STOCK EXCHANGE AGREEMENT

THIS STOCK EXCHANGE AGREEMENT (the “Agreement”), dated as of the 28th day of
April, 2008, is by and between Decorize, Inc., a Delaware corporation (the
“Company”), and James K. Parsons, an individual (“Parsons”).

WHEREAS, on June 15, 2001, the Company issued to Parsons that certain Promissory
Note in the original principal amount of $925,000.00, which was amended by
certain Note Modification Agreements to extend the applicable maturity date and
was further amended by that certain Amended and Restated Promissory Note in the
original principal amount of $609,467.69 on May 5, 2006 (collectively, the
“Note”); and

WHEREAS, the Company desires to issue and sell to Parsons, and Parsons desires
to purchase from the Company, 1,500,000 shares (the “Shares”) of the common
stock, $0.001 par value per share, of the Company (“Common Stock”), in exchange
for a reduction of the principal balance of the Note, as further set forth
below;

NOW, THERFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:

1.
PURCHASE AND SALE

1.1.
Sale of Shares. Upon the terms and subject to the conditions set forth in this
Agreement, the Company hereby agrees to issue the Shares to Parsons upon the
receipt of the consideration described herein, and Parsons hereby agrees to
purchase from the Company, all right, title and interest in and to all of the
Shares, free of all liens, claims and encumbrances.

1.2.
Consideration. The aggregate purchase price for the Shares is the sum of
$300,000.00 (the “Purchase Price”), at a price of $0.20 per share, which shall
be paid by applying the Purchase Price against the outstanding principal balance
of the Note. The reduction in the outstanding principal balance of the Note
shall be evidenced by the issuance of a Second Amended and Restated Promissory
Note, in the form of Exhibit A to this Agreement (the “New Note”), which shall
be issued in full replacement and substitution for the Note. Upon issuance of
the New Note and the Shares, the Note shall cease to be of any further force or
effect.

1.3.
Closing Procedure. Concurrent with the execution of this Agreement, the Company
shall deliver to Parsons stock certificate(s) representing the Shares, issued in
the name of Parsons and this Agreement (the “Closing Documents”). All actions
taken on the date hereof with respect to the transactions contemplated hereunder
shall be deemed to have been taken simultaneously at the time the last of any
such actions is taken or completed.

 

1.4.
Removal of Restrictive Legends. In connection with any proposed sale of the
Shares, any legend endorsed on a certificate pursuant to Section 3.2(d) and any
related stop transfer instructions with respect to any Shares shall be removed,
and the Company shall within ten (10) business days request its transfer agent
to issue promptly a certificate without such legend to the holder thereof, if
(i) such Shares shall be registered under the Securities Act of 1933, as amended
(the “Securities Act”), (ii) such legend may be properly removed under the terms
of Rule 144 under the Securities Act or (iii) such holder shall provide the
Company with an opinion of counsel, satisfactory to the Company, to the effect
that a sale, transfer or assignment of such Shares may be made pursuant to Rule
144(k) under the Securities Act.

 
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2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and
warrants to Parsons as follows:

2.1.
Organization and Good Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has all necessary corporate power and authority to own or lease its assets
and to carry on its business as now being conducted and presently proposed to be
conducted. The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which its ownership or leasing
of assets, or the conduct of its business, makes such qualification necessary,
except where the failure to be so qualified would not result in a material and
adverse change in the business, assets, financial condition, results of
operations, affairs or prospects of the Company and its subsidiaries, taken as a
whole (“Material Adverse Change”). Except for any subsidiaries disclosed in its
SEC Documents (as defined in Section 2.3), the Company has no subsidiaries and
no equity interests in any corporation, partnership, joint venture or other
entity.

2.2.
Requisite Power and Authorization. The Company has all necessary corporate power
and authority to execute and deliver the Closing Documents and to perform its
obligations under each of the Closing Documents, including without limitation
the issuance of the Shares hereunder. All corporate actions of the Company
required for the execution and delivery of the Closing Documents and the
issuance and delivery of the Shares has been duly and effectively taken, and no
further actions, authorizations or consents, including, without limitation, any
consents of the stockholders of the Company, are required. Each of the Closing
Documents constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditor’s rights,
and (ii) as limited by general principles of equity that restrict the
availability of equitable remedies.

