THE PAYMENT OF THIS INSTRUMENT, BOTH PRINCIPAL AND INTEREST, AND ALL OTHER
INDEBTEDNESS EVIDENCED HEREBY, IS SUBORDINATE, SUBJECT AND MADE JUNIOR IN RIGHT
OF PAYMENT TO THE PRIOR RIGHTS OF FOOTHILL CAPITAL CORPORATION, ITS SUCCESSORS
AND ASSIGNS, IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AND SUBORDINATION AGREEMENT, DATED FOR REFERENCE PURPOSES ONLY AS
OF MARCH 19, 2001, WHICH INTERCREDITOR AND SUBORDINATION AGREEMENT IS
INCORPORATED HEREIN BY REFERENCE

EXECUTION COPY

                                 PROMISSORY NOTE

U.S. $5,000,000                                            Dated: March 19, 2001

            FOR VALUE RECEIVED, each of the undersigned, STYLECRAFT LAMPS, INC.,
a Tennessee corporation ("Stylecraft") and PETALS, INC., a Delaware corporation
("Petals", and, together with Stylecraft, the "Borrowers"), HEREBY JOINTLY AND
SEVERALLY AND UNCONDITIONALLY PROMISES TO PAY to the order of INTERIORS
INVESTORS, L.L.C., a Delaware limited liability company (the "Lender"), in
lawful money of the United States of America the principal sum of FIVE MILLION
AND NO/100 U.S. DOLLARS (U.S. $5,000,000), such amount representing the original
aggregate principal amount of the term loan evidenced hereby (the "Term Loan")
owed by the Borrowers to the Lender pursuant to this Promissory Note, and in
respect of which original aggregate principal amount of the Term Loan evidenced
hereby, Stylecraft and Petals received $2,000,000 and $3,000,000, respectively.

            The Borrowers promise to pay all principal due hereunder in one (1)
installment, payable on March 14, 2002 (the "Final Maturity Date").

            The Borrowers promise to pay interest in cash on the unpaid
principal amount of the Term Loan from the date hereof until such principal
amount is paid in full, and interest shall be due and payable (A) for the period
commencing on the date hereof through and including May 31, 2001, on May 31,
2001, and (B) thereafter on the last Business Day (as defined below) of each
calendar month, and (C) at maturity (each such date a "Payment Date"). Interest
shall be computed on the basis of a year of 365 days and actual days elapsed at
a per annum rate (the "Interest Rate") equal to (i) sixteen percent (16.0%) for
the period from the date hereof through and including September 30, 2001 and
(ii) eighteen percent (18.0%) for the period commencing on October 1, 2001
through the Final Maturity Date, or such lesser rate as prescribed under
applicable usury laws. At any time during an Event of Default (as hereinafter
defined) interest on all due and unpaid Obligations shall be computed at the
then applicable Interest Rate plus two percent (2.0%) per annum, or such lesser
rate as prescribed under applicable usury laws.

            In addition to the terms otherwise defined herein, the following
terms used in this Promissory Note shall have the following meanings:

            "Collateral Documents" means all agreements, instruments and
      documents creating (or purporting to create) a security interest in the
      collateral specified therein in favor of the Lender, executed and
      delivered in connection with this Agreement, including, without
      limitation, (i) the Security Agreement executed by the Borrowers
      substantially in the form of Exhibit A-1 attached hereto, (ii) the
      Security Agreement executed by each of Interiors and Interiors' domestic
      incorporated subsidiaries (other than the Borrowers) substantially in the
      form of Exhibit A-2 attached hereto, (iii) the
<PAGE>

      Pledge Agreements executed by Interiors and certain subsidiaries of
      Interiors in respect of the capital stock of each of Interiors' and such
      subsidiaries' direct subsidiaries in substantially the form of Exhibit B-1
      and Exhibit B-2, respectively, attached hereto, and (iv) each intellectual
      property security agreement, other security agreements, mortgages, loan
      agreements, notes, guarantees, subordination agreements, pledges, powers
      of attorney, consents, assignments, contracts, notices, financing
      statements and all other written matter whether heretofore, now or
      hereafter executed by or on behalf of Interiors or any of its
      subsidiaries, together with all agreements and documents referred to
      therein or contemplated thereby.

