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                          SUBORDINATED PROMISSORY NOTE


$537,248.00                                                   March 23, 1998
                                                     Los Angeles, California

                      FOR VALUE RECEIVED, Interiors, Inc., a Delaware
corporation ("Obligor"), hereby promises to pay to the order of Robert M.
Perkowitz ("Holder"), as trustee for each of the persons listed on Attachment A
hereto (the "Shareholders"), the principal sum of FIVE HUNDRED THIRTY-SEVEN
THOUSAND TWO HUNDRED FORTY-EIGHT DOLLARS ($537,248.00), together with interest
thereon, without offset or deduction of any kind or nature (whether pertaining
to this Note or to any other agreement by or among the parties hereto), on
March 31, 1999, at which time the unpaid principal amount hereof and all
accrued and unpaid interest thereon shall become due and payable.

                      If any payment of principal or interest on this Note is 
due on a Saturday, Sunday or legal holiday under the laws of the State of
California, such payment shall be made on the next succeeding business day.
Interest accrued on the unpaid principal balance of this Note shall be payable
on the date set forth above. Upon the payment in full of all unpaid principal
of this Note, all accrued and unpaid interest shall be due and payable
forthwith.

                      Interest on the unpaid balance of this Note shall accrue 
at the rate of ten percent (10%) per annum from the date hereof through the
date that the principal of this Note is paid in full (subject to increase upon
the failure of Obligor to make the Prepayment, as provided below), and such
interest shall accrue on the basis of actual days based on a 365-day year.

                      Obligor may, at its election, on or prior to July 31, 
1998, prepay to Holder SEVENTY-SEVEN THOUSAND TWO HUNDRED FORTY-EIGHT DOLLARS
($77,248.00) of the principal amount of this Note together with all accrued and
unpaid interest on such prepaid principal amount (the "Prepayment"); provided,
however, that the Prepayment shall not be permitted unless that certain
Subordinated Promissory Note dated as of the date hereof and made by Obligor in
favor of Holder, as trustee for certain creditors of Obligor (the "Creditor
Promissory Note"), shall have been paid in full. If Obligor fails to make the
Prepayment, then (i) interest on the unpaid balance of this Note shall accrue
at the rate of fifteen percent (15%) per annum from July 31, 1998 through the
date that the principal of this Note is

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paid in full and (ii) Obligor shall issue to the Holder (as trustee for the
Shareholders) not later than five (5) business days after July 31, 1998 shares
of Class A Common Stock, par value $.001 per share, of Obligor having a fair
market value equal to TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) (which
shares will be deposited by Obligor into the Escrow Account (as defined in the
Merger Agreement)).

                      Each payment made pursuant to this Note shall be credited
first on interest then due and the remainder on principal; and interest shall
thereupon cease to accrue upon the principal so credited. Obligor reserves the
right to prepay all or any part of the principal of this Note at any time
without penalty.

                      "Event of Default" shall mean the failure of Obligor to 
make any payment of interest or principal on this Note within five (5) days
after the due date (unless cured within ten (10) days after Obligor's receipt
of written notice of the occurrence thereof). Any notice required to be given
to Obligor hereunder must be delivered in accordance with the provisions of
Section 12.01 of that certain Agreement and Plan of Merger dated as of the date
hereof among Obligor, the Shareholders and others. Upon the occurrence of an
Event of Default, (i) the unpaid principal amount of and accrued interest on
this Note shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which
are hereby expressly waived by the Obligor, (ii) the Irrevocable Proxy attached
hereto as Attachment B shall become effective in accordance with its terms and
(iii) Obligor shall issue to the Holder (as trustee for the Shareholders),
shares of Class A Common Stock, par value $.001 per share, of Obligor having a
fair market value equal to FIVE MILLION DOLLARS ($5,000.000.00) within three
days of such uncured default. For purposes of this Note, "fair market value"
shall be computed using the average closing bid price per share of the Class A
Common Stock for the thirty (30) trading days immediately preceding the
valuation date.

                      Principal and interest shall be paid in lawful money of 
the United States and shall be made at 3817 Bonwood Drive, Charlotte, North
Carolina 28211, or at such other place as Holder shall have designated to
Obligor in writing for such purpose.

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                      This Note and the indebtedness evidenced hereby shall be 
subordinate (i) to the Creditor Promissory Note and (ii) in the manner and to
the extent as may be set forth in a Subordination Agreement between the Holder
and Obligor's bank lender.

                      This Note may not be sold, transferred, assigned, pledged
or otherwise disposed of by Holder without the prior written consent of
Obligor.

                      This Note is being delivered and is intended to be 
performed in the State of California, and shall be governed by and construed
and enforced in accordance with the internal laws of the State of California.

                                                 INTERIORS, INC.,
                                                 a Delaware corporation

                                                 By: /s/ Max Munn
                                                    ---------------------
                                                    An Authorized Officer

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                                  Attachment A

Sienna Limited Partnership I
Ed Ende
Robert Brennan
Sienna Limited Partnership II
Daniel L. Skaff
Paradian Management, Inc.
Robert Perkowitz
Tom Kubek
Ed Zambar
Lois Varga
Bryan Lawson
Victoria Bogust

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