EXHIBIT 2.12

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<S>                                     <C>
ISRAEL DISCOUNT BANK LTD.               Loan account no. _841-01-202243
MAIN BRANCH -  FOREIGN CURRENCY         Isr./For. currency proceeds current account no. 968-130915
(hereinafter: "the Bank")               [_] Proceeds account no. (principal+interest) 940-01-202243
                                        [_] Proceeds account no. (principal) 940-01-202243
Date: 21.12.04                          [_] Proceeds account no. (interest)  ___/____________
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                                           Code + target product /___/____/____/

                                      804
                 APPLICATION TO RECEIVE A FOREIGN CURRENCY LOAN

I/we the undersigned:

1.   Name HI-TEX (FOUNDED BY TEFRON LTD.) I.D./Passport no. 5512489816
     Address BRANCH POB 028

2.   Name ____________________________________ I.D./Passport no. ______________
     Address ______________________________________

3.   Name ____________________________________ I.D./Passport no. ______________
     Address ______________________________________


Hereby apply to the Bank to grant us a loan in the sum of 8,500,000
(IN WORDS EIGHT MILLION, FIVE HUNDRED THOUSAND)
currency U.S. DOLLARS (hereinafter: "the Loan") on the following conditions:

1.      PURPOSE OF THE LOAN   (complete as appropriate).

[_]  The requested Loan has been designated for -
     _____________________________________________________________________
     _____________________________________________________________________
     _____________________________________________________________________

     The requested Loan has not been designated nor will it be used by us and/or
     by any person on our behalf for the purpose of purchasing any rights in an
     apartment in which we /and/or our adult children and/or our parents intend
     to live.

     - OR -

[_]  The Loan is designated for the purchase of rights / in leasing an apartment
     in which we and/or our adult children and/or our parents intend to live, or
     for the construction, extension or refurbishing of such an apartment (see
     the schedule attached hereto).

2.   GRANT OF THE LOAN

     a.   Please open a special loan account in our name (the number of which
          will appear at the beginning of this form and be hereinafter called:
          "THE LOAN ACCOUNT") which will be operated according to the conditions
          contained herein.

     b.   Please credit the current account specified at the beginning of this
          form (hereinafter: "THE CURRENT ACCOUNT") with the proceeds of the
          Loan and debit the Loan Account with the proceeds of the Loan against
          such crediting of the Current Account. The crediting of the Current
          Account with the proceeds of the Loan will be deemed to constitute the
          receipt of the Loan by us on such dates of crediting, and will be
          hereinafter called: "THE DATE OF RECEIPT OF THE LOAN".


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     c.   The conditions of operating the Current Account signed by us
          constitute an integral part hereof.

          In respect of crediting the Account with the loan proceeds, a
          "transaction entry" commission will be charged, as fixed from time to
          time in the Bank's list of charges displayed in the Bank's branches.

          The commission for entering the transaction in the Account at the
          Bank's current rates is NIS _______

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)

3.   INSTRUCTIONS REGARDING CONVERSION

     If the Current Account is maintained in Israeli currency, please convert
     the full amount of the Loan into new shekels, according to the purchase
     rate ("for transfers and cheques") of the currency of the Loan, as
     customary in the Bank on the conversion date, plus such commissions and
     levies as will be customary for the time being.

4.   CONDITIONS OF THE LOAN

     a.   TERM AND REPAYMENT OF THE LOAN

          The Loan will be for a term of 96 months commencing the 31ST day of
          DECEMBER, 2004 and expiring on the 31 day of DECEMBER, 2012 and be
          repaid by us in installments in the amounts and on the dates set out
          below as marked with an X save that it is hereby expressly stated that
          in the event the date of payment falls on a day which is not a
          business day in the Bank (as determined by the Bank in this regard)
          such payment date will be deferred until the banking business day next
          following.

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)

     b.   REPAYMENT OF THE LOAN

          1)   [_] PAYMENT BY SEPARATING THE PRINCIPAL FROM THE INTEREST ON THE
               LOAN*:

               a)   THE PRINCIPAL OF THE LOAN WILL BE REPAID by us as detailed
                    below and marked with an X:

                    [_]  by a single payment on the ____ day of ___________

                         - OR -

                    [X]  in a total of 32 consecutive installments which will be
                         paid every 3 months on the 31 day of each Gregorian
                         calendar month in which the payment of the principal of
                         the Loan mentioned will occur commencing the 31 day of
                         DECEMBER, 2005 and terminating on the 31 day of
                         DECEMBER 2012.

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)

               b)   INTEREST* WILL BE PAID by us on the date set out below as
                    marked with an X:

                    [_]  in a single payment on the ____ day of
                         _________________

                    - OR -

                    [_]  on the repayment dates of the principal of the Loan as
                         detailed in sub-paragraph (a) above and marked with an
                         X.

                    - OR -

--------
* The interest rate will be specified in paragraph (c) below.


                                       2
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                    [X]  in a total of 32 consecutive installments which will be
                         paid every 3 months on the 31 day of each Gregorian
                         calendar month in which the payment of the interest of
                         the Loan mentioned will occur commencing the 31 day of
                         MARCH, 2005 and terminating on the 31 day of DECEMBER,
                         2012.

