Document:

EXHIBIT 4.7

                             SUBORDINATION AGREEMENT

     This Subordination Agreement (this "AGREEMENT"), dated as of April 26,
2006, is entered into by TEFRON USA, INC., a Delaware corporation ("SUBORDINATED
CREDITOR") in favor of SUNTRUST BANK ("SUNTRUST"), in its capacity as
administrative agent ("ADMINISTRATIVE AGENT") for the Lenders from time to time
party to the Senior Credit Agreement (as defined in the Senior Credit Agreement
defined and described below; such Lenders being called herein, together with
Administrative Agent, individually, a "SENIOR LENDER" and collectively, "SENIOR
LENDERS") to determine the parties' respective rights, remedies and interests
with respect to certain debts, liabilities or obligations owing to each by
ALBAHEALTH, LLC, a Delaware limited liability company ("BORROWER"). This
Agreement is made with respect to the following facts:

     A.   Subordinated Creditor is a current (or former) shareholder, partner or
          member of, or an investor in, Borrower, or is otherwise affiliated
          with Borrower; and has obtained, or hereafter may obtain, certain
          claims against Borrower in the nature of money owed.

     B.   Senior Lenders are proposing to extend a revolving credit facility to
          Borrower for the purposes of, among others, refinancing existing
          indebtedness and funding transaction costs and working capital needs;
          however, Senior Lenders are unwilling to provide or continue such
          credit facility to Borrower unless Subordinated Creditor subordinates
          its claims against Borrower in the manner set forth below.
          Subordinated Creditor hereby acknowledges and affirms that Senior
          Lenders' financial accommodations to Borrower constitute valuable
          consideration to Subordinated Creditor.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, and to
induce Senior Lenders to extend such financial accommodations to Borrower as
they may determine, and to better secure Senior Lenders with respect to the
foregoing, the parties hereby agree as follows:

     1. SUBORDINATION AND STANDBY.

     a. INDEBTEDNESS. Except as otherwise expressly set forth in Section 4,
unless and until all "SENIOR INDEBTEDNESS" (as hereinafter defined) has been
fully paid and satisfied in cash, and this Agreement has ceased to be effective,
Subordinated Creditor shall not accept or receive, by setoff or in any other
manner, from Borrower or any Subsidiary of the Borrower (an "AFFILIATE
GUARANTOR") the whole or any part of any sums which may now or hereafter be
owing to Subordinated Creditor by Borrower, or any of its predecessors,
successors or assigns, including, without limitation, a receiver, trustee or
debtor in possession (the term "BORROWER," as used hereinafter, shall include
any such predecessors, successors or assigns) under or in connection with the
"SUBORDINATED INDEBTEDNESS" (as hereinafter defined).

<PAGE>

     b. LIENS AND SECURITY INTERESTS. As of the date of this Agreement,
Subordinated Creditor has no security interests or liens over any property of
Borrower or any subsidiary of Borrower, and Subordinated Creditor hereby agrees
that, until the termination of this Agreement, it shall not create any security
interests or liens over any property of Borrower or any subsidiary of Borrower.
Without limitation of the foregoing, but in furtherance thereof, so long as this
Agreement shall remain in effect:

     (1) Subordinated Creditor shall not commence, prosecute or participate in
any other action, whether private, judicial, equitable, administrative or
otherwise, including, without limitation, any bankruptcy case against Borrower
or any of the Affiliate Guarantors or any of its (or their) assets, provided
that, (i) as more fully set forth in Section 5 hereof, Subordinated Creditor may
file a proof of claim in a bankruptcy or insolvency proceeding involving
Borrower or any of the Affiliate Guarantors, which proof of claim shall indicate
Subordinated Creditor's subordination hereunder and (ii) should any default
occur in the payment of any amounts of accrued interest which, pursuant to
Section 4 below, Borrower is permitted to pay to Subordinated Creditor, and
Subordinated Creditor is permitted to receive from Borrower, Subordinated
Creditor may sue on the Subordinated Note in respect of such default and obtain
judgment thereon, but Subordinated Creditor shall not execute upon or otherwise
enforce such judgment except with the prior written consent of Administrative
Agent and the other Senior Lenders or unless this Agreement has been terminated;

     (2) Subordinated Creditor shall have no right either to possess any such
assets, enforce any security interests in, foreclose, levy or execute upon, or
collect or attach any such assets, whether by private or judicial action or
otherwise; and

     (3) Subordinated Creditor shall neither take, nor consent to or acquiesce
in the taking of, any action hereafter to set aside, challenge or otherwise
dispute the existence or priority of any Senior Indebtedness or the creation,
attachment, perfection or continuation of any lien or security interest of any
Senior Lender in any assets of Borrower or any Affiliate Guarantor.

     c. DEFINITIONS.

     (1) "SENIOR INDEBTEDNESS". The term "SENIOR INDEBTEDNESS" shall mean,
collectively, all "Obligations," as that term is defined under that certain
Declining Revolving Credit Agreement, dated as of April 26, 2006, among
Borrower, the Lenders and Administrative Agent (as it may be amended, restated,
refinanced, replaced, supplemented or modified from time to time, the "SENIOR
CREDIT AGREEMENT"), whether for principal, premium, interest (including all
interest accruing after the initiation of any bankruptcy case, whether or not
allowed), fees, expenses, indemnities or otherwise; PROVIDED, HOWEVER, that for
purposes of this Agreement, the maximum aggregate principal amount of Senior
Indebtedness shall not exceed $13,500,000.

