Document:

<PAGE>

                                                                    EXHIBIT 10.1

                                FOURTH AMENDMENT
                                       OF
                SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT

         This Fourth Amendment, dated effective as of August 1, 2003, by and
among CROWN CRAFTS, INC. (the "COMPANY"), and BANC OF AMERICA STRATEGIC
SOLUTIONS, INC. (ASSIGNEE OF BANK OF AMERICA, N.A.), THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, and WACHOVIA BANK, NATIONAL ASSOCIATION (SUCCESSOR BY MERGER
TO WACHOVIA BANK, N.A.) (collectively, the "PURCHASERS").

         WHEREAS, the parties hereto have executed and delivered that certain
Subordinated Note and Warrant Purchase Agreement dated as of July 23, 2001, as
amended by First Amendment of Subordinated Note and Warrant Purchase Agreement
dated as of September 28, 2001, Second Amendment of Subordinated Note and
Warrant Purchase Agreement dated as of February 10, 2003 and Global Amendment
Agreement dated as of April 29, 2003 (as so amended, the "PURCHASE AGREEMENT");

         WHEREAS, the Company has requested a modification of, among other
things, the covenants under the Purchase Agreement;

         WHEREAS, the Purchasers are willing to enter into this Amendment
subject to the satisfaction of conditions and terms set forth herein;

         WHEREAS, capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Purchase Agreement; and

         NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.                AMENDMENTS TO PURCHASE AGREEMENT.

         lA.      SECTION 1.01 OF THE PURCHASE AGREEMENT. Section 1.01 of the
Purchase Agreement is amended by deleting the definitions of "Foreign Stock
Pledge Agreement" and "Obligations" and substituting the following therefor

                  "Foreign Stock Pledge Agreement" shall mean, collectively, (i)
         the Foreign Stock Pledge Agreement, substantially in the form of
         Exhibit E, executed by the Company (and, pursuant to Section 7.07, any
         other Obligor creating or acquiring a Direct Foreign Subsidiary), and
         (ii) and if requested by the Required Holders, any pledge or other
         agreement which may be required pursuant to applicable law in the
         jurisdiction in which a Direct Foreign Subsidiary is located, in each
         case to be executed and delivered by the Company and each other Obligor
         which owns any Direct Foreign Subsidiaries, pledging to the agent
         pursuant thereto, for the ratable benefit of the Required Holders
         subject to the Lien of the Senior Lenders, 65% of the capital stock of
         all Direct Foreign Subsidiaries, to secure the payment of all of the
         Obligations, as any of the foregoing may be amended or supplemented
         from time to time.

<PAGE>

                  "Obligations" shall mean all Debts, indebtedness, liabilities,
         covenants, duties and other obligations of the Obligors: (i) to the
         Collateral Agent, any of the Purchasers, or any of their respective
         successors, permitted transferees or permitted assigns, included or
         arising from time to time under this Agreement or any other Transaction
         Document, whether evidenced by any note or other writing, whether
         arising from the extension of credit, opening of a letter of credit,
         acceptance or loan guaranty, including, without limitation, principal,
         interest, Yield-Maintenance Amount, fees, costs, attorney's fees and
         indemnification amounts and any and all extensions or renewals thereof
         in whole or in part, direct or indirect, absolute or contingent, due or
         to become due, primary or secondary, or joint or several; (ii) to any
         Purchaser or Affiliate thereof arising under any Interest Rate
         Protection Agreement with any such Purchaser or Affiliate, including,
         without limitation, any premature termination or breakage or other
         costs with respect thereto; (iii) to any Purchaser and its Affiliates,
         arising in connection with any banking or related transactions,
         services or functions provided to the Company in connection with the
         conduct of the Company's business (excluding extensions of credit
         giving rise to any Debt for money borrowed not related to this
         Agreement or any of the other Transaction Documents).

         lB.      SECTION 8.01(a) OF THE PURCHASE AGREEMENT. Section 8.01(a) of
the Purchase Agreement is amended by deleting it in its entirety and
substituting the following therefor:

                  (a)      Minimum EBITDA. Consolidated EBITDA shall not be less
         than, for each Fiscal Quarter set forth below and the 3 immediately
         preceding Fiscal Quarters, the amount set forth below corresponding to
         such Fiscal Quarter:

<TABLE>
<CAPTION>
------------------------------------------------------------------
         FISCAL QUARTER ENDING                      MINIMUM EBITDA
------------------------------------------------------------------
<S>                                                 <C>
December 29, 2002 through March 28, 2004              $6,885,000

------------------------------------------------------------------
June 27, 2004 through March 27, 2005                  $7,000,000

------------------------------------------------------------------
June 26, 2005 through April 2, 2006                   $7,200,000

------------------------------------------------------------------
July 2, 2006 and each Fiscal Quarter thereafter       $7,400,000

------------------------------------------------------------------
</TABLE>

         lC.      SECTION 2.04 OF THE PURCHASE AGREEMENT. Section 2.04 of the
Purchase Agreement is amended by deleting it in its entirety and substituting
the following therefor:

                  SECTION 2.04. INTEREST ON THE NOTE.

                  (i)      RATE AND PAYMENT. Interest shall accrue at a rate per
                           annum equal to 10% payable in immediately available
                           funds and 1.65% payable by delivery on July 31 of
                           each year of a promissory note in substantially the
                           form of Exhibit A-2 hereto (a "PIK NOTE"). Interest
                           at the rate of 10% shall be payable (i) on the last
                           Business Day of each calendar month, commencing on
                           July 31, 2001 and continuing thereafter until the
                           Notes have been paid in full, (ii) upon any
                           prepayment of any Note to the date of prepayment on
                           the amount prepaid, and (iii) at maturity of the
                           Note, whether by acceleration or otherwise.
                           Notwithstanding anything else contained in this
                           Section 2.04(a), the Company shall make payments with
                           respect to the Notes in immediately available funds
                           at such times and in such minimum amounts as are
                           necessary for the Notes not to have "significant
                           original issue discount" as that term is defined in
                           Section 163(i) of the Code. For this purpose,

                                       2

<PAGE>

                           the issue price of the Notes shall be computed by
                           assuming that the fair market value of the Warrant is
                           as set forth on the Purchaser Schedule hereto.

