SEVENTH AMENDMENT TO CREDIT AGREEMENT


SEVENTH  AMENDMENT  TO  CREDIT  AGREEMENT,  dated as of  March  27,  1996  (this
"Amendment"),  to the Revolving Credit, Factoring and Security Agreement,  dated
as of September 20, 1993, as amended by letter agreement Re: Amendment to Credit
Agreement  with respect to the  Mississippi  Property,  dated June 14, 1994 (the
"First  Amendment") and by letter  agreement Re:  Amendment to Credit  Agreement
with  respect to  Additional  Guarantors,  dated  August 24,  1994 (the  "Second
Amendment"),  and by the  Third  Amendment  to  Credit  Agreement,  dated  as of
February 28, 1995 (the "Third Amendment"), and by the Fourth Amendment to Credit
Agreement, dated as of March 1, 1995 (the "Fourth Amendment"),  and by the Fifth
Amendment to Credit Agreement, dated as of June 28, 1995 (the "Fifth Amendment")
and by the Sixth Amendment to Credit Agreement, dated as of August 15, 1995 (the
"Sixth  Amendment")  (as so amended,  and as further  amended,  supplemented  or
otherwise modified from time to time, the "Credit  Agreement"),  between THE CIT
GROUP/COMMERCIAL SERVICES, INC. ("Lender") and SALANT CORPORATION ("Borrower").

                              W I T N E S S E T H :

WHEREAS, Lender and Borrower are parties to the Credit Agreement;

WHEREAS, Borrower has requested Lender to amend the Credit Agreement to increase
the Maximum Credit and the Revolving Loan Limit as defined  therein and to amend
certain financial covenants set forth therein; and

WHEREAS,  Lender is willing to make such amendments to the Credit Agreement upon
the terms and subject to the conditions set forth in this Amendment;

NOW,  THEREFORE,  in  consideration  of the premises,  the parties hereto hereby
agree, effective as of the Effective Date, as defined below, as follows:

1.       Defined Terms.  Initially capitalized terms used and not
 otherwise defined herein shall have their
respective meanings as defined in the Credit Agreement.

2.       Amendment of Section 3.1(a) (iii).  Section 3.1(a) (iii) of the Credit
 Agreement is amended in its
         ---------------------------------
entirety to read as follows:


<PAGE>



         "(iii)  Fifty  percent  (50%)  of  the  value  of  Eligible  Inventory,
         provided,  however, that solely for, and at all times during the months
         of May, June, July and August of 1996, such advance rate shall be sixty
         percent (60%) of the value of Eligible Inventory."

3.       Amendment of Section 3.1(c).  Section 3.1(c) of the Credit Agreement 
is amended in its entirety to read
         ---------------------------
as follows:

         "(c)  Notwithstanding  anything to the contrary  contained herein or in
         any of the other Financing  Agreements,  except in Lender's discretion,
         the aggregate unpaid principal amount of Revolving Loans outstanding at
         any time based on the value of all Eligible  Inventory shall not exceed
         $60,000,000 (the "Inventory Sublimit"),  provided, however, that solely
         for, and at all times during,  the months of May, June, July and August
         of 1996,  the  Inventory  Sublimit  may  equal  but  shall  not  exceed
         $70,000,000.  On or before  September 10, 1996,  Borrower  shall pay in
         full to Lender that  portion of the  Revolving  Loans which is equal to
         the difference (such amount, the "Inventory  Overadvance") between: (i)
         the aggregate  amount of Revolving Loans then  outstanding with respect
         to Eligible  Inventory,  and (ii) the lesser of: (A) the maximum amount
         of Revolving Loans with respect to Eligible Inventory to which Borrower
         is entitled on  September  1, 1996,  based on an advance  rate of fifty
         percent (50%) of the value of Eligible Inventory, and (B) the Inventory
         Sublimit as in effect on September 1, 1996.  Borrower's  failure to pay
         the  Inventory  Overadvance  in full on or before  September  10, 1996,
         shall  constitute  an Event of  Default  under  Section  8.1(a) of this
         Agreement."