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<PAGE>

     (2) "SUBORDINATED INDEBTEDNESS". The term "SUBORDINATED INDEBTEDNESS" shall
mean all indebtedness of Borrower to Subordinated Creditor, whether consisting
of principal, interest or otherwise, evidenced by and arising under that certain
Unsecured Subordinated Promissory Note, dated April 26, 2006, in the original
principal amount of $3,000,000, issued by Borrower to the order of Subordinated
Creditor (together with any extensions or renewals thereof, or amendments
thereto, called herein the "SUBORDINATED NOTE").

     2. MODIFICATIONS OF INDEBTEDNESS.

     a. SENIOR INDEBTEDNESS. Subject to the right of the Subordinated Creditor
to receive the payments permitted under clause (ii) of Section 4, Senior Lenders
shall have the right, without notice to Subordinated Creditor, to amend,
restate, supplement or otherwise modify the Senior Indebtedness, in accordance
with the terms of the Senior Credit Agreement, including, without limitation,
any extensions or shortening of time of payments (even if such shortening causes
any Senior Indebtedness to be due on demand or otherwise), any revision of any
amortization schedule with respect thereto, and any increase in the amount of
the Senior Indebtedness (provided that no more than $13,500,000 outstanding
principal amount of indebtedness incurred under the Senior Credit Facility will
be deemed to be Senior Indebtedness for purposes of this Agreement), and
Subordinated Creditor consents and agrees to any such amendment, restatement,
supplement or other modification.

     b. SUBORDINATED INDEBTEDNESS. Subordinated Creditor understands and agrees
that, other than the Subordinated Indebtedness referred to in clause (2) of
Section 1(c) above, no Subordinated Indebtedness may be created hereafter except
as may be permitted under the Senior Credit Agreement, and no document,
instrument or agreement evidencing all or any part of any Subordinated
Indebtedness so created may be modified or amended except as permitted under the
Senior Credit Agreement.

     3. SUBORDINATED INDEBTEDNESS OWED ONLY TO SUBORDINATED CREDITOR.

     a. Subordinated Creditor warrants and represents that it has not previously
assigned any interest in the Subordinated Indebtedness, that no other party owns
an interest in any of the Subordinated Indebtedness (whether as joint holders,
participants or otherwise), and that the entire Subordinated Indebtedness is
owing only to Subordinated Creditor.

     b. Subordinated Creditor covenants and agrees that the entire Subordinated
Indebtedness shall continue to be owing only to it; PROVIDED that Subordinated
Creditor may assign some or all of its interest in the Subordinated Indebtedness
after the assignee has executed and delivered to Senior Lenders an agreement
subordinating, in the manner set forth herein, all rights, remedies and
interests with respect to the assigned Subordinated Indebtedness.

     4. PAYMENTS RECEIVED BY SUBORDINATED CREDITOR. Notwithstanding the terms of
Section l.a. and 2.a., Borrower may pay, and Subordinated Creditor may receive
if and so long as no Default or Event of Default (as those terms are defined in
the Senior Credit Agreement) has occurred and is continuing or would result
after giving effect to such payment, (i) regularly scheduled payments of
interest on the Subordinated Note at the rate and the times set forth in the
Subordinated Note as in effect on the date hereof and (ii) at any time after
August 31, 2009, payments of principal and interest (including regularly
scheduled payments of principal and interest, voluntary prepayments and
mandatory prepayments, in whole or in part). If any other payment, distribution
or any collateral proceeds thereof are received by Subordinated Creditor from
Borrower or any Affiliate Guarantor with respect to the Subordinated
Indebtedness prior to the full payment and satisfaction of all the Senior
Indebtedness and termination of this Agreement, Subordinated Creditor shall
receive and hold the same in trust as trustee for the benefit of Senior Lenders
and shall forthwith deliver such assets to Administrative Agent, for the benefit
of Senior Lenders, in precisely the form received (except for the endorsement or
assignment by Subordinated Creditor where necessary), for application on any of
the Senior Indebtedness, due or not due. In the event of the failure of
Subordinated Creditor to make any such endorsement or assignment to
Administrative Agent, Administrative Agent and Administrative Agent's officers
or agents are hereby irrevocably authorized to make such endorsement or
assignment.

                                       3
<PAGE>

Subject to the prior payment in full in cash of the Senior Indebtedness, the
Subordinated Creditor shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
Subordinated Indebtedness shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the
Subordinated Creditor by virtue of this Section 4 or Section 5 which otherwise
would have been made to the Subordinated Creditor shall, as between the Company
and the Subordinated Creditor, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Agreement are and are intended solely for the purpose of defining the
relative rights of the Subordinated Creditor, on the one hand, and the holders
of the Senior Indebtedness, on the other hand.

This section 4 shall not restrict the ability of the Subordinated Creditor to
convert the Subordinated Indebtedness to Common Units in accordance with section
11 of the Subordinated Note, and the holders of the Senior Indebtedness shall
not have any rights in or to such Common Units by virtue of this section 4.

