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                              INDEMNITY UNDERTAKING

In this Undertaking the following expressions shall have the meaning assigned to
them:

"THE COMPANY"                   Delta Galil Industries Ltd.

"THE COMPANIES LAW"             The Companies Law 1999 and any Law amending or
                                replacing the same, as may be in force from time
                                to time.

"OFFICE HOLDER"                 Any person who from time to time officiates as
                                an office holder as such expression is defined
                                in section 1 of The Companies Law, including an
                                office holder who officiates on behalf of the
                                company in another company in which the Company
                                holds at least 25% of the rights in the share
                                capital and/or or the voting rights and/or the
                                right to appoint directors (hereinafter "OFFICE
                                HOLDER IN THE OTHER COMPANY").

"D&O INSURANCE
POLICY" OR "POLICY"             A D&O insurance policy purchased or that may be
                                purchased by the Company, whether by way of a
                                single policy or by way of more than one policy.

"THE DOLLAR" OR
"THE US DOLLAR"                 An amount in NIS calculated in accordance with
                                the Representative Rate of the US Dollar as may
                                be published by The Bank of Israel at the
                                relevant time.

WHEREAS                 The Company owns a D&O Insurance Policy;

AND WHEREAS             The cover, the financial amount or the terms of the D&O
                        Insurance Policy may not fully secure the Office Holders
                        in respect of a Claim (if and to the extent filed)
                        against the Office Holders;

AND WHEREAS             The Company is desirous of granting to the Office
                        Holders an independent Indemnity Undertaking, in
                        addition to the D&O Insurance Policy, PROVIDED that the
                        amount of indemnification will be limited to an
                        aggregate of US$15 million for all Office Holders with
                        respect to any series of events, minus any amount
                        reimbursed by the D&O Insurance Policy;

AND WHEREAS             This Undertaking does not apply to the cases detailed in
                        section 263 of The Companies Law;

AND WHEREAS             This Undertaking serves to enhance the entitlement of
                        the Office Holders to indemnity and not to diminish the
                        entitlement and therefore this Undertaking should be
                        construed in the widest manner subject to the
                        limitations of law.

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THEREFORE, by virtue of approval by a resolution of the Audit Committee of the
Board of Directors dated January 16, 2003, and by virtue of approval by a
resolution of the Board of Directors of the Company dated January 16, 2003, and
by virtue of approval by a resolution of the extraordinary General Meeting of
the Company dated March 25, 2003, the Company hereby undertakes in accordance
with the provisions of The Companies Law and in accordance with the By-laws of
the Company to grant to the Office Holders of the Company indemnity as detailed
in this Undertaking.

1.      UNDERTAKING FOR INDEMNITY
        Subject to the conditions detailed in this Undertaking and to the
        provisions of The Companies Law -

        1.1     The Company hereby irrevocably undertakes to indemnify every
                Office Holder in respect of all liability as specified in
                section 1.2 hereafter, that may be imposed upon him as a result
                of acts that he carried out or may carry out in his capacity as
                an Office Holder of the Company or as an Office Holder in The
                Other Company (including acts carried out prior to the date of
                this Undertaking), that are directly or indirectly connected
                with one or more of the types of events detailed in the Addendum
                to this Undertaking or to any part of them or anything connected
                with them, directly or indirectly, (hereinafter "THE ADDENDUM")
                provided that the maximum amount of the indemnity shall not
                exceed the amount detailed in section 2 hereafter.

        1.2     The Office Holder Indemnity Undertaking specified in section 1.1
                above shall apply to every monetary liability to the extent that
                it may be imposed upon the Office Holder both in Israel and/or
                abroad, in favor of any person and/or other entity in accordance
                with a judgment, including a judgment by compromise or an
                arbitrator's decision approved by the Court, and in respect of
                reasonable costs of the proceedings including attorneys' fees,
                that the Office Holder expended or was obligated to pay by the
                Court, in proceedings instituted against the Office Holder by
                the Company or on behalf of the Company or by a person and/or
                other entity, or in a criminal charge in which the Office Holder
                was acquitted or criminal charge in which he was found guilty in
                respect of an offence that does not require proof of criminal
                intent.