 
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2.3.
SEC Documents. The Company has filed with the Securities and Exchange Commission
(the “SEC”) all reports, statements, schedules and other documents
(collectively, the “SEC Documents”) required to be filed by it pursuant to the
Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”). As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder, and none of
the SEC Documents, at the time they were filed with the SEC, contained any
untrue statement of a material fact or omitted 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. As of
their respective dates, the financial statements included in the SEC Documents
(the “Financial Statements”) complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Except (i) as may be indicated in the notes to the
Financial Statements or (ii) in the case of the unaudited interim statements, as
permitted by Form 10-QSB under the Exchange Act, the Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present in all material respects the financial
position of the Company and its subsidiaries as of the dates thereof and the
results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal recurring year-end adjustments and
footnotes). Except as set forth in the Financial Statements filed with the SEC
prior to the date hereof, neither the Company nor any of its subsidiaries has
any liabilities, whether absolute, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the date
of such Financial Statements, (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in such Financial Statements,
which liabilities and obligations referred to in clauses (i) and (ii),
individually or in the aggregate, are not material to the financial condition or
operating results of the Company or any of its subsidiaries and (iii)
liabilities and obligations incurred in connection with the Closing Documents
and the transactions contemplated thereby.

2.4.
No Conflicts. Neither the execution, delivery and performance by the Company of
this Agreement, the other Closing Documents, and all instruments and documents
to be delivered by the Company, nor the consummation of the transactions
contemplated by any of the foregoing (i) has constituted or resulted in, or will
constitute or result in, a default under or breach or violation of any term or
provision of the Certificate of Incorporation or bylaws of the Company, as
amended, or material contracts or instruments to which the Company or any of its
subsidiaries is a party or federal, state or local laws, rules or regulations,
writs, orders, judgments or decrees which are applicable to the Company, any of
its subsidiaries or their assets, (ii) will result in the acceleration or
termination of any rights under any contract or instrument to which the Company
or any of its subsidiaries is a party or (iii) will result in the creation or
imposition of any liens, charges or encumbrances upon any assets of the Company
or any of its subsidiaries.

 

2.5.
Consents. No approval, consent, order, authorization or other action by, or
notice to or filing with, any governmental authority or regulatory agency or any
other person or entity, and no lapse of a waiting period, is required in
connection with the execution, delivery or performance by the Company of this
Agreement, any other Closing Document, the issuance and delivery of any of the
Shares or any other transactions contemplated by any of the Closing Documents
except for filings required under applicable state “blue sky” laws (which shall
be duly filed and effective prior to the issuance of the Shares if so required
under such laws).

 

2.6.
No Material Adverse Change. Since the date of the most recent SEC Documents, the
business of the Company and each subsidiary has been operated in the ordinary
course and substantially consistent with past practice and there has not been
any Material Adverse Change.

 
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2.7.
Litigation. There is no claim, action, suit, proceeding or investigation pending
or to the Company’s knowledge, currently threatened against the Company or any
of its subsidiaries, or any of their respective directors or officers, in their
capacities as such, (i) that questions the validity of this Agreement or any
other Closing Document or the issuance of the Shares, or the right of the
Company to enter into this Agreement or any other Closing Document or to
consummate the transactions contemplated by any Closing Document or (ii) that
might result, either individually or in the aggregate, in any Material Adverse
Change or in any change in the current equity ownership of the Company.

 

2.8.
Validity of Shares. The Shares, when issued by the Company to Parsons upon
payment in full of the Purchase Price, will be validly issued, fully paid and
non-assessable.