     5. CLAIMS IN BANKRUPTCY. In the event of any bankruptcy, assignment for the
benefit of creditors or similar proceedings against Borrower or any Affiliate
Guarantor, Subordinated Creditor shall file all claims it may have against
Borrower, and shall direct the debtor in possession or trustee in bankruptcy, as
appropriate, to pay over to Administrative Agent, for the benefit of Senior
Lenders, all amounts due to Subordinated Creditor on account of the Subordinated
Indebtedness until the Senior Indebtedness has been paid in full in cash. If
Subordinated Creditor fails to file such claims as requested by Administrative
Agent, Administrative Agent may file such claims on Subordinated Creditor's own
behalf.

     6. POSTPETITION FINANCING; LIENS. In the event of any bankruptcy case
against Borrower or any Affiliate Guarantor or any of the assets of Borrower or
any Affiliate Guarantor, Subordinated Creditor hereby expressly consents to the
granting by Borrower or any Affiliate Guarantor to any or all Senior Lenders of
senior liens and priorities in connection with any post-petition financing of
Borrower or any Affiliate Guarantor by any or all Senior Lenders.

     7. SALE OF ASSETS. In the event of a sale of some or all of the assets of
Borrower or any Affiliate Guarantor, whether initiated by any Senior Lender;
i.e., as part of a liquidation of its liens and security interests, or initiated
by Borrower with Senior Lenders' consent, Subordinated Creditor agrees to
release any security interest, lien or claim in such assets, or any of them,
upon the request of any Senior Lender, whether or not Subordinated Creditor will
receive any proceeds from such sale. Should Subordinated Creditor fail to do so
within five (5) business days after its receipt of any Senior Lender's request,
Administrative Agent or such Senior Lender may, acting as Subordinated
Creditor's attorney-in-fact, do so itself in Subordinated Creditor's name.

                                       4
<PAGE>

     8. LEGEND. Any instrument at any time evidencing any Subordinated
Indebtedness, including the Subordinated Note (herein, a "SUBORDINATED
INSTRUMENT") will be forthwith inscribed with a provision conspicuously
indicating that payment thereon is subordinated to the claims of Senior Lenders
under the Senior Credit Agreement, and copies thereof will forthwith be
delivered to Senior Lenders. Any instrument evidencing any of the Subordinated
Indebtedness or any portion thereof which is hereafter executed will, on the
date thereof, be inscribed with the aforesaid legend, and copies thereof will be
delivered to Senior Lenders on the date of its execution or within five (5)
business days thereafter.

     9. ADDITIONAL REMEDIES. If Subordinated Creditor violates any of the terms
of this Agreement, in addition to any remedies in law, equity or otherwise,
Senior Lenders may restrain such violation in any court of law and may interpose
this Agreement as a defense in any action by Subordinated Creditor.

     10. SUBORDINATED CREDITOR'S WAIVERS.

     a. All of the Senior Indebtedness shall be deemed to have been made or
incurred in reliance upon this Agreement. Subordinated Creditor expressly waives
all notice of the acceptance by Senior Lenders of the subordination and other
provisions of this Agreement and agrees that no Senior Lender has made any
warranties or representations with respect to the legality, validity,
enforceability, collectibility or perfection of the Senior Indebtedness or any
liens or security interests held in connection therewith.

     b. Subordinated Creditor agrees that each Senior Lender shall be entitled
to manage and supervise its loans in accordance with applicable law and its
usual practices, modified from time to time as it deems appropriate under the
circumstances, without regard to the existence of any rights that Subordinated
Creditor may now or hereafter have in or to any assets. No Senior Lender shall
have any liability to Subordinated Creditor as a result of any and all lawful
actions which such Senior Lender takes or omits to take (including, without
limitation, actions with respect to the creation, perfection or continuation of
its liens or security interest, actions with respect to the occurrence of any
default or event of default, actions with respect to the foreclosure upon, sale,
release or failure to realize upon, any of its collateral, and actions with
respect to the collection of any claim for all or any part of the Senior
Indebtedness from any account debtor or any other party), regardless of whether
any such actions or omissions may affect such Senior Lender's rights to
deficiency or Subordinated Creditor's rights of subrogation or reimbursement.

     c. Each Senior Lender may, from time to time, enter into agreements and
settlements with Borrower as it may determine, including, without limitation,
any substitution of collateral, any release of any lien or security interest and
any release of Borrower. Subordinated Creditor waives any and all rights it may
have to require any Senior Lender to marshall assets.

                                       5
<PAGE>

     11. WAIVERS. No waiver of any provision hereof shall be deemed to be made
by Administrative Agent or Subordinated Creditor hereunder unless it is in
writing signed by the waiving party. Each such waiver shall be a waiver only
with respect to the specific instance involved and shall in no way impair the
rights of the waiving party or the obligations of the other party to the waiving
party in any other respect at any other time.

