WAIVER
                                
     AGREEMENT, dated as of March 27, 1996 by and among Walsh
Greenwood & Co. ("Lender"), Signal Apparel Company, Inc., The
Shirt Shed, Inc. and American Marketing Works, Inc. (collectively
"Borrowers").

     WHEREAS, Lender and Borrowers entered a Credit Agreement
dated as of March 31, 1995, as amended by a First Amendment to
Credit Agreement dated as of August 10, 1995 (the "Credit
Agreement") by which Borrowers have borrowed from Lenders
approximately $20 million; and

     WHEREAS, Borrowers have defaulted and anticipate that they
may become or continue in default under certain provisions of the
Credit Agreement, in particular the payment of interest pursuant
to Section 2.5 of the Credit Agreement; and

     WHEREAS, Borrowers have requested of Lender a waiver of any
default under the Credit Agreement which may exist currently or
which may arise prior to January 1, 1997, subject to the terms
hereof.

     NOW, THEREFORE, for and in consideration of the foregoing,
the sufficiency of which is acknowledged, the parties agree as
follows:

     1. Lender hereby waives any default by Borrowers of its
payment obligations and of its financial representations and
warranties under the Credit Agreement, including its affirmative
covenants to maintain payments to senior lenders and to comply
with certain financial covenants pursuant to Sections 7.3 and
8.13, respectively, of the Credit Agreement, which defaults
currently exist or may arise prior to January 1, 1997, subject in
all respects to the terms and conditions of Paragraphs 2 and 3
hereof. In particular, the foregoing waiver shall include those
Events of Default described in Sections 9(a),(c),(d) and (h) of
the Credit Agreement. The foregoing waiver shall apply equally to
Borrowers' obligation under the Note executed in connection with
the Credit Agreement.

     2.  The foregoing waiver shall in no respect relieve
Borrowers from the right of Lenders to accrue late payment
penalties or interest pursuant to Section 2.5(a) of the Credit
Agreement, nor shall it apply to the Affirmative Covenants of
Section 7 or the Negative Covenants of Section 8, other than
Sections 7.3 and 8.13 and those covenants which pertain solely to
the payment of money to Lender or the Borrowers' senior lenders.
In particular, this agreement and the foregoing waiver shall
become null, void and of no effect upon the occurrence of the
Event of Default described in Section 9(e) and (f) of the Credit
Agreement or upon the exercise by any of Borrowers' senior
lenders of any rights in and to the Collateral, as defined in the
Credit Agreement.

     3.  Upon entering the Credit Agreement, Lender and Borrowers
also executed an Intercreditor Agreement, dated as of March 31,
1995, with BNY Financial Corporation and Greyrock Capital Group,
Inc., and this Waiver is granted pursuant to section 4.7 of such
Agreement. To the extent that the existence of this Waiver should
adversely affect Lender's rights under such Intercreditor
Agreement or cause the other parties to such Agreement to obtain
additional rights in and to the Collateral, as defined in the
Credit Agreement, then this Waiver shall immediately become null,
void and of no effect.

     4.  This Waiver in no respect shall constitute an amendment
of the Credit Agreement but merely shall be a temporary waiver by
Lender of its rights to exercise its powers thereunder. All terms
of the Credit Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF the parties have caused this Waiver to be
executed on the day and date first above written.

SIGNAL APPAREL COMPANY, INC.

BY: /s/ William S. Watts



THE SHIRT SHED, INC.

BY: /s/ William S. Watts



AMERICAN MARKETING WORKS, INC.

BY: /s/William S. Watts



WALSH GREENWOOD & CO.

BY: /s/Paul R. Greenwood