Document:

Exhibit
      4.3

     

    UNLESS
      AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM,
      THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
      NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
      OR
      ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
      TO A
      SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
      CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST
      COMPANY (55 WATER STREET, NEW YORK, NEW YORK), TO THE ISSUER OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
      REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
      AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
      MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
      OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
      CEDE & CO., HAS AN INTEREST HEREIN. 

    

    
      	
              REGISTERED

            	
              Principal
                Amount: An amount specified on Schedule
                A hereto,
                not to exceed $200,000,000*

            
	 	 
	
              No.
                FL-01

            	
              CUSIP
                073902835

            

    

     

    THE
      BEAR
      STEARNS COMPANIES INC.

    

    BEARLINX
      ALERIAN MLP SELECT INDEX ETN (THE “NOTES”)

     

    Coupon
      Amount: See “Coupon” on the reverse hereof.

     

    Original
      Issue Date: July
      20,
      2007

     

    Maturity
      Date: The third Business Day following the last Index Business Day in the Final
      Measurement Period.

     

    Coupon
      Payment Date: The fifth Business Day following each Coupon Valuation Date.
      The
      last Coupon Payment Date will be the Maturity Date.

     

    Redeemable
      On and After: N/A

     

    Optional
      Repayment Date(s): N/A 

     

    Denomination:
      $38.8915, increased in multiples of $38.8915**

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    *    
      The
      aggregate Principal Amount outstanding under this Note and the Global Note
      issued on July 20, 2007 taken together may not at any time exceed $200,000,000.
      

     

    **  
      The
      minimum purchase for any purchaser domiciled in a Member State of the European
      Union shall be $100,000.

     

    THE
      BEAR
      STEARNS COMPANIES INC., a Delaware corporation (the “Company”), for value
      received, hereby promises to pay to CEDE & CO., or registered assigns, (i)
      the Cash Settlement Amount on the maturity date shown above (the “Maturity
      Date”), as the same may be adjusted pursuant to the terms herein, (ii) the
      Coupon Amount on each Coupon Payment Date, if applicable, and (iii) the
      Redemption Amount on the accelerated Maturity Date, if applicable.

     

    The
      Company may, without the consent of the Noteholders, offer further issuances
      of
      the Notes at offering prices based upon market conditions and VWAP Levels at
      any
      time during the term of the Notes. Such further issuances, if any, will be
      consolidated to form a single series with the Notes and will have the same
      CUSIP
      number and will trade interchangeably with the Notes immediately upon
      settlement. As of any date of determination, the Principal Amount outstanding
      under the Notes will be the most recent amount specified on Schedule
      A
      hereto
      in the column “Aggregate Principal Amount Outstanding,” provided that the
      Principal Amount will not at any time exceed $200,000,000. 

     

    Payment
      of any amount pursuant to the foregoing shall be made by the Company in
      immediately available funds against presentation of this Note at the office
      or
      agency of the Trustee (as defined below) maintained for that purpose in the
      Borough of Manhattan, The City of New York, in such coin or currency of the
      United States of America as at the time of payment is legal tender for the
      payment of public and private debt. 

     

    REFERENCE
      IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
      HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT
      AS
      IF SET FORTH ON THE FACE HEREOF.

     

    This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      New York.

     

    This
      Note
      is one of the series of Medium-Term Notes, Series B, of the
      Company.

     

    Unless
      the certificate of authentication hereon has been executed by The Bank of New
      York, Trustee under the Indenture, or its successor thereunder, by the manual
      signature of one of its authorized signatories, this Note shall not be entitled
      to any benefit under the Indenture or be valid or obligatory for any
      purpose.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly executed
      under its corporate seal.

     

    Dated:
      December __, 2007

     

    THE
      BEAR
      STEARNS COMPANIES INC.

     

    By:  ______________________________
Executive
      Vice President and 
Chief
      Financial Officer

     

    ATTEST:

     

    _________________________

    Secretary

     

    [Corporate
      Seal]

     

    CERTIFICATE
      OF AUTHENTICATION

     

    This
      is
      one of the Securities of the series designated therein referred to in the
      within-mentioned Indenture.

     

     

    THE
      BANK
      OF NEW YORK, as Trustee

     

    By: 
      _____________________________
Authorized
      Signature

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    [Reverse
      of Note]

     

    THE
      BEAR
      STEARNS COMPANIES INC.

    

    BEARLINX
      ALERIAN MLP SELECT INDEX ETN

     

    This
      Note
      is one of a duly authorized issue of debentures, notes or other evidences of
      indebtedness (hereinafter called the “Securities”) of the Company of the series
      hereinafter specified, all such Securities issued and to be issued under the
      Indenture dated as of May 31, 1991, as amended (herein called the “Indenture”)
      between the Company and The Bank of New York as successor to JPMorgan Chase
      Bank, N.A. (formerly, the Chase Manhattan Bank), as trustee (herein called
      the
“Trustee,” which term includes any successor trustee under the Indenture), to
      which Indenture and all indentures supplemental thereto reference is hereby
      made
      for a statement of the respective rights and limitations of rights thereunder
      of
      the Company, the Trustee and the Holders of the Securities, and the terms upon
      which the Securities are, and are to be, authenticated and delivered. As
      provided in the Indenture, Securities may be issued in one or more series,
      which
      different series may be issued in various aggregate principal amounts, may
      mature at different times, may bear interest, if any, at different rates, may
      be
      subject to different redemption provisions, if any, may be subject to different
      repayment provisions, if any, may be subject to different sinking, purchase
      or
      analogous funds, if any, may be subject to different covenants and Events of
      Default and may otherwise vary as in the Indenture provided or permitted. This
      Note is one of the series of the Securities designated as Medium-Term Notes,
      Series B. The Notes of this series may be issued at various times with different
      maturity dates, redemption dates and different principal repayment provisions,
      may bear interest at different rates and may otherwise vary, all as provided
      in
      the Indenture.

     

    Certain
      Definitions

     

    
      	
              Index:
                

            	
              means
                the Alerian MLP Select Index (ticker “AMZS”), as published by Standard
                & Poor’s, a division of The McGraw-Hill Companies, Inc. (“Sponsor”),
                in consultation with Alerian Capital Management
                LLC.

            

    

     

    
      	
              Index
                Components:

            	
              means,
                as of any date of determination, the constituents underlying the
                Index.

            

    

     

    
      	
              Closing
                Date:

            	
              means,
                with respect to any Further Issuance, such date as may be determined
                by
                the Issuer.

            

    

     

    
      	
              Settlement
                Date:

            	
              means,
                with respect to any Further Issuance, such date as may be determined
                by
                the Issuer.

            

    

     

    
      	
              Pricing
                Date:

            	
              means,
                with respect to any Further Issuance, such date as may be determined
                by
                the Issuer.

            

    

     

    
      	
              Denomination:

            	
              means
                $38.8915 per Note.

            

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	
              Principal
                Amount:

            	
              means,
                as of any date of determination, the most recent amount specified
                in the
                column “Aggregate Principal Amount Outstanding” on Schedule
                A
                hereto.

            

    

     

    
      	
              Further
                Issuances:

            	
              means
                that the Issuer may, at its sole discretion and without the consent
                of the
                Noteholders, offer further issuances of the Notes at offering prices
                based
                upon market conditions and VWAP Levels at that time. These further
                issuances, if any, will be consolidated to form a single series with
                the
                Notes and will have the same CUSIP number and will trade interchangeably
                with the Notes immediately upon
                settlement.

            

    

     

    
      	
              Initial
                Measurement Period:

            	
              means
                the period from July 12, 2007 to July 19,
                2007.

            

    

     

    
      	
              Index
                Divisor:

            	
              means,
                as of any date of determination, the divisor used by the Sponsor
                to
                calculate the level of the Index.

            

    

     

    
      	
              Coupon:

            	
              the
                Notes will pay a coupon, if any, on each Coupon Payment Date. For
                each
                Note held, on each Coupon Payment Date each Noteholder will receive
                an
                amount in U.S. dollars equal to the difference between the Reference
                Dividend Amount minus the Tracking Fee (the “Coupon Amount”). To the
                extent the Reference Dividend Amount is less than the Tracking Fee
                on any
                Coupon Valuation Date, there will be no coupon payment made on the
                corresponding Coupon Payment Date, and an amount equal to the difference
                between the Tracking Fee and the Reference Dividend Amount in respect
                of
                such period (the “Tracking Fee Shortfall”) will be added to the Tracking
                Fee deducted from the Reference Dividend Amount in respect of the
                next
                Coupon Payment Date. For the avoidance of doubt, the process will
                be
                repeated to the extent necessary until such time as the accrued Tracking
                Fee has been deducted from the appropriate Reference Dividend Amount
                in
                all prior months. 

            

    

     

    
      	
              Coupon
                Payment Date:

            	
              means
                the fifth Business Day following each Coupon Valuation Date, subject
                to
                adjustment as described herein.

            

    

     

    
      	
              Coupon
                Valuation Date:

            	
              means
                the first Business Day of each calendar month during the term of
                the Notes
                beginning on August 1, 2007, and the last Coupon Valuation Date shall
                be
                the Calculation Date, subject to adjustment as described herein.
                

            

    

     

    
      	
              Reference
                Dividend Amount:

            	
              means, as
                of any Coupon Payment Date, an amount per Note equal to the gross
                cash
                dividends that would have been received by a Reference Holder in
                respect
                of a quantity of Index Components held by such Reference Holder on
                an
                “ex-dividend date” with respect to any Index Component, which “ex-dividend
                date” occurred during the period from and including the first Index
                Business Day following the Initial Measurement Period to and excluding
                the
                immediately preceding Coupon Valuation Date. Any non-cash dividends
                that
                would have been received by a Reference Holder during any period
                of
                determination will be valued in cash by the Calculation Agent and
                will be
                included in the gross cash dividends for purposes of this
                calculation.

            

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	
              Tracking
                Fee:

            	
              means,
                as of any date of determination, an amount per Note equal to the
                product
                of 0.070834% multiplied by the Current NAV. The Tracking Fee will
                be
                increased by an amount equal to any Tracking Fee
                Shortfall.

            

    

     

    
      	
              Current
                NAV: 

            	
              means,
                as of any date of determination, an amount per Note equal to the
                product
                of (i) the Denomination multiplied by (ii) a fraction, the numerator
                of
                which is equal to the VWAP Level as of such date and the denominator
                of
                which is equal to the Initial VWAP Level, as determined by the Calculation
                Agent.

            

    

     

    
      	
              Cash
                Settlement Amount:

            	
              means
                an amount per Note payable in U.S. dollars on the Maturity Date equal
                to
                (i) the Denomination multiplied by the Index Ratio minus (ii) the
                accrued
                Tracking Fee, if any.

            

    

     

    
      	
              Index
                Ratio:

            	
              means,
                as of any date of determination, an amount equal to the quotient
                of the
                Final VWAP Level divided by the Initial VWAP Level.
                

            

    

     

    
      	
              VWAP
                Level:

            	
              means,
                as of any date of determination and with respect to the Index, the
                quotient of (1) the arithmetic mean of the sum for each Index Component
                of
                the products of (i) the volume weighted-average price of that Index
                Component as of such date and (ii) the published share weighting
                of that
                Index Component as of such date divided by (2) the Index Divisor
                as of
                such date, as determined by the Calculation
                Agent.

            

    

     

    
      	
              Initial
                VWAP Level:

            	
              means
                388.915.

            

    

     

    
      	
              Final
                VWAP Level:

            	
              means
                the arithmetic mean of the VWAP Levels measured each Index Business
                Day in
                the Final Measurement Period, as determined by the Calculation
                Agent.

            

    

     

    
      	
              Final
                Measurement Period:

            	
              means
                the five Index Business Days from and including the Calculation
                Date.

            

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	
              Calculation
                Date:

            	
              means
                July 9, 2027, unless such day is not an Index Business Day, in which
                case
                the Calculation Date shall be the next Index Business Day. The Calculation
                Date is subject to adjustment as described
                herein.

            

    

     

    
      	
              Maturity
                Date:

            	
              means
                the third Business Day following the final Index Business Day in
                the Final
                Measurement Period.

            

    

     

    
      	
              Early
                Redemption Event:

            	
              a
                Noteholder may redeem its Notes as of the last Business Day of each
                week
                during the term of the Notes (each, a “Redemption Valuation Date”) by
                delivering a Redemption Notice to the Company via email no later
                than
                10:00 a.m. New York City time on the Business Day prior to such Redemption
                Valuation Date. If the Company receives a Redemption Notice in accordance
                with the foregoing, the Company or its affiliate will send a form
                of
                Redemption Confirmation to such Noteholder via return email, which
                such
                Noteholder must complete, execute and return to the Company via facsimile
                by no later than 4:00 p.m. New York City time on the same Business
                Day.
                The Company or its affiliate must acknowledge receipt of a Noteholder’s
                completed Redemption Confirmation in order for such Noteholder’s
                redemption to be effective. The procedures described in the foregoing
                paragraph are referred to herein as the “Notice
                Procedures.”

            

    

     

    
      	 	
              Upon
                compliance with the Notice Procedures, the Calculation Agent will
                accelerate the Calculation Date with respect to the Notes being redeemed
                to the relevant Redemption Valuation Date, which will automatically
                accelerate the final Coupon Valuation Date and the Maturity Date
                with
                respect to the Notes being redeemed in accordance with the terms
                set forth
                herein. On the accelerated Maturity Date the redeeming Noteholder
                will
                receive an amount per Note in U.S. dollars equal to (i) the Cash
                Settlement Amount minus Redemption Fee Amount plus (ii) the Coupon
                Amount,
                if any (the “Redemption Amount”). 

            

    

     

    
      	 	
              The
                Tracking Fee applicable to the Notes subject to an Early Redemption
                Event
                shall be an amount equal to the sum of (i) the Tracking Fee Shortfall
                as
                of the last Coupon Valuation Date (if any) plus (ii) the Tracking
                Fee as
                of the next Coupon Valuation Date multiplied by a percentage, the
                numerator of which is the total number of days since the prior Coupon
                Valuation Date, and the denominator of which is 30 (the “Adjusted Tracking
                Fee”). To the extent the Reference Dividend Amount as of the accelerated
                Calculation Date is greater than the Adjusted Tracking Fee, the Redemption
                Amount will include a coupon payment equal to the Coupon Amount (with
                the
                Calculation Agent using the Adjusted Tracking Fee in calculating
                such
                Coupon Amount). To the extent the Reference Dividend Amount as of
                the
                accelerated Calculation Date is less than the Adjusted Tracking Fee,
                the
                Redemption Amount will not include any coupon payment, and an amount
                equal
                to the difference between the Adjusted Tracking Fee less the Reference
                Dividend Amount will be subtracted from the Index Ratio in determining
                the
                Cash Settlement Amount payable on the accelerated Maturity Date.
                

            

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              The
                Company will inform a redeeming Noteholder of the Redemption Amount
                on the
                first Business Day following the final Index Business Day in the
                Final
                Measurement Period.

            

    

     

    
      	 	
              A
                Noteholder may redeem its Notes only in amounts of 75,000 Notes or
                greater, subject to adjustment by the Calculation Agent. A Noteholder
                may
                not redeem its Notes in the week in which the Notes
                mature.

            

    

     

    
      	
              Redemption
                Notice:

            	
              means
                the form of redemption notice attached to the applicable Pricing
                Supplement as Appendix 1.

            

    

     

    
      	
              Redemption
                Confirmation:

            	
              means
                the form of redemption confirmation attached to the applicable Pricing
                Supplement as Appendix 2.

            

    

     

    
      	
              Redemption
                Fee:

            	
              means
                0.125%

            

    

     

    
      	
              Redemption
                Fee Amount:

            	
              means,
                as of any date of determination, an amount per Note in U.S. dollars
                equal
                to the product of the Redemption Fee multiplied by the applicable
                Cash
                Settlement Amount. 

            

    

     

    
      	
              Reference
                Holder:

            	
              means,
                as of any date of determination, a hypothetical holder of a number
                of
                shares of each of the Index Components in the then current weightings
                within the Index as if such holder had invested an amount in the
                Index as
                of that date equal to the then equivalent Cash Settlement Amount
                (as if
                the Calculation Agent were to determine the Cash Settlement Amount
                on that
                date), as determined by the Calculation
                Agent.

            

    

     

    
      	
              Exchange
                Listing:

            	
              the
                Notes are currently listed for trading on the New York Stock Exchange
                (the
                "NYSE") under the ticker symbol “BSR”. NYSE Euronext, Inc., the parent
                company of the NYSE, has informed the Issuer that it is transferring
                all
                exchange-traded notes and exchange-traded funds currently listed
                for
                trading on the NYSE, including the Notes, to the NYSE Arca platform.
                The
                Issuer is currently in the process of taking the steps necessary
                to effect
                this transfer. The Issuer expects the process to be completed by
                the first
                quarter of 2008.

            

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	
              Business
                Day:

            	
              means
                any day other than a Saturday or Sunday, on which banking institutions
                in
                New York, New York, are not authorized or obligated by law or executive
                order to close. 

            

    

     

    
      	
              Index
                Business Day:

            	
              means
                any day on which each Primary Exchange and each Related Exchange
                are
                scheduled to be open for trading.

            

    

     

    
      	
              Primary
                Exchange:

            	
              means,
                with respect to each Index Component, the primary exchange or market
                of
                trading of such Index Component.

            

    

     

    
      	
              Related
                Exchange:

            	
              means,
                with respect to each Index Component, each exchange or quotation
                system
                where trading has a material effect (as determined by the Calculation
                Agent) on the overall market for futures or options contracts relating
                to
                such Index Component.

            

    

     

    Redemption;
      Defeasence

     

    The
      Notes
      may be redeemed by a Noteholder prior to the expiration of the term in
      accordance with the terms specified above. The Notes are not subject to
      defeasance. 

     

    Further
      Issuances

     

    The
      Company may, at its sole discretion and without the consent of the Noteholders,
      offer Further Issuances of the Notes at offering prices based upon market
      conditions and VWAP Levels at that time. If there is substantial demand for
      the
      Notes, the Company may issue additional Notes frequently. These Further
      Issuances, if any, will be consolidated to form a single series with the Notes
      and will have the same CUSIP number and will trade interchangeably with the
      Notes immediately upon settlement. Any additional issuances will increase the
      aggregate Principal Amount of the outstanding Notes of this series, plus the
      aggregate Principal Amount of any Notes bearing the same CUSIP number that
      are
      issued pursuant to any future issuances of Notes bearing the same CUSIP number.
      The prices of any additional offerings will be determined at the time of pricing
      of each offering, which price will be a function of the prevailing market
      conditions and VWAP Levels at the time of the relevant sale.

     

    Principal
      Amount

     

    The
      aggregate Principal Amount outstanding under the Notes is, as of any date of
      determination, the most recent amount listed in the column “Aggregate Principal
      Amount Outstanding” on Schedule
      A
      hereto.
      In connection with an Early Redemption Event or a Further Issuance described
      herein, the Company shall deliver written instructions to the Trustee
      instructing the Trustee increase or decrease, as the case may be, the aggregate
      Principal Amount outstanding under the Notes by making the appropriate notation
      to Schedule
      A;
      provided, that the aggregate Principal Amount of the Notes and the Global Note
      issued on July 20, 2007 taken together shall at no time be greater than
      $200,000,000. The written instructions shall include the Pricing Date, Closing
      Date and Settlement Date of the Early Redemption Event or Further Issuance,
      as
      applicable, the price per Note of the Early Redemption Event or Further
      Issuance, the amount of the increase or decrease to Principal Amount pursuant
      to
      the Early Redemption Event or Further Issuance, and the aggregate Principal
      Amount outstanding under the Notes following the Early Redemption Event or
      Further Issuance. The Trustee shall update Schedule
      A
      hereto
      in accordance with the written instructions delivered by the Company, and any
      such update shall be effective as of the date specified by the written
      instructions provided by the Company.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    Discontinuance
      of the Index

     

    If
      the
      Sponsor discontinues publication of or otherwise fails to publish the Index
      and
      such Sponsor or another entity publishes a successor or substitute index that
      the Calculation Agent determines to be comparable to the discontinued Index
      (such index being referred to herein as a “Successor Index”), then the Final
      VWAP Level for such Successor Index will be determined by reference to the
      volume weighted-average prices of the components underlying such Successor
      Index
      on the relevant exchanges or markets for such components multiplied by each
      such
      component’s respective weighting within the Successor Index on the dates and at
      the times as of which the Final VWAP Level for such components of the Successor
      Index are to be determined. 

     

    Upon
      any
      selection by the Calculation Agent of a Successor Index, the Calculation Agent
      will cause notice thereof to be furnished to the Company and the Trustee. If
      a
      Successor Index is selected by the Calculation Agent, the Successor Index will
      be used as a substitute for the Index for all purposes, including for purposes
      of determining whether a Market Disruption Event exists with respect to the
      Index.

     

    If
      the
      Index is discontinued or if the Sponsor fails to publish the Index prior to,
      and
      such discontinuance is continuing on, the Calculation Date and the Calculation
      Agent determines that no Successor Index is available at such time, then in
      connection with its calculation of the Cash Settlement Amount, the Calculation
      Agent will determine the VWAP Levels to be used in calculating the Final VWAP
      Level. The Final VWAP Level will be computed by the Calculation Agent using
      the
      Index Components that comprised the Index immediately prior to such
      discontinuance, failure or modification. In such event, the Calculation Agent
      will cause notice thereof to be furnished to the Company and the
      Trustee.

     

    Adjustments
      to the Index

     

    If
      at any
      time the method of calculating the Index or a Successor Index, or the value
      thereof, is changed in a material respect, or if the Index or a Successor Index
      is in any other way modified so that such index does not, in the opinion of
      the
      Calculation Agent, fairly represent the level of the Index or such Successor
      Index had such changes or modifications not been made, then, for purposes of
      calculating the level of the such index, the Index Ratio or any of its
      components or the Cash Settlement Amount or making any other determinations
      as
      of or after such time, the Calculation Agent will make such calculations and
      adjustments as the Calculation Agent determines may be necessary in order to
      arrive at a level of an index comparable to the Index or such Successor Index,
      as the case may be, as if such changes or modifications had not been made,
      and
      calculate the Cash Settlement Amount (including the components thereof) with
      reference to such Index or such Successor Index, as adjusted. Accordingly,
      if
      the method of calculating the Index or a Successor Index is modified so that
      the
      level of such index is a fraction of what it would have been if it had not
      been
      modified (e.g., due to a split in the index), then the Calculation Agent will
      adjust such index in order to arrive at a level for the Index or such Successor
      Index as if it had not been modified (e.g., as if such split had not occurred).
      In such event, the Calculation Agent will cause notice thereof to be furnished
      to the Company and the Trustee.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    In
      the
      event that, on the Calculation Date, the Index is not calculated by the Sponsor
      but is calculated by a third party acceptable to the Calculation Agent, the
      Calculation Agent will use such third party’s calculation as its reference for
      determining the level of the Index during the Final Measurement
      Period.