     12. INFORMATION CONCERNING FINANCIAL CONDITION. Subordinated Creditor
hereby assumes responsibility for keeping itself informed of the financial
condition of Borrower and each Affiliate Guarantor and of all other
circumstances bearing upon the risk of nonpayment of the Senior Indebtedness,
and agrees that no Senior Lender shall have any duty to advise it of information
known to any Senior Lender regarding such condition or any such circumstances.
In the event any Senior Lender, in its sole discretion, undertakes, at any time
or from time to time, to provide any such information to Subordinated Creditor,
such Senior Lender shall be under no obligation (i) to provide any such
information to Subordinated Creditor on any subsequent occasion, (ii) to
undertake any investigation not a part of its regular business routine, or (iii)
to disclose any information which, pursuant to its commercial finance practices,
such Senior Lender wishes to maintain confidential.

     13. THIRD PARTY BENEFICIARIES.

     a. This Agreement is solely for the benefit of Senior Lenders, Subordinated
Creditor and their respective successors and assigns, and neither Borrower nor
any Affiliate Guarantor or any other persons or entities are intended to be
third party beneficiaries hereunder or to have any right, benefit, priority or
interest under, or because of the existence of, or to have any right to enforce,
this Agreement. Senior Lenders and Subordinated Creditor shall have the right to
modify or terminate this Agreement at any time without notice to or approval of
Borrower or any Affiliate Guarantor or any other person or persons.

     b. Nothing in this Agreement is intended to or shall impair, as between
Borrower, its creditors other than Senior Lenders, and Subordinated Creditor,
the obligation of Borrower, which is absolute and unconditional, to pay to
Subordinated Creditor the principal of and interest on any Subordinated
Instrument and all of the Subordinated Indebtedness as and when the same shall
become due and payable in accordance with their terms, or affect the relative
rights of Subordinated Creditor and creditors of Borrower other than Senior
Lenders.

     c. Notwithstanding any of the foregoing, if any third party satisfies the
Senior Indebtedness owing to any Senior Lender, such Senior Lender may assign
its rights and remedies hereunder to such third party, and such third party
shall be deemed to be a Senior Lender for all purposes of this Agreement. If a
determination is made in favor of any third party, including, without
limitation, a trustee in bankruptcy, that such Senior Lender's liens or security
interests are invalid, avoidable or unperfected, the subordination set forth in
Section 1 hereinabove shall be deemed null and void, but only to the extent of
such invalidity, avoidability and imperfection.

                                       6
<PAGE>

     14. NOTICES. For the purposes of this Agreement, written notices shall be
sent by U.S. first class mail, postage prepaid; or by U.S. certified mail,
return receipt requested, postage prepaid; or by personal delivery; or by
facsimile confirmed by the recipient; and addressed to the notified party at its
address set forth below its signature line, or such other address specified by
the party with like notice. Notices shall be deemed received on the earlier of
(i) the day of actual receipt or (ii) ten (10) business days after deposit in
the U.S. mail, if sent by first class mail; upon the date set forth in the
return receipt, if by certified mail; on the day of confirmation of delivery by
the recipient, if by facsimile; or on the day of transmittal by personal
delivery.

     15. EFFECTIVENESS. This Agreement shall continue in effect until all Senior
Indebtedness has been fully paid and satisfied and all commitments of Senior
Lenders in regard thereto have been terminated.

     16. CONSENT TO JURISDICTION; ADDITIONAL WAIVERS. SUBORDINATED CREDITOR AND
SENIOR LENDERS EACH CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN ATLANTA, GEORGIA. SUBORDINATED CREDITOR WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL SERVICE OF PROCESS BE MADE
IN THE MANNER SET FORTH IN SECTION 14 OF THIS AGREEMENT. SUBORDINATED CREDITOR
AND SENIOR LENDERS EACH WAIVES, TO THE FULLEST EXTENT EACH MAY EFFECTIVELY DO
SO, ANY DEFENSE OR OBJECTION BASED UPON FORUM NON CONVENIENS AND ANY DEFENSE OR
OBJECTION TO VENUE OF ANY ACTION INSTITUTED WITHIN ATLANTA, GEORGIA. EACH OF THE
PARTIES HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR
DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS AGREEMENT.

     17. GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED AND ACCEPTED AT AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF GEORGIA, AND SHALL BE
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS)
OF THE STATE OF GEORGIA.

     18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties' respective successors and assigns, subject
to the provisions hereof.

     19. INTEGRATED AGREEMENT. This Agreement sets forth the entire
understanding of the parties with respect to the within matters and may not be
modified or amended except upon a writing signed by all parties.

     20. AUTHORITY. Each of the signatories hereto certifies that such party has
all necessary authority to execute this Agreement.

     21. HEADINGS. The paragraph headings used in this Agreement are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.

     22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each one of which where so executed shall be deemed to be an
original, and all of which taken together shall constitute one and the same
agreement. Any signatures delivered by a party by facsimile transmission or by
e-mail transmission of an adobe file format document (also known as a PDF file)
shall be deemed an original signature hereto.

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<PAGE>

                                                  "Subordinated Creditor"

                                                  TEFRON USA, INC.

