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                                                                 EXHIBIT 10.79


                           BORROWER PLEDGE AGREEMENT


               PLEDGE AND SECURITY AGREEMENT dated as of May 2, 2000, made by
Decora, Incorporated, a Delaware corporation (the "Pledgor"), in favor of Ableco
Finance LLC, as collateral agent for the Lenders parties to the Financing
Agreement referred to below (in such capacity, the "Collateral Agent").

                              W I T N E S S E T H:

               WHEREAS, Decora Industries, Inc. (the "Parent"), the Pledgor, the
financial institutions from time to time party thereto (the "Lenders"), The CIT
Group/Business Credit, Inc., as administrative agent for the Lenders (the
"Administrative Agent") and the Collateral Agent have entered into a Financing
Agreement, dated as of the date hereof (such Agreement, as amended, restated or
otherwise modified from time to time, being hereinafter referred to as the
"Financing Agreement");

               WHEREAS, it is a condition precedent to the Lenders making and
maintaining Loans and assisting the Pledgor in obtaining the Support Letter of
Credit under the Financing Agreement that the Pledgor shall have executed and
delivered to the Collateral Agent a pledge and security agreement providing for
the pledge to the Collateral Agent of, and the grant to the Collateral Agent for
the benefit of the Lenders of a security interest in, certain indebtedness from
time to time owing to the Pledgor and certain of the outstanding shares of
capital stock from time to time owned by the Pledgor of each Subsidiary now or
hereafter existing and in which Pledgor has any interest at any time;

               WHEREAS, the Pledgor has determined that the execution, delivery
and performance of this Agreement directly benefits, and is in the best interest
of the Pledgor;

               NOW, THEREFORE, in consideration of the premises and the
agreements herein and in order to induce the Agents and the Lenders to enter
into the Financing Agreement with the Pledgor, the Pledgor hereby agrees with
the Collateral Agent as follows:

               SECTION 1. Definitions. All terms used in this Agreement which
are defined in the Financing Agreement or in Article 8 or Article 9 of the
Uniform Commercial Code (the "Code") currently in effect in the State of New
York and which are not otherwise defined herein shall have the same meanings
herein as set forth therein. In addition, as used in this Agreement, the
following terms shall have the following meanings:


               "Other Obligations" means any Obligations (as defined in Section
3 hereof) other than Term Loan Obligations.

               SECTION 2. Pledge and Grant of Security Interest. (a) As
collateral security for all of the Other Obligations, the Pledgor hereby pledges
and assigns to the Collateral Agent, and

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grants to the Collateral Agent for the benefit of the Lenders a continuing
security interest in, the following (the "Pledged Collateral"):

               (i) the indebtedness described in Schedule I hereto and all
indebtedness from time to time required to be pledged to the Collateral Agent
pursuant to the terms of the Financing Agreement (the "Pledged Debt"), the
promissory notes and other instruments evidencing the Pledged Debt and all
interest, cash, instruments, investment property and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Debt;

               (ii) the shares of stock described in Schedule II hereto (the
"Pledged Shares") issued by the corporations described in such Schedule II (the
"Existing Subsidiaries"), the certificates representing the Pledged Shares, all
options and other rights, contractual or otherwise, in respect thereof and all
dividends, cash, instruments, investment property and other property (including
but not limited to, any stock dividend and any distribution in connection with a
stock split) from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;

               (iii) the shares of stock at any time and from time to time
acquired by the Pledgor, of any and all Subsidiaries which are Unrestricted
Subsidiaries (as defined in the Indenture), whether now or hereafter existing,
all or a portion of the stock of which is acquired by the Pledgor at any time
(such Subsidiaries, together with the Existing Subsidiaries, being hereinafter
referred to collectively as the "Pledged Subsidiaries" and individually as a
"Pledged Subsidiary"), the certificates representing such shares, all options
and other rights, contractual or otherwise, in respect thereof and all
dividends, cash, instruments, investment property and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares;

               (iv) all additional shares of stock, from time to time acquired
by the Pledgor, of any Pledged Subsidiary, the certificates representing such
additional shares, all options and other rights, contractual or otherwise, in
respect thereof and all dividends, cash, instruments, investment property and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such additional shares; and

               (v)  all proceeds of any and all of the foregoing;

               in each case, whether now owned or hereafter acquired by the
Pledgor and howsoever its interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).