     

    Market
      Disruption Events

     

    To
      the
      extent a Disrupted Day (as defined below) exists with respect to an Index
      Component on an Averaging Date (as defined below), the volume weighted-average
      price with respect to such Index Component (and only with respect to such Index
      Component) for such Averaging Date will be determined by the Calculation Agent
      on the first succeeding Index Business Day that is not a Disrupted Day (the
      “Deferred Averaging Date”) with respect to such Index Component irrespective of
      whether pursuant to such determination, the Deferred Averaging Date would fall
      on a date originally scheduled to be an Averaging Date. For the avoidance of
      doubt, if the postponement described in the preceding sentence results in the
      volume weighted-average price of a particular Index Component being calculated
      on a day originally scheduled to be an Averaging Date, for purposes of
      determining the Final VWAP Level the Calculation Agent will apply the volume
      weighted-average price and the published share weighting with respect to such
      Index Component for such Deferred Averaging Date to (i) the VWAP Level of the
      date(s) of the original disruption with respect to such Index Component and
      (ii)
      the VWAP Level of such Averaging Date. In no event, however, shall any
      postponement pursuant to this paragraph result in the final Averaging Date
      with
      respect to any Index Component occurring more than three Index Business Days
      following the day originally scheduled to be the final Averaging Date. In such
      case, any volume weighted-average price and share weighting with respect to
      any
      Index Component required to be determined in respect of the Final VWAP Level
      calculation will be determined by the Calculation Agent based upon its estimate
      of the price and share weighting that would have prevailed on the Primary
      Exchange for such Index Component but for such suspension or limitation.

     

    An
      “Averaging Date” means the each of the five Index Business Days during the Final
      Measurement Period, subject to adjustment as described herein. 

     

    A
      “Disrupted Day” with respect to any Index Component is any Index Business Day on
      which the Primary Exchange or any Related Exchange fails to open for trading
      during its regular trading session or on which a Market Disruption Event has
      occurred and is continuing, in both cases, which the Calculation Agent
      determines is material.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    For
      purposes of the foregoing definition, “Market Disruption Event” means, with
      respect to an Index Component: 

     

    (a)  the
      occurrence or existence of a condition specified below:

     

      any
      suspension of or limitation imposed on trading by the Primary Exchange or any
      Related Exchange or otherwise, and whether by reason of movements in price
      exceeding limits permitted by the Primary Exchange or any Related Exchanges
      or
      otherwise, (A) relating to the Index Component or (B) in futures or options
      contracts relating to the Index Component, on any Related Exchange; or

     

      any
      event
      (other than an event described in (b) below) that disrupts or impairs (as
      determined by the Calculation Agent) the ability of market participants in
      general (A) to effect transactions in, or obtain market values for the relevant
      Index Component or (B) to effect transactions in, or obtain market values for,
      futures or options contracts relating to the relevant Index Component, on any
      Related Exchange; or

     

    (b)  the
      closure on any Business Day of the Primary Exchange or any Related Exchange
      prior to its Scheduled Closing Time unless such earlier closing time is
      announced by the Primary Exchange or such Related Exchange at least one hour
      prior to the earlier of (i) the actual closing time for the regular trading
      session on the Primary Exchange or such Related Exchange on such Index Business
      Day for the Primary Exchange or such Related Exchange and (ii) the submission
      deadline for orders to be entered into the Primary Exchange system for execution
      at the close of trading on such Index Business Day for the Primary Exchange
      or
      such Related Exchange.

     

    “Index
      Business Day” means any day on which the Primary Exchange and each Related
      Exchange are scheduled to be open for trading.

     

    For
      purposes of the above definition:

     

    (c)  a
      limitation on the hours in a trading day and/or number of days of trading will
      not constitute a Market Disruption Event if it results from an announced change
      in the regular business hours of the Relevant Exchange, and

     

    (d)  for
      purposes of clause (a) above, any limitations on trading during significant
      market fluctuations, under NYSE Rule 80B, NASD Rule 4120 or any analogous rule
      or regulation enacted or promulgated by the NYSE, NASD or any other self
      regulatory organization or the SEC of similar scope as determined by the
      Calculation Agent, will be considered “material.” 

     

    “Primary
      Exchange” means, with respect to each Index Component, the primary exchange or
      market of trading of the such Index Component.

     

    “Related
      Exchange” means, with respect to each Index Component, each exchange or
      quotation system where trading has a material effect (as determined by the
      Calculation Agent) on the overall market for futures or options contracts
      relating to such Index Component.

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    “Scheduled
      Closing Time” means, with respect to the Primary Exchange or the Related
      Exchange, on any Index Business Day, the scheduled weekday closing time of
      the
      Primary Exchange or such Related Exchange on such Index Business Day, without
      regard to after hours or any other trading outside of the regular trading
      session hours.

     

    Events
      of Default and Acceleration

     

    If
      an
      Event of Default with respect to any Notes has occurred and is continuing,
      then
      the amount payable to Noteholders upon any acceleration permitted by the Notes
      will be equal to the Cash Settlement Amount as though the date of early
      repayment were the Maturity Date of the Notes, adjusted by an amount equal
      to
      any losses, expenses and costs to the Company of unwinding any underlying or
      related hedging or funding arrangements, all as determined by the Calculation
      Agent. If a bankruptcy proceeding is commenced in respect of the Company, the
      claims of the holder of a Note may be limited under Title 11 of the United
      States Code.

     

    Settlement
      and Payment

     

    Settlement
      for the Notes will be made by Bear, Stearns & Co. Inc. in immediately
      available funds. Payments of the Cash Settlement Amount will be made by the
      Company in immediately available funds, so long as the Notes are maintained
      in
      book-entry form.

     

    Calculation
      Agent

     

    The
      Calculation Agent for the Notes will be Bear, Stearns & Co. Inc. All
      determinations made by the Calculation Agent will be at the sole discretion
      of
      the Calculation Agent and will be conclusive for all purposes and binding on
      the
      Company and the holders of the Notes, absent manifest error and provided the
      Calculation Agent shall be required to act in good faith in making any
      determination. Manifest error by the Calculation Agent, or any failure by it
      to
      act in good faith, in making a determination adversely affecting the payment
      of
      principal, interest or premium on principal to holders would entitle the
      holders, or the Trustee acting on behalf of the holders, to exercise rights
      and
      remedies available under the Indenture. If the Calculation Agent uses its
      discretion to make any determination, the Calculation Agent will notify the
      Company and the Trustee, who will provide notice to the registered holders
      of
      the Notes.

     

    General

     

    If
      so
      specified on the face of this Note, this Note may be redeemed by the Company
      on
      and after the date so indicated on the face hereof. If no such date is set
      forth
      on the face hereof, this Note may not be redeemed prior to maturity. On and
      after such date, if any, from which this Note may be redeemed, this Note may
      be
      redeemed in whole or in part in increments of $38.8915, at the option of the
      Company, at a redemption price equal to 100% of the principal amount to be
      redeemed, together with interest thereon payable to the Redemption Date, on
      notice given, unless otherwise specified on the face hereof, not more than
      60
      nor less than 30 days prior to the Redemption Date. If less than all the
      Outstanding Notes having such terms as specified by the Company are to be
      redeemed, the particular Notes to be redeemed shall be selected by the Trustee
      not more than 60 days prior to the Redemption Date from the Outstanding Notes
      having such terms as specified by the Company not previously called for
      redemption, by such method as the Trustee shall deem fair and appropriate.
      The
      notice of such redemption shall specify which Notes are to be redeemed. In
      the
      event of redemption of this Note, in part only, a new Note or Notes in
      authorized denominations for the unredeemed portion hereof shall be issued
      in
      the name of the Holder hereof upon the surrender hereof.

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    If
      so
      specified on the face of this Note, this Note will be subject to repayment
      at
      the option of the Holder hereof on the Optional Repayment Date(s). If no
      Optional Repayment Date is set forth on the face hereof, this Note may not
      be
      repaid at the option of the Holder prior to maturity. On and after the Optional
      Repayment Date, if any, from which this Note may be repaid at the option of
      the
      Holder, this Note shall be repayable in whole or in part in increments of
      $38.8915 at a repayment price equal to 100% of the principal amount to be
      repaid, together with interest thereon payable to the Optional Repayment Date.
      For this Note to be repaid in whole or in part at the option of the Holder
      hereof, the Trustee must receive not less than 30 nor more than 60 days prior
      to
      the Optional Repayment Date (i) this Note with the form entitled “Option to
      Elect Repayment,” which appears below, duly completed or (ii) a telegram, telex,
      facsimile transmission or a letter from a member of a national securities
      exchange or the National Association of Securities Dealers, Inc. or a commercial
      bank or trust company in the United States of America setting forth the name
      of
      the Holder of this Note, the principal amount of this Note, the certificate
      number of this Note or a description of this Note’s tenor or terms, the
      principal amount of this Note to be repaid, a statement that the option to
      elect
      repayment is being exercised thereby and a guarantee that this Note with the
      form entitled “Option to Elect Repayment,” which appears below, duly completed,
      will be received by the Trustee no later than five Business Days after the
      date
      of such telegram, telex, facsimile transmission or letter and this Note and
      such
      form duly completed are received by the Trustee by such fifth Business Day.
      Exercise of the repayment option shall be irrevocable.

     

    If
      any
      Event of Default with respect to the Notes shall occur and be continuing, the
      Trustee or the Holders of not less than 25% in principal amount of the
      Outstanding Notes may declare the principal of all the Notes due and payable
      in
      the manner and with the effect provided in the Indenture.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Company and
      the rights of the Holders of the Securities of each series to be affected under
      the Indenture at any time by the Company and the Trustee with the consent of
      the
      Holders of 66-2/3% in aggregate principal amount of the Securities at the time
      Outstanding of each series affected thereby. The Indenture also contains
      provisions permitting the Holders of specified percentages in aggregate
      principal amount of the Securities of each series at the time Outstanding,
      on
      behalf of the Holders of all Securities of each series, to waive compliance
      by
      the Company with certain provisions of the Indenture and certain past defaults
      under the Indenture and their consequences. Any such consent or waiver by the
      Holder of this Note shall be conclusive and binding upon such Holder and upon
      future Holders of this Note and of any Note issued upon the registration of
      transfer hereof or in exchange hereof or in lieu hereof whether or not notation
      of such consent or waiver is made upon this Note.

     

    Holders
      of Securities may not enforce their rights pursuant to the Indenture or the
      Securities except as provided in the Indenture. No reference herein to the
      Indenture and no provision of this Note or the Indenture shall alter or impair
      the obligation of the Company, which is absolute and unconditional, to pay
      the
      Cash Settlement Amount, Coupon Amount and, if applicable, Redemption Amount
      with
      respect to this Note at the time, place, and rate, and in the coin or currency,
      herein prescribed.

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Security Register of the
      Company, upon surrender of this Note for registration of transfer at the office
      or agency of the Company in the Borough of Manhattan, The City of New York,
      duly
      endorsed by, or accompanied by a written instrument of transfer in form
      satisfactory to the Company, and this Note duly executed by, the Holder hereof
      or by his attorney duly authorized in writing and thereupon one or more new
      Notes, of authorized denominations and for the same aggregate principal amount,
      will be issued to the designated transferee or transferees.

     

    Unless
      otherwise specified on the face hereof, the Notes are issuable only in
      registered form without coupons in denominations of $38.8915 or any amount
      in
      excess thereof which is an integral multiple of $38.8915; provided however
      that
      the minimum purchase for any purchaser domiciled in a Member State of the
      European Union shall be $100,000. As provided in the Indenture and subject
      to
      certain limitations therein set forth, this Note is exchangeable for a like
      aggregate principal amount of Notes of different authorized denomination as
      requested by the Holder surrendering the same.

     

    No
      service charge will be made for any such registration of transfer or exchange,
      but the Company may require payment of a sum sufficient to cover any tax or
      other governmental charge payable in connection therewith.

