SECURITY AGREEMENT

      This Security Agreement (this "Agreement") dated the 29th day of April,
2004, is made by Decorize, Inc., a Delaware corporation ("Borrower"), in favor
of SRC Holdings Corporation, a Missouri corporation ("Lender").

                                R E C I T A L S:

      A. Borrower has executed and delivered to Lender that certain Secured Line
of Credit Promissory Note in the principal amount of up to $500,000, dated the
date of this Agreement (the "Note").

      B. For value received, Borrower has agreed to enter into this Agreement
and grant to Lender a continuing security interest in, and lien on, the
Collateral (as defined below), in order to secure the payment and prompt
performance of the Obligations (defined below).

                                   AGREEMENT:

      NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
Borrower and Lender agree as follows:

      1. Conditions; Grant of Security. This Agreement is hereby made subject to
the Note and all of its terms and conditions. All capitalized terms used but not
defined in this Agreement shall have the respective meanings given to such terms
in the Note. Borrower hereby assigns, pledges and grants to Lender for its
benefit, a continuing security interest in, all of the assets currently owned by
or hereafter acquired by Borrower and physically located in Springfield,
Missouri, including, but not limited to purchase orders, inventory, contracts,
agreement, and all books and records (including, without limitation, all written
records, invoices, purchase orders, computer disks, tapes, printouts and other
storage media) evidencing or relating in any way to the foregoing, but
specifically excluding any real property interests or accounts receivable
(collectively, the "Collateral").

      2. Security for Obligations. This Agreement and the security interest
created hereby secures the prompt and complete payment, observance and
performance of all duties, liabilities, obligations and indebtedness of every
kind, nature and description owing by Borrower to Lender arising from the Note
(collectively, the "Obligations").

      3. Borrower Remains Liable. Notwithstanding anything to the contrary
contained in this Agreement: (a) Borrower shall remain liable under the
contracts and agreements included in the Collateral and obligated to perform all
of its duties and obligations under such contracts and agreements, to the same
extent as if this Agreement had not been executed, (b) the exercise by Lender of
any of its rights under this Agreement shall not release Borrower from any of
its duties or obligations under the contracts and agreements included in the
Collateral, and (c) Lender shall have no obligation or liability under the
contracts and agreements included in the Collateral by reason of this Agreement,
nor shall Lender be obligated to perform any of the obligations or


                                       1
<PAGE>

duties of Borrower thereunder or to take any action to collect or enforce any
claim for payment assigned to Lender under this Agreement.

      4. Representations and Warranties. Borrower represents and warrants as
follows:

            (a) Borrower owns the Collateral free and clear of any lien,
      security interest, charge or encumbrance of any kind whatsoever
      (collectively, "Liens"), except for those liens granted in the
      Subordinated Security Agreement, dated December 10, 2003 (the "Parsons
      Agreement"), by and between Borrower and James K. Parsons, and those
      represented by the Financing Statements (as defined below) set forth on
      Exhibit A to this Agreement. The security interests granted by this
      Agreement shall be senior to any granted by the Company in the Parsons
      Agreement. No effective financing statement, continuation statement or
      amendment thereto promulgated under the Uniform Commercial Code (the
      "Code") of any state (collectively, "Financing Statement") or other
      similar instrument covering all or any part of the Collateral is on file
      in any recording office, except for Financing Statements as may be filed,
      or may have been filed, in favor of Lender, and those listed on Exhibit A
      to this Agreement. The validity of the Collateral in whole or in part, and
      Borrower's title thereto, is not currently being questioned in any
      litigation or regulatory proceeding to which Borrower is a party, nor is
      any such litigation or proceeding threatened.

            (b) No authorization, approval or other action by, and no notice to
      or other filing with, any governmental authority or regulatory body is
      required for the execution, delivery or performance of this Agreement by
      Borrower, or for the perfection of or the exercise by Lender of its rights
      and remedies under this Agreement, which has not been previously obtained
      (other than any required filing of Financing Statements by Lender).

