EXHIBIT 10.1


                SECOND AMENDMENT TO THE ASSET PURCHASE AGREEMENT

     This Second  Amendment to the Asset Purchase  Agreement is made as of April
15, 1999, by and among Signal  Apparel  Company,  Inc.,  an Indiana  corporation
("Signal"),  Tahiti  Apparel,  Inc., a New Jersey  corporation  ("Tahiti"),  Zvi
Ben-Haim  and  Michael   Harary   (Ben-Haim  and  Harary   referred  to  as  the
"Stockholders"),

                                   WITNESSETH

     WHEREAS,  Signal,  Tahiti and the  Stockholders  entered  into that certain
Asset  Purchase   Agreement   dated  December  18,  1999  (the  "Asset  Purchase
Agreement"),  whereby Signal agreed to purchase substantially all of the assets,
and assumed certain of the liabilities, of Tahiti;

     WHEREAS, the Asset Purchase Agreement was amended by Amendment to the Asset
Purchase Agreement dated March 16, 1999 (the "First Amendment");

     WHEREAS,  the  parties  closed the  transaction  contemplated  by the Asset
Purchase Agreement on March 22, 1999;

     WHEREAS,  the  parties  desire  to amend the Asset  Purchase  Agreement  to
reflect a change in the price at which at which the Stockholders  would have the
option of repurchasing  the assets of the Business  pursuant to Section 13.16 of
the Asset Purchase Agreement.

     NOW, THEREFORE it is hereby agreed that:

     1. Unless  otherwise  defined herein,  capitalized  terms used herein shall
have the meanings  ascribed to them in the Asset  Purchase  Agreement and in the
First Amendment.

     2. The second  sentence of Section 13.16 of the Asset  Purchase  Agreement,
which  begins  "Upon  the  occurrence  of a  Financing  Default . . ." is hereby
deleted in its entirety and replaced with the following: "Upon the occurrence of
a Financing  Default,  the Stockholders  shall have the option (the "Option") to
jointly  repurchase  the assets of the Business as they then exist for an amount
equal to the Purchase  Price  payable in shares of the Buyer Common Stock valued
at $1.18750,  plus the assumption of the liabilities of the Business incurred in
the ordinary course of business."

     3. In the event of any  conflict  between  this  Second  Amendment  and the
provisions  of  the  Asset  Purchase  Agreement  or  the  First  Amendment,  the
provisions of this Second Amendment shall be deemed to control.






     IN WITNESS WHEREOF,  the undersigned have executed this Second Amendment as
of the date first set forth above.


                                         SIGNAL APPAREL COMPANY, INC.


                                         By: /s/ Howard Weinberg
                                             ---------------------------
                                             Name:  Howard Weinberg
                                             Title: CFO


                                         TAHITI APPAREL, INC.


                                         By: /s/ Zvi Ben-Haim
                                             ---------------------------
                                             Name:  Zvi Ben-Haim
                                             Title: President

                                             /s/ Zvi Ben-Haim
                                         -------------------------------
                                                 Zvi Ben-Haim

                                             /s/ Michael Harary
                                         -------------------------------
                                                 Michael Harary