     

    Prior
      to
      the due presentment of this Note for registration of transfer, the Company,
      the
      Trustee and any agent of the Company or the Trustee may treat the Person in
      whose name this Note is registered as the owner hereof for all purposes, whether
      or not this Note be overdue, and neither the Company, the Trustee nor any such
      agent shall be affected by notice of the contrary.

     

    The
      Cash
      Settlement Amount payable with respect to this Note shall in no event be higher
      than the maximum rate, if any, permitted by applicable law.

     

    All
      capitalized terms used in this Note and not otherwise defined herein shall
      have
      the meanings assigned to them in the Indenture.

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    ____________________________________

     

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of this
      instrument, shall be construed as though they were written out in full according
      to applicable laws or regulations:

    
      	
              TEN
                COM

            	
              -

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              -
                

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              -

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              -

            	
              ___________________
                Custodian ___________________

            
	 	 	
                           
                  (Cust)                                               (Minor)

            
	 	 	
                          
                   Under Uniform Gifts to Minors Act

            
	 	 	 
	 	 	
              ________________________________________________

                                                           
                (State)

            

    

     

    Additional
      abbreviations may also be used though not in the above list.

    ____________________________________

     

    OPTION
      TO
      ELECT REPAYMENT

     

    The
      undersigned hereby irrevocably request(s) and instruct(s) the Company to repay
      this Note (or portion thereof specified below) pursuant to its terms on
      ____________, 20___ (the “Optional Repayment Date”) at a price equal to the
      principal amount thereof, together with interest to the Optional Repayment
      Date,
      to the undersigned at

     

      
        

      

    

     

      
        

      

    

    (Please
      print or typewrite name and address of the undersigned.)

     

    For
      this
      Note to be repaid the Trustee must receive at 111 Sanders Creek Parkway,
      Syracuse, New York 13057, Attention: Corporate Trust Operations, or at such
      other place or places of which the Company shall from time to time notify the
      Holder of this Note, not more than 60 days nor less than 30 days prior to the
      Optional Repayment Date, this Note with this “Option to Elect Repayment” form
      duly completed.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    If
      less
      than the entire principal amount of this Note is to be repaid, specify the
      portion thereof (which shall be increments of $38.8915) which the Holder elects
      to have repaid: $_________________; and
      specify the denomination or denominations (which, unless a different minimum
      denomination is set forth on the face hereof, shall be $25,000 or an integral
      multiple of $38.8915 in excess of $25,000) of the Notes to be issued to the
      Holder for the portion of this Note not being repaid (in the absence of any
      such
      specification, one such Note will be issued for the portion not being repaid):
      $________________.

    
      	 	 
	
              Date:_________________

            	
              ________________________________

            
	 	
              Note:
                The signature to this Option to Elect Repayment must correspond with
                the
                same as written upon the face of this Note in every particular without
                alteration or enlargement.

            

    

    ____________________________________

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned 

    hereby
      sell(s), assign(s) and transfer(s) unto

     

    
      
        

      

    

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

     

    
      
        

      

      
         

        
          

        

        
           

          
            

          

        

      

    

    PLEASE
      PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
      OF
      ASSIGNEE

    
       

      
        

      

    

    the
      within Note and all rights thereunder, hereby irrevocably constituting and
      appointing

    
       

      
        

      

    

    
       

      
        

      

    

    Attorney
      to
      transfer said Note on the books of the Company, with full power of substitution
      in the premises.

     

    
      	
              Dated:_______________________

            	
              __________________________________________

            

    

     

    ____________________________________

                          
      (Signature Guarantee)

    

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      A

    

    
      	
              Closing
                Date

            	
              Pricing
                Date

            	
              Settlement
                Date

            	
              Issue/Redemption
                

              Price
                per Note

            	
              Principal
                Amount 

              Issued
                (Redeemed)

            	
              Aggregate
                Principal 

              Amount
                Outstanding

            
	
              July
                11, 2007

            	
              July
                19, 2007

            	
              July
                20, 2007

            	
              $38.8915

            	
              $75,039,438.02

            	
              $75,039,438.021

            
	
              August
                7, 2007

            	
              August
                7, 2007

            	
              August
                10, 2007

            	
              $35.629

            	
              $12,470,150.00

            	
              $87,509,588.02

            
	
              December
                7, 2007

            	
              December
                7, 2007

            	
              December
                12, 2007

            	
              $34.04

            	
              $5,106,000.00

            	
              $92,615,588.02

            

    

    

    

    

    

    ______________________

    1
      Evidenced by a separate Global Note issued on July 20, 2007 (the “Initial
      Global Note”).
      The
      aggregate Principal Amount outstanding under this Note and the Initial Global
      Note taken together may not at any time exceed $200,000,000.Exhibit: 10.1

                        TWELFTH AMENDMENT TO AMENDED AND
                            RESTATED CREDIT AGREEMENT

                  THIS TWELFTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT ("Twelfth Amendment") is made as of the 27th day of December, 2007, by
and between CULP, INC., a North Carolina corporation (together with its
successors and permitted assigns, the "Borrower"), and WACHOVIA BANK, NATIONAL
ASSOCIATION (formerly, Wachovia Bank, N.A.), a national banking association, as
Agent and as a Bank (together with its endorsees, successors and assigns, the
"Bank").