            (c) All representations and warranties made by Borrower in the Note
      are hereby incorporated by reference, to the same extent as if fully set
      forth in this Agreement.

      5.    Further Assurances.

            (a) Borrower agrees that from time to time, Borrower will promptly
      execute and deliver all further instruments and documents, and take all
      further action, that may be required by this Agreement, or that Lender may
      reasonably request, in order to perfect and protect any security interest
      evidenced or purported to be evidenced by this Agreement or to enable
      Lender to exercise and enforce rights and remedies available to it under
      this Agreement or otherwise with respect to the Collateral.

            (b) Borrower hereby authorizes Lender to file one or more Financings
      Statements relative to all or any part of the Collateral without the
      signature of Borrower where permitted by law. A carbon, photographic or
      other reproduction of this Agreement or any Financing Statement covering
      the Collateral in whole or in part shall be sufficient as a Financing
      Statement where permitted by law.

            (c) Borrower will promptly furnish to Lender from time to time, such
      statements, reports, schedules, copies of purchase orders, invoices and
      other documents identifying and describing the Collateral as Lender may
      reasonably request, prepared in reasonable detail.


                                       2
<PAGE>

      6. Insurance. Borrower shall, at its own expense, maintain insurance with
respect to the Collateral in such amounts, against such risks, in such form and
with by financially sound and reputable insurers, as shall be reasonably
satisfactory to Lender, including, without limitation, insurance covering the
Collateral for property damage, fire and hazard risk, transport risk, maritime
risk, and risk of failure to pay and/or inability to pay, in reasonable and
customary amounts for businesses similar to that of Borrower.

      7. Transfers and Other Liens. Borrower shall not:

            (a) except for in the ordinary course of business, sell, lease
      transfer, convey, assign (by operation of law or otherwise), or otherwise
      dispose of any of the Collateral; or

            (b) create or suffer to exist any Lien upon or with respect to any
      of the Collateral to secure indebtedness of Borrower or any other person,
      or for any other reason, except for the security interest created by this
      Agreement.

      8. Lender Appointed Attorney-in-Fact. Borrower hereby irrevocably appoints
Lender as Borrower's attorney-in-fact, with full authority in the place and
stead of Borrower and in the name of Borrower or otherwise, from time to time in
Lender's discretion at any time after the occurrence of an ongoing Event of
Default, to take any action and to execute any instrument which Lender may deem
necessary or advisable to accomplish the purposes of this Agreement, without
limitation:

            (a) to obtain and adjust insurance required pursuant to Section 6;

            (b) to ask, demand, collect, sue for, recover, compound, receive and
      give acquittance and receipts for moneys due and to become due under or in
      respect of any of the Collateral;

            (c) to receive, endorse, and collect any drafts or other
      instruments, documents and chattel paper, in connection with clause (a) or
      (b) above; and

            (d) to file any claims or take any action or institute any
      proceedings which Lender may deem necessary or desirable to enforce the
      rights of Lender with respect to any of the Collateral.

      9. Lender May Perform. If Borrower fails to perform any covenant or
agreement contained in this Agreement, Lender may itself perform, or cause
performance of, such covenant or agreement, and the expenses of Lender incurred
in connection therewith shall become a part of the Obligations under this
Agreement.

      10. Lender's Duties. The powers conferred on Lender under this Agreement
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it under this Agreement, Lender shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.


                                       3
<PAGE>

      11. Events of Default. Each of the following events constitutes an Event
of Default under this Agreement:

            (a) Borrower fails to pay any Obligation when due and payable,
      whether at a date for the payment of a fixed installment or as a
      contingent or other payment becomes due and payable or as a result of
      acceleration or otherwise, and such failure continues for five (5) days
      after notice thereof is received from Lender;

            (b) any Event of Default occurs under the Note; or

            (c) any Lien shall be placed on the Collateral in whole or in part
      except for (i) Liens in favor of Lender, or (ii) other Liens that have
      been approved by the prior written consent of the Lender.

