Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Financing Statement - AnnTaylor Distribution Services Inc. and General Electric Capital Assurance Co.


                                                         
Recording Requested By and
When Recorded Mail To:

Oppenheimer Wolff & Donnelly
- - -----------------------------
45 South Seventh Street
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Plaza VII, Suite 3400
- - -----------------------------
Minneapolis, Minnesota 55402
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Attn:  Duane L. Paulson
- - -----------------------------
GECA Loan No. 2331

- - ---------------------------------------------------------------------------

           MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
                       SECURITY AGREEMENT
                AND FIXTURE FINANCING STATEMENT

     THIS  MORTGAGE,  ASSIGNMENT OF RENTS  AND  LEASES,  SECURITY
AGREEMENT  AND  FIXTURE FINANCING STATEMENT (this 'Mortgage')  is
made   this  20th  day  of  November,  1995,  between  ANNTAYLOR
DISTRIBUTION SERVICES, INC., a Delaware corporation as Mortgagor,
whose address is 414 Chapel Street, New Haven, Connecticut 06511;
and  GENERAL  ELECTRIC  CAPITAL  ASSURANCE  COMPANY,  a  Delaware
corporation,  as  Mortgagee,  whose  address  is  P.O.  Box  490,
Seattle, King County, Washington 98111-0490.

     Mortgagee  is  making a loan (the 'Loan') in  the  principal
amount of Seven Million and No/100 Dollars ($7,000,000.00) to  be
secured by that certain real property (the 'Realty') described in
Exhibit A attached hereto.  The Loan, if not sooner paid, is  due
and  payable in full on November 30, 2002.  The terms of the Loan
provide for:  (i) monthly payments of principal and interest; and
(ii) adjustment in the amount of installment payments to a change
in the amortization period after the second loan year.

     In  consideration of the Loan and the sum of One and  No/100
Dollars  ($1.00) in hand paid by the Mortgagee,  the  receipt  of
which  is  hereby  acknowledged, Mortgagor does hereby  MORTGAGE,
GRANT,  BARGAIN, SELL, AND CONVEY, unto Mortgagee, its successors
and  assigns,  forever,  AND GRANT TO THE  MORTGAGEE  A  SECURITY
INTEREST  IN,  all of Mortgagor's estate, rights,  title,  claim,
interest  and demand, either in law or in equity, of, in  and  to
the  following  property,  whether  the  same  be  now  owned  or
hereafter acquired (the 'Property'):

     (a)  The Realty and all rights to the land lying in  alleys,
streets and roads adjoining or abutting the Realty;

      (b)  All  buildings,  improvements  and  tenements  now  or
hereafter located on the Realty;

     (c)  All fixtures now or hereafter attached to the buildings
actually  constituting a part of the buildings, improvements  and
Realty  which are necessary to the functional use of the building
itself,   rather  than  the  specific  operation  of  Mortgagor's
business,  which  fixtures  are  generally  limited  to  heating,
cooling,  air-conditioning, ventilating, refrigerating, plumbing,
generating,  power, lighting, fire prevention and  extinguishing,
security and access control, boilers, water heaters and furnaces,
and  all shrubbery and plants; all of which items shall be deemed
part  of  the real property and not severable wholly or  in  part
without material injury to the freehold;

     (d)  All easements, all access, air and development  rights,
all  minerals and oil, gas and other hydrocarbon substances,  all
royalties, all water, water rights and water stock, and all other
rights,  hereditaments, privileges, permits, licenses, franchises
and  appurtenances  now  or hereafter belonging  or  in  any  way
appertaining to the Realty;

     (e)  All  present  and  future  contracts  and  policies  of
insurance  which  insure  Realty or any building,  structures  or
improvements thereon, or any such fixtures against casualties and
theft,  and all monies and proceeds and rights thereto which  may
be or become payable by virtue of any such insurance contracts or
policies;

    (f) All of the rents, revenues, issues, profits and income of
the  Property,  and  all  present and  future  leases  and  other
agreements  for the occupancy or use of all or any  part  of  the
Realty,   including  without  limitation  all  cash  or  security
deposits,  advance  rentals and deposits or payments  of  similar
nature  and all guaranties of tenants' or occupants' performances
under  such  leases  and  agreements; SUBJECT,  HOWEVER,  to  the
assignment  of  rents  and  other property  to  Mortgagee  herein
contained;

     (g)  All general intangibles relating to the development  or
use  of  the Property, including without limitation all  permits,
licenses  and franchises to the extent necessary to the  building
itself  which is a part of the Property, all names  under  or  by
which the Property may at any time be operated or known, and  all
rights  to carry on business under any such names or any  variant
thereof, and all trademarks, trade names, logos and good will  in
any  way  relating to the Property, excluding, however, the  name
'AnnTaylor';

     (h) All awards, compensation and settlements in lieu thereof
made as a result of the taking by power of eminent domain of  the
whole  or  any  part of the Property, including  any  awards  for
damages sustained to the Property for a temporary taking,  change
in grade of streets or taking of access;

     (i) All water stock relating to the Property, all shares  of
stock  or other evidence of ownership of any part of the Property
that  is  owned  by  Mortgagor in common  with  others,  and  all
documents of membership in any owners' or members' association or
similar group having responsibility for managing or operating any
part of the Property; and

    (j) All products and proceeds of all of the foregoing.

     TO  HAVE AND TO HOLD all of the aforedescribed Property  and
all  parts, rights, members and appurtenances thereof,  unto  the
Mortgagee, its successors and assigns, forever.

      TO   SECURE   THE  FOLLOWING  (collectively  the   'Secured
Obligations'):

     (1)  Payment of the sum of Seven Million and No/100  Dollars
($7,000,000.00) with interest thereon, according to the terms and
provisions of a promissory note of even date herewith, payable to
Mortgagee, or order, and made by Mortgagor and AnnTaylor, Inc., a
Delaware corporation, and all modifications, extensions, renewals
and replacements thereof (collectively the 'Note');

     (2) Payment of all sums advanced to protect the security  of
this Mortgage, together with interest thereon as herein provided;

     (3)  Payment of all other sums which are or which may become
owing under the Loan Documents;

    (4) Performance of all of Mortgagor's other obligations under
the Loan Documents; and

    (5) Payment of the principal and interest on all other future
loans  or  advances  made  by Mortgagee  to  Mortgagor  when  the
promissory  note  evidencing  the loan  or  advance  specifically
states  that  it  is  secured  by this  Mortgage,  including  all
modifications, extensions, renewals, and replacements of any such
future  loan or advance, but the maximum principal amount of  the
indebtedness is twice the amount of initial principal  amount  of
the Loan.

     As  used  herein, the term 'Loan Documents' means the  Note,
this  Mortgage, an Assignment of Rents and Leases (the  terms  of
which  shall control in the event of any conflict with the  terms
of  Article  6 of this Mortgage), any loan agreement and  Uniform
Commercial  Code  Financing  Statements  executed  in  connection
herewith,  and  any  other instrument or document  evidencing  or
securing  the Loan or otherwise executed in connection therewith,
together   with  all  modifications,  extensions,  renewals   and
replacements thereof.

     MORTGAGOR HEREBY REPRESENTS, WARRANTS, COVENANTS AND  AGREES
AS FOLLOWS:

                           ARTICLE 1
                         TITLE AND USE
                         ---------------

     1.1 Warranty of Title.  Mortgagor represents and warrants to
         -----------------
Mortgagee that:  (a) except as may otherwise be expressly  stated

in  this Mortgage, Mortgagor has good and marketable title in fee

simple to Realty and is the sole and absolute owner of all  other

Property;  (b)  the  Property is free from  liens,  encumbrances,

exceptions  or  other charges of any kind whatsoever  other  than

non-delinquent  installments of ad  valorem  property  taxes  and

special   assessments,  the  'Permitted  Exceptions,'   if   any,

permitted under the policy of mortgagee's title insurance  issued

to  Mortgagee  in  connection with this Mortgage  and  any  other

liens, encumbrances, exceptions or charges expressly permitted by

the  terms  of this Mortgage, and no others, whether superior  or

inferior  to  this Mortgage, will be created or  suffered  to  be

created by Mortgagor during the life of this Mortgage without the

prior written consent of Mortgagee; (c) no default on the part of

Mortgagor  or,  to the best of Mortgagor's knowledge,  any  other

person  exists  under  any  of the Permitted  Exceptions  and  as

applicable  all  are  in  full  force  and  effect  and   without

modification;  (d) Mortgagor will comply with the  terms  of  the

Permitted  Exceptions and will not modify the  same  without  the

Mortgagee's written consent; and (e) Mortgagor has the  right  to

grant,  transfer,  convey  and  assign  the  Property  as  herein

provided  and  will forever warrant and defend the Property  unto

Mortgagee  against  all claims and demands of  any  other  person

whomsoever,  subject only to said non-delinquent installments  of

taxes and assessments and Permitted Exceptions.