                  (ii)     DEFAULT RATE. After maturity, whether by acceleration
                           or otherwise, interest shall accrue on the Notes at
                           the Default Rate set forth in Section 3.05 below, all
                           of which shall be paid in immediately available
                           funds.

         lD.      SECTION 8.01(b) OF THE PURCHASE AGREEMENT. Section 8.01(b) of
the Purchase Agreement is amended by deleting it in its entirety and
substituting the following therefor:

                  (b)      Debt/EBITDA Ratio. The Debt/EBITDA Ratio will not
         exceed, at the end of each Fiscal Quarter set forth below, calculated
         as to Debt as of such Fiscal Quarter and calculated as to Consolidated
         EBITDA for such Fiscal Quarter and the 3 immediately preceding Fiscal
         Quarters, the ratio set forth below corresponding to such Fiscal
         Quarter :

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
         FISCAL QUARTER ENDING                  MAXIMUM DEBT/EBITDA RATIO
-------------------------------------------------------------------------
<S>                                             <C>
December 29, 2002 through March 28, 2004              4.75 to 1.00

-------------------------------------------------------------------------
June 27, 2004 through September 26, 2004              4.25 to 1.00

-------------------------------------------------------------------------
December 26, 2004 through March 27, 2005              4.00 to 1.00

-------------------------------------------------------------------------
June 26, 2005 through September 25, 2005              3.75 to 1.00

-------------------------------------------------------------------------
December 25, 2005 through July 2, 2006                3.50 to 1.00

-------------------------------------------------------------------------
October 1, 2006 through December 31, 2006             3.25 to 1.00

-------------------------------------------------------------------------
April 1, 2007 and each Fiscal Quarter thereafter      3.00 to 1.00

-------------------------------------------------------------------------
</TABLE>

2.                CONDITIONS OF EFFECTIVENESS. This Amendment shall be effective
         as of August 1, 2003 (the "EFFECTIVE DATE"), upon the satisfaction of
         the following conditions:

         (a)      the Purchasers shall have received executed originals of this
                  Amendment and the Fifth Amendment, satisfactory to the
                  Required Holders in all respects, to the Credit Agreement,
                  dated as of July 23, 2001, among the Company, Churchill
                  Weavers, Inc., Hamco, Inc. and Crown Crafts Infant Products,
                  Inc., as borrowers, Wachovia Bank, National Association
                  (successor by merger to Wachovia Bank, N.A.), as agent, and
                  Wachovia Bank, National Association (successor by merger to
                  Wachovia Bank, N.A.), Banc of America Strategic Solutions,
                  Inc. (assignee of Bank of America, N.A.) and The Prudential
                  Insurance Company of America, as

                                       3

<PAGE>

                  lenders, each agreement being dated the Effective Date, in
                  form and substance satisfactory to the Purchasers.

         (b)      The Company shall have paid all costs and expenses (including
                  attorney's fees and expenses) incurred by any Purchaser
                  through the Effective Date, pursuant to statements submitted
                  to the Company (which statements may include estimates of time
                  and expenses to be incurred on and after the dates of posting
                  of actual time and expenses set forth therein, which estimated
                  amounts shall be subject to subsequent adjustment to reflect
                  actual time and expenses subsequently posted).

         (c)      The representations and warranties contained herein shall be
                  true on and as of the date hereof; there shall exist on the
                  date hereof, after giving effect to this Amendment, no Event
                  of Default or Default; there shall exist no material adverse
                  change in the business, properties, prospects, operations or
                  condition, financial or otherwise, of the Company or its
                  Subsidiaries since March 31, 2003 other than as reported by
                  the Company in its quarterly reports on Form 10-Q filed with
                  the Securities and Exchange Commission for quarterly periods
                  subsequent to March 31, 2003; and the Company shall have
                  delivered to the Purchasers a certificate signed by a senior
                  officer of the Company to such effect.

3.                REPRESENTATIONS, WARRANTIES AND COVENANTS.

         (a)      The Company hereby restates and renews each of the
                  representations and warranties made by it in the Purchase
                  Agreement, as amended hereby, as though made on and as of the
                  date hereof, with each reference therein to "this Agreement",
                  "hereof', "hereunder", "thereof', "thereunder" and words of
                  like import being deemed to be a reference to the Purchase
                  Agreement as amended hereby.

         (b)      The Company further represents and warrants as follows:

                  (i)      The execution, delivery and performance by the
                           Company of this Amendment are within its corporate
                           powers, have been duly authorized by all necessary
                           corporate action and do not contravene (A) its
                           charter or by-laws, (B) law or (C) any legal or
                           contractual restriction binding on or affecting the
                           Company; and such execution, delivery and performance
                           do not or will not result in or require the creation
                           of any Lien upon or with respect to any of the
                           properties of the Company or any of its Subsidiaries.

                  (ii)     No governmental approval is required for the due
                           execution, delivery and performance by the Company of
                           this Amendment, except for such governmental
                           approvals as have been duly obtained or made and
                           which are in full force and effect on the date hereof
                           and not subject to appeal.

                  (iii)    Each of this Amendment and the Notes constitutes the
                           legal, valid and binding obligations of the Company
                           enforceable against the Company in accordance with
                           their respective terms.

                                       4

<PAGE>

                  (iv)     There are no pending or threatened actions, suits or
                           proceedings affecting the Company or any of its
                           Subsidiaries or the properties of the Company or any
                           of its Subsidiaries before any court, governmental
                           agency or arbitrator, that may, if adversely
                           determined, materially adversely effect the financial
                           condition, properties, business, operations or
                           prospects of the Company and it Subsidiaries,
                           considered as a whole, or affect the legality,
                           validity or enforceability of the Purchase Agreement,
                           as amended by this Amendment.

4.                MISCELLANEOUS.

         4A.      REFERENCE TO AND EFFECT ON THE PURCHASE AGREEMENT. (a) Upon
the effectiveness of this Amendment, on and after the date hereof each reference
in the Purchase Agreement to "this Agreement", "hereunder", "hereof' or words of
like import referring to the Purchase Agreement, and each reference in any other
document to "the Purchase Agreement", "thereunder", "thereof' or words of like
import referring to the Purchase Agreement, shall mean and be a reference to the
Purchase Agreement, as amended hereby.

         (b)      Except as specifically amended above, the Purchase Agreement,
and all other related documents, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed.

         (c)      The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any holder of a Note under the Purchase Agreement or
the Notes, nor constitute a waiver of any provision of any of the foregoing.

         4B.      COSTS AND EXPENSES. The Company agrees to pay on demand all
costs and expenses incurred by the Purchasers or any other holder of a Note in
connection with the preparation, execution and delivery of this Amendment,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel. The Company further agrees to pay on demand all costs and expenses, if
any (including, without limitation, reasonable counsel fees and expenses of
counsel), incurred by the Purchasers or any other any holder of a Note in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Amendment, including, without limitation, counsel fees and
expenses in connection with the enforcement of rights under this paragraph 4B.

         4C.      EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.

