<PAGE>   1
                   GRANT OF SECURITY INTEREST IN TRADEMARKS



     AGREEMENT made this 5th day of June, 1997 by and between DM MANAGEMENT
COMPANY, a corporation duly organized and existing under the laws of the State
of Delaware and having a principal place of business at 25 Recreation Park Road,
Hingham, MA 02043 (herein "DM"), and CITIZENS BANK OF MASSACHUSETTS, duly
organized and existing under the laws of The Commonwealth of Massachusetts and
having a principal place of business at 35 Summer Street, Boston, MA 02110
(herein the "BANK").

                              W I T N E S S E T H:

     WHEREAS, by instrument dated June 5, 1997, DM executed and delivered to the
BANK a security agreement (the "All-Asset Security Agreement") pursuant to which
DM granted a security interest to the BANK in all of its property, including,
without limitation, a lien on and security interest in all of DM's patents and
trademarks; and

     WHEREAS, DM owns the United States registrations of the trademarks listed
on EXHIBIT "A" hereto, which registrations have been issued by the U.S. Patent
and Trademark Office (the "PTO"); and

     WHEREAS, DM wishes to file this instrument with the PTO to confirm its
grant of a security interest to the BANK of all of its federally registered
trademarks listed in EXHIBIT "A" hereto as security for the "Obligations" (the
"OBLIGATIONS") as defined in that certain Loan Agreement dated June 5, 1997 by
and between DM and the BANK (the "LOAN AGREEMENT").

     NOW, THEREFORE, DM does hereby confirm its grant of a security interest in
all of its rights to the trademarks and United States registrations thereof
listed on Exhibit A and all goodwill associated therewith annexed hereto and
made a part hereof, which Exhibit consists of 1 page (all herein referred to as
"COLLATERAL").

     Provided, nevertheless, that if DM shall well and truly pay and perform all
OBLIGATIONS of DM to the BANK hereby secured (as herein provided) and all
covenants and agreements of DM herein contained, then this instrument shall be
void and of no further effect and the interest hereby granted shall cease and
terminate, and the BANK will execute and deliver such documents as may be
necessary to discharge this instrument to DM and release the lien granted
pursuant hereto.

     DM hereby warrants and represents to the BANK:

     (a) That it has full power and authority to enter into this Agreement.

     (b) That it will maintain all of said trademarks in full force and effect,
except as it is prevented from so doing by law or by judgment of any court of
competent jurisdiction.

     Upon the occurrence and continuance of any EVENT OF DEFAULT as defined in
the LOAN AGREEMENT, the BANK shall have, in addition to all other rights
provided herein or therein, the rights and remedies of a secured party under the
Uniform Commercial Code; and further, after the occurrence and continuance of an
EVENT OF 

<PAGE>   2



DEFAULT, the BANK may, upon reasonable notice to DM, at any time or times, sell
and deliver any or all of the COLLATERAL at public or private sale, for cash,
upon such terms as the BANK deems advisable, at its sole discretion. Expenses of
retaking, holding, preparing for sale, selling or similarly relating to
realization on the COLLATERAL shall include reasonable attorneys' fees. The
BANK's rights and remedies under this Agreement will be cumulative and not
exclusive of any other right or remedy which the BANK may have. For the purpose
hereof, notice of any intended sale or disposition in writing at least ten (10)
days before the time of such sale or disposition, shall be deemed reasonable
notice.

     If the BANK shall exercise its rights to sell any or all of such
COLLATERAL, then DM agrees to assign unto the BANK or as the BANK may direct all
of its rights and claims that it may have for past infringement of any of the
trademarks in the COLLATERAL.

     The BANK shall be under no duty or obligation to enforce any rights or take
any action with respect to the COLLATERAL, including without limitation, the
maintaining or prosecuting of any claims or rights for infringement by third
parties and DM hereby holds the BANK harmless of and from all liability, loss or
damage, including reasonable attorney's fees, by reason of this instrument
including without limitation all costs, expenses or damages incurred as a result
of being joined in any litigation relating to the COLLATERAL.

     This Agreement shall be construed and enforced under the laws of The
Commonwealth of Massachusetts and shall take effect as an instrument under seal.


WITNESS                                DM MANAGEMENT COMPANY


/s/ Paul J. Levenson                   By: /s/ Olga L. Conley
--------------------------                --------------------------------------
Paul J. Levenson                            Olga L. Conley
                                       Title: Vice President of Finance
                                              ----------------------------------


WITNESS                                CITIZENS BANK OF MASSACHUSETTS


/s/ Paul J. Levenson                   By:  /s/ Lori B. Leeth VP  
--------------------------                --------------------------------------
Paul J. Levenson                            Lori B. Leeth
                                       Title: Vice President 
                                              ----------------------------------

                                      -3-
<PAGE>   3



                          COMMONWEALTH OF MASSACHUSETTS



Suffolk, ss.                                            June 5, 1997

     Then personally appeared Olga L. Conley, the Vice President of Finance of
DM Management Company, as aforesaid, and acknowledged the foregoing instrument
to be the free act and deed of DM Management Company, before me.

                                       /s/ Paul J. Levenson
                                       -----------------------------------------
                                       Notary Public

                                       My Commission Expires: March 13, 2003



                          COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss.                                            June 5, 1997

     Then personally appeared Lori B. Leeth, a Vice President of Citizens Bank
of Massachusetts, as aforesaid, and acknowledged the foregoing instrument to be
the free act and deed of Citizens Bank of Massachusetts.

                                       /s/ Paul J. Levenson
                                       -----------------------------------------
                                       Notary Public

                                       My Commission Expires: March 13, 2003


                                      -4-
<PAGE>   4




                                   EXHIBIT "A"
                                   -----------

                                   TRADEMARKS
                                   ----------


REGISTRATION NO.        TRADEMARK                           REGISTRATION DATE
----------------        ---------                           -----------------
1,204,106               J. Jill Ltd. [and design]           August 3, 1982
1,844,940               J. Jill Ltd.                        July 12, 1994
1,859,770               J. Jill Ltd.                        October 25, 1994
1,323,907               Nicole Summers [and design]         March 5, 1985
1,329,522               Nicole Summers [and design]         April 9, 1985
1,844,937               Nicole Summers                      July 12, 1994
1,845,725               Nicole Summers                      July 19, 1994
                                                     


                                      -5-