4.       Amendment of Section 3.3.  Section 3.3 of the Credit Agreement is
 amended in its entirety to read as follows:

         "3.3  Maximum Credit

         The aggregate  principal  amount of the  Revolving  Loans and Letter of
         Credit   Accommodations  at  any  time  outstanding  shall  not  exceed
         $120,000,000,  provided,  however,  that solely  for,  and at all times
         during, the months of March, April, May, June, July, August,  September
         and  October  of 1996,  such  outstanding  amount  shall not exceed the
         amount  set forth  opposite  each such  month  and  provided,  further,
         however,  that during the first  twenty  (20) days of each  month,  the
         Maximum  Credit  may equal but shall not  exceed  the higher of (i) the
         Maximum Credit on the last day of the  immediately  preceding  month or
         (ii) the amount set forth below opposite such month:

<TABLE>
<CAPTION>

         Month (1996)                           Amount

<S>                                         <C>
         March                              $132,000,000
         April                              $135,000,000
         May                                $130,000,000
         June                               $132,000,000
         July                               $130,000,000
         August                             $135,000,000
         September                          $135,000,000
         October                            $130,000,000
</TABLE>

Notwithstanding anything to the contrary contained herein, the Maximum Credit as
of November 21, 1996 and thereafter shall not exceed $120,000,000."

5.       Amendment of Section 3.6(k).  The first sentence of Section 3.6(k) of
 the Credit Agreement is amended in its entirety to read as follows:

         "From and after  September 30, 1996,  Borrower  shall have the right to
         cease factoring the Accounts of any of its divisions or other operating
         units  upon not less than  sixty  (60)  days  prior  written  notice to
         Lender,  provided,  however,  that (x) all Accounts  shall at all times
         constitute  security for all Obligations and (y) if Borrower delivers a
         notice to Lender in accordance  with this Section  3.6(k) that Borrower
         will cease any and all further factoring of its Accounts,  the exercise
         of such right shall be subject to Borrower's  executing and  delivering
         to Lender all such  documents  as Lender  shall  reasonably  request in
         connection therewith."

6.       Amendment of Section 7.18.  Section 7.18 of the Credit Agreement is
 amended in its entirety to read as  follows:

         "7.18  Working Capital

Borrower  shall  not at the end of any  fiscal  month  permit  its  consolidated
working  capital  to be  less  than  $80,000,000  during  the  period  from  the
Consummation  Date  through the day before the last day of its 1993 fiscal year,
and  $85,000,000  during the period  from the last day of its 1993  fiscal  year
through the day before the last day of its 1996  fiscal  year,  and  $90,000,000
thereafter."

7.       Amendment of Section 7.19.  Section 7.19 of the Credit Agreement is 
amended in its entirety to read as follows:

         "7.19  Stockholders' Equity

Borrower shall not permit its consolidated  stockholders' equity to be less than
$55,000,000 at any time during the period from the Consummation Date through the
day before the last day of its 1993 fiscal year,  $60,000,000 at any time during
the period from the last day of its 1993 fiscal year  through the day before the
last day of its 1996 fiscal year, and  $70,000,000  thereafter.  Notwithstanding
anything  to  the  contrary   contained   herein,   write-offs   for   goodwill,
restructuring  expense or other unusual or non-recurring  expense arising during
Borrower's  1996 fiscal year in connection  with or pursuant to a  restructuring
and which Borrower would  otherwise be required to include in the  determination
of Borrower's  consolidated  stockholders' equity, shall, in an aggregate amount
not to exceed  $5,000,000,  be excluded  from such  determination  of Borrower's
consolidated stockholders' equity from and after December 28, 1996."

8.       Amendment of Section 7.21.  Section 7.21 of the Credit Agreement is 
amended in its entirety to read as follows:

         "7.21  Fixed Charge Coverage Ratio

         Borrower  shall  not  permit  the  ratio  of (a)  the  sum  of (i)  the
         consolidated  net income  (including  royalty  income) from  continuing
         operations  (excluding any unusual or non-recurring  items of income or
         expense)  before  interest and taxes of Borrower  and its  Subsidiaries
         during any computation  period and (ii) the  consolidated  depreciation
         and  amortization  expenses of Borrower and its  Subsidiaries  for such
         computation  period  to (b) the sum of (I)  the  consolidated  interest
         expense  (including all imputed interest on capital lease  obligations)
         of Borrower and its  Subsidiaries  and (II) the aggregate amount of all
         scheduled  repayments of Indebtedness  (other than the  Obligations) by
         Borrower and its Subsidiaries during the computation period, to be less
         than 1.5:1.0 at the end of its 1993, 1994, 1995 and 1996 fiscal years."

