March 18, 1996 Mr. Max Munn President Decor Group, Inc. 320 Washington Street Mt. Vernon, NY 10553 Re: Bridge Loan Dear Mr. Munn: This letter summarizes our agreement as follows: 1. Bridge Loan. Upon the execution of this letter, the undersigned ("Lender") shall loan (the "Loan")___________________________________________ to Decor Group, Inc., a Delaware corporation (the "Company"), pursuant to the terms of a certain promissory note in the amount of ____________ (i) payable on the earlier of March 18, 1997 or (ii) the closing of the Company's next public offering (the "Note"). The form of the Note is attached hereto as Exhibit A. Concurrently, with the execution of this letter, the Company shall execute and deliver the Note to Lender. 2. Issuance of Bridgeholder's Warrants. As additional consideration, solely for making the Loan, the Company hereby grants to Lender the right to receive ____________________ Class A Redeemable Common Stock Purchase Warrants (the "Bridgeholder's Warrants") of the Company. The terms and conditions of the Bridgeholder Warrants will be identical to the terms and conditions of the Class A Warrants being offered to the public pursuant to the Company's next Public Offering (the "Public Offering"). At any time following the date on which the next registration statement (the "Registration Statement") filed by the Company with the Securities and Exchange Commission (the 1 Mr. Max Munn March 18, 1996 "Commission") under the Securities Act of 1933, as amended (the "Securities Act") is declared effective by the Commission, Lender may exercise its right to receive the Bridgeholder's Warrants by delivering notice thereof to the Company and the Company will deliver to Lender certificates representing each of the Bridgeholder's Warrants. 3. Registration Rights. The Company agrees to include the Bridgeholder's Warrants and the shares of the Common Stock issuable upon exercise of the Bridgeholder's Warrants (collectively, the "Registrable Securities"), in the Registration Statement at no cost or expense to Lender. Anything in this Section 3 to the contrary notwithstanding, in the event that the managing underwriter of the Public Offering informs the Company in writing that the inclusion of the Registrable Securities in the Public Offering will result in the inability to effect the Public Offering or qualify the Public Offering in one or more states which such managing underwriter, in its sole discretion, deems necessary for the Public Offering to proceed, Lender shall agree to withhold some or all of the Registrable Securities from registration in accordance with the instructions of such managing underwriter. In such event, upon Lender's request, the Company shall file a registration statement with the Commission for the purpose of registering the Registrable Securities as soon as practicable after the closing date of such Public Offering at no cost or expense to Lender. Lender agrees not to sell, pledge, hypothecate, encumber or otherwise dispose of any of the Registrable Securities for a period of thirteen (13) months following the Effective Date, subject to earlier release at the discretion of the underwriter of the Initial Public Offering. 4. Representations of Lender. Lender represents that he is acquiring the Bridgeholder's Warrants for investment purposes only and not with a view to any resale or public distribution thereof. Lender has had full access to the books and records of the Company and has had the opportunity to question the officers, counsel and independent accountants of the Company. Lender is an "accredited investor" as defined in section 2(15) of the Securities Act and Regulation D promulgated by the Commission. 5. Security. As collateral for the Loan, the Company agrees that Lender shall have a security interest in 200,000 shares of common stock and 200,000 shares of Class A preferred stock of Interiors, Inc., all of which are owned by the Company, free and clear of any other liens or encumbrances, other than those created simultaneously herewith in connection with bridge loans to the Company aggregating no more than $250,000. The Company shall make all filings, at the Company's expense, which are necessary to reflect such security interest. In addition, in the event of a default by the Company hereunder or under the Note, Laurie Munn shall personally guarantee all of the Company's obligations due under the Note. 6. Governing Law; Jurisdiction and Venue. Regardless of the place of execution or performance, this letter and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to such State's conflicts of laws provisions. Each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and state courts located in the State of New York, County of New York. Please acknowledge your consent to the foregoing terms by countersigning the enclosed duplicate copy of this letter and returning it to us together with the Notes. Very truly yours, By:_____________________________ Name: Title: AGREED TO AND ACKNOWLEDGED: DECOR GROUP, INC. By:_____________________________ Max Munn, President As to Paragraph 5 Above: ________________________________ Laurie Munn