                                                  By: /s/ Yosef Shiran
                                                  --------------------
                                                  Name: Yosef Shiran
                                                  Title: Chief Financial Officer

                                                  By: /s/ Asaf Alperovitz
                                                  -----------------------
                                                  Name: Asaf Alperovitz
                                                  Title: Senior Vice President

                                                  Address for Notices:

                                                  Tefron USA, Inc.
                                                  Attention: Yosef Shiran
                                                  Industrial Center
                                                  Teradyon, P.O. Box 1365,
                                                  Misgav 20179, Israel
                                                  Telecopier: (972) 4-990-0054

<PAGE>

All of the foregoing is consented
and agreed to as of the date first
set forth above:

"Borrower"

ALBAHEALTH, LLC                           SUNTRUST BANK, AS ADMINISTRATIVE AGENT

By: /s/ A. William Ott                    By: /s/ J. Christopher Deisley
------------------------------            ------------------------------
Name: A. William Ott                      Name: J. Christopher Deisley
Title: President                          Title: Senior Vice President

Address for Notices                       Address for Notices

AlbaHealth, L.L.C.                        SunTrust Bank
425 North Gateway Avenue                  25 Park Place, 23rd Floor
Rockwood, TN 37854                        Atlanta, Georgia 30303
Attention: Chief Financial Officer        Attention: J. Christopher Deisley
Telecopier: 865-354-1541                  Telecopier: 404 532-0417EXHIBIT 4.8

THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE TO THE SENIOR
INDEBTEDNESS (AS DEFINED IN THE SUBORDINATION AGREEMENT DESCRIBED BELOW) IN THE
MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED
AS OF APRIL __, 2006 AMONG ALBAHEALTH, LLC, TEFRON USA, INC. AND SUNTRUST BANK,
AS ADMINISTRATIVE AGENT; AND THE HOLDER OF THIS UNSECURED SUBORDINATED
PROMISSORY NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE SUBORDINATION
PROVISIONS OF THE SUBORDINATION AGREEMENT.

                     UNSECURED SUBORDINATED PROMISSORY NOTE

U.S. $3,000,000.00                                               APRIL 26, 2006
(Principal Amount)                                               (Date of Issue)

     FOR VALUABLE CONSIDERATION RECEIVED, AlbaHealth, LLC, a Delaware limited
liability company (the "Company"), hereby promises to pay to Tefron USA, Inc., a
Delaware corporation ("Seller"), the principal amount of Three Million and
00/100 Dollars ($3,000,000.00), together with interest (calculated on the basis
of actual days elapsed and a 360 calendar day year) on the unpaid principal
balance hereof, from the Date of Issue and until this Unsecured Subordinated
Promissory Note ("Note") is paid in full, at a rate equal to the rate determined
in accordance with paragraph 2 (the "Interest Rate").

1.   MATURITY DATE. The principal balance represented by this Note, together
     with all accrued and unpaid interest due hereunder, shall be due and
     payable, in full, to Seller on or before August 31, 2009 (the "Maturity
     Date").

2.   INTEREST RATE. Interest will accrue on the outstanding principal balance at
     an interest rate per annum equal to the LIBOR in effect on the first day of
     the FIXED RATE TERM plus a margin of 3.00% (the "Margin"). Such rate is set
     on the first day of each Fixed Rate Term based upon the then applicable
     LIBOR, plus the Margin, and is fixed for the duration of each Fixed Rate
     Term. "LIBOR" means, for each Fixed Rate Term, an annual rate equal to the
     rate for the applicable Fixed Rate Term appearing on the display designated
     as Page 3750 on the Dow Jones Markets Service (or such other page on that
     service or such other service designated by the British Banker's
     Association for the display of such Association's Interest Settlement Rates
     for Dollar deposits) as of 11:00 a.m. (London, England time) on the day
     that is two business days prior to the first day of the relevant Fixed Rate
     Term or if such page 3750 is unavailable for any reason at such time, the
     rate which appears on the Reuters Screen ISDA Page as of such date and such
     time; provided, however, that if the relevant foregoing sources are
     unavailable for the relevant Fixed Rate Term, the LIBOR shall be determined
     from such financial reporting service or other information as shall be
     mutually acceptable to the Company and the Seller. "Fixed Rate Term" means
     a period commencing on a Business Day and continuing for three (3) months,
     during which the outstanding principal balance of this Note bears interest
     determined in relation to LIBOR. The first Fixed Rate Term shall commence
     on the Date of Issue.

<PAGE>

     At the end of the first Fixed Rate Term, and at the end of each subsequent
     Fixed Rate Term until final maturity of this Note, another Fixed Rate Term
     of the same length shall commence, and the interest rate shall be adjusted
     to reflect the LIBOR in effect on the first day of the new Fixed Rate Term
     plus the Margin. If any Fixed Rate Term would end on a day which is not
     followed by a Business Day, then such Fixed Rate Term shall be extended to
     the next day which is followed by a Business Day. "Business Day" means any
     day except a Saturday, Sunday or any other day on which commercial banks in
     Georgia are authorized or required by law to close.

     If the Company shall default in the payment of principal of or interest,
     then the outstanding principal amount and, to the extent permitted by
     applicable law, any interest payments thereon not paid when due, shall
     thereafter bear interest at the Default Rate. Interest at the Default Rate
     shall be payable upon demand and shall accrue from the initial date of such
     default until it is cured or waived. The "Default Rate" shall mean the
     interest calculated in accordance with the first two paragraphs of this
     section 2 plus an additional margin of 2.00%.