                    - OR -

                    [_]  first payment on ____ day of _________________ (namely
                         ____ months after the date of receiving the Loan) and
                         the remaining payments of principal in _______ equal
                         consecutive installments which will be paid every
                         ______ months on the ___ of each Gregorian calendar
                         month in which payment of such interest on the Loan
                         will be paid - commencing the ____ day of
                         __________________ and terminating on the ____ day of
                         __________________. During the period which will
                         commence on the date of receipt of the Loan and
                         terminate on the first date prescribed for the payment
                         thereof (hereinafter: "the Grace Period"), no payment
                         is required to be paid on account of the outstanding
                         balance of the Loan and/or on account of the interest
                         that has accrued on the Loan except where any of the
                         events enumerated in clause 14 hereof has occurred.

                    For the avoidance of any doubt it is hereby expressly
                    emphasized and declared that during the Grace Period, the
                    interest on the Loan will be posted once every ____ months
                    to the Proceeds Account, and similarly bear interest
                    according to the terms of the Loan. On the first date
                    prescribed for the payment thereof, the balance of the
                    interest posted and which has accrued in the Proceeds
                    Account as stated (according to the calculation and records
                    of the Bank) will be compounded with the principal of the
                    Loan and similarly be called in all respects "the Loan
                    Principal". As from such date onwards the interest will be
                    calculated, repaid and paid by us on the dates prescribed
                    for the payment thereof as set out above.

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)

               2)   [_] Repayment of the principal and interest* using the
                    "Spitzer method" tables:

                    [_]  the Loan Principal and the interest will be repaid in
                         _________________ equal consecutive installments in the
                         sum of ______________ in the currency of the Loan -
                         each which include payment of both the principal of the
                         Loan and the interest in respect thereof.

                    The above payments will fall every _________________ months
                    on the ____ of each Gregorian calendar month commencing the
                    ____ day of _________________ and terminating the ____ day
                    of _________________.

                     - or -

                    [_]  payment of the Loan Principal and the interest in
                         respect thereof will commence on the ____ day of
                         __________________ (namely ____ months after the date
                         of receiving the Loan). During the period which will
                         commence on the date of receipt of the Loan and
                         terminate on the first date prescribed for the payment
                         thereof (hereinafter: "the Grace Period"), no payment
                         is required to be paid on account of the outstanding
                         balance of the Loan and/or on account of the interest
                         that has accrued on the Loan except where any of the
                         events enumerated in clause 14 hereof has occurred.

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                    For the avoidance of any doubt it is hereby expressly
                    emphasized and declared that during the Grace Period, the
                    interest on the Loan will be posted once every ____ months
                    to the Proceeds Account, and similarly bear interest
                    according to the terms of the Loan. On the first date
                    prescribed for the payment thereof, the balance of the
                    interest posted and which has accrued in the Proceeds
                    Account as stated (according to the calculation and records
                    of the Bank) will be compounded with the principal of the
                    Loan and similarly be called in all respects "the Loan
                    Principal". As from such date onwards, the Principal of the
                    Loan and the interest (which will be calculated as stated in
                    sub-paragraph (c) hereof) will be repaid in ____ equal,
                    consecutive installments in the sum of ___________
                    (________________________) in the currency of the Loan each
                    - comprising payment of Principal of the Loan and the
                    interest in respect thereof. The above installments will be
                    paid every ____ months on the ____ of each Gregorian
                    calendar month in which payment of the Principal of the Loan
                    and such interest will fall - commencing the ____ day of
                    _________________ and terminating on the ____ day of
                    _________________.


                                SIGNATURE OF THE CUSTOMER (INITIALS) ___________

                     - or -

               3)   [_] The repayment of the Loan will be as follows:

                    a)   The interest will be paid by us over _________________
                         months in _________________ consecutive installments.
                         These installments will be payable monthly on the
                         _________________ of each Gregorian calendar month
                         commencing the ____ day of _________________ and
                         terminating the ____ day of _________________.

                    b)   The Principal of the Loan and the interest, using the
                         Spitzer method tables, will be repaid in
                         _________________ equal consecutive installments in the
                         sum of NIS. _____________ each. These payments will
                         fall monthly on the _________________ of each Gregorian
                         calendar month.

                                SIGNATURE OF THE CUSTOMER (INITIALS) ___________

          c.   INTEREST

               1)   The interest rate on the Loan will be as stated below and
                    marked with an X (hereinbefore and hereinafter: "the
                    interest")

                    [_]  Fixed interest at the rate of ____ % per annum (the
                         nominal interest rate) which is equal, using the annual
                         adjusted interest computation to ____% per annum.

