Document:

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                                                                    EXHIBIT 10.2

No.   1-A-1                                                  $15,115,371.80 USD

                                 INTERIORS, INC.

                              Amended and Restated
                 Secured Convertible Note due December 31, 2008

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THERE IS AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                  This Amended and Restated Secured Convertible Note is an
amendment and restatement of a duly authorized issue of a Secured Convertible
Note due September 29, 2004 of Interiors Inc., a Delaware corporation (the
"Issuer"), issued on September 30, 1999 (the "Issuance Date")(such Secured
Convertible Note due September 29, 2004, the "Original Note"), to Limeridge LLC,
and designated as its Amended and Restated Secured Convertible Note due December
31, 2008 (the "Note"). This Note is being issued as of the 27th day of December
2001 (the "Amendment Date"). Upon the execution and delivery of this Note by the
Issuer and its acceptance by the Holder, the Original Note shall be deemed
cancelled, void and of no further force and effect, and by its acceptance of
this Note, the Holder agrees to simultaneously delivery to the Issuer the
Original Note for retirement and cancellation.

                  This Note: (i) has been issued under the terms and provisions
of the Secured Convertible Note Purchase Agreement dated as of September 30,
1999 between the Issuer and Holder and the other holder of Notes (the
"Agreement") and shall be subject to all of the terms and conditions and
entitled to all of the benefits thereof; and (ii) amends and restates the
Original Note in accordance with the terms and provisions of that certain Debt
Restructuring Agreement, dated as of December 24, 2001, by and among the Issuer,
Petals, Inc. ("Petals"), TBD Three, Inc., f/k/a Stylecraft Lamps, Inc.
("Stylecraft"), Habitat Solutions, Inc. ("Habitat") and Concepts 4, Inc.
("Concepts"), and the Holder, and Endeavour Capital Fund, S.A. and The Endeavour
Capital Investment Fund, S.A. (collectively, "Endeavour").

                  The obligations of the Issuer under this Note have been
secured by the Collateral (as defined in the Agreement) pursuant to the terms of
the Agreement and that certain Amended and Restated Security Agreement (the
"Amended and Restated Security Agreement"), of even date herewith, entered into
between the Issuer, Petals, Petals Factory Outlet of Connecticut, Inc., a
Connecticut corporation ("Petals-CT"), Petals Factory Outlet Inc., a New York
corporation ("Petals-NY"), Petals Factory Outlet of Florida, Inc., a Florida
corporation ("Petals-FL"), Petals Factory Outlet of Pennsylvania, Inc., a
Pennsylvania corporation ("Petals-PA"), Habitat, Windsor Art, Inc., a California
corporation ("Windsor"), Stylecraft, TBD Two, Inc., f/k/a Troy Lighting, Inc., a
California corporation ("Troy"), TBD One, Inc., f/k/a CSL Lighting Mft., Inc., a
Delaware corporation ("CSL"), Decor Group, Inc., a Delaware corporation
("Decor"), and Concepts 4, (Petals, Petals-CT, Petals-NY, Petals-FL, Petals-PA,
Habitat, Stylecraft, Troy, CSL, Decor, and Concepts 4, collectively, the
"Subsidiaries") and the Holder.

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                FOR VALUE RECEIVED, the Issuer promises to pay to

                                  LIMERIDGE LLC

the registered holder hereof or its registered assigns, if any (the "Holder"),
the principal sum of:

                  [Fifteen Million One Hundred Fifteen Thousand
                   Three Hundred Seventy One and Eighty Cents]

                             United States Dollars,

on or prior to December 31, 2008 (the "Maturity Date") or such earlier date this
Note is required to be repaid by the Issuer pursuant to the terms herein, and to
pay interest, as outlined below, at the rate of six percent (6.0%) per annum on
the principal sum outstanding for the term of this Note. Accrual of interest
shall commence as of the Amendment Date and shall accrue from day to day.
Interest shall be payable in cash by the Issuer upon the earlier to occur of (a)
a Conversion Date, (b) redemption as set forth below, or (c) upon an Event of
Default as defined below. Unless otherwise agreed in writing by both parties
hereto, the interest so payable will be paid to the person in whose name this
Note is registered on the records of the Issuer regarding registration and
transfers of the Note (the "Note Register"), provided, however, that the
Issuer's obligation to a transferee of this Note arises only if such transfer,
sale or other disposition is made in accordance with the terms and conditions
contained in the Agreement and this Note. All amounts due hereunder shall be
paid in cash in lawful currency of the United States of America.

         Principal and interest are payable at the address last appearing on the
Note Register as designated in writing by the Holder hereof from time to time.

         The Note is subject to the following additional provisions:

         1. The Note is exchangeable for like Notes in equal aggregate principal
amount of authorized denominations, as requested by the Holder surrendering the
same, but shall not be issuable in denominations of less than $50,000 (unless
such amount represents the remaining principal balance outstanding). No service
charge will be made for such registration or transfer or exchange.

         2. The Issuer shall be entitled to withhold from all payments of
principal and/or interest of this Note any amounts required to be withheld under
the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended,
or other applicable laws at the time of such payments.

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         3. This Note has been issued subject to investment representations of
the original Holder hereof and may be transferred or exchanged only in
compliance with the Securities Act and applicable state securities laws and in
compliance with the restrictions on transfer provided in the Agreement. Prior to
the due presentment for such transfer of this Note, the Issuer and any agent of
the Issuer may treat the person in whose name this Note is duly registered on
the Note Register as the owner hereof for the purpose of receiving payment as
herein provided and all other purposes, whether or not this Note is overdue, and
neither the Issuer nor any such agent shall be affected by notice to the
contrary. The transferee shall be bound, as the original Holder by the same
representations and terms described herein and under the Agreement.

         4. The Holder is entitled, at its option, at any time after September
29, 2000 to convert this Note, in whole or in part, in minimum denominations of
$50,000 (unless such amount represents the remaining principal balance
outstanding), into shares of the Issuer's Class A Common Stock, $.001 par value
per share (the "Common Stock") in accordance with the following terms and
conditions:

                  (a) The Holder may exercise its right to convert the Note by
telecopying an executed and completed notice of conversion (the "Notice of
Conversion") to the Issuer and delivering the original Notice of Conversion and
the original Note to the Issuer by express courier. Each Business Day on which a
Notice of Conversion is telecopied to and received by the Issuer in accordance
with the provisions hereof shall be deemed a "Conversion Date". The Issuer will
transmit the certificates representing shares of Common Stock issuable upon
conversion of the Note (together with the certificates representing the Note not
so converted) to the Holder via express courier, by electronic transfer (if
applicable) or otherwise within five Business Days after the Conversion Date,
provided, the Issuer has received the original Notice of Conversion and Note
being so converted. If the Company has not received the original Notice of
Conversion and original Note being converted within three Business Days after
Conversion Date, then the Issuer shall transmit the certificates representing
the shares of Common Stock issuable upon conversion of the Note (together with
the certificates representing the Note not so converted) to the Holder via
express courier, by electronic transfer (if applicable) or otherwise within
three Business Days after receipt of the original Notice of Conversion and
original Note being converted. In addition to any other remedies which may be
available to the Holder, in the event that the Issuer fails to effect delivery
of such shares of Common Stock within (i) five Business Days after receipt of a
Notice of Conversion (provided the Issuer has received the original Notice of
Conversion and Note within three Business Days after the Conversion Date), or
(ii) three Business Days after receipt of the original Notice of Conversion and
original Note being converted if the Issuer has not received the original Notice
of Conversion and original Note being converted within three Business Days after
the Conversion Date, the Holder will be entitled to revoke the Notice of
Conversion by delivering a notice to such effect to the Issuer whereupon the
Issuer and the Holder shall each be restored to their respective positions
immediately prior to delivery of the Notice of Conversion. The Notice of
Conversion and Note representing the portion of the Note converted shall be
delivered as follows:

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                  To the Issuer:

                                    Interiors, Inc.
                                    320 Washington Street
                                    Mount Vernon, New York 10553
                                    Telephone:  (914) 665-5400
                                    Facsimile: (914) 665-5469
                                    Attention: President

                  or to such other address as may be communicated by the Issuer
         to the Holder in writing.