         4D.      GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

         4E.      NO DEFAULT OR CLAIMS. To induce the Purchasers to enter into
this Amendment, the Company hereby acknowledges and agrees that, as of the date
hereof, and after giving effect to the terms hereof, there exists (i) no Default
or Event of Default, (ii) no right of offset,

                                       5

<PAGE>

recoupment, defense, counterclaim, claim or objection in favor of the Company
arising out of or with respect to any of the Notes or other obligations of the
Company owed to any holder of a Note, and (iii) each Purchaser has acted in good
faith and has conducted its relationships with the Company in a commercially
reasonable manner in connection with the negotiations, execution and delivery of
this Amendment and in all respects in connection with the Purchase Agreement,
the Company hereby waiving and releasing any such claims to the contrary that
may exist as of the date of this Amendment.

                                       6

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                            CROWN CRAFTS, INC.

                                            By /s/ E. RANDALL CHESTNUT
                                               ---------------------------------
                                               Name:  E. Randall Chestnut
                                               Title: President and CEO

                                            BANC OF AMERICA STRATEGIC
                                            SOLUTIONS, INC. (ASSIGNEE OF BANK OF
                                            AMERICA, N.A.)

                                            By /s/ JOHN F. REGISTER
                                               ---------------------------------
                                               Name: John F. Register
                                               Title: Principal

                                            THE PRUDENTIAL INSURANCE
                                             COMPANY OF AMERICA

                                            By /s/ PAUL G. PRICE
                                               ---------------------------------
                                               Name: Paul G. Price
                                               Title: Vice President

                                            WACHOVIA BANK, NATIONAL
                                            ASSOCIATION (SUCCESSOR BY MERGER TO
                                            WACHOVIA BANK, N.A.)

                                            By /s/ MONICA H. COLE
                                               --------------------------------
                                               Name: Monica H. Cole
                                               Title: Vice President

                                       7<PAGE>

                                                                    EXHIBIT 10.2

                       FIFTH AMENDMENT TO CREDIT AGREEMENT

         THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Fifth Amendment") is
dated as of August 1, 2003 among CROWN CRAFTS, INC., CHURCHILL WEAVERS, INC.,
HAMCO, INC. and CROWN CRAFTS INFANT PRODUCTS, INC. (collectively, the
"Borrowers"), WACHOVIA BANK, NATIONAL ASSOCIATION (successor by merger to
Wachovia Bank, N.A.), as Agent (the "Agent") and WACHOVIA BANK, NATIONAL
ASSOCIATION (successor by merger to Wachovia Bank, N.A.), BANC OF AMERICA
STRATEGIC SOLUTIONS, INC. (assignee of Bank of America, N.A.) and THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, as Lenders (collectively, the "Lenders");

                              W I T N E S S E T H :

         WHEREAS, the Borrowers, the Agent and the Lenders executed and
delivered that certain Credit Agreement, dated as of July 23, 2001, as amended
by First Amendment to Credit Agreement dated as of September 28, 2001, Second
Amendment to Credit Agreement dated as of November 25, 2002, Third Amendment to
Credit Agreement dated as of February 10, 2003 and Global Amendment Agreement
dated as of April 29, 2003 (as so amended, the "Credit Agreement");

         WHEREAS, the Borrowers, the Agent and the Lenders have agreed to
certain amendments to the Credit Agreement, subject to the terms and conditions
hereof;

         NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrowers, the Agent and the
Lenders hereby covenant and agree as follows:

         1. Definitions. Unless otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.

         2. Amendments to Section 1.01A. SECTION 1.01A of the Credit Agreement
hereby is deleted entirely and the following is substituted therefor:

                  The following terms as defined in this SECTION 1.01 pertaining
         to yield maintenance regarding the Term Loan Notes shall, for all
         purposes of this Agreement and any amendment hereto (except as herein
         otherwise expressly provided), have the meanings set forth herein.

                  "Called Principal" means, with respect to any Term Loan Note,
         the principal of such Term Loan Note that is prepaid (i) in connection
         with any payment of principal following a declaration that all

<PAGE>

         principal of the Term Loans is immediately due and payable pursuant to
         SECTION 6.01, (ii) following the commencement of any case under the
         Bankruptcy Code in which any Borrower is the debtor and (iii) where
         mutually agreed by the Borrowers and the Lenders.

                  "Discounted Value" means, with respect to the Called Principal
         of any Term Loan Note, the amount obtained by discounting all remaining
         Scheduled Principal Reduction Amounts with respect to such Called
         Principal from their respective scheduled due dates to the Settlement
         Date with respect to such Called Principal, in accordance with accepted
         financial practice and at a discount factor (as converted to reflect
         the periodic basis on which interest on such Term Loan Note is payable,
         if payable other than on a semi-annual basis) equal to the Reinvestment
         Yield with respect to such Called Principal.

                  "Reinvestment Yield" means, with respect to the Called
         Principal of any Term Loan Note, the yield to maturity implied by (i)
         the yields reported, as of 10:00 A.M. (New York City local time) on the
         Domestic Business Day next preceding the Settlement Date with respect
         to such Called Principal, on the display designated as "Page 678" on
         the Telerate Service (or such other display as may replace page 678 on
         the Telerate Service) for actively traded U.S. Treasury securities
         having a maturity equal to the Remaining Average Life of such Called
         Principal as of such Settlement Date, or if such yields shall not be
         reported as of such time or the yields reported as of such time shall
         not be ascertainable, (ii) the Treasury Constant Maturity Series yields
         reported, for the latest day for which such yields shall have been so
         reported as of the Domestic Business Day next preceding the Settlement
         Date with respect to such Called Principal, in Federal Reserve
         Statistical Release H. 15 (519) (or any comparable successor
         publication) for actively traded U.S. Treasury securities having a
         constant maturity equal to the Remaining Average Life of such Called
         Principal as of such Settlement Date. Such implied yield shall be
         determined, if necessary, by (a) converting U.S. Treasury bill
         quotations to bond-equivalent yields in accordance with accepted
         financial practice and (b) interpolating linearly between Yields
         reported for various maturities. For purposes of this calculation for
         any Term Loan Note, it is agreed that the mandatory prepayment schedule
         applicable to the Term Loan Notes as originally issued (the Scheduled
         Principal Reduction Amounts as set forth in this Agreement as of the
         Closing Date, with a maturity date of June 30, 2006 and the Cash
         Contract Rate as set forth in this Agreement as of the Closing Date)
         shall be used.

                  "Remaining Average Life" means, with respect to the Called
         Principal of any Term Loan Note, the number of years (calculated to the
         nearest one-twelfth year) obtained by dividing (i) such Called
         Principal into (ii) the sum of the products obtained by multiplying (a)
         each of the remaining Scheduled Principal Reduction Amounts of such
         Called Principal (but not of interest thereon) by (b) the number of
         years (calculated to the nearest one-twelfth year) which will elapse
         between the Settlement Date with respect to such Called Principal and
         the scheduled due date of such remaining Scheduled Principal Reduction
         Amounts. For purposes of this calculation for any Term Loan Note, it is
         agreed that the mandatory prepayment schedule applicable to the Term
         Loan Notes as originally issued (the Scheduled Principal Reduction
         Amounts as set forth in this Agreement as of the Closing Date, with a
         maturity date of June 30, 2006 and the Cash Contract Rate as set forth
         in this Agreement as of the Closing Date) shall be used.

