Document:

PRIVATE PLACEMENT PURCHASE AGREEMENT dated ___ __, 2004 by and among COLONIAL
COMMERCIAL CORP., a New York corporation (the "Company"), and GOLDMAN ASSOCIATES
OF NEW YORK, INC., a _____ corporation ("Investor").

6. PURCHASE OF SECURITIES.

     (a)  At the closing referred to in Section 3 (the "Closing"), Investor will
          purchase from the Company:

          (i)  a note in the form of Exhibit A (the "Note") in the principal
               amount of $750,000;

          (ii) 600,000 shares (the "Shares") of common stock of the Company (the
               "Common Stock"); and

          (iii) a warrant in the form of Exhibit B (the "Warrant") to purchase
               150,000 shares (the "Warrant Shares") of Common Stock at an
               exercise price of $3.00 per share.

     (b)  The purchase price for the Note is $750,000. The purchase price for
          the Shares (at $1.25 per share) and for the warrant is $750,000. The
          total purchase price of $1,500,000 will be paid at Closing pursuant to
          the escrow provisions set out in Section 2.

     (c)  The Note, the Shares, the Warrant and the Warrant Shares are
          hereinafter sometimes collectively referred to as the "Securities."

7. Escrow

(a)  Concurrently herewith

          (i)  The Company is depositing in escrow, with Marvin Natiss, as
               escrow agent (the "Escrow Agent")

               (1)  The Note and certificates representing the Shares and the
                    warrants (collectively, the "Instruments");

          (ii) Investor is depositing with the Escrow Agent $1,500,000 (the
               "Funds") to be held by the Escrow Agent in his
               non-interest-bearing escrow account.

     (b)  Upon the refinancing by the Company of its bank indebtedness with
          Wells Fargo Business Credit, Inc. on or before July 31, 2004 (the
          "Refinancing"), the Company and Investor shall jointly direct the
          Escrow Agent to release the Instruments to Investor, and to release
          the Funds to the Company.

     (c)  In the event that the Refinancing has not been occurred by July 31,
          2004, the parties shall jointly instruct the Escrow Agent to return
          the Securities to the Company and to return the Funds to the Investor,
          and the parties shall have no further liability hereunder.

     (d)  By countersigning this Agreement, the Escrow Agent agrees to act in
          accordance with joint instructions as aforesaid.

                                      -31-
<PAGE>

8.   The Closing shall occur concurrently with the Refinancing and at the place
     of the Refinancing, but only if the Refinancing occurs on or before July
     31, 2004.

9.   Representations and Warranties by the Company.

     (a)  The Company is a corporation duly organized, validly existing and in
          good standing under the laws of New York. It has all requisite
          corporate power and authority and is entitled to carry on its business
          as now being conducted and to own, lease or operate its properties as
          and in the places where such business is now conducted and such
          properties are now owned, leased or operated.

     (b)  Neither the execution, delivery nor performance of this Agreement by
          the Company will, with or without the giving of notice or the passage
          of time, or both, conflict with, result in a default, right to
          accelerate or loss of rights under, or result in the creation of any
          lien, charge or encumbrance pursuant to, any provision of its
          certificate of incorporation or by-laws or any franchise, mortgage,
          deed of trust, lease, license, agreement, understanding, law, rule or
          regulation or any order, judgment or decree to which it is a party or
          by which it may be bound or affected. The Company has the full power
          and authority to enter into this Agreement and to carry out the
          transactions contemplated hereby, all proceedings required to be taken
          to authorize the execution, delivery and performance of this Agreement
          and the agreements relating hereto have been properly taken and this
          Agreement constitutes a valid and binding obligation of the Company,
          except as may be limited by bankruptcy and similar laws affecting
          creditors generally.

     (c)  The total number of outstanding shares of capital stock of the Company
          is as set forth in the Company's Report on SEC Form 10-Q for the
          quarter ended March 31, 2004 (the "10-Q"). Except as set forth in the
          SEC Form 10-K for the year ended December 31, 2003 (the "10-K"), there
          are no options to purchase shares of capital stock of the Company or
          agreements or understandings (whether or not binding) whereby the
          Company is obligated to issue or transfer any shares or any interest
          therein, and no person or entity made any claim for any such shares or
          interest. No person has any preemptive right or right of first refusal
          or similar right to purchase any securities of the Company.