                  In the event that the Common Stock issuable upon conversion of
the Note is not delivered to the Holder within (i) seven Business Days after the
Conversion Date (provided the Issuer has received the original Notice of
Conversion and Note within three Business Days after the Conversion Date), or
(ii) three Business Days after receipt of the original Notice of Conversion and
original Note being converted if the Issuer has not received the original Notice
of Conversion and original Note being converted within three Business Days after
the Conversion Date (and assuming the Holder has not revoked such Notice of
Conversion as permitted above), the Issuer shall pay to the Holder, in
immediately available funds, upon demand, as liquidated damages for such failure
and not as a penalty, for each $100,000 principal amount of Note sought to be
converted, $250 for each calendar day that the shares of Common Stock are not
delivered, which liquidated damages shall run from the eighth Business Day after
the Conversion Date up until the time that either the Notice of Conversion is
revoked or the Common Stock is delivered, at which time such liquidated damages
shall cease. Any and all payments required pursuant to this paragraph shall be
payable only in cash immediately. The Holder's right to liquidated damages
pursuant to the terms of this Section shall in no way affect the Holder's right
pursuant to Section 7 below to consider this Note immediately due and payable
upon the occurrence of an Event of Default (as defined in Section 7 below).

                  (b) The Holder may, at its sole option convert this Note into
that number of shares of fully paid and nonassessable shares of Common Stock
(the "Conversion Shares") which is to be derived from dividing the Conversion
Amount by the Conversion Price. For purposes of this Note, the term "Conversion
Amount" shall mean the principal dollar amount of the Note being converted. The
"Conversion Price" shall be equal to eighty-five percent (85%) of the lesser of
(i) the closing Bid Price of the Common Stock of the Issuer on December 27,
2001, or (ii) the average closing Bid Prices of the Common Stock of the Issuer
for the five (5) consecutive trading days immediately preceding a Conversion
Date, as such Conversion Price shall be adjusted pursuant to the terms hereof;
provided, that if the Issuer merges with or acquires an entity with a
pre-acquisition valuation of fifteen million dollars ($15,000,000) or more (a
"Significant Transaction"), then such Conversion Price will be fixed based upon
a discount mutually agreed upon by the Issuer and the Holder from the closing
price of the Common Stock of the Issuer prior to the date of consummation of
such Significant Transaction. The "Bid Price" shall be deemed to be the reported
last bid price regular way of the Common Stock as reported by Bloomberg LP or if
unavailable, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, the closing bid price
as reported by Nasdaq or such other system then in use, or, if the Common Stock
is not quoted by any such organization, the closing bid price in the
over-the-counter market as furnished by the principal national securities
exchange on which the Common Stock is traded. The principal amount of this Note
shall be reduced as per that principal amount indicated on the Notice of
Conversion upon the proper receipt by the Holder of such shares of Common Stock
due upon such Notice of Conversion.

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                  (c) Upon each adjustment of the Conversion Price, the Holder
shall thereafter be entitled to (but not obligated to) receive upon conversion
of this Note, at the Conversion Price resulting from such adjustment, the number
of shares of Common Stock obtained by (i) multiplying the Conversion Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock receivable hereunder immediately prior to such adjustment and (ii)
dividing the product thereof by the Conversion Price resulting from such
adjustment.

                  (d) The Conversion Price shall be adjusted as follows:

                           (i) In the case of any amendment to the Issuer's
Certificate of Incorporation to change the designation of the Common Stock or
the rights, privileges, restrictions or conditions in respect to the Common
Stock or division of the Common Stock, this Note shall be adjusted so as to
provide that upon exercise thereof, the Holder shall receive, in lieu of each
share of Common Stock theretofore issuable upon such conversion, the kind and
amount of shares, other securities, money and property receivable upon such
designation, change or division by the Holder issuable upon such conversion had
the conversion occurred immediately prior to such designation, change or
division. This Note shall be deemed thereafter to provide for adjustments, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section. The provisions of this Subsection (i) shall apply in the
same manner to successive reclassifications, changes, consolidations and
mergers.

                           (ii) If the Issuer shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares of Common
Stock, or declare a dividend or make any other distribution upon the Common
Stock payable in shares of Common Stock, the Conversion Price in effect
immediately prior to such subdivision or dividend or other distribution shall be
proportionately reduced, and conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller number of shares of Common Stock,
the Conversion Price in effect immediately prior to such combination shall be
proportionately increased.

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                           (iii) If any capital reorganization or
reclassification of the capital stock of the Issuer, or any consolidation or
merger of the Issuer with or into another corporation or other entity, or the
sale of all or substantially all of the Issuer's assets to another corporation
or other entity shall be effected in such a way that holders of shares of Common
Stock shall be entitled to receive stock, securities, other evidence of equity
ownership or assets with respect to or in exchange for shares of Common Stock,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale (except as otherwise provided below in this Section) lawful and
adequate provisions shall be made whereby the Holder shall thereafter have the
right to receive upon the conversion hereof upon the basis and upon the terms
and conditions specified herein, such shares of stock, securities, other
evidence of equity ownership or assets as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of Common Stock immediately theretofore receivable upon
the conversion of this Note under this Section had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in any such
case appropriate provisions shall be made with respect to the rights and
interests of the holder to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Conversion Price and of
the number of shares of Common Stock receivable upon the conversion of this
Note) shall thereafter be applicable, as nearly as may be, in relation to any
shares of stock, securities, other evidence of equity ownership or assets
thereafter deliverable upon the exercise hereof including an immediate
adjustment, by reason of such consolidation or merger, of the Conversion Price
to the value for the Common Stock reflected, by the terms of such consolidation
or merger if the value so reflected is less than the Conversion Price in effect
immediately prior to such consolidation or merger. Subject to the terms of this
Note, in the event of a merger or consolidation of the Issuer with or into
another corporation or other entity as a result of which the number of shares of
common stock of the surviving corporation or other entity issuable to investors
of Common Stock, is greater or lesser than the number of shares of Common Stock
of the Issuer outstanding immediately prior to such merger or consolidation,
then the Conversion Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as though there were a
subdivision or combination of the outstanding shares of Common Stock. The Issuer
shall not effect any such consolidation, merger or sale, unless, prior to the
consummation thereof, the successor corporation (if other than the Issuer)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument the obligation to deliver to the
Holder such shares of stock, securities, other evidence of equity ownership or
assets as, in accordance with the foregoing provisions, the Holder may be
entitled to receive or otherwise acquire. If a purchase, tender or exchange
offer is made to and accepted by the holders of more than fifty (50%) percent of
the outstanding shares of Common Stock, the Issuer shall not effect any
consolidation, merger or sale with the person having made such offer or with any
affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the Holder shall have been given a reasonable
opportunity to then elect to receive upon the conversion of this Note the amount
of stock, securities, other evidence of equity ownership or assets then issuable
with respect to the number of shares of Common Stock in accordance with such
offer.

                           (iv) In case the Issuer shall, at any time prior to
conversion of this Note, consolidate or merge with any other corporation or
other entity (where the Issuer is not the surviving entity) or transfer all or
substantially all of its assets to any other corporation or other entity, then
the Issuer shall, as a condition precedent to such transaction, cause effective
provision to be made so that the Holder upon the conversion of this Note after
the effective date of such transaction shall be entitled to receive the kind
and, amount of shares, evidences of indebtedness and/or other securities or
property receivable on such transaction by the Holder of the number of shares of
Common Stock as to which this Note was convertible immediately prior to such
transaction (without giving effect to any restriction upon such exercise); and,
in any such case, appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the provisions of this Note shall
thereafter be applicable (as nearly as may be practicable) with respect to any
shares, evidences of indebtedness or other securities or assets thereafter
deliverable upon conversion of this Note. Upon the occurrence of any event
described in this Subsection (iv), the Holder shall have the right to (i)
convert this Note immediately prior to such event at a Conversion Price equal to
the lesser of (a) the then Conversion Price or (b) the price per share of Common
Stock paid in such event, (ii) retain ownership of this Note, in which event,
appropriate provisions shall be made so that this Note shall be convertible at
the Holder's option into shares of stock, securities or other equity ownership
of the surviving or acquiring entity, or (iii) force redemption of the then
outstanding principal amount of this Note in accordance with the provisions of
Section 18 below.