2.      AMOUNT OF INDEMNITY
        2.1     The amount of the indemnity that the Company may be liable to
                pay to all Office Holders in the Company and Office Holders in
                The Other Company, in the aggregate, in accordance with this
                present Undertaking in respect of the same series of events out
                of those events that are specified in the Addendum, shall not
                exceed the sum of $15,000,000 (fifteen million US Dollars) minus
                any amount reimbursed directly to any Office Holder by the
                insurer under the D&O Insurance Policy, PROVIDED, however, that
                the total amount of indemnity shall not exceed 25% of the
                shareholders' equity of the Company on the date of the payment
                of such amount (hereinafter "THE MAXIMUM INDEMNITY AMOUNT").

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        2.2     If and to the extent that the total amounts of indemnity that
                the Company may be demanded to pay shall exceed the Maximum
                Indemnity Amount (as it was at such time) in accordance with
                section 2.1 above, the Maximum Indemnity Amount or the balance
                thereof, as the case may be, shall be divided between the Office
                Holders that are entitled to indemnity in such manner that the
                amount of indemnity that each Office Holder will actually
                receive shall be calculated in accordance with the ratio between
                the amount of indemnity due to each of the Office Holders in
                respect of the liabilities or the expenses that each Office
                Holder is liable to bear as a result of the legal proceeding,
                and between the amount of indemnity due to each of the said
                Office Holders, in respect of the liabilities or the expenses
                that each Office Holder is liable to bear as a result of the
                legal proceeding, in the aggregate in respect of such event.

        2.3     In the event that an Office Holder shall receive indemnity or
                shall be entitled to receive indemnity from the Insurer of the
                D&O Insurance Policy in respect of the event that is the subject
                of the indemnity, the indemnity will be awarded in respect of
                the difference between the amount of the monetary liability
                imposed upon the Office Holder and/or between the legal costs
                expended by or imposed upon the Office Holder, as in section 1
                above, and between the amount received from the Insurer in
                respect of such matter, provided that the amount of the
                indemnity for which the Company will be liable in accordance
                with this Undertaking shall not exceed the Maximum Indemnity
                Amount.

3.      HANDLING OF CLAIM
        In any event in respect of which an Office Holder may be entitled to
        indemnity as aforesaid, the Office Holder and the Company will act as
        follows:

        3.1     The Office Holder shall notify the Company in writing as to any
                legal proceeding instituted against him and as to any
                apprehension or threat that a legal proceeding may be instituted
                against him and as to any circumstances that come to his
                attention that may cause the institution of legal proceedings
                against him (hereinafter "THE PROCEEDING"), the aforesaid as
                soon as possible after he shall become aware of same, and he
                shall without delay furnish the Company or whomsoever shall be
                determined by the Company, with a copy of every document that
                may be served upon him in connection with such Proceeding.

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        3.2     The Office Holder shall cooperate fully with the Company and
                with whomsoever the Company may determine, including with the
                Insurer of the D&O Insurance Policy, and shall furnish all
                information that may be required in connection with the Claim
                and shall observe all the other provisions of the Policy in
                connection with defense against the Claim.

        3.3     The Company shall be entitled to take upon itself the handling
                of the legal defense of the Office Holder against the Proceeding
                and to entrust the defense to an attorney to be chosen by the
                Company at its discretion taking into consideration the
                obligations of the Company in accordance with the D&O Insurance
                Policy and the possibility of the appointment of attorneys on
                behalf of the Insurer (hereinafter "THE COMPANY'S ATTORNEY").

        3.4     Notwithstanding the aforesaid in section 3.3 above, the Office
                Holder may object to his representation by the Company's
                Attorney on reasonable grounds or in circumstances in which, in
                the opinion of the Office Holder or in the opinion of the
                Company's Attorney, there is a conflict of interests between the
                defense of the Office Holder and the defense of the Company.

