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                                  MORTGAGE
                                  --------

      MORTGAGE made this 30th day of July, 1997, by and between DM Management
Company, a Delaware Corporation with a principal office at 25 Recreation Park
Drive, Hingham, Massachusetts 02043 (herein called "Mortgagor"), and Citizens
Bank of Massachusetts with a principal place of business at 55 Summer Street,
Boston, Massachusetts 02110 (herein called "Mortgagee" which expression shall
include its successors and assigns).

                                   WITNESSETH:

        DM Management Company, a Delaware Corporation with a principal place of
business at 25 Recreation Park Drive, Hingham, Massachusetts 02043 (the
"Mortgagor") hereby grants to Citizens Bank of Massachusetts (the "Mortgagee"),
with mortgage covenants, the real property described on Exhibit A (hereinafter
called the "Mortgaged Premises") to secure (a) the full payment of the sum of
$6,000,000.00, or such lesser amount which shall have been advanced, together
with interest and other charges, all as provided in a certain "Revolving Note"
dated June 5, 1997 of the Mortgagor (as defined in a certain Loan Agreement
("Loan Agreement") dated June 5, 1997 by and between the Mortgagor and the
Mortgagee) to the order of the Mortgagee and delivered pursuant to the Loan
Agreement in the original face amount of $6,000,000.00, together with all
substitutions or replacements therefor and all renewals or extensions thereof
and the full performance of all other obligations of the maker of said note as
provided therein; (b) the full payment of the sum of $1,650,000.00, as provided
in a certain "Real Estate Note" (as defined in the Loan Agreement) of the
Mortgagor to the order of the Mortgagee, executed and delivered by the Mortgagor
to the Mortgagee, pursuant to the Loan Agreement in the full amount of
$1,650,000.00, with interest and other charges as provided therein, together
with all substitutions and replacements therefor and all renewals and extensions
thereof and the full performance of all other obligations of the maker of said
note as provided therein; (c) the full payment of the sum of $3,600,000.00, with
interest and other charges, all as provided in a certain "Term Note" (as defined
in the Loan Agreement) of the Mortgagor to the order of the Mortgagee dated June
5, 1997, executed and delivered by the Mortgagor to the Mortgagee pursuant to
the Loan Agreement, in the original face amount of $3,600,000.00, together with
all substitutions or replacements therefor and all renewals or extensions
thereof and the full performance of all other obligations of the maker of said
note as provided therein; (d) the full payment and performance by the Mortgagor
of all indebtedness, obligations and liabilities of the Mortgagor to the
Mortgagee, direct or indirect, absolute or contingent, now existing or hereafter
arising (including, without limitation, all "Obligations", as defined in the
Loan Agreement) which Loan Agreement provides, among other things, for the
establishment of a "Revolving Loan" (as defined therein) pursuant to which
"Advances" (as defined therein) may be made from time to time, and for repayment
of all or a portion of the outstanding balance of such Advances together with
interest and other charges, all in accordance therewith, for the issuance of
letters of credit pursuant to "L/C Applications" (as defined therein) therein
and for the grant of "Loans" (as defined therein) as provided therein; and (e)
the full payment and performance of all covenants and agreements herein
contained or referred to on the part of the Mortgagor to be kept and performed
and payment and performance of all other indebtedness, liabilities or
obligations of the Mortgagor to the Mortgagee, direct or indirect, absolute or
contingent, now or hereafter existing (collectively hereafter referred to as
"Obligations").

      Together with all furnaces, machinery, articles, fixtures and equipment
thereon and used in connection with the occupation, maintenance, use or
operation thereof including, without limitation, heaters, gas and electric
fixtures, screens, screen doors, shades, storm doors and windows, awnings,
garbage incinerator, receptacles and disposals, refrigerators and refrigeration
equipment, ventilating and air conditioning equipment, built in cases,

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cabinets, counters and drawers, door bell and alarm systems, portable or
sectional buildings, and all other fixtures or equipment of whatever kind or
nature at present contained in or on the Mortgaged Premises, or placed therein
prior to the full payment and discharge of this mortgage including without
limitation together with the proceeds of the foregoing.