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                           (v) Whenever the Conversion Price shall be adjusted
pursuant to this Section the Issuer shall promptly mail by registered or
certified mail, return receipt requested, to the Holder a certificate signed by
its President or Vice President and by its Treasurer, or Secretary, setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board of Directors of the Issuer made any
determination hereunder), and the Conversion Price after giving effect to such
adjustment, and shall cause copies of such certificates to be mailed (by
first-class mail, postage prepaid) to the Holder. The Issuer shall make such
certificate and mail it to the Holder immediately after each adjustment.

                  (e) The Issuer will not, by amendment of its Certificate of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Issuer, but will
at all times in good faith assist in the carrying out of all the provisions of
this Note and in taking of all such action as may be necessary or appropriate in
order to protect the conversion rights of the Holder against impairment.

                  (f) In the event of any liquidation, dissolution or winding up
of the Issuer, whether voluntary or involuntary, before any distribution may be
made with respect to the Issuer's Common Stock or any other class of common
stock or preferred stock of the Issuer, the Holder shall be entitled to receive
out of the assets available for distribution to shareholders an amount in cash
equal to the Redemption Price of such principal amount of Note then outstanding
(the "Liquidation Amount"). If any portion of the principal amount of this Note
shall have been prepaid or converted into Common Stock prior to such
liquidation, dissolution or winding up, the interest component of the
Liquidation Amount pursuant to clause (ii) above shall be calculated annually
based on the average principal amount of this Note which shall be outstanding
during each consecutive twelve month period from the date of issuance of this
Note to the date immediately prior to such liquidation, dissolution or winding
up of the Company. If the assets of the Company available for distribution to
shareholders shall be insufficient to pay the Holder the full Liquidation Amount
to which they shall be entitled, then any such distribution of assets of the
Issuer shall be distributed ratably to all of the holders of the Notes. After
the payment of the Liquidation Amount shall have been made in full to the Holder
or funds necessary for such payment shall have been set aside by the Issuer in
trust for the account of holders of the Notes so as to be available for such
payments, the holders of the Notes shall be entitled to no further participation
in the distribution of the assets of the Issuer, and the remaining assets of the
Issuer legally available for distribution to shareholders shall be distributed
among the holders of Common Stock and any other classes or series of Common
Stock or preferred stock of the Issuer in accordance with their respective
terms.

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         5. No provision of this Note shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, upon an Event of Default (as
defined below), to pay the principal of, and interest on this Note at the place,
time, and rate, and in the coin or currency herein prescribed.

         6. The Issuer hereby expressly waives demand and presentment for
payment, notice on nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, and diligence in taking any
action to collect amounts called for hereunder and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder.

         7. If one or more of the following described events (each of which
being an "Event of Default" hereunder) shall occur and shall be continuing (as
set forth below) for a period of seven Business Days after notice from the
Holder:

                  (a) any of the representations, covenants, or warranties made
         by the Issuer herein, or in the Agreement (including all Exhibits
         annexed thereto) shall have been incorrect when made; or

                  (b) any of the representations, covenants, or warranties made
         by the Debtor or any of the Subsidiaries in the Amended and Restated
         Security Agreement shall have been incorrect when made in any material
         respect; or

                  (c) the Issuer shall breach, fail to perform, or fail to
         observe in any material respect any material covenant, term, provision,
         condition, agreement or obligation of the Issuer under this Note (or
         any security of the Issuer held by the Holder), the Amended and
         Restated Security Agreement, the Agreement and the Registration Rights
         Agreement between the parties dated September 30, 1999 (the
         "Registration Rights Agreement"); or

                  (d) Any of the Subsidiaries shall breach, fail to perform, or
         fail to observe in any material respect any material covenant, term,
         provision, condition, agreement or obligation to be performed by them
         under the Amended and Restated Security Agreement between the parties
         of even date herewith; or

                  (e) a trustee, liquidator or receiver shall be appointed for
         the Issuer (and/or any of the Subsidiaries) or for a substantial part
         of its property or business without its consent and shall not be
         discharged within thirty (30) calendar days after such appointment; or

                  (f) any governmental agency or any court of competent
         jurisdiction at the instance of any governmental agency shall assume
         custody or control of the whole or any substantial portion of the
         properties or assets of the Issuer (and/or any of the Subsidiaries) and
         shall not be dismissed within thirty (30) calendar days thereafter; or

                                       8
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                  (g) bankruptcy, reorganization, insolvency or liquidation
         proceedings or other proceedings for relief under any bankruptcy law or
         any law for the relief of debtors shall be instituted by or against the
         Issuer (and/or any of the Subsidiaries) and, if instituted against the
         Issuer (and/or any of the Subsidiaries), Issuer (and/or any of the
         Subsidiaries) shall by any action or answer approve of, consent to or
         acquiesce in any such proceedings or admit the material allegations of,
         or default in answering a petition filed in any such proceeding or such
         proceedings shall not be dismissed within thirty (30) calendar days
         thereafter; or

                  (h) the Common Stock is suspended and/or delisted from trading
         on the OTC Bulletin Board, or the Issuer has received notice of final
         action concerning delisting from the OTC Bulletin Board, unless in each
         such instance, the Issuer's Common Stock shall be listed on the Nasdaq
         Small Cap Market, the Nasdaq National Market, the American Stock
         Exchange or the New York Stock Exchange within seven business days from
         such suspension and/or delisting on the OTC Bulletin Board; or

                  (i) the Registration Statement including the shares of Common
         Stock underlying this Note has not been declared effective by the
         Securities and Exchange Commission by June 30, 2002, or the
         effectiveness of such Registration Statement shall be suspended for
         more than seven consecutive business days; or

                  (j) the Issuer shall have failed to pay interest within five
         Business Days of when due hereunder and/or principal within three
         Business Days of when due hereunder and/or comply with the redemption
         provisions contained herein within three Business Days of when due
         hereunder; in each case, upon receipt of written notice of such payment
         default; or

                  (k) the Issuer shall have failed to timely deliver shares of
         Common Stock issuable upon conversion of the Notes and/or exercise of
         the Warrants issued by the Issuer pursuant to the terms of this Note
         and the Warrants; or

                  (l) the Issuer, or any other party, shall, at any time after
         the Amendment Date, (i) in any way materially and adversely alter
         Holder's security interest that it has been granted in the Collateral
         pursuant to the Amended and Restated Security Agreement, or (ii) sell,
         transfer or convey the Collateral; or

                  (m) the Company and/or any of the Subsidiaries shall cease
         operations, cease to operate as a going concern, terminate its
         corporate existence, or sell, transfer and/or convey all or
         substantially all of its assets, or either shall combine with another
         entity whereby the Issuer is not the surviving entity; or

                  (n) a judgment in excess of $100,000 shall be entered against
         Debtor and/or Subsidiary or a warrant of execution or similar process
         shall be issued or levied against its property and within thirty (30)
         days after such judgment, warrant or process shall not have been paid
         in full or proper appeal of the same made.

                                       9
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                  (o) the occurrence of any "Event of Default" as that term is
         defined in the Amended and Restated Security Agreement,

         then, or at any time thereafter, and in each and every such case,
         unless such Event of Default shall have been cured or waived in writing
         by the Holder (which waiver shall not be deemed to be a waiver of any
         subsequent default) or cured as provided herein, at the option of the
         Holder, and in the Holder's sole discretion, the Holder may consider
         the entire principal amount of this Note (and all interest through such
         date) immediately due and payable in cash, at the cash equivalent of
         the Redemption Price for such then outstanding principal amount of
         Note, (or the Holder shall be entitled to recover from the Collateral
         as per the terms of the Amended and Restated Security Agreement, but
         shall be entitled to enforce its rights hereunder in the event the
         Collateral is insufficient to the amounts due and owing as aforesaid)
         without presentment, demand protest or notice of any kind, all of which
         are hereby expressly waived, anything herein or in any note or other
         instruments contained to the contrary notwithstanding, and Holder may
         immediately, and without expiration of any period of grace, enforce any
         and all of the Holder's rights and remedies provided herein or any
         other rights or remedies afforded by law (including but not limited to
         consequential damages if any). It is agreed that in the event of such
         action, such Holder shall be entitled to receive all reasonable fees,
         costs and expenses incurred, including without limitation such
         reasonable fees and expenses of attorneys. Nothing contained herein
         shall limit the rights of the Holder to collect liquidated damages as
         provided herein or in any other agreement entered into between the
         Holder and the Issuer, or any other damages that the Holder may
         otherwise be entitled to under the terms of this Note or the Agreement
         (including any Exhibit annexed thereto).