    1.2 Hazardous Substances.
        ---------------------
         
         (a)  Representations and Warranties.   Mortgagor  hereby
              ------------------------------
    represents and warrants to Mortgagee that:  (i) to  the  best
    
    of  Mortgagor's knowledge, no asbestos has ever been used  in
    
    the  construction,  repair or maintenance  of  any  building,
    
    structure  or other improvement now or heretofore located  on
    
    the  Property; (ii) no Hazardous Substance (as defined below)
    
    is   currently   being   generated,  manufactured,   refined,
    
    transported,   treated,  stored,  handled  or  disposed   of,
    
    transferred,  produced  or processed  on,  under  or  in  the
    
    Property,  except in compliance with all applicable  federal,
    
    state and local statutes, ordinances, rules, regulations  and
    
    other  laws;  (iii) neither Mortgagor nor,  to  the  best  of
    
    Mortgagor's  knowledge, any other person or entity  has  ever
    
    caused  or permitted any Hazardous Substance to be generated,
    
    manufactured, refined, transported, treated, stored,  handled
    
    or  disposed of, transferred, produced or processed on, under
    
    or  in the Property, except in compliance with all applicable
    
    federal,   state  and  local  statutes,  ordinances,   rules,
    
    regulations  and other laws; (iv) Mortgagor has not  received
    
    any  notice  of,  nor is Mortgagor aware of,  any  actual  or
    
    alleged  violation  with  respect  to  the  Property  of  any
    
    federal,  state or local statute, ordinance, rule, regulation
    
    or   other  law  pertaining  to  Hazardous  Substances;   and
    
    (v)  neither  Mortgagor nor the Property is  subject  to  any
    
    governmental or judicial claim, order, judgment or lien  with
    
    respect  to the clean-up of Hazardous Substances at  or  with
    
    respect  to  the Property.  Mortgagor further represents  and
    
    warrants to Mortgagee that the foregoing representations  and
    
    warranties contained in this paragraph 1.2(a) are made  after
    
    and  are  based upon inspection of the Property by  Mortgagor
    
    and  a  review  of the Phase I Environmental Site  Assessment
    
    Report  dated October 27, 1995, prepared by ATEC  Associates,
    
    Inc.

         
         
         (b)  Definition.   As used herein, the  term  'Hazardous
              ----------
    Substance' means any hazardous, toxic or dangerous substance,
    
    waste  or  material which is or becomes regulated  under  any
    
    federal,  state or local statute, ordinance, rule, regulation
    
    or  other  law  now  or  hereafter in  effect  pertaining  to
    
    environmental   protection,  contamination   or   clean   up,
    
    including without limitation any substance, waste or material
    
    which  now  or  hereafter is (i) designated as  a  'hazardous
    
    substance'  under or pursuant to the Federal Water  Pollution
    
    Control  Act  (33 U.S.C. 1251 et seq.), (ii)  defined  as  a
                                  ------
    'hazardous   waste'  under  or  pursuant  to   the   Resource
    
    Conservation and Recovery Act (42 U.S.C. 6901 et  seq.),  or
                                                  -------
    (iii) defined as a 'hazardous substance' in the Comprehensive
    
    Environmental  Response, Compensation and Liability  Act  (42
    
    U.S.C. 9601 et seq.).
                ------


     1.3  Warranty of Regarding other Debt.  Mortgagor represents
          ---------------------------------
and  warrants to Mortgagee that the entering into of the Loan and

granting  this  Mortgage on the Property  does  not  violate  any

covenants  or restrictions in any debt instruments or  agreements

with or obligations to any other lenders.



                           ARTICLE 2
                     MORTGAGOR'S COVENANTS
                     ---------------------
      
      
      2.1   Payment   and  Performance  of  Secured  Obligations.
            ----------------------------------------------------
Mortgagor  will pay when due all sums which are now or which  may

become  owing  on  the Note, and will pay and perform  all  other

Secured Obligations, in accordance with their terms.



    2.2 Payment of Taxes, Utilities, Liens and Charges.
        -----------------------------------------------
         
         (a)  Taxes  and  Assessments.  Except as  the  same  may
              -----------------------
    otherwise  be  paid  under Article 3  relating  to  reserves,
    
    Mortgagor will pay when due directly to the payee thereof all
    
    taxes   and   assessments   (including   without   limitation
    
    non-governmental  levies or assessments such  as  maintenance
    
    charges,  owner association dues or charges, or fees,  levies
    
    or   charges   resulting   from  covenants,   conditions   or
    
    restrictions)  levied, assessed or charged  against  or  with
    
    respect  to  the  Property or this Mortgage.   Upon  request,
    
    Mortgagor shall promptly furnish to Mortgagee all notices  of
    
    amounts   due  under  this  subparagraph  and  all   receipts
    
    evidencing such payments.  However, Mortgagor may contest any
    
    such  taxes  or  assessments by appropriate proceedings  duly
    
    instituted and diligently prosecuted at Mortgagor's  expense.
    
    Mortgagor  shall  not  be obligated  to  pay  such  taxes  or
    
    assessments while such contest is pending if the Property  is
    
    not thereby subjected to imminent loss or forfeiture and,  if
    
    Mortgagor has not provided evidence that it has deposited the
    
    entire  amount  assessed  with  the  applicable  governmental
    
    authority,  it  deposits  the  entire  amount  together  with
    
    projected  penalties  and  interest  with  the  Mortgagee  or
    
    provides other security satisfactory to the Mortgagee in  its
    
    sole discretion.



         (b)  Utilities.  Mortgagor will pay when due all utility
              ---------
    charges and assessments for services furnished the Property.

         
         
         (c) Liens and Charges.  Mortgagor will pay when due  the
             -----------------
    claims of all persons supplying labor or materials to  or  in
    
    connection   with   the   Property.   Without   waiving   the
    
    restrictions  of  paragraph  4.1,  Mortgagor  will   promptly
    
    discharge  any  lien  or other charge,  whether  superior  or
    
    inferior  to this Mortgage, which may be claimed against  the
    
    Property.



    2.3 Insurance.
        ----------
          
          
          (a)  Coverages  Required.   Mortgagor  will  keep   the
               -------------------
    following insurance coverages in effect with respect  to  the
    
    Property:

                 
                 
                 (i)  Insurance  against loss  by  fire  and  the
        
        hazards   now  or  hereafter  embraced  by  the  standard
        
        'extended coverage' form of insurance, in an amount equal
        
        at   all  times  to  the  full  insurable  value  of  the
        
        improvements  then  located on the  Property.   All  such
        
        insurance  coverage  shall contain  a  'replacement  cost
        
        endorsement' satisfactory to Mortgagee.



                 (ii)     Flood  risk insurance  in  the  maximum
        
        amount  of  insurance  coverage  available  or  the  full
        
        replacement   cost  of  the  buildings  on  the   Realty,
        
        whichever  is  less, if the Realty is  now  or  hereafter
        
        designated as being located within a special flood hazard
        
        area under the Flood Disaster Protection Act of 1973  and
        
        if flood insurance is available.



                 (iii)    Loss  of rental value insurance  and/or
        
        business interruption insurance, as follows:  If  all  or
        
        any portion of the Property is rented or leased, loss  of
        
        rental  value  insurance in an amount equal  to  six  (6)
        
        months' aggregate gross rents from the Property as is  so
        
        occupied.   If  all  or any portion of  the  Property  is
        
        occupied by Mortgagor, business interruption insurance in
        
        an  amount equal to six (6) months' net income from  such
        
        portion of the Property as is so occupied.  The amount(s)
        
        of  such coverage(s) shall be subject to adjustment, from
        
        time  to  time at Mortgagee's request, to reflect changes
        
        in the rental and/or income levels during the term of the
        
        Loan.



                 (iv)    Comprehensive public liability insurance
        
        against  claims  for  bodily injury,  death  or  property
        
        damage  occurring on, in or about the Property (including
        
        coverage  for elevators and escalators, if  any,  on  the
        
        Property),  with the coverage being in an amount  of  not
        
        less  than One Million and No/100 Dollars ($1,000,000.00)
        
        combined  single-limit liability  coverage,  or  in  such
        
        greater amount(s) as Mortgagee may reasonably require.



                 (v)  Boiler  and  machinery  insurance  covering
        
        pressure vessels, air tanks, boilers, machinery, pressure
        
        piping,  heating,  air  conditioning  and  elevator   and
        
        escalator  equipment,  provided the improvements  contain
        
        equipment of such nature, and insurance against  loss  of
        
        occupancy  or use arising from breakdown of any  of  such
        
        items,  in  such  amounts  as  Mortgagee  may  reasonably
        
        require.



                 (vi)     Building ordinance coverage endorsement
        
        including contingent liability from operation of building
        
        laws, demolition cost and increased cost of construction,
        
        if, at any time, the Property constitutes a nonconforming
        
        but  permitted  use  under  applicable  zoning  or  other
        
        governmental laws.



                 (vii)   Insurance against such similar or  other
        
        hazards,  casualties, liabilities and  contingencies,  in
        
        such  forms  and amounts, as Mortgagee may from  time  to
        
        time reasonably require.



                 (viii)   To  the  extent Insurance  required  as
        
        referred  to hereinabove covers the Mortgagor's inventory
        
        and  other  property not identified  as  a  part  of  the
        
        Property  in this Mortgage, then the proceeds  from  such
        
        insurance or such other property shall not be payable  to
        
        Mortgagee  under  this Mortgage or  the  other  documents
        
        executed in connection with this Loan.



         (b)  Policies.  Each insurance policy will  be  in  form
              --------
    acceptable  to  Mortgagee, and will be issued  by  a  company
    
    acceptable  to  Mortgagee, which company shall,  among  other
    
    things,  be (i) duly authorized to provide such insurance  in
    
    the  state  in which the Property is located, and (ii)  rated
    
    'A'  or  better with a size rating of 'V' or larger  by  A.M.
    
    Best  Company  in  its  most recent  publication  of  ratings
    
    (provided,  however,  that if A.M. Best Company  changes  its
    
    designations, the basis for its ratings or ceases to  provide
    
    ratings,  Mortgagee  shall be entitled to select  replacement
    
    ratings in the exercise of its reasonable business judgment).
    
    Each  hazard insurance policy will include a Form  438BFU  or
    
    equivalent  mortgagee endorsement in favor  of  and  in  form
    
    acceptable to Mortgagee, and each liability insurance  policy
    
    will  name  Mortgagee as an additional insured. All  required
    
    policies will provide for at least thirty (30) days'  written
    
    notice  to  Mortgagee  prior to the  effective  date  of  any
    
    cancellation or material amendment, which term shall  include
    
    any  reduction in the scope or limits of coverage.  Mortgagor
    
    shall  furnish  to Mortgagee a certificate  and  evidence  of
    
    insurance   setting  forth  the  coverage,  the   limits   of
    
    liability,  the carrier, the policy number and the expiration
    
    date,  and upon the written request of Mortgagee, a  copy  of
    
    the  corresponding policies or sections requested by it.   As
    
    security  for  the  Secured  Obligations,  Mortgagor   hereby
    
    assigns  to Mortgagee its interest in the insurance  policies
    
    but  only to the extent they relate to the Property, together
    
    with  all  proceeds thereof, and to the extent applicable  to
    
    blanket  policies,  rights thereto and all unearned  premiums
    
    returnable upon cancellation.



         (c) Payment; Renewals.  Mortgagor shall promptly furnish
             -----------------
    to  Mortgagee  all  renewal  notices  relating  to  insurance
    
    policies.   Except as the same may otherwise  be  paid  under
    
    Article  3  relating  to  reserves, Mortgagor  will  pay  all
    
    premiums  on insurance policies directly to the carrier.   At
    
    least  thirty (30) days prior to the expiration date of  each
    
    such  policy, Mortgagor shall furnish to Mortgagee a  renewal
    
    policy  or  certificate and evidence of insurance in  a  form
    
    acceptable  to  Mortgagee, together with  evidence  that  the
    
    renewal  premium  has  been  paid.   However,  in  the  event
    
    Mortgagor  provides to Mortgagee an acceptable  certification
    
    that  coverage will continue for a period of at least  thirty
    
    (30)  days  after written notice of the insurer's  intent  to
    
    cancel  or  materially  amend such  insurance  coverage  even
    
    though  the  current  terms of the  policy  or  policies  may
    
    expire,  Mortgagee  will accept, in lieu of  the  policy,  or
    
    certificate and evidence, at least fourteen (14)  days  prior
    
    to  the expiration date of each such policy, evidence that it
    
    is  processing the renewal of (or obtaining of new)  policies
    
    in   a  form  acceptable  to  Mortgagee  in  accordance  with
    
    Mortgagor's  customary  practices and Mortgagor  shall,  upon
    
    Mortgagee's request, furnish evidence that binds the coverage
    
    notwithstanding  that such renewal (or new) premium  has  not
    
    then  been  paid.   Within  ninety (90)  days  following  the
    
    expiration  date,  Mortgagor  shall  furnish  Mortgagee  with
    
    evidence that the renewal (or new) premium has been paid.



        (d) Insurance Proceeds.
            ------------------
                
                (i) In the event of any loss, Mortgagor will give
        
        prompt  written  notice thereof to the insurance  carrier
        
        and Mortgagee.  Mortgagor hereby authorizes Mortgagee  as
        
        Mortgagor's  attorney-in-fact to make proof of  loss,  to
        
        adjust  and compromise any claim, to commence, appear  in
        
        and  prosecute, in Mortgagee's or Mortgagor's  name,  any
        
        action  relating to any claim, and to collect and receive
        
        insurance  proceeds;  provided, however,  that  Mortgagee
        
        shall  have  no  obligation to do so.   If  an  event  of
        
        default  is not continuing, the preceding sentence  shall
        
        apply except that the Mortgagee shall not be entitled  to
        
        be  the  Mortgagor's attorney-in-fact and  the  Mortgagor
        
        shall  be  entitled  to  jointly  participate  with   the
        
        Mortgagee  in  adjusting any loss and  appearing  in  any
        
        proceeding.

                 
                 
                 (ii)     Except as may otherwise be required  by
        
        applicable  law,  Mortgagee  shall  apply  any  insurance
        
        proceeds received hereunder first to the payment  of  the
        
        costs  and  expenses incurred in the  collection  of  the
        
        proceeds  and  shall  then apply the  balance  (the  'Net
        
        Proceeds'), in its absolute discretion and without regard
        
        to the adequacy of its security, to:



                         (A)  The payment of indebtedness secured
            
            hereby,  whether then due and payable  or  not.   Any
            
            such application of proceeds to principal on the Note
            
            shall be without the imposition of any prepayment fee
            
            otherwise  payable  under the  Note,  but  shall  not
            
            extend  or  postpone the due dates of the installment
            
            payments  under  the  Note,  or  change  the  amounts
            
            thereof; or



                        (B) The reimbursement of Mortgagor, under
            
            Mortgagee's    prescribed    disbursement     control
            
            procedures, for the cost of restoration or repair  of
            
            the   Property.   Mortgagee  may,  at   its   option,
            
            condition  the reimbursement on Mortgagee's  approval
            
            of    the    plans   and   specifications   of    the
            
            reconstruction,    contractor's    cost    estimates,
            
            construction   budget   and   schedule,   architects'
            
            certificates,  waivers of liens, sworn statements  of
            
            mechanics and materialmen, and such other evidence of
            
            costs,   percentage   completion   of   construction,
            
            application of payments and satisfaction of liens  as
            
            Mortgagee may reasonably require.

                  
                  
                  (iii)     Notwithstanding  the  provisions   of
        
        paragraph 2.3(d)(ii) above, Mortgagee agrees that the Net
        
        Proceeds  from a loss described in this paragraph  2.3(d)
        
        will  be  made  available under clause (ii)(B)  above  to
        
        reimburse Mortgagor for the cost of restoration or repair
        
        of  the  Property,  provided that each of  the  following
        
        conditions is satisfied:



                         (A) No event of default has occurred and
            
            is continuing at the time the proceeds are received;


                         
                         
                         (B)  The Net Proceeds are less than  the
            
            indebtedness then secured by this Mortgage;

                         
                         
                         (C)  The proceeds are received more than
            
            one (1) year prior to the maturity date of the Note;

                         
                         
                         (D)  Mortgagor  gives Mortgagee  written
            
            notice within thirty (30) days after the proceeds are
            
            received  that  it intends to restore or  repair  the
            
            Property and requests that the Net Proceeds  be  made
            
            available therefor, and Mortgagor thereafter promptly
            
            commences the restoration or repair and completes the
            
            same  with  reasonable diligence in  accordance  with
            
            plans and specifications approved by Mortgagee, which
            
            approval shall not be unreasonably withheld;



                         (E) The Net Proceeds are sufficient,  in
            
            Mortgagee's reasonable business judgment, to  restore
            
            or repair the Property substantially to its condition
            
            prior  to  the  damage  or  destruction  or,  if   in
            
            Mortgagee's  reasonable business  judgment  they  are
            
            not,  Mortgagor deposits with Mortgagee funds  in  an
            
            amount equal to the deficiency, which funds Mortgagee
            
            may, at its option, require be expended prior to  use
            
            of the Net Proceeds; and



                           (F)    Mortgagee   receives   evidence
            
            reasonably  satisfactory  to  Mortgagee  that,   upon
            
            completion of the restoration or repair, the Property
            
            can  be  operated substantially as it was before  and
            
            will produce substantially as much income from tenant
            
            leases as it did before the damage or destruction.



                 (iv)     Except  to  the extent,  if  any,  that
        
        insurance proceeds are applied to payment of the  Secured
        
        Obligations,  Mortgagor's obligation to  restore,  repair
        
        and  maintain  the Property as provided in paragraph  2.4
        
        shall  not  be  excused, regardless of whether  insurance
        
        proceeds are available or insufficient.



         (e) Transfer of Title.  If the Property is sold pursuant
             -----------------
    to  Article 8 or if Mortgagee otherwise acquires title to the
    
    Property,  Mortgagee shall have all of the right,  title  and
    
    interest  of  Mortgagor in and to any insurance policies  and
    
    unearned   premiums  thereon  and  in  and  to  the  proceeds
    
    resulting from any damage to the Property prior to such  sale
    
    or acquisition.



    2.4 Preservation and Maintenance of Property; Right of Entry.
        --------------------------------------------------------

        
        (a) Preservation and Maintenance.  Mortgagor (i) will not
            -----------------------------
    commit  or  suffer  any  waste or permit  any  impairment  or
    
    deterioration  of  the Property, (ii) will  not  abandon  the
    
    Property, (iii) will restore or repair promptly and in a good
    
    and workmanlike manner all or any part of the Property to the
    
    equivalent of its original condition, or such other condition
    
    as  Mortgagee  may approve in writing, in the  event  of  any
    
    damage,  injury  or loss thereto, whether  or  not  insurance
    
    proceeds are available to cover in whole or in part the costs
    
    of  such  restoration or repair, (iv) will keep the Property,
    
    including  improvements, fixtures, equipment,  machinery  and
    
    appliances  thereon, in good condition and repair  and  shall
    
    replace fixtures, equipment, machinery and appliances of  the
    
    Property  when necessary to keep such items in good condition
    
    and  repair, and (v) will generally operate and maintain  the
    
    Property in a commercially reasonable manner.

        
        
        (b) Alterations.  No building or other improvement on the
            -----------
    Realty  will  be structurally altered, removed or demolished,
    
    in  whole  or  in  part,  without Mortgagee's  prior  written
    
    consent,  nor  will any fixture or chattel  covered  by  this
    
    Mortgage and adapted to the use and enjoyment of the Property
    
    be  removed at any time without like consent unless  actually
    
    replaced  by  an  article  of  equal  suitability,  owned  by
    
    Mortgagor,  free  and clear of any lien or security  interest
    
    except such as may be approved in writing by Mortgagee.



