LIBERTE INVESTORS/, 10-K405, 1995-09-28

LIBERTE INVESTORS/
10-K405, 1995-09-28
REAL ESTATE INVESTMENT TRUSTS

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<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended JUNE 30, 1995 [Fee Required]
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]

For the transition period from __________to__________

COMMISSION FILE NUMBER 1-6802

LIBERTE INVESTORS
(Exact name of Registrant as specified in its charter)

Created Under a Declaration of Trust
Pursuant to the Laws of
The Commonwealth of Massachusetts 75-1328153
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
600 N. Pearl St., Suite 420, LB 168
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 214/720-8950

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class Name of each Exchange
Shares of Beneficial Interest, on which registered
Without Par Value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. /X/

AT SEPTEMBER 15, 1995, THE AGGREGATE MARKET VALUE OF THE REGISTRANT'S SHARES OF
BENEFICIAL INTEREST HELD BY NON-AFFILIATES WAS $21,515,323.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by SQection 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES X * NO
----- -----

* The registrant's confirmed plan of reorganization did not provide for a
distribution of securities; however, all required documents and reports have
been timely filed by the registrant after confirmation of the plan.

THE NUMBER OF SHARES OF BENEFICIAL INTEREST OUTSTANDING AS OF SEPTEMBER 15,
1995, WAS 12,153,658 SHARES, NET OF 269,550 SHARES HELD IN TREASURY.

-- DOCUMENTS INCORPORATED BY REFERENCE --
The proxy statement for the upcoming 1995 Annual Meeting is incorporated into
Part III of this Form 10-K by reference.
<PAGE> 2

LIBERTE INVESTORS

FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 1995

Table of Contents

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I

ITEM 1 BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 2 PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ITEM 3 LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF
SECURITY-HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

PART II

ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ITEM 6 SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . . . 14
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

PART III

ITEM 10 TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT . . . . . . . . . . . . . . . . . . . . *
ITEM 11 EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . *

PART IV

ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>

* Incorporated by reference to the Trust's Proxy Statement for its upcoming 1995
Annual Meeting.
<PAGE> 3

PART I

ITEM 1. BUSINESS

OVERVIEW

Liberte Investors ("LBI" or the "Trust") is an unincorporated voluntary
association of the type commonly termed as a Massachusetts business trust
organized under the laws of the Commonwealth of Massachusetts pursuant to a
Declaration of Trust dated June 26, 1969, as amended. The principal business
activity of LBI is investing in notes receivable, primarily first mortgage
construction notes and first mortgage acquisition and development notes.
Secondarily, LBI invests in other secured or guaranteed notes related directly
or indirectly to real estate. Over the past seven fiscal years, however, the
Trust has progressively curtailed its lending activities in an effort to repay
its indebtedness and reduce the size of its note receivable and real estate
portfolio.

The curtailment of lending activities began in June 1989 when the Trust's
outstanding commercial paper was downgraded by the rating agencies to below
investment grade. As a result, the Trust ceased originating investments
secured by commercial income producing real estate and limited new investment
originations to notes secured by single-family houses and lots. In May 1990
LBI restructured its unsecured senior indebtedness to pledge a portion of its
note receivables and foreclosed real estate and require amortization of the
indebtedness. In May 1991 LBI again restructured its senior indebtedness by
pledging all of its assets, extending the term, and amending the amortization
schedule. As a result of these efforts, LBI's senior indebtedness, including
outstanding commercial paper, was reduced from $692.6 million at June 30, 1989,
to $87.7 million at June 30, 1993. On April 1, 1993, LBI's remaining senior
indebtedness was due and payable, and on June 1, 1993, $100 million of
subordinated indebtedness matured. At this time, LBI reached agreement with a
committee representing the holders of subordinated notes for a restructure of
LBI's indebtedness in a voluntary "pre-negotiated" bankruptcy procedure.

Accordingly, on October 25, 1993, the Trust filed a voluntary petition for
reorganization under Chapter 11 of the United States Bankruptcy Code. On
November 2, 1993, the Trust filed with the Bankruptcy Court a disclosure
statement and related plan of reorganization. An order was entered by the
Bankruptcy Court confirming a modified plan of reorganization for the Trust on
January 24, 1994. On April 7, 1994, the Trust emerged from bankruptcy.
Pursuant to the plan of reorganization, certain assets and liabilities,
including the remaining senior indebtedness, were transferred to Resurgence
Properties Inc. ("RPI"), and RPI's common stock was distributed to the holders
of the Trust's outstanding subordinated indebtedness in full satisfaction of
such holders' claims against the Trust.

The plan of reorganization approved by LBI's creditors, shareholders and
the Bankruptcy Court contemplated that LBI would engage in the business of
investing in notes receivable secured by mortgages on real estate. After
emerging from Chapter 11, the Board of Trustees decided to delay making
investments in longer maturities of notes receivable until such time as LBI
reduced its investment in illiquid foreclosed real estate. Accordingly, LBI
concentrated its efforts on improving the operating performance of its
foreclosed real estate and arranging sales contracts thereon. By December 31,
1994, LBI had reduced its investment in foreclosed real estate (net of
reserves) to $7.5 million from $15.1 million at June 30, 1994.

Management developed, and the Board of Trustees approved, a revised
business plan to resume investments in construction and development notes
receivable secured by single-family houses and lots,

1
<PAGE> 4

subject to LBI obtaining a commitment for senior secured financing, in order
for LBI to utilize leverage to increase its projected profitability.
Accordingly, in January 1995 LBI made application with a commercial bank for a
senior line of credit in the amount of $60 million. The Trust obtained a
commitment for such financing on March 2, 1995.

An unsolicited proposal, pursuant to which the parties making the
proposal would tender to purchase up to 45% of the Trust's outstanding shares
of beneficial interest with the intention of having the Trust purchase
operating companies and distressed undervalued assets, was received on March 1,
1995. The proposal required that a majority of the Board of Trustees be
elected by the offeror and that the chief executive officer be replaced. The
Trust appointed a Special Committee composed of its outside Trustees, Messrs.
Bishop and Rose, to explore the alternatives for the Trust. The Special
Committee appointed special legal counsel and retained Bear Stearns & Co. as
its financial advisor.

The Trust has received numerous proposals from parties interested in
acquiring shares of LBI, for cash and/or other property, either from LBI's
shareholders or from newly issued shares from LBI. The Trust has also received
proposals to merge or otherwise combine operating companies into or with LBI.
Each of the proposals was reviewed by the Special Committee and its advisors.
In May 1995 the Special Committee determined that the Trust would not proceed
at such time with the managaement business plan previously approved by the
Board of Trustees. As a result of this action by the Special Committee, in
June 1995 the employment arrangement with Mr. Enloe was modified to reduce his
annual compensation and require that he devote only a portion of his time to
the business affairs of the Trust, thereby allowing Mr. Enloe to pursue other
business opportunities. Further, since management's proposal for leveraged
single-family construction and development lending was no longer being
considered by the Trust, the Special Committee was discontinued and henceforth
all proposals for the Trust's future operations would be considered by the full
Board of Trustees and its legal counsel and financial advisor.

At the present time, LBI and its advisors are continuing to investigate
and evaluate the active proposals and to solicit other proposals for
investments in or business combinations with LBI. LBI has established no time
schedule for accomplishing any transaction, nor can there be any assurance that
such a transaction can be consummated. During this period, the Board of
Trustees has authorized management to extend the maturities of a portion of its
notes receivable portfolio through new note receivable originations, but LBI
will not utilize any leverage in its investment activities.

PORTFOLIO REVIEW

At June 30, 1995, the Trust's portfolio of funded investments of notes
receivable and foreclosed real estate (excluding cash and cash equivalents)
totaled $21.2 million in principal amount ($10.7 million net of reserves).
There were no amounts to be advanced under any notes receivable at June 30,
1995, and at that date, all foreclosed real estate was classified as
nonearning.

At June 30, 1995, the Trust's portfolio of notes receivable aggregated
$5.8 million, carried interest rates ranging from 8.5% to 10.5% on the
outstanding balances, and had a weighted average yield on earning notes of
8.25% during the fiscal year. Notes classified as nonearning are notes on
which the accrual of interest has been discontinued. At June 30, 1995, the
Trust had no notes which were more than 90 days past due in interest but on
which the Trust was continuing to accrue interest.

<PAGE> 5

At June 30, 1995, the Trust's nonearning assets aggregated $15.8 million
($5.3 million net of reserves) and consisted of: (i) $392,066 ($262,165 net of
reserves) of notes with respect to which the Trust had ceased to accrue
interest; and (ii) $15.4 million ($5.0 million net of reserves) of
investments in foreclosed real estate. The following table reflects the
Trust's nonearning assets net of reserves by type of property and geographic
location at June 30, 1995: NOTE C - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
Texas California Total
----------- ----------- -----------
<S> <C> <C> <C>
Single-family residences $ - $ 262,165 $ 262,165
Single family lots 194,677 1,989,000 2,183,677
Land 2,832,516 - 2,832,516
----------- ----------- -----------
$ 3,027,193 $ 2,251,165 $ 5,278,358
=========== =========== ===========
</TABLE>

The Trust maintains an allowance for possible losses ("Reserves") on its
investments in foreclosed real estate and notes receivable. At June 30, 1995,
the allowance for possible losses maintained by the Trust totaled $10.5
million. During fiscal 1995, provisions totaling $3.2 million and charge-offs,
net of recoveries, of $4.4 million were recorded in the allowance for possible
losses. The Trust is dependent on the liquidation of the properties for the
recovery of its investments in foreclosed real estate. All gains and losses
realized on liquidation are credited or charged, as the case may be, to the
allowance for possible losses on foreclosed real estate. See NOTE D - NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS.

TERMINATION OF MANAGEMENT AGREEMENT

The Trust was managed by Lomas Management, Inc. ("LMI") since its
inception in 1969 until February 28, 1995. LMI is a wholly owned subsidiary of
Lomas Financial Corp. ("LFC"), the original sponsor of the Trust. Mr. Enloe
was hired by the Trust as its full-time president and chief executive officer
and the Trust's first direct employee in 1992. Under the management agreement
in effect prior to July 1, 1992, whenever the Trust invested in any first
mortgage construction or acquisition and development note recommended by LMI,
LFC was required to participate, directly or through one or more of its
subsidiaries. Subsequent management agreements made no provision for this
required participation arrangement. On February 28, 1995, the Trust continued
its movement toward self administration by terminating its management agreement
with LMI and assuming all remaining operating and accounting responsibilities.
Any remaining property management requirements on assets owned with LFC are
provided for in the asset disposition agreement described below.

Effective February 28, 1995, the Trust entered into an "Asset Disposition
Agreement" with ST Lending, Inc. ("STL"), a wholly owned subsidiary of LFC,
whereby the Trust and STL exchanged their respective ownership positions in a
group of assets. No gain or loss was recognized as a result of this
transaction. Therefore, at June 30, 1995, the Trust owned 100% of its
foreclosed real estate and note receivable portfolio with the exception of one
real estate asset that remains 80% owned by the Trust (the Trust's portion
equals $1,164,000, net of reserves), and approximately 50% of a mortgage note
receivable originated to construct houses in California (the Trust's portion
equals $262,165, net of reserves). The Trust had no further funding obligation
under this note at June 30, 1995, and expects to receive

3
<PAGE> 6

repayments out of the sale proceeds from the completed houses in sufficient
amounts to retire this note during the next fiscal year.

A group of approximately 14 receivables, which have no carrying value and
relate primarily to deficiency judgments obtained during foreclosures or
remedial collection activities, remain 80% owned by the Trust and 20% owned by
STL. The Asset Disposition Agreement stipulates that the Trust will pay STL
10% of its gross proceeds received, in addition to STL's 20% ownership, from
this pool of loans in return for STL's asset administration. On or about March
1, 1996, STL will transfer its 20% ownership in this pool of assets to the
Trust.

Under the management agreement in effect prior to February 28, 1995 (the
"Management Agreement"), LMI was entitled to basic compensation at an annual
rate of 1% of the daily average book value of the Trust's Invested Assets (as
defined in the Management Agreement) plus $81,000 per year for accounting
services. During the fiscal year ended June 30, 1995, LMI received
compensation of $157,907. Additionally, STL received compensation of $10,898
which represents 10% of the Trust's gross proceeds received on the portion of
its portfolio described above.

The foregoing descriptions of the Management Agreement and the Asset
Disposition Agreement do not purport to be complete but are summaries of the
material provisions thereof.

COMPETITION

The Trust competes with commercial banks, savings and loan associations,
mortgage bankers, and other financial institutions that lend money to builders
and developers. Many of these institutions have greater capital, larger staffs
and other resources that are not necessarily available to the Trust. LBI
expects to focus on smaller loans and customers where LBI's service may be
considered an advantage.

In its ongoing efforts to liquidate its real estate investments, the
Trust competes with commercial banks, savings and loan associations, mortgage
bankers, the Resolution Trust Corporation, and other financial institutions
that are seeking to sell their own portfolios of foreclosed real estate. The
primary factors affecting competition are the value of the foreclosed real
estate, the price at which the seller is willing to sell the asset, and the
seller's ability and willingness to provide or arrange financing for the
prospective buyer.

CERTAIN CUSTOMERS

Revenue from RPI provided greater than 10% of total revenue for the
fiscal year ended June 30, 1995, and consisted of: (i) interest on a note
receivable collateralized by a pool of first mortgage loans and by Deeds of
Trust on various real estate assets, (ii) the receipt of $500,000 as a
settlement for early termination of a consulting arrangement originally
expected to end on March 31, 1996, and (iii) dividend income on the RPI
preferred stock held by LBI.

FEDERAL INCOME TAX/REIT STATUS

<PAGE> 7

(July 1, 1993). Accordingly the Trust is subject to federal income tax on its
taxable income. With the change in status to a taxable entity, the Trust
adopted Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes" (SFAS 109). Since there was no financial impact on the year
ended June 30, 1994, and the quarter ended September 30, 1994, neither an
amended Form 10-K nor Form 10-Q, respectively, have been filed to reflect the
adoption of SFAS 109. See NOTE H - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Also see "Transfer Restrictions" in Part II, Item 5.

EMPLOYEES

On June 30, 1995, the Trust had two full-time and four part-time
employees.

ITEM 2. PROPERTIES

The Trust's operations are conducted primarily in Dallas, Texas. At June
30, 1995, the Trust's headquarters were located on properties owned by LFC. As
of August 31, 1995, the Trust relocated in Dallas and leases its office space
from an unrelated third party. The lease term is less than one year. See also
the discussion of the Trust's foreclosed real estate under the heading
"Portfolio Review" in ITEM 1. BUSINESS.

ITEM 3. LEGAL PROCEEDINGS

The Trust is involved in routine litigation incidental to its business
which, in the opinion of management, will not result in a material adverse
impact on the Trust's financial condition, results of operation, or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

Not applicable.

5
<PAGE> 8

PART II

MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The New York Stock Exchange trading symbol for Liberte Investors' Shares
of Beneficial Interest is LBI. The approximate number of record holders of the
Trust's Shares of Beneficial Interest at September 15, 1995, was 2,319.
Depository companies held approximately 9,447,000 shares for an unknown number
of beneficial owners on that date. During the last two fiscal years, the Trust
has not paid any dividends and does not intend to pay dividends during fiscal
1996. The high and low per share prices during each quarter of the last two
fiscal years have been:

<TABLE>
<CAPTION>
1995 1994
------------- ------------- -------------
QUARTER ENDED HIGH LOW HIGH LOW
------------- ----- ----- ----- -----
<S> <C> <C> <C> <C>
September 30 2 1-5/8 1-5/8 1
December 31 1-7/8 1-1/2 1-7/8 5/8
March 31 2 1-5/8 2-1/2 1-1/2
June 30 2-1/4 1-1/2 2-1/8 1-3/8

</TABLE>

TRANSFER RESTRICTIONS

In order to avoid limitations on the use of the Trust's tax attributes,
the Declaration of Trust as amended, generally prohibits the transfer of Shares
to any Person who is a holder of 5% or more of the Shares or to any Person who
would become a holder of 5% or more of the Shares after giving effect to the
transfer, directly or by attribution. "Person" for this purpose is defined
broadly to mean any individual, corporation, estate, debtor, association,
company, partnership, joint venture or similar organization.

If a transfer violates this prohibition, either (i) the Shares that were
purported to be transferred in excess of the 5% limit will be deemed to remain
the property of the initial transferor, or (ii) upon election by the Trust,
such Shares shall be transferred to an agent designated by the Trust, who will
sell them in an arm's-length transaction, the proceeds of such sale to be
allocated to the purported transferee up to (x) the amount paid by such
transferee for such Shares and (y) where the purported transfer was by gift
inheritance or any similar transfer, the fair market value of such Shares at
the time of the purported transfer.

If the purported transferee has resold the Shares to an unrelated party
in an arm's length transaction, the purported transferee will be deemed to have
sold the Shares as an agent for the initial transferor, and will be required to
transfer the proceeds of such sale to the agent designated by the Trust, except
to the extent that the agent grants written permission to the purported
transferee to retain a portion of the proceeds up to the amount that would have
been payable to such transferee had the Shares been sold by the agent rather
than by the purported transferee.

The Declaration of Trust further provides that the Trust may require, as
a condition to the registration of the transfer of any Shares, that the
proposed transferee furnish to the Trust all information

<PAGE> 9

reasonably requested by the Trust with respect to the proposed transferee's
direct or indirect ownership interests in Shares.

The Board of Trustees of the Trust will have the power to approve
transfers that would otherwise be prohibited under the foregoing provisions.

New certificates evidencing ownership of Shares bear a conspicuous legend
referencing the transfer restrictions and are held by the Trust's transfer
agent for replacement of old certificates when submitted for transfer.

ITEM 6. SELECTED FINANCIAL DATA (in thousands, except per share amounts)

On October 25, 1993, the Trust filed for protection under Chapter 11 of
the United States Bankruptcy Code, and on April 7, 1994, the Trust emerged from
bankruptcy. Results for 1995 are not comparable to previous years because of
the bankruptcy. See NOTE E - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30
-----------------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ 2,172 $ 10,019 $ 15,115 $ 19,763 $ 42,193
Interest expense - 7,673 16,295 20,515 36,537
Provision for possible losses 3,192 3,175 15,150 32,000 62,100
Loss before reorganization
items and extraordinary item (2,868) (11,147) (34,672) (43,141) (66,346)
Loss per share before reorganization
items and extraordinary item (0.23) (0.91) (2.94) (3.68) (5.67)
Cash dividends declared
per share - - - - -
</TABLE>

<TABLE>
<CAPTION>
AT JUNE 30
-----------------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total assets $ 32,036 $ 36,316 $ 261,575 $ 337,527 $ 451,053
Shareholders' equity 31,620 34,914 63,591 98,333 141,309
Debt - - 187,725 234,057 303,223
</TABLE>

7
<PAGE> 10

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

On October 25, 1993, the Trust filed for protection under Chapter 11 of
the United States Bankruptcy Code, and on April 7, 1994, the Trust emerged from
bankruptcy. Results for 1995 are not comparable to 1994 and 1993 because of
the bankruptcy. See NOTE E - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

1995 Compared to 1994. The Trust's net loss was $2.9 million in fiscal
1995 compared to a $29.3 million loss in fiscal 1994. Contributing to the
smaller loss were the following factors that occurred in connection with the
Trust's emergence from bankruptcy: (i) an increase in consulting fee income
from RPI; (ii) the elimination of interest expense; (iii) the elimination of
reorganization items; (iv) the elimination of debt restructure costs; (v)
reductions in legal fees and foreclosed real estate expenses related to the
smaller size of the loan and foreclosed real estate portfolios; and (vi) a
substantial reduction in the Trust's cost of directors and officers insurance.
These factors were partially offset by a decrease in note receivable interest
and a decrease in foreclosed real estate income.

Income on notes receivable decreased from $5.7 million in fiscal 1994 to
$.7 million in fiscal 1995. The $5.0 million decrease was the result of a
significant decrease in average earning notes which was partially offset by an
increase in yield. Average earning notes declined from $74 million with a
yield of 7.77% in fiscal 1994 to $8 million with a yield of 8.25% in fiscal
1995.

Nonearning notes averaged $276,000 for fiscal 1995 compared to $19.7
million for fiscal 1994. Assuming that the yield on these notes would have been
the same as the yield on earning notes had they been on earning status, income
on notes receivable would have been $23,000 higher than reported in fiscal 1995
and $1.5 million higher in fiscal 1994. The Trust's efforts to reduce
nonearning assets continues.

At June 30, 1995, the Trust's portfolio of funded investments of notes
receivable and foreclosed real estate (excluding cash and cash equivalents)
totaled $21.2 million in principal amount, compared to $37.3 million at June
30, 1994. Funded earning investments decreased from $11.9 million at the end
of fiscal 1994 to $5.4 million at the end of fiscal 1995. There were no
amounts to be advanced under any notes receivable at June 30, 1995, and at that
date, all foreclosed real estate was classified as nonearning.

At June 30, 1995, the Trust's portfolio of notes receivable aggregated
$5.8 million compared to $12.1 million at June 30, 1994. The interest rates
on the notes at June 30, 1995, ranged from 8.5% to 10.5% on the outstanding
balances. The weighted average yield on the Trust's earning notes was 8.25%
and 7.77% during the fiscal years ended June 30, 1995, and June 30, 1994,
respectively. Notes classified as nonearning are notes on which the accrual of
interest has been discontinued. At June 30, 1995, and 1994, the Trust had no
notes which were more than 90 days past due in interest but on which the Trust
was continuing to accrue interest.

At June 30, 1995, the Trust's nonearning assets aggregated $15.8 million,
which consisted of: (i) $392,066 (or 1.2% of total assets) of notes with
respect to which the Trust had ceased to accrue interest; and (ii) $15.4
million (or 48.0% of total assets) of investments in foreclosed real estate.
At June 30, 1994, the Trust's nonearning assets aggregated $25.5 million, which
consisted of: (i) $272,308 (or 0.8% of total assets) of notes with respect to
which the Trust had ceased to accrue interest and (ii) $25.2 million (or 69.4%
of total assets) of investments in foreclosed real estate.

<PAGE> 11

In addition to notes made to facilitate the sale of foreclosed real
estate, one new note was produced during fiscal 1995.

Income on foreclosed real estate was eliminated in fiscal 1995 as a
result of the sale or transfer of all remaining operating real estate during
the fourth quarter of fiscal 1994.

Income from temporary investments increased $683,000 to $892,000 in
fiscal 1995 principally as a result of the Trust's increase in cash and cash
equivalents to $20.6 million at June 30, 1995, from $9.8 million at June 30,
1994. The increase is principally a result of the collection of notes
receivable and the sale of foreclosed real estate.

Consulting fee and other revenue began in the fourth quarter of fiscal
1994 in connection with an agreement with RPI. The consulting agreement called
for the Trust to receive $87,500 of consulting fee income per quarter until
March 31, 1996. The Trust agreed to discontinue the consulting arrangement in
exchange for a payment of $500,000 in lieu of the $525,000 that would have been
received ratably over the next six calendar quarters.

The Trust's indebtedness and corresponding interest expense was
eliminated upon emergence from bankruptcy on April 7, 1994.

The provision for possible losses was $3.2 million in fiscal 1995 and
fiscal 1994. The allowance for possible losses was $10.5 million at June 30,
1995, compared to $11.7 million at June 30, 1994. While the Trust believes the
allowance for possible losses is adequate at June 30, 1995, management will
periodically review its portfolio using then-current information to make the
estimates and assumptions that are used to determine the adequacy of the
allowance for note losses and the valuation of the real estate acquired in
connection with foreclosures or in satisfaction of notes.

A $1.1 million and $1.2 million reversal to the allowance for possible
losses on notes receivable occurred in fiscal 1995 and fiscal 1994,
respectively, as a result of the substantial reduction in the Trust's portfolio
of notes receivable. The Trust's reduction in notes receivable involved a
substantial payoff of a large note during the second quarter of fiscal 1995 and
the transfer of the majority of notes receivable to RPI in connection with the
emergence from bankruptcy in fiscal 1994. These reversals partially offset the
provision for losses on the Trust's portfolio of foreclosed real estate.

The provision for possible losses on foreclosed real estate was $4.3
million in fiscal 1995 compared to $4.4 million in fiscal 1994. The allowance
for possible losses on foreclosed real estate was $10.4 million at June 30,
1995, compared to $10.1 million at June 30, 1994. The $4.3 million provision
for possible losses on foreclosed real estate in fiscal 1995 results from
increases in the estimates of losses on disposition of foreclosed real estate,
which are based primarily on updated property valuations which reflect recent
real estate sales. A large portion of the Trust's remaining foreclosed real
estate is in the form of land which is inherently illiquid and/or in geographic
locations where real estate markets for this type of property remain depressed.

Salaries and related expenses decreased $1.1 million to $619,000 in
fiscal 1995 compared to $1.7 million in fiscal 1994. Severance pay expenses
primarily related to Mr. Enloe's employment contract were $99,000 in fiscal
1995 compared to $519,000 in fiscal 1994. Bonus and stock compensation
expenses included a reversal (credit) of $60,000 in fiscal 1995 compared to an
expense of $704,000 in fiscal 1994.

9
<PAGE> 12

General and administrative expenses decreased $740,000 to $402,000 in
fiscal 1995. The principal expense reduction in 1995 resulted from reduced
premium for the trustees and officers insurance coverages. The premium
decreased in fiscal 1995 as a result of the substantial decrease in the Trust's
assets and the reduction of the number of trustees and officers following the
emergence from bankruptcy on April 7, 1994.

Legal, audit and advisory fees, foreclosed real estate expenses, and
management fee expenses all have a significant correlation to the size of the
Trust's investment portfolio and as a result, these expenses were substantially
reduced following the transfer of approximately 85% of the Trust's assets to
RPI in connection with the emergence from bankruptcy.

Trustee fees and expenses were reduced to $61,000 in fiscal 1995 from
$249,000 in fiscal 1994 principally as a result of reducing the number of
trustees from nine to three upon emergence from bankruptcy. The Trustees also
agreed to reduce their fee compensation by 50% to $10,800 per year (not
including meeting fees).

The following expenses incurred in fiscal 1994 were related to
restructuring efforts which culminated the bankruptcy filing; (i) debt
restructuring of $2.1 million; (ii) reorganization items of $5.2 million; and
(iii) an extraordinary item of $12.9 million. No such expenses were incurred
in fiscal 1995. See NOTE E - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

1994 Compared to 1993. The Trust's net loss was $29.3 million in fiscal
1994 compared to a $34.7 million loss in fiscal 1993. Contributing to the
smaller loss were the following factors: (i) a decrease in the provision for
possible losses; (ii) a decrease in interest expense; (iii) an increase in
foreclosed real estate income and (iv) a decrease in debt restructure costs.
These factors were partially offset by a decrease in note receivable interest,
an increase in reorganization expense items and extraordinary losses due to the
bankruptcy filing and transfer of assets and liabilities to RPI in connection
with the Plan of Reorganization.

Income on notes receivable decreased from $11.3 million in fiscal 1993 to
$5.7 million in fiscal 1994. Of the $5.6 million decrease, substantially all
was the result of a decrease in average earning notes. Average earning notes
declined from $146 million with a yield of 7.71% in fiscal 1993 to $74 million
with a yield of 7.77% in fiscal 1994.

Average nonearning notes for fiscal 1994 totaled $19.7 million compared
to $21.3 million for fiscal 1993. Assuming that the yield on these notes would
have been the same as the yield on earning notes had they been on earning
status, income on notes receivable would have been $1.5 million higher than
reported in fiscal 1994 and $1.6 million higher in fiscal 1993.

There was no new note production in fiscal 1994 or fiscal 1993 other than
notes made to facilitate the sale of foreclosed real estate.

Income on foreclosed real estate increased from $3.6 million in fiscal
1993 to $4.0 million in fiscal 1994 primarily because several projects changed
from nonearning to earning status during the third quarter of fiscal 1993.
Foreclosed real estate is classified as earning if the net cash flow on the
individual property is projected to exceed the Trust's average cost of funds
during the succeeding twelve months. See NOTE A - NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.

<PAGE> 13

Interest expense decreased from $16.3 million in fiscal 1993 to $7.7
million in fiscal 1994. Of the $8.6 million decrease, $5.5 million was the
result of a decrease in average debt outstanding and $3.1 million was the
result of a decrease in the average cost of debt. Average debt outstanding
declined from $213.6 million with an average cost of 7.63% in fiscal 1993 to
$140.8 million with an average cost of 5.45% in fiscal 1994. The average cost
of debt decreased in fiscal 1994 as a result of the Trust ceasing to accrue
interest on the Subordinated Notes on October 25, 1993. This was partially
offset by the expiration of an interest rate swap, which had resulted in a
reduction of interest expense, and the increase in the rate on the Trust's
senior debt to the default rate of prime or the corporate base rate plus 200
basis points for the period beginning May 16, 1993, until the Trust filed its
Chapter 11 petition on October 25, 1993. Average cost of debt for these
purposes includes bank fees and other rate adjustments such as the net effect
of the interest rate swap. This swap produced a reduction of interest costs of
$1,253,000 in fiscal 1993.

The provision for possible losses was $3.2 million in fiscal 1994
compared to $15.2 million in fiscal 1993. The allowance for possible losses
was $11.7 million at June 30, 1994, compared to $53.9 million at June 30, 1993.

The provision for possible losses on notes receivable was a reversal of
$1.2 million in fiscal 1994 compared to $1.3 million in fiscal 1993. The
allowance for possible losses on notes receivable was $1.6 million at June 30,
1994, compared to $17.7 million at June 30, 1993. The decrease in the
provision and allowance for possible losses on notes receivable in fiscal 1994
compared to fiscal 1993 includes the impact of a smaller note receivable
portfolio during fiscal 1994 and smaller net charge-offs in fiscal 1994
compared to fiscal 1993.

The provision for possible losses on foreclosed real estate was $4.4
million in fiscal 1994 compared to $13.9 million in fiscal 1993. The allowance
for possible losses on foreclosed real estate was $10.1 million at June 30,
1994, compared to $36.2 million at June 30, 1993. At June 30, 1994, foreclosed
real estate totaled $25.2 million compared to $164.4 million at June 30, 1993.
Any loss incurred upon foreclosure of collateral underlying a note is charged
to the allowance for possible losses on notes receivable.

The $13.9 million provision for possible losses on foreclosed real estate
in fiscal 1993 results primarily from a provision of approximately $2.4 million
related to the adoption of Statement of Position 92-3 as discussed below and
increases in the estimates of losses on disposition of foreclosed real estate,
which are based primarily on updated property valuations which reflect real
estate sales, the inability of the Trust to meet previous marketing plans for
disposal of foreclosed real estate, and the unavailability of real estate
financing for potential buyers.

Salary and related expenses increased $970,000 to $1.7 million in fiscal
1994 from $756,000 in fiscal 1993. Salary increases were immaterial while
compensation expense related to bonuses and stock option grants increased
$448,000. The Trust also established a liability for the expected termination
of Mr. Enloe's employment agreement in the amount of $481,000.

General and administrative expenses decreased $347,000 to $1.1 million in
fiscal 1994 compared to $1.5 million in fiscal 1993. The decrease was related
to reduction in: (i) shareholders related expenses of $144,000; (ii) travel
and lodging expenses of $118,000; (iii) corporate insurance premiums of
$30,000; and (iv) other miscellaneous expenses of $55,000.

11
<PAGE> 14

Management fees totaled $1.8 million in fiscal 1994, compared to $2.9
million in fiscal 1993. The decrease is a result of the decrease in the
Trust's portfolio of invested assets. The decrease in legal and audit and
advisory expenses from fiscal 1993 to fiscal 1994 was primarily a result of a
decrease in legal fees related to the Trust's troubled assets and its senior
credit agreements.

Operating expenses included debt restructure costs of $7.4 million in
fiscal 1993 and $2.1 million in fiscal 1994. The fees incurred in fiscal 1993
were related to a possible restructuring with financing to have been provided
by a third party, a possible exchange of the subordinated notes for equity in
the Trust, and an agreement whereby the subordinated noteholders would exchange
their debt for equity in a new company that was expected to hold most of the
Trust's assets. Debt restructure costs in fiscal 1994 were incurred from July
through October 25, 1993, when the Trust filed a voluntary petition for
reorganization under Chapter 11.

Reorganization items netting $5.2 million in fiscal 1994 include amounts
incurred while the Trust was in Chapter 11 for legal and financial advisors and
consulting fees for the Trust and certain representatives of the Trust's
subordinated noteholders, senior debt holders and shareholders.

The extraordinary item totaling $12.9 million represents the difference
between $212.1 million of assets and $199.2 million in liabilities that were
transferred by the Trust to RPI upon its emergence from Chapter 11. See NOTE E
- - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

In fiscal 1993 the Trust adopted The American Institute of Certified
Public Accountants' Statement of Position 92-3, "Accounting for Foreclosed
Assets" ("SOP 92-3"). SOP 92-3 requires foreclosed assets held for the sale to
be carried at the lower of (a) fair value less estimated costs to sell or (b)
cost. Fair value was determined by discounting expected cash flows using a
risk-adjusted interest rate. Prior to adopting SOP 92-3, the Trust carried its
foreclosed assets held for sale at the lower of (a) net realizable value or (b)
cost. Net realizable value was determined using the Trust's cost-of-funds
rate. The adoption of this statement had an adverse effect on the Trust's
balance sheet and statement of operations of $2.4 million during fiscal 1993
because the Trust's cost-of-funds rate was less than the risk-adjusted discount
rate required to be used under SOP 92-3.

LIQUIDITY AND CAPITAL RESOURCES

Prior to its emergence from Chapter 11, the Trust faced substantial
liquidity problems due to reduced cash flows from operating and investing
activities, the required substitution of bank financing for commercial paper
financing, and its inability to borrow additional funds under its bank credit
facilities. Following its emergence from Chapter 11, the Trust no longer has
liquidity problems and has concentrated its efforts on liquidating its real
estate investments for cash and notes. The Trust's principal funding
requirements are now operating expenses including legal, audit, and advisory
expenses in connection with potential acquisition candidates. The Trust
anticipates that its primary sources of funding these disbursements will be its
collections on notes receivable, proceeds from the sale of foreclosed property,
and income on cash investments.

<PAGE> 15

Operating activities for fiscal 1995 used $0.5 million of cash compared
to $33.3 million in fiscal 1994 and $14.6 million in fiscal 1993. The table
below reflects cash flow from operating activities (in millions):

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30
------------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Total income $ 2.2 $ 10.0 $ 15.1
Interest expense - (7.7) (16.3)
-------- -------- --------
Net interest margin 2.2 2.3 (1.2)
Operating expenses (1.8) (10.3) (18.3)
Net change in other receivables,
assets and liabilities (0.9) (7.2) 4.9
Reorganization items - (5.2) -
Extraordinary items - (12.9) -
-------- -------- --------
Net cash used by operating activities $ (0.5) $ (33.3) $ (14.6)
======== ======== ========
</TABLE>

Net cash provided by investing activities for fiscal 1995 was $12.4
million compared to $44.6 million in fiscal 1994 and $52.3 million in fiscal
1993. The table below reflects the impact of the contraction of the Trust's
note receivable portfolio on cash flow from investing activities (in millions):

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30
------------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Collections on mortgage loans $ 1.4 $ 28.8 $ 36.3
Collections on RPI note receivable 0.6 - -
Advances on mortgage loans (0.3) (0.3) (1.8)
Sales of foreclosed real estate 10.3 13.4 23.4
Net sales (purchases) of restricted
cash investments 0.6 4.7 (3.2)
Expenditures on foreclosed real estate (0.2) (2.0) (2.4)
-------- -------- --------
Net cash used by investing activities $ 12.4 $ 44.6 $ 52.3
======== ======== ========
</TABLE>

The Trust is a debt-free organization with a significant proportion of
its assets consisting of highly liquid investments and is currently exploring
acquisition opportunities in addition to growth in its notes-receivable
portfolio.

13
<PAGE> 16

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See ITEM 14 for a listing of the consolidated financial statements filed
with this report. The response to this item is submitted in a separate section
of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

<PAGE> 17

PART III

Pursuant to General Instruction G(3) to Form 10-K, the information
required by Items 10, 11, 12, and 13 is incorporated by reference to the
Trust's Proxy Statement for its upcoming 1995 Annual Meeting.

15
<PAGE> 18

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report.

(1) The following consolidated financial statements are included in
this Item 14:

<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Report of Ernst & Young LLP, Independent Auditors . . . . . . . . . . . . . . . . . . 22
Consolidated Balance Sheet at June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . 23
Consolidated Statement of Operations for Years Ended
June 30, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Consolidated Statement of Shareholders' Equity for Years Ended
June 30, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Consolidated Statement of Cash Flows for Years Ended
June 30, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . 27

(2) The following consolidated financial statement schedule is
included in this Item 14:

Schedule IV - Mortgage Loans on Real Estate . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable and therefore have been omitted, or the information
required is included in the financial statements, including the
notes thereto.

<PAGE> 19

(3) EXHIBITS:

Exhibit
Number
-------

(2.1)(9) The Registrant's First Amended Plan of Reorganization
dated December 14, 1993.

(2.2)(9) The Registrant's Modification to the First Amended
Plan of Reorganization dated January 9, 1994.

(3.1)(1) Declaration of Trust of the Registrant dated June 26,
1969, as amended by the First and Second Amendments
thereto.

(3.2)(2) Third Amendment to the Declaration of Trust of the
Registrant.

(3.3)(3) Fourth Amendment to the Declaration of Trust of the
Registrant.

(3.4)(10) Fifth Amendment to the Declaration of Trust of the
Registrant.

(3.5)(4) By-laws of the Registrant.

(10.1)(2) Management Agreement among the Registrant, Lomas
Management, Inc., and Lomas Financial Corporation,
dated as of July 1, 1992.

(10.2)(5) Participation Agreement between the Registrant and
Lomas Financial Corporation (formerly, Lomas &
Nettleton Financial Corporation) dated as of July 28,
1970.

(10.3)(6) Employment Agreement dated January 31, 1993, between
the Registrant and Robert Ted Enloe III.

(10.4)(6) Stock Option Agreement dated January 31, 1993,
between the Registrant and Robert Ted Enloe III.

(10.5)(7) Stock Option Agreement dated May 7, 1993, between the
Registrant and Robert Ted Enloe III.

(10.6)(7) Retirement Plan for Trustees of the Registrant dated
October 11, 1988.

(10.7)(8) Promissory note dated October 22, 1993, between the
Registrant and Robert Ted Enloe III.

(10.8)(8) Stock Pledge and Security Agreement dated October 22,
1993, between the Registrant and Robert Ted Enloe
III.

(10.9) Asset Disposition Agreement dated February 28, 1995,
between the Registrant and ST Lending, Inc.

17
<PAGE> 20

(3) EXHIBITS: Continued

Exhibit
Number
-------

(10.10) The Registrant's 1995 Equity Incentive Plan.

(10.11) Stock Option Agreement dated February 15, 1995,
between the Registrant and Robert Ted Enloe III.

(10.12) Stock Option Agreement dated February 15, 1995,
between the Registrant and Bradley S. Buttermore.

(27) Financial Data Schedules.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed during the last quarter of the
period covered by this annual report.

- --------------------------------------------------------------------------------
Footnotes

(1) Incorporated by reference to the Registrant's
Registration Statement on Form S-3 dated April 4, 1986
(No. 33-4577).

(2) Incorporated by reference to the Registrant's Form 10-K
for the fiscal year ended June 30, 1992.

(3) Incorporated by reference to the Registrant's Form 8-K
dated January 7, 1993.

(4) Incorporated by reference to the Registrant's
Registration Statement on Form S-11 dated June 30, 1969
(No. 2-33821).

(5) Incorporated by reference to the Registrant's
Registration Statement on Form S-2 dated March 1, 1985
(No. 2-95695).

(6) Incorporated by reference to the Registrant's Form 10-Q
dated March 31, 1993.

(7) Incorporated by reference to the Registrant's Form 10-K
for the fiscal year ended June 30, 1993.

(8) Incorporated by reference to the Registrant's Form 10-Q
dated December 31, 1993.

(9) Incorporated by reference to the Registrant's Form 8-K
dated February 9, 1994.

(10) Incorporated by reference to the Registrant's Form
10-K for the fiscal year ended June 30, 1994.

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

<PAGE> 21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Trust has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

LIBERTE INVESTORS
Registrant

DATE: September 26, 1995 By /s/BRADLEY S. BUTTERMORE
------------------------
Bradley S. Buttermore
Senior Vice President,
Treasurer, and Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<S> <C> <C>
/s/ TED ENLOE Trustee and September 26, 1995
---------------------------------- Principal Executive Officer
(Ted Enloe)

/s/ BRADLEY S. BUTTERMORE Principal Financial and September 26, 1995
---------------------------------- Accounting Officer
(Bradley S. Buttermore)

/s/ GENE H. BISHOP Trustee September 26, 1995
----------------------------------
(Gene H. Bishop)

/s/ EDWARD W. ROSE III Trustee September 26, 1995
----------------------------------
(Edward W. Rose III)
</TABLE>

19
<PAGE> 22

ANNUAL REPORT ON FORM 10-K

ITEM 8 AND ITEM 14(a)(1) AND (2), 14(c) and 14(d)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
CONSOLIDATED FINANCIAL STATEMENT SCHEDULE

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED FINANCIAL STATEMENT SCHEDULE AND EXHIBITS

YEAR ENDED JUNE 30, 1995

LIBERTE INVESTORS AND SUBSIDIARY

DALLAS, TEXAS

<PAGE> 23

LIBERTE INVESTORS AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
(ITEM 14(a)(1) and (2))

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Ernst & Young LLP, Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Consolidated Balance Sheet at June 30, 1995, and 1994 . . . . . . . . . . . . . . . . . . . . . . . . 23

Consolidated Statement of Operations For Years Ended
June 30, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Consolidated Statement of Shareholders' Equity for Years Ended
June 30, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Consolidated Statement of Cash Flows for Years Ended
June 30, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Consolidated Financial Statement Schedule:
IV Mortgage Loans on Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted, or the information required is included in the financial
statements, including the notes thereto.

21
<PAGE> 24

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Shareholders and Trustees
Liberte Investors

We have audited the accompanying consolidated balance sheet of Liberte
Investors and subsidiary as of June 30, 1995 and 1994, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the three years in the period ended June 30, 1995. Our audits also
included the financial statement schedule listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Liberte Investors and subsidiary at June 30, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended June 30, 1995, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

ERNST & YOUNG LLP

Dallas, Texas
July 28, 1995

<PAGE> 25
LIBERTE INVESTORS AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

June 30
----------------------------
1995 1994
----------- -----------
<S> <C> <C>
Assets
Notes receivable - Note B
RPI $ 5,406,132 $ 6,000,000
Mortgage loans 401,240 6,130,956
Foreclosed real estate - Note C
Nonearning 15,385,214 25,207,002
----------- -----------
21,192,586 37,337,958

Less: Allowance for possible losses - Note D 10,498,922 11,709,395
----------- -----------
10,693,664 25,628,563

Unrestricted cash and cash equivalents 20,576,517 9,157,640
Restricted cash and cash equivalents - Note F 59,245 623,300
Accrued interest and other receivables 103,888 324,555
Other assets 602,664 581,919
----------- -----------
$32,035,978 $36,315,977
=========== ===========

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

Liabilities and Shareholders' Equity
Liabilities
Accrued interest and other liabilities $ 416,164 $ 1,402,032

Shareholders' Equity - Note K
Preferred Stock, 10 million shares
authorized, none are outstanding
Shares of Beneficial Interest, no
par value, unlimited authorization:
12,423,208 issued and 12,153,658
outstanding, net of 269,550 held in
Treasury, at June 30, 1995; 12,423,208
issued and outstanding at June 30, 1994 31,619,814 34,913,945
----------- -----------
Commitments and Contingencies - Note F $32,035,978 $36,315,977
=========== ===========

</TABLE>

See notes to consolidated financial statements.

23
<PAGE> 26

LIBERTE INVESTORS AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended June 30
----------------------------------------------
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
Income
Notes receivable interest $ 657,511 $ 5,740,167 $ 11,259,126
Temporary investment interest 892,008 208,849 271,424
Foreclosed real estate - 3,952,256 3,550,828
Consulting fees and other 622,555 117,767 33,800
----------- ------------ ------------
2,172,074 10,019,039 15,115,178
----------- ------------ ------------
Expenses
Interest - 7,672,694 16,295,318
Provision for possible losses - Note D 3,192,000 3,175,000 15,150,000
Salaries and related costs 619,433 1,726,012 755,637
General and administrative 402,185 1,142,437 1,488,975
Legal, audit and advisory 321,469 737,619 2,111,667
Foreclosed real estate 274,546 2,505,716 3,277,262
Management fees - Note G 168,805 1,824,044 2,928,258
Trustees' fees and expenses 61,215 249,180 342,697
Debt restructure - 2,132,902 7,437,048
----------- ------------ ------------
5,039,653 21,165,604 49,786,862
----------- ------------ ------------
Loss before reorganization items
and extraordinary item (2,867,759) (11,146,565) (34,671,684)
Reorganization items:
Professional fees - (5,499,463) -
Interest earned on accumulated cash
resulting from Chapter 11 proceedings - 304,913 -
----------- ------------ ------------
- (5,194,550) -
Extraordinary item:
Loss on extinguishment of debt - Note E - (12,936,395) -
----------- ------------ ------------
Net Loss $(2,867,579) $(29,277,510) $(34,671,684)
=========== ============ ============
Loss per Share of Beneficial Interest
Loss before reorganization items
and extraordinary item $ (0.23) $ (0.91) $ (2.94)
Reorganization items - (0.43) -
Extraordinary item - (1.06) -
----------- ------------ ------------
Net loss $ (0.23) $ (2.40) $ (2.94)
=========== ============ ============
Weighted average number of
Shares of Beneficial Interest 12,322,773 12,221,975 11,788,750
=========== ============ ============
</TABLE>

See notes to consolidated financial statements.

24
<PAGE> 27
LIBERTE INVESTORS AND SUBSIDIARY

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
Shares of
Beneficial Interest
-------------------------
Number Amount
---------- ------------
<S> <C> <C>
Balance at July 1, 1992 11,804,208 $ 98,333,030
Rescind 240,000 shares
Shares of Beneficial Interest (240,000) (330,000)
Unearned compensation 240,000 302,500
Cancelled 31,000 shares (31,000) (42,625)
Net loss - (34,671,684)
---------- ------------
Balance at June 30, 1993 11,773,208 63,591,221

Shares issued under
stock options 650,000 975,000
Executive loan to purchase stock options - (374,766)
Net loss - (29,277,510)
---------- ------------
Balance at June 30, 1994 12,423,208 34,913,945

Deferred interest on executive loan - (22,227)
Purchase of 269,550 shares of treasury stock (269,550) (404,325)
Net loss - (2,867,579)
---------- ------------
Balance at June 30, 1995 12,153,658 $ 31,619,814
========== ============

</TABLE>

See notes to consolidated financial statements.

<PAGE> 28

LIBERTE INVESTORS AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended June 30
------------------------------------------------
1995 1994 1993
-------------- ------------- ---------------
<S> <C> <C> <C>
Operating activities:
Loss before reorganization items
and extraordinary item $ (2,867,579) $ (11,146,565) $ (34,671,684)
Noncash expenses and revenues included in net loss:
Provision for possible losses 3,192,000 3,175,000 15,150,000
Net change in other receivables, assets and
liabilities (879,229) (20,151,576) 4,880,355
-------------- ------------- ---------------
Net cash used by operating activities
before reorganization items (554,808) (28,123,141) (14,641,329)

Net cash used by reorganization items -- (5,191,102) --
-------------- ------------- ---------------
Net cash used by operating activities (554,808) (33,314,243) (14,641,329)
-------------- ------------- ---------------

Investing activities:
Collections on notes receivable 1,997,003 28,828,704 36,293,250
Advances on notes receivable (308,299) (314,387) (1,760,983)
Expenditures on foreclosed real estate (127,350) (2,016,948) (2,414,009)
Sales and basis reductions of foreclosed
real estate 10,252,601 13,398,005 23,394,426
Net sales (purchases) of restricted cash
investments 564,055 4,745,018 (3,184,703)
-------------- ------------- ---------------
Net cash provided by investing activities 12,378,010 44,640,392 52,327,981
-------------- ------------- ---------------

Financing activities:
Purchase of treasury stock (404,325) -- --
Decrease in notes payable -- (4,597,411) (46,331,285)
-------------- ------------- ---------------
Net cash used by financing activities (404,325) (4,597,411) (46,331,285)
-------------- ------------- ---------------

Net increase (decrease) in unrestricted cash
and cash equivalents 11,418,877 6,728,738 (8,644,633)
Unrestricted cash and cash equivalents at
beginning of year 9,157,640 2,428,902 11,073,535
-------------- ------------- ---------------
Unrestricted cash and cash equivalents at
end of year $ 20,576,517 $ 9,157,640 $ 2,428,902
============== ============= ===============

Schedule of noncash investing and financing
activities:
Transfer of notes receivable to foreclosed
real estate $ 4,792,782 $ 18,252,995 $ 13,499,472
Charge-offs to allowance for possible
losses, net $ 4,402,473 $ 19,234,742 $ 20,252,734
Sales of foreclosed real estate financed
by notes receivable $ 138,400 $ 3,888,112 $ 14,679,561

Interest paid $ -- $ 4,754,000 $ 11,045,000
</TABLE>

See notes to consolidated financial statements.

26
<PAGE> 29

LIBERTE INVESTORS AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 1995

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include the accounts of the Trust
and its subsidiary. Significant intercompany balances and transactions have
been eliminated.

Recognition of Income - Interest is taken into income as it accrues. The
Trust discontinues the accrual of interest income when circumstances exist
which cause the collection of such interest to be doubtful. Determination to
discontinue accruing interest is made after a review by the Trust's management
of all relevant facts including delinquency of principal and/or interest, and
credit of the borrower.

27
<PAGE> 30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

Allowance for Possible Losses - The Trust provides for possible losses on
notes receivable and foreclosed real estate based on an evaluation of each note
and each property acquired through foreclosure (or deed in lieu of
foreclosure). Consideration is given to the collectibility of the note and to
the estimated value of the collateral underlying a note or of properties held.
The Trust also maintains unallocated reserves on its portfolio of notes
receivable.

Foreclosed Real Estate - Foreclosed real estate is recorded at the lower
of cost or fair value less estimated costs to sell determined at, and
subsequent to, foreclosure. Any loss attributable to the excess of cost over
fair value at the time of foreclosure is charged to the allowance for losses on
notes receivable. Gains (losses) realized on liquidation are credited
(charged) to the allowance for losses on foreclosed real estate.

Foreclosed real estate is classified as earning if the net cash flow on
the individual property is projected to exceed the Trust's average cost of
funds during the succeeding twelve months. The properties on which the cash
flow is not projected to exceed the Trust's average cost of funds during the
succeeding twelve months are classified as nonearning.

In-Substance Foreclosures - Properties collateralizing notes receivable
that have been substantively repossessed or are being managed under the control
of the Trust are recorded as foreclosed real estate. A note is considered to be
an in-substance foreclosure if the following criteria are met: (1) the debtor
has little or no equity in the collateral, considering the current fair value
of the collateral; (2) proceeds for repayment of the note can be expected to
come only from the operation or sale of the collateral; and (3) the debtor has
either formally or effectively abandoned control of the collateral to the
creditor or retained control of the collateral but, because of the current
financial condition of the debtor, the economic prospects for the debtor and/or
the collateral in the foreseeable future, it is doubtful that the debtor will
be able to rebuild equity in the collateral or otherwise repay the note in the
foreseeable future.

Sales of Foreclosed Assets Financed by Notes Receivable - The Trust may
finance a portion of the sale of foreclosed real estate for qualified
borrowers. A cash downpayment of 20% is normally required, and the financing
terms generally do not exceed five years, with many financings being for less
than five years. The notes are made at market rates of interest either
floating over a base rate of interest or a fixed rate generally tied to similar
maturity treasury notes.

Adoption of Authoritative Statements - In May 1993 the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
("SFAS") No. 114, "Accounting by Creditors for Impairment of a Note." SFAS No.
114 was subsequently amended by SFAS No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures." SFAS No. 114
requires impairment of a note be measured based on the present value of
expected future cash flows discounted at the note's effective interest rate.
The Trust is required to adopt this standard for the fiscal year beginning July
1, 1995.

In March 1995 the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." SFAS No. 121 requires that assets held for disposal
be valued at the lower of carrying amount or fair value less costs to sell.
The Trust is required to adopt this standard for the fiscal year beginning July
1, 1996.

<PAGE> 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

The Trust has determined that the adoption of SFAS No's. 114, 118, and
121 will not have a material effect on its financial position or results of
operation.

Loss Per Share of Beneficial Interest - Loss per Share of Beneficial
Interest is based on the weighted average number of shares outstanding during
the year.

Cash and Cash Equivalents - Cash and cash equivalents include highly
liquid investments with original maturities of three months or less.

Reclassifications - Certain amounts in prior years' financial statements
have been reclassified to conform to the current year's presentation.

NOTE B - NOTES RECEIVABLE

The following is a summary of notes receivable activity for the years
ended June 30, 1995, and 1994:

<TABLE>
<CAPTION>
1995 1994
------------- --------------
<S> <C> <C>
Balance at beginning of year $ 12,130,956 $ 137,569,142

Advances and capitalized items
on notes receivable 341,714 340,323
Sales and collection of foreclosed
real estate financed by notes
receivable 138,400 3,888,112
Collections of principal (1,997,003) (28,828,704)
Foreclosures (4,792,782) (18,252,995)
Write-off of principal (13,913) (8,673,449)
Transfer of assets upon emergence
from Chapter 11 - (73,911,473)
------------- --------------
Balance at end of year $ 5,807,372 $ 12,130,956
============= ==============
</TABLE>

29
<PAGE> 32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE C - FORECLOSED REAL ESTATE

The following is a summary of the Trust's activity in foreclosed real
estate for the years ended June 30, 1995, and 1994:

1995 1994
------------ ------------

Balance at beginning of year $ 25,207,002 $ 164,416,526

Foreclosures 4,840,782 18,252,995
Expenditures 127,350 2,016,948
------------ -------------
Total additions 4,968,132 20,269,943
Cost of real estate sold (14,789,920) (28,437,212)
Transfer of assets upon emergence
from Chapter 11 - (131,042,255)
------------ -------------
Balance at end of year $ 15,385,214 $ 25,207,002
============ =============

<PAGE> 33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

The following table sets forth the Trust's portion of foreclosed real
estate by type of property and geographic location:

<TABLE>
<CAPTION>
June 30
-----------------------------------
1995 1994
----------- ------------
<S> <C> <C>
Type of Property:
Single-family $ - $ 1,726,091
Single-family lots 6,732,532 7,303,970
Condo lots/land - 4,768,677
Land 8,652,682 6,809,219
Completed properties:
Industrial - 4,522,155
Other - 76,890
----------- -----------
$15,385,214 $25,207,002
=========== ===========
Geographic location:
Texas $ 9,356,477 $11,149,820
California 6,028,737 5,725,691
Tennessee - 4,522,156
Rhode Island - 1,889,066
Massachusetts - 1,760,472
Other - 159,797
----------- -----------
$15,385,214 $25,207,002
=========== ===========
</TABLE>

The Trust has substantively repossessed or obtained control of the
management of certain properties collateralizing $2,084,394 and $6,245,694 of
notes receivable at June 30, 1995, and 1994, respectively. As a result, these
notes have been accounted for as foreclosed real estate.

31
<PAGE> 34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE D - ALLOWANCE FOR POSSIBLE LOSSES

A summary of transactions affecting the Trust's allowance for possible
losses for the three-year period ended June 30, 1995, is as follows:

<TABLE>
<CAPTION>
Notes Foreclosed
Receivable Real Estate Total
----------- ------------ ------------
<S> <C> <C> <C>
Balance at July 1, 1992 $23,275,974 $ 35,765,577 $ 59,041,551
Provision for possible losses 1,263,731 13,886,269 15,150,000
Amounts charged off, net of recoveries (6,811,338 (13,441,396) (20,252,734)
----------- ------------ ------------
Balance at June 30, 1993 17,728,367 36,210,450 53,938,817
Provision for possible losses (1,208,000) 4,383,000 3,175,000
Amounts charged off, net of recoveries (8,457,842) (10,776,900) (19,234,742)
Allowance related to assets transferred
upon emergence from Chapter 11 (6,499,604) (19,670,076) (26,169,680)
----------- ------------ ------------
Balance at June 30, 1994 1,562,921 10,146,474 11,709,395
Provision for possible losses (1,148,960) 4,340,960 3,192,000
Amounts charged off, net of recoveries (284,060) (4,118,413) (4,402,473)
----------- ------------ ------------
Balance at June 30, 1995 $ 129,901 $ 10,369,021 $ 10,498,922
=========== ============ ============

</TABLE>

NOTE E - EMERGENCE FROM BANKRUPTCY

Upon the Trust's emergence from bankruptcy on April 7, 1994, certain
assets and liabilities were transferred to the holders of the subordinated
notes in full satisfaction of such notes. The net assets transferred exceeded
the debt satisfied resulting in a loss on extinguishment of debt, which has
been reported as an extraordinary item.

As part of this process, net notes receivable of $73.4 million, the
related accrued interest receivable of $.6 million, and net foreclosed real
estate of $111.3 million were transferred to RPI.

The Trust paid claims and closing costs, made debt payments and
transferred cash to RPI totaling $28.0 million.

The Trust received a $6.0 million note receivable from RPI and $.3
million of preferred stock in RPI. The Trust transferred additional assets
totaling $.3 million and liabilities for escrow deposits totaling $1.6 million
to RPI and adjusted its accrued liabilities by $.2 million.

<PAGE> 35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In accordance with the terms of the Plan of Reorganization, the Trust was
relieved of its liability on the $83.1 million of senior debt, the $100.0
million of subordinated debt and the related $9.5 million of accrued interest
on the subordinated debt. The recording of the above transactions resulted in
an extraordinary loss on extinguishment of debt of approximately $12.9 million.

Fresh-start reporting, in which the emerging entities' assets and
liabilities would have been adjusted to their fair value, was considered but
deemed inappropriate since the reorganization value of the Trust's assets
immediately before the confirmation of the Plan was not less than the total of
all post-petition liabilities and allowed claims. Also, there was no change in
control of the Trust's ownership.

NOTE F - COMMITMENTS AND CONTINGENCIES

At June 30, 1995, the Trust had commitments for indemnification of
development bond issuers and other guarantees totaling $885,445.

Cash and cash equivalents at June 30, 1995, included restrictive cash of
$59,245 for claims due to bankruptcy. At June 30, 1994, restrictive cash
investments included $71,073 for claims due to bankruptcy, $480,500 to secure a
letter of credit, and $71,727 of borrowers' escrow deposits.

The Trust is involved in routine litigation incidental to its business,
which, in the opinion of management, will not result in a material adverse
impact on the Trust's financial condition, results of operations, or cash
flows.

NOTE G - TERMINATION OF MANAGEMENT AGREEMENT

33
<PAGE> 36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

Trust had no further funding obligation under this note at June 30, 1995, and
expects to receive repayments out of the sale proceeds from the completed
houses in sufficient amounts to retire this note during the next fiscal year.

NOTE H - FEDERAL INCOME TAXES

The Trust filed its June 30, 1994, Form 10-K and September 30, 1994, Form
10-Q as a real estate investment trust (a "REIT") as defined in the Internal
Revenue Code. Disclosures were made in those filings that there was some
uncertainty as to whether the Trust qualified as a REIT for its fiscal years
ended June 30, 1992, 1993, and 1994. In connection with the preparation of its
fiscal 1994 tax return, the Trust concluded that it no longer qualified as a
REIT effective the beginning of fiscal 1994 (July 1, 1993). Accordingly the
Trust is subject to federal income tax on its taxable income. The Trust
incurred taxable losses in fiscal 1995 and 1994; therefore, no provision for
income taxes is necessary in the financial statements for those periods. With
the change in status to a taxable entity, the Trust adopted SFAS No. 109
"Accounting for Income Taxes." Since there was no financial impact on the
year ended June 30, 1994, and the quarter ended September 30, 1994, neither an
amended Form 10-K nor Form 10-Q, respectively, have been filed to reflect the
adoption of SFAS 109.

At June 30, 1995, the Trust had, for federal tax purposes, net operating
loss carryforwards estimated to be in excess of $225 million which expire at
various times between the years 2005 and 2010. Significant components of the
Trust's deferred tax assets at June 30, 1995, consisted of net operating loss
carryforwards ($76.5 million), financial statement loss reserves ($3.2
million), and other items ($3.9 million), all of which were completely offset
by a valuation allowance. (The Trust has no material deferred tax
liabilities.)

The Trust had no income tax expense for the fiscal years ended June 30,
1995, and 1994. The difference between the statutory federal income tax rate
of 34% and the Trust's zero percent effective rate is due to the tax benefits
related to net operating losses which are fully reserved because of the
uncertainty that the Trust will realize the tax benefits related to those
losses.

<PAGE> 37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE I - FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107 "Disclosures about Fair Value of Financial Statements"
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate that value. In cases where quoted market prices are not available,
fair values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. In that
regard, the derived fair value estimates cannot be substantiated by comparison
to independent markets and, in many cases, could not be realized in immediate
settlement of the instrument. SFAS No. 107 excludes certain financial
instruments and all nonfinancial instruments from its disclosure requirements.
Accordingly, the aggregate fair value amounts presented do not represent the
underlying value of the Trust.

The fair value of cash and cash equivalents approximates their carrying
value because of the liquidity and short-term maturities of these instruments.
The fair value of notes receivable - mortgage loans is estimated by discounting
cash flows at interest rates currently being offered for notes with similar
terms to borrowers of similar credit quality. The fair value of the note
receivable - RPI approximates its carrying value because it bears interest at a
LIBOR-based floating rate.

The estimated fair values of the Trust's financial instruments at June
30, 1995, are as follows (in thousands):

<TABLE>
<CAPTION>
Carrying Fair
Amount Value
------ -----
<S> <C> <C>
Financial Assets:
Cash and cash equivalents $20,636 $20,636
Note receivable-RPI 5,406 5,406
Notes receivable - mortgage loans (net of allowance
for possible losses) 271 271

</TABLE>

NOTE J - CERTAIN CUSTOMERS

35
<PAGE> 38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE K - SHAREHOLDERS' EQUITY

Included in Shareholders' Equity is a deduction for a promissory note
in favor of the Trust from Robert Ted Enloe III in the amount of $365,625 plus
deferred interest thereon. The note has a term of 5 1/2 years and bears
interest at 5% compounded semi-annually, which is payable at maturity. The note
is secured by a pledge of 650,000 Shares of Beneficial Interest of the Trust.

On February 13, 1995, the Board of Trustees adopted the 1995 Equity
Incentive Plan (the "Plan") which provides for up to 1,500,000 shares to be
issued and used for employee incentive purposes. As of February 15, 1995,
options to purchase a total of 646,000 shares of the Trust's shares of
beneficial interest were granted to two executive officers of the Trust
("Incentive Stock Option Agreements"). The exercise price of these stock
options is $1.625 per share which approximated market value at the time of
grant. These stock options expire on February 15, 2005, pursuant to vesting
schedules indicated in the related Incentive Stock Option Agreements. The
effective date of the Plan is February 15, 1995, contingent upon approval by
the shareholders of the Trust by February 13, 1996.

On February 15, 1995, the Trust repurchased 269,550 Shares of Beneficial
Interest from LFC (a former affiliate) at a price which approximated market
value on that date.

<PAGE> 39

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

LIBERTE INVESTORS AND SUBSIDIARY
JUNE 30, 1995

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F COL. G COL. H
- -----------------------------------------------------------------------------------------------------------------------------
Principal
Amount of
Loans
Subject To
Final Periodic Face Carrying Delinquent
Interest Maturity Payment Prior Amount of Amount of Principal or
Description Rate Date Terms Liens Mortgages Mortgages Interest
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RPI Note receivable LIBOR + 2% 1998 Quarterly $5,406,132 $5,406,132 $ -

Construction loan:
Single-family
41st Street Prime + 1.5% 1995 Payable upon sale 340,364 340,364 340,364
of completed property.

Other (17 loans) 0-10.5% 1995-1998 60,876 4,604
------------------------
$5,807,372 $344,968
========================
</TABLE>

37
<PAGE> 40

NOTES TO SCHEDULE IV

June 30, 1995

(1) For income tax purposes the cost of notes is the carrying amount as shown
on the schedule. Allowance for possible losses of $129,901 is allocated
to notes receivable at June 30, 1995. Basis for the allocated amount is
explained under "Accounting Policies - Allowance for Possible Losses."

(2) Reconciliation of "Mortgage Loans on Real Estate" (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30
-----------------------------------
1995 1994 1993
------- -------- --------
<S> <C> <C> <C>
Balance at beginning of year $12,131 $137,569 $178,672
Additions during year:
New mortgage loans and advances
on existing loans and other 480 4,228 16,598
------- -------- --------
12,611 141,797 195,270
Deductions during year:
Collections of principal 1,997 28,829 36,293
Foreclosures 4,793 18,253 13,499
Write-off of principal 14 8,673 7,909
Transfer of assets upon emergence
from Chapter 11 - 73,911 -
------- -------- --------
Balance at end of year $ 5,807 $ 12,131 $137,569
======= ======== ========
</TABLE>

38
<PAGE> 41

LIBERTE INVESTORS

INDEX TO EXHIBITS

Exhibit No.
- -----------

(10.9) Asset Disposition Agreement dated February 28, 1995, between
the Registrant and ST Lending, Inc.

(10.10) The Registrant's 1995 Equity Incentive Plan.

(10.11) Stock Option Agreement dated February 15, 1995, between the
Registrant and Robert Ted Enloe III.

(10.12) Stock Option Agreement dated February 15, 1995, between the
Registrant and Bradley S. Buttermore.

(27) Financial Data Schedules.

<PAGE> 1

EXHIBIT 10.9

ASSET DISPOSITION AGREEMENT

THIS Asset Disposition Agreement dated as of the 28th day of February,
1995 (the "Agreement"), is made by and among Liberte Investors, a Massachusetts
business trust ("Liberte"), ST Lending, Inc., a Delaware corporation ("STL"),
and Lomas Management, Inc., a Nevada corporation ("LMI").

R E C I T A L S

WHEREAS, Liberte and STL are the holders of certain participation
interests in the assets listed on the attached Schedule A pursuant to a certain
(i) Participation Agreement dated as of July 28, 1970, between Lomas Financial
Corporation ("LFC") and Liberte ("LFC's right, title, and interest therein
having been assigned to STL), and (ii) Proceeds Agreement dated as of May 1,
1990, by and among LFC, Liberte, LMI, Lomas Mortgage USA, Inc., L&N
Consultants, Inc., and Naples Canta Mar, Ltd. (both agreements as each of them
may have been amended or modified being collectively referred to in this
agreement as the "Participation Agreement"); and

WHEREAS, LMI is the manager of the assets listed on the attached
Schedule A pursuant to that certain Management Agreement dated as of July 1,
1992, by and among LMI, LFC, and Liberte (the "Management Agreement"); and

WHEREAS, STL and Liberte have reached certain agreements with respect
to the assets listed on the attached Schedule A (the "Participated Assets"),
and Liberte and LMI have reached certain agreements with respect to the
Management Agreement; and

WHEREAS, the parties desire to describe and implement such agreements
through this Agreement;

NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows.

1. Exchange Assets.

1.1 Transfer of Participation Interests. Effective
February 28, 1995 (the "Effective Date") Liberte will transfer to STL
its participation interests in the Participated Assets described on
the attached Schedule B (the "STL Exchange Assets") pursuant to a
Master Assignment dated as of the Effective Date between Liberte and
STL substantially in the form attached to this Agreement as Exhibit
B-1 (the "Liberte Master Assignment"); and STL will transfer to
Liberte on the Effective Date its participation interests in the
assets

-1-
<PAGE> 2
described on the attached Schedule C (the "Liberte Exchange Assets")
pursuant to a Master Assignment dated as of the Effective Date between
STL and Liberte substantially in the form attached hereto as Exhibit
C-1 (the "STL Master Assignment"). On the "Effective Date" Liberte
will deliver to STL the fully executed Liberte Master Assignment along
with originals of the participation certificates evidencing Liberte's
participation interest in the STL Exchange Assets; and STL will
deliver to Liberte the fully executed STL Master Assignment along with
original participation certificates evidencing STL's participation
interest in the Liberte Exchange Assets.

1.2 Transfer of Title. STL will authorize LMI to cause
the title nominees that hold legal title to the STL Exchange Assets
and the Liberte Exchange Assets, being L & N Consultants ("LNCI") and
Lomas Mortgage USA, Inc. ("Lomas Mortgage"), to execute and deliver to
STL and to Liberte, as appropriate, on the Effective Date, the various
deeds, assignments, and other documents (the "Exchange Asset Transfer
Documents") necessary to convey to Liberte and STL all of their
respective rights, title, and interests in and to the STL Exchange
Assets and the Liberte Exchange Assets. The Exchange Asset Transfer
Documents will consist of deeds and assignments as appropriate to each
Exchange Asset, in substantially the forms attached hereto as Exhibit
B-2 with respect to the STL Exchange Assets and Exhibit C-2 with
respect to the Liberte Exchange Assets. Except for the representations
and warranties contained in this Agreement and in the Exchange Asset
Transfer Documents, the transfers to be made pursuant to this
Agreement shall be without representation or warranty of any kind.

1.3 Liabilities. With respect to liabilities associated
with or related to the Exchange Assets, from and after the Effective
Date STL will be solely responsible for any and all liabilities,
whether accrued before or after the Effective Date, in respect of the
STL Exchange Assets, and Liberte will be solely responsible for any
and all liabilities, whether accrued before or after the Effective
Date, in respect of the Liberte Exchange Assets. For purposes of this
Agreement, "liabilities associated with, related to, and in respect
of" the Exchange Assets shall mean all liabilities associated with the
Exchange Assets, including, without limitation, all liabilities
associated with the ownership and management of the Exchange Assets
(the "Property Related Liabilities") and shall exclude only those
liabilities incurred by or on behalf of Liberte, STL, LMI, or the
title nominees that hold legal title to the Exchange Assets (or their
respective affiliates) that do not arise on account of the Exchange
Assets themselves and are therefore not Property Related Liabilities.
The foregoing provisions

-2-
<PAGE> 3
shall in no event limit, modify, discharge, or waive any liabilities
or obligations that the parties may have under or in respect of (i)
the representations and warranties set forth in this Agreement, (ii)
the Liberte Master Assignment, (iii) the STL Master Assignment; (iv)
the Exchange Asset Transfer Documents, or (v) the Management
Agreement.

1.4 Closing Date. The closing of the transactions
described in this section (the "Closing") shall take place on the
Effective Date.

1.5 Exchange Asset Management; Closing Adjustments and
Costs. During the period prior to the Effective Date, there will be no
change in the current management of the Exchange Assets including,
without limitation, current efforts to liquidate the Exchange Assets.
All items of income, revenues, and expenses actually received or paid
in respect of the Exchange Assets prior to the Effective Date shall
be apportioned and allocated between Liberte and STL in accordance
with their respective prorata participation interests as provided
pursuant to the Participation Agreement. LMI agrees that, pursuant to
the Management Agreement, all such items of income, revenue, and
expense have been or will be properly allocated in accordance with the
provisions of this paragraph, and all parties further agree to
promptly correct any errors in respect of the foregoing allocations
after the Effective Date by an appropriate payment from the party in
whose favor such error existed to the other party. Prior to the
Closing, LMI will produce, and the parties will approve, schedules
showing accrued and unpaid taxes and outstanding payables with respect
to the management of the Exchange Assets, including, without
limitation, site work, expenses related to obtaining and maintaining
entitlements, legal expenses, and other expenses related to the
management and liquidation of the Exchange Assets. All such expenses
will be prorated as of the Effective Date. Closing costs arising as a
direct result of the transfer of the Exchange Assets, including,
without limitation, costs associated with obtaining title commitments
and reports, escrow and recording fees, transfer taxes, and other
costs associated with the delivery of transfer and other documents,
will also be prorated between STL and Liberte in accordance with their
respective participation interests pursuant to the Participation
Agreement. The parties will each be responsible for their respective
legal expenses and the cost of any policies of title insurance that
any party, in its sole discretion, chooses to obtain.

1.6 Property Adjustment. Because the net asset value of
the STL Exchange Assets is less than the net asset value of STL's
current participation interest in the Exchange Assets by the sum of
$59,294.96, Liberte will make a cash payment to STL

-3-
<PAGE> 4
on the Effective Date in that amount plus the amount of Liberte's
share of property tax prorations. STL hereby acknowledges receipt of
such payment. Should any of the Exchange Assets be sold or otherwise
disposed of prior to the Effective Date, Liberte and STL will mutually
agree upon a satisfactory property adjustment.

2. Non-Exchange Assets.

2.1 Schedule D Assets. With respect to the Participated
Assets listed on the attached Schedule D (the "Schedule D Assets"),
Liberte and STL agree that, although the Schedule D Assets may have
future value, it is too speculative to determine as of the Effective
Date. Accordingly, the parties hereby agree that the Schedule D Assets
will not be exchanged and LMI will continue to manage the Schedule D
Assets as described in Section 4 hereof except that LMI's compensation
for such management will be as described in this paragraph, until
December 31, 1995 (the "Settlement Date"). LMI's management will focus
upon generating cash flow from such assets, whether by liquidation or
otherwise, and LMI will obtain the consent of STL and Liberte prior to
entering into any agreements or making any material expenditures with
respect to the Schedule D Assets. LMI will distribute monies generated
from the Schedule D Assets as follows: (i) payment of all expenses
associated with the relevant transaction to the extent not previously
paid; (ii) payment of ten percent of the total of such funds,
calculated on a gross basis, to LMI in full compensation for its
efforts; and (iii) payment of the balance of such funds 80% to Liberte
and 20% to STL. Effective as of the Settlement Date, STL will transfer
to Liberte its remaining interest in the Schedule D Assets, without
recourse or warranty and on an "As Is" basis, with no proration of
Property Related Liabilities, for no additional consideration.

2.2 Schedule E Assets. With respect to the Participated
Assets listed on the attached Schedule E (the "Schedule E Assets"),
Liberte and STL have agreed that, for various reasons, the Schedule E
Assets should not be exchanged. Accordingly, the Schedule E Assets
will remain as Participated Assets pursuant to the Participation
Agreement and will be managed pursuant to Section 4 hereof until the
Settlement Date. Effective as of the Settlement Date, STL will
transfer its interest in any remaining Schedule E Assets to Liberte,
without recourse or warranty and on an "As Is" basis, with no
proration of Property Related Liabilities, for no additional
consideration.

2.3 Remainder Assets. With respect to Asset Nos. 4471 and
541708 (the "Remainder Assets"), STL and Liberte will each retain its
current participation interest and each of these

-4-
<PAGE> 5
assets will continue to be Participated Assets pursuant to the
Participation Agreement. The Remainder Assets will be managed pursuant
to Section 4 hereof until they are fully liquidated.

3. Representations and Warranties.

3.1 Each party to this agreement makes the following
representations and warranties.

(a) such party is duly organized, validly
existing, and in good standing under the laws of state in
which it is organized;

(b) the execution and delivery by such party of
this Agreement and all other documents and instruments
executed and delivered by such party in connection with this
Agreement, and such party's consummation of the transactions
described in this Agreement have been duly authorized and do
not conflict with such party's charter or bylaws or, with
respect to Liberte, declaration of trust, any applicable law,
or any contractual restriction that is binding on or affects
such party;

(c) all authorizations, consents, approvals, or
other actions by, or notices or communications to, any persons
necessary for, or otherwise in connection with, the
consummation by such party of the transactions described in
this Agreement, if any, has been obtained; and

(d) this Agreement is the legal, valid, and
binding obligation of such party, enforceable in accordance
with its terms.

3.2 STL Representation and Warranty. STL hereby
represents and warrants to Liberte that, with respect to the Liberte
Exchange Assets, from and after the Closing, neither STL, nor, except
with respect to Property Related Liabilities, any third party claiming
through STL, will have any further rights, title, claims, or
interests, whether legal, beneficial, or otherwise, including, without
limitation, any participation interest.

3.3 Liberte Representation and Warranty. Liberte hereby
represents and warrants to STL that, with respect to the STL Exchange
Assets, from and after the Closing, neither Liberte, nor, except with
respect to Property Related Liabilities, any third party claiming
through Liberte, will have any further rights, title, claims, or
interests, whether legal, beneficial, or otherwise, including, without
limitation, any participation interest.

-5-
<PAGE> 6
4. Post Closing Asset Management Issues.

4.1 Participated Asset Management. The parties anticipate
that the Management Agreement will terminate on or before the
expiration of its current term by mutual agreement of the parties to
the Management Agreement. Accordingly, the parties to this Agreement
hereby agree that, with respect to the assets that will continue to be
Participated Assets after the Closing, LMI will manage such assets for
the benefit of STL and Liberte, using reasonable efforts to preserve
and generate cash flow from such assets. LMI will receive no
management fee except as specifically provided in Section 2.1 of this
Agreement with respect to the Schedule D Assets only. LMI's management
of the Remainder Assets will continue until such assets are fully
liquidated, which the parties expect will occur prior to the
Settlement Date. LMI's management of all other Participated Assets
will continue until the earlier of their liquidation or the Settlement
Date. The parties agree to cooperate with and assist each other in a
manner reasonably required to accomplish the intent and purpose of
this Agreement. Liberte and STL will continue to share revenues and
expenses associated with the Participated Assets according to their
participation interest in such assets, pursuant to the Participation
Agreement.

4.2 Contingent Liabilities; Third Party
Agreements; Escrows and Deposits. With respect to any currently
existing contingent liabilities, third party agreements, asset related
escrows and deposits, and any other benefits, liabilities, and
obligations that affect any of the parties to this Agreement or the
various nominee titleholders of the Participated Assets and that
derive from the Participated Assets or the relationships established
on account of the Participated Assets, the parties to this Agreement
will cooperate and do all things reasonably necessary to fairly and
equitably resolve or otherwise apportion and secure each currently
existing agreement, obligation, or benefit. To the extent that such
matters affect or arise on account of the Exchange Assets, the parties
will make reasonable efforts to complete such resolution prior to the
Closing. All such matters relating to the remaining Participated
Assets will be resolved as soon as reasonably possible, but in no
event later than the Settlement Date.

5. Miscellaneous.

5.1 Notices. All notices and other communications
necessary or desirable pursuant to this Agreement shall be in writing
and shall be effective on the date deposited in the United States Mail
by registered or certified mail, postage prepaid, return receipt
requested, or delivered by recognized overnight courier, personally
delivered, or sent by facsimile

-6-
<PAGE> 7
transmission, to the parties at their respective addresses as shown on
the signature page of this Agreement. Notices or communications sent
otherwise will be effective upon receipt. The parties may change their
addresses for notices in accordance with this paragraph.

5.2 All representations, warranties, rights, and
obligations contained in this Agreement shall survive the Closing.

5.3 This Agreement and the documents referred to in this
Agreement constitute the full and complete agreement of the parties
hereto with respect to the subject matter of this Agreement and
supersede any and all prior agreements with respect to such matters.

5.4 This Agreement may be amended or modified only by a
written instrument executed by all parties. This Agreement will be
governed by the laws of the state of Texas without giving affect to
the principles of conflicts of laws.

5.5 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.

5.6 No failure or delay of any party in the exercise of
any right given to such party under this Agreement shall be deemed to
be a waiver thereof. No waiver by any party of any condition under
this Agreement for its benefit shall constitute a waiver of any other
or further right, nor shall any single or partial exercise of any
right preclude any other or further exercise thereof or of any other
rights. The waiver of any breach of this Agreement shall not be deemed
to be a waiver of any other or subsequent breach of this Agreement. No
extensions of time for the performance of any obligation shall be
deemed or construed as an extension of time for the performance of any
other obligation.

5.7 Upon the written request of any party (the
"Requesting Party"), from time to time, the other party or parties
shall do, execute, acknowledge, and deliver, at the sole cost and
expense of the Requesting Party, such further acts, deeds,
conveyances, assignments, notices of assignment or transfer and
assurances as the Requesting Party may reasonably require in order to
better assure, convey, grant, assign, transfer, and confirm upon the
Requesting Party the rights now or hereafter intended to be granted
under this Agreement or any other instrument executed in connection
with this Agreement.

5.8 This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered

-7-
<PAGE> 8
shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

5.9 Each of the exhibits and schedules referred to in
this Agreement and attached to this Agreement is hereby incorporated
into this Agreement by this reference, with the same force and effect
as if set forth at length in the body of this Agreement.

5.10 If any party brings any action or suit against any
other party by reason of any breach of this Agreement on the part of
such other party, then, in such event the prevailing party shall be
entitled to have and recover from such other party all costs and
expenses of the action or suit, including, without limitation,
reasonable attorneys' fees, and court costs and expenses resulting
therefrom.

IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.

Address Liberte Investors,
a Massachusetts business trust

By: /s/ TED ENLOE
- ----------------------------------- --------------------------------
Name: Ted Enloe
- ----------------------------------- ------------------------------
Title: President
- ----------------------------------- -----------------------------

Address ST Lending, Inc.
a Delaware corporation

By: /s/ CAREY B. WICKLAND
- ----------------------------------- --------------------------------
Name: Carey B. Wickland
- ----------------------------------- ------------------------------
Title: President
- ----------------------------------- -----------------------------

Address Lomas Management, Inc.
a Nevada corporation

-8-
<PAGE> 9
Schedule A
Asset Disposition Agreement

Participated Assets

I. Exchange Assets

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
--------- ---- ----------
<S> <C> <C>
3211 R Greystone Housing
3382 R Swln, Inc.
3385 R Pavlakos/McNair Dev Co
3592 R Marsh Lane Self Storage, Inc.
3674 R Swln, Inc.
3701 R Dunning Partnership
4189 R Ventura Properties, Inc.
4439 R Village Park Homes-Venture
4553 L Blume Eastlake Ltd Partnership
540101 R Bel Tiara Ventures II
</TABLE>

II. Non Exchange Assets (Schedule D)

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
--------- ----- ----------
<S> <C> <C>
3647 L Ronald Holmes
4137 L Kenwood Homes Inc./Bill Walte
4169 L Israel Fogiel
4391 L Timbercrest Companies Inc.
4545 L Michael A. Howland & Lorraine K.
4571 L Robert K. Utley III
4583 L Gene Eidelman/Yuri Eidelman/
4587 L Ed H. Street Jr.
4604 L Hicks Road Associates L.P.
4609 L Van Holm Brian Eidelman Yuri & G
4624 L Alden Brian
4681 L James R. Stuhmer
4637 L Eddy Brunstein & Israel Fogiel &
3437 R Ike Harris
4630 L Lexington Square-Receivable
</TABLE>

III. Non Exchange Assets (Schedule E)

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
--------- ----- ----------
<S> <C> <C>
3934 R Porten Sullivan
4401 L Johnny L. Swaim
4402 L Victor R. Means Jr.
4601 R New Worth Jv. (LNCI)
4632 R Lawler (LNCI)
4644 L Highland Plaza Tax Penalty
4645 L Highland Plaza Tax & Cam Tenant
</TABLE>
<PAGE> 10
Schedule A
Asset Disposition Agreement

Participated Assets

IV. Non Exchange Assets (Remainder Assets)

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
--------- ---- ----------
<S> <C> <C>
4471 R Cal-Oaks Investors-89 Lp
541708 L 41st Street East Development Co.
</TABLE>
<PAGE> 11
Schedule B
Asset Disposition Agreement

STL Exchange Assets

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
--------- ---- ----------
<S> <C> <C>
3211 R Greystone Housing
3395 R Pavlakoa/McNair Dev Co
3592 R Marsh Lane Self Storage, Inc.
3701 R Dunning Partnership
4553 L Blume Eastlake Ltd Partnership
540101 R Bel Tiara Ventures II
</TABLE>
<PAGE> 12
EXHIBIT B-1

MASTER ASSIGNMENT

LIBERTE INVESTORS, a Massachusetts business trust ("Assignor"), for
and in consideration of TEN DOLLARS ($10.00) and other good and valuable
consideration paid to Assignor by ST LENDING, INC., a Delaware corporation
("Assignee"), the receipt and sufficiency of which are hereby acknowledged,
hereby CONVEYS, GRANTS, TRANSFERS and ASSIGNS unto Assignee, without recourse
or warranty except as otherwise provided herein, all of the following assets
(the "STL Assets"):

Section 1. (a) The undivided participation interests of Assignor under
the Participation Agreement (as hereinafter defined), including, without
limitation, any and all participation certificates evidencing such interests
(the "Participation Certificates"), in and to the unpaid amounts of principal
and interest of the mortgage loans identified on the attached Schedule I (the
"Participated Mortgage Loans"), (b) any other rights or interests of Assignor
in and to the Participated Mortgage Loans or Participation Certificates or
payments thereunder, and (c) any other rights of Assignor in and to the
promissory notes evidencing such Participated Mortgage Loans (the "Participated
Notes"), and in and to any and all mortgages, assignments of leases,
guaranties, letters of credit, pledged accounts, surety bonds or arrangements
and all other agreements, documents, instruments or deposits evidencing,
insuring or securing the Participated Mortgage Loans or the Participation
Certificates.

Section 2. To the extent not conveyed pursuant to Section 1 above, (a)
all of the undivided participation interests of Assignor (the "Participated
Owned Property Interests") in and to all proceeds from the parcels of real
property identified on the attached Schedule II, as evidenced by the Proceeds
Agreement (as defined below) or otherwise, (b) any other rights or interests of
Assignor in and to the Participated Owned Property Interests, including,
without limitation, the participation certificates evidencing such interest,
and (c) any other rights or interests of Assignor in and to all other
agreements, documents, instruments or deposits evidencing, insuring or
otherwise relating to the Participated Owned Property Interests.

Section 3. The interest of Assignor in and to any and all
participation, servicing, nominee, proceeds or similar agreements related to
the Participated Mortgage Loans and the Participated Owned Property Interests,
including, without limitation, the Participation Agreement dated July 28,
1970 (the "Participation Agreement") between Lomas Financial Corporation
("LFC") and Assignor (formerly known as Lomas & Nettleton Mortgage Investors)
and the Proceeds Agreement dated August 1, 1990 among LFC, Assignor (formerly
known as Lomas & Nettleton Mortgage Investors) and certain affiliates of LFC
(the "Proceeds Agreement").

-1-
<PAGE> 13
REPRESENTATIONS AND WARRANTIES OF ASSIGNOR

Assignor represents and warrants to Assignee and its successors and
assigns that:

(i) Assignor is a business trust duly organized, validly existing
and in good standing under the laws of the State of
Massachusetts;

(ii) Assignor has full power and authority to execute and deliver
this Master Assignment, and this Master Assignment has been
duly authorized, executed and delivered by Assignor and is
valid, binding and enforceable against Assignor in accordance
with its terms;

(iii) Neither the execution nor the delivery of this Master
Assignment by Assignor will (a) conflict with Assignor's
Declaration of Trust, (b) violate, conflict with, or result in
any breach of any terms or provisions of, or constitute a
default under, any material contract, agreement or instrument
to which Assignor or its affiliates is a party or by which
Assignor or its affiliates or any of their properties are
bound or (c) violate, conflict with or breach any provision of
any applicable law, rule or regulation;

(iv) Assignor (a) is the sole legal and beneficial owner of the
assets conveyed hereby and (b) has good title thereto, free
and clear of any and all liens, encumbrances, participation
interests, charges, claims or equity interests of any nature,
except as disclosed in writing to Assignee contemporaneously
herewith.

GOVERNING LAW

THIS MASTER ASSIGNMENT SHALL BE DEEMED TO BE A CONTRACT UNDER THE INTERNAL LAWS
OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS,
AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF SAID STATE, EXCEPT AS MAY OTHERWISE BE REQUIRED BY MANDATORY PROVISIONS
OF LAW.

EXECUTED as of February 28, 1995.

ASSIGNOR:

LIBERTE INVESTORS,
a Massachusetts business trust

By: /s/ TED ENLOE
--------------------------------
Name: Ted Enloe
------------------------------
Title: President
-----------------------------

-2-
<PAGE> 14
MASTER ASSIGNMENT BETWEEN
LIBERTE INVESTORS (ASSIGNOR)
AND ST LENDING, INC. (ASSIGNEE)

SCHEDULE I

PARTICIPATED MORTGAGE LOANS

STL ASSET NO. CURRENT BORROWER NAME
- ------------- ---------------------
<S> <C>
4553 Blume Eastlake Ltd Partnership
</TABLE>

-3-
<PAGE> 15
MASTER ASSIGNMENT BETWEEN
LIBERTE INVESTORS (ASSIGNOR)
AND ST LENDING, INC. (ASSIGNEE)

SCHEDULE II

PARTICIPATED OWNED PROPERTY INTERESTS