               (b) As collateral security for all of the Term Loan A Obligations
and Term Loan B Obligations, the Pledgor hereby pledges and assigns to the
Collateral Agent, and grants to the Collateral Agent for the benefit of the
Lenders a continuing security interest in, all of the Collateral.

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               (c) The Collateral Agent's security interest in the Collateral
securing the Other Obligations shall have priority over the Collateral Agent's
security interest in the Collateral securing the Term Loan A Obligations and
Term Loan B Obligations.

               SECTION 3. Security for Obligations. The security interest
created hereby in the Pledged Collateral constitutes continuing collateral
security for all of the following obligations whether now existing or hereafter
incurred (the "Obligations"):

               (a) the prompt payment by the Pledgor, as and when due and
payable (by scheduled maturity, required prepayment, acceleration, demand or
otherwise), of all amounts from time to time owing by it in respect of the
Financing Agreement, the Notes and the other Loan Documents, whether for
principal, interest (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
bankruptcy, insolvency or reorganization of the Pledgor, whether or not a claim
for post-filing interest is allowed in such proceeding), Letter of Credit
Obligations, fees, indemnification payments, expense reimbursements or
otherwise; and

               (b) the due performance and observance by the Pledgor of all of
its other obligations from time to time existing in respect of the Financing
Agreement, the Notes and all other Loan Documents.

               SECTION 4. Delivery of the Pledged Collateral.

               (a) All promissory notes currently evidencing the Pledged Debt
and all certificates currently representing the Pledged Shares shall be
delivered to the Collateral Agent on or prior to the execution and delivery of
this Agreement. All other promissory notes, certificates and instruments
constituting Pledged Collateral from time to time or required to be pledged to
the Collateral Agent pursuant to the terms of the Financing Agreement (the
"Additional Collateral") shall be delivered to the Collateral Agent within ten
(10) days of receipt thereof by or on behalf of Pledgor. All such promissory
notes, certificates and instruments shall be held by or on behalf of the
Collateral Agent pursuant hereto and shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to the Collateral Agent. Within ten (10) days of the receipt by
Pledgor of the Additional Collateral, a Pledge Amendment, duly executed by the
Pledgor, in substantially the form of Schedule III hereto (a "Pledge Amendment")
shall be delivered to the Collateral Agent, in respect of the Additional
Collateral which are to be pledged pursuant to this Agreement and the Financing
Agreement, which Pledge Amendment shall from and after delivery thereof
constitute part of Schedules I and II hereto. The Pledgor hereby authorizes the
Collateral Agent to attach each Pledge Amendment to this Agreement and agrees
that all promissory notes, certificates or instruments listed on any Pledge
Amendment delivered to the Collateral Agent shall for all purposes hereunder
constitute Pledged Collateral and the Pledgor shall be deemed upon delivery
thereof to have made the representations and warranties set forth in Section 5
with respect to such Additional Collateral.

               (b) If the Pledgor shall receive, by virtue of its being or
having been an owner of any Pledged Collateral, any (i) stock certificate
(including, without limitation, any certificate


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representing a stock dividend or distribution in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or split-off), promissory note or
other instrument, (ii) option or right, whether as an addition to, substitution
for, or in exchange for, any Pledged Collateral, or otherwise, (iii) dividends
payable in cash (except such dividends permitted to be retained by the Pledgor
pursuant to Section 7 hereof) or in securities or other property or (iv)
dividends or other distributions in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, the Pledgor shall receive such stock certificate,
promissory note, instrument, option, right, payment or distribution in trust for
the benefit of the Collateral Agent, shall segregate it from the Pledgor's other
property and shall deliver it forthwith to the Collateral Agent in the exact
form received, with any necessary indorsement and/or appropriate stock powers
duly executed in blank, to be held by the Collateral Agent as Pledged Collateral
and as further collateral security for the Obligations.