        3.5     If within fourteen days of the receipt of a notice as in section
                3.1 above, the Company (or the Insurer) has not taken upon
                itself the handling of the defense of the Office Holder against
                the Proceeding or if the Office Holder and/or the Company's
                Attorney object to the representation of the Office Holder by
                the Company's Attorney in circumstances as in section 3.4 above,
                the Office Holder may, after giving to the Company suitable
                notice, entrust the defense to an attorney of his own choice
                (hereinafter "THE OTHER ATTORNEY") provided that the amount of
                fees to be paid to the Other Attorney is subject to approval as
                reasonable, by the Audit Committee of the Company. The Office
                Holder will be given an opportunity to appear and raise his
                contentions before the Audit Committee. The Audit Committee
                shall give a reasoned decision. If the entire amount of the fee
                requested is not approved and the Office Holder decides not to
                forego the services of the Other Attorney, the Office Holder
                shall be entitled - if he shall so desire - to receive from the
                Company the reasonable amount of fee that was approved and the
                balance shall be paid by the Office Holder at his own account.

        3.6     Notwithstanding the aforesaid in sections 3.4 and 3.5 above, if
                the D&O Insurance Policy applies to the matter, the Company will
                act in accordance with the provisions of the Policy in all
                matters connected with differences of opinion with the Insurer
                relating to the identity of the representing attorney in
                accordance with the provisions of the policy, and the provisions
                of the policy will take precedence on this matter over any
                agreement between the Office Holder and between the Company.
                Subject to the aforesaid, the Company will make a reasonable
                effort to honor the wishes of the Office Holder within the
                limits of the Policy.

<PAGE>

        3.7     If the Company decides to take upon itself the conduct of the
                defense against the Proceeding and the Office Holder does not
                object in circumstances as in section 3.4 above, the Office
                Holder, at the request of the Company, will sign a power of
                attorney authorizing the Company as well as the Company's
                Attorney, to handle the defense of the Office Holder against the
                Proceeding and to represent the Office Holder in all matters
                connected with such defense, and the Company and the Company's
                Attorney may handle such defense (with current report to the
                Office Holder and in consultation with the Office Holder and his
                legal advisers) and may finalize the Proceeding as they may deem
                fit subject to the provisions of section 3.13 hereafter.

        3.8     If the Company decides to take upon itself the conduct of the
                defense against the Proceeding and the Office Holder does not
                object in circumstances as in section 3.4 above, the Company
                shall bear all the costs and payments involved, in such manner
                that the Office Holder will not be demanded to pay or finance
                the same by himself, and the Company will not be liable to the
                Office Holder under this Undertaking in respect of legal costs
                including attorneys' fees, spent by the Office Holder in defense
                against the Proceeding.

        3.9     If the Company shall pay any amount to the Office Holder by
                virtue of the Undertaking, whether by way of advance payment or
                otherwise, and it subsequently transpires that the Office Holder
                is bound to repay such amount, in whole or in part, because he
                was not entitled to indemnity in view of the provisions of
                section 263 of The Companies Law or because of the provisions of
                any other Law, such amount shall be refunded by the Office
                Holder in Dollar value plus interest at the rate usual in Bank
                Leumi LeIsrael Ltd. on dollar loans, from the date of receipt of
                the amount until the repayment thereof.

        3.10    If the Company shall pay any amount to or on behalf of the
                Office Holder by virtue of this Undertaking, and subsequently
                the liability in respect of which the amount was paid is
                annulled or the amount thereof is reduced for any reason, the
                Office Holder shall assign to the Company all his rights to
                restitution of the amount from the plaintiff in the Proceeding,
                and the Office Holder shall do everything necessary to ensure
                that such assignment is valid and enforceable by the Company,
                and once the Office Holder does so, he will be exempt from the
                repayment of the amount the right of restitution of which has
                been assigned. If the Office Holder does not make such
                assignment, the Office Holder will be liable to repay the
                amount, in whole or in part, as the case may be, in Dollar value
                plus interest at the rate usual in Bank Leumi LeIsrael Ltd. on
                dollar loans, from the date of receipt of the amount until the
                repayment thereof.