                    - or -

                    [_]  Variable interest at 2%, above the LIBOR rate (as
                         hereinafter defined) calculated and adjusted annually
                         as set out below:-

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)


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               2)   COMPUTATION AND PAYMENT OF THE INTEREST:

                    a)   CALCULATION OF THE INTEREST

                    The interest will be computed on a daily basis in respect of
                    the period commencing from the date of receipt of the Loan
                    until the full and actual payment thereof based on a 360 day
                    year.

                    b)   MANNER OF DETERMINING THE LIBOR RATE

                    1)   The Bank will determine the LIBOR interest rate in
                         respect of each interest period 2 banking business days
                         prior to the commencement of each respective interest
                         period and each LIBOR interest rate determined by the
                         Bank will apply in respect of the period commencing at
                         the beginning of the respective interest period and
                         continue until the expiration thereof. In this
                         connection, it is emphasized and stated that any change
                         in the LIBOR rate will lead to a corresponding change
                         in the interest rate on the Loan, according to the rate
                         of the change of the LIBOR interest as compared with
                         the rate thereof prior to the change, as calculated by
                         the Bank.

                    2)   DEFINITIONS

                    In this sub-paragraph (b) the following expressions shall
                    bear the meanings set out opposite them:-

                    (a)  "THE LONDON INTERBANK OFFERED RATE (LIBOR) means the
                         interest rate determined by the Bank, having regard to
                         the highest interest rate at which Interbank deposits
                         and/or loans in foreign currency are offered in the
                         London Euromarket in a tenor comparable to the interest
                         period as quoted on or about 11.00 a.m. (London time)
                         and published by Reuters Information Service, and, in
                         the absence of such publication by Reuters, the LIBOR
                         rate will be that determined by the Bank having regard
                         to the LIBOR rate, quoted and published by such other
                         information service or entity as will, in the opinion
                         of the Bank, be an appropriate substitute for the
                         Reuters publication. In the absence of such quotation
                         and publication with respect to the LIBOR interest
                         rate, the Bank's own determinations shall be in
                         substitution therefor with respect to all the foregoing
                         matters and will be absolute and final in all respects.

                    With respect to a Loan linked to a basket of currencies -
                    the LIBOR rate shall mean such rate as expresses the
                    weighted average of the LIBOR interest rates (that will be
                    fixed by the Bank as mentioned above) of each of the foreign
                    currencies comprising the basket of currencies based on the
                    number of units of each of the currencies therein -
                    according to the Bank's own conclusive calculation and
                    determinations.

                    (b)  "INTEREST PERIOD" means a period of _________________
                         months commencing the date of the receipt of the Loan
                         with each interest period commencing upon the
                         expiration of the preceding interest period.

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)


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                    (c)  "MONTH" means a period commencing on a particular day
                         in any Gregorian calendar month and terminating on the
                         corresponding day of the next succeeding Gregorian
                         calendar month.

                    "MONTHS" mean a period commencing on a particular day in any
                    Gregorian calendar month and expiring on the corresponding
                    day of the Gregorian calendar month in which the respective
                    interest period expires.

                    In this connection it is expressly stated and emphasized
                    that if the corresponding day falls on a day which is not a
                    banking business day, the interest period will expire on the
                    first succeeding banking business day thereafter.

                    If there is no corresponding day in the Gregorian month in
                    which the interest period expires, the interest period will
                    expire on the last banking business day in such Gregorian
                    calendar month.

                    (d)  "BANKING BUSINESS DAY" means a day on which banks in
                         London effect transactions between them in deposits
                         and/or loans in foreign currency in the Interbank
                         Euromarket in London.

               3)   Without derogating from the generality of that stated in
                    sub-paragraph (1) above, we are aware and agree that the
                    current rate of the variable interest is _____% per annum
                    (being the nominal interest rate) which is equal, when using
                    the annual adjusted interest calculation, to _____% per
                    annum.

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)

          d.   ARREARS INTEREST

               1)   Any amount due or becoming due to the Bank hereunder which
                    is not paid by us on the date prescribed for the payment
                    thereof hereunder or which remains unpaid to the Bank
                    following the Bank's first demand, will bear interest on
                    arrears at such variable rate (hereinafter: "ARREARS
                    INTEREST") in respect of the period commencing on the date
                    on which we were due to pay the same until the date of the
                    actual payment thereof, the arrears interest to be
                    calculated on a daily basis in a manner corresponding to the
                    provisions of sub-paragraph (c)(2)(a) above, in accordance
                    with the procedures of the Bank, and be subject to the
                    provisions of any law, the arrears interest to be at the
                    highest rate charged by the Bank from time to time on
                    unauthorized overdrafts in current overdraft accounts in the
                    currency of the Loan, or at the highest rate prevailing in
                    the Bank from time to time on unauthorized overdrafts in
                    current overdraft accounts, according to the currency in
                    which the Proceeds Account is maintained, if it is
                    maintained in a currency other than that of the currency of
                    the Loan.

               2)   For the avoidance of doubt it is hereby stated that neither
                    the Bank's right to arrears interest nor the actual recovery
                    thereof will derogate, suspend or prejudice any remedy
                    and/or relief available to the Bank hereunder or by law or
                    the Bank's right to take any measures at any time whatsoever
                    in order to collect any sum unpaid by us on due date or from
                    continuing to take such steps.