     Notwithstanding any other provision of this Note, interest under this Note
     shall not exceed the maximum amount permitted by law. If any amount is paid
     under this note as interest in excess of such maximum rate, then the amount
     so paid will not constitute interest but will constitute a prepayment on
     account of the principal amount of this Note.

3.   PAYMENT. Accrued interest on this Note shall be due and payable in
     consecutive quarterly installments commencing on July 5, 2006, and
     continuing on the fifth (5th) day of each October, January, April and July
     thereafter until this Note is paid in full, by deposit to such account as
     Seller may have last designated by written notice to the Company. All
     payments made after 1:00 p.m., Georgia time, shall be deemed to have been
     received on the next Business Day. The principal balance under this Note
     shall due and payable on the Maturity Date.

4.   TERMINATION. On or prior to the Maturity Date, upon final, irrevocable and
     indefeasible payment, in whole or in aggregate installments, of the full
     amount due and owing under this Note, this Note will terminate and be of no
     further force and effect.

5.   UNSECURED NOTE. Seller acknowledges and agrees that the indebtedness
     represented by this Note is unsecured.

                                       2
<PAGE>

6.   MEMBERSHIP INTEREST REDEMPTION AGREEMENT. This Note is issued pursuant to
     the terms of that certain Membership Interest Redemption Agreement dated
     April __, 2006, by and between the Company and Seller and is subject to the
     terms thereof.

7.   SUBORDINATED NOTE. ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED
     TO CERTAIN OTHER INDEBTEDNESS PURSUANT TO, AND TO THE EXTENT PROVIDED IN,
     AND IS OTHERWISE SUBJECT TO THE TERMS OF, THAT CERTAIN SUBORDINATION
     AGREEMENT AMONG THE COMPANY, SELLER AND SUNTRUST BANK, AS ADMINISTRATIVE
     AGENT (THE "SUBORDINATION AGREEMENT"). The indebtedness evidenced by this
     Note shall not be subordinated to any indebtedness other than Senior
     Indebtedness as defined in the Subordination Agreement.

8.   RIGHT TO PREPAY BY COMPANY. At any time prior to the Maturity Date, the
     Company may, in its sole discretion, prepay this Note, in whole or in part
     without premium or penalty, at a price equal to one hundred percent (100%)
     of the principal amount of the Note, plus accrued interest on a daily basis
     to the date of prepayment.

9.   COMPANY COVENANTS. (a) The Company hereby covenants and agrees that in the
     event the Company achieves a trailing 12-month EBITDA of at least (i)
     $4,800,000 for any fiscal quarter ending during 2006, (ii) $5,200,000 for
     any fiscal quarter ending during 2007; or (iii) $5,500,000 for any fiscal
     quarter ending during 2008, the Company will use its reasonable best
     efforts to negotiate an increase in its revolving credit availability with
     SunTrust Bank, the Company's primary lender, or its successor (hereinafter,
     the "Bank"), for the purpose of prepaying the principal balance of this
     Note; provided, however, that the Company shall not be required to accept
     any revolving credit increase to the extent that the Bank would increase
     the interest rate applicable to the Company's revolving credit availability
     or subject the Company to terms and conditions that are materially
     disadvantageous from the terms and conditions in the revolving credit
     agreement in effect immediately prior to the proposed increase.

     The Company agrees that until payment of this Note in full, it shall
     deliver to Seller financial statements and other information in the form
     and at the times that is provided by the Company to either the Bank or to
     any other holder of common units of the Company.

          (b) Until final, irrevocable and indefeasible payment of this Note in
     full, the Company will not (and will cause its subsidiaries not to) make
     any "Restricted Payments". "Restricted Payment" means (i) the declaration
     or payment, or agreement to declare to pay, directly or indirectly, of any
     dividend or other distribution, including any return of capital or
     distribution of cash or other assets to the Company's equity holders on
     account of their holding of Company securities, and (ii) any payment on
     account of, or setting apart assets for a sinking or other analogous fund
     for, the purchase, redemption, retirement, defeasance or other acquisition
     of, any shares of Company securities (including any options, warrants, or
     other rights to purchase such securities, whether now or hereafter
     outstanding). Notwithstanding the foregoing, "Restricted Payments" shall
     not include (x) distributions to the holders of Company securities on a
     quarterly basis to enable them to pay income taxes payable in cash in such
     fiscal year, which are payable on account of their holdings of Company
     securities, provided that such payments in the aggregate for any fiscal
     year shall not exceed 42.5% of the Company's taxable income for the
     relevant tax year; (y) Restricted Payments made by any Company subsidiary
     to the Company; and (z) payments described in this Note.

                                       3
<PAGE>

          (c) The Company will not, and will not permit any of its subsidiaries
     to, sell, lease or otherwise transfer any property or assets to, or
     purchase, lease or otherwise acquire any property or assets from, or
     otherwise engage in any other transactions with, any of its affiliates
     (which includes any person or entity that directly, or indirectly through
     one or more intermediaries, controls, is controlled by, or is under common
     control with, the Company), except (i) in the ordinary course of business
     consistent with past practice at prices and on terms and conditions not
     less favorable to the Company or such subsidiary than could be obtained on
     an arm's-length basis from unrelated third parties, and (ii) any payment
     permitted by subsection (b) of this Section 9.