               SECTION 5. Representations and Warranties. The Pledgor represents
and warrants as follows:

               (a) The Existing Subsidiaries set forth in Schedule II hereto are
the Pledgor's only Subsidiaries existing on the date hereof. The Pledged Shares
have been duly authorized and validly issued, are fully paid and nonassessable
and, except as noted in Schedule II hereto, constitute 100% of the issued shares
of capital stock of the Pledged Subsidiaries as of the date hereof. All other
shares of stock constituting Pledged Collateral will be, when issued, duly
authorized and validly issued, fully paid and nonassessable.

               (b) The promissory notes currently evidencing the Pledged Debt
have been, and all other promissory notes from time to time evidencing Pledged
Debt, when executed and delivered, will have been, duly authorized, executed and
delivered by the respective makers thereof, and all such promissory notes are or
will be, as the case may be, legal, valid and binding obligations of such
makers, enforceable against such makers in accordance with their respective
terms.

               (c) The Pledgor is and will be at all times the legal and
beneficial owner of the Pledged Collateral free and clear of any Lien, security
interest, option or other charge or encumbrance except for the security interest
created by this Agreement.

               (d) The exercise by the Agents of any of their rights and
remedies hereunder will not contravene law or any material contractual
restriction binding on or affecting the Pledgor or any of its properties and
will not result in or require the creation of any Lien, security interest or
other charge or encumbrance upon or with respect to any of its properties other
than pursuant to this Agreement and the other Loan Documents.

               (e) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required to be obtained
or made by the Pledgor for (i) the due execution, delivery and performance by
the Pledgor of this Agreement, (ii) the grant by the Pledgor, or the perfection,
of the security interest purported to be created hereby in the Pledged
Collateral or (iii) the exercise by the Agents or the Lenders of any of their
rights and remedies

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hereunder, except as may be required in connection with any sale of any Pledged
Collateral by laws affecting the offering and sale of securities generally.

               (f) This Agreement creates a valid security interest in favor of
the Collateral Agent in the Pledged Collateral, as security for the Obligations.
The Collateral Agent's having possession of the promissory notes evidencing the
Pledged Debt, the certificates representing the Pledged Shares and all other
certificates, instruments and cash constituting Pledged Collateral from time to
time results in the perfection of such security interest. Such security interest
is, or in the case of Pledged Collateral in which the Pledgor obtains rights
after the date hereof, will be, a perfected, first priority security interest.
All action necessary or desirable to perfect and protect such security interest
has been duly taken, except for the Collateral Agent's having possession of
certificates, instruments and cash constituting Pledged Collateral after the
date hereof.

               SECTION 6. Covenants as to the Pledged Collateral. So long as any
Obligations shall remain outstanding, the Pledgor will, unless the Collateral
Agent shall otherwise consent in writing:

               (a) keep adequate records concerning the Pledged Collateral and
permit the Agents or any agents or representatives thereof at any time or from
time to time to examine and make copies of and abstracts from such records
pursuant to the terms of Section 7.01(f) of the Financing Agreement;

               (b) at its expense, promptly deliver to the Collateral Agent a
copy of each notice or other communication received by it in respect of the
Pledged Collateral;

               (c) at its expense, defend the Collateral Agent's right, title
and security interest in and to the Pledged Collateral against the claims of any
Person;

               (d) at its expense, at any time and from time to time, promptly
execute and deliver all further instruments and documents and take all further
action that may be necessary or that the Collateral Agent may reasonably request
in order to (i) perfect and protect the security interest purported to be
created hereby, (ii) enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder in respect of the Pledged Collateral or (iii)
otherwise effect the purposes of this Agreement, including, without limitation,
delivering to the Collateral Agent, after the occurrence and during the
continuation of an Event of Default, irrevocable proxies in respect of the
Pledged Collateral;

               (e) not sell, assign (by operation of law or otherwise), exchange
or otherwise dispose of any Pledged Collateral or any interest therein except as
permitted by Section 7(a)(i) hereof;

               (f) not create or suffer to exist any Lien, security interest or
other charge or encumbrance upon or with respect to any Pledged Collateral
except for the security interest created hereby or pursuant to any other Loan
Document;