9.       Amendment of Section 10.1(a).  Section 10.1(a) of the Credit Agreement
 is amended in its entirety to read as follows:

         "10.1    Term.

         (a) This  Agreement  and the other  Financing  Agreements  shall become
         effective  as of the date  hereof and shall  continue in full force and
         effect for a term  ending on March 31,  1997 (the  "Renewal  Date") and
         from year to year thereafter,  unless sooner terminated pursuant to the
         terms hereof."

10.  Representations and Warranties.  Borrower hereby represents and warrants to
Lender that the  representations  and  warranties  set forth in Section 6 of the
Credit  Agreement  are true on and as of the date hereof as if made on and as of
the date hereof after giving effect to this Amendment,  except to the extent any
such representation or warranty expressly relates to a prior date, and breach of
any of the  representations  and  warranties  made  in  this  paragraph  8 shall
constitute  an Event of  Default  under  Section  8.1(b) or 8.1(c) of the Credit
Agreement,  as applicable.  Borrower further represents and warrants that, after
giving effect to this  Amendment,  no Event of Default or event which,  with the
lapse of time or the giving of notice or both,  would become an Event of Default
has occurred and is continuing.

11.      Effectiveness.  This Amendment shall become effective on the date 
(the "Effective Date") Lender shall have received each of the following:

                           a.       The written consent of all Participants to
                                    the execution and delivery of this
                                    Amendment by Lender.

                           b.       Counterparts of this Amendment, duly
                                    executed and delivered by Borrower and
                                    Lender.

                           c.       A duly executed copy of the Consent of
                                    Guarantors substantially in the form of
                                    Exhibit A hereto.

12. Continuing Effect of Credit Agreement. This Amendment shall not constitute a
waiver or  amendment  of any  provision of the Credit  Agreement  not  expressly
referred  to herein and shall not be  construed  as a consent to any  further or
future  action on the part of  Borrower  that would  require  consent of Lender.
Except as expressly  amended,  the  provisions  of the Credit  Agreement are and
shall remain in full force and effect.

13.      Counterparts.  This Amendment may be executed in counterparts,
 and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.

14.      Governing Law.  This Amendment shall be governed by, and construed 
and interpreted in accordance with,the laws of the state of New York.

IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be duly
executed and delivered in New York, New York by their proper and duly authorized
officers as of the day and year first above written.

THE CIT GROUP/COMMERCIAL
 SERVICES, INC.

By:

Title:

SALANT CORPORATION

By:

Title:

<PAGE>






                                    EXHIBIT A

                              CONSENT OF GUARANTORS

Each of the  undersigned,  CLANTEXPORT,  INC.,  DENTON MILLS,  INC., FROST BROS.
ENTERPRISES,  INC., SLT SOURCING,  INC.,  each a Guarantor  under its respective
Guarantee,  each dated as of September 20, 1993,  and SALANT CANADA INC. and JJ.
FARMER CLOTHING INC., each a guarantor under its respective  Guaranty (Unlimited
Liability),  each dated as of September 20, 1994  (individually,  in the case of
each of the foregoing  Guarantors,  its  "Guarantee"),  made in favor of the CIT
Group/Commercial Services, Inc. ("Lender"),  pursuant to the Credit Agreement as
defined in the Seventh Amendment to Credit Agreement, dated as of March __, 1996
between Lender and Salant Corporation (the  "Amendment"),  to which this Consent
is  attached,  hereby  consents to the  Amendment  and the matters  contemplated
thereby,  and  hereby  confirms  and  agrees  that its  Guarantee  is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects except that, on and after the effective date of the Amendment, each
reference in its Guarantee to "the Credit Agreement", "thereunder", "thereof" or
words of like  import  referring  to the  Credit  Agreement  shall mean and be a
reference to the Credit Agreement as amended by the Amendment.

IN  WITNESS  WHEREOF,  each  of the  undersigned  has  caused  this  Consent  of
Guarantors to be duly executed and delivered by its  authorized  officer this __
day of March, 1996.

CLANTEXPORT, INC.                           FROST BROS. ENTERPRISES, INC.

By:                                         By:

Title:                                         Title:

DENTON MILLS, INC.                                   SLT SOURCING, INC.

By:                                              By:

Title:                                                 Title:

VERA LICENSING, INC.                                 SALANT CANADA INC.

By:                                                   By:

Title:                                               Title:


<PAGE>




JJ. FARMER CLOTHING, INC.

By:

Title: