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                                INDEMNITY AGREEMENT
                                          
     THIS AGREEMENT is dated the 26th day of November, 1996.
                                          
                                          
                                   B E T W E E N:

                               STANDA INVESTMENTS INC

                        a corporation incorporated under the
                          laws of the Province of Ontario

                                  (the "Landlord")

                                                         OF THE FIRST PART
                                          
                                      - and -

                               PILLOWTEX CORPORATION

                                (the "Indemnifier")

                                                         OF THE SECOND PART

     In order to induce the Landlord to enter into the lease (the "Lease") 
dated the 26th day of November, 1996, and made between the Landlord and 
Torfeaco Industries Limited, as Tenant, and for other good and valuable 
consideration, the receipt and sufficiency whereof is hereby acknowledged, 
the Indemnifier hereby makes the following indemnity and agreement (the 
("Indemnity") with and in favor of the Landlord:

1.   The Indemnifier hereby agrees with the Landlord that at all times during
     the Term of the Lease and any extension or renewal of the Lease it will (a)
     make the due and punctual payment of all Rent, monies, charges and other
     amounts of any kind whatsoever payable under the Lease by the Tenant
     whether to the Landlord or otherwise and whether the Lease has been
     disaffirmed or disclaimed; (6) effect prompt and complete performance of
     all and singular the terms, covenants and conditions contained in the Lease
     on the part of the Tenant to be kept, observed and performed; and (c)
     indemnify and save the Landlord harmless from any loss, costs or damages
     arising out of any failure by the Tenant to pay the aforesaid Rent, monies,
     charges or other amounts due under the Lease or resulting from any failure
     by the Tenant to perform any of the terms, covenants and conditions
     contained in the Lease.

2.   This Indemnity is absolute and unconditional and the obligations of the
     Indemnifier shall not be released, discharged, mitigated, impaired or
     affected by (a) any extension of time, indulgences or modifications which
     the Landlord extends to or makes with the Tenant in respect of the
     performances of any of the obligations 

                                       

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     of the Tenant under the Lease; (b) any waiver by or failure of the Landlord
     to enforce any of the terms, covenants and conditions contained in the 
     Lease; (c) any assignment of the Lease by the Tenant or by any trustee, 
     receiver or liquidator; (d) any consent which the Landlord gives to any 
     such assignment or subletting; (e) any amendment to the Lease or any waiver
     by the Tenant of any of its rights under the Lease; (f) the expiration of 
     the Term.

3.   The Indemnifier hereby expressly waives notice of the acceptance of this
     Agreement and all notice of non-performance, non-payment or non-observance
     on the part of the Tenant of the terms, covenants and conditions contained
     in the Lease. Without limiting the generality of the foregoing, any notice
     which the Landlord desires to give to the Indemnifier shall be sufficiently
     given if delivered in person to the Indemnifier or if mailed by prepaid
     registered or certified post addressed to the Indemnifier at the Leased
     Premises, and every such notice is deemed to have been given upon the day
     it was so delivered in person, or if mailed, forty-eight (48) hours after
     it was mailed. The Indemnifier may designate by notice in writing a
     substitute address for that set forth above and thereafter notices shall be
     directed to such substituted address. If two or more persons are named as
     Indemnifier, any notice given hereunder or under the Lease shall be
     sufficiently given if delivered or mailed in the foregoing manner to any
     one of such persons.

4.   In the event of default under the Lease or under this Indemnity, the
     Indemnifier waives any right to require the Landlord to (a) proceed against
     the Tenant or pursue any rights or remedies against the Tenant with respect
     to the Lease; (b) proceed against or exhaust any security of the Tenant
     held by the Landlord; or (c) pursue any other remedy whatsoever in the
     Landlord's power. The Landlord has the right to enforce this Indemnity
     regardless of the acceptance of additional security from the Tenant and
     regardless of any release or discharge of the Tenant by the Landlord or by
     others or by operation of any law.

5.   Without limiting the generality of the foregoing, the liability of the
     Indemnifier under this Indemnity is not and is not deemed to have been
     waived, released, discharged, impaired or affected by reason of the release
     or discharge of the Tenant in any receivership, bankruptcy, winding-up or
     other creditors proceedings or the rejection, disaffirmance or disclaimer
     of the Lease in any proceeding and shall continue with respect to the
     periods prior thereto and thereafter, for and with respect to the Term as
     if the Lease had not been disaffirmed or disclaimed, and in furtherance
     hereof, the Indemnifier agrees, upon any such disaffirmance or disclaimer,
     that the Indemnifier shall, at the option of the Landlord, become the
     Tenant of the Landlord upon the same terms and conditions as are contained
     in the Lease, applied MUTATIS MUTANDIS.  The liability of the Indemnifier
     shall not be affected by any repossession of the Leased Premises by the

                                       
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     Landlord, provided, however, that the net payments received by the Landlord
     after deducting all costs and expenses of repossessing and reletting the
     Leased Premises shall be credited from time to time by the Landlord against
     the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay
     any balance owing to the Landlord from time to time immediately upon
     demand.

6.   No action or proceedings brought or instituted under this Indemnity and no
     recovery in pursuance thereof shall be a bar or defence to any further
     action or proceeding which may be brought under this Indemnity by reason of
     any further default hereunder or in the performance and observance of the
     terms, covenants and conditions contained in the Lease.

7.   No modification of this Indemnity shall be effective unless the same is in
     writing and is executed by both the Indemnifier and the Landlord.

8.   The Indemnifier shall, without limiting the generality of the foregoing, be
     bound by this Indemnity in the same manner as though the Indemnifier were
     the Tenant named in the Lease.

9.   If two or more individuals, corporations, partnerships or other business
     associations (or any combination of two or more thereof) execute this
     Indemnity as Indemnifier, the liability of each such individual,
     corporation, partnership or other business association hereunder is joint
     and several. In like manner, if the Indemnifier named in the Indemnity is a
     partnership or other business association, the members of which are by
     virtue of statutory or general law subject to personal liability, the
     liability of each such member is joint and several.

10.  All of the terms, covenants and conditions of this Indemnity extend to and
     are binding upon the Indemnifier, his or its heirs, executors;
     administrators, successors and assigns, as the case may be, and enure to
     the benefit of and may be enforced by the Landlord, its successors and
     assigns, as the case may be, and any mortgagee, chargee, trustee under a
     deed of trust or other encumbrancer of all or any part of the Centre
     referred to in the Lease.

11.  The expressions "Landlord", "Tenant", "Rent", "Term" and "Premises" and
     other terms or expressions where used in this Indemnity, respectively, have
     the same meaning as in the Lease.

12.  This Agreement shall be construed in accordance with the laws of the
     Province of Ontario.

13.  Wherever in this Indemnity reference is made to either the Landlord or the
     Tenant, the reference is deemed to apply also to the respective heirs,
     executors, administrators, successors and assigns and permitted assigns,
     respectively, of the Landlord and the Tenant, as the case may be, named in
     the Lease Any assignment 

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     by the Landlord of any of its interest in the Lease operates automatically
     as an assignment of such assignee of the benefit of this Indemnity.


     IN WITNESS WHEREOF the Landlord and the Indemnifier have signed and 
sealed this Indemnity.

                                       INDEMNIFIER

                                       PILLOWTEX CORPORATION

                                       Per: /s/ (Signature Illegible)
                                           -------------------------------
                                       Authorized Signing Authority


                                       LANDLORD:.

                                       STANDA INVESTMENTS INC.

                                       Per: /s/ (Signature Illegible)
                                           -------------------------------

                                       Authorized Signing Authority