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               (g) not make or consent to any amendment or other modification or
waiver with respect to any Pledged Collateral or enter into any agreement or
permit to exist any restriction with respect to any Pledged Collateral other
than pursuant to the Loan Documents;

               (h) not permit the issuance of (i) any additional shares of any
class of capital stock of any Pledged Subsidiary, (ii) any securities
convertible voluntarily by the holder thereof or automatically upon the
occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such shares of capital stock or (iii) any warrants, options, contracts
or other commitments entitling any Person to purchase or otherwise acquire any
such shares of capital stock; and

               (i) not take or fail to take any action which would in any manner
impair the value or enforceability of the Collateral Agent's security interest
in any Pledged Collateral.

               SECTION 7. Voting Rights, Dividends, Etc. in Respect of the
Pledged Collateral.

               (a) So long as no Event of Default shall have occurred and be
continuing:

                      (i) the Pledgor may exercise any and all voting and other
consensual rights pertaining to any Pledged Collateral for any purpose not
inconsistent with the terms of this Agreement, the Financing Agreement or the
other Loan Documents; provided, however, that (A) the Pledgor will not exercise
or refrain from exercising any such right, as the case may be, if the Collateral
Agent gives it notice that, in the Collateral Agent's reasonable judgment, such
action would have a material adverse effect on the value of any Pledged
Collateral and (B) the Pledgor will give the Collateral Agent at least five (5)
Business Days' notice of the manner in which it intends to exercise, or the
reasons for refraining from exercising, any such right which is reasonably
likely to have a Material Adverse Effect;

                      (ii) the Pledgor may receive and retain any and all
dividends or interest paid in respect of the Pledged Collateral to the extent
permitted by the Financing Agreement; provided, however, that any and all (A)
dividends and interest paid or payable other than in cash in respect of, and
instruments and other property received, receivable or otherwise distributed in
respect of or in exchange for, any Pledged Collateral, (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in surplus, and (C) cash
paid, payable or otherwise distributed in redemption of, or in exchange for, any
Pledged Collateral, together with any dividend or interest payment which at the
time of such payment was not permitted by the Financing Agreement, shall be, and
shall forthwith be delivered to the Collateral Agent to hold as, Pledged
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Collateral Agent, shall be segregated from the other property or
funds of the Pledgor, and shall be forthwith delivered to the Collateral Agent
in the exact form received with any necessary indorsement and/or appropriate
stock powers duly executed in blank, to be held by the Collateral Agent as
Pledged Collateral and as further collateral security for the Obligations; and

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                      (iii) the Collateral Agent will execute and deliver (or
cause to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of enabling
the Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to paragraph (i) of this Section 7(a) and to receive the
dividends which it is authorized to receive and retain pursuant to paragraph
(ii) of this Section 7(a).

               (b)  Upon the occurrence and during the continuance of an Event
of Default:

                      (i) all rights of the Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to paragraph (i) of subsection (a) of this Section 7, and to receive
the dividends and interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (ii) of subsection (a) of this Section
7, shall cease, and all such rights shall thereupon become vested in the
Collateral Agent which shall thereupon have the sole right to exercise such
voting and other consensual rights and to receive and hold as Pledged Collateral
such dividends and interest payments;

                      (ii) the Collateral Agent is authorized to notify each
debtor with respect to the Pledged Debt to make payment directly to the
Collateral Agent and may collect any and all monies due or to become due to the
Pledgor in respect of the Pledged Debt and the Pledgor hereby authorizes each
such debtor to make such payment directly to the Collateral Agent without any
duty of inquiry;

                      (iii) without limiting the generality of the foregoing,
the Collateral Agent may at its option exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining to any of the Pledged Collateral as if it were the absolute owner
thereof, including, without limitation, the right to exchange, in its
discretion, any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other adjustment of any
Pledged Subsidiary, or upon the exercise by any Pledged Subsidiary of any right,
privilege or option pertaining to any Pledged Collateral, and, in connection
therewith, to deposit and deliver any and all of the Pledged Collateral with any
committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine; and

                      (iv) all dividends and interest payments which are
received by the Pledgor contrary to the provisions of paragraph (i) of this
Section 7(b) shall be received in trust for the benefit of the Collateral Agent,
shall be segregated from other funds of the Pledgor, and shall be forthwith paid
over to the Collateral Agent as Pledged Collateral in the exact form received
with any necessary indorsement and/or appropriate stock powers duly executed in
blank, to be held by the Collateral Agent as Pledged Collateral and as further
collateral security for the Obligations.