            "Guaranties" means, collectively, (i) that certain Guaranty executed
      by Interiors in substantially the form of Exhibit C-1 attached hereto,
      (ii) that certain Guaranty executed by all of Interiors' subsidiaries in
      substantially the form of Exhibit C-2 attached hereto, and (ii) that
      certain Guaranty executed by Munn and his spouse in substantially the form
      of Exhibit C-3 attached hereto (all such guarantors being collectively
      referred to herein as "Guarantors").

            "Interiors" means Interiors, Inc., a Delaware corporation and owner
      of 100% of the capital stock of each of the Borrowers.

            "Loan Documents" means this Promissory Note, the Guaranties, the
      Collateral Documents, the Special Sale Payment Agreement, and all other
      documents, instruments, notes and agreements executed in connection
      therewith or contemplated thereby, as the same may be amended, restated,
      supplemented or otherwise modified from time to time.

            "Loan Parties" means, collectively, the Borrowers and the
      Guarantors.

            "Material Debt Agreements" means, collectively, (i) the Senior
      Credit Agreement, (ii) each of that certain Secured Convertible Note in
      the original amount of $13,540,626, dated as of September 20, 1999 issued
      by Interiors in favor of Limeridge LLC ("Limeridge") (as defined below)
      and that certain Secured Convertible Note in the original amount of
      $1,744,518, dated as of December 31, 1999 issued by Interiors in favor of
      Endeavour Capital Fund SA ("Endeavour"), and the security agreements
      related thereto, (iii) that certain Convertible Debenture dated as of
      March 23, 1999 in the original amount of $2,000,000 issued by Interiors in
      favor of DMB Property Ventures Limited Partnership, (iv) that certain
      Promissory Note in the original amount of $2,000,000, dated as of July 27,
      2000 issued by Interiors in favor of Donald M. Landis, and (v) that
      certain Loan Agreement dated as of June 13, 2000 by and between
      Stylecraft, as borrower, Interiors, as guarantor, and Bank of America, as
      lender, evidencing a commitment by Bank of America to make loans to
      Stylecraft in maximum principal amount equal to $2,300,000 (and the
      security agreements and mortgages related thereto), as amended by an
      Amendment to Loan Agreement and an Amendment to Loan Agreement and
      Promissory Note, dated as of September 5, 2000 and March 16, 2001,
      respectively, in each case, as in effect as of the date hereof.

            "Obligations" means all unpaid principal of and accrued and unpaid
      interest on the Term Loan, all Special Sale Payments, if any, all accrued
      and unpaid fees and all


                                       2
<PAGE>

      expenses, reimbursements, indemnities and other obligations of the
      Borrowers or any other Loan Party to the Lender or any indemnified person
      hereunder or under any of the other Loan Documents.

            "Reduction Amount" means, with respect to any event, an amount equal
      to the sum of (i) any permanent reduction in the Senior Indebtedness
      constituting term loans under (and as required by) the Senior Credit
      Agreement as a result of such event, plus (ii) any required prepayment of
      the Senior Indebtedness (as defined below) constituting revolving debt
      under (and as required by) the Senior Credit Agreement as a result of such
      event exclusive of the amount of any such payments which result in a net
      increase of revolving loan availability under the Senior Credit Agreement
      over the revolving loan availability in effect immediately prior to such
      payment.

            "Remaining Net Proceeds" means, with respect to any event, an amount
      equal to the sum of (i) the Sale Consideration (as defined in the Special
      Sale Payment Agreement) received by Interiors or any of its subsidiaries
      in connection with such event minus (ii) the Reduction Amount calculated
      in respect of such event.

