this
Agreement to either party shall be sufficient if in writing and if sent by
registered or certified mail, return receipt requested, to the address of such
party hereinabove set forth, or to such other address as such party may
hereafter designate by a notice given to the other party in the manner provided
in this Section 8.03.

         8.04. Waiver. A waiver by a party hereto of a breach of any term,
covenant or condition of this Agreement by the other party hereto shall not
operate or be construed as waiver of any other or subsequent breach by such
party of the same or any other term, covenant or condition hereof.

         8.05. Prior Agreements. Any and all prior Agreements between the
Company and the Employee, whether written or oral, between the parties, relating
to any and all matters covered by, and contained or otherwise dealt with in this
Agreement are hereby canceled and terminated.

         8.06. Entire Agreement. This Agreement sets forth the entire Agreement
between the parties with respect to the subject matter hereof and no waiver,
modification, change or amendment of any of its provisions shall be valid unless
in writing and signed by the party against whom such claimed waiver,
modification, change or amendment is sought to be enforced.

         8.07. Authority. The parties severally represent and warrant that they
have the power, authority and right to enter into this Agreement and to carry
out and perform the terms; covenants and conditions hereof.

         8.08. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. The federal and state
courts in Nassau County, New York shall have exclusive jurisdiction on all
matters relating to this Agreement

         8.09. Severability. In the event that any of the provisions of this
Agreement, or any portion thereof, shall be held to be invalid or unenforceable,
the validity and enforceability of the remaining provisions shall not be
affected or impaired, but shall remain in full force and effect.


         8.10. Titles. The titles of the Articles and Sections of this Agreement
are inserted merely for convenience and ease of reference and shall not affect
or modify the meaning of any of the terms, covenants or conditions of this
Agreement.

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

                                             COLONIAL COMMERCIAL CORP.

                                             BY:___________________________
                                                               (Title)

                                             ------------------------------
                                                               (Employee)