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               SECTION 8. Additional Provisions Concerning the Pledged
Collateral.

               (a) The Pledgor hereby authorizes the Collateral Agent to file,
without the signature of the Pledgor where permitted by law, one or more
financing or continuation statements, and amendments thereto, relating to the
Pledged Collateral.

               (b) The Pledgor hereby irrevocably appoints the Collateral Agent
the Pledgor's attorney-in-fact and proxy, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Collateral Agent's discretion exercised reasonably, to take any
action and to execute any instrument which the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement (subject to
the rights of the Pledgor under Section 7(a) hereof), including, without
limitation, to receive, indorse and collect all instruments made payable to the
Pledgor representing any dividend, interest payment or other distribution in
respect of any Pledged Collateral and to give full discharge for the same.

               (c) If the Pledgor fails to perform any agreement or obligation
contained herein, the Collateral Agent itself may perform, or cause performance
of, such agreement or obligation, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Pledgor pursuant to
Section 10 hereof.

               (d) Other than the exercise of reasonable care to assure the safe
custody of the Pledged Collateral while held hereunder, the Collateral Agent
shall have no duty or liability to preserve rights pertaining thereto and shall
be relieved of all responsibility for the Pledged Collateral upon surrendering
it or tendering surrender of it to the Pledgor. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment substantially equal to that which the Collateral Agent accords its own
property, it being understood that the Collateral Agent shall not have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.

               (e) The Collateral Agent may at any time after the occurrence and
during the continuation of an Event of Default in its discretion (i) without
notice to the Pledgor, transfer or register in the name of the Collateral Agent
or any of its nominees any or all of the Pledged Collateral, subject only to the
revocable rights of the Pledgor under Section 7(a) hereof, and (ii) exchange
certificates or instruments constituting Pledged Collateral for certificates or
instruments of smaller or larger denominations.

               SECTION 9. Remedies Upon Default. If any Event of Default shall
have occurred and be continuing:

               (a) The Collateral Agent may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party on
default under the Code then in effect in the State of

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New York; and without limiting the generality of the foregoing and without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or elsewhere, at such price or prices and on such other terms as
the Collateral Agent may deem commercially reasonable. The Pledgor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days'
notice to the Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Collateral Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.

               (b) The Pledgor recognizes that it may be impracticable to effect
a public sale of all or any part of the Pledged Shares or any other securities
constituting Pledged Collateral and that the Collateral Agent may, therefore,
determine to make one or more private sales of any such securities to a
restricted group of purchasers who will be obligated to agree, among other
things, to acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges that
any such private sale may be at prices and on terms less favorable to the seller
than the prices and other terms which might have been obtained at a public sale
and, notwithstanding the foregoing, agrees that such private sales shall be
deemed to have been made in a commercially reasonable manner and that the
Collateral Agent shall have no obligation to delay sale of any such securities
for the period of time necessary to permit the issuer of such securities to
register such securities for public sale under the Securities Act of 1933, as
amended (the "Securities Act"). The Pledgor further acknowledges and agrees that
any offer to sell such securities which has been (i) publicly advertised on a
bona fide basis in a newspaper or other publication of general circulation in
the financial community of New York, New York (to the extent that such an offer
may be so advertised without prior registration under the Securities Act) or
(ii) made privately in the manner described above to not less than fifteen bona
fide offerees shall be deemed to involve a "public sale" for the purposes of
Section 9-504(3) of the Code (or any successor or similar, applicable statutory
provision) as then in effect in the State of New York, notwithstanding that such
sale may not constitute a "public offering" under the Securities Act, and that
the Agents may, in such event, bid for the purchase of such securities.