         8. In case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or
impaired thereby.

         9. [this section intentionally left blank]

         10. This Note, together with all documents referenced herein, embodies
the full and entire understanding and agreement between the Issuer and Holder
with respect to the subject matter hereof and supersedes all prior oral or
written agreements and understandings relating to the subject matter hereof.
Neither this Note nor any terms hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Issuer and the
Holder. All capitalized terms not otherwise defined herein shall have the same
meaning as given in the Agreement. In the event of any inconsistencies between
this Note and the Agreement, the Note shall control. No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Note shall affect, or be used to interpret, change or restrict,
the express terms and provisions of this Note.

                                       10
<PAGE>

         11. This Note will be exclusively construed and enforced in accordance
with and governed exclusively by the laws of the State of New York, except for
matters arising under the Securities Act, without reference to principles of
conflicts of law. Each of the parties consents to the exclusive jurisdiction of
the U.S. District Court sitting in the Southern District of the State of New
York sitting in Manhattan in connection with any dispute arising under this Note
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 the
other party to this Note 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 Note 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. Each party waives its right to a trial by jury.

         12. The convertibility of this Note shall be restricted such that
during such time as the Issuer is a reporting company under the Securities
Exchange Act of 1934, as amended, that portion of the Note which, if otherwise
converted, would result in Holder owning 4.99% or more of the then issued and
outstanding Common Stock, shall not be convertible until the Holder is not an
owner of 4.99% or more of the then issued and outstanding Common Stock.

         13. In the event the Issuer, at any time while this Note is
outstanding, shall issue any shares of Common Stock (or any instrument
convertible into Common Stock), otherwise than: (i) pursuant to options,
warrants, instruments and agreements under which convertible notes and/or shares
of convertible preferred stock of the Issuer were issued, or other obligations
to issue shares of Common Stock as of the Issuance Date, all as described in
Section 4.3 of the Agreement or in the SEC filings made by the Issuer within
twelve months prior to the Issuance Date, or (ii) all shares reserved for
issuance pursuant to the Issuer's stock option, incentive, or other similar
plan, which plan and which grant was in effect as of the Issuance Date and
approved by the Board of Directors of the Issuer ((i) and (ii) collectively
referred to as the "Existing Obligations"), for a consideration less than the
Conversion Price that would be in effect at the time of such issue, then, and
thereafter successively upon each such issue, the Conversion Price shall be
amended from then on to be equal to the lesser of (i) one hundred (100%) percent
of the average of the Bid Prices during the five consecutive trading days
immediately preceding a Conversion Date, or (ii) the resulting quotient from the
following formula: (y) the number of shares of Common Stock outstanding
immediately prior to such issue shall be multiplied by the Conversion Price in
effect at the time of such issue and the product shall be added to the aggregate
consideration, if any received by the Issuer upon such issue of additional
shares of Common Stock; and (z) the sum so obtained shall be divided by the
number of shares of Common Stock outstanding immediately after such issue.
Except for the Existing Obligations, and options that may be issued under any
employee incentive stock option and/or any qualified stock option plan adopted
by the Issuer, for the purposes of this adjustment, the issuance of any security
of the Issuer carrying the right to convert such security into shares of Common
Stock or of any warrant, right, or option to purchase Common Stock shall result
in an adjustment to the Conversion Price upon issuance of shares of Common Stock
upon the Holder's exercise of its conversion rights.

                                       11
<PAGE>

         14. In the event the Holder shall elect to convert any portion of this
Note as provided herein, the Issuer cannot refuse conversion based on any claim
that the Holder or anyone associated or affiliated with the Holder has been
engaged in any violation of law, unless an injunction from a court, restraining
and/or enjoining conversion of all or part of said portion of this Note shall
have been issued and the Issuer posts a surety bond for the benefit of the
Holder in the amount of 130% of the principal amount of the Note sought to be
converted plus outstanding interest through such date, which is subject to the
injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to the Holder in the event it obtains a favorable judgment (but shall not in any
way limit any additional damages the Holder may be entitled to).

         15. Upon receipt by the Issuer of evidence of the loss, theft,
destruction or mutilation of any Note certificate(s), and (in the case of loss,
theft or destruction) of indemnity or security reasonably satisfactory to the
Issuer, and upon the cancellation of the Note certificate(s), if mutilated, the
Issuer shall execute and deliver new certificates for Note(s) of like tenure and
date.

         16. This Note does not entitle the Holder to any voting rights or other
rights as a shareholder of the Issuer prior to the conversion into Common Stock
thereof, except as provided by applicable law. If, however, at the time of the
surrender of this Note and conversion the Holder hereof shall be entitled to
convert this Note, the shares of Common Stock so issued shall be and be deemed
to be issued to the Holder as the record owner of such shares as of the close of
business on the Conversion Date.

         17. Except as expressly provided herein or as required by law, so long
as this Note remains outstanding, the Issuer shall not, without the approval by
vote or written consent by the Holder, take any action that would adversely
affect the rights, preferences or privileges of this Note.

         18. The Issuer shall have the right to redeem this Note, in whole or in
part (except that portion of the principal amount of this Note that is the
subject of a Notice of Conversion which has previously been sent to the Issuer),
in cash at the Redemption Price (as defined below) at any time by thereafter
providing written notice (the "Redemption Notice") to the Holder. The Issuer
shall wire transfer the appropriate amount of funds to the Holder to complete
the redemption, which shall be (if the Redemption Notice is received via
facsimile by the Holder prior to the first anniversary of the Issuance Date) no
later than the tenth Business Day after the Holder has received the Redemption
Notice via facsimile (the "Redemption Date") and if the Redemption Notice is
received via facsimile by the Holder after the first anniversary of the Issuance
Date no later than the third Business Day after the Holder has received the
Redemption Notice via facsimile (also referred to as a Redemption Date. Upon
facsimile receipt of the Redemption Notice, the Holder's right to convert this
Note shall terminate and be canceled immediately; provided, however, that the
right to convert this Note shall immediately be reinstated if the Issuer fails
to comply with the redemption provisions hereof. In the event the Issuer fails
to wire the appropriate amount of funds to the Holders as set forth in the
Redemption Notice on or before the Redemption Date, or shall otherwise fail to
comply with the redemption provisions set forth herein on three separate
occasions, then the Issuer shall have waived its right to redeem any portion of
this Note at any time thereafter (the foregoing shall have not be deemed as a
waiver by the Holder of any rights it may have under Section 7 herein).

                                       12
<PAGE>

                  The Redemption Notice shall set forth (i) the Redemption Date,
(ii) the Redemption Price, as defined below, and (iii) the principal amount of
the Note being redeemed. The Redemption Notice shall be irrevocable, and it
shall be delivered by facsimile to the Holder at its address as the same shall
appear on the books of the Issuer.

                  The Redemption Price shall be equal to the sum of (a) the
entire outstanding principal amount of this Note being redeemed, (b) all accrued
and unpaid interest on this Note, (c) all accrued and unpaid fees and expenses
required to be paid for so long as the Note is outstanding pursuant to Section
12.7 of the Agreement.

                  At the close of business on the Redemption Date, subject to
the Holder's receipt of the applicable Redemption Price, the portion of this
Note being redeemed shall be automatically canceled and converted into a right
to receive the Redemption Price, and all rights of this Note, including the
right to conversion shall cease without further action. Immediately following
the Redemption Date (assuming full compliance by the Issuer with the redemption
provisions set forth herein), the Holder shall surrender its original Note at
the office of the Issuer, and the Issuer shall issue to the Holder a new Note
certificate for the principal amount that remains outstanding, if any.

         The Issuer shall not be entitled to send any Redemption Notice and
begin the redemption procedure hereunder unless it has:

                           (i) the full amount of the Redemption Price in cash,
         available in a demand or other immediately available account in a bank
         or similar financial institution;

                           (ii) immediately available credit facilities, in the
         full amount of the Redemption Price with a bank or similar financial
         institution; or

                           (iii) a combination of the items set forth in (a) and
         (b) above, aggregating the full amount of the Redemption Price.

         19. The Original Note has been cancelled and is hereby rendered null
and void and of no further force and effect, and is superseded by this Amended
and Restated Secured Convertible Note in all respects.

               [the balance of this page intentionally left blank]

                                       13
<PAGE>

                  IN WITNESS WHEREOF, the Issuer has caused this Amended and
Restated Secured Convertible Note to be duly executed by an officer thereunto
duly authorized.