      12. Remedies. If any Event of Default shall occur, Lender may protect and
enforce its rights under this Agreement by any appropriate proceedings,
including proceedings for specific performance of any covenant or agreement
contained in this Agreement or any Obligations due it or enforce any other legal
or equitable right which it may have. All rights, remedies and powers conferred
upon Lender under this Agreement shall be deemed cumulative and not exclusive of
any other rights, remedies or powers available under this Agreement at law or in
equity. Lender's authority and rights shall include, without limitation, the
following:

            (a) Lender may exercise in respect of the Collateral, in addition to
      other rights and remedies provided for in this Agreement or otherwise
      available to it, all the rights and remedies of a secured party on default
      under the Code (whether or not the Code applies to the affected
      Collateral) and also may (i) require Borrower to, and Borrower hereby
      agrees that it will at its expense and upon request of Lender forthwith,
      assemble all or part of the Collateral as directed by Lender and make it
      available to Lender and (ii) without notice except as specified below,
      sell the Collateral or any part thereof in one or more parcels at public
      or private sale for cash, on credit or for future delivery, and upon such
      other terms as Lender may deem commercially reasonable. Borrower agrees
      that, to the extent notice of sale shall be required by law, at least ten
      (10) business days' notice to Borrower 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. Lender shall not be obligated to make
      any sale of Collateral regardless of notice of sale having been given.
      Lender 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) All cash proceeds received by Lender in respect of any sale of,
      collection from, or other realization upon all or any part of the
      Collateral may, in the discretion of Lender, be held by Lender as
      collateral for, and/or then or at any time thereafter applied in whole or
      in part by Lender against all or any part of the Obligations in such order
      as


                                       4
<PAGE>

      Lender shall elect, subject to any mandatory provisions of this Agreement,
      the Note or applicable law. Any surplus of such cash or cash proceeds held
      by Lender and remaining after payment in full of all the Obligations shall
      be paid over to Borrower or to whomsoever may be lawfully entitled to
      receive such surplus.

      The execution and delivery of this Agreement in no manner shall impair or
affect any other security (by endorsement or otherwise) for the payment of the
Obligations and no security taken hereafter as security for payment of the
Obligations shall impair in any manner or affect this Agreement, all such
present and further additional security to be considered as cumulative security.
Any of the Collateral for, or any obligor on, any of the Obligations may be
released without altering, varying or diminishing in any way the force, effect,
Lien, security interest, or charge of this Agreement as to the Collateral not
expressly released, and this Agreement shall continue as a security interest and
charge on all of the Collateral not expressly released until all the Obligations
secured hereby have been paid in full. This Agreement shall not be construed as
relieving Borrower from full recourse liability on the Obligations and any and
all further and other indebtedness secured by this Agreement and for any
deficiency thereon.

      13. Indemnity and Expenses.

            (a) Borrower agrees to indemnify Lender 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 from Lender's gross
      negligence or willful misconduct.

            (b) Borrower will upon demand pay to Lender the amount of any and
      all reasonable expenses, including the reasonable fees and disbursements
      of its counsel and of any experts and agents, which Lender 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 of the Collateral, (iii) the exercise
      or enforcement of any of the rights of Lender under this Agreement, or
      (iv) the failure by Borrower to perform or observe any of the provisions
      of this Agreement.

      14. Security Interest Absolute. All rights of Lender and security
interests created by this Agreement, and all Obligations of Borrower under this
Agreement, shall be absolute and unconditional, irrespective of:

            (a) any lack of validity or enforceability of the Note or any
      related document or instrument;

            (b) any change in the time, manner or place of payment of, or in any
      other term of, all or any of the Obligations or any other amendment or
      waiver of or any consent to any departure from the Note;

            (c) any exchange, release or non-perfection of any other collateral,
      or any release or amendment or waiver of or consent to departure from any
      guaranty, for all or any of the Obligations; or


                                       5
<PAGE>

            (d) any other circumstance which might otherwise constitute a
      defense available to, or a discharge of, Borrower, or a third party holder
      of a security interest.