10.  EVENTS OF DEFAULT. Each of the following events shall be an Event of
     Default ("Event of Default") for purposes of this Note:

     a.   PAYMENT OF INTEREST. The Company defaults in the due and punctual
          payment of any installment of interest under this Note;

     b.   PAYMENT OF PRINCIPAL. The Company defaults in the due and punctual
          payment of the principal amount of this Note on the Maturity Date;

     c.   NOTE TERMS. The Company defaults in the due and punctual performance
          or observance of any material terms contained in this Note, and such
          default continues for a period of ten (10) consecutive days after
          written notice thereof to the Company by Seller;

     d.   INSOLVENCY MATTERS. The Company makes an assignment for the benefit of
          creditors or admits in writing its inability to pay its debts as they
          become due, or files a voluntary petition in bankruptcy, or is
          adjudicated a "debtor" under the U.S. federal bankruptcy law or other
          similar federal or state law or insolvent, or files any petition or
          answer seeking for itself any reorganization, arrangement,
          composition, readjustment, liquidation, dissolution or similar relief
          under any present or future statute, law or regulation, or files any
          answer admitting the material allegations of a petition filed against
          the Company for any such relief, or a trustee, receiver or liquidator
          shall be appointed for the Company or all or any substantial part of
          the properties of the Company, or if any petition for bankruptcy,
          reorganization or arrangement under federal bankruptcy law, or any
          similar federal or state law, shall be filed by or against, consented
          to, or acquiesced in by the Company, or if any proceeding for the
          dissolution or liquidation of the Company shall be instituted;
          provided, that if such appointment, petition or proceeding was
          involuntary and not consented to by the Company, the same shall become
          an Event of Default upon the same not being discharged, stayed or
          dismissed within sixty (60) days; or

                                       4
<PAGE>

     e.   ASSIGNMENT. The Company's obligations under this Note shall be
          assigned to a third party. For purposes of this paragraph d., an
          "assignment" shall not be deemed to occur upon the sale or merger of
          the Company to or with any party, which does not result in a "Change
          in Control" of the Company. "Change in Control" shall mean (a) the
          failure of Encompass Group, L.L.C., a Delaware limited liability
          company ("Encompass") (i) at any time during which the president of
          the Company is not a member of the board of directors or other
          managing body of the Company, to have and exercise voting power for
          the election of at least a majority of the board of directors or other
          managing body of the Company or (ii) at any time during which the
          president of the Company is a member of the board of directors or
          other managing body of the Company, to have and exercise voting power
          for the election of at least two members of the board of directors or
          other managing body of the Company (provided that this clause (ii)
          shall only apply so long as the board of directors or other managing
          body of the Company consists of five or fewer members); or (b) the
          failure of Encompass at any time to directly own beneficially and of
          record on a fully diluted basis 51% of the outstanding equity
          interests (including limited liability company interests and warrants,
          rights or options to purchase any equity interests) (collectively,
          "Capital Stock") of the Company; or (c) the failure of the Company at
          any time to own beneficially and of record on a fully diluted basis
          100% of the outstanding Capital Stock of each of its subsidiaries,
          free and clear of all liens other than liens created under the
          security documents entered into by the Company and the Bank.
          Notwithstanding anything else in this Section, the pledge by Encompass
          of its membership interests, whether now owned or hereafter acquired,
          to Wachovia Bank, National Association, as agent, and its successors
          and assigns (hereinafter, "Wachovia Bank") shall not constitute a
          Change in Control.

11.  REMEDIES ON DEFAULT; ACCELERATION. Upon the occurrence of an Event of
     Default as described under Sections 10.a., 10.c. and 10.e. hereof, Seller
     shall have the right to declare the principal amount hereof and all accrued
     but unpaid interest thereon to be immediately due and payable upon written
     notice from Seller to the Company.

     Upon the occurrence of an Event of Default as described under Sections
     10.b., Seller shall have the option to either (a) declare the principal
     amount hereof and all accrued but unpaid interest thereon to be immediately
     due and payable upon written notice from Seller to the Company, or (b)
     convert the principal balance of this Note into Common Units of the
     Company, which are free and clear of any restriction, lien or encumbrance
     of any kind, at a rate equal $274.20 per Common Unit, subject to adjustment
     for dividends, distributions, reclassifications, or similar events
     affecting the Company's Common Units (which adjustments are intended to put
     Seller in the same position with regard to its percentage ownership of the
     issued and outstanding equity of the Company as it would have been had the
     relevant event not occurred) (the "Conversion Price"). The number of Common
     Units to be issued upon such conversion shall be equal to the quotient
     obtained by dividing (i) the entire principal amount of this Note plus
     accrued interest by (ii) the Conversion Price.

                                       5
<PAGE>

     Upon the occurrence of an Event of Default as described under Section
     10.d., the principal amount and all accrued but unpaid interest thereon
     will automatically become and be immediately due and payable without any
     declaration or other act on behalf of Seller.

