PROMISSORY NOTE

$15,000,000                              New York, New York
					 March 31, 1995


	FOR VALUED RECEIVED, each of the undersigned, SIGNAL 
APPAREL COMPANY, INC., an Indiana corporation ("SIGNAL"), 
THE SHIRT SHED, INC., a Delaware corporation ("SSI") and 
AMERICAN MARKETING WORKS, INC. ("AMW"), hereby jointly and 
severally unconditionally promises to pay on the Maturity 
Date to the order of WALSH GREENWOOD & CO. (the "LENDER"), 
at its office located at One East Putnam Avenue, Greenwich, 
Connecticut 06830, in lawful money of the United States of 
America and in immediately available funds, the principal 
amount of the lesser of (a) FIFTEEN MILLION DOLLARS 
($15,000,000) and (b) the aggregate unpaid principal amount 
of all Loans made pursuant to Section 2.1 of the Credit 
Agreement referred to below, and to pay interest in like 
money at such office on the unpaid principal amount hereof 
from time to time, on the dates and in the manner as 
provided in Section 2.5 of the Credit Agreement, at the rate 
which is the lesser of (a) the applicable rate per annum set 
forth in Section 2.5 of the Credit Agreement, and (b) the 
maximum rate of interest which may be charged or collected 
by the Lender under applicable law, until paid in full (both 
before and after judgment).

	The holder of this Note is authorized to, and so long 
as it holds this Note shall, record the date and amount of 
each Loan made by the Lender pursuant to Section 2.1 of the 
Credit Agreement, the date and amount of each payment or 
prepayment of principal thereof, and any such recordation 
shall constitute PRIMA FACIE evidence of the accuracy of the 
information so recorded; PROVIDED that failure of the Lender 
to make any such recordation (or any error in such 
recordation) shall not affect the joint and several 
obligations of the undersigned under this Note or under the 
Credit Agreement.

	The Note is the Note referred to in the Credit 
Agreement, dated as of March 31, 1995 (as amended, 
supplemented or otherwise modified from time to time, the 
"CREDIT AGREEMENT"), among the undersigned and the Lender, 
is entitled to the benefits thereof, if secured as provided 
therein and is subject to optional prepayment in whole or in 
part as provided therein.  Terms used herein which are 
defined in the Credit Agreement shall have such defined 
meanings unless otherwise defined herein or unless the 
context otherwise requires.

	Upon the occurrence of any one or more of the Events of 
Default specified in the Credit Agreement, all amounts then 
remaining unpaid on this Note shall become, or may be 
declared to be, immediately due and payable, all as provided 



therein.  The Borrower expressly waives diligence, 
presentment, protest, demand and other notices of any kind.

	This Note shall be governed by, and construed and 
interpreted in accordance with, the laws of the State of New 
York,

			     SIGNAL APPAREL COMPANY, INC.

			     By: /s/ William H. Watts
				Name: William H. Watts
				Title: Executive VP and CFO

			     THE SHIRT SHED, INC.

			     By: /s/ William H. Watts
				Name: William H. Watts
				Title: Exececutive VP and CFO

			     AMERICAN MARKETING WORKS, INC.

			     By: /s/ William H. Watts
				Name: William H. Watts
				Title: Executive VP and CFO

THIS NOTE IS SUBJECT IN ITS ENTIRETY TO THE INTERCREDITOR 
AGREEMENT DATED AS OF THE DATE HEREOF AMONG THE MAKER, WALSH 
GREENWOOD & CO., BNY FINANCIAL CORPORATION AND GREYROCK 
CAPITAL GROUP, INC., AND NO PAYMENTS MAY BE RECEIVED BY 
WALSH GREENWOOD & CO. OR ANY HOLDER HEREOF UNLESS EXPLICITLY 
PERMITTED THEREBY.