DEBT RESTRUCTURING AGREEMENT





                 THIS DEBT RESTRUCTURING AGREEMENT ("Agreement") is entered

into this 24th day of December 2001 by and among Interiors Inc. ("Interiors" or

the "Borrower"), Petals, Inc. ("Petals"), TBD Three, Inc., f/k/a Stylecraft

Lamps, Inc. ("Stylecraft"), Habitat Solutions, Inc. ("Habitat") and Concepts 4,

Inc. ("Concepts") and Limeridge LLC ("Limeridge") and The Endeavour Capital

Fund, S.A. and The Endeavour Capital Investment Fund, S.A. (collectively,

"Endeavour"). Limeridge and Endeavour are collectively referred to herein as the

"Lenders").



                              W I T N E S S E T H:



                  WHEREAS, pursuant to (a) Secured Convertible Note Purchase

Agreement (the "Limeridge Note Purchase Agreement"), (b) Registration Rights

Agreement (the "Limeridge Registration Agreement") and (c) a Security Agreement

(the "Limeridge Security Agreement"), each dated September 30, 1999 between

Interiors and Limeridge, Limeridge agreed to loan monies to Interiors; and



                  WHEREAS, in accordance therewith, Limeridge provided funds to

Interiors and Interiors executed a Secured Convertible Promissory Note due

September 29, 2004 in the amount of $13,540,626 in favor of Limeridge (the

"Limeridge Note"); the Limeridge Note Purchase Agreement, the Limeridge

Registration Agreements, the Limeridge Security Agreement and the Limeridge Note

collectively referred to as the "Limeridge Loan Documents"); and



                  WHEREAS, pursuant to (a) Secured Convertible Note Purchase

Agreement (the "Endeavour Note Purchase Agreement"), (b) Registration Rights

Agreement (the "Endeavour Registration Agreement") and (c) a Security Agreement

(the "Endeavour Security Agreement"), each dated December 31, 1999 between

Interiors and Endeavour, Endeavour agreed to loan monies to Interiors; and



                  WHEREAS, in accordance therewith, Endeavour provided funds to

Interiors and Interiors executed a Secured Convertible Promissory Note due

September 29, 2004 in the amount of $1,744,518 in favor of Endeavour (the

"Endeavour Note"); the Endeavour Note Purchase Agreement, the Endeavour

Registration Agreements, the Endeavour Security Agreement and the Endeavour Note

collectively referred to as the "Endeavour Loan Documents"); and



                  WHEREAS, pursuant to the Limeridge Security Agreement and the

Endeavour Security Agreement (collectively, the "Security Agreements"), as of

September 30, 1999 Interiors pledged to Lenders all of its right, title and

interest in and to the shares of its wholly owned subsidiary, Petals (the

"Collateral"), to secure its obligations to Lenders under the Limeridge Note and

the Endeavour Note (collectively, the "Notes"); and



                  WHEREAS, on or about June 15, 2000 Foothill Capital

Corporation ("Foothill") entered into a Loan and Security Agreement with

Interiors and its subsidiaries, including Petals (the "Foothill Agreement"),

pursuant to which Foothill agreed to provide up to $25,000,000 to Interiors and

its subsidiaries through term loans and a revolving credit facility, subject to

certain conditions; and











                  WHEREAS, there have been a number of material events of

default by Borrower under the Limeridge Loan Documents and the Endeavour Loan

Documents (collectively, the "Loan Documents") and, as a result, Lenders have

exercised certain rights as secured lenders pursuant to the Loan Documents

including sending notices of default and acceleration of the Indebtedness to

Borrower and advising Borrower of their intentions to foreclose their security

interests on Borrower's ownership interest in Petals; and



                  WHEREAS, as of April 26, 2001, the Lenders, Interiors, Petals,

Stylecraft and Habitat entered into a Forbearance and Acknowledgement Agreement

(the "Forbearance Agreement"), pursuant to which, inter alia, the Borrower

reaffirmed its Indebtedness, as of April 1, 2001 to Limeridge in the amount of

$19,868,514.25 and to Endeavour in the amount of $2,616,389.95, and based on

Borrower's covenant to execute, by not later than July 31, 2001, definitive

contracts with bona fide unaffiliated third parties to sell the equity or assets

of any of Petals, Stylecraft or the Subsidiaries at prices aggregating not less

than $38.0 million with "Contingencies" (as defined in the Forbearance

Agreement) to expire by August 31, 2001, the Lenders agreed to forbear from

exercising their rights and remedies against the Borrower and the Collateral

through September 30, 2001; and



                  WHEREAS, Borrower defaulted in meeting its obligations under

the Forbearance Agreement; and



                  WHEREAS, during September, 2001, Borrower, Stylecraft and

Stylecraft Acquisition, Inc. has entered into a asset purchase agreement,

pursuant to which Stylecraft was to sell substantially all of its assets for

$26,750,000; and



                  WHEREAS, Lenders objected to the proposed sale of Stylecraft's

assets as Borrower indicated that the proceeds thereof would not be available

