EXHIBIT 3

                      SECOND AMENDMENT TO RIGHTS AGREEMENT

     THIS SECOND AMENDMENT to the Rights Agreement (the "Rights Agreement")
dated as of September 11, 1996, between Empire of Carolina, Inc. and American
Stock Transfer & Trust Company as Rights Agent ("American Stock Transfer") is
dated as of the 12th day of June 1997.

         WHEREAS, following the consummation of the transactions contemplated by
that certain Securities Purchase Agreement dated as of May 5, 1997 among the
Corporation, HPA Associates L.L.C., a Delaware limited liability company, and
EMP Associates L.L.C., a Delaware limited liability company, as amended by
Amendment No. 1 thereto (as amended, the "Securities Purchase Agreement"), the
Company will have issued securities convertible into or exercisable for a
substantial number of shares of the Corporation's Common Stock and certain
investors will beneficially own securities convertible into or exercisable for
significant levels of the Corporation's outstanding Common Stock; and

         WHEREAS, the Board of Directors of the Company believes that it is in
the best interests of the Company and its stockholders that the Rights Agreement
be amended as set forth herein; and

         WHEREAS, Section 27 of the Rights Agreement authorizes the Board of
Directors of the Company and the Rights Agent to adopt the proposed amendment
without the approval of the Company's stockholders;

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties agree to amend the Rights Agreement as
follows:

         1. Section 1(a) of the Rights Agreement is hereby amended by deleting
Section 1(a) thereof in its entirety and substituting the following therefor:

                  (a) "Acquiring Person" means any Person who or which, together
         with all Affiliates and Associates of such Person, shall be the
         Beneficial Owner of 15% or more of the aggregate number of
         Fully-Diluted Common Shares of the Company, but shall in no event
         include any Exempt Person. Notwithstanding the foregoing, (i) no Person
         shall become an "Acquiring Person" as the result of (A) an acquisition
         of Common Shares by the Company which, by reducing the number of the
         Company's Common Shares outstanding, increases the proportionate number
         of shares beneficially owned by such Person to 15% or more of the
         Fully-Diluted Common Shares or (B) the lapse, forfeiture, cancellation,
         termination or expiration without exercise or conversion into Common
         Shares of the Company of any stock option, warrant, convertible
         security or other right to acquire Common Shares; provided, however,
         that if a

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         Person shall become the Beneficial Owner of 15% or more of the
         Fully-Diluted Common Shares of the Company by reason of share
         acquisitions by the Company or the lapse, forfeiture, cancellation,
         termination or expiration without exercise or conversion into Common
         Shares of any stock option, warrant, convertible security or other
         right to acquire Common Shares of the Company and shall, after such
         share acquisitions by the Company or such lapse, forfeiture,
         cancellation, termination or expiration, (A) acquire, in one or more
         transactions, beneficial ownership of an additional number of Common
         Shares which exceeds the lesser of 10,000 Common Shares or 0.25% of the
         then-outstanding Common Shares and (B) beneficially own after such
         acquisition 15% or more of the Fully-Diluted Common Shares of the
         Company at such time, then such Person shall be deemed to be an
         "Acquiring Person" and (ii) if the Board of Directors determines in
         good faith that a Person who would otherwise be an Acquiring Person, as
         defined pursuant to the foregoing provisions of this paragraph (a), has
         become such inadvertently, and such Person divests as promptly as
         practicable a sufficient number of Common Shares so that such Person
         would no longer be an Acquiring Person, as defined pursuant to the
         foregoing provisions of this paragraph (a), then such Person shall not
         be deemed to be an "Acquiring Person" for any purposes of this
         Agreement.

         2. Section 1 of the Rights Agreement is hereby amended by inserting the
following immediately after Section 1(l) thereof:

                  (m) "Fully-Diluted Common Shares" means the sum of (A) the
         aggregate number of Common Shares of the Company then outstanding and
         (B) the aggregate number of Common Shares of the Company then issuable
         upon the exercise of all outstanding stock options, warrants,
         convertible securities, and other rights to acquire Common Shares of
         the Company then outstanding.

         3. Section 1 of the Rights Agreement is hereby amended by redesignating
paragraphs (m) through (y) thereof as paragraphs (n) through (z).

         4. Capitalized terms used but not defined herein shall have the meaning
assigned to such terms in the Rights Agreement.

         5. Except as expressly amended hereby, the Rights Agreement remains in
full force and effect.

         6. This Amendment shall be deemed to be a contract made under the laws
of the State of Delaware, and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and performed entirely within such State.


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         7. This Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.

                                           EMPIRE OF CAROLINA, INC.
Attest:

By       /s/ Lawrence Geller               By      /s/ Steven Geller
Name:  Lawrence Geller                     Name:   Steven Geller
Title: General Counsel and Secretary       Title:  Chairman and Chief

                                                    Executive Officer


                                           AMERICAN STOCK TRANSFER &
                                           TRUST COMPANY
Attest:

By       /s/                               By      /s/ Herbert J. Lemmer
Name:                                      Name:   Herbert J. Lemmer
Title:                                     Title:  Vice President



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