               (c) Any cash held by the Collateral Agent as Pledged Collateral
and all cash proceeds received by the Collateral Agent in respect of any sale
of, collection from, or other realization upon, all or any part of the Pledged
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
to Section 10 hereof) in whole or in part by the Collateral Agent against, all
or any part of the Obligations in such order as the Collateral Agent shall elect
consistent with the provisions of the Financing Agreement. Any surplus of such
cash or cash proceeds held by the Collateral Agent and remaining after payment
in full of all of the Obligations shall be paid over to the Pledgor or to such
person as may be lawfully entitled to receive such surplus.

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               (d) In the event that the proceeds of any such sale, collection
or realization are insufficient to pay all amounts to which any Agent or any
Lender is legally entitled, the Pledgor shall be liable for the deficiency,
together with interest thereon at the highest rate specified in the Financing
Agreement for interest on overdue principal thereof or such other rate as shall
be fixed by applicable law, together with the costs of collection and the
reasonable fees of any attorneys employed by any Agent and any Lender to collect
such deficiency.

               SECTION 10. Indemnity and Expenses.

               (a) The Pledgor agrees to indemnify the Agents from and against
any and all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting solely and directly from either Agent's
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.

               (b) The Pledgor will upon demand pay to the Agents the amount of
any and all reasonable costs and expenses, including the fees and disbursements
of each Agent's counsel and of any experts and agents, which the Agents may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of any Agent or any of the Lenders hereunder,
or (iv) the failure by the Pledgor to perform or observe any of the provisions
hereof.

               SECTION 11. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied or delivered, if
to the Pledgor, to it at its address specified in the Financing Agreement, and
if to any Agent, to it at its address specified in the Financing Agreement, or
as to either such Person at such other address as shall be designated by such
Person in a written notice to such other Person complying as to delivery with
the terms of this Section 11. All such notices and other communications shall be
effective (i) if sent by certified mail, return receipt requested, when received
or three (3) Business Days after mailing, whichever first occurs, (ii) if
telecopied, when transmitted and confirmation is received, provided same is on a
Business Day and, if not, on the next Business Day, or (iii) if delivered, upon
delivery, provided same is on a Business Day and, if not, on the next Business
Day.

               SECTION 12. Consent to Jurisdiction, Etc.

               (a) Any legal action or proceeding with respect to this Agreement
or any document related thereto may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, the Pledgor hereby accepts
unconditionally the jurisdiction of the aforesaid courts. The Pledgor hereby
irrevocably waives any objection, including without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which the
Pledgor may now or hereafter have to the bringing of any such action or
proceeding in such respective jurisdictions.

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               (b) The Pledgor irrevocably consents to the service of process of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to the
Pledgor at its address referred to in Section 11 hereof.

               (c) Nothing contained in this Section 12 shall affect the right
of the Agents to serve legal process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Pledgor in any other
jurisdiction.

               SECTION 13. Waiver of Jury Trial. EACH OF THE PLEDGOR AND THE
COLLATERAL AGENT (BY ACCEPTING THIS AGREEMENT) WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING FROM ANY OTHER LOAN DOCUMENT AND
AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

               SECTION 14. Miscellaneous.

               (a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Pledgor and the Collateral
Agent, and no waiver of any provision of this Agreement, and no consent to any
departure by the Pledgor therefrom, shall be effective unless it is in writing
and signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

               (b) No failure on the part of the Collateral Agent to exercise,
and no delay in exercising, any right hereunder or under any other document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The rights and remedies of the Collateral Agent provided herein
and in the other Loan Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights of the
Collateral Agent under any document against any party thereto are not
conditional or contingent on any attempt by the Collateral Agent to exercise any
of its rights under any other document against such party or against any other
person.

               (c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.