                  "Remaining Scheduled Payments" means, with respect to the
         Called Principal of any Term Loan Note, all payments of such Called
         Principal and interest thereon that would be due on or after the
         Settlement Date with respect to such Called Principal if no payment of
         such Called Principal were made prior to its scheduled due date. For
         purposes of this calculation for any Note, it is agreed that the
         Scheduled Principal Reduction Amounts as set forth in this Agreement as
         of the Closing Date, with a maturity date of June 30, 2006 and the Cash
         Contract Rate as set forth in this Agreement as of the Closing Date,
         shall be used.

                  "Settlement Date" means with respect to the Called Principal
         of any Term Loan Note, the date on which such Called Principal is to be
         prepaid pursuant to SECTION 2.09 or 2.10 or is declared to be
         immediately due and payable pursuant to SECTION 6.01, as the context
         requires.

                  "Yield-Maintenance Amount" means, with respect to any Term
         Loan Note, an amount equal to the excess, if any, of the Discounted
         Value of the Called Principal of such Term Loan Note over the sum of
         (i) such Called Principal plus (ii) interest accrued thereon as of
         (including interest due on) the Settlement Date with respect to such
         Called Principal. The Yield-Maintenance Amount shall in no event be
         less than zero. For purposes of this calculation for any Term Loan
         Note, it is agreed that the Scheduled Principal

                                       2

<PAGE>

         Reduction Amounts as set forth in this Agreement as of the Closing
         Date, with a maturity date of June 30, 2006 and the Cash Contract Rate
         as set forth in this Agreement as of the Closing Date, shall be used.

         3. Amendments to SECTION 1.01B. SECTION 1.01B of the Credit Agreement
hereby is amended by deleting the definitions of "Consolidated Excess Cash
Flow", "Eligible Accounts", "Foreign Stock Pledge Agreement", "Obligations",
"Revolving Loan Termination Date", "Scheduled Principal Reduction Amount" and
"Senior Officer", and substituting therefor the following new definition of such
terms:

                  "Consolidated Excess Cash Flow" means, for each Annual Period,
         (i) Consolidated Available Free Cash Flow for such Annual Period, minus
         (ii) Cash Interest paid during such Annual Period, minus (iii) the
         aggregate of the Minimum Principal Reduction Amounts paid during such
         Annual Period.

                  "Eligible Accounts" means that portion of the Accounts
         Receivable Collateral of each Borrower consisting of trade accounts
         receivable actually owing to such Borrower by its Account Debtors
         subject to no counterclaim, defense, setoff or deduction, provided, in
         each of the foregoing cases, that such Accounts Receivable Collateral
         is at all times subject to a duly perfected, first priority security
         interest in favor of Collateral Agent, subject only to any Permitted
         Encumbrances excluding, however, in any event any such account:

                           (i)      with respect to which any portion thereof is
                  more than 90 days past invoice date or more than 60 days past
                  due date (or such lesser number of days which the Agent may
                  establish by written notice from time to time to the Borrowers
                  in its good faith credit judgment);

                           (ii)     which is owing by any Subsidiary or other
                  Affiliate;

                           (iii)    which is owing by any Account Debtor having
                  50% or more in face value of its then existing accounts with
                  such Borrower more than 90 days past invoice date or more than
                  60 days past due date;

                           (iv)     the assignment of which is subject to any
                  requirements set forth in the Assignment of Claims Act of
                  1940, as amended;

                           (v)      which is owing by any Account Debtor whose
                  accounts, in face amount, with such Borrower exceed 10% of
                  such Borrower's Eligible Accounts, but only to the extent of
                  such excess; provided, however, that Account Receivable
                  Collateral from the following Account Debtors shall not be
                  considered ineligible solely on the basis of exceeding such
                  10% limitation, so long as the aggregate amount of Accounts
                  Receivable Collateral owed by any such Account Debtor does not
                  exceed the following amount for such Account Debtor, and so
                  long as there is no material deterioration in the
                  creditworthiness of such Account Debtor: (1) for each of Toys
                  R Us, Sears, Roebuck, Target and Wal-Mart, $1,000,000, and (2)
                  for each of Burlington Coat Factory, J.C. Penney and K-Mart,
                  $500,000;

                           (vi)     which arises from a sale to an Account
                  Debtor with its principal office, assets or place of business
                  outside the United States, unless the sale is backed by an
                  irrevocable letter of credit that is issued or confirmed by a
                  bank acceptable to the Agent that is in form and substance
                  acceptable to the Agent and payable in the full amount of such
                  account is freely convertible into Dollars at a place of
                  payment within the United States, and, if requested by the
                  Agent, such letter of credit, or amounts payable thereunder,
                  is collaterally assigned to the Collateral Agent;

                           (vii)    which arises from (A) the sale of goods
                  which have not been delivered and accepted by the Account
                  Debtor (a "bill and hold" arrangement), or (B) services which
                  have not been performed by such Borrower and accepted by the
                  Account Debtor;

                                       3

<PAGE>

                           (viii)   which is owing by any Account Debtor which
                  is the subject (as debtor) of any voluntary or involuntary
                  case or proceeding under any bankruptcy, insolvency or other
                  similar law or as to which a trustee, receiver, liquidator,
                  custodian or other similar official has been appointed for it
                  or for any substantial part of its property;

                           (ix)     which arises from the sale of any Inventory
                  Collateral that is not Eligible Inventory pursuant to clause
                  (iii) of the proviso contained in the definition of "Eligible
                  Inventory";

                           (x)      with respect to which the Agent determines
                  in its good faith credit judgment that collection of such
                  account is insecure, or that payment thereof is doubtful or
                  will be delayed by reason of such Account Debtor's financial
                  condition or that the prospect of payment or performance by
                  such Account Debtor is or will be impaired;

                           (xi)     with respect to which the Account Debtor's
                  executive offices are located in the State of New Jersey,
                  Minnesota, Indiana or any other state imposing similar
                  conditions to the right of a creditor to collect accounts,
                  unless (A) such Borrower has filed a notice of business
                  activities report, or such other similar report required by
                  such state, with the appropriate officials of such state for
                  the then current year, or (B) such Account Debtor has
                  substantial assets located, respectively, outside of the
                  States of New Jersey, Minnesota, Indiana or such other state,
                  as the case may be;

                           (xii)    which is owed by, billed to, or will be paid
                  by an Account Debtor located in the State of Alabama or any
                  other state the laws of which deny creditors access to its
                  courts in the absence of qualification to do business as a
                  foreign corporation in such state or in the absence of the
                  filing of any required reports with such state, unless such
                  Borrower has qualified as a foreign corporation authorized to
                  do business in Alabama or such state or has filed such
                  required reports;

                           (xiii)   which is subject to any Lien other than a
                  Permitted Encumbrance;

                           (xiv)    which consists of "billings over cost"
                  (items which have been invoiced but for which costs incurred
                  in connection therewith have not been recognized);

                           (xv)     which is owing by any Account Debtor with
                  respect to which any Borrower has determined for any reason
                  not to continue selling goods to or performing services for on
                  open account;

                           (xvi)    which is evidenced by chattel paper or an
                  instrument of any kind, or has been reduced to judgment;

                           (xvii)   which is owed by an Account Debtor owing any
                  account with a balance greater than $100,000 which is not an
                  Eligible Account;

                           (xviii)  with respect to which such Borrower has made
                  an agreement with the Account Debtor (A) for any deduction
                  therefrom, except for discounts or allowances which are made
                  in the ordinary course of business for prompt payment and
                  which discounts or allowances are reflected in the calculation
                  of the face amount of each invoice related to such account,
                  but only to the extent of such deduction, or (B) to extend the
                  time of payment thereof beyond the period set forth in clause
                  (i) in this definition;

                           (xix)    which arises from a retail sale of goods to
                  a Person who is purchasing the same primarily for personal,
                  family or household purposes;

                                       4

<PAGE>

                           (xx)     which represents a progress billing (unless
                  the Required Lenders, in the exercise of their sole
                  discretion, after the Borrower's request, permits the same to
                  not be excluded hereunder) or a retainage or;

                           (xxi)    which has not otherwise been determined by
                  mutual agreement of the Agent and the Borrowers to be
                  ineligible for purposes hereof.

                  "Foreign Stock Pledge Agreement" means, collectively, (i) the
         Foreign Stock Pledge Agreement, substantially in the form of EXHIBIT T,
         to be executed by the Parent (and, pursuant to SECTION 5.15, any other
         Borrower creating or acquiring a Direct Foreign Subsidiary), and (ii)
         and if requested by the Collateral Agent, any pledge or other agreement
         which may be required pursuant to applicable law in the jurisdiction in
         which a Direct Foreign Subsidiary is located, in each case to be
         executed and delivered by the Parent and each other Borrower which owns
         any Direct Foreign Subsidiaries, pledging to the Collateral Agent
         pursuant thereto, for the ratable benefit of the Lenders, 65% of the
         capital stock of all Direct Foreign Subsidiaries, to secure the payment
         of all of the Obligations, as any of the foregoing may be amended or
         supplemented from time to time.

                  "Obligations" means all Debts, indebtedness, liabilities,
         covenants, duties and other obligations of the Borrowers: (i) to the
         Agent, the Collateral Agent or the Lenders included or arising from
         time to time under this Agreement or any other Credit Document, whether
         evidenced by any note or other writing, whether arising from the
         extension of credit, opening of a letter of credit, acceptance or loan
         guaranty, including, without limitation, principal, interest,
         Yield-Maintenance Amount, fees, costs, attorney's fees and
         indemnification amounts and any and all extensions or renewals thereof
         in whole or in part, direct or indirect, absolute or contingent, due or
         to become due, primary or secondary, or joint or several; (ii) to the
         Agent or Wachovia, with respect to all Letter of Credit Obligations and
         all other obligations arising in connection with the issuance of any
         Letter of Credit; (iii) to any Lender or Affiliate thereof arising
         under any Interest Rate Protection Agreement with any such Lender or
         Affiliate, including, without limitation, any premature termination or
         breakage or other costs with respect thereto; (iv) to any Lender and
         its Affiliates, arising in connection with any banking or related
         transactions, services or functions provided to any Borrower in
         connection with the conduct of such Borrower's business (excluding
         extensions of credit giving rise to any Debt for money borrowed not
         related to this Agreement or any of the other Credit Documents).

                  "Revolving Loan Termination Date" means the earliest to occur
         of: (i) June 30, 2005, (ii) the date the Revolving Loan Commitments are
         terminated pursuant to SECTION 6.01 following the occurrence of an
         Event of Default, or (iii) the date the Borrowers terminate the
         Revolving Loan Commitments entirely pursuant to SECTION 2.07.

                  "Scheduled Principal Reduction Amount" means, for each Annual
         Period, the aggregate amount of principal payments required to be made
         on the Term Loans for such Annual Period, subject to deferment of the
         Deferred Principal Amount, if any, for such Annual Period pursuant to
         SECTION 2.01(c), which Scheduled Principal Reduction Amount shall be:
         (i) for the Annual Period ending on June 30, 2002, $2,000,000; and (ii)
         for each Annual Period thereafter, $3,000,000.

                  "Senior Officer" means any of the following officers of
         Parent, regardless of actual title: Chief Executive Officer; Chief
         Operating Officer; Chief Financial Officer and Treasurer.

                                       5

<PAGE>

         Amendment to SECTION 5.20(a). SECTION 5.20(a) hereby is deleted in its
entirety, and the following is substituted therefor:

                  (a)      Minimum EBITDA. Consolidated EBITDA shall not be less
         than, for each Fiscal Quarter set forth below and the 3 immediately
         preceding Fiscal Quarters, the amount set forth below corresponding to
         such Fiscal Quarter:

<TABLE>
<CAPTION>
--------------------------------------------------------------------
      FISCAL QUARTER ENDING                           MINIMUM EBITDA
--------------------------------------------------------------------
<S>                                                   <C>
December 29, 2002 through March 28, 2004                $6,885,000

--------------------------------------------------------------------
June 27, 2004 through March 27, 2005                    $7,000,000

--------------------------------------------------------------------
June 26, 2005 through April 2, 2006                     $7,200,000

--------------------------------------------------------------------
July 2, 2006 and each Fiscal Quarter thereafter         $7,400,000

--------------------------------------------------------------------
</TABLE>

         Amendment to SECTION 5.20(b). SECTION 5.20(b) hereby is deleted in its
entirety, and the following is substituted therefor:

                  (b)      Debt/EBITDA Ratio. The Debt/EBITDA Ratio will not
         exceed, at the end of each Fiscal Quarter set forth below, calculated
         as to Debt as of such Fiscal Quarter and calculated as to Consolidated
         EBITDA for such Fiscal Quarter and the 3 immediately preceding Fiscal
         Quarters, the ratio set forth below corresponding to such Fiscal
         Quarter :

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
      FISCAL QUARTER ENDING                              MAXIMUM DEBT/EBITDA RATIO
----------------------------------------------------------------------------------
<S>                                                      <C>
December 29, 2002 through March 28, 2004                       4.75 to 1.00

----------------------------------------------------------------------------------
June 27, 2004 through September 26, 2004                       4.25 to 1.00

----------------------------------------------------------------------------------
December 26, 2004 through March 27, 2005                       4.00 to 1.00

----------------------------------------------------------------------------------
June 26, 2005 through September 25, 2005                       3.75 to 1.00

----------------------------------------------------------------------------------
December 25, 2005 through July 2, 2006                         3.50 to 1.00

----------------------------------------------------------------------------------
October 1, 2006 through December 31, 2006                      3.25 to 1.00

----------------------------------------------------------------------------------
April 1, 2007 and each Fiscal Quarter thereafter               3.00 to 1.00

----------------------------------------------------------------------------------
</TABLE>

                                       6

<PAGE>

          Amendment to Exhibit G (Compliance Certificate). Exhibit G to the
Credit Agreement hereby is deleted in its entirety, and Exhibit G attached
hereto is substituted therefor.

         4. Restatement of Representations and Warranties. The Borrowers hereby
restate and renew each and every representation and warranty heretofore made by
them in the Credit Agreement and the other Loan Documents as fully as if made on
the date hereof (except where reference is expressly made to a specific date)
and with specific reference to this Fifth Amendment and all other loan documents
executed and/or delivered in connection herewith.

         5. Effect of Amendment. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Loan Documents shall be and remain
in full force and effect, and shall constitute the legal, valid, binding and
enforceable obligations of the Borrowers. The amendments contained herein shall
be deemed to have prospective application only, unless otherwise specifically
stated herein.

         6. Ratification. The Borrowers hereby restate, ratify and reaffirm each
and every term, covenant and condition set forth in the Credit Agreement and the
other Loan Documents effective as of the date hereof.

         7. Counterparts. This Fifth Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.

         8. Section References. Section titles and references used in this Fifth
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.

         9. No Default. To induce the Agent and the Lenders to enter into this
Fifth Amendment and to continue to make advances pursuant to the Credit
Agreement, the Borrowers hereby acknowledge and agree that, as of the date
hereof, and after giving effect to the terms hereof, (i) there exists no Default
or Event of Default, (ii) there exists no right of offset, defense,
counterclaim, claim or objection in favor of the Borrowers arising out of or
with respect to any of the Loans or other obligations of the Borrowers owed to
the Lenders under the Credit Agreement and (iii) the Agent and each Lender has
acted in good faith and has conducted its relationships with the Borrowers in a
commercially reasonable manner in connection with the negotiations, execution
and delivery of this Fifth Amendment and in all respects in connection with the
Credit Agreement, each of the Borrowers hereby waiving and releasing any such
claims to the contrary that may exist as of the date of this Fifth Amendment.

         10. Further Assurances. The Borrowers agree to take such further
actions as the Agent shall reasonably request in connection herewith to evidence
the amendments herein contained.

         11. Governing Law. This Fifth Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of Georgia.

         12. Conditions Precedent. This Fifth Amendment shall become effective
only upon (i) payment to the Agent, for the ratable account of the Lenders, of
an amendment fee equal to

                                       7

<PAGE>

$47,500, (ii) execution and delivery of this Fifth Amendment by each of the
parties hereto and (iii) execution and delivery by all parties thereto of a
Fifth Amendment of Subordinated Note and Warrant Purchase Agreement (the Global
Amendment Agreement dated as of April 29, 2003 in effect constituting the fourth
amendment to such Subordinated Note and Warrant Purchase Agreement) in form and
substance satisfactory to the Agent and the Lenders, amending the Senior
Subordinated Notes Purchase Agreement to conform it to the changes contained in
Sections 1, 2, 3, 4 and 5 hereof, to the extent applicable.

                       [SIGNATURES COMMENCE ON NEXT PAGE]

                                       8

<PAGE>

         IN WITNESS WHEREOF, each of the Borrowers, the Agent and each of the
Lenders has caused this Fifth Amendment to be duly executed, under seal, by its
duly authorized officer as of the day and year first above written.

                                            CROWN CRAFTS, INC.,           (SEAL)

                                            By: /s/ E. RANDALL CHESTNUT
                                                --------------------------------
                                                Name:  E. Randall Chestnut
                                                Title: President and CEO

                                            CHURCHILL WEAVERS, INC.,
                                            HAMCO, INC.
                                            CROWN CRAFTS INFANT
                                                PRODUCTS, INC.            (SEAL)

                                            By: /s/ AMY VIDRINE SAMSON
                                                --------------------------------
                                                Name:  Amy Vidrine Samson
                                                Title: Vice President

                                            WACHOVIA BANK, NATIONAL
                                            ASSOCIATION (successor by merger
                                            to Wachovia Bank, N.A.),      (SEAL)
                                            as Agent and as a Lender

                                            By: /s/ MONICA H. COLE
                                                --------------------------------
                                                Name:  Monica H. Cole
                                                Title: Vice President

                                       9

<PAGE>

                                            BANC OF AMERICA STRATEGIC SOLUTIONS,
                                            INC. (assignee of Bank of America,
                                            N.A.), (SEAL)
                                            as a Lender

                                            By: /s/ JOHN F. REGISTER
                                                --------------------------------
                                                Name:  John F. Register
                                                Title: Principal

                                            THE PRUDENTIAL INSURANCE (SEAL)
                                            COMPANY OF AMERICA, as a Lender

                                            By: /s/ PAUL G. PRICE
                                                --------------------------------
                                                Name:  Paul G. Price
                                                Title: Vice President

                                       10

<PAGE>

                                                                       EXHIBIT G

                             COMPLIANCE CERTIFICATE

         Reference is made to the Credit Agreement dated as of July 23, 2001, as
amended by First Amendment to Credit Agreement dated as of September 28, 2001,
Second Amendment to Credit Agreement dated as of November 25, 2002, Third
Amendment to Credit Agreement dated as of February 10, 2003, Global Amendment
Agreement dated as of April 29, 2003 and Fifth Amendment to Credit Agreement
dated as of August 1, 2003 (as so amended and as thereafter modified and
supplemented and in effect from time to time, the "Credit Agreement") by and
among Crown Crafts, Inc., Churchill Weavers, Inc., Hamco, Inc. and Crown Crafts
Infant Products, Inc. (collectively or individually, as the context shall
require, the "Borrowers"), the Lenders from time to time parties thereto, and
Wachovia Bank, National Association (successor by merger to Wachovia Bank,
N.A.), as Agent. Capitalized terms used herein shall have the meanings ascribed
thereto in the Credit Agreement.

         Pursuant to SECTION 5.01(c) of the Credit Agreement, ________________,
the duly authorized ______________ of the Borrowers, hereby certifies to the
Agent and the Lenders that, as of the date hereof, (i) the information contained
in the Compliance Certificate attached hereto is true, accurate and complete in
all material respects and (ii) no Default is in existence.

CROWN CRAFTS, INC.                          CHURCHILL WEAVERS, INC.
                                            HAMCO, INC.
                                            CROWN CRAFTS INFANT PRODUCTS, INC.