                                            INTERIORS, INC.

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

Date:  December ____, 2001

                                       14<PAGE>
                                                                    EXHIBIT 10.3

No.   2-A-1                                                    $1,972,417.47 USD

                                 INTERIORS, INC.

                              Amended and Restated
                 Secured Convertible Note due December 31, 2008

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THERE IS AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

         This Amended and Restated Secured Convertible Note is an amendment and
restatement of a duly authorized issue of a Secured Convertible Note due
September 29, 2004 of Interiors Inc., a Delaware corporation (the "Issuer"),
issued on December ___, 1999 (the "Issuance Date") (such Secured Convertible
Note due September 29, 2004, the "Original Note"), to Endeavour Capital Fund SA,
and designated as its Amended and Restated Secured Convertible Note due December
31, 2008 (the "Note"). This Note is being issued as of the 27th day of December,
2001 (the "Amendment Date"). Upon the execution and delivery of this Note by the
Issuer and its acceptance by the Holder, the Original Note shall be deemed
cancelled, and of no further force and effect, and by its acceptance of this
Note, the Holder agrees to simultaneously delivery to the Issuer the Original
Note for retirement and cancellation.

         This Note: (i) has been issued under the terms and provisions of the
Exchange Agreement dated as of December , 1999 between the Issuer and Holder
(the "Exchange Agreement") and shall be subject to all of the terms and
conditions and entitled to all of the benefits thereof; and (ii) amends and
restates the Original Note in accordance with the terms and provisions of that
certain Debt Restructuring Agreement, dated as of December 24, 2001, by and
among the Issuer, 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"), the Holder and The Endeavour
Capital Investment Fund, S.A.

         The obligations of the Issuer under this Note have been secured by the
collateral described in that certain Amended and Restated Security Agreement
(the "Amended and Restated Security Agreement"), of even date herewith, entered
into between the Issuer, Petals, Petals Factory Outlet of Connecticut, Inc., a
Connecticut corporation ("Petals-CT"), Petals Factory Outlet Inc., a New York
corporation ("Petals-NY"), Petals Factory Outlet of Florida, Inc., a Florida
corporation ("Petals-FL"), Petals Factory Outlet of Pennsylvania, Inc., a
Pennsylvania corporation ("Petals-PA"), Habitat, Windsor Art, Inc., a California
corporation ("Windsor"), Stylecraft, TBD Two, Inc., f/k/a Troy Lighting, Inc., a
California corporation ("Troy"), TBD One, Inc., f/k/a CSL Lighting Mft., Inc., a
Delaware corporation ("CSL"), Decor Group, Inc., a Delaware corporation
("Decor"), and Concepts 4, (Petals, Petals-CT, Petals-NY, Petals-FL, Petals-PA,
Habitat, Stylecraft, Troy, CSL, Decor, and Concepts 4, collectively, the
"Subsidiaries"), and the Holder.

<PAGE>

                FOR VALUE RECEIVED, the Issuer promises to pay to

                            ENDEAVOUR CAPITAL FUND SA

the registered holder hereof or its registered assigns, if any (the "Holder"),
the principal sum of:

      [One Million Nine Hundred Seventy Two Thousand Four Hundred Seventeen
                             and Forty Seven Cents]

                             United States Dollars,

on or prior to December 31, 2008 (the "Maturity Date") or such earlier date this
Note is required to be repaid by the Issuer pursuant to the terms herein, and to
pay interest, as outlined below, at the rate of six percent (6.0%) per annum on
the principal sum outstanding for the term of this Note. Accrual of interest
shall commence as of the Amendment Date and shall accrue from day to day.
Interest shall be payable in cash by the Issuer upon the earlier to occur of (a)
a Conversion Date, (b) redemption as set forth below, or (c) upon an Event of
Default as defined below. Unless otherwise agreed in writing by both parties
hereto, the interest so payable will be paid to the person in whose name this
Note is registered on the records of the Issuer regarding registration and
transfers of the Note (the "Note Register"), provided, however, that the
Issuer's obligation to a transferee of this Note arises only if such transfer,
sale or other disposition is made in accordance with the terms and conditions
contained in the Exchange Agreement and this Note. All amounts due hereunder
shall be paid in cash in lawful currency of the United States of America.

         Principal and interest are payable at the address last appearing on the
Note Register as designated in writing by the Holder hereof from time to time.

         The Note is subject to the following additional provisions:

         1. The Note is exchangeable for like Notes in equal aggregate principal
amount of authorized denominations, as requested by the Holder surrendering the
same, but shall not be issuable in denominations of less than $50,000 (unless
such amount represents the remaining principal balance outstanding). No service
charge will be made for such registration or transfer or exchange.

         2. The Issuer shall be entitled to withhold from all payments of
principal and/or interest of this Note any amounts required to be withheld under
the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended,
or other applicable laws at the time of such payments.

                                       2
<PAGE>

         3. This Note has been issued subject to investment representations of
the original Holder hereof and may be transferred or exchanged only in
compliance with the Securities Act and applicable state securities laws. Prior
to the due presentment for such transfer of this Note, the Issuer and any agent
of the Issuer may treat the person in whose name this Note is duly registered on
the Note Register as the owner hereof for the purpose of receiving payment as
herein provided and all other purposes, whether or not this Note is overdue, and
neither the Issuer nor any such agent shall be affected by notice to the
contrary. The transferee shall be bound, as the original Holder by the same
representations and terms described herein and under the Exchange Agreement.

         4. The Holder is entitled, at its option, at any time after September
29, 2000 to convert this Note, in whole or in part, into shares of the Issuer's
Class A Common Stock, $.001 par value per share (the "Common Stock") in
accordance with the following terms and conditions:

                  (a) The Holder may exercise its right to convert the Note by
telecopying an executed and completed notice of conversion (the "Notice of
Conversion") to the Issuer and delivering the original Note to the Issuer by
express courier. Each Business Day on which a Notice of Conversion is telecopied
to and received by the Issuer in accordance with the provisions hereof shall be
deemed a "Conversion Date". The Issuer will transmit the certificates
representing shares of Common Stock issuable upon conversion of the Note
(together with the certificates representing the Note not so converted) to the
Holder via express courier, by electronic transfer (if applicable) or otherwise
within five Business Days after the Conversion Date, provided, the Issuer has
received the original Note being so converted. If the Company has not received
the original Note being converted within three Business Days after Conversion
Date, then the Issuer shall transmit the certificates representing the shares of
Common Stock issuable upon conversion of the Note (together with the
certificates representing the Note not so converted) to the Holder via express
courier, by electronic transfer (if applicable) or otherwise within three
Business Days after receipt of the original Note being converted. In addition to
any other remedies which may be available to the Holder, in the event that the
Issuer fails to effect delivery of such shares of Common Stock within (i) five
Business Days after receipt of a Notice of Conversion (provided the Issuer has
received the original Note within three Business Days after the Conversion
Date), or (ii) three Business Days after receipt of the original Note being
converted if the Issuer has not received the original Note being converted
within three Business Days after the Conversion Date, the Holder will be
entitled to revoke the Notice of Conversion by delivering a notice to such
effect to the Issuer whereupon the Issuer and the Holder shall each be restored
to their respective positions immediately prior to delivery of the Notice of
Conversion. The Notice of Conversion and Note representing the portion of the
Note converted shall be delivered as follows:

                  To the Issuer:

                                    Interiors, Inc.
                                    320 Washington Street
                                    Mount Vernon, New York 10553
                                    Telephone:  (914) 665-5400
                                    Facsimile: (914) 665-5469
                                    Attention: President

                                       3
<PAGE>

                  or to such other address as may be communicated by the Issuer
         to the Holder in writing.