            "Senior Credit Agreement" means that certain Loan and Security
      Agreement, dated as of June 15, 2000 by and among Interiors, Inc., Artisan
      House, Inc., CSL Lighting Manufacturing, Inc., Model Home Interiors, Inc.,
      Petals, Inc., Stylecraft Lamps, Inc., Troy Lighting, Inc., Vanguard
      Studios, Inc., and Windsor Art, Inc., as borrowers, and Foothill Capital
      Corporation, as Lender, as amended by an Amendment 2 [SIC] to Loan
      Agreement, and an Amendment 2 to Loan Agreement and Waiver, dated as of
      August 15, 2000 and October 13, 2000, respectively, as in effect as of the
      date hereof.

            "Special Sale" means the occurrence of any of (i) the sale of the
      assets and/or capital stock of Stylecraft, and (ii) the sale of the assets
      and/or capital stock of Petals.

            "Special Sale Payment" shall have the meaning assigned to such term
      in the Special Sale Payment Agreement.

            "Special Sale Payment Agreement" means that certain Letter
      Agreement, dated as of March 19, 2001, by and between the Borrowers and
      the Lender, and acknowledged by Foothill Capital Corporation, as the same
      may be amended, restated, supplemented or otherwise modified from time to
      time.

            The proceeds of the Term Loan shall be used by the Borrowers for
working capital and other general corporate purposes; provided, however, that on
the date hereof at least $2,000,000 of the net proceeds of this Promissory Note
advanced to Stylecraft shall be used by Stylecraft to pay the outstanding trade
obligations of Stylecraft to trade creditors of Stylecraft acceptable to the
Lender in its sole discretion.

            Subject to the terms of the Senior Credit Agreement, the net
proceeds of sales or issuance of debt securities or equity securities, in a
public offering or private placement by Interiors or any of its subsidiaries,
and net proceeds of assets sales (other than the sale of inventory in the
ordinary course of business), shall be used to prepay the Obligations, to the
full extent of the net proceeds so received; provided, however, that,
notwithstanding the foregoing:


                                       3
<PAGE>

            (A) upon the sale or disposition of all or substantially all of the
      Petals, Inc. business unit of Interiors, after giving effect to any
      application of net proceeds to the payment of the outstanding indebtedness
      under the Senior Credit Agreement (the "Senior Indebtedness") as required
      under the Senior Credit Agreement, the Borrowers shall first make a
      mandatory minimum prepayment of the Obligations in an amount equal to the
      lesser of (i) the Remaining Net Proceeds of such sale and (ii) $2,500,000
      (which amount shall be applied first to the Special Sale Payment and then
      to accrued and unpaid interest on the Term Loan and then to unpaid
      principal on the Term Loan), and thereafter any Remaining Net Proceeds may
      be applied to permanently reduce Interiors' indebtedness to Limeridge and
      Endeavour, and thereafter any Remaining Net Proceeds shall be applied to
      permanently repay the remaining balance of all Obligations;

            (B) upon the sale or disposition of all or substantially all of the
      Stylecraft business unit of Interiors, after giving effect to any
      application of net proceeds to the payment of Senior Indebtedness as
      required under the Senior Credit Agreement, Interiors may apply up to
      $2,500,000 of the Remaining Net Proceeds of such sale to make a payment to
      Limeridge and/or Endeavour to permanently reduce Interiors' indebtedness
      to Limeridge and Endeavour, and any Remaining Net Proceeds shall be
      applied to permanently repay the remaining balance of all Obligations
      (which shall be applied first to the Special Sale Payment and then to
      accrued and unpaid interest on the Term Loan and then to unpaid principal
      on the Term Loan and then to any other outstanding Obligations);

            (C) upon the sale or disposition of any other assets of Interiors or
      any of its subsidiaries (other than (i) the sale of inventory or
      disposition of obsolete inventory, in each case, in the ordinary course of
      business and (ii) the disposition in the ordinary course of business of
      equipment that is obsolete, excess or no longer used or useful in
      Interiors' or its subsidiaries' business), after giving effect to any
      application of net proceeds to the payment of Senior Indebtedness as
      required under the Senior Credit Agreement, the Borrowers shall pay an
      amount not less than 50% of the excess of (a) the Remaining Net Proceeds
      of all such other sales or dispositions over (b) $2,000,000, to
      permanently repay the balance of all Obligations (which shall be applied
      first to any due and unpaid Special Sale Payment and then to accrued and
      unpaid interest on the Term Loan and then to unpaid principal on the Term
      Loan and then to any other outstanding Obligations).