                                       6
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5.   COMMISSIONS AND OTHER PAYMENTS

     a.   We hereby undertake to bear the expense of and pay the Bank all costs,
          charges, commissions (including, but without derogating from the
          generality of the foregoing, the stamp duty hereof and all penalties
          in respect of late payment and non-payment of stamp duty on due date)
          and the commissions relating to the signature and issuance of this
          instrument and the implementation of the Loan hereunder, pursuant to
          the procedures customary in the Bank and in accordance with any
          variation applicable therein from time to time (hereinafter: "COSTS
          AND COMMISSIONS") including (but without diminishing) we shall pay you
          also a handling fee and collection charge on the dates and in the
          amounts set out below:

          1)   On the date of the receipt of the Loan we will pay you a handling
               fee

               a)   [_] equal to ___% (_______________ per centum) of the Loan,
                    save that the amount of the handling fee will in no case be
                    less than the minimum amount of the handling fee prescribed
                    from time to time in the Bank's list of charges as appearing
                    in the branches of the Bank. The current rate of the minimum
                    handling fee in the Bank amounts to __________

                    - OR -

               b)   [_] in the sum of NIS. (EXEMPT) (________________________)

          2)   On any date prescribed in this instrument for making any
               repayment of the Loan, we will pay you in respect of such payment
               a collection charge in the sum of NIS. 4.60

               And also a commission for "RECORDING A TRANSACTION IN THE
               ACCOUNT", as prescribed from time to time in the Bank's list of
               charges, which is available in the branches of the Bank. The rate
               of the commission for recording a transaction in the account as
               currently existing in the Bank is the amount of NIS 1.21.

          3)   We instruct the Bank to debit the Current Account with the amount
               of the costs and commissions on the date prescribed for the
               installments according to the conditions hereof, and undertake to
               ensure that there will be at such time a sufficient credit
               balance in the Current Account for effecting such debits. The
               Bank will be entitled to debit any account now or hereafter
               maintained in our name and/or in the name of any of us, with the
               amounts that will be required to discharge such costs and
               commissions, and, to the extent necessary, convert the payment
               into the currency of the Loan, according to the procedures of the
               Bank in this regard, according to the selling rate of the
               currency of the Loan customary in the Bank and prevailing at such
               time. The Bank will be entitled to debit the Current Account
               whether it is in credit or overdrawn, or becomes overdrawn as a
               result of such debit. Where the Account is overdrawn, the amount
               of the debit will bear interest in accordance with the conditions
               of the Current Account.

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)

     b.   Without prejudice to the generality of sub-paragraph (a) above, we are
          aware and agree that the Bank may vary the rate of the collection
          charge mentioned in sub-paragraph (a)(2) above provided notice to that
          effect will be sent to us by the Bank two weeks prior to the date of
          the variation.


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     c.   In the event of any payments of any kind that we owe or will owe to
          the Bank under the terms hereof will be paid to or collected by the
          Bank (whether it is collected from us, from any third party or as a
          result of the realization of collateral or any of them) on a date
          which is not the respective date of the payment prescribed for that
          payment hereunder (whatever the reason, including by way of
          accelerating all or any part of the Loan), we will then pay to the
          Bank, immediately upon its first demand, such sum or sums as will
          compensate and indemnify the Bank for any loss or damage that will be
          incurred by the Bank as a result of making such payment (in respect of
          interest differentials until the expiration of the relevant interest
          period) on the date being other than that prescribed herein, as
          determined by the Bank.

6.   EFFECTIVE COST

     (TO BE COMPLETED WHERE THE AMOUNT OF THE LOAN TO AN INDIVIDUAL DOES NOT
     EXCEED NIS. 500,000 AND THE AMOUNT OF THE LOAN THAT IS GRANTED TO PURCHASE
     OR PLEDGE A RESIDENTIAL APARTMENT, DOES NOT EXCEED NIS 1,000,000).

     We are aware and agree that THE EFFECTIVE COST RATE of the Loan is ____%
     per annum.

                      SIGNATURE OF THE CUSTOMER (INITIALS)

7.   MANNER OF REPAYING THE LOAN

     The Loan will be repaid by way of debiting the Proceeds Account, as set out
     below: Mark x where appropriate:.

     a)   [_] We request that payment of the Principal of the Loan, and payment
          of the interest thereon be separated as below, and for such purpose
          please open in our name:

          1)   A special proceeds account for repaying the Principal of the Loan
               ("THE PROCEEDS ACCOUNT (PRINCIPAL)").

          and

          2)   A special proceeds account for paying the interest on the Loan
               ("THE PROCEEDS ACCOUNT (INTEREST)").

               The Proceeds Account (Principal) and the Proceeds Account
               (Interest), will be jointly and severally called in this document
               "(the) Proceeds Account".

     - or -

     b)   [_] For the purpose of repaying the Loan please open in our name a
          special proceeds account (in this document called "the Proceeds
          Account") that will be operated in accordance with the terms hereof,
          in Israeli currency / foreign currency*.

          1)   We hereby instruct the Bank to debit THE PROCEEDS ACCOUNT (as
               appropriate and as marked above) on the payment date of each
               installment or of any sum becoming due from us to the Bank under
               this instrument (hereinafter: "(THE) PAYMENT/S") except for the
               payment of the costs and commissions set out in sub-paragraph
               5(a) above, with the amount required to discharge such
               installment and convert the payment into the currency of the
               Loan, and hereby undertake to ensure that there will be a
               sufficient balance standing to our credit in the Proceeds Account
               at that time in order to effect the foregoing debits - save that
               nothing in the foregoing shall derogate from our obligation to
               discharge any debit balance resulting, if and to the extent it
               results, in the Proceeds Account, together with arrears interest
               and all charges incidental to the foregoing.