                  In the event that the Common Stock issuable upon conversion of
the Note is not delivered to the Holder within (i) seven Business Days after the
Conversion Date (provided the Issuer has received the original Notice of
Conversion and Note within three Business Days after the Conversion Date), or
(ii) three Business Days after receipt of the original Notice of Conversion and
original Note being converted if the Issuer has not received the original Notice
of Conversion and original Note being converted within three Business Days after
the Conversion Date (and assuming the Holder has not revoked such Notice of
Conversion as permitted above), the Issuer shall pay to the Holder, in
immediately available funds, upon demand, as liquidated damages for such failure
and not as a penalty, for each $100,000 principal amount of Note sought to be
converted, $250 for each calendar day that the shares of Common Stock are not
delivered, which liquidated damages shall run from the eighth Business Day after
the Conversion Date up until the time that either the Notice of Conversion is
revoked or the Common Stock is delivered, at which time such liquidated damages
shall cease. Any and all payments required pursuant to this paragraph shall be
payable only in cash immediately. The Holder's right to liquidated damages
pursuant to the terms of this Section shall in no way affect the Holder's right
pursuant to Section 7 below to consider this Note immediately due and payable
upon the occurrence of an Event of Default (as defined in Section 7 below).

                  (b) The Holder may, at its sole option convert this Note into
that number of shares of fully paid and nonassessable shares of Common Stock
(the "Conversion Shares") which is to be derived from dividing the Conversion
Amount by the Conversion Price. For purposes of this Note, the term "Conversion
Amount" shall mean the principal dollar amount of the Note being converted. The
"Conversion Price" shall be equal to eighty-five percent (85%) of the lesser of
(i) the closing Bid Price of the Common Stock of the Issuer on December 27,
2001, or (ii) the average closing Bid Prices of the Common Stock of the Issuer
for the five (5) consecutive trading days immediately preceding a Conversion
Date, as such Conversion Price shall be adjusted pursuant to the terms hereof;
provided, that if the Issuer merges with or acquires an entity with a
pre-acquisition valuation of fifteen million dollars ($15,000,000) or more (a
"Significant Transaction"), then such Conversion Price will be fixed based upon
a discount mutually agreed upon by the Issuer and the Holder from the closing
price of the Common Stock of the Issuer prior to the date of consummation of
such Significant Transaction. The "Bid Price" shall be deemed to be the reported
last bid price regular way of the Common Stock as reported by Bloomberg LP or if
unavailable, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, the closing bid price
as reported by Nasdaq or such other system then in use, or, if the Common Stock
is not quoted by any such organization, the closing bid price in the
over-the-counter market as furnished by the principal national securities
exchange on which the Common Stock is traded. The principal amount of this Note
shall be reduced as per that principal amount indicated on the Notice of
Conversion upon the proper receipt by the Holder of such shares of Common Stock
due upon such Notice of Conversion.

                                       4
<PAGE>

                  (c) Upon each adjustment of the Conversion Price, the Holder
shall thereafter be entitled to (but not obligated to) receive upon conversion
of this Note, at the Conversion Price resulting from such adjustment, the number
of shares of Common Stock obtained by (i) multiplying the Conversion Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock receivable hereunder immediately prior to such adjustment and (ii)
dividing the product thereof by the Conversion Price resulting from such
adjustment.

                  (d) The Conversion Price shall be adjusted as follows:

                           (i) In the case of any amendment to the Issuer's
Certificate of Incorporation to change the designation of the Common Stock or
the rights, privileges, restrictions or conditions in respect to the Common
Stock or division of the Common Stock, this Note shall be adjusted so as to
provide that upon exercise thereof, the Holder shall receive, in lieu of each
share of Common Stock theretofore issuable upon such conversion, the kind and
amount of shares, other securities, money and property receivable upon such
designation, change or division by the Holder issuable upon such conversion had
the conversion occurred immediately prior to such designation, change or
division. This Note shall be deemed thereafter to provide for adjustments, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section. The provisions of this Subsection (i) shall apply in the
same manner to successive reclassifications, changes, consolidations and
mergers.

                           (ii) If the Issuer shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares of Common
Stock, or declare a dividend or make any other distribution upon the Common
Stock payable in shares of Common Stock, the Conversion Price in effect
immediately prior to such subdivision or dividend or other distribution shall be
proportionately reduced, and conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller number of shares of Common Stock,
the Conversion Price in effect immediately prior to such combination shall be
proportionately increased.

                           (iii) If any capital reorganization or
reclassification of the capital stock of the Issuer, or any consolidation or
merger of the Issuer with or into another corporation or other entity, or the
sale of all or substantially all of the Issuer's assets to another corporation
or other entity shall be effected in such a way that holders of shares of Common
Stock shall be entitled to receive stock, securities, other evidence of equity
ownership or assets with respect to or in exchange for shares of Common Stock,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale (except as otherwise provided below in this Section) lawful and
adequate provisions shall be made whereby the Holder shall thereafter have the
right to receive upon the conversion hereof upon the basis and upon the terms
and conditions specified herein, such shares of stock, securities, other
evidence of equity ownership or assets as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of Common Stock immediately theretofore receivable upon
the conversion of this Note under this Section had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in any such
case appropriate provisions shall be made with respect to the rights and
interests of the holder to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Conversion Price and of
the number of shares of Common Stock receivable upon the conversion of this
Note) shall thereafter be applicable, as nearly as may be, in relation to any
shares of stock, securities, other evidence of equity ownership or assets
thereafter deliverable upon the exercise hereof including an immediate
adjustment, by reason of such consolidation or merger, of the Conversion Price
to the value for the Common Stock reflected, by the terms of such consolidation
or merger if the value so reflected is less than the Conversion Price in effect
immediately prior to such consolidation or merger. Subject to the terms of this
Note, in the event of a merger or consolidation of the Issuer with or into
another corporation or other entity as a result of which the number of shares of
common stock of the surviving corporation or other entity issuable to investors
of Common Stock, is greater or lesser than the number of shares of Common Stock
of the Issuer outstanding immediately prior to such merger or consolidation,
then the Conversion Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as though there were a
subdivision or combination of the outstanding shares of Common Stock. The Issuer
shall not effect any such consolidation, merger or sale, unless, prior to the
consummation thereof, the successor corporation (if other than the Issuer)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument the obligation to deliver to the
Holder such shares of stock, securities, other evidence of equity ownership or
assets as, in accordance with the foregoing provisions, the Holder may be
entitled to receive or otherwise acquire. If a purchase, tender or exchange
offer is made to and accepted by the holders of more than fifty (50%) percent of
the outstanding shares of Common Stock, the Issuer shall not effect any
consolidation, merger or sale with the person having made such offer or with any
affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the Holder shall have been given a reasonable
opportunity to then elect to receive upon the conversion of this Note the amount
of stock, securities, other evidence of equity ownership or assets then issuable
with respect to the number of shares of Common Stock in accordance with such
offer.

                                       5
<PAGE>

                           (iv) In case the Issuer shall, at any time prior to
conversion of this Note, consolidate or merge with any other corporation or
other entity (where the Issuer is not the surviving entity) or transfer all or
substantially all of its assets to any other corporation or other entity, then
the Issuer shall, as a condition precedent to such transaction, cause effective
provision to be made so that the Holder upon the conversion of this Note after
the effective date of such transaction shall be entitled to receive the kind
and, amount of shares, evidences of indebtedness and/or other securities or
property receivable on such transaction by the Holder of the number of shares of
Common Stock as to which this Note was convertible immediately prior to such
transaction (without giving effect to any restriction upon such exercise); and,
in any such case, appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the provisions of this Note shall
thereafter be applicable (as nearly as may be practicable) with respect to any
shares, evidences of indebtedness or other securities or assets thereafter
deliverable upon conversion of this Note. Upon the occurrence of any event
described in this Subsection (iv), the Holder shall have the right to (i)
convert this Note immediately prior to such event at a Conversion Price equal to
the lesser of (a) the then Conversion Price or (b) the price per share of Common
Stock paid in such event, (ii) retain ownership of this Note, in which event,
appropriate provisions shall be made so that this Note shall be convertible at
the Holder's option into shares of stock, securities or other equity ownership
of the surviving or acquiring entity, or (iii) force redemption of the then
outstanding principal amount of this Note in accordance with the provisions of
Section 18 below.

                                       6
<PAGE>

                           (v) Whenever the Conversion Price shall be adjusted
pursuant to this Section the Issuer shall promptly mail by registered or
certified mail, return receipt requested, to the Holder a certificate signed by
its President or Vice President and by its Treasurer, or Secretary, setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board of Directors of the Issuer made any
determination hereunder), and the Conversion Price after giving effect to such
adjustment, and shall cause copies of such certificates to be mailed (by
first-class mail, postage prepaid) to the Holder. The Issuer shall make such
certificate and mail it to the Holder immediately after each adjustment.