            The indebtedness evidenced hereby may be prepaid in whole or in part
at any time and from time to time without premium or penalty, but subject to the
prior payment of any Special Sale Payment then due and payable by the Borrowers.

            All payments of principal and interest in respect of this Promissory
Note shall be made payable to the Lender in lawful money of the United States of
America for the Lender's account at such place as shall be designated by the
Lender for such purpose.

            This Promissory Note is the Promissory Note referred to in, and is
entitled to the benefits of, and all amounts due hereunder are secured pursuant
to the terms of, the Collateral Documents.


                                       4
<PAGE>

            EACH BORROWER WAIVES ANY AND ALL REQUIREMENTS OF DEMAND,
PRESENTMENT, PROTEST, NOTICE OF DISHONOR OR FURTHER NOTICE OF ANY KIND IN
CONNECTION WITH THIS PROMISSORY NOTE.

            Should any payment of principal or interest become due and payable
on any day other than a Business Day ("Business Day" being any day not a
Saturday, Sunday or legal holiday in Chicago, Illinois or New York, New York),
the maturity thereof shall be extended to the next succeeding Business Day and
interest shall continue to accrue at the applicable rate until such payment is
made.

            Each Borrower agrees to reimburse the Lender for any reasonable
costs and out-of-pocket expenses (including attorneys' fees and expenses of
attorneys and paralegals for the Lender) paid or incurred by the Lender in
connection with the preparation, negotiation, execution, delivery, review,
amendment, modification and administration of the Loan Documents. Should the
indebtedness represented by this Promissory Note or any part hereof or any other
Loan Document be collected at law or in equity or in bankruptcy, receivership or
other court proceeding, or should this Promissory Note or any other Loan
Document be placed in the hands of attorneys for collection after default, each
Borrower agrees to pay, in addition to the principal, interest due and payable
hereon and any other sums due and payable hereon, all costs of collecting or
attempting to collect this Promissory Note or the other Obligations, including
attorneys' fees and expenses (including those incurred in connection with any
appeal).

            This Promissory Note shall not require the payment nor permit the
collection of interest or any late payment charge in excess of the maximum rate
permitted by law. If any excess interest or late payment charge in such respect
is provided for under this Promissory Note or shall be adjudicated to provide
for such terms, neither Borrower nor its respective successors or assigns shall
be obligated to pay such interest or late payment charge in excess of the
maximum amount permitted by law, and the right to demand the payment of any such
excess shall be and hereby is waived. In the event Lender shall collect monies
which are deemed to constitute interest which would increase the effective
interest rate to a rate in excess of the maximum rate permitted by law, all such
sums deemed to constitute interest in excess of the maximum rate permitted by
law shall, upon such determination, at the option of Lender, be returned to the
Borrowers or credited against the principal balance of Borrowers' obligation
then outstanding under this Promissory Note. This provision shall control any
other provision of this Promissory Note.

            Upon the occurrence of any of the following events (each an "Event
of Default"): (i) (a) any Borrower shall fail to pay the principal amount of the
Obligations when due or (b) any Borrower shall fail to pay interest on the Term
Loan, or any Borrower or any other Loan Party shall fail to pay any other amount
due hereunder or under any other Loan Document, and such failure shall continue
unremedied for three (3) Business Days; (ii) if any representation or warranty
made by any Loan Party herein or in any of the other Loan Documents shall be
false or misleading in any material respect when made or deemed made; (iii) any
event shall have occurred that permits the holder of Interiors' or any of its
subsidiaries' obligations or indebtedness (including, without limitation, the
Senior Indebtedness, but excluding the indebtedness of Interiors and its
subsidiaries to Limeridge and Endeavour) to accelerate the maturity thereof or
any subsidiary of Interiors fails to pay when due any such obligations or