      Together with all of Mortgagor's right, title and interest in and to all
leases, tenancies and occupancies (the "Leases") whether written or not, which
have been entered into, or which may at any time in the future be entered into
regarding the Mortgaged Premises, together with all rent, income and profit
arising out of the Leases and all security and other deposits held by or held on
behalf of Mortgagor.

      TO HAVE AND TO HOLD said granted Mortgaged Premises with all the
privileges and appurtenances to the same belonging to the said Mortgagee and its
successors and assigns as its own property for its own use and benefit forever.
The Mortgagor and Mortgagor's heirs, executors, administrators, successors and
assigns do hereby covenant, grant and agree to, and with the said Mortgagee, and
its successors and assigns, that until the delivery hereof Mortgagor is the
lawful owner of said Mortgaged Premises and is possessed thereof in Mortgagor's
own rights and fee simple; and that Mortgagor has full power and authority to
grant and convey the same in the manner aforesaid; that the said Mortgaged
Premises are free and clear of all and every encumbrance other than those shown
on Exhibit "A", and that Mortgagor will, and Mortgagor's heirs, executors,
administrators, successors and assigns shall and will warrant and defend the
same to the Mortgagee, and its successors and assigns, against the lawful claims
and demands of any person or persons whomsoever.

      Provided, nevertheless, that if the said Mortgagor, and Mortgagor's heirs,
executors, administrators, successors and assigns shall faithfully perform the
following covenants and conditions, this mortgage shall be void, and otherwise
to remain in full force.

      The Mortgagor for itself and Mortgagor's heirs, executors, administrators,
successors and assigns covenants and agrees as follows:

              All Obligations shall be fully and timely kept and performed.

              Mortgagor will pay all taxes, assessments, and other governmental
or municipal charges, fines or impositions arising in connection with the
Mortgaged Premises, and in default thereof the Mortgagee may pay the same.

              That Mortgagor will keep the Mortgaged Premises above conveyed in
good order and condition and will not permit any waste thereof, reasonable wear
and tear excepted.

      Mortgagor will keep the structures, fixtures, and improvements now
existing or hereafter erected or situated on the Mortgaged Premises insured
against loss by fire and other hazards, casualties and contingencies, as
Mortgagee may, from time to time, require, said insurance to be placed with such
company(ies) and be for such periods and in such amounts as may be required by
the Mortgagee, all such insurance policies to be deposited with, and payable in
case of loss to Mortgagee, subject only to the rights of the holders of those
mortgages, if any, shown on Exhibit "A" hereto, hereby granting to Mortgagee in
the event of default authorization as attorney irrevocable of the Mortgagor to
cancel such insurance and to retain the return premium thereof and to transfer
such insurance to any 

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person or persons claiming title to the Mortgaged Premises or any part thereof
by virtue of foreclosure proceedings or otherwise.

      The Mortgagor covenants to cause, at the request of the Mortgagee, the
Mortgagee to be named as an additional insured on any liability insurance policy
maintained in respect to the Mortgaged Premises and further covenants to effect
such liability insurance at the request of the Mortgagee, such insurance to be
on such terms and in such form and for such periods and amounts as the Mortgagee
shall, from time to time, approve or require.

      The Mortgagor covenants, upon demand by the Mortgagee, to make equal
monthly payments to the Mortgagee sufficient to amortize the amount (estimated
by the Mortgagee) of all taxes and assessments laid against the Mortgaged
Premises, within a period ending one month prior to the due date of such taxes
and assessments. The Mortgagee shall hold such monthly payments to pay such
taxes and assessments when due and payable, and in the event of the foreclosure
of this mortgage, all such payments shall be credited to the amount of the
principal obligations remaining unpaid to the extent that they have not been
used for the payment of taxes and assessments as provided herein. So long as
Mortgagor shall make monthly payments of such taxes to any mortgagee whose
mortgage is prior in right to the mortgage herein granted, the covenant of the
Mortgagor with respect to said monthly payments of taxes shall be deemed to have
been performed.