<PAGE>

        3.11    If the Company's Attorney represents in the Proceeding both the
                Company and the Office Holder, and it subsequently transpires
                that the Office Holder was not entitled to indemnity in view of
                the provisions of section 263 of The Companies Law or because of
                the provisions of any other Law, and a difference of opinion
                arises with regard to the liability of the Office Holder to
                repay the legal costs or with regard to the amount for
                repayment, the dispute will be referred to the decision of an
                arbitrator agreed upon between the parties. The Company shall
                bear the costs of the arbitration including attorneys' fees
                unless the arbitrator determines in his decision that the Office
                Holder exploited the arbitration proceedings with a lack of BONA
                FIDES. The arbitrator shall be appointed by the procedure
                detailed in section 3.13 below.

        3.12    The Office Holder shall not give his consent to a compromise or
                to the referral of the Proceeding to decision by arbitration
                without the prior written consent of the Company, and to the
                extent that consent of the Insurer is required, without the
                prior written consent of the Insurer of the D&O Insurance
                Policy. The Company will not agree to a compromise unless the
                Compromise Agreement does not expose the Company and/or the
                Office Holders to additional Claims on the part of the plaintiff
                or plaintiffs and that the Agreement contains no admission or
                recognition of liability of the Office Holders for the causes of
                action that are the subject of the Proceeding. The Company will
                bring the details of the Compromise Agreement to the attention
                of the Office Holders. In the event of a difference of opinion
                between the Company and between an Office Holder or Office
                Holders as to whether the Compromise Agreement satisfies the
                provisions of this section, the dispute will be referred for
                expeditious decision by an arbitrator appointed upon request
                either by the Company or by the Office Holder. The arbitrator
                shall be appointed within 7 days of the request by one of the
                parties for the referral of the dispute to decision by an
                arbitrator, and if no agreement is reached as to the identity of
                the arbitrator, the arbitrator will be appointed by the Chairman
                of the Israel Bar Council. The Company shall bear the costs of
                the arbitration including attorneys' fees.

        3.13    Neither the Company nor the Company's Attorney shall agree to a
                compromise the amount of which is in excess of the amount of
                indemnity to which the Office Holder is entitled, without the
                prior written consent of the Office Holder, and to the extent
                that consent of the Insurer is required, without the prior
                consent of the Insurer as well.

4.      VALIDITY OF THE UNDERTAKING

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        4.1     The Undertaking shall be valid both in respect of proceedings
                instituted against the Office Holder in the course of his
                employment or office in the Company and also in respect of
                proceedings that may be instituted against him, including his
                estate, after the termination of his employment or office in the
                Company, provided that such proceedings relate to acts that were
                carried out by the Office Holder after his appointment as an
                Office Holder in the course of or in his capacity as an Office
                Holder of the Company, or as a result thereof. The Undertaking
                will also be available for the estate of the Office Holder, his
                heirs and legal substitutes.

        4.2     The Company will only be required to pay by virtue of this
                Undertaking, amounts in excess of money actually paid to or for
                or instead of the Office Holder by any insurance purchased by
                the Company or by a company controlled by the Company or an
                affiliated corporation (if the Office Holder officiates therein
                as an Office Holder at the request of the Company) or any
                indemnity undertaking of a company controlled by the Company or
                an affiliated corporation or any entity other than the Company.

        4.3     This Undertaking shall in no way limit or prevent the Company
                from granting to the Office Holder an additional special
                indemnity or indemnities provided that the same will in no way
                derogate from or prejudice the indemnity undertakings that are
                the subject of this Undertaking.

        4.4     This Undertaking shall in no way limit or prevent the Company
                from increasing the Maximum Indemnity Amount in respect of
                events that are the subject of the indemnity, whether in view of
                a decrease in the amount insured pursuant to the D&O Insurance
                Policy, or in view of the inability of the Company to obtain D&O
                insurance to cover events that are the subject of the indemnity
                on reasonable terms, or for any other reason, provided that the
                resolution in respect thereof is adopted in the manner
                determined in The Companies Law.

        4.5     The undertakings of the Company pursuant to this Undertaking
                shall, to the extent permitted by law, be construed widely so
                that they may be carried out in a manner that will achieve their
                intended purpose. In the event of a contradiction between any
                provision of this Undertaking and between a provision of law
                that may not be excepted, altered or added to, such provision of
                law shall take precedence, but the aforesaid shall not prejudice
                or derogate from the validity of the other provisions of this
                Undertaking.

        4.6     For the removal of doubt it is hereby determined that his
                Undertaking does not constitute an agreement in favor of a third
                party and may not be assigned.

<PAGE>

5.      If in order to give validity to any of the aforesaid undertakings, any
        act, resolution, approval or any additional or other process, may be
        required, the Company undertakes to cause the same to be effected and/or
        adopted, as the case may be, in a manner that will enable the Company to
        perform all of its undertakings as aforesaid.

6.      The indemnity undertaking in favor of an Office Holder in the Company in
        accordance with this Undertaking, shall apply also to an Office Holder
        in The Other Company, as defined in the preamble to this Undertaking,
        subject to the changes required by the context, in respect of events and
        acts carried out in the frame of his office or employment in The Other
        Company.


                    IN WITNESS WHEREOF WE HAVE SET OUR HAND,
                         THIS ______ DAY OF ______ 2003





                                     ---------------------------
                                     DELTA GALIL INDUSTRIES LTD.


AGREED AND ACCEPTED :



----------------------                     ------------------------
Name:                                                Date

<PAGE>

                             ADDENDUM TO UNDERTAKING
                                 TYPES OF EVENTS

1.      Acts connected with transactions carried out by the Company and/or a
        subsidiary with other corporations, whether before or after the
        performance of the transaction, including the entering into the
        transaction, the performance thereof, follow-up and supervision of the
        transaction and the acts carried out by the Office Holder on behalf of
        the Company.

2.      Acts resulting from the fact that the Company is a public company and/or
        that its securities were offered to the public and/or are Stock Exchange
        traded, in Israel or abroad.

3.      The issue of securities, including, but without derogation from the
        generality of the foregoing, the offer of securities to the public by
        way of prospectus, private offer or the offer of securities in any other
        manner and the allotment of options to employees of the company.

4.      A transaction within the meaning of such expression in section 1 of The
        Companies Law including the receipt of credit, transfer, sale or
        purchase of assets or liabilities, including securities or the grant or
        receipt of a right in any of the above, and any act directly or
        indirectly connected with such a transaction.

5.      Acts and/or decisions (including the non-performance of an act or the
        non-taking of a decision) relating to hedging the assets or liabilities
        of the Company.

6.      Sale, purchase or holding of negotiable securities.

7.      A report or notice filed in accordance with The Companies Law or The
        Securities Law, including the Regulations enacted thereunder, or in
        accordance with Laws and Regulations dealing with similar matters
        outside of Israel, or in accordance with rules or directives of the
        Stock Exchange in Israel or abroad and/or the non-filing of such a
        report or notice.

8.      Reports, notices, and applications for approval (including acts
        connected with such reports, notices and applications) to judicial and
        administrative authorities in Israel and abroad, including the
        Securities Commission (in Israel and abroad); The Stock Exchange (in
        Israel and abroad); the cartel authorities; the Registrar of Data
        information; the Companies and Trademarks Registrar; The Registrar of
        Pledges; The Land Registrar etc.

9.      Acts connected with the terms of employment of employees including the
        handling of pension funds, provident funds, insurance and savings funds,
        options and other bonuses.

10.     Acts connected with trade and marketing relations, including acts and
        agreements with independent contractors, customers, insurers, insurance
        agents and other agents, suppliers, providers of various services,
        orders and purchases for the Company.

<PAGE>

11.     Any act that occasions damage to person, sickness, death, damage to
        property including loss of use.

12.     Any act that causes failure to adopt proper security arrangements.

13.     A change in the structure of the Company or its reorganization or
        resolutions in connection with same, including, but without derogation
        from the generality of the aforesaid, merger, split, alteration of the
        share capital of the Company, its subsidiaries, their winding up or
        sale, an allotment or distribution.

14.     Events connected with the data systems of the Company.

15.     An expression, statement, including the expression of a viewpoint or
        opinion made BONA fides by an office Holder in the course of his work
        and by virtue of his capacity as Office Holder, including at a meeting
        of the Board of Directors or of a Committee of the Board.

16.     Each of the types of events detailed above that are connected with the
        office of the Office Holder in The Other Company as defined in the
        preamble of Undertaking above.