                                       5
<PAGE>

indebtedness; (iv) if any Loan Party shall fail to perform or observe any other
term or condition binding upon it hereunder or under any of the other Loan
Documents and such failure shall continue unremedied for ten (10) Business Days
following written notice; or (v) (a) if any Loan Party (other than Interiors)
shall generally not pay its debts as such debts become due or any Loan Party
shall make a general assignment for the benefit of creditors; (b) if any
proceeding shall be instituted by or, unless dismissed within thirty (30) days,
against, any Loan Party seeking to adjudicate it a bankrupt or insolvent or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency, or relief of debtors generally, or seeking the entry of
an order for relief or for the appointment of a receiver, trustee, custodian, or
other similar officer for it or for any part of its assets; or (c) if any Loan
Party shall take any action to authorize any of the actions set forth in
subclauses (v) (a) and (v) (b) of this paragraph; then the Lender may, without
demand, notice or legal process of any kind, declare the outstanding principal
amount of the Term Loan together with all accrued and unpaid interest thereon
and all other amounts due hereunder and under the other Loan Documents
(collectively, the "Indebtedness") to be, whereupon the Indebtedness shall
become, immediately due and payable; provided, however, that upon the occurrence
of any Event of Default specified in subclause (v) of this paragraph, the
Indebtedness shall automatically become due and payable.

            Each Borrower hereby represents and warrants on and as of the date
hereof that: (i) such Borrower has the requisite power and authority to execute,
deliver, and perform its obligations under this Promissory Note and the other
Loan Documents to which it is a party, and such Borrower has taken all necessary
action to authorize the same, and such execution, delivery, and performance do
not violate or contravene its respective organizational documents or any law,
regulation, agreement, writ, or order applicable to or binding upon it; and (ii)
this Promissory Note and all of the other Loan Documents to which it is a party
have been duly executed and delivered, and constitute the legal, valid, and
binding obligations of such Borrower, enforceable against such Borrower in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally. In addition, on and as of the date hereof each Borrower makes
each of the representations and warranties contained in the Senior Credit
Agreement, which representations and warranties, along with the definitions of
the terms utilized therein and any related provisions, as in effect on the date
hereof and without giving effect to any amendment, restatement, waiver or other
modification thereto unless consented to hereunder by the Lender, are hereby
incorporated by reference herein and shall apply with the same force and effect
as though set forth herein in their entirety and shall survive the termination
of the Senior Credit Agreement; provided, however, for purposes of the
Borrowers' representations and warranties required of it under this paragraph,
any references to the "Agreement," the "Loan Documents", the "Obligations", the
"Collateral" or "Foothill" or like defined terms in the representations and
warranties contained in the Senior Credit Agreement shall be deemed to be
references to this Promissory Note, the Loan Documents, the Obligations, the
Collateral and the Lender hereunder, respectively.

            Each Borrower covenants and agrees that until the payment in full of
all Obligations, (i) except to obtain a forbearance from Limeridge, Endeavour
and Foothill, no Loan Party shall amend, restate, extend, supplement or
otherwise modify the Material Debt Agreements, (ii) so long as an Event of
Default shall be continuing, the Borrowers shall not make any dividends or any
other distributions to Interiors to fund, nor shall Interiors make any


                                       6
<PAGE>

payments in respect of, Interiors' obligations under that certain Convertible
Debenture dated as of March 23, 1999 in the original amount of $2,000,000 issued
by Interiors in favor of DMB Property Ventures Limited Partnership, and (iii)
each Borrower will, and shall cause Interiors and other Loan Parties party
thereto to comply, at all times with each of the covenants of Interiors and its
subsidiaries contained in the Senior Credit Agreement, which covenants, along
with the definitions of the terms utilized therein and any related provisions,
as in effect on the date hereof and without giving effect to any amendment,
restatement, waiver or other modification thereto unless consented to hereunder
by the Lender, are hereby incorporated by reference herein and shall apply with
the same force and effect as though set forth herein in their entirety and shall
survive the termination of the Senior Credit Agreement; provided, however, for
purposes of Interiors' and the other Loan Parties' covenants required of it
under this paragraph, any references to the "Agreement," the "Loan Documents",
the "Obligations", the "Collateral" or "Foothill" or like defined terms in the
covenants contained in the Senior Credit Agreement shall be deemed to be
references to this Promissory Note, the Loan Documents, the Obligations, the
Collateral and the Lender hereunder, respectively.

            It is a condition precedent to the Lender making the Term Loan that
the Borrowers shall have provided the following to the Lender:

            (A) each of the agreements, instruments and other documents listed
      on the List of Closing Documents attached hereto as Exhibit D attached
      hereto;

            (B) a written opinion of counsel to the Loan Parties addressed to
      the Lender addressing the issues identified in Exhibit E attached hereto,
      containing such assumptions and qualifications and otherwise in form and
      substance acceptable to the Lender;

            (C) evidence satisfactory to the Lender that not less than
      $2,000,000 of the initial proceeds of the Term Loan shall be applied to
      repay the outstanding trade obligations of Stylecraft to Berman
      Industries, Inc.; and

            (D) evidence satisfactory to the Lender that the Borrowers shall
      have paid unpaid fees and expenses of the Lender's counsel.

            Each Borrower further agrees to indemnify and hold harmless the
Lender (and its subsequent permitted assigns), and each affiliate thereof and
each director, officer, employee, agent or representative thereof (each, an
"indemnified person") in connection with any losses, claims, damages,
liabilities or other expenses (whether asserted by any Loan Party or any third
party) to which such indemnified persons may become subject, insofar as such
losses, claims, damages, liabilities (or actions or other proceedings commenced
or threatened in respect thereof) or other expenses arise out of or in any way
relate to or result from any use or intended use of the Term Loan or the
proceeds thereof, and each Borrower agrees to reimburse each indemnified person
for any legal or other expenses incurred in connection with investigating,
defending or participating in any such loss, claim, damage, liability or action
or other proceeding (whether or not such indemnified person is a party to any
action or proceeding out of which indemnified expenses arise), provided that no
Borrower shall have any obligation hereunder to indemnify any indemnified person
for any loss, claim, damage, liability or expense which resulted from the gross
negligence or willful misconduct of such indemnified person. All amounts owing
to the


                                       7
<PAGE>

Lender or other indemnified person pursuant to this paragraph shall be paid by
the Borrowers promptly following any demand by the person or entity entitled to
such payment pursuant to the terms of this paragraph. None of the Lender or its
subsequent permitted assigns shall be responsible or liable to any Borrower or
any other person for damages which may be alleged as a result of this Promissory
Note or any of the other Loan Documents. The provisions of this paragraph shall
survive repayment of the Term Loan and cancellation of this Promissory Note.

            Notwithstanding any provision of this Promissory Note and any other
Loan Document to the contrary, the Borrowers consent and agree, and the Lender
by acceptance of this Promissory Note likewise consents and agrees, that all
amounts payable to the Lender by the Borrowers hereunder or by any Loan Party
pursuant to any other Loan Document, all of the Loan Parties' obligations under
each of the Loan Documents, and all rights and remedies of the Lender hereunder
or under any of the Loan Documents, shall be subordinated to the extent set
forth in that certain Intercreditor and Subordination Agreement, dated as of
March 19, 2001, by and among Foothill Capital Corporation, as senior lender, the
Lender, as subordinate lender, and Berman Industries, Inc., as a subordinated
trade creditor of Stylecraft, and acknowledged by Interiors, the Borrowers and
certain other subsidiaries of Interiors (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"). To the extent that any provision herein shall conflict with the
provisions of the Intercreditor Agreement, so long as the Intercreditor
Agreement shall be in effect, the provisions of the Intercreditor Agreement
shall prevail.

            All payments made by, or on behalf of, any Borrower hereunder will
be made without setoff, counterclaim or other defense.