      That if the Mortgagor fails to make any payment provided for in the
documents, instruments or agreements evidencing the Obligations, including
without limitation, this Mortgage Deed (hereinafter, collectively, the
"Instruments"), for taxes, insurance premiums, repair of the Mortgaged Premises,
or otherwise, then the Mortgagee may pay the same, and all sums so advanced,
with interest thereon at the same rate as then prevailing under the Loan
Agreement, from the date of such advance, shall be added to the principal of the
Obligations, and shall be secured hereby;

      That in the event the said Mortgaged Premises or any part thereof shall be
taken or condemned for public or quasi-public purposes or by the proper
authority, the Mortgagor shall have no claim against the award for damages or be
entitled to any portion of the award until the Obligations have been paid and
performed in full, and all rights to damages of the Mortgagor are hereby
assigned to the Mortgagee to the extent of any such Obligations that remain
unpaid, the Mortgagor, however, having the right to appeal such awards in the
Courts of competent jurisdiction;

      That the Mortgagor shall not from this time forward convey or permit the
transfer of the Mortgaged Premises or the structures or improvements thereon, or
any interest therein, (legal or equitable), without the prior written consent of
the Mortgagee;

      That if there shall be any default on any of the terms, conditions, or
covenants of the Instruments, all sums due the Mortgagee by the Mortgagor shall
at the option of the Mortgagee become immediately due and payable, and the
Mortgagee or its assigns shall have the STATUTORY POWER OF SALE.

      The Obligations which this Mortgage Deed secures may also be secured by
other security documents and agreements and the Mortgagee shall have the
absolute right, in its sole discretion, to determine which rights, security
liens, and security interests it shall at any time pursue or take any action in
respect of, without in any way modifying or affecting any rights thereunder.



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      This mortgage is upon the STATUTORY CONDITIONS, for any breach of which
the Mortgagee shall have the STATUTORY POWER OF SALE.

      The Mortgagor represents that to the best of Mortgagor's knowledge and
belief neither the Mortgagor nor any person for whose conduct the Mortgagor is
responsible ever:

              (i) owned, occupied, or operated a site or vessel on which any
      hazardous material or oil was or is stored (except if such storage was or
      is in compliance with all laws, ordinances, and regulations pertaining
      thereto) transported, or disposed of (the term site, vessel, and hazardous
      material respectively being used in this Section with the meaning given
      those terms under New Hampshire R.S.A. l47-B as amended);

              (ii) directly or indirectly transported, or arranged for the
      transport, of any hazardous material or oil (except if such transportation
      was or is in compliance with all laws, ordinances and regulations
      pertaining thereto);

              (iii)  caused or was legally responsible for any release, or 
      threat of release, of any hazardous material or oil; or

              (iv) received notification from any federal, state, or other
      governmental authority of: any potential, known, or threat of release of
      any hazardous material or oil on or from the Mortgaged Premises or any
      other site or vessel owned, occupied, or operated either by the Mortgagor
      or any person for whose conduct the Mortgagor is responsible or whose
      liability may result in a lien on the Mortgaged Premises; or the
      incurrence of any expense of loss by such governmental authority, or by
      any other person, in connection with the assessment, containment, or
      removal of any release, or threat of release, of any hazardous material or
      oil from the Mortgaged Premises or any such site or vessel.

      The Mortgagor represents and warrants that to the best of Mortgagor's
knowledge and belief no hazardous material or oil was ever, or is now, stored on
(except in compliance with all laws, ordinances, and regulations pertaining
thereto), transported, or disposed of on the Mortgaged Premises.

