<PAGE>

                         REGISTRATION RIGHTS AGREEMENT


            THIS REGISTRATION RIGHTS AGREEMENT, dated as of the 25th day of
August, 1998, among the entities listed on Schedule A (collectively referred to
as the "Holders"), the placement agent (hereinafter also referred to as the
"Holders") and INTERIORS INC., a corporation incorporated under the laws of the
state of Delaware, and having its principle place of business at 320 Washington
Street, Mount Vernon, New York 10553 (the "Company").


            WHEREAS, the Investors are purchasing from the Company, pursuant to
a 7% Convertible Debenture Subscription Agreement dated the date hereof (the
"Subscription Agreement"), an aggregate of Seven Hundred and Fifty Thousand
($750,000) Dollars principal amount of the Company's 7% Convertible Debenture,
and Warrants to purchase Three Hundred Seventy Five Thousand (375,000) shares
of the Company's Common Stock; and

            WHEREAS, the Company desires to grant to the Holders the
registration rights set forth herein with respect to the underlying shares of
Common Stock convertible under the Debenture (the "Underlying Shares") where
applicable, and the registration rights set forth herein with respect to the
shares of Common Stock underlying the Warrants (the "Warrant Shares")
(collectively hereinafter referred to as the "Stock" or "Securities" of the
Company). All capitalized terms not defined herein shall have the same meaning
as set forth in the Subscription Agreement.

            NOW, THEREFORE, the parties hereto mutually agree as follows:

            Section 1. Registrable Securities. As used herein the term
"Registrable Security" means the Securities; provided, however, that with
respect to any particular Registrable Security, such security shall cease to be
a Registrable Security when, as of the date of determination, (i) it has been
effectively registered under the Securities Act of 1933, as amended (the "1933
Act") and disposed of pursuant thereto, (ii) registration under the 1933 Act is
no longer required for the immediate public distribution of such security as a
result of the provisions of Rule 144 promulgated under the 1933 Act, or (iii)
it has ceased to be outstanding. The term "Registrable Securities" means any
and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure affecting
the Common Stock, such adjustment shall be made in the definition of
"Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Section 1.

            Section 2. Restrictions on Transfer. The Holders acknowledge and
understand that prior to the registration of the Securities as provided herein,
the Securities are "restricted securities" as defined in Rule 144 promulgated
under the Act. The Holders understand that no disposition or transfer of the
Securities may be made by the Holders in the absence of (i) an opinion of
counsel to the Holders that such transfer may be made without registration
under the 1933 Act or (ii) such registration.




<PAGE>


            Section 3. Registration Rights.
                       --------------------

                  (a) The Company agrees that it will use its best efforts to
prepare and file with the Securities and Exchange Commission ("Commission"),
within forty-five (45) days after the Closing Date, a registration statement
which shall cover the underlying shares and warrant shares (on Form S-3) under
the 1933 Act (the "Registration Statement"), at the sole expense of the Company
(except as provided in Section 3(c) hereof), in respect of all holders of
Registrable Securities, so as to permit a resale of the Registrable Securities
under the Act. The Company shall use its best efforts to cause the Registration
Statement that the Company is required to file to become effective within one
hundred five (105) days from the Closing Date. The number of shares designated
in the Registration Statement or any amendment thereto, to be registered, shall
be two hundred (200%) percent of the number of Securities that would be
required if all the Registrable Securities were issued on the day before the
filing of the Registration Statement.

                  (b) The Company will maintain the effectiveness the
Registration Statement or post-effective amendment filed under this Section 3
hereof current under the 1933 Act until the earlier of (i) the date that all of
the Registrable Securities have been sold pursuant to the Registration
Statement, (ii) the date the holders thereof receive an opinion of counsel that
all of the Registrable Securities may be sold under the provisions of Rule 144
or (iii) five years after the Issuance Date.

                  (c) All fees, disbursements and out-of-pocket expenses and
costs incurred by the Company in connection with the preparation and filing of
the Registration Statement and the amendment under subparagraph 3(a) and in
complying with applicable securities and Blue Sky laws (including, without
limitation, all attorneys' fees) shall be borne by the Company. The Holder
shall bear the cost of underwriting discounts and commissions, if any,
applicable to the Registrable Securities being registered and the fees and
expenses of its counsel. The Company shall qualify any of the securities for
sale in such states as such Holder reasonably designates and shall furnish
indemnification in the manner provided in Section 6 hereof. However, the
Company shall not be required to qualify any of the securities for sale in any
state which will require an escrow or other restriction relating to the Company
and/or the sellers. The Company at its expense will supply the Holder with
copies of the Registration Statement and the prospectus or offering circular
included therein and other related documents in such quantities as may be
reasonably requested by the Holders.

                  (d) The Company shall not be required by this Section 3 to
include a Holder's Registrable Securities in any Registration Statement which
is to be filed if, in the opinion of counsel for both the Holders and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for the Holders and
the Company) the proposed offering or other transfer as to which such
registration is requested is exempt from applicable federal and state
securities laws and would result in all Investors or transferees obtaining
securities which are not "restricted securities", as defined in Rule 144 under
the 1933 Act.


                                       2

<PAGE>


                  (e) In the event the Registration Statement to be filed by
the Company pursuant to Section 3(a) above is not filed with the Commission
within forty-five (45) days from the Closing Date and/or the Registration
Statement is not declared effective by the Commission within one hundred five
(105) days from the Closing Date, then the Company will pay Holder (pro rated
on a daily basis), as liquidated damages for such failure and not as a penalty,
two (2%) percent of the Purchase Price of the then outstanding Securities for
the first thirty (30) day period that such filing and/or effectiveness is
delayed, and three (3%) percent of the Purchase Price of the then outstanding
Securities for every thirty (30) days thereafter until the Registration
Statement has been filed and/or declared effective. Such payment of the
liquidated damages shall be made to the Holder in cash, immediately upon
demand, provided, however, that the payment of such liquidated damages shall
not relieve the Company from its obligations to register the Securities
pursuant to this Section.

                  If the Company does not remit the damages to the Holders as
set forth above, the Company will pay the Holders' reasonable costs of
collection, including attorneys' fees, in addition to the liquidated damages.
The registration of the Securities pursuant to this provision shall not affect
or limit Holders' other rights or remedies as set forth in this Agreement.

                  (f) No provision contained herein shall preclude the Company
from selling securities pursuant to any Registration Statement in which it is
required to include Registrable Securities pursuant to this Section 3.

                  (g) If at any time or from time to time after the effective
date of the Registration Statement, the Company notifies the Holders in writing
of the existence of a Potential Material Event (as defined in Section 3(h)
below), the Holders shall not offer or sell any Registrable Securities or
engage in any other transaction involving or relating to Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Holder receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Securities for more
than two (2) twenty (20) day periods in the aggregate during any twelve month
period, during the periods the Registration Statement is required to be in
effect. If a Potential Material Event shall occur prior to the date the
Registration Statement is filed, then the Company's obligation to file the
Registration Statement shall be delayed without penalty for not more than two
(2) twenty (20) day periods. The Company must give each Holder notice in
writing at least two (2) business days prior to the first day of the blackout
period.

                  (h) "Potential Material Event" means any of the following:
(a) the possession by the Company of material information not ripe for
disclosure in a registration statement; or (b) any material engagement or
activity by the Company which would be adversely affected by disclosure in a
registration statement at such time, that the Registration Statement would be
materially misleading absent the inclusion of such information.

             Section 4. Cooperation with Company. Holders will cooperate with 
the Company in all respects in connection with this Agreement, including timely
supplying all



                                       3

<PAGE>


information reasonably requested by the Company and executing and returning all
documents reasonably requested in connection with the registration and sale of
the Registrable Securities.

            Section 5. Registration Procedures. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Act, the Company shall (except
as otherwise provided in this Agreement), as expeditiously as possible:

                  (a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the time period specified in Section 3(b) hereof and to comply with the
provisions of the Act with respect to the sale or other disposition of all
securities covered by such registration statement whenever the Holder of such
securities shall desire to sell or otherwise dispose of the same (including
prospectus supplements with respect to the sales of securities from time to
time in connection with a registration statement pursuant to Rule 415
promulgated under the Act);

                  (b) furnish to each Holder such numbers of copies of a
summary prospectus or other prospectus, including a preliminary prospectus or
any amendment or supplement to any prospectus, in conformity with the
requirements of the Act, and such other documents, as such Holder may
reasonably request in order to facilitate the public sale or other disposition
of the securities owned by such Holder;

                  (c) register and qualify the securities covered by the
Registration Statement under such other securities or blue sky laws of such
jurisdictions as the Holders shall reasonably request (subject to the
limitations set forth in Section 3(d) above), and do any and all other acts and
things which may be necessary or advisable to enable each Holder to consummate
the public sale or other disposition in such jurisdiction of the securities
owned by such Holder, except that the Company shall not for any such purpose be
required to qualify to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified or to file therein any general consent to
service of process;

                  (d) list such securities on the OTC Bulletin Board or NASDAQ
Small Cap Stock Market or other national securities exchange on which any
securities of the Company are then listed, if the listing of such securities is
then permitted under the rules of such exchange or NASDAQ;

                  (e) notify each Holder of Registrable Securities covered by
the Registration Statement, at any time when a prospectus relating thereto
covered by the Registration Statement is required to be delivered under the
Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.





                                       4

<PAGE>


            Section 6. Indemnification.
                       ----------------

                  (a) The Company agrees to indemnify and hold harmless the
Holders, and each officer, director or person, if any, who controls each Holder
within the meaning of the 1933 Act ("Distributing Holder") against any losses,
claims, damages or liabilities, joint or several (which shall, for all purposes
of this Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees), to which the Distributing Holder may
become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, or any related preliminary
prospectus, final prospectus, offering circular, notification or amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the Company (i) will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, preliminary prospectus, final prospectus, offering
circular, notification or amendment or supplement thereto in reliance upon, and
in conformity with, written information furnished to the Company by the
Distributing Holder, specifically for use in the preparation thereof, or (ii)
cannot pay any amounts paid in settlement of any loss, claim, damage or
liability if such settlement is effected without the consent of the Company,
which consent shall not be unreasonably withheld. This Section 6(a) shall not
inure to the benefit of any Distributing Holder with respect to any person
asserting such loss, claim, damage or liability who purchased the Registrable
Securities which are the subject thereof if the Distributing Holder failed to
send or give (in violation of the 1933 Act or the rules and regulations
promulgated thereunder) a copy of the prospectus contained in such Registration
Statement to such person at or prior to the written confirmation of such person
of the sale of such Registrable Securities, where the Distributing Holder was
obligated to do so under the 1933 Act or the rules and regulations promulgated
thereunder. This indemnity provision will be in addition to any liability which
the Company may otherwise have.

                  (b) Each Distributing Holder agrees that it will indemnify
and hold harmless the Company, and each officer, director, or person, if any,
who controls the Company within the meaning of the 1933 Act, against any
losses, claims, damages or liabilities (which shall, for all purposes of this
Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees) to which the Company or any such
officer, director or controlling person may become subject under the 1933 Act
or otherwise, insofar as such losses claims, damages or liabilities (or actions
in respect thereof); arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, or any related preliminary prospectus, final prospectus, offering
circular, notification or amendment or supplement thereto, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, preliminary prospectus, final prospectus, offering
circular, notification or



                                       5

<PAGE>


amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by such Distributing Holder,
specifically for use in the preparation thereof. This indemnity provision will
be in addition to any liability which the Distributing Holder may otherwise
have.

                  (c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than as to the particular item as to which indemnification is
then being sought solely pursuant to this Section 6. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, assume the defense thereof, subject to
the provisions herein stated and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, unless the indemnifying party shall not pursue the
action to its final conclusion. The indemnified party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense
of the indemnifying party if the indemnifying party has assumed the defense of
the action with counsel reasonably satisfactory to the indemnified party;
provided that if the indemnified party is the Distributing Holder, the fees and
expenses of such counsel shall be at the expense of the indemnifying party if
(i) the employment of such counsel has been specifically authorized in writing
by the indemnifying party, or (ii) the named parties to any such action
(including any impleaded parties) include both the Distributing Holder and the
indemnifying party and the Distributing Holder shall have been advised by such
counsel that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal defenses which
may be available to the Distributing Holder (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf
of the Distributing Holder, it being understood, however, that the indemnifying
party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable only for the
reasonable fees and expenses of one separate firm of attorneys for the
Distributing Holder, which firm shall be designated in writing by the
Distributing Holder). No settlement of any action against an indemnified party
shall be made without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld.

            Section 7. Contribution. In order to provide for just and equitable
contribution under the 1933 Act in any case in which (i) the indemnified party
makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that the express provisions of Section 6 hereof
provide for


                                       6                      

<PAGE>


indemnification in such case, or (ii) contribution under the 1933 Act may be
required on the part of any indemnified party, then the Company and the
applicable Distributing Holder shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
all purposes of this Agreement, include, but not be limited to, all costs of
defense and investigation and all attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
the applicable Distributing Holder on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Distributing Holder agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 7. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

            Section 8. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by reputable courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:





                                       7             


<PAGE>


     If to INTERIORS INC.:

                        INTERIORS INC.
                        320 Washington Street
                        Mount Vernon, New York 10553
                        Attn: Max Munn, President
                        Facsimile: (914) 665-5469
                        Telephone: (914) 665-5400



     If to the Holders at the addresses set forth on Schedule A attached
hereto.

     Any party hereto may from time to time change its address or facsimile
number for notices under this Section by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.

            Section 9. Assignment. This Agreement is binding upon and inures to
the benefit of the parties hereto and their respective heirs, successors and
permitted assigns. The rights granted the Holders under this Agreement shall
not be assigned without the written consent of the Company, which consent shall
not be unreasonably withheld. In the event of a transfer of the rights granted
under this Agreement, the Holder agrees that the Company may require that the
transferee comply with reasonable conditions as determined in the discretion of
the Company.

            Section 10. Counterparts; Facsimile; Amendments. This Agreement may
be executed in multiple counterparts, each of which may be executed by less
than all of the parties and shall be deemed to be an original instrument which
shall be enforceable against the parties actually executing such counterparts
and all of which together shall constitute one and the same instrument. Except
as otherwise stated herein, in lieu of the original documents, a facsimile
transmission or copy of the original documents shall be as effective and
enforceable as the original. This Agreement may be amended only by a writing
executed by all parties.

            Section 11. Termination of Registration Rights. The rights granted
pursuant to this Agreement shall terminate as to each Holder (and permitted
transferees or assignees) upon the occurrence of any of the following:

            (a) all Holder's Securities subject to this Agreement have been
registered;

            (b) all of such Holder's Securities subject to this Agreement may
be sold without such registration pursuant to Rule 144 promulgated by the SEC
pursuant to the Securities Act;

            (c) all of such Holder's Securities subject to this Agreement can
be sold pursuant to Rule 144(k).




                                       8

<PAGE>


            Section 12. Headings. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

            Section 13. Governing Law: Venue; Jurisdiction. This Agreement will
be construed and enforced in accordance with and governed by the laws of the
State of New York, except for matters arising under the Act, without reference
to principles of conflicts of law. Each of the parties consents to the
jurisdiction of the U.S. District Court sitting in the Southern District of the
State of New York or the state courts of the State of New York in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions.
Each party hereby agrees that if another party to this Agreement obtains a
judgment against it in such a proceeding, the party which obtained such
judgment may enforce same by summary judgment in the courts of any country
having jurisdiction over the party against whom such judgment was obtained, and
each party hereby waives any defenses available to it under local law and
agrees to the enforcement of such a judgment. Each party to this Agreement
irrevocably consents to the service of process in any such proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party at its address set forth herein. Nothing herein shall affect the
right of any party to serve process in any other manner permitted by law.

            Section 14. Severability. If any provision of this Agreement shall
for any reason be held invalid or unenforceable, such invalidity or
unenforceablity shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid or unenforceable provision had never been
contained herein.

            Section 15. Capitalized Terms. All capitalized terms not otherwise
defined herein shall have the meaning assigned to them in the 7% Convertible
Debenture Subscription Agreement.

            Section 16. Entire Agreement. This Agreement, together with all
documents referenced herein, embody the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or
agreement of any kind not expressly set forth in this Agreement shall affect,
or be used to interpret, change or restrict, the express terms and provisions
of this Agreement.




                                       9


<PAGE>


            IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed, on the day and year first
above written.

                                 INTERIORS

                                 By /s/ Max Munn
                                   ------------------------------------
                                    Name: Max Munn
                                    Title: President




                                  SOVEREIGN PARTNERS L.P.

                                  By
                                    -----------------------------------
                                     Name: Mark Valentine
                                     Title:



                                  DOMINION CAPITAL FUND, LTD

                                  By
                                    -----------------------------------
                                    Name: Mark Valentine
                                    Title:
 






<PAGE>


            IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed, on the day and year first
above written.

                                 INTERIORS

                                 By 
                                   ------------------------------------
                                    Name: Max Munn
                                    Title: President




                                  SOVEREIGN PARTNERS L.P.

                                  By /s/ Mark Valentine
                                    -----------------------------------
                                     Name: Mark Valentine
                                     Title: Agent



                                  DOMINION CAPITAL FUND, LTD

                                  By /s/ Mark Valentine
                                    -----------------------------------
                                    Name: Mark Valentine
                                    Title: Agent