            The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of outstanding principal balance of the Term Loan
and the date and amount of each principal payment hereunder; provided, that the
failure of the Lender to maintain such schedule or any error therein shall not
in any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Promissory Note.

            THIS PROMISSORY NOTE SHALL BE INTERPRETED, GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION 735 ILCS
105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAW
PROVISIONS) OF THE STATE OF ILLINOIS. THE BORROWERS HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING UNDER OR WITH RESPECT HERETO.

            Any legal action or proceeding with respect to this Promissory Note
or any of the other Loan Documents may be brought in the courts of the State of
Illinois or of the United States of America for the Northern District of
Illinois and, by execution and delivery of this Promissory Note, each Borrower
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Borrower further
irrevocably consents to the service of process out of any of the aforementioned
courts in any action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the applicable Borrower at its
address designated below, such service to become effective seven


                                       8
<PAGE>

days after such mailing. Nothing herein shall affect the right of the Lender or
any holder of this Promissory Note to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any Borrower in any other jurisdiction. Each Borrower hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection with
this Promissory Note brought in the courts referred to above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.

            Neither the failure nor delay on the part of the Lender to exercise
any right, power or privilege under this Promissory Note and no course of
dealing between the Borrowers and the Lender shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
this Promissory Note preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Lender would otherwise have. No notice to or demand on the Borrowers
in any case shall entitle the Borrowers to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the right of the
Lender to any other or further action in any circumstances without notice or
demand.

            All notices, demands and requests that any party is required or
elects to give to any other under this Promissory Note or any of the other Loan
Documents shall be in writing and any such notice shall become effective (a)
upon personal delivery thereof, including but not limited to, delivery by
overnight mail and courier service or (b) three (3) Business Days after it shall
have been mailed by United States mail, first class, certified or registered,
with postage prepaid, in each case addressed or delivered to such party
(provided that no notice to the Lender shall be effective until actually
received by it) at (i) its address set forth below its signature hereto with
respect to the Borrowers, (ii) 100 E. Huron Street, Chicago, Illinois, 60616,
Attention: Robert Berman, with respect to the Lender, and (iii) the address set
forth in the applicable Loan Document with respect to any other Loan Party, or
at such other address as may be designated by any such party in a notice to the
other parties.

            At any time and from time to time, each Borrower agrees that the
Borrowers will cooperate with the Lender and will execute and deliver, or cause
to be executed and delivered, all such further instruments and documents, and
will take all such further actions, as the Lender may reasonably request in
order to carry out the provisions and purposes of this Promissory Note and all
of the other Loan Documents.

            Whenever in this Promissory Note reference is made to Lender or
Borrower, such reference shall be deemed to include, as applicable, a reference
to their respective successors and permitted assigns. The provisions of this
Promissory Note shall be binding upon and shall inure to the benefit of said
successors and permitted assigns. Each Borrower's successors and assigns shall
include, without limitation, a receiver, trustee or debtor-in-possession of or
for such Borrower.

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                                       9
<PAGE>

            No Borrower may assign or delegate any of its obligations or
agreements hereunder. No amendment, modification or waiver of any provision of
this Promissory Note shall be effective unless it is in writing and signed by
the Lender and the Borrowers.

                                        STYLECRAFT LAMPS, INC.

                                        By:_____________________________________
                                        Name:    Max Munn
                                        Title:   _______________________________
                                        Address: 320 Washington Street
                                                 Mount Vernon, NY  10553


                                        PETALS, INC.

                                        By:_____________________________________
                                        Name:    Max Munn
                                        Title:   _______________________________
                                        Address: 320 Washington Street
                                                 Mount Vernon, NY  10553


SIGNATURE PAGE TO PROMISSORY NOTE
<PAGE>

                   SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
                                       TO
           PROMISSORY NOTE OF STYLECRAFT LAMPS, INC. and PETALS, INC.,

                              DATED MARCH 19, 2001

                      Principal                Principal
                      Amount of                 Amount      Unpaid
            Date        Loan                     Paid       Balance
            ----        ----                     ----       -------


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