3.
REPRESENTATIONS AND WARRANTIES OF PARSONS. Parsons represents and warrants to
the Company as follows:

3.1.
Due Authorization. Parsons has full capacity to enter into this Agreement and to
carry out his obligations hereunder. This Agreement has been duly executed and
delivered by Parsons and constitutes the legal, valid and binding obligations of
Parsons, enforceable against him in accordance with its terms.

3.2.
Investment Representations. Parsons further represents and warrants as follows:

3.2.1.
The undersigned is purchasing the Shares for his own account and not with a view
to resale or redistribution in a manner which would require registration under
the Securities Act, or any state securities laws, or for sale in connection with
a “distribution” as that term is used in Section 2(11) of the Securities Act, of
the shares.

3.2.2.
The undersigned understands that the Shares are not registered under the
Securities Act or the securities laws of any state and may not be disposed of in
whole or in part in the absence of registration under the Securities Act or any
state securities laws, unless an exemption from registration is available.

3.2.3.
The undersigned understands that there is a very limited public market for the
Shares and it may not be possible for the undersigned to readily liquidate its
investment. As a consequence, the undersigned may never be able to sell or
dispose of such Shares and may thus have to bear the risk of investment in such
Shares for a substantial period of time. The undersigned has adequate means of
providing for its current and future contingencies and has no need for liquidity
with regard to its investment in the Shares.

3.2.4.
The undersigned has been informed and understands that the Shares, upon issue,
will have such restrictive legends as are required by law or as the Company may
otherwise determine.

3.2.5.
The undersigned has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Shares and making an informed decision with respect to the purchase of
the Shares. Parsons is not relying upon any representation or warranty by the
Company with respect to the value of the Shares, and accordingly no such
representations or warranties are made.

 
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3.2.6.
The undersigned has had an opportunity to ask questions of and receive
satisfactory answers from the Company, or any person or persons acing on the
Company’s behalf, concerning the terms and conditions of this investment, and
all such questions have been answered to the full satisfaction of Parsons.

 

4.
MISCELLANEOUS PROVISIONS

4.1.
Assignment. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, heirs and assigns.

4.2.
Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

4.3.
Entire Agreement. This Agreement and the documents referred to herein contain
the entire understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties, conveyances
or undertakings other than those expressly set forth herein. This Agreement
supersedes any prior agreements and understandings between the parties with
respect to the subject matter of this Agreement.

 

4.4.
Modification. No change or modification of this Agreement shall be valid or
binding upon the parties hereto, nor shall any waiver of any term or condition
in the future be so binding, unless such change or modification or waiver shall
be in writing and signed by the parties hereto.

 

4.5.
GOVERNING LAW; VENUE. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE
EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF
DELAWARE AS APPLIED TO AGREEMENTS AMONG DELAWARE RESIDENTS ENTERED INTO AND TO
BE PERFORMED ENTIRELY WITHIN DELAWARE, WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS OF SUCH JURISDICTION. VENUE FOR ANY ACTION TO ENFORCE, INTERPRET OR
RESOLVE ANY DISPUTE WITH RESPECT TO ANY PROVISION OF THIS AGREEMENT SHALL BE
EXCLUSIVELY IN GREENE COUNTY, MISSOURI, AND ALL PARTIES HERETO AGREE THAT ANY
LITIGATION DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT MUST BE BROUGHT
BEFORE AND DETERMINED BY A COURT OF COMPETENT JURISDICTION WITHIN SUCH COUNTY
AND STATE. EACH OF THE PARTIES FURTHER ACKNOWLEDGE THAT SUCH VENUE IS
APPROPRIATE AND AGREE NOT TO RAISE ANY ARGUMENT THAT SUCH VENUE IS IN ANY WAY
UNDULY INCONVENIENT FOR ANY OF THEM, WITH THEIR EXECUTION HEREOF BEING EVIDENCE
OF THEIR AGREEMENT TO SUBMIT TO THE JURISDICTION OF SUCH COURTS.

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

DECORIZE, INC.
A Delaware corporation

By:
/s/ Steve Crowder
 
By:
/s/ James K. Parsons
   
Steve Crowder
   
James K. Parsons
   
President
       

 
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