By: ______________________ (SEAL)           By: _________________________ (SEAL)
    Name:                                       Name:
    Title:                                      Title:

                                       11

<PAGE>

                               CROWN CRAFTS, INC.
                              COMPLIANCE CHECKLIST

         1.       Minimum EBITDA (Section 5.20(a))

                  Consolidated EBITDA shall not be less than, for each Fiscal
         Quarter set forth below and the 3 immediately preceding Fiscal
         Quarters, the amount set forth below corresponding to such Fiscal
         Quarter:

<TABLE>
<CAPTION>
----------------------------------------------------------------
         FISCAL QUARTER ENDING                    MINIMUM EBITDA
----------------------------------------------------------------
<S>                                               <C>
December 29, 2002 through March 28, 2004            $6,885,000

----------------------------------------------------------------
June 27, 2004 through March 27, 2005                $7,000,000

----------------------------------------------------------------
June 26, 2005 through April 2, 2006                 $7,200,000

----------------------------------------------------------------
July 2, 2006 and each Fiscal Quarter thereafter     $7,400,000

----------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                         <C>
(a) Consolidated EBITDA      Schedule 1     $ _________

Minimum Consolidated EBITDA                [$6,885,000]
                                           [$7,000,000]
                                           [$7,200,000]
                                           [$7,400,000]
</TABLE>

                                       12

<PAGE>

         2.       Debt/EBITDA Ratio (Section 5.20(b))

                  The Debt/EBITDA Ratio will not exceed, at the end of each
         Fiscal Quarter set forth below, calculated as to Debt as of such Fiscal
         Quarter and calculated as to Consolidated EBITDA for such Fiscal
         Quarter and the 3 immediately preceding Fiscal Quarters, the ratio set
         forth below corresponding to such Fiscal Quarter:

<TABLE>
<CAPTION>
------------------------------------------------------------------------
       FISCAL QUARTER ENDING                   MAXIMUM DEBT/EBITDA RATIO
------------------------------------------------------------------------
<S>                                            <C>
December 29, 2002 through March 28, 2004             4.75 to 1.00

------------------------------------------------------------------------
June 27, 2004 through September 26, 2004             4.25 to 1.00

------------------------------------------------------------------------
December 26, 2004 through March 27, 2005             4.00 to 1.00

------------------------------------------------------------------------
June 26, 2005 through September 25, 2005             3.75 to 1.00

------------------------------------------------------------------------
December 25, 2005 through July 2, 2006               3.50 to 1.00

------------------------------------------------------------------------
October 1, 2006 through December 31, 2006            3.25 to 1.00

------------------------------------------------------------------------
April 1, 2007 and each Fiscal Quarter thereafter     3.00 to 1.00

------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                        <C>
(a) Consolidated Debt        Schedule 2                      $ ___________

(b) Consolidated EBITDA      Schedule 1                      $ ___________

(c) actual ratio of (a) to (b)                                 ___ to 1.00

         Limitation:                       (c) may not exceed [4.75 to 1.0]
                                                              [4.25 to 1.0]
                                                              [4.00 to 1.0]
                                                              [3.75 to 1.0]
                                                              [3.50 to 1.0]
                                                              [3.25 to 1.0]
                                                              [3.00 to 1.0]
</TABLE>

         3.       Senior Debt/EBITDA Ratio (Section 5.20(c))

         The Senior Debt/EBITDA Ratio will not exceed, at the end of each Fiscal
         Quarter set forth below, calculated as to Senior Debt as of such Fiscal
         Quarter and calculated as to

                                       13

<PAGE>

         Consolidated EBITDA for such Fiscal Quarter and the 3 immediately
         preceding Fiscal Quarters (except that for the Fiscal Quarter ending
         March 31, 2002, such calculation shall be for such Fiscal Quarter and
         the 2 immediately preceding Fiscal Quarters), the ratio set forth below
         corresponding to such Fiscal Quarter:

<TABLE>
<CAPTION>
------------------------------------------------------------------------
                                                         MAXIMUM SENIOR
     FISCAL QUARTER ENDING                             DEBT/EBITDA RATIO
------------------------------------------------------------------------
<S>                                                    <C>
March 31, 2002                                            4.80 to 1.0

------------------------------------------------------------------------
June 30, 2002                                             3.50 to 1.0

------------------------------------------------------------------------
September 29, 2002                                        3.25 to 1.0

------------------------------------------------------------------------
December 29, 2002                                         3.00 to 1.0

------------------------------------------------------------------------
March 30, 2003                                            2.75 to 1.0

------------------------------------------------------------------------
June 29, 2003 and September 28, 2003                      2.50 to 1.0

------------------------------------------------------------------------
December 28, 2003                                        2.25 to 1.0

------------------------------------------------------------------------
March 28, 2004 through September 26, 2004                2.00 to 1.0

------------------------------------------------------------------------
December 26, 2004                                         1.75 to 1.0

------------------------------------------------------------------------
March 27, 2005 and thereafter                            1.50 to 1.00

------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                        <C>
(a) Consolidated Senior Debt  Schedule 2                     $ ___________

(b) Consolidated EBITDA       Schedule 1                     $ ___________

(c) actual ratio of (a) to (b)                                 ___ to 1.00

                           Limitation:     (c) may not exceed [4.80 to 1.0]
                                                              [3.50 to 1.0]
                                                              [3.25 to 1.0]
                                                              [3.00 to 1.0]
                                                              [2.75 to 1.0]
                                                              [2.50 to 1.0]
                                                              [2.25 to 1.0]
                                                              [2.00 to 1.0]
                                                              [1.75 to 1.0]
                                                              [1.50 to 1.0]
</TABLE>

                                       14

<PAGE>

         4.       EBITDA/Cash Interest Ratio (Section 5.20(d))

         The EBITDA/Cash Interest Ratio will not be less than, at the end of
         each Fiscal Quarter set forth below, for such Fiscal Quarter and the 3
         immediately preceding Fiscal Quarters (except that for the Fiscal
         Quarter ending March 31, 2002, such calculation shall be for such
         Fiscal Quarter and the 2 immediately preceding Fiscal Quarters), the
         amount set forth below corresponding to such Fiscal Quarter:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
                                                         MINIMUM EBITDA/CASH
          FISCAL QUARTER ENDING                            INTEREST RATIO
----------------------------------------------------------------------------
<S>                                                      <C>
March 31, 2002                                              1.60 to 1.0

----------------------------------------------------------------------------
June 30, 2002                                               1.65 to 1.0

----------------------------------------------------------------------------
September 29, 2002                                          1.80 to 1.0

----------------------------------------------------------------------------
December 29, 2002                                           2.00 to 1.0

----------------------------------------------------------------------------
March 30, 2003                                              2.20 to 1.0