         (c)  Right of Entry.  Mortgagee is hereby authorized  to
              --------------
    enter the Property, including the interior of any structures,
    
    at  reasonable  times and after reasonable  notice,  for  the
    
    purpose  of  inspecting the Property and for the  purpose  of
    
    performing  any  of  the  acts it is  authorized  to  perform
    
    hereunder.



    2.5 Hazardous Substances.
        --------------------
         
         (a) No Future Hazardous Substances.  Mortgagor will  not
             ------------------------------
    cause  or  permit  the  Property  to  be  used  to  generate,
    
    manufacture,   refine,  transport,  treat,   store,   handle,
    
    dispose,   transfer,   produce  or  process   any   Hazardous
    
    Substance, except in compliance with all applicable  federal,
    
    state and local statutes, ordinances, rules, regulations  and
    
    other  laws, nor shall Mortgagor cause or permit, as a result
    
    of  any  intentional or unintentional act or omission on  the
    
    part  of Mortgagor or any tenant, subtenant or other user  or
    
    occupier  of  the  Property, a releasing, spilling,  leaking,
    
    pumping,  pouring,  emitting,  emptying  or  dumping  of  any
    
    Hazardous  Substance onto the Property or any other  property
    
    or into any waters, except in compliance with all such laws.


         (b)  Notification; Clean Up.  Mortgagor will immediately
              ----------------------
    notify  Mortgagee should Mortgagor (i) become  aware  of  any
    
    Hazardous   Substance  or  other  environmental  problem   or
    
    liability  with  respect to the Property,  (ii)  receive  any
    
    notice  of,  or  become  aware  of,  any  actual  or  alleged
    
    violation with respect to the Property of any federal,  state
    
    or  local  statute, ordinance, rule, regulation or other  law
    
    pertaining to Hazardous Substances, or (iii) become aware  of
    
    any  lien  or  action with respect to any of  the  foregoing.
    
    Mortgagor will, at its sole expense, take all actions as  may
    
    be  necessary  or  advisable for the  clean-up  of  Hazardous
    
    Substances  on  or  with respect to the  Property,  including
    
    without  limitation  all  removal, containment  and  remedial
    
    actions  in  accordance with all applicable laws and  in  all
    
    events  in  a  manner  satisfactory to Mortgagee,  and  shall
    
    further  pay or cause to be paid all clean-up, administrative
    
    and  enforcement costs of governmental agencies with  respect
    
    to Hazardous Substances on or with respect to the Property if
    
    obligated to do so by contract or by law.



         (c)  Verification.  For the purposes of  inspecting  the
              ------------
    Property to ascertain the accuracy of all representations and
    
    warranties in this Mortgage relating to Hazardous Substances,
    
    and  the  observance  of  all  covenants  contained  in  this
    
    paragraph 2.5 (i) Mortgagee is hereby authorized to enter and
    
    inspect   the  Property,  including  the  interior   of   any
    
    structures, at reasonable times and after reasonable  notice,
    
    and  (ii)  if and at any time Hazardous Substances are  being
    
    handled  on  the Property, Mortgagor shall furnish  Mortgagee
    
    with  such  information and documents as  may  be  reasonably
    
    requested   by  Mortgagee  to  confirm  that  such  Hazardous
    
    Substances,  are  being  handled  in  compliance   with   all
    
    applicable  federal,  state and local  statutes,  ordinances,
    
    rules, regulations and other laws.  Mortgagor shall reimburse
    
    Mortgagee  upon demand for all costs and expenses,  including
    
    without limitation attorneys' fees, incurred by Mortgagee  in
    
    connection  with  any  such  entry  and  inspection  and  the
    
    obtaining of such information and documents.


     
     2.6  Parking.   If any part of the automobile parking  areas
          -------
included within the Property is taken by condemnation, or  before

said areas are otherwise reduced, Mortgagor will take all actions

as  are necessary to provide parking facilities in kind, size and

location  to  comply  with  all  governmental  zoning  and  other

regulations  and  all  leases.  Before making  any  contract  for

substitute   parking  facilities,  Mortgagor  will   furnish   to

Mortgagee  satisfactory assurance of completion thereof  free  of

liens  and  in  conformity with all government zoning  and  other

regulations.



     2.7  Use of Property.  Mortgagor will comply with all  laws,
          ---------------
ordinances,  regulations  and requirements  of  any  governmental

body,  and  all  other  covenants, conditions  and  restrictions,

applicable  to  the  Property, and pay all fees  and  charges  in

connection  therewith.   Unless required  by  applicable  law  or

unless Mortgagee has otherwise agreed in writing, Mortgagor  will

not  allow  changes in the use for which all or any part  of  the

Property  was  intended at the time this Mortgage  was  executed.

Mortgagor  will  not initiate or acquiesce in  a  change  in  the

zoning  classification of the Property without Mortgagee's  prior

written consent.
    
    
    2.8 Condemnation.
        -------------
          

          (a)   Proceedings.   Mortgagor  will  promptly   notify
                -----------
    Mortgagee  of  any  action  or  proceeding  relating  to  any
    
    condemnation  or  other taking (including without  limitation
    
    change of grade), whether direct or indirect, of the Property
    
    or  part  thereof  or  interest therein, and  Mortgagor  will
    
    appear  in and prosecute any such action or proceeding unless
    
    otherwise   directed  by  Mortgagee  in  writing.   Mortgagor
    
    authorizes    Mortgagee,    at   Mortgagee's    option,    as
    
    attorney-in-fact for Mortgagor, to commence,  appear  in  and
    
    prosecute, in Mortgagee's or Mortgagor's name, any action  or
    
    proceeding relating to any such condemnation or other taking,
    
    and to settle or compromise any claim in connection with such
    
    condemnation   or  other  taking;  provided,  however,   that
    
    Mortgagee  shall  have no obligation to do so.   All  awards,
    
    payments,   damages,  direct,  consequential  and  otherwise,
    
    claims,  and  proceeds thereof, in connection with  any  such
    
    condemnation or other taking, or for conveyances in  lieu  of
    
    condemnation,  are  hereby assigned  to  Mortgagee,  and  all
    
    proceeds  of  any  such awards, payments, damages  or  claims
    
    shall be paid to Mortgagee.

         
         
         (b) Application of Proceeds.  Mortgagee shall apply  any
             -----------------------
    such proceeds in the manner and upon the terms and conditions
    
    set forth in paragraph 2.3(d)(ii) relating to the application
    
    of  insurance  proceeds, without regard to the provisions  of
    
    paragraph 2.3(d)(iii).



     2.9 Protection of Mortgagee's Security.  Mortgagor will give
         ----------------------------------
notice  to Mortgagee of and will, at its expense, appear  in  and

defend any action or proceeding that might affect the Property or

title thereto or the interests of Mortgagee therein or the rights

or  remedies  of Mortgagee.  If any such action or proceeding  is

commenced  or if Mortgagee is made a party to any such action  or

proceeding by reason of this Mortgage, or if Mortgagor  fails  to

perform  any  obligation on its part to be  performed  hereunder,

then  Mortgagee, in its own discretion, may make any appearances,

disburse  any sums, make any entries upon the Property  and  take

any  actions  as  may  be necessary or desirable  to  protect  or

enforce  the  security  of this Mortgage, to  remedy  Mortgagor's

failure to perform its obligations (without, however, waiving any

default   by  Mortgagor)  or  otherwise  to  protect  Mortgagee's

interests.  Mortgagor agrees to pay all loss, damage,  costs  and

expenses, including reasonable attorneys' fees, of Mortgagee thus

incurred.   This  paragraph shall not  be  construed  to  require

Mortgagee to incur any expenses, make any appearances or take any

actions.

     
     
     2.10     Reimbursement of Mortgagee's Expenses.  All amounts
              -------------------------------------
disbursed  by  Mortgagee pursuant to paragraph 2.9 or  any  other

provision  of  this  Mortgage, with interest  thereon,  shall  be

additional  indebtedness of Mortgagor secured by  this  Mortgage.

All  such amounts shall be immediately due and payable and  shall

bear  interest from the date of disbursement at the interest rate

in  effect on the Note from time to time, or at the maximum  rate

which  may  be  collected from Mortgagor on such amounts  by  the

payee thereof under applicable law if that is less.


     
     2.11     Books and Records; Financial Statements.  Mortgagor
              ---------------------------------------
will  keep  and maintain at Mortgagor's address stated above,  or

such  other place as Mortgagee may approve in writing,  books  of

accounts and records adequate to reflect correctly the results of

the   operation  of  the  Property  and  copies  of  all  written

contracts,   leases  and  other  instruments  which  affect   the

Property.   Such  books,  records, contracts,  leases  and  other

instruments  shall  be  subject to  examination,  inspection  and

copying  at  any  reasonable time by Mortgagee.   Mortgagor  will

furnish  to  Mortgagee, within twenty (20) days after Mortgagee's

request  therefor,  the following documents,  each  certified  to

Mortgagee  by  Mortgagor  as being true,  correct  and  complete:

(a)  a  copy of all leases and other agreements for the occupancy

or  use  of all or any part of the Property, (b) a rent roll  for

the  Property,  showing the name of each  tenant,  and  for  each

tenant, the suite occupied, the number of square feet rented, the

lease  expiration date, the rent payable, the date through  which

rent  has been paid, the amount of any security deposit  and  the

number  and term of any renewal options, (c) a copy of  the  most

recent  real  and  personal  property  tax  statements  for   the

Property,  (d)  a  copy  of the most recent  statements  for  the

insurance  coverages maintained under paragraph  2.3(a)  of  this

Mortgage,  and  (e)  a statement of income and  expenses  of  the

Property  for  the most recently ended fiscal year of  Mortgagor.

In  addition, Mortgagor and any general partner therein  and  any

guarantor   of  the  Loan  will  furnish  to  Mortgagee,   within

twenty  (20) days after Mortgagee's request therefor, a  complete

and   current  financial  statement,  in  reasonable  detail  and

certified as correct by Mortgagor or such partner or guarantor.



                           ARTICLE 3
                            RESERVES
                            --------

     
     3.1  Deposits.  Mortgagor will, at the time of  making  each
          ---------
installment payment under the Note, deposit with Mortgagee a sum,

as  estimated  by  Mortgagee, equal to (a) the  rents  under  any

ground  lease, (b) the taxes and special assessments next due  on

the  Property, and (c) the premiums that will next become due  on

insurance  policies as may be required under this Mortgage,  less

all  sums  already deposited therefor, divided by the  number  of

months  to  elapse before two (2) months prior to the  date  when

such  rents, taxes, special assessments and premiums will  become

delinquent.   Mortgagee  may require Mortgagor  to  deposit  with

Mortgagee,   in  advance,  such  other  sums  for  other   taxes,

assessments, premiums, charges and impositions in connection with

Mortgagor or the Property as Mortgagee reasonably deems necessary

to  protect  Mortgagee's interests (herein 'Other  Impositions').

Such sums for Other Impositions shall be deposited in a lump  sum

or in periodic installments, at Mortgagee's option.  If requested

by  Mortgagee,  Mortgagor will promptly deliver to Mortgagee  all

bills  and notices with respect to any rents, taxes, assessments,

premiums   and  Other  Impositions.   All  sums  deposited   with

Mortgagee  under  this  paragraph  3.1  are  hereby  pledged   as

additional   security   for   the   Secured   Obligations.    The

requirements  of  this paragraph are subject to  any  conditional

waiver  executed by Mortgagee, limited to the time when ownership

of the Property is as stated in such waiver.

     
     
     3.2  Application of Deposits.  All such deposited sums shall
          -----------------------
be  held  by  Mortgagee and applied in such  order  as  Mortgagee

elects to pay such rents, taxes, assessments, premiums and  Other

Impositions or, in the event of default hereunder, may be applied

in  whole  or  in  part,  to indebtedness  secured  hereby.   The

arrangement  provided for in this Article 3  is  solely  for  the

added  protection  of Mortgagee and entails no responsibility  on

Mortgagee's  part  beyond the allowing  of  due  credit,  without

interest,  for  the  sums  actually received  by  it.   Upon  any

assignment of this Mortgage by Mortgagee, any funds on hand shall

be  turned  over  to  the  assignee  and  any  responsibility  of

Mortgagee with respect thereto shall terminate.  Each transfer of

the  Property  shall automatically transfer to  the  grantee  all

rights  of  Mortgagor  with  respect  to  any  funds  accumulated

hereunder.   Upon  payment  in full of the  Secured  Obligations,

Mortgagee  shall  promptly  refund  to  Mortgagor  the  remaining

balance of any deposits then held by Mortgagee.



     3.3 Adjustments to Deposits.  If the total deposits held  by
         -----------------------
Mortgagee  exceed  the amount deemed necessary  by  Mortgagee  to

provide  for  the  payment  of  such rents,  taxes,  assessments,

premiums  and Other Impositions as the same fall due,  then  such

excess shall, provided no event of default then exists hereunder,

be   credited  by  Mortgagee  on  the  next  due  installment  or

installments of such deposits.  If at any time the total deposits

held  by  Mortgagee is less than the amount deemed  necessary  by

Mortgagee  to  provide for the payment thereof as the  same  fall

due,  then  Mortgagor will deposit the deficiency with  Mortgagee

within thirty (30) days after written notice to Mortgagor stating

the amount of the deficiency.

                           
                           
                           ARTICLE 4
            RESTRICTIONS ON TRANSFER OR ENCUMBRANCE
            ---------------------------------------

     
     
     4.1 Restrictions on Transfer or Encumbrance of the Property.
         -------------------------------------------------------
If  the Property or any part thereof or interest therein shall be

encumbered,  sold  (by  contract  or  otherwise),  conveyed,   or

otherwise  transferred  by Mortgagor, or if  without  Mortgagee's

prior  written consent there shall be any change in the ownership

of  any stock interest in a corporate Mortgagor, in the ownership

of  any  general partnership interest in any general  or  limited

partnership  Mortgagor  or  in the ownership  of  any  beneficial

interest in any other Mortgagor which is not a natural person  or

persons,  or  if without Mortgagee's prior written consent  there

shall  be any change in the ownership of any such stock,  general

partnership  or  other beneficial interest  in  any  corporation,

partnership or other entity, organization or association directly

or  indirectly  owning an interest in Mortgagor,  then  the  same

shall  be  deemed  to  be  a  'Transfer'  for  purposes  of  this

paragraph.   In the event of such a Transfer, Mortgagee  may,  at

its sole option, declare such Transfer to constitute an event  of

default  under  this Mortgage and invoke any remedy  or  remedies

provided for in paragraph 8.1 hereof or may, at its sole  option,

consent  to such Transfer and increase the interest rate  on  the

indebtedness  secured hereby.  Neither of the  foregoing  options

shall apply, however, in the case of a Transfer (a) by devise  or

descent  or  operation  of law upon the death  of  an  individual

Mortgagor, a partner of a partnership Mortgagor, a shareholder of

a  corporate Mortgagor, the owner of a beneficial interest of any

other  Mortgagor which is not a natural person, or the  owner  of

any  stock,  partnership  or  other beneficial  interest  in  any

corporation,   partnership  or  other  entity,  organization   or

association   directly  or  indirectly  owning  an  interest   in

Mortgagor,  provided  that following the Transfer  the  person(s)

and/or  firm(s)  having  effective  managerial  control  of   the

Property are reasonably satisfactory to Mortgagee, (b) a Transfer

of  the Property or any portion thereof to AnnTaylor, Inc. or any

of  its  subsidiaries, (the 'Permitted Transferees'), so long  as

the  transfer is subject to this Mortgage in all respects and the

Permitted  Transferee has executed and delivered to the Mortgagee

such  documents  as  are  reasonably  requested  to  give  effect

thereto, or (c) transfers of shares of stock in AnnTaylor  Stores

Corporation  so  long  as  its stock  is  publicly  traded  on  a

recognized stock exchange.



                           ARTICLE 5
           UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
           ------------------------------------------

    
    
    5.1 Grant to Mortgagee.  This Mortgage constitutes a security
        -------------------
agreement pursuant to the Uniform Commercial Code with respect to

all  Property  constituting 'Property' as  described  herein  and

Mortgagor hereby grants Mortgagee a security interest in all such

property  as  additional  security for the  Secured  Obligations.

Notwithstanding the foregoing, the Mortgagee agrees that  it  has

no  security interest, lien or claim in, on or to the  inventory,

personal   property,   computer   equipment,   materials-handling

equipment, or similar personal property or fixtures which may now

or  in  the  future be located on the Realty.   If  requested  by

Mortgagor, Mortgagee agrees to execute an instrument in form  and

substance reasonably satisfactory to Mortgagee stating that  such

items  are  free  from  any lien, claim or security  interest  of

Mortgagee, certifying that Mortgagor is not in default, (if it is

not)   and  consenting  to  such  transaction  conditioned   upon

Mortgagee  having  no responsibility for such  property  and  the

agreement of the secured party that, in the event Mortgagee takes

possession of the Property through exercise of its remedies as  a

result  of  a  deed in lieu of foreclosure, it will  remove  such

property  upon Mortgagee's request without damaging the Property,

within  a  reasonable  time  after Mortgagee's  request  or  such

property  shall  be  deemed  abandoned  by  the  secured   party;

provided,  however, nothing herein shall be construed to  require

any  consent  from  Mortgagee for such  transaction  or  for  the

alteration or replacement of any such items.



     5.2  Mortgagee's  Rights  and  Remedies.   With  respect  to
          ----------------------------------
Property  subject  to the foregoing security interest,  Mortgagee

has  all of the rights and remedies (i) of a secured party  under

the  Uniform  Commercial  Code, (ii) provided  herein,  including

without  limitation the right to cause such Property to  be  sold

under   the   power  of  sale  granted  by  this  Mortgage,   and

(iii) provided by law.  In exercising its remedies, Mortgagee may

proceed  against  the items of real property  and  any  items  of

personal  property  separately  or  together  and  in  any  order

whatsoever,  without  in any way affecting  the  availability  of

Mortgagee's  remedies.   Upon demand by  Mortgagee  following  an

event of default hereunder, Mortgagor will assemble any items  of

personal  property and make them available to  Mortgagee  at  the

Property,  a  place  which  is hereby  deemed  to  be  reasonably

convenient  to both parties.  Mortgagee shall give  Mortgagor  at

least  ten (10) days' prior written notice of the time and  place

of  any public sale or other disposition of such Property  or  of

the time of or after which any private sale or any other intended

disposition  is  to  be made.  Any person  permitted  by  law  to

purchase at any such sale may do so.  Such Property may  be  sold

at  any  one  or  more public or private sales  as  permitted  by

applicable  law.   All  expenses incurred in  realizing  on  such

Property shall be borne by Mortgagor.



     5.3  Fixture Filing.  THIS MORTGAGE SHALL BE EFFECTIVE AS  A
          ---------------
FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL

GOODS  WHICH  ARE  OR  ARE  TO BECOME  FIXTURES  RELATED  TO  THE

PROPERTY.   FOR  PURPOSES  OF  THE UNIFORM  COMMERCIAL  CODE  THE

FOLLOWING INFORMATION IS FURNISHED:



         (a) The name and address of the record owner of the real
    estate described in this instrument is:

            
            AnnTaylor Distribution Services, Inc.
            414 Chapel Street
            New Haven, Connecticut 06511

        
        (b) the name and address of the Debtor is:

            AnnTaylor Distribution Services, Inc.
            414 Chapel Street
            New Haven, Connecticut 06511

        (c) the name and address of the Secured Party is:

            General Electric Capital Assurance Company
            P. O. Box 490
            Seattle, Washington 98111-0490

        (d)   Information  concerning  the  security   interest
    evidenced by this instrument may be obtained from the Secured
    Party at its address above.

        (e) This document covers goods which are or are to become
    fixtures.

        (f) Proceeds and products of collateral are also covered.

                           
                           
                           ARTICLE 6
      ASSIGNMENT OF RENTS AND LEASES; LEASES OF PROPERTY;
      ---------------------------------------------------
        APPOINTMENT OF RECEIVER; MORTGAGEE IN POSSESSION
        ------------------------------------------------

     
     
     6.1 Mortgagor to Comply with Leases.  Mortgagor will, at its
         -------------------------------
own cost and expense:

         
         (a) Faithfully abide by, perform and discharge each  and
    every obligation, covenant and agreement under any leases  or
    other  agreements for the occupancy or use  of  the  Property
    (collectively  'Leases')  to be  performed  by  the  landlord
    thereunder;

         (b)  Enforce or secure the performance of each and every
    material  obligation, covenant, condition  and  agreement  of
    said Leases by the tenants thereunder to be performed;

         (c)  Not  borrow against, pledge or further  assign  any
    rentals  due under said Leases (which shall not prohibit  the
    transfers  referred to in subparagraph (b) of  paragraph  4.1
    above);

         (d) Not permit the prepayment of any rents due under any
    of the Leases for more than one month in advance nor for more
    than  the next accruing installment of rents, nor anticipate,
    discount, compromise, forgive or waive any such rents;

         (e)  Not waive, excuse, condone or in any manner release
    or   discharge  any  tenants  of  or  from  the  obligations,
    covenants,  conditions and agreements by said tenants  to  be
    performed under the Leases;

         (f)  Not  permit  any  tenant to assign  or  sublet  its
    interest in any of the Leases unless required to do so by the
    terms of the Lease and then only if such assignment does  not
    work  to  relieve the tenant of any liability for payment  of
    and performance of its obligations under such Lease;

        (g) Not terminate any Lease or accept a surrender thereof
    or  a  discharge of the tenant providing for a term (assuming
    that all renewal options, if any, are exercised) of more than
    five  (5)  years nor shall Mortgagor terminate  or  accept  a
    surrender  in any single twelve (12) month period  more  than
    twenty-five percent (25%) of the aggregate total net rentable
    area without the written consent of the Mortgagee;

        (h) Not consent to a subordination of the interest of any
    tenant  to  any party other than Mortgagee and then  only  if
    specifically consented to by the Mortgagee; and

          (i)  Not  amend  or  modify  any  Lease  or  alter  the
    obligations  of  the  parties thereunder,  excepting  in  the
    ordinary  and prudent course of business with due regard  for
    the  security afforded the Mortgagee by the Lease,  and  will
    not,  without  the Mortgagee's written consent,  enter  into,
    execute,  modify,  or  extend  any  Lease  now  existing   or
    hereafter  made  providing  for a  term  (assuming  that  all
    renewal options, if any, are exercised) of more than five (5)
    years  unless  the  leased premises is less than  twenty-five
    percent  (25%)  of  the  net rentable area  of  the  building
    improvements at the Property.

     
     
     6.2  Mortgagee's Right to Perform under Leases.  Should  the
          -----------------------------------------
Mortgagor   fail  to  perform,  comply  with  or  discharge   any
obligations of Mortgagor under any lease or should the  Mortgagee
become aware of or be notified by any tenant under any lease of a
failure  on the part of Mortgagor to so perform, comply  with  or
discharge  its obligations under said lease, Mortgagee  may,  but
shall  not be obligated to, and without further demand  upon  the
Mortgagor,  and without waiving or releasing Mortgagor  from  any
obligation  in this Mortgage contained, remedy such failure,  and
the  Mortgagor agrees to repay upon demand all sums  incurred  by
the  Mortgagee  in  remedying  any  such  failure  together  with
interest at the then rate in effect on the Note.  All such  sums,
together  with  interest  as  aforesaid  shall  become  so   much
additional  indebtedness secured by this Mortgage,  but  no  such
advance shall be deemed to relieve the Mortgagor from any default
hereunder.

     
     
     6.3  Assignment  of  Leases and Rents.  The  Mortgagor  does
          --------------------------------
hereby  sell,  assign  and transfer unto  Mortgagee  all  of  the
leases,  rents, issues, income and profits now due and which  may
hereafter  become due under or by virtue of the Leases  including
those,  if  any, described on Exhibit B attached hereto,  whether
written  or verbal, or any agreement for the use or occupancy  of
the  Property,  it  being  the  intention  of  this  Mortgage  to
establish  an  absolute present transfer and  assignment  of  the
Leases and all of the rents, issues, income and profits from  the
Property  unto  the Mortgagee, and not merely the granting  of  a
security   interest,  and  the  Mortgagor  does  hereby   appoint
irrevocably  the  Mortgagee its true and lawful attorney  in  its
name and stead, which appointment is coupled with an interest, to
collect all of said rents and profits; provided, Mortgagee grants
the  Mortgagor  the privilege, revocable, to collect  and  retain
such  rents,  income, and profits unless and until  an  event  of
default exists under this Mortgage.  Upon an event of default and
whether  before or after the institution of proceedings  to  sell
the  Property or foreclose this Mortgage or during any period  of
redemption  the Mortgagee, and without regard to waste,  adequacy
of  the  security or solvency of the Mortgagor,  may  revoke  the
privilege  granted  Mortgagor hereunder  to  collect  the  rents,
issues,  income  and profits of the Property,  and  may,  at  its
option, without notice:

         (a)  in  person  or  by agent, with  or  without  taking
    possession  of  or  entering the Property,  with  or  without
    bringing any action or proceeding, give, or require Mortgagor
    to  give,  notice  to  any  or all tenants  under  any  lease
    authorizing  and  directing the tenant  to  pay  such  rents,
    issues, income and profits to Mortgagee; collect all  of  the
    rents,  issues and profits; enforce the payment  thereof  and
    exercise  all of the rights of the landlord under  any  lease
    and  all  of  the rights of Mortgagee hereunder; enter  upon,
    take possession of, manage and operate said Property, or  any
    part  thereof; cancel, enforce or modify any leases, and  fix
    or  modify  rents, and do any acts which the Mortgagee  deems
    proper  to protect the security hereof with or without taking
    possession of said Property; or

        (b) apply for the appointment of a receiver in accordance
    with  the  statutes  and  law made and  provided  for,  which
    receivership Mortgagor hereby consents to, who shall  collect
    the  rents, profits and all other income of any kind;  manage
    the  Property  so  as  to prevent waste; and  execute  leases
    within or beyond the period of receivership.

     The  rents, issues, income and profits may be applied,  less
costs  and  expenses  of  operation, management  and  collection,
including attorneys fees and the payment of the fees and expenses
of  any  agent or receiver, to the payment of taxes, assessments,
insurance  premiums  and expenditures for the management,  repair
and  upkeep  of  the Property, to the performance  of  landlord's
obligations under any Leases and to the Secured Obligations,  all
in  such order as the Mortgagee may determine.  The entering upon
and  taking  possession of the Property, the collection  of  such
rents  and profits and the application thereof as aforesaid shall
not cure or waive any defaults under this Mortgage nor in any way
operate  to prevent the Mortgagee from pursuing any other  remedy
which  it  may  now  or hereafter have under the  terms  of  this
Mortgage  nor  shall it in any way be deemed  to  constitute  the
Mortgagee  a mortgagee-in-possession.  The rights and  powers  of
the  Mortgagee  hereunder shall remain in full force  and  effect
both  prior to and after any foreclosure of the Mortgage and  any
sale pursuant thereto.

     
     
     6.4 Leases of the Property.  Without the Mortgagee's written
         -----------------------
consent,  the Mortgagor will not enter into, execute, modify,  or
extend any Lease now existing or hereafter made providing a  term
(assuming  that  all renewal options, if any, are  exercised)  of
more  than five (5) years unless the leased premises is less than
twenty-five  percent  (25%)  of the  net  rentable  area  of  the
building  improvements  at  the Property.   Mortgagor  shall  not
surrender  or terminate any Lease now existing or hereafter  made
providing a term (assuming that all renewal options, if any,  are
exercised)  of  more  than  five (5) years  nor  shall  Mortgagor
surrender  or  terminate in any single twelve-month  period  more
than  twenty-five  percent  (25%)  of  the  aggregate  total  net
rentable area without the written consent of the Mortgagee.  Each
lease of the Property, at the election of the Mortgagee, will  be
either  superior or subordinate to the lien of the Mortgage,  and
each  tenant  shall  execute  an  appropriate  subordination   or
attornment agreement as required by the Mortgagee.  Also, to  the
extent  required by the Mortgagee, each tenant shall  execute  an
estoppel certificate and acknowledge receipt of a notice  of  the
assignment of its lease, all satisfactory in form and content  to
the Mortgagee.



                           ARTICLE 7
                       EVENTS OF DEFAULT
                       -----------------

     
     
     7.1 Events of Default.  Any one or more of the following  is
         -------------------
an event of default hereunder:

         
         
         (a) Failure to make any payment when due under the Note,
    this Mortgage or any of the other Loan Documents, followed by
    the  failure to make such payment within ten (10) days  after
    written  notice  thereof  given to  Mortgagor  by  Mortgagee;
    provided,  however, that Mortgagee shall not be obligated  to
    give  Mortgagor  written  notice  prior  to  exercising   its
    remedies with respect to such default if Mortgagee had  twice
    previously given Mortgagor during that calendar year a notice
    of default for failure to make a payment of similar type.

         (b) Failure to perform any other covenant, agreement  or
    obligation under the Note, this Mortgage or any of the  other
    Loan  Documents, followed by the failure to cure such default
    within thirty (30) days after written notice thereof given to
    Mortgagor  by Mortgagee (or if such cure cannot be  completed
    within  such  thirty (30) day period through the exercise  of
    diligence, the failure by Mortgagor to commence the  required
    cure  within  such thirty (30) day period and  thereafter  to
    continue  the  cure with diligence and to complete  the  cure
    within  ninety  (90)  days following  Mortgagee's  notice  of
    default).

         (c)  Mortgagor  or  any trustee  of  Mortgagor  files  a
    petition  in bankruptcy or for an arrangement, reorganization
    or  any  other form of debtor relief; or such a  petition  is
    filed  against Mortgagor or any trustee of Mortgagor and  the
    petition  is not dismissed within forty-five (45) days  after
    filing.

        (d) A decree or order is entered for the appointment of a
    trustee,  receiver or liquidator for Mortgagor or Mortgagor's
    property,  and  such  decree or order is not  vacated  within
    forty-five (45) days after the date of entry.

        (e) Mortgagor commences any proceeding for dissolution or
    liquidation;  or  any  such proceeding is  commenced  against
    Mortgagor   and  the  proceeding  is  not  dismissed   within
    forty-five (45) days after the date of commencement.

         (f) Mortgagor makes an assignment for the benefit of its
    creditors,  or  admits in writing its inability  to  pay  its
    debts generally as they become due.

         (g)  There is an attachment, execution or other judicial
    seizure of any portion of Mortgagor's assets and such seizure
    is not discharged within ten (10) days.

        (h) Any representation or disclosure made to Mortgagee by
    Mortgagor  or  any  guarantor  of  the  Loan  proves  to   be
    materially false or misleading when made, whether or not that
    representation or disclosure is contained herein.

                           
                           
                           
                           ARTICLE 8
                            REMEDIES
                            --------

    8.1 Acceleration Upon Default; Additional Remedies.  Upon the
        -------------------------
occurrence  and  continuance of an event  of  default  hereunder,
Mortgagee may, at its option and without notice to or demand upon
Mortgagor, take any one or more of the following actions:

         
        (a)  Declare  any or all indebtedness  secured  by  this
    Mortgage to be due and payable immediately.

         
        (b)  Bring  a court action to enforce the provisions  of
    this  Mortgage  or  any  of the indebtedness  or  obligations
    secured by this Mortgage.

        
        (c) Bring a court action to foreclose this Mortgage.

        
        (d)  Foreclose  this Mortgage under the  power  of  sale
    granted   by  this  Mortgage  in  any  manner  permitted   by
    applicable law.

        
        (e)  Exercise  any  or all of the  rights  and  remedies
    provided for herein in the event of default hereunder.

        
        (f)  Exercise any other right or remedy available  under
    law or in equity.

     
     
     8.2 Right to Foreclose.  If an event of default shall occur,
         -------------------
the  Mortgagee  may,  either  with or  without  entry  or  taking
possession,  proceed by suit or suits at law or in equity  or  by
any other appropriate proceedings or remedy to enforce payment of
the  Secured  Obligations or the performance of  any  other  term
hereof or any other right and the Mortgagor hereby authorizes and
fully  empowers  the  Mortgagee to foreclose  this  Mortgage  and
grants  to  the Mortgagee full authority to sell the Property  at
public auction and convey title to the Property to the purchaser,
either  in  one  parcel  or separate lots  and  parcels,  all  in
accordance with and in the manner prescribed by law, and  out  of
the  proceeds  arising from sale and foreclosure  to  retain  the
principal   and  interest  due  on  the  Note  and  the   Secured
Obligations  together with all such sums of  money  as  Mortgagee
shall  have  expended or advanced pursuant to  this  Mortgage  or
pursuant to statute together with interest thereon at the rate of
interest  provided for in the Note and all costs and expenses  of
such  foreclosure,  including lawful attorney's  fees,  with  the
balance,  if any, to be paid to the persons entitled  thereto  by
law.   In any such proceeding the Mortgagee may apply all or  any
portion  of the Secured Obligations to the amount of the purchase
price.

     
     
     8.3  Application  of  Proceeds  of  Foreclosure  Sale.   The
          ------------------------------------------------
proceeds  of  any  foreclosure sale  of  the  Property  shall  be
distributed and applied in the following order of priority unless
otherwise provided by law: (a) to all costs and expenses incident
to the foreclosure proceedings and in all prior efforts to effect
collection  of  the  Secured  Obligations,  including  all   such
allowable  items  as  are  mentioned in the  preceding  paragraph
hereof;  (b)  all  other  items  which  under  the  terms  hereof
constitute  Secured Obligations additional to that  evidenced  by
the  Note,  with interest thereon as provided herein  or  in  the
Note;  (c)  all  interest remaining unpaid on the Note;  (d)  all
principal  remaining unpaid on the Note, to be applied  first  to
principal  which is not the subject of any guaranty by any  third
party and thereafter, after all such non-guaranteed principal has
been  repaid,  to  principal that is  the  subject  of  any  such
guaranty; and (e) the balance, if any, shall be paid over to  the
Mortgagor  or  its  successors and assigns.  In  any  event,  the
purchaser under any foreclosure sale shall be under no obligation
to see to the proper application of the purchase money.

    
    
    8.4 Waiver of Order of Sale and Marshaling.  Mortgagor waives
        --------------------------------------
all  rights to direct the order in which any of the Property will
be  sold  in the event of any sale under this Mortgage, and  also
any right to have any of the Property marshaled upon any sale.

     
     
     8.5  Non-Waiver of Defaults.  The entering upon  and  taking
          ----------------------
possession  of  the  Property, the collection  of  Rents  or  the
proceeds of fire and other insurance policies or compensation  or
awards  for  any  taking  or  damage of  the  Property,  and  the
application or release thereof as herein provided, shall not cure
or waive any default or notice of default hereunder or invalidate
any act done pursuant to such notice.

     
     
     8.6  Foreclosure Subject to Tenancies.  Mortgagee shall have
          --------------------------------
the right at its option to foreclose this Mortgage subject to the
rights of any tenant or tenants of the Property.

     
     
     8.7  Evasion  of Prepayment Terms.  If an event  of  default
          ----------------------------
hereunder has occurred and is continuing, a tender of payment  of
the  amount necessary to satisfy the entire indebtedness  secured
hereby made at any time prior to foreclosure sale (including sale
under  power of sale) by Mortgagor, its successors or assigns  or
by  anyone  in  behalf of Mortgagor, its successors  or  assigns,
shall  constitute an evasion of the prepayment terms of the  Note
and  be  deemed to be a voluntary prepayment thereunder  and  any
such  payment  to  the extent permitted by law, will,  therefore,
include  the  additional payment required  under  the  prepayment
privilege, if any, contained in the Note.

     
     
     8.8  Remedies Cumulative.  To the extent permitted  by  law,
          --------------------
every right and remedy provided in this Mortgage is distinct  and
cumulative to all other rights or remedies under this Mortgage or
afforded  by  law  or  equity  or  any  other  agreement  between
Mortgagee  and  Mortgagor,  and may  be  exercised  concurrently,
independently   or   successively,  in  any   order   whatsoever.
Mortgagee  may  exercise any of its rights and  remedies  at  its
option without regard to the adequacy of its security.

      
      
      8.9  Mortgagee's  Expenses.   Mortgagor  will  pay  all  of
           ---------------------
Mortgagee's expenses incurred in any efforts to enforce any terms
of  this  Mortgage, whether or not any suit is  filed,  including
without  limitation  legal  fees and  disbursements,  foreclosure
costs  and title charges.  All such sums, with interest  thereon,
shall  be  additional indebtedness of Mortgagor secured  by  this
Mortgage.   Such  sums shall be immediately due and  payable  and
shall  bear interest from the date of disbursement at the default
rate  of  interest stated in the Note, or the maximum rate  which
may  be collected from Mortgagor under applicable law if that  is
less.

     
     
     8.10     Right  to Discontinue Proceedings.   In  the  event
              ---------------------------------
Mortgagee  shall  have proceeded to invoke any right,  remedy  or
recourse permitted under this Mortgage and shall thereafter elect
to  discontinue  or  abandon the same for any  reason,  Mortgagee
shall  have  the  unqualified right to do so and  in  such  event
Mortgagor  and  Mortgagee  shall  be  restored  to  their  former
positions  with  respect  to  the indebtedness  secured  by  this
Mortgage.   This Mortgage, the Property and all rights,  remedies
and  recourse of the Mortgagee shall continue as if the same  had
not been invoked.

                           
                           
                           
                           ARTICLE 9
                            GENERAL
                            -------

     
     
     9.1  Application of Payments.  Except as applicable  law  or
          ------------------------
this  Mortgage  may otherwise provide, all payments  received  by
Mortgagee  under the Note or this Mortgage shall  be  applied  by
Mortgagee  in  the following order of priority:  (a)  Mortgagee's
expenses  incurred in any efforts to enforce any  terms  of  this
Mortgage;  (b)  amounts payable to Mortgagee by  Mortgagor  under
Article 3 for reserves; (c) interest and late charges payable  on
the  Note;  (d)  principal of the Note; (e) interest  payable  on
advances   made  to  protect  the  security  of  this   Mortgage;
(f) principal of such advances; and (g) any other sums secured by
this  Mortgage  in such order as Mortgagee, at  its  option,  may
determine; provided, however, that Mortgagee may, at its  option,
apply any such payments received to interest on and principal  of
advances  made to protect the security of this Mortgage prior  to
applying such payments to interest on or principal of the Note.

    
    
    9.2 Release of Mortgage.  Upon payment of all sums secured by
        -------------------
this Mortgage, this Mortgage and all assignments contained herein
shall  be  void,  and  this Mortgage shall  be  released  by  the
Mortgagee at the cost and expense of the Mortgagor, otherwise  to
remain in full force and effect.

     
     
     9.3 Mortgagee's Powers.  Without affecting the liability  of
         ------------------
any person for payment or performance of the Secured Obligations,
Mortgagee, at its option, may extend the time for payment of  the
indebtedness  secured hereby or any part thereof, reduce  payment
thereon,  release  anyone  liable on any  of  said  indebtedness,
accept  a  renewal note or notes therefor, modify the  terms  and
time  of  payment of the indebtedness, release the lien  of  this
Mortgage  on any part of the Property, take or release  other  or
additional security, release or cause to be released all  or  any
part of the Property, or consent to the making of any map or plat
of  the  Property, or consent to the granting of any easement  or
creating  of  any restriction on the Property,  or  join  in  any
subordination or other agreement affecting this Mortgage  or  the
lien   or  charge  hereof.   Mortgagor  shall  pay  Mortgagee   a
reasonable  service  charge, together with such  title  insurance
premiums  and  attorneys' fees as may be incurred at  Mortgagee's
option, for any such action if taken at Mortgagor's request.

     
     
     9.4  Subrogation.  Mortgagee shall be subrogated for further
          ------------
security to the lien, although released of record, of any and all
encumbrances discharged, in whole or in part, by the proceeds  of
the Loan or any other indebtedness secured hereby.

     
     
     9.5  No Violation of Usury Laws.  Interest, fees and charges
          --------------------------
collected  or to be collected in connection with the indebtedness
secured hereby shall not exceed the maximum, if any, permitted by
any  applicable law.  If any such law is interpreted so that said
interest,  fees and/or charges would exceed any such maximum  and
Mortgagor is entitled to the benefit of such law, then:  (a) such
interest,  fees  and/or charges shall be reduced  by  the  amount
necessary  to  reduce  the  same to the  permitted  maximum;  and
(b)  any  sums  already  paid  to Mortgagee  which  exceeded  the
permitted maximum will be refunded.  Mortgagee may choose to make
the  refund either by treating the payments, to the extent of the
excess, as prepayments of principal or by making a direct payment
to  the person(s) entitled thereto.  No prepayment premium  shall
be  assessed on prepayments under this paragraph.  The provisions
of  this  paragraph shall control over any inconsistent provision
of this Mortgage or the Note or any other Loan Documents.

    
    
    9.6 Additional Documents; Power of Attorney.  Mortgagor, from
        ---------------------------------------
time  to time, will execute, acknowledge and deliver to Mortgagee
upon  request,  and  hereby irrevocably  appoints  Mortgagee  its
attorney-in-fact  to  execute,  acknowledge,   deliver   and   if
appropriate   file   and   record,  such   security   agreements,
assignments   for   security  purposes,   assignments   absolute,
financing   statements,   affidavits,  certificates   and   other
documents,  in  form and substance satisfactory to Mortgagee,  as
Mortgagee  may  request in order to perfect, preserve,  continue,
extend or maintain the assignments herein contained, the lien and
security  interest under this Mortgage, and the priority thereof,
but  for no other purposes.  Mortgagor will pay to Mortgagee upon
request  therefor all costs and expenses incurred  in  connection
with the preparation, execution, recording and filing of any such
document.

     
     
     9.7  Waiver  of Statute of Limitations.  To the full  extent
          ----------------------------------
Mortgagor may do so, Mortgagor hereby waives the right to  assert
any statute of limitations as a defense to the enforcement of the
lien  of  this Mortgage or to any action brought to  enforce  the
Note or any other obligation secured by this Mortgage.
     
     
     
     9.8  Forbearance by Mortgagee Not a Waiver.  Any forbearance
          -------------------------------------
by  Mortgagee  in  exercising any right or remedy  hereunder,  or
otherwise afforded by applicable law, shall not be a waiver of or
preclude  the exercise of any right or remedy, and no  waiver  by
Mortgagee of any particular default by Mortgagor shall constitute
a  waiver of any other default or of any similar default  in  the
future.   Without limiting the generality of the  foregoing,  the
acceptance  by  Mortgagee of payment of any sum secured  by  this
Mortgage  after  the due date thereof shall not be  a  waiver  of
Mortgagee's  right to either require prompt payment when  due  of
all other sums so secured or to declare a default for failure  to
make prompt payment.  The procurement of insurance or the payment
of  taxes or other liens or charges by Mortgagee shall not  be  a
waiver  of  Mortgagee's right to accelerate the maturity  of  the
indebtedness  secured  by this Mortgage,  nor  shall  Mortgagee's
receipt  of any awards, proceeds or damages under paragraphs  2.3
and  2.8  hereof operate to cure or waive Mortgagor's default  in
payment of sums secured by this Mortgage.

     
     
     9.9  Modifications  and Waivers.  This  Mortgage  cannot  be
          --------------------------
waived, changed, discharged or terminated orally, but only by  an
instrument   in  writing  signed  by  the  party   against   whom
enforcement  of  any waiver, change, discharge or termination  is
sought.

     
     
     9.10     Notice.   Except as applicable  law  may  otherwise
              ------
require, all notices and other communications shall be in writing
and  shall be deemed given when delivered by personal service  or
when  mailed,  by certified or registered mail, postage  prepaid,
addressed  to  the  address set forth at the  beginning  of  this
Mortgage.  Any party may at any time change its address for  such
purposes by delivering or mailing to the other parties hereto  as
aforesaid a notice of such change.

    
    
    9.11    Governing Law; Severability; Captions.  This Mortgage
            -------------------------------------
shall  be governed by the laws of the State of Kentucky.  If  any
provision  or  clause of this Mortgage conflicts with  applicable
law,  such conflicts shall not affect other provisions or clauses
hereof   which  can  be  given  effect  without  the  conflicting
provision, and to this end the provisions hereof are declared  to
be  severable.   The captions and headings of the paragraphs  and
articles of this Mortgage are for convenience only and are not to
be used to interpret or define the provisions hereof.

     
     
     9.12     Definitions.  As used herein:  the term 'Mortgagor'
              -----------
means  the  Mortgagor herein named, together with any  subsequent
owner  of  the Property or any part thereof or interest  therein,
and  the  term  'Mortgagee'  means the  Mortgagee  herein  named,
together with any subsequent owner or holder of the Note  or  any
interest therein, including pledgees, assignees and participants.

     
     

     9.13     Successors  and Assigns Bound;  Joint  and  Several
              -----------------------------
Liability;  Agents.  This Mortgage shall bind and  inure  to  the
- - --------    -----
benefit  of  the  parties  hereto  and  their  respective  heirs,
devisees,  legatees,  administrators, executors,  successors  and
assigns,  subject  to the provisions of Article  4  hereof.   All
obligations  of  Mortgagor hereunder are joint and  several.   In
exercising  any rights hereunder or taking actions  provided  for
herein,  Mortgagee  may  act through  its  employees,  agents  or
independent contractors as authorized by Mortgagee.

     
     
     9.14    Number; Gender.  This Mortgage shall be construed so
             --------------
that  wherever  applicable the use of the singular  number  shall
include  the plural number, and vice versa, and the  use  of  any
gender shall be applicable to all genders.

     
     
     9.15    Time.  Time is of the essence in connection with all
             ----
obligations of Mortgagor herein.

     
     
     IN  WITNESS  WHEREOF, Mortgagor and Mortgagee have  executed
this Mortgage as of the day and year first above written.


                              ANNTAYLOR DISTRIBUTION SERVICES, INC.,
                                a Delaware corporation


                                By: /s/ Walter J. Parks
                                    --------------------

                                Its:  Vice President





STATE OF New York  )
                                    )SS
COUNTY OF New York   )

    The foregoing instrument was acknowledged before me this 20th
day  of  November,  1995,  by  Walter J. Parks, the Vice President
of  ANNTAYLOR  DISTRIBUTION   SERVICES, INC., a Delaware 
corporation, on behalf of the corporation.



                                Notary Public /s/ Jocelyn F.L. Barandiaran
                                My Commission Expires  Nov. 30, 1996




THIS DOCUMENT WAS DRAFTED BY:


Duane L. Paulson
Oppenheimer Wolff & Donnelly
Plaza VII, Suite 3400
45 South Seventh Street
Minneapolis, Minnesota 55402

=======================================================================
                           EXHIBIT A
                               TO
                            MORTGAGE
                            --------


                       PROPERTY SCHEDULE
                       -----------------

LEGAL DESCRIPTION
- - ------------------


Being LOT 49, as shown on the plat of RIVERPORT, SECTION 2,  plat
of  which is of record in Plat and Subdivision Book 34, Page  50,
in the Office of the Clerk of Jefferson County, Kentucky.


Being  the  same  property  acquired  by  ANNTAYLOR  DISTRIBUTION
SERVICES,  INC., a Delaware corporation, by Deed  dated  June  1,
1994, of record in Deed Book 6460, Page 547, in the Office of the
Clerk of Jefferson County, Kentucky.







Being the same property acquired  by _________________________  by  Deed

dated _______________  of record in Deed Book _______, Page______ in

the Office of the Clerk of Jefferson, County, Kentucky.






                            Z3484\11269\498\MORTGAGE\11-21-95\DLP