--------
* Delete as appropriate.


                                       8
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               Any amount received in the Bank to the credit of the Proceeds
               Account will be applied in repayment of the payments according to
               the following order: in payment of the interest and only
               thereafter, in discharging the principal of the Loan - or
               according to such other order as will be determined by the Bank.

          2)   With respect to repayment by way of debiting the Proceeds
               Account, it is hereby expressly stated and declared that:

               a)   Where the alternative has been chosen of debiting a Proceeds
                    Account in the currency of the Loan, we are aware that the
                    debit balance that will accrue in such Proceeds Account
                    (together with arrears interest as mentioned in paragraph
                    4(d) above and any charges incidental to all of the
                    foregoing), will at all times be in the currency of the
                    Loan.

               b)   Where the alternative has been chosen of debiting a Proceeds
                    Account in Israeli currency, we are aware and hereby
                    instruct the Bank to convert the payment into Israeli
                    currency on the date of debiting such Proceeds Account with
                    any payment, according to the procedures of the Bank in this
                    regard, at the selling rate of the currency of the Loan that
                    will be customary in the Bank on the date the conversion is
                    made, plus such commissions and/or levies as will be
                    customary at that time. Any credit balance that will accrue
                    in the Proceeds Account (together with arrears interest as
                    stated in paragraph 4(d) above and/or charges incidental to
                    all the foregoing) will at all times be in Israeli currency.

               c)   The Bank will be entitled, at any time, to debit any account
                    that is and/or will be maintained in our name and/or in the
                    name of any us with the amounts required to discharge any
                    debit balance created in the Proceeds Account, or any part
                    thereof and convert to the extent necessary the payment into
                    Israeli currency according to the procedures of the Bank in
                    this regard, according to the selling rate of the currency
                    of the Loan that will be customary in the Bank on the date
                    of making the conversion, plus commissions and levies as
                    will be customary at that time.

               d)   The debiting of any account/s with the debit balance amounts
                    mentioned in sub-paragraph (1) above will not be deemed to
                    be payment unless such account/s hold credit balances
                    sufficient to fully cover such payment/s.

               e)   The Bank will be entitled to cancel any debit or any part
                    thereof without sufficient cover as mentioned and redebit
                    the Proceeds Account therewith and/or treat the same as an
                    amount which was not paid on the date prescribed for the
                    payment thereof according to the conditions hereof. Where
                    the Bank has elected to leave the debit in the Current
                    Account, such debit will bear interest on the conditions and
                    at the rate that apply to the Account.

                SIGNATURE OF THE CUSTOMER (INITIALS) (INITIALLED)

8.   ADDITIONAL COSTS AS A RESULT OF CHANGES IN THE LAW

     a.   In the event of a change in any law or statute of any kind in Israel
          or abroad ("law") and/or in the event of any change in any directives
          or procedures or instructions of the State of Israel or of the
          Ministry of Finance and/or of the Bank of Israel and/or any competent
          authority or in the interpretation by the Bank of the provisions of
          any such law or directives, procedures or instructions or in the event
          of new procedures or requirements of any kind being directed to the
          Bank, directly or indirectly, or to any bodies in the control of the
          Bank, by the State of Israel or the Ministry of Finance or the Bank of
          Israel or any competent authority in Israel or abroad, as a result of
          which:


                                       9
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          1)   The Bank's costs (whether direct or indirect) will increase, in
               connection with the grant of the Loan or continuing to maintain
               or grant the Loan will increase, as determined by the Bank,
               including, without derogating from the generality of the
               foregoing, in connection with the financing thereof or the
               collateral that have been or will be given to secure the same;

          and/or

          2)   In the opinion of the Bank, and at its determination, there will
               be restrictions or more severe requirements for making financial
               provisions or there will be imposed upon the Bank taxes, levies,
               penalties and payments of interest or any other payments in
               connection with the grant of the Loan or continuing to maintain
               or grant the Loan, including, but without derogating from the
               generality of the foregoing, payments in connection with the
               financing of the Loan or the collateral that have been or will be
               given to secure the same ("COMPULSORY PAYMENTS") including new or
               additional obligatory payments;

          and/or

          3)   Restrictions or liquidity requirements will be imposed on the
               Bank or become more severe or stricter requirements made in
               connection with liquid assets, including, without derogating from
               the generality of the foregoing, with respect to assets and/or
               deposits that the Bank is required to hold in connection with the
               grant of the Loan or continuing to maintain or grant the same;

          and/or

          4)   The Bank will become liable to deduct tax at source on the
               interest in respect of the Loan or on the Bank's financial
               sources or, inter alia, for financing the Loan;

          and/or

          5)   An adverse change occurs in the rate of return on the Bank's
               equity capital compared with the rate it was expected to obtain
               on the date of the signature hereof;

     b.   Then, and upon the occurrence of any of the cases set out in
          sub-paragraph (a) above, we undertake to pay the Bank, from time to
          time, and upon the Bank's first demand, such additional sums at such
          rate as will, in the opinion of the Bank, indemnify or compensate the
          Bank, including, but without derogating from the generality of the
          foregoing, in respect of any additional or new costs, liabilities and
          expenses or losses and damages, as stated in sub-paragraph (a) above,
          this being in addition to and without prejudice to our right to prepay
          the Loan, in accordance with its terms. For the avoidance of any doubt
          it is clarified that we will bear the payments mentioned above even if
          we elect to exercise our right to prepay the Loan as aforesaid.

     c.   For the avoidance of any doubt it is clarified that all payments will
          be paid by us to the Bank free and clear of any tax, deduction, levy
          or compulsory payment, and without set off. In the event of our being
          required to deduct or pay tax in respect of any payment that is due to
          the Bank in accordance with the present Application, the amount of the
          payment to the Bank will be increased so as to ensure that even after
          making such deduction, the Bank will be left with the net amount
          required to discharge such payment.


                                       10
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9.   CHANGES IN MARKET CONDITIONS

     a.   If, at the discretion of the Bank, and in accordance with its
          determination, there will be no reasonable possibility of determining
          the interest rate, for any reason, or any adverse change occurs in the
          conditions of the Interbank Market with respect to trading in the
          currency of the Loan, or the Bank will have no reasonable possibility
          to raise sources of finance in the currency of the Loan in the
          ordinary course of its business, or it will have no possibility of
          raising sufficient sources of financing and/or the sources of the
          financing or the Bank's cost of raising the money will increase, the
          Bank will be entitled to vary the terms of the Loan in connection with
          continuing to grant the Loan, including, without derogating from the
          generality of the foregoing, in regard to determining the interest
          rate, the interest payment dates, the basis for calculating the
          interest or substituting the currency of the Loan by another, and like
          terms, all as will be customary in and acceptable to the Bank at such
          time, or to call for the early repayment of the entire outstanding
          balance of the Loan, all as determined by the Bank and subject as
          provided in sub-paragraph (b) below.

     b.   If the Bank decides to exercise its right under sub-paragraph (a)
          above to vary the terms of the Loan, the Bank will send us 14 days
          prior notice regarding the change of the terms and the date of their
          entering into effect.

     c.   1)   If the Bank decides to call for repayment of the Loan as
               mentioned in paragraphs 8, 9 and 10 hereof, 14 days' prior notice
               in writing to that effect will be sent to us by the Bank.

          2)   Such acceleration (early repayment) will be subject to the
               conditions set out in paragraph 12 hereof.

10.  ILLEGALITY

     a.   If, at any time, and according to the determination of the Bank, a
          change occurs in any law or the directives or procedures or
          instructions mentioned in paragraph 8 above, in a manner whereby the
          granting of the Loan to us or continuing to maintain or grant the same
          will become illegal or impracticable for the Bank, the Bank will be
          entitled to refuse to grant us the Loan, in whole or in part, and in
          the event of the Loan or any part thereof having already been granted,
          the Bank will be entitled to demand the early repayment of the
          outstanding balance of the Loan.

     b.   In the event of any requirement for such early repayment, we undertake
          to pay the Bank, within 30 days of the date of its first written
          demand given in accordance with the terms of this paragraph, the full
          amount of the outstanding balance of the Loan. For the avoidance of
          any doubt it is clarified that such early repayment will be subject to
          the conditions set out in paragraph 12 hereof.

11.  COLLATERAL TO REPAY THE LOAN

     All the collateral and securities of whatsoever kind and type which have
     been or will be given, from time to time, to the Bank by us or by any third
     party on our behalf will serve as security for the full and punctual
     repayment of all the sums due and becoming due from us to the Bank in
     connection with the Loan and under this instrument. We will furnish the
     Bank, upon demand, additional collateral and securities to the satisfaction
     of the Bank if, at the discretion of the Bank, and at any time, and from
     time to time, the collateral and security given to it as above will be
     insufficient to secure our undertakings hereunder. Such collateral and
     securities will be continuing securities, independent of one another.


                                       11
<PAGE>


12.  PREPAYMENT

     We will be entitled to prepay, at any time, the full undischarged balance
     of the Loan (or part thereof), on the conditions set out in the explanatory
     sheet received by us from the Bank in connection with prepayment, and
     subject to the satisfactory fulfilment of all the following conditions:

     a)   No event will have occurred that constitutes a ground for accelerating
          the Loan according to the documentation that has been or will be
          signed by us in favour of the Bank;

     b)   The Bank will have received prior notice in writing from us regarding
          our intention to prepay, such notice to specify the amount we wish to
          prepay, the notice to be given to the Bank in a manner and upon the
          conditions set out in the aforementioned explanatory sheet;

     c)   We will furnish to the Bank prior to prepayment in the event of prior
          approval from the Bank of Israel or any other competent authority
          being required as a condition for effecting prepayment in accordance
          with our request as set out above.

13.  If, in the opinion of the Bank, as a result of such prepayment, the
     preparation of a new or other repayment schedule for the Loan will be
     necessary, then and in those circumstances you will furnish us with such
     new or other repayment schedule, and we will repay the Loan in accordance
     therewith.