12.  NOTICES. All notices required under the terms of this Note shall be in
     writing and either delivered personally or sent by United States first
     class mail. If sent by mail, notice shall be deemed given when deposited in
     the United States mail, properly addressed and with postage prepaid. Unless
     changed by subsequent written notice, the following address shall be used:

     If to the Company:                 AlbaHealth, LLC
                                        ATTN: Bill Ott
                                        425 North Gateway Avenue
                                        Rockwood, TN 37854
                                        Facsimile: 865-354-1541

     with a copy to:                    Timothy M. Barnett, Esq.
                                        Winthrop & Weinstine, P.A.
                                        225 South Sixth Street, Suite 3500
                                        Minneapolis, MN 55402
                                        Facsimile: (612) 604-6853

     If to Seller:                      Tefron USA, Inc.
                                        ATTN: Yosef Shiran
                                        Industrial Center
                                        Teradyon, P.O. Box 1365,
                                        Misgav 20179, Israel
                                        Facsimile: (972) 4-990-0054

     with a copy to:                    Gross, Kleinhendler, Hodak, Halevy,
                                        Greenberg & Co.
                                        ATTN:  Richard Mann, Adv.
                                        One Azrieli Center
                                        Tel Aviv 67021, Israel
                                        Facsimile:  (972) 3-607-4411

13.  MODIFICATION AND WAIVER. No purported amendment, modification or waiver of
     any provision hereof shall be binding unless set forth in a written
     document signed by the Company and Seller (in the case of amendments or
     modifications) or by the party to be charged thereby (in the case of
     waivers). No waiver shall be effective except in a written instrument
     signed by the party against whom enforcement of any such waiver is sought.
     Any waiver shall be limited to the provision hereof in the circumstances or
     events specifically made subject thereto, and shall not be deemed a waiver
     of any other term hereof or of the same circumstance or event upon any
     reoccurrence thereof.

14.  TIME IS OF THE ESSENCE WITH RESPECT TO THIS NOTE.

                                       6
<PAGE>

15.  ASSIGNMENT. Seller shall not have the right to assign, sell, transfer,
     delegate, or otherwise dispose of, whether voluntarily or involuntarily,
     any right or obligation under this Note without the prior written consent
     of the Company. Neither this Note nor any interest therein may be assigned
     by the Company without Seller's written consent; provided, however, that an
     assignment shall not be deemed to occur upon the sale or merger of the
     Company to or with any party, which does not result in a "Change in
     Control" (as defined above) of the Company. Any purported assignment,
     transfer, or delegation in violation of this Section 14 shall be null and
     void. Subject to the foregoing limits on assignment and delegation, and the
     limits set forth in Section 10.d., this Note shall be binding upon and
     shall inure to the benefit of the parties and their respective successors
     and assigns.

16.  WAIVER OF DEMAND, PRESENTMENT AND NOTICE OF DISHONOR. The undersigned and
     each endorser or guarantor, together with their respective successors and
     assigns, hereof hereby waives demand, notice of demand, presentment,
     protest, notice of protest and notice of dishonor.

17.  GOVERNING LAW AND VENUE. This Note shall be construed and interpreted
     pursuant to and in accordance with the laws of the State of Georgia. Any
     dispute arising out of or relating to this Note or the alleged breach of
     it, or otherwise related to the transactions contemplated hereby, will be
     discussed between the disputing parties in a good faith effort to arrive at
     a mutual settlement of any such controversy. If, notwithstanding such
     discussions, such dispute cannot be resolved, any action at law, suit in
     equity or judicial proceeding arising directly, indirectly or otherwise in
     connection with, out of, related to or from this Note or any provision
     hereof shall be venued only in the courts of the State of Georgia. Seller
     and the Company hereby consent to the personal jurisdiction of these courts
     and waive any objection that such venue is inconvenient or improper. Seller
     and the Company hereby waive personal service of the summons, complaint and
     other process issued in any such action or suit and agrees that service of
     such summons, complaints and other process may be made by registered or
     certified mail addressed to such party at the address set forth in Section
     12 hereof and that service shall be deemed completed upon the earlier of
     such party's actual receipt thereof or 10 days after deposit in the United
     States or Israeli mail, as the case may be, proper postage prepaid.

18.  WAIVER OF JURY TRIAL. THE PARTIES, HAVING BEEN REPRESENTED BY COUNSEL EACH
     KNOWLINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
     OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE OR ANY
     RELATED AGREEMENT OR UNDER ANY AMENDMENT WHICH MAY IN THE FUTURE BE
     DELIVERED IN CONNECTION WITH THIS NOTE AND AGREES THAT ANY SUCH ACTION OR
     PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

                                       7
<PAGE>

     IN WITNESS WHEREOF, this Unsecured Subordinated Promissory Note has been
executed and delivered effective as of the date first set forth above.

                                                     ALBAHEALTH, LLC

                                                     By: /s/ A. William Ott
                                                     ----------------------
                                                     Its: PRESIDENT

Agreed and accepted this 26th day of April, 2006.

TEFRON USA, INC.

By: /s/ Yosef Shiran
--------------------
YOSEF SHIRAN
ITS CHIEF EXECUTIVE OFFICER

By: /s/ Asaf Alperovitz
-----------------------
Asaf Alperovitz
Its Chief Executive Officer

                                       8

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