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                                 CML GROUP, INC.
                                 AMENDMENT NO. 1
                                       TO
                          COMMON STOCK PURCHASE WARRANT
                                      NO. 3


     AMENDMENT NO. 1, dated as of July 27, 1998, to the Common Stock Purchase
Warrant No. 3, dated as of March 11, 1998, (the "WARRANT"), executed by CML
GROUP, INC., a Delaware corporation ("COMPANY"), in favor of FSC Corp.
("HOLDER").

     The Company and the Holder hereby agree as follows:

     1. The number of shares of Common Stock for which the Warrant shall be
exercisable as of the date of this Amendment No. 1 ("AMENDMENT") shall be
576,300. The first paragraph of the Warrant is hereby amended accordingly.

     2. The following new ss.7.1 is hereby added to the Warrant in appropriate
order:

         SS.7.1. GENERAL. If (and on each occasion that) at any time during the
     period commencing July 27, 1998 and ending on the earlier to occur of
     August 1, 1999 or the date all the obligations under the Credit Agreement
     have been paid in full there shall occur any issuance or sale of any shares
     of Common Stock (including pursuant to any options, warrants or other
     rights exercisable for shares of Common Stock) or any shares of other
     classes of capital stock of the Company or other securities or rights then
     convertible into or exercisable for shares of Common Stock, or there shall
     be any adjustment to any conversion rate for any convertible securities
     convertible into or exercisable for Common Stock, so that in any such case
     the total number of shares of Common Stock on a Fully-Diluted Basis
     immediately following such issuance, sale or adjustment exceeds the total
     number of shares of Common Stock on a Fully-Diluted Basis as of July 27,
     1998 immediately following the effectiveness of Amendment No. 1 to this
     Warrant, the issuance of the July 1998 Securities and the cancellation of
     certain Warrants issued to Rothschild Recovery Group, L.P., then the number
     of shares of Common Stock to be received by the holder of this Warrant
     shall be appropriately and automatically adjusted such that, with respect
     to the unexercised portion of this Warrant the proportion of (a) the number
     of shares of Common Stock issuable hereunder immediately prior to such
     event or transaction to (b) the total number of shares of Common Stock of
     the Company on a Fully-Diluted Basis immediately prior to such event or
     transaction is equal to the proportion of (x) the number of shares of
     Common Stock issuable hereunder immediately after such event or transaction
     to (y) the total number of shares of Common Stock on a Fully-Diluted Basis
     immediately after such event or transaction and the Exercise Price shall be
     appropriately adjusted such that the aggregate Exercise Price for the total
     number of shares of Common Stock of the Company issuable hereunder
     immediately prior to such event or transaction is equal to the aggregate
     Exercise Price for the total number of shares


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of Common Stock of the Company issuable hereunder immediately after such event
or transaction. No adjustment to the number of shares of Common Stock to be
received by the holder of this Warrant or to the Exercise Price shall be made
pursuant to this ss.7.1 as a result of any transaction for which an adjustment
shall be required under ss.6, the other provisions of ss.7 or ss.8. For purposes
of this ss.7.1, any amendment to the exercise or conversion price or any other
re-pricing of any of the Excluded Securities shall constitute an issuance of
securities exercisable for or convertible into Common Stock. Upon any such
amendment or re-pricing, such securities shall no longer constitute Excluded
Securities hereunder.

The existing provisions of ss.7 shall be re-numbered (i.e. ss.7.2 ET SEQ.), as
appropriate.

     1. The following new defined terms are hereby added to ss.12:

         EXCLUDED SECURITIES means the 5 1/2% Subordinated Debentures Due 2003
     of the Company.

         FULLY-DILUTED BASIS means, with respect to the Common Stock of the
     Company at any time, the number of issued and outstanding shares of Common
     Stock at such time, calculated assuming (i) the exercise in full of the
     Warrants (as defined in the Warrant Agreement), and (ii) the conversion
     into shares of Common Stock of all shares of other classes of capital stock
     of the Company or other securities then convertible into shares of Common
     Stock (other than Excluded Securities) and (iii) the exercise in full of
     all options, warrants, convertible securities or other rights for the
     issuance of shares of Common Stock (other than Excluded Securities).

         JULY 1998 SECURITIES means, collectively, (i) the Secured Redeemable
     Subordinated Note, dated July 27, 1998, issued by the Company to the State
     of Wisconsin Investment Board, and (ii) the 11,814,718 shares of Common
     Stock of the Company issued by the Company as of July 27, 1998 to certain
     funds advised or managed by DDJ Capital Management, LLC.

     1. The Warrant Agreement is hereby amended in each of the following
respects:

     a.  the reference to "400,000" set forth in the definition of "Minimum
         Number" is hereby amended to read "200,000"; and

     b.  the reference to "$1,000,000" set forth in ss.8.1(a)(i) is hereby
         amended to read "$500,000."

     1. The Company hereby represents and warrants to the Holder and covenants
with the Holder that:

     a.  The SCHEDULE attached hereto lists and describes the authorized capital
         stock of the Company on and as of the date hereof, and all securities
         exercisable for or convertible into capital stock of the Company (other
         than Excluded Securities), after giving effect to this Amendment, the
         issuance of the July 1998 Securities


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         and the cancellation of Warrants issued to Rothschild Recovery
         Group, L.P.;

     b.  the execution and delivery by the Company of this Agreement and the
         performance by the Company of its agreements and obligations under this
         Agreement, the Warrant Agreement and the Warrant have been duly and
         properly authorized by all necessary corporate or other action on the
         part of the Company, and do not and will not conflict with, result in
         any violation of, or constitute any default under (i) any provision of
         any governing document of the Company, (ii) any contractual obligation
         of the Company or (iii) any applicable law;

     c.  each of this Amendment, the Warrant Agreement and the Warrant, as
         amended hereby, constitutes the legal, valid and binding obligation of
         the Company, enforceable against the Company in accordance with its
         terms, except as such enforceability may be limited by bankruptcy,
         reorganization, insolvency, moratorium or other similar laws, and to
         general equitable principles; and

     d.  all obligations of the Company under the Warrant Agreement and the
         Warrant are hereby ratified and confirmed in all respects.

     1. Except as otherwise expressly provided herein, all of the terms,
conditions and provisions of the Warrant and the Warrant Agreement, and all the
rights of the Holder thereunder, shall remain unchanged.


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     IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT NO. 1 TO
COMMON STOCK PURCHASE WARRANT NO. 3 to be executed by their respective
authorized officers as of the date first above written.



COMPANY:                                          HOLDER:



CML GROUP, INC.                                   FSC CORP.





By: _____________________________                 By: __________________________
Name:                                                 Name:
Title:                                                Title