14.  ACCELERATION OF THE LOAN

     The Bank will be entitled, upon the occurrence of any one of the events set
     out below, and in addition to but without derogating from anything stated
     in any agreement and/or document which has been or will be signed by us to
     the Bank in the future, to demand the immediate repayment of the full
     outstanding balance of the Loan or any part thereof together with the
     interest and costs and commission that have accrued until such time and
     which have not been discharged and we will be liable to pay the Bank the
     amounts specified in the Bank's demand on the date therein specified, the
     following being the events in question:

     a.   If a receivership order is granted against the customers or if the
          customers have passed a winding-up resolution or have requested a
          receivership order against them or a winding-up order has been made
          against them or if they have reached a compromise or settlement with
          all or any of their creditors or a petition is presented for the
          granting of such orders or if a stay of proceedings order is granted
          in relation to the customers or a petition presented for the grant of
          such an order.

     b.   If we fail to pay the Bank any payment on the date prescribed for the
          payment thereof or in accordance with the Bank's first demand, or if
          such non-payment is anticipated in the opinion of the Bank.

     c.   If we commit a breach of any of our undertakings towards the Bank or
          such a breach is anticipated in the opinion of the Bank.

     d.   If any event or situation occurs which gives cause for accelerated
          repayment according to the conditions of any undertaking or agreement
          or document made or signed by us under which we are or may be
          committed towards the Bank or any third party.


                                       12
<PAGE>


     e.   If, in the opinion of the Bank, the collateral and securities that
          have been granted to you as set out in paragraph 11 above are
          insufficient to secure all the monies which are or will become due to
          you from us hereunder and/or by reason of any cause, document,
          agreement or other commitment or if any event or situation has
          occurred which could affect the Bank's prospects of being repaid out
          of the foregoing securities and collateral - all at the discretion of
          and as determined exclusively by, the Bank.

          /If a receiving order is granted against the Customers or if the
          Customers adopt a winding-up resolution or seek a receiving order
          against them or a winding-up order is issued against them or if they
          reach a compromise or arrangement with their creditors or any of them,
          or if a petition is presented to grant any of the foregoing orders or
          if a stay of proceedings order is granted in relation to them or
          petition filed for granting such an order.

15.  BUSINESS DAYS

     We are aware that if the Loan Principal or any of the installments or
     prepayment of the Loan occurs on the Sabbath or on Sunday, or on a day on
     which the Bank does not transact business in foreign currency, such payment
     will be made on the first succeeding business day as determined by the
     Bank.

16.  JURISDICTION AND PROPER LAW

     a.   This document will be construed in accordance with and pursuant to the
          laws of the State of Israel.

     b.   (1)  The exclusive jurisdiction so far as territorial jurisdiction is
               concerned is hereby agreed between the parties as being vested
               solely in accordance with the following, in accordance with the
               election of the plaintiff:-

               a.   Actions which, according to their subject matter and
                    substance must be dealt with by a District Court - will be
                    dealt with by one of the following courts, as elected by the
                    plaintiff:

                    1)   the District Court in whose jurisdiction the branch in
                         which the Account (of the customer) to which such
                         action relates is maintained;

                    - OR -

                    2)   The Tel Aviv District Court.

               b.   Actions which, according to their subject matter and
                    substance must be dealt with by a Magistrates Court - will
                    be dealt with by one of the following courts, as elected by
                    the plaintiff:

                    1)   The Magistrates Court situated in the jurisdiction of
                         the District Court in whose jurisdiction the branch in
                         which the Account (of the customer) to which such
                         action relates is maintained, or the Magistrates Court
                         nearest to such branch;

                    - OR -

                    2)   The Tel Aviv Magistrates Court.

          (2)  In instances where the action concerned relates to a number of
               accounts maintained in different branches for the customer - the
               jurisdiction will be as elected by the plaintiff in accordance
               with the possibilities set out in sub-paragraphs (1) (a) or (b)
               above (including all the options thereof).


                                       13
<PAGE>


     c.   Nothing in the foregoing shall derogate from the right of the winning
          party to conduct execution proceedings in any area which is consistent
          with the provisions of the Execution Law.

17.  GENERAL

     a.   For the avoidance of any doubt the Bank will be entitled to make any
          technical or operational change in the manner of operating the Account
          or the Proceeds Account or the Loan Account or in the numbers thereof,
          provided that this will not serve to detract from the terms of the
          Loan.

     b.   A waiver by the Bank in our favour of any prior breach or
          non-performance of one or more of the conditions hereof will not be
          deemed to be as any justification or pretext for a further breach or
          non-performance of any of the conditions hereof, and the forbearance
          by the Bank of the exercise of any such right granted to it hereunder
          or under any of the collateral or security documents or by law will
          not be construed as a waiver of such right, and any other waiver,
          compromise or arrangement with the Bank will only be binding on the
          Bank if it is made in writing.

     c.   The Bank may transfer and assign its rights hereunder. We shall not be
          entitled to transfer and assign our rights and/or obligations
          hereunder.

     d.   The headings to the paragraphs herein are for purposes of reference
          and do not form part hereof nor do they have any meaning with regard
          to the interpretation of this instrument and any of the provisions
          thereof.

     e.   If this document has been signed by two or more persons, the
          provisions contained therein shall be binding upon them jointly and
          severally.

     f.   References herein to the plural shall include the singular and
          vice-versa; and everything stated herein in the masculine gender,
          shall also apply to the feminine gender and vice-versa.

     g.   Our signature hereto constitutes an acknowledge by us of the receipt
          thereof.