                  (e) The Issuer will not, by amendment of its Certificate of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Issuer, but will
at all times in good faith assist in the carrying out of all the provisions of
this Note and in taking of all such action as may be necessary or appropriate in
order to protect the conversion rights of the Holder against impairment.

                  (f) In the event of any liquidation, dissolution or winding up
of the Issuer, whether voluntary or involuntary, before any distribution may be
made with respect to the Issuer's Common Stock or any other class of common
stock or preferred stock of the Issuer, the Holder shall be entitled to receive
out of the assets available for distribution to shareholders an amount in cash
equal to the Redemption Price of such principal amount of Note then outstanding
(the "Liquidation Amount"). If any portion of the principal amount of this Note
shall have been prepaid or converted into Common Stock prior to such
liquidation, dissolution or winding up, the interest component of the
Liquidation Amount pursuant to clause (ii) above shall be calculated annually
based on the average principal amount of this Note which shall be outstanding
during each consecutive twelve month period from the date of issuance of this
Note to the date immediately prior to such liquidation, dissolution or winding
up of the Company. If the assets of the Company available for distribution to
shareholders shall be insufficient to pay the Holder the full Liquidation Amount
to which they shall be entitled, then any such distribution of assets of the
Issuer shall be distributed ratably to all of the holders of the Notes. After
the payment of the Liquidation Amount shall have been made in full to the Holder
or funds necessary for such payment shall have been set aside by the Issuer in
trust for the account of holders of the Notes so as to be available for such
payments, the holders of the Notes shall be entitled to no further participation
in the distribution of the assets of the Issuer, and the remaining assets of the
Issuer legally available for distribution to shareholders shall be distributed
among the holders of Common Stock and any other classes or series of Common
Stock or preferred stock of the Issuer in accordance with their respective
terms.

         5. No provision of this Note shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, upon an Event of Default (as
defined below), to pay the principal of, and interest on this Note at the place,
time, and rate, and in the coin or currency herein prescribed.

                                       7
<PAGE>

         6. The Issuer hereby expressly waives demand and presentment for
payment, notice on nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, and diligence in taking any
action to collect amounts called for hereunder and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder.

         7. If one or more of the following described events (each of which
being an "Event of Default" hereunder) shall occur and shall be continuing (as
set forth below) for a period of seven Business Days after notice from the
Holder:

                  (a) any of the representations, covenants, or warranties made
         by the Issuer herein, or in the Agreement (including all Exhibits
         annexed thereto) shall have been incorrect when made; or

                  (b) any of the representations, covenants, or warranties made
         by the Debtor or any of the Subsidiaries in the Amended and Restated
         Security Agreement shall have been incorrect when made in any material
         respect; or

                  (c) the Issuer shall breach, fail to perform, or fail to
         observe in any material respect any material covenant, term, provision,
         condition, agreement or obligation of the Issuer under this Note (or
         any security of the Issuer held by the Holder), the Amended and
         Restated Security Agreement, the Registration Rights Agreement entered
         into between the Issuer and the Holder, dated December ___, 1999 (the
         "Registration Rights Agreement"), and the Exchange Agreement, between
         the parties; or

                  (d) Any of the Subsidiaries shall breach, fail to perform, or
         fail to observe in any material respect any material covenant, term,
         provision, condition, agreement or obligation to be performed by them
         under the Amended and Restated Security Agreement between the parties
         of even date herewith; or

                  (e) a trustee, liquidator or receiver shall be appointed for
         the Issuer (and/or any of the Subsidiaries) or for a substantial part
         of its property or business without its consent and shall not be
         discharged within thirty (30) calendar days after such appointment; or

                  (f) any governmental agency or any court of competent
         jurisdiction at the instance of any governmental agency shall assume
         custody or control of the whole or any substantial portion of the
         properties or assets of the Issuer (and/or any of the Subsidiaries) and
         shall not be dismissed within thirty (30) calendar days thereafter; or

                  (g) bankruptcy, reorganization, insolvency or liquidation
         proceedings or other proceedings for relief under any bankruptcy law or
         any law for the relief of debtors shall be instituted by or against the
         Issuer (and/or any of the Subsidiaries) and, if instituted against the
         Issuer (and/or any of the Subsidiaries), Issuer (and/or any of the
         Subsidiaries) shall by any action or answer approve of, consent to or
         acquiesce in any such proceedings or admit the material allegations of,
         or default in answering a petition filed in any such proceeding or such
         proceedings shall not be dismissed within thirty (30) calendar days
         thereafter; or

                                       8
<PAGE>

                  (h) the Common Stock is suspended and/or delisted from trading
         on the OTC Bulletin Board, or the Issuer has received notice of final
         action concerning delisting from the OTC Bulletin Board, unless in each
         such instance, the Issuer's Common Stock shall be listed on the Nasdaq
         Small Cap Market, the Nasdaq National Market, the American Stock
         Exchange or the New York Stock Exchange within seven business days from
         such suspension and/or delisting on the OTC Bulletin Board; or

                  (i) the Registration Statement including the shares of Common
         Stock underlying this Note has not been declared effective by the
         Securities and Exchange Commission by June 30, 2002, or the
         effectiveness of such Registration Statement shall be suspended for
         more than seven consecutive business days; or

                  (j) the Issuer shall have failed to pay interest within five
         Business Days of when due hereunder and/or principal within three
         Business Days of when due hereunder and/or comply with the redemption
         provisions contained herein within three Business Days of when due
         hereunder; in each case, upon receipt of written notice of such payment
         default; or

                  (k) the Issuer shall have failed to timely deliver shares of
         Common Stock issuable upon conversion of the Notes and/or exercise of
         the Warrants issued by the Issuer pursuant to the terms of this Note
         and the Warrants; or

                  (l) the Issuer, or any other party, shall, at any time after
         the Amendment Date, (i) in any way materially and adversely alter
         Holder's security interest that it has been granted in the Collateral
         pursuant to the Amended and Restated Security Agreement, or (ii) sell,
         transfer or convey the Collateral; or

                  (m) the Company and/or any of the Subsidiaries shall cease
         operations, cease to operate as a going concern, terminate its
         corporate existence, or sell, transfer and/or convey all or
         substantially all of its assets, or either shall combine with another
         entity whereby the Issuer is not the surviving entity; or

                  (n) a judgment in excess of $100,000 shall be entered against
         Debtor and/or Subsidiary or a warrant of execution or similar process
         shall be issued or levied against its property and within thirty (30)
         days after such judgment, warrant or process shall not have been paid
         in full or proper appeal of the same made; or

                  (o) the occurrence of any "Event of Default" as that term is
         defined in the Amended and Restated Security Agreement,

                                       9
<PAGE>

         then, or at any time thereafter, and in each and every such case,
         unless such Event of Default shall have been cured or waived in writing
         by the Holder (which waiver shall not be deemed to be a waiver of any
         subsequent default) or cured as provided herein, at the option of the
         Holder, and in the Holder's sole discretion, the Holder may consider
         the entire principal amount of this Note (and all interest through such
         date) immediately due and payable in cash, at the cash equivalent of
         the Redemption Price for such then outstanding principal amount of
         Note, (or the Holder shall be entitled to recover from the Collateral
         as per the terms of the Amended and Restated Security Agreement, but
         shall be entitled to enforce its rights hereunder in the event the
         Collateral is insufficient to the amounts due and owing as aforesaid)
         without presentment, demand protest or notice of any kind, all of which
         are hereby expressly waived, anything herein or in any note or other
         instruments contained to the contrary notwithstanding, and Holder may
         immediately, and without expiration of any period of grace, enforce any
         and all of the Holder's rights and remedies provided herein or any
         other rights or remedies afforded by law (including but not limited to
         consequential damages if any). It is agreed that in the event of such
         action, such Holder shall be entitled to receive all reasonable fees,
         costs and expenses incurred, including without limitation such
         reasonable fees and expenses of attorneys. Nothing contained herein
         shall limit the rights of the Holder to collect liquidated damages as
         provided herein or in any other agreement entered into between the
         Holder and the Issuer, or any other damages that the Holder may
         otherwise be entitled to under the terms of this Note, the Exchange
         Agreement or the Amended and Restated Security Agreement.

         8. In case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or
impaired thereby.

         9. [this section intentionally left blank]

         10. This Note, together with all documents referenced herein, embodies
the full and entire understanding and agreement between the Issuer and Holder
with respect to the subject matter hereof and supersedes all prior oral or
written agreements and understandings relating to the subject matter hereof.
Neither this Note nor any terms hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Issuer and the
Holder. All capitalized terms not otherwise defined herein shall have the same
meaning as given in the Exchange Agreement. In the event of any inconsistencies
between this Note and the Exchange Agreement, the Note shall control. No
statement, representation, warranty, covenant or agreement of any kind not
expressly set forth in this Note shall affect, or be used to interpret, change
or restrict, the express terms and provisions of this Note.

         11. This Note will be exclusively construed and enforced in accordance
with and governed exclusively by the laws of the State of New York, except for
matters arising under the Securities Act, without reference to principles of
conflicts of law. Each of the parties consents to the exclusive jurisdiction of
the U.S. District Court sitting in the Southern District of the State of New
York sitting in Manhattan in connection with any dispute arising under this Note
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 the
other party to this Note 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 Note 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. Each party waives its right to a trial by jury.

                                       10
<PAGE>

         12. The convertibility of this Note shall be restricted such that,
during such time as the Issuer is a reporting company under the Securities
Exchange Act of 1934, as amended, that portion of the Note which, if otherwise
converted, would result in Holder owning 4.99% or more of the then issued and
outstanding Common Stock, shall not be convertible until the Holder is not an
owner of 4.99% or more of the then issued and outstanding Common Stock.

         13. In the event the Issuer, at any time while this Note is
outstanding, shall issue any shares of Common Stock (or any instrument
convertible into Common Stock), otherwise than: (i) pursuant to options,
warrants, instruments and agreements under which convertible notes and/or shares
of convertible preferred stock of the Issuer were issued, or other obligations
to issue shares of Common Stock as of the Issuance Date, all as described in the
SEC filings made by the Issuer within twelve months prior to the Issuance Date,
or (ii) all shares reserved for issuance pursuant to the Issuer's stock option,
incentive, or other similar plan, which plan and which grant was in effect as of
the Issuance Date and approved by the Board of Directors of the Issuer ((i) and
(ii) collectively referred to as the "Existing Obligations"), for a
consideration less than the Conversion Price that would be in effect at the time
of such issue, then, and thereafter successively upon each such issue, the
Conversion Price shall be amended from then on to be equal to the lesser of (i)
one hundred (100%) percent of the average of the Bid Prices during the five
consecutive trading days immediately preceding a Conversion Date, or (ii) the
resulting quotient from the following formula: (y) the number of shares of
Common Stock outstanding immediately prior to such issue shall be multiplied by
the Conversion Price in effect at the time of such issue and the product shall
be added to the aggregate consideration, if any received by the Issuer upon such
issue of additional shares of Common Stock; and (z) the sum so obtained shall be
divided by the number of shares of Common Stock outstanding immediately after
such issue. Except for the Existing Obligations, and options that may be issued
under any employee incentive stock option and/or any qualified stock option plan
adopted by the Issuer, for the purposes of this adjustment, the issuance of any
security of the Issuer carrying the right to convert such security into shares
of Common Stock or of any warrant, right, or option to purchase Common Stock
shall result in an adjustment to the Conversion Price upon issuance of shares of
Common Stock upon the Holder's exercise of its conversion rights.

                                       11
<PAGE>

         14. In the event the Holder shall elect to convert any portion of this
Note as provided herein, the Issuer cannot refuse conversion based on any claim
that the Holder or anyone associated or affiliated with the Holder has been
engaged in any violation of law, unless an injunction from a court, restraining
and/or enjoining conversion of all or part of said portion of this Note shall
have been issued and the Issuer posts a surety bond for the benefit of the
Holder in the amount of 130% of the principal amount of the Note sought to be
converted plus outstanding interest through such date, which is subject to the
injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to the Holder in the event it obtains a favorable judgment (but shall not in any
way limit any additional damages the Holder may be entitled to).

         15. Upon receipt by the Issuer of evidence of the loss, theft,
destruction or mutilation of any Note certificate(s), and (in the case of loss,
theft or destruction) of indemnity or security reasonably satisfactory to the
Issuer, and upon the cancellation of the Note certificate(s), if mutilated, the
Issuer shall execute and deliver new certificates for Note(s) of like tenure and
date.

         16. This Note does not entitle the Holder to any voting rights or other
rights as a shareholder of the Issuer prior to the conversion into Common Stock
thereof, except as provided by applicable law. If, however, at the time of the
surrender of this Note and conversion the Holder hereof shall be entitled to
convert this Note, the shares of Common Stock so issued shall be and be deemed
to be issued to the Holder as the record owner of such shares as of the close of
business on the Conversion Date.

         17. Except as expressly provided herein or as required by law, so long
as this Note remains outstanding, the Issuer shall not, without the approval by
vote or written consent by the Holder, take any action that would adversely
affect the rights, preferences or privileges of this Note.

          18. The Issuer shall have the right to redeem this Note, in whole or
in part (except that portion of the principal amount of this Note that is the
subject of a Notice of Conversion which has previously been sent to the Issuer),
in cash at the Redemption Price (as defined below) at any time by thereafter
providing written notice (the "Redemption Notice") to the Holder. The Issuer
shall wire transfer the appropriate amount of funds to the Holder to complete
the redemption, which shall be (if the Redemption Notice is received via
facsimile by the Holder prior to the first anniversary of the Issuance Date) no
later than the tenth Business Day after the Holder has received the Redemption
Notice via facsimile (the "Redemption Date") and if the Redemption Notice is
received via facsimile by the Holder after the first anniversary of the Issuance
Date no later than the third Business Day after the Holder has received the
Redemption Notice via facsimile (also referred to as a Redemption Date. Upon
facsimile receipt of the Redemption Notice, the Holder's right to convert this
Note shall terminate and be canceled immediately; provided, however, that the
right to convert this Note shall immediately be reinstated if the Issuer fails
to comply with the redemption provisions hereof. In the event the Issuer fails
to wire the appropriate amount of funds to the Holders as set forth in the
Redemption Notice on or before the Redemption Date, or shall otherwise fail to
comply with the redemption provisions set forth herein on three separate
occasions, then the Issuer shall have waived its right to redeem any portion of
this Note at any time thereafter (the foregoing shall have not be deemed as a
waiver by the Holder of any rights it may have under Section 7 herein).

                                       12
<PAGE>

                  The Redemption Notice shall set forth (i) the Redemption Date,
(ii) the Redemption Price, as defined below, and (iii) the principal amount of
the Note being redeemed. The Redemption Notice shall be irrevocable, and it
shall be delivered by facsimile to the Holder at its address as the same shall
appear on the books of the Issuer.

                  The Redemption Price shall be equal to the sum of (a) the
entire outstanding principal amount of this Note being redeemed, (b) any and all
payment due to the Holder from the Issuer pursuant to the terms of the Exchange
Agreement, and (c) all accrued and unpaid interest on this Note.

                  At the close of business on the Redemption Date, subject to
the Holder's receipt of the applicable Redemption Price, the portion of this
Note being redeemed shall be automatically canceled and converted into a right
to receive the Redemption Price, and all rights of this Note, including the
right to conversion shall cease without further action. Immediately following
the Redemption Date (assuming full compliance by the Issuer with the redemption
provisions set forth herein), the Holder shall surrender its original Note at
the office of the Issuer, and the Issuer shall issue to the Holder a new Note
certificate for the principal amount that remains outstanding, if any.

         The Issuer shall not be entitled to send any Redemption Notice and
begin the redemption procedure hereunder unless it has:

                  (i) the full amount of the Redemption Price in cash, available
         in a demand or other immediately available account in a bank or similar
         financial institution;

                  (ii) immediately available credit facilities, in the full
         amount of the Redemption Price with a bank or similar financial
         institution; or

                  (iii) a combination of the items set forth in (a) and (b)
         above, aggregating the full amount of the Redemption Price.

         19. The Original Note has been cancelled and is hereby rendered null
and void and of no further force and effect, and is superseded by this Amended
and Restated Secured Convertible Note in all respects.

               [the balance of this page intentionally left blank]

                                       13
<PAGE>

                  IN WITNESS WHEREOF, the Issuer has caused this Amended and
Restated Secured Convertible Note to be duly executed by an officer thereunto
duly authorized.

                                            INTERIORS, INC.

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

Date:  December ____, 2001

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