Isn't it funny that kids always wake up when we're having the most fun? In the wide world Nicole, entire families live in one room. In these places, kids are exposed to sexual intimacy in the same bed they are sleeping in.
Anyway, read aloud to her the book, "Where Did I Come From?" by Peter Mayle. It has great illustrations of a mom and dad in bed and explains the sex thing without calling it sex. She will become preoccupied with the more interesting part of the book ~ how babies grow and are born.
This will, effectively, change the subject for her and give her something else to think and talk about.
By the way, little kids DO talk to the world about what they see. If I were you and/or your husband, I would practice not turning red in the face. It is bound to come up sooner or later :o)