              IN WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS:

<TABLE>
<S>          <C>
             Hi-Tex (founded by
__________   Tefron Ltd.)  /S/.        Signed by: 1. ___________________ I.D.____________
Date     Customer's signature and name    (to be completed in the case of a body corporate)
</TABLE>

                                      2.    ___________________ I.D.____________

Signed before: _______________________________________
(for identification      Name and signature of person certifying the signature
purposes only)

THE REST OF THIS FORM (WHICH HAS NOT BEEN COMPLETED) HAS NOT BEEN TRANSLATED.


                                       14
<PAGE>


Branch: 010 Main Tel Aviv                          Date: 03/01/2005        Time:
Hi-Tex (founded by Tefron) Ltd.                    Account no. 140-01-202243
POB 29 Branch 99999

         Repayment Schedule - Foreign Currency Loan at Variable Interest

Loan account: 010-0841-01-202243            Proceeds Account: 0-0940-01-202251

<TABLE>
<S>                       <C>
Loan currency             : U.S. dollar
Original loan             :8,500,000.00       Original no. of         : 32       Loan value                 31.12.2004
amount                                        installments
Manner of repaying        :Fixed principal    Frequency of            : 3        Final date                 31.12.2012
principal                                     principal repayment:
Manner of paying          : interest          Interest payment        : 3
interest                    frequency         frequency :
Interest rate             : 4.5600%           LIBOR interest          : 2.5600   Margin %                   0000

Next interest variation   : 31/03/2005        Interest variation      : 3
                                              frequency
Adjusted interest         :4.6386%            Loan term:              : 96 months
</TABLE>



<TABLE>
<CAPTION>
Date                           Principal                 Interest           Installment amount       New balance
----                           ---------                 --------           ------------------       -----------
<C>                            <C>                       <C>                    <C>                  <C>
31/12/2004                                                                                           8,500,000.00
31/03/2005                     265,625.00                96,900.00              362,525.00           8,234,375.00
30/06/2005                     265,625.00                94,914.90              360,539.90           7,968,780.00
30/09/2005                     265,625.00                92,862.50              358,487.50           7,703,125.00
31/12/2005                     265,625.00                89,767.08              355,392.08           7,437,500.00
31/03/2006                     265,625.00                84,787.50              350,412.50           7,171,875.00
30/06/2006                     265,625.00                82,667.81              348,292.81           6,906,250.00
30/09/2006                     265,625.00                80,480.83              346,105.83           6,640,625.00
31/12/2006                     265,625.00                77,385.42              343,010.42           6,375,000.00
31/03/2007                     265,625.00                72,675.00              338,300.00           6,109,375.00
30/06/2007                     265,625.00                70,420.73              336,048.73           5,843,750.00
30/09/2007                     265,625.00                68,099.17              333,724.17           5,578,125.00
31/12/2007                     265,625.00                65,003.76              330,628.75           5,312,500.00
31/03/2008                     265,625.00                61,235.42              326,860.42           5,046,875.00
30/06/2008                     265,625.00                58,173.65              323,798.65           4,781,250.00
30/09/2008                     265,625.00                55,717.50              321,342.50           4,515,625.00
31/12/2008                     265,625.00                52,622.08              318,247.08           4,250,000.00
31/03/2009                     265,625.00                48,450.00              314,075.00           3,984,375.00
30/06/2009                     265,625.00                45,926.56              311,551.56           3,718,750,00
30/09/2009                     265,625.00                43,335.83              308,960.83           3,453,125.00
31/12/2009                     265,625.00                40,240.42              305,865.42           3,187,500,00
31/03/2010                     265,625.00                36,337.50              301,962.60           2,921,875.00
30/06/2010                     265,625.00                33,679.48              299,304.48           2,656,250.00
30/09/2010                     265,625.00                30,954.17              296,579.17           2,390,625.00
31/12/2010                     265,625.00                27,858.75              293,483.75           2,128,000.00
31/03/2011                     265,625.00                24,225.00              289,850.00           1,859,375.00
30/06/2011                     265,625.00                21,432.40              287,057.40           1,593,750.00
30/09/2011                     265,625.00                18,572.50              284,197.50           1,328,125.00
31/12/2011                     265,625.00                15,477.08              281,102.08           1,062,500.00
31/03/2012                     265,625.00                12,247.08              277,872.08             796,875.00
30/06/2012                     265,625.00                 9,185.31              274,810.31             531,250,00
30/09/2012                     265,625.00                 6,190.83              271,815.83             265,625.00
31/12/2012                     265,625.00                 3,095.42              268,720.42                   0.00
Total                        8,500,000.00             1,620,921.67           10,120,921.67
</TABLE>

On each principal payment date, a collection charge will be made of NIS.  4.60
Collection fees according to the representative rate of exchange of 4.308000 US$
1.07
This commission will vary from time to time as publicized by the Bank.
Exempt from documentation commission