for distribution and repayment of a portion of the Borrowers' obligations to

Lenders under the Loan Documents in accordance with and as provided for in the

Forbearance Agreement; and



                  WHEREAS, the Borrower and Petals advised the Lenders that it

was in negotiations with Blythe, Inc ("Blythe") to consummate the sale of the

assets and business of Petals for a gross cash purchase price of approximately

$27.5 million and further requested that Lenders forbear from taking any action

to enforce their various rights and remedies against Borrower and/or exercising

their rights to collect the Indebtedness (as hereinafter described in Section 1

below) and foreclose on the Collateral for a certain period of time with respect

thereto; and



                  WHEREAS, on September 28, 2001, the Borrower, Petals,

Stylecraft, Habitat, Concepts and Lenders entered into a comprehensive

amendment, guaranty and security agreement with Lenders dated as of September

28, 2001, pursuant to which, inter alia, (a) Lenders were paid the sum of

$2,800,000 from the sale of the Stylecraft assets, (b) the Borrower reaffirmed

its Indebtedness, as of September 15, 2001 to Limeridge in the amount of

$22,829,283.12 and to Endeavour in the amount of $3,013,994.67 (prior to credit

for the $2,800,000 from the sale of the Stylecraft assets), (c) Obligors in

addition to Borrower agreed to guaranty Borrower's indebtedness to the Lenders

and secure such guarantees with subordinate liens on their assets, (d) the

Lenders agreed to permit the sale of the Stylecraft assets to occur and (e)

Lenders agreed to further temporarily forbear from exercising their rights and

remedies with respect to the material events of default under the Loan Documents

and the Forbearance Agreement through December 31, 2001 (the "Second Forbearance

Agreement"; together with the Forbearance Agreement, the "Forbearance

Agreements"); and







                                       2





                  WHEREAS, Obligors have again materially defaulted under the

Second Forbearance Agreement including, without limitation (a) the entry of a

judgment against Interiors and Petals in excess of $1.9 million by Matrix

Leasing, resulting in a Forbearance Default under the terms of the Forbearance

Agreements, and (b) breach of representations relating to intercompany advances

or loans of money between Obligors; and



                  WHEREAS, in addition to the foregoing defaults under the

Forbearance Agreements, although Blythe had been in advanced negotiations to

purchase the assets and business of Petals for $24 million, Blythe has recently

reduced its proposed gross purchase price to not more than $20.0 million; an

amount which is substantially less than represented to Lenders by Borrower, and

insufficient to reduce the defaulted Indebtedness owed to the Lenders under the

Notes by an aggregate amount satisfactory to Lenders; and



                  WHEREAS, the Lenders have notified the Borrower of their

intent to foreclose, effective as of December 27, 2001, on the Collateral

securing the Notes.



                  NOW, THEREFORE, in consideration of the mutual covenants set

forth herein and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties hereto hereby agree as

follows:



1. Certain Definitions. Unless otherwise defined in this Agreement, all

capitalized terms used herein shall have the same meanings as are defined in the

Forbearance Agreements.



2. Acknowledgement of Indebtedness.



         2.1 Borrower hereby reaffirms that as of December 25, 2001, Borrower is

         indebted to



                  (a) Limeridge pursuant to the Loan Documents in the amount of

                  $22,463,294.34, which includes (i) $12,990,626.00 of Limeridge

                  Principal, (ii) $2,247,969.00 in fees and expenses pursuant to

                  Section 12.7 of the Limeridge Purchase Agreement, (iii)

                  $2,558,376.13 in past accrued interest and (iv) $4,666,323.21

                  in liquidated damages for breach of the Limeridge Registration

                  Agreement;



                  (b) Endeavour pursuant to the Loan Documents in the amount of

                  $2,931,108.61, which includes (i) $1,744,518.00 of outstanding

                  Endeavour Principal, (ii) $301,996.07 in fees and expenses

                  pursuant to Section 12.7 of the Endeavour Purchase Agreement,

                  (iii) $262,383.12 in past accrued interest and (iv)

                  $622,211.42 in liquidated damages for breach of the Endeavour

                  Registration Agreement;







                                       3





         2.2 As used in this Agreement, Borrower's "Indebtedness" to the Lenders

         shall mean the sums referred to above in Section 2.1 hereof as such

         amounts shall continue to accrue, plus Lenders' reasonable costs and

         expenses incurred in collection of any and all of the Indebtedness from

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