                                   BACKGROUND
                                   ----------

                  The Borrower and the Bank entered into an Amended and Restated
Credit Agreement, dated as of August 23, 2002, as amended by Second Amendment to
Amended and Restated Credit Agreement (the "Second Amendment"), dated as of June
3, 2003, by Third Amendment to Amended and Restated Credit Agreement (the "Third
Amendment"), dated as of August 23, 2004, by Fourth Amendment to Amended and
Restated Credit Agreement ("Fourth Amendment"), dated as of December 7, 2004, by
Fifth Amendment to Amended and Restated Credit Agreement ("Fifth Amendment")
dated as of February 18, 2005, by Sixth Amendment to Amended and Restated Credit
Agreement ("Sixth Amendment"), dated as of August 30, 2005, by Seventh Amendment
to Amended and Restated Credit Agreement ("Seventh Amendment"), dated as of
December 7, 2005, by Eighth Amendment to Amended and Restated Credit Agreement
("Eighth Amendment"), dated as of January 29, 2006, by Ninth Amendment to
Amended and Restated Credit Agreement, dated as of July 20, 2006 ("Ninth
Amendment"), and by Tenth Amendment to Amended and Restated Credit Agreement,
dated as of January 22, 2007 ("Tenth Amendment") and by Eleventh Amendment to
Amended and Restated Credit Agreement, dated as of April 16, 2007 ("Eleventh
Amendment") (it being acknowledged by the parties hereto that the proposed First
Amendment to Amended and Restated Credit Agreement, which had been under
discussion in March 2003, was never executed by the parties and is of no force
or effect; otherwise, such agreement, as amended by the Second Amendment, Third
Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh
Amendment, Eighth Amendment, Ninth Amendment, Tenth Amendment and Eleventh
Amendment, and as it may be further amended, restated, supplemented and/or
modified, shall be referred to herein as the "Credit Agreement"). Terms used
herein and not herein defined shall have the meanings given to them in the
Credit Agreement.

                  The Borrower has now requested additional amendments to the
provisions of the Credit Agreement, which the Bank is willing to accommodate
subject to the terms, provisions and conditions set forth in this Twelfth
Amendment.

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the Bank hereby agree as follows:

<PAGE>

                  1.     Amendments to Credit Agreement. The Credit Agreement is
hereby amended as follows:

                  (a)    The following definition in Section 1.01 is hereby
amended and restated in its entirety to read as follows:

                  "Termination Date" means whichever is applicable of (i)
         December 31, 2008, (ii) the date the Commitments are terminated
         pursuant to Section 6.01 following the occurrence of an Event of
         Default, or (iii) the date the Borrower terminates the Commitments
         entirely pursuant to Section 2.08.

                  (b)    The matrix set forth in Section 2.06(a)(ii) of the
Credit Agreement is hereby amended, restated and replaced by the following
matrix:

                  Debt/EBITDA Ratio                       Applicable Margin
                  -----------------                       -----------------

         Less than 2.50 to 1.00                                  1.95%

         Greater than or equal to 2.50 to 1.00                   2.50%

                  (c)    Section 5.24 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:

                  "Section 5.24 Capital Expenditures. Aggregate Capital
Expenditures for any Fiscal Year will not exceed $5,000,000.00."

                  (d)    Section 5.27 of the Credit Agreement, entitled "Minimum
EBITDA", is hereby deleted in its entirety.

                  (e)    A new Section 5.28, entitled "Funded Debt/EBITDA
Ratio", is hereby added to the Credit Agreement, which new section shall read as
follows:

                         5.28  Funded Debt/EBITDA Ratio. The Borrower will
         maintain at the end of each Fiscal Quarter a ratio of Funded Debt to
         EBITDA of not more than 3.00 to 1.00.

                  2.     Further Assurances. The Borrower will execute such
confirmatory instruments, if any, with respect to the Credit Agreement and this
Twelfth Amendment as the Bank may reasonably request.

                  3.     Ratification by Borrower. The Borrower ratifies and
confirms all of its representations, warranties, covenants, liabilities and
obligations under the Credit Agreement (except as expressly modified by this
Twelfth Amendment) and agrees that: (i) except as expressly modified by this
Twelfth Amendment, the Credit Agreement continues in full force and effect as if

                                       2
<PAGE>

set forth specifically herein; and (ii) the Borrower has no right of setoff,
counterclaim or defense to payment of its obligations under the Credit
Agreement. The Borrower and the Bank agree that this Twelfth Amendment shall not
be construed as an agreement to extinguish the Borrower's obligations under the
Credit Agreement or the Notes and shall not constitute a novation as to the
obligations of the Borrower under the Credit Agreement or the Notes. The Bank
hereby expressly reserves all rights and remedies it may have against all
parties who may be or may hereafter become secondarily liable for the repayment
of the obligations under the Credit Agreement or the Notes.

                  4.     Amendments. This Twelfth Amendment may not itself be
amended, changed, modified, altered, or terminated without in each instance the
prior written consent of the Bank. This Twelfth Amendment shall be construed in
accordance with and governed by the laws of the State of North Carolina.

                  5.     Counterparts. This Twelfth Amendment may be executed in
any number of counterparts, each of which shall be deemed to be an original and
all of which, taken together, shall constitute one and the same agreement.

                  6.     Modification and Extension Fee. The Borrower shall pay
to the Bank on the date this Twelfth Amendment is executed, an amendment and
extension fee equal to $10,000.00, which fee, once paid, shall be fully earned
and non-refundable.

                  7.     Bank's Expenses. In accordance with Section 9.03 of the
Credit Agreement, Borrower hereby acknowledges and agrees to pay all reasonable
out-of-pocket expenses incurred by the Bank in connection with the preparation
of this Twelfth Amendment, including without limitation reasonable attorneys'
fees.

                            [Signature Page Follows]

                                       3
<PAGE>

                  IN WITNESS WHEREOF, this Twelfth Amendment has been duly
executed under seal by Borrower and Bank as of the day and year first above
written.

                                          BORROWER:

                                          CULP, INC.                   (SEAL)

                                          By: /s/ Kenneth R. Bowling
                                              ----------------------
                                          Name: Kenneth R. Bowling
                                          Title: Vice President and Chief
                                                 Financial Officer

                                          BANK:

                                          WACHOVIA BANK, NATIONAL ASSOCIATION,
                                          as Agent and as Bank         (SEAL)

                                          By: /s/ Matthew M. Rankin
                                              ---------------------
                                          Name: Matthew M. Rankin
                                          Title: Senior Vice President

                                       4

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