----------------------------------------------------------------------------
June 29, 2003 through December 28, 2003                     2.25 to 1.0

----------------------------------------------------------------------------
March 28, 2004 through December 26, 2004                    2.50 to 1.0

----------------------------------------------------------------------------
March 27, 2005 through December 25, 2005                    2.75 to 1.0

----------------------------------------------------------------------------
April 2, 2006 and each Fiscal Quarter thereafter           3.00 to 1.00

----------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                        <C>
(a) Consolidated EBITDA       Schedule 1                       $ __________

(b) Cash Interest Schedule 3                                   $ __________

(c) actual ratio of (a) to (b)                                  ___ to 1.00

                           Limitation:     (c) may not exceed [1.60 to 1.0]
                                                              [1.65 to 1.0]
                                                              [1.80 to 1.0]
                                                              [2.00 to 1.0]
                                                              [2.20 to 1.0]
                                                              [2.25 to 1.0]
                                                              [2.50 to 1.0]
                                                              [2.75 to 1.0]
                                                              [3.00 to 1.0]
</TABLE>

                                       15

<PAGE>

         5.       Minimum Stockholders' Equity (Section 5.20(e))

         As of the end of each Fiscal Quarter, Stockholders' Equity will not be
         less than the sum of (i) Stockholders' Equity as of the Closing Date
         (after giving effect to the sale of its adult bedding line of business
         to its former management) plus (ii) 75% of the cumulative (since the
         Closing Date) Reported Net Income (excluding any Fiscal Quarter during
         which Reported Net Income is less than $0.00) of the Parent and the
         Subsidiaries.

<TABLE>
<S>                                                         <C>
(a)      Stockholders' Equity                               $ __________

(b)      Cumulative positive Reported Net Income since
         the Closing Date                                   $ __________

(c)      75% of (b)                                         $ __________

(d)      sum of (c) and $ ___________(1)                    $ __________

         Limitation: (a) must not be less than (d)
</TABLE>

         6.       Capital Expenditures (Section 5.20(f))

         No Borrower shall, nor shall it permit any Subsidiary to, make any
         expenditures (including obligations incurred under any lease) in any
         Fiscal Year that are required to be capitalized under GAAP in the
         aggregate for any Borrower and the Subsidiaries, on a consolidated
         basis, exceeding $500,000.

         (a)      aggregate Capital Expenditures made to date in current
                  Fiscal Year                               $ __________

                  Limitation: (a) may not exceed $500,000

-----------------
(1) Insert amount of Stockholders' Equity as of the Closing Date

                                       16

<PAGE>

         7.       Operating Leases (Section 5.20(g))

         No Borrower shall, nor shall it permit any Subsidiary to, enter into or
         remain or become liable upon any lease (other than intercompany leases
         between the Borrower and its Subsidiaries) which would be characterized
         as an operating lease under GAAP if the aggregate amount of all
         consolidated rents paid by the Borrower and its Subsidiaries under all
         such leases would exceed $3,000,000 in the first Fiscal Year following
         the Closing Date, with such amount increasing each Fiscal Year
         thereafter by an additional 5% of the amount in effect at the end of
         the preceding Fiscal Year.

         (a) aggregate amount of consolidated rents payable in current Fiscal
             Year                                                  $ ___________

             Limitation: (a) may not exceed [$3,000,000](2)

-----------------
(2) Increase after the first Fiscal Year by an additional 5% of the amount in
effect at the end of the preceding Fiscal Year

                                       17

<PAGE>

                                                      Schedule 1

                               CONSOLIDATED EBITDA

(a)      Consolidated Net Income for:

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

(b)      depreciation and amortization expenses for:

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

(c)      Consolidated Interest Expense for:

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

(d)      income tax expense included in Consolidated Net
         Income for:

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

                                       18

<PAGE>

(e)      before-tax reserve related to the closing of the
         operations of Burgundy Interamericana SA de CV for:(3)

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

         ____ quarter ____                                          $___________

-----------------
(3) Include only for the following Fiscal Quarters, not exceeding following
amounts for such Fiscal Quarters: (1) for the Fiscal Quarter ending December 29,
2002, $1,775,000, (2) for the Fiscal Quarter ending March 30, 2003, $225,000 and
(3) for the Fiscal Quarter ending June 29, 2003, $275,000

                                       19

<PAGE>

                                                      Schedule 2

                 CONSOLIDATED DEBT AND CONSOLIDATED SENIOR DEBT

                              CONSOLIDATED DEBT(4)

<TABLE>
<S>                                                                              <C>
(a)       obligations for borrowed money                                         $__________

(b)       payment obligations evidenced by bonds, debentures notes or            $__________
          other similar instruments

(c)       obligations to pay the deferred purchase price of property or          $__________
          services, except trade accounts payable and accrued expenses
          arising in the ordinary course of business

(d)       obligations as lessee under capital leases or leases for               $__________
          which the Borrowers Person retain tax ownership of the
          property subject to a lease

(e)       obligations to reimburse any bank or other Person in respect           $__________
          of amounts payable under a banker's acceptance

(f)       Redeemable Preferred Stock                                             $__________

(g)       obligations to reimburse any bank or other Person in respect           $__________
          of amounts paid or undrawn amounts available to be paid under
          a letter of credit or similar instrument

(h)       Debt of others secured by a Lien on any asset of any                   $__________
          Borrower, whether or not such Debt is assumed by such Borrower

(i)       obligations with respect to interest rate protection                   $__________
          agreements, foreign currency exchange agreements or other
          hedging arrangements, other than commodity hedging agreements
          entered into as risk protection rather than as an investment
          (each valued as the termination value thereof computed in
          accordance with a method approved by the International Swap
          Dealers Association and agreed to in the applicable
          agreement, if any)
</TABLE>

-----------------
(4) Exclude Contingent Interest and amounts payable pursuant to SECTION 2.06(a)
of the Senior Subordinated Notes Purchase Agreement

                                       20

<PAGE>

<TABLE>
<S>                                                                              <C>
(j)       Debt of others Guaranteed by any Borrower                              $__________

(k)       CONSOLIDATED DEBT (sum of (a) through (i))                             $__________

                            CONSOLIDATED SENIOR DEBT

(l)       Subordinated Debt                                                      $__________

(m)       CONSOLIDATED SENIOR DEBT ((j) less (k))                                $__________
</TABLE>

                                       21

<PAGE>

                                                      Schedule 3

                                  CASH INTEREST

<TABLE>
<S>                                                                              <C>
(a)      interest on Revolving Loans                                             $_____________

(b)      interest on Term Loans at Cash Contract Rate                            $_____________

(c)      interest on Senior Subordinated Debt                                    $_____________

(d)      CASH INTEREST (sum of (a), plus (b), plus (c))                          $_____________
</TABLE>

                                       22

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