The Mortgagor shall:

              (i) not store (except in compliance with all laws, ordinances, and
      regulations pertaining thereto), or dispose of any hazardous material or
      oil on the Mortgaged Premises, or on any other site or vessel owned,
      occupied, or operated either by the Mortgagor, or by any person for whose
      conduct Mortgagor is responsible;

              (ii) neither directly or indirectly transport or arrange for the
      transport of any hazardous material or oil (except in compliance with all
      laws, ordinances, and regulations pertaining thereto);

              (iii) take all such action, including, without limitation, the
      conducting of engineering tests (at the sole expense of the Mortgagor) (x)
      to confirm that no hazardous material or oil is or ever was stored on the
      Mortgaged Premises (y) to assess, contain, and remove any such hazardous
      material or oil on the Mortgaged Premises, and (z) to qualify for any
      insurance program or safe harbor which may be available under said R.S.A.
      l47-B, as amended; and



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              (iv) provide the Mortgagee with written notice: (x) upon the
      Mortgagor's obtaining knowledge of any potential or known release, or
      threat of release, of any hazardous material or oil at or from the
      Mortgaged Premises, or any other site or vessel owned, occupied or
      operated by the Mortgagor or by any person for whose conduct the Mortgagor
      is responsible or whose liability may result in a lien on the Premises;
      (y) upon the Mortgagor's receipt of any notice to such effect from any
      federal, state, or other governmental authority; and (z) upon the
      Mortgagor's obtaining knowledge of any incurrence of any expense or loss
      by such governmental authority in connection with the assessment,
      containment, or removal of any hazardous material or oil for which expense
      or loss the Mortgagor may be liable or for which expense a lien may be
      imposed on the Mortgaged Premises.

      The Mortgagor shall indemnify, defend, and hold the Mortgagee harmless of
and from any claim brought or threatened against the Mortgagee by any person,
entity, or governmental agency or authority on account of the failure by the
Mortgagor to comply with the terms and provisions hereof (each of which may be
defended, compromised, settled, or pursued by the Mortgagee with counsel of the
Mortgagor's selection, but at the expense of Mortgagor). The within
indemnification shall survive payment of the Obligations and/or termination,
release, or discharge executed by the Mortgagee in favor of the Mortgagor.

      The obligations of Mortgagor hereunder, if more than one, shall be joint
and several.

      If any provision of this Mortgage or portion of such provision or the
application thereof to any person or circumstance shall to any extent be held
invalid or unenforceable, the remainder of this Mortgage (or the remainder of
such provision) and the application thereof to other persons or circumstances
shall not be affected thereby.

      The use of the singular herein shall include the plural, and the use of
the plural shall include the singular, and the use of the masculine gender shall
include the feminine and the use of the feminine shall include the masculine.

      This agreement shall be governed and construed according to the laws of
the State of New Hampshire.

      This agreement shall bind Mortgagor and Mortgagor's heirs, executors,
administrators, successors and assigns and shall inure to the benefit of the
Mortgagee and its successors and assigns.


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      IN WITNESS WHEREOF, Mortgagor has caused this instrument to be executed on
this 30th day of July, 1997.

Witness                             DM MANAGEMENT COMPANY

/s/ Lori B. Leeth                   By: Olga L. Conley
--------------------------              ---------------------------------------
                                        Olga L. Conley, Vice President Finance 


                          COMMONWEALTH OF MASSACHUSETTS

COUNTY OF SUFFOLK

      On this 30th day of July, 1997, before me, personally appeared the
undersigned officer, Olga L. Conley, known to me (or satisfactorily proven) to
be the person whose name is subscribed to the foregoing written instrument as
the Vice President Finance of DM Management Company in its name and on its
behalf and acknowledged that they executed the same for the purposes therein
contained.

      IN WITNESS WHEREFORE I have hereunto set my hand and official seal.

                                            /s/ Cynthia B. Gaiser
                                            ---------------------------------
                                            Notary Public
                                            My Commission Expires: 4/10/98