      15. Amendments; Waivers. No amendment or waiver of any provision of this
Agreement nor consent to any departure by Borrower from the provisions of this
Agreement, shall in any event be effective unless the same shall be in writing
and signed by both Borrower and Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

      16. Addresses for Notices. Unless otherwise provided in this Agreement,
all notices, requests, consents, demands and other communications shall be in
writing and shall be delivered by (a) United States certified mail, return
receipt requested, postage prepaid, (b) facsimile transmission, with receipt of
successful transmission, (c) in person or by courier with receipt of delivery,
or (d) nationally recognized overnight delivery service, with receipt of
delivery, in each case to such party's respective address as set forth on the
signature page to this Agreement; or, as to any party, to such other address as
may be designated by such party in written notice to the other party. All
notices, requests, consents and demands made under this Agreement will be
effective, if addressed to Lender or Borrower as aforesaid, with proof of
delivery.

      17. Continuing Security Interest; Transfer of Note. This Agreement shall
create a continuing security interest in the Collateral and shall (a) be binding
upon Borrower, its successors and assigns, and (b) inure, together with the
rights and remedies of Lender hereunder, to the benefit of Lender, its
successors, transferees and assigns. Upon the payment in full of the
Obligations, the security interest granted by this Agreement shall terminate and
all rights to the Collateral shall revert to Borrower. Upon any such
termination, Lender will, at Borrower's expense, execute and deliver to Borrower
such documents as Borrower shall reasonably request to evidence such
termination.

      18. GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN
ACCORDANCE WITH, UNDER AND GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE
WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS. The parties irrevocably
submit to the exclusive jurisdiction of the state and federal courts located in
Greene County, Missouri for the purpose of any suit, action or other proceeding
arising out of or based on this Agreement. Each party, to the extent applicable
law permits, waives, and will not assert by way of motion, as a defense or
otherwise, in any suit, action or proceeding brought in the above-named courts,
any claim that (a) it is not subject personally to the jurisdiction of those
courts, (b) the suit, action or proceeding is brought in an inconvenient forum,
(c) the venue of the suit, action or proceeding is improper, or (d) any of these
agreements and instruments, or their respective subject matter, may not be
enforced in or by these courts.


                                       6
<PAGE>

      19. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, and all of which shall constitute
one and the same agreement.

      IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be
duly executed and delivered as of the date first above written.

                                        BORROWER:

                                        DECORIZE, INC.,
                                        a Delaware corporation

                                        By: /s/ Steve Crowder
                                           -------------------------------------
                                        Name:  Steve Crowder
                                        Title: President

                                        Address: 1938 East Phelps
                                                 Springfield, Missouri 65802
                                                 Attn:  Chief Financial Officer

                                        LENDER:

                                        SRC HOLDINGS CORPORATION,
                                        a Missouri corporation

                                        By: /s/ John P. Stack
                                           -------------------------------------
                                        Name:  John P. Stack
                                        Title: President

                                        Address: 3140 East Division Street
                                                 Springfield, MO 65802


                                       7
<PAGE>

                                    EXHIBIT A

                            UCC FINANCING STATEMENTS

<TABLE>
<CAPTION>
SECURED PARTY                                           FINANCING STATEMENT #            FILING DATE
-------------                                           ---------------------            -----------
<S>                                                     <C>                              <C>
Liberty Bank                                            11003974                         August 21, 2001
1414 E. Primrose
Springfield, MO  65804

GE Capital Commercial Services, Inc.                    11189302                         October 9, 2001
P.O. Box 2730
High Point, NC  27260

Liberty Bank                                            11261994                         October 1, 2001
1414 E. Primrose
Springfield, MO  65804

The CIT Group/Commercial Services, Inc.                 30115041                         January 14, 2003
301 S. Tryon Street
P.O. Box 31307 (28231-1307) Charlotte, NC 28202

CitiCapital Technology Finance, Inc.                    31310823                         May 2, 2003
1255 Wrights Lane
Westchester, PA  19380
</TABLE>


                                       8