     (d)  SEC Documents; Financial Statements.

          (i)  SEC REPORTS AND COMPANY FINANCIAL STATEMENTS.

          (1)  The term "SEC Reports" means the 10-K and the 10-Q. The SEC
               Reports and other Company filings are accessible on the SEC's
               website at WWW.SEC.GOV. Investor represents that Investor has
               carefully reviewed and studied the SEC Reports.

                                      -32-
<PAGE>

          (2)  The SEC Reports, at the time filed, (a) did not contain any
               untrue statement of a material fact or omit to state a material
               fact required to be stated therein or necessary in order to make
               the statements therein, in light of the circumstances under which
               they were made, not misleading and (b) complied as to form in all
               material respects with the applicable requirements of the
               Exchange Act. The consolidated financial statements of Company
               (including the related notes and schedules thereto) included in
               the SEC Reports (the "Company Financial Statements") (i) comply
               as to form in all material respects with applicable accounting
               requirements and with the published rules and regulations of the
               Securities and Exchange Commission ("SEC") with respect thereto,
               (ii) have been prepared in accordance with U.S. GAAP applied on a
               consistent basis during the periods involved (except as may be
               indicated in the notes thereto, or, in the case of the unaudited
               statements, as permitted by the Instructions to Form 10-Q
               promulgated by the SEC) and (iii) fairly present (subject, in the
               case of the unaudited statements, to normal year-end adjustments)
               (A) the financial position of Company, (B) results of its
               operations and (C) cash flows, in each case, as of the dates
               thereof or for the period indicated, as the case may be.

          (3)  Copies of the certificate of incorporation and bylaws of the
               Company are listed as exhibits to the Form 10K and are accessible
               at the SEC's web site mentioned above.

          (e)  The Securities have been duly authorized by the Company.

          (f)  The Company has advised the Investor that the Company is
               concurrently engaged in a private placement of securities to
               other investors (the "Other Investors").

          (g)  Except for the aforesaid representations and warranties by the
               Company, neither the Company nor any officer or director of the
               Company is making any representation or warranty to Investor
               regarding any matter or thing.

10.  Other Agreements.

     (a)  Effective as of the Closing, Michael Goldman shall be elected a
          director of the Company.

     (b)  During the period ending December 31, 2005, the Company will not
          increase the salaries of Bernard Korn, Bill Pagano or James Stewart
          without the prior consent of Investor provided that Mr. Korn's salary
          shall increase in 2005 under the terms of his employment agreement
          currently in effect.

     (c)  Investor agrees that it and its affiliates will not until May 31, 2008
          without the prior written consent of the Board of Directors of the
          Company (i) acquire, agree to acquire or make any proposal to acquire
          any voting securities or assets of the Company or any of its
          affiliates, (ii) propose to enter into any merger, consolidation,
          recapitalization, business combination or other similar transaction
          involving the Company or any of its affiliates, (iii) make, or in any
          way participate in any "solicitation" of "proxies" (as such terms are
          used in the proxy rules of the Securities and Exchange Commission) to
          vote or seek to advise or influence any person with respect to the
          voting of any voting securities of the Company or any of its

                                      -33-
<PAGE>

          affiliates or (iv) form, join or in any way participate in a "group"
          as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
          as amended, in connection with any of the foregoing or (v) advise,
          assist or encourage any other persons in connection with the
          foregoing.

     (d)  Concurrently herewith Investor and other 5% shareholders of the
          Company have by separate instrument agreed that none of such persons
          shall purchase additional shares of Common Stock until May 31, 2008 if
          such purchase would reduce the net operating tax loss carryforward of
          the Company or would reduce the number of shares that 5% shareholders
          can buy without reducing the net operating tax loss carryforward.

11. Registration of Shares.

     (a)  The Company will on or before November 1, 2004 file with the SEC a
          registration statement under the Securities Act of 1933 for the resale
          by Investor of the Shares and of the Warrant Shares issued or issuable
          under the Warrants.

     (b)  The Company shall use its best efforts to cause the registration
          statement to become effective not later than 120 days after the date
          of filing.

     (c)  The Company will pay all expenses of such registration, except for
          fees of Investor' counsel and underwriting discounts and commissions.
          As a condition to registration the parties will execute
          indemnification agreements that are common in transactions of this
          type.

12. Representations by Investor

     (a)  Investor is proceeding in this transaction based solely on such
          investigations and with such legal, accounting tax and other
          assistance as it has deemed appropriate.

     (b)  Investor represents and warrants to the Company that:

     (i)  An investment in the Securities entails substantial risks. Without
          limiting the generality of the foregoing, substantially all of the
          Company's indebtedness is due on demand by the Company's lenders, and
          substantially all of its assets are pledged to its lenders.

     (ii) Investor has sufficient knowledge and experience in financial and
          business matters to be able to evaluate the risks and merits of the
          investment represented by the purchase of the Securities;

    (iii) Investor is able to bear the economic risks of such investment,
          including the risk of losing all such investment, and Investor has no
          need for liquidity with respect to Investor's investment;

     (iv) Investor understands that no prospectus, offering circular or other
          offering statement containing information with respect to the Company
          and the Securities or with respect to the Company's business is being
          issued;

     (v)  Investor has had the opportunity to ask questions and receive answers
          from knowledgeable individuals concerning the Company, its business
          and the Securities;

                                      -34-
<PAGE>

     (vi) Investor understands that the Securities (a) have not been registered
          (or, with respect to state securities or Blue Sky laws, otherwise
          qualified for sale) under the Securities Act of 1933, as amended (the
          "Act"), or under the securities or Blue Sky laws and regulations of
          any state , and (b) cannot be sold, transferred or otherwise disposed
          of except during the effectiveness of a subsequent registration under
          the Act and applicable state securities or Blue Sky laws or pursuant
          to an exemption from such registration which is available at the time
          of desired sale, and will bear a legend to that effect;

    (vii) Investor is aware that the information and conditions necessary to
          permit routine sales of the Shares, or any portion thereof, under Rule
          144 of the Act may not be available at a time when the registration
          statement aforesaid is not in effect and Investor wishes to transfer
          part or all of the Securities, and that in any event Investor may then
          be prohibited from engaging in trading because of confidentiality,
          fiduciary and other legal requirements;

   (viii) Investor is an "accredited investor" as defined in Rule 501(a) of
          Regulation D, promulgated under the Act, in that Investor's net worth
          exceeds $5,000,000.

     (ix) Investor is purchasing the Securities for Investor's own account and
          not with a view to resale or other distribution thereof inconsistent
          with or in violation of the federal securities laws or the securities
          or Blue Sky laws of any state; and

     (x)  Investor is not obligated to transfer any Securities to any other
          person or entity nor does Investor have any agreement or understanding
          to do so.

13. MISCELLANEOUS

     (a)  This Agreement sets forth in full all understandings of the Company
          and Investor with respect to the subject matter of this Agreement. It
          may not be amended or terminated orally. The internal laws of the
          State of New York shall govern this Agreement. This Agreement shall be
          enforceable by decrees of specific performance (without posting bond
          or other security), in addition to such other remedies as may be
          available.

     (b)  Representations and warranties hereunder shall expire on December 31,
          2004.

     (c)  This Agreement may be signed in one or more counterparts each of which
          shall constitute an original.

         IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date set forth above.

                                      -35-
<PAGE>

                                         COLONIAL COMMERCIAL CORP.

                                         By:
                                         ---------------------------

                                         GOLDMAN ASSOCIATES OF NEW YORK, INC.

                                         By:
                                         ---------------------------

                                         Escrow Agent

                                         ---------------------------
                                         Marvin Natiss, Esq.

                                      -36-
<PAGE>Principal Sum: $750,000

Investor: GOLDMAN ASSOCIATES OF NEW YORK, INC.

Investor's Address:
                   ------------------

Dated: July 29, 2004

                                  SECURED NOTE

                                  (the "Note")

                            COLONIAL COMMERCIAL CORP.

COLONIAL COMMERCIAL CORP., a New York corporation (hereinafter called the
"Company"), hereby promises to pay to the order of Investor the Principal Sum
on June 30, 2008 (the "Maturity Date").

This Note shall accrue interest at the prime rate of Citibank in effect from
time to time, payable quarterly on the 10th day of each October, January, April
and July beginning October 10, 2004. This Note shall accrue interest after the
giving of an Acceleration Notice (as defined below) at the rate of 18% per annum
(or, if less, the highest rate permitted by law), payable on demand. Interest
shall be computed on the basis of a 360-day year.

Payments to Investor shall be made to Investor's address set forth above or to
such other address as Investor shall direct by notice to the Company.

6.       This Note is being issued under a Private Placement Purchase Agreement
         of even date herewith among the Company and Investor (the "Private
         Placement Purchase Agreement"), and the Investor is entitled to all
         benefits thereunder. Capitalized terms that are not defined in this
         Note shall have the meanings attributed thereto in the Private
         Placement Purchase Agreement.

7.       The Company may prepay this Note at any time or times, in whole or in
         part, without penalty or premium. Partial payments shall be applied
         first to interest and then to principal

8.       Grant of Security Interest

     (a)  To secure the obligations of the Company to the Investor under this
          Note (the "secured obligations"), each of the Company and each of its
          subsidiaries that are countersigning this Note as a "Grantor of a
          Security Interest" (collectively, the "Grantors") hereby grants to the
          Investor a security interest in all of the Grantor's assets and
          properties and in the proceeds thereof, including without limitation
          all of the following properties, assets and rights of the Company,
          wherever located, whether now owned or hereafter acquired or arising,
          and all proceeds and products thereof:

          (i)  All personal and fixture property of every kind and nature
               including, without limitation, all furniture, fixtures,
               equipment, raw materials, inventory, other goods, accounts,
               contract rights, rights to the payment of money, insurance refund
               claims and all other insurance claims and proceeds, tort claims,
               chattel paper, electronic chattel paper, documents, instruments,
               securities and other investment property, deposit accounts,
               rights to proceeds of letters of credit, letter-of-credit rights,
               supporting obligations of every nature, and general

                                        1
<PAGE>

               intangibles including, without limitation, all tax refund claims,
               license fees, patents, patent applications, trade secrets and
               know-how (whether or not patentable or patented), trademarks,
               trademark applications, trade names, copyrights, copyright
               applications, rights to sue and recover for past infringement of
               patents, trademarks and copyrights, computer programs, computer
               software, engineering drawings, service marks, customer lists,
               goodwill, and all licenses, permits, agreements of any kind or
               nature pursuant to which (i) the Grantor operates or has
               authority to operate, (ii) the Grantor possesses, uses or has
               authority to possess or use property (whether tangible or
               intangible) of others, or (iii) others possess, use, or have
               authority to possess or use property (whether tangible or
               intangible) of the Grantor, and all recorded data of any kind or
               nature, regardless of the medium of recording, including, without
               limitation, all software, writings, plans, specifications, and
               schematics.

     (b)  The Company's indebtedness to Investor under this Note, and the
          security interests aforesaid, shall be subordinated to Senior Lenders
          (as hereinafter defined) to the fullest extent from time to time
          requested by the Senior Lenders. "Senior Lenders" means Wells Fargo
          Business Credit, Inc. or any lender that at time refinances any
          indebtedness of the Company to Wells Fargo Business Credit, Inc., and
          Senior Lender means Wells Fargo Business Credit, Inc. or any such
          other lender. "Senior Indebtedness" means debt to which the
          indebtedness under this Note is at any time subordinate as aforesaid.
          The term "Prior Debt" means Senior Indebtedness, indebtedness and
          obligations to American Standard, Inc, and current or future
          obligations to vendors and lessors in respect of forklifts, vehicles,
          copiers and miscellaneous other equipment.

     (c)  Investor hereby accepts the terms of any subordination agreement and
          inter-creditor and other agreements (including but not limited to a
          subordination agreement and inter-creditor agreement entered or to be
          entered among the Investor, the Company and Wells Fargo Business
          Credit, Inc. on or about the date hereof) that are at any time or
          times proposed by Wells Fargo Business Credit, Inc. or by any other
          Senior Lender, with the same force and effect as if Investor had
          directly signed such subordination and inter-creditor and other
          agreements. Without limiting the generality of the foregoing, Investor
          hereby irrevocably appoints each of Bernard Korn and William Pagano as
          Investor's attorney in fact to execute and deliver such agreements in
          the name of Investor and on its behalf.

                                        2
<PAGE>

     (d)  Until this Note is discharged in full, the Company will not without
          the consent of Investor incur more than $15 million in principal
          amount of indebtedness outstanding at any time to Senior Lenders. Such
          agreement is only between the Company and Investor, does not bind
          Wells Fargo Business Credit, Inc. or any other Senior Lender, and does
          not limit the right of Wells Fargo Business Credit, Inc. or any other
          Senior Lender to lend to the Company any amount whatsoever and to
          obtain the full benefit of the subordination aforesaid with respect
          thereto.

(e)  Subject to the subordination aforesaid,

     (i)  upon default by the Company under any of the secured obligations,
          Investor shall be entitled to all rights afforded under the Uniform
          Commercial Code of any applicable State (the "UCC") to a secured
          creditor upon default by its debtor, it being understood that the
          Company hereby also grants to Investor all such rights and waivers as
          under the Uniform Commercial Code a debtor may make available to a
          secured creditor by express agreement or waiver.

     (ii) Each Grantor represents and warrants that the security interest
          granted by it hereunder is and shall at all times be a perfected
          security interest in all assets of such Grantor in which a security
          interest may be perfected by filing a financing statement under the
          Uniform Commercial Code, that (except for Prior Indebtedness) it has
          granted no material security interest in its assets and that no person
          or entity has obtained or claims any such security interest, that
          (except as to Prior Indebtedness), no prior financing statements is on
          file against the Grantor or its assets, that (except for Prior
          Indebtedness) such security interest is and shall at all times be
          first and prior to any other security interest at any time granted or
          to be granted by the Grantor, that the Company's assets are all
          located in the States of New Jersey and New York and Pennsylvania and
          that the Grantor's records with respect to its accounts are maintained
          in the States of New Jersey, New York and Pennsylvania. Each Grantor
          agrees in advance to advise Investor, and in advance to execute and
          file such financing statements and other instruments and documents as
          Investor may deem appropriate to maintain its security interest and
          the priority thereof, if the Grantor proposes to move or relocate any
          of its assets or properties or if there is any other change or
          proposed or anticipated change in the matters represented in the
          preceding sentence.

    (iii) Each Grantor agrees promptly to execute and file all such financing
          statements and all such filings with patent and other offices, and all
          equivalent filings in other jurisdictions and other countries, as in
          the opinion of Investor shall be required or advisable to perfect the
          security interest granted hereunder, and the Grantor hereby
          irrevocably appoints Investor as the attorney in fact of the Grantor
          in the Grantor's name to file such financing statements and other
          filings.

                                        3
<PAGE>

     (iv) The security interest granted hereunder shall not be discharged or in
          any way affected by the extension or other modification of any of the
          secured obligations, or by any other act or omission which would
          otherwise discharge the security interest at law or in equity.

     (v)  Upon payment in full of this Note, the security interest shall be
          discharged and the Investor shall file appropriate UCC termination
          statements.

9.   PURCHASE FOR INVESTMENT. The Investor, by acceptance hereof, acknowledges
     that the Note has not been registered under the Securities Act of 1933 (the
     "Act"), covenants and agrees with the Company that such Investor is taking
     and holding this Note for investment purposes and not with a view to, or
     for sale in connection with, a distribution thereof.

10.  EVENTS OF DEFAULT AND ACCELERATION OF THE NOTE.

     (a)  A default with respect to this Note shall exist if any of the
          following shall occur:

          (i)  The Company shall fail to make any payment of interest or
               principal when due, or the Company shall otherwise breach any
               other provision of this Note, and such failure to make payment or
               such other breach shall continue for 10 business days after
               written notice by Investor to the Company.

          (ii) Any representations or warranties made in the Private Placement
               Purchase Agreement by the Company shall be untrue or incorrect in
               any material respect and such representations and warranties
               shall not have expired pursuant to Section 8(b) of the Private
               Placement Purchase Agreement, or the Company shall breach any
               material covenant set forth in the Private Placement Purchase
               Agreement and such breach shall continue for 10 business days
               after written notice by Investor to the Company.

          (iii) A receiver, liquidator or trustee of the Company or of a
               substantial part of its properties shall be appointed by court
               order and such order shall remain in effect for more than 45
               calendar days; or the Company shall be adjudicated bankrupt or
               insolvent; or a substantial part of the property of the Company
               shall be sequestered by court order and such order shall remain
               in effect for more than 45 calendar days; or a petition to
               reorganize the Company under any bankruptcy, reorganization or
               insolvency law shall be filed against the Company and shall not
               be dismissed within 45 calendar days after such filing.

          (iv) The Company shall file a petition in voluntary bankruptcy or
               request reorganization under any provision of any bankruptcy,
               reorganization or insolvency law, or shall consent to the filing
               of any petition against it under any such law.

          (v)  The Company shall have defaulted in respect of any obligation for
               borrowed money and the lender in respect thereof shall have
               accelerated or shall have purported to accelerate the maturity
               thereof; or

          (vi) The Company shall make an assignment for the benefit of its
               creditors or consent to the making of any such assignment, or
               admit in writing its inability to pay its debts generally as they
               become due, or consent to the appointment of a receiver, trustee
               or liquidator of the Company, or of all or any substantial part
               of its properties.

                                       4
<PAGE>

          (b)  If a default shall occur and be continuing, the Investor may, in
               addition to such Investor's other remedies, by written notice to
               the Company (an "Acceleration Notice"), declare the principal
               amount of this Note, together with all interest accrued thereon,
               to be due and payable immediately. Upon any such declaration,
               such amount shall become immediately due and payable.

11.      MISCELLANEOUS.

     (a)  All notices and other communications required or permitted to be given
          hereunder shall be in writing and shall be given (and shall be deemed
          to have been duly given upon receipt) by delivery in person, by
          telegram, by facsimile, recognized overnight mail carrier, telex or
          other standard form of telecommunications, or by registered or
          certified mail, postage prepaid, return receipt requested, addressed
          as follows: (a) if to the Investor, to its address set forth above or
          to such other address as Investor shall furnish to the Company in
          accordance with this Section, or (b) if to the Company, to it at its
          headquarters office, or to such other address as the Company shall
          furnish to the Investor in accordance with this Section.

     (b)  This Note shall be governed and construed in accordance with the laws
          of the State of New York applicable to agreements made and to be
          performed entirely within such state.

     (c)  All disputes hereunder shall be resolved exclusively by the Federal
          and State courts in Nassau County New York.

     (d)  The Investor of this Note shall be entitled to recover its reasonable
          legal and actual costs of collecting on this Note, and such costs
          shall be deemed added to the principal amount of this Note.

     (e)  The Company waives protest, notice of protest, presentment, dishonor,
          notice of dishonor and demand.

     (f)  This Note may not be changed or terminated orally.

     (g)  The Section headings in this Note are for convenience only.

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed on the
date set forth above.

COLONIAL COMMERCIAL CORP.

By:      ____________________________________

Subsidiaries that are "Grantors of a Security Interest" under this Note

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

by _________________

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

by _________________

Confirmed as to Appointment of Attorney in fact

GOLDMAN ASSOCIATES OF NEW YORK, INC.

By __________________________________

                                       5

<PAGE>

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