               (d) This Agreement shall create a continuing security interest in
the Pledged Collateral and shall (i) remain in full force and effect until the
payment in full or release of the Obligations after the Total Commitment has
been terminated and all Letters of Credit have been canceled or cash
collateralized and (ii) be binding on the Pledgor and by its acceptance hereof,
the Collateral Agent, and their respective successors and assigns and shall
inure, together with all rights and remedies of the Agents and the Lenders
hereunder, to the benefit of the Pledgor, the

                                       11


<PAGE>   12

Agents and the Lenders and their respective successors, transferees and assigns.
Without limiting the generality of clause (ii) of the immediately preceding
sentence, the Collateral Agent may assign or otherwise transfer its rights and
obligations under this Agreement to any other Person pursuant to the terms of
the Financing Agreement, and such other Person shall thereupon become vested
with all of the benefits in respect thereof granted to the Collateral Agent
herein or otherwise. Upon any such assignment or transfer, all references in
this Agreement to the Collateral Agent shall mean the assignee of the Collateral
Agent. None of the rights or obligations of the Pledgor hereunder may be
assigned or otherwise transferred without the prior written consent of the
Collateral Agent.

               (e) Upon the satisfaction in full of the Obligations after the
Total Commitment has been terminated and the Support Letter of Credit has been
canceled or cash collateralized, (i) this Agreement and the security interest
created hereby shall terminate and all rights to the Pledged Collateral shall
revert to the Pledgor, and (ii) the Collateral Agent will, upon the Pledgor's
request and at the Pledgor's expense, (A) return to the Pledgor such of the
Pledged Collateral as shall not have been sold or otherwise disposed of or
applied pursuant to the terms hereof and (B) execute and deliver to the Pledgor,
without recourse, representation or warranty, such documents as the Pledgor
shall reasonably request to evidence such termination.

               (f) This Agreement shall be governed by and construed in
accordance with the law of the State of New York, except as required by
mandatory provisions of law and except to the extent that the validity and
perfection or the perfection and the effect of perfection or non-perfection of
the security interest created hereby, or remedies hereunder, in respect of any
particular Pledged Collateral are governed by the law of a jurisdiction other
than the State of New York.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


                                       12

<PAGE>   13





               IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
executed and delivered by its officer thereunto duly authorized, as of the date
first above written.

                                            DECORA, INCORPORATED



                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:


ACCEPTED AND AGREED:

ABLECO FINANCE LLC,
as Collateral Agent



By:
   -------------------------------
   Name:
   Title:



<PAGE>   14


                   SCHEDULE I TO PLEDGE AND SECURITY AGREEMENT

                                  Pledged Debt

<TABLE>
<CAPTION>
                                                                          Original
         Name of Maker                     Description                Principal Amount
         ------------                      -----------                ----------------
<S>                                        <C>                        <C>
    Decora Industries, Inc.           Promissory note, dated            $15,207,000
                                       September 30, 1997.

</TABLE>

<PAGE>   15





                  SCHEDULE II TO PLEDGE AND SECURITY AGREEMENT

                                 Pledged Shares
<TABLE>
<CAPTION>
     Name of Issuer          Number of Shares             Class                   Certificate No.(s)
     --------------          ----------------             -----                   ------------------
<S>                          <C>                          <C>                     <C>

        None.

</TABLE>


<PAGE>   16


                                  SCHEDULE III

                                       TO

                          PLEDGE AND SECURITY AGREEMENT

                                PLEDGE AMENDMENT

               This Pledge Amendment, dated ___________________________, is
delivered pursuant to Section 4 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement, dated as of May __, 2000 made by Decora, Incorporated in favor
of Ableco Finance LLC, as Collateral Agent for the Lenders party to the
Financing Agent referred to in the Pledge Agreement, as it may heretofore have
been or hereafter may be amended or otherwise modified or supplemented from time
to time and that the promissory notes or shares listed on this Pledge Amendment
shall be and become part of the Pledged Collateral referred to in said Pledge
Agreement and shall secure all of the Obligations referred to in said Pledge
Agreement.

                                  Pledged Debt

<TABLE>
<CAPTION>

                                                                             Original
      Name of Maker              Description                               Principal Amount
      -------------              -----------                               ----------------
<S>                              <C>                                       <C>

</TABLE>



                                 Pledged Shares

<TABLE>
<CAPTION>
     Name of Issuer           Number of Shares              Class           Certificate No(s)
     --------------           ----------------              -----           -----------------
<S>                           <C>                           <C>             <C>
</TABLE>




                                                   DECORA, INCORPORATED


                                                   By:
                                                      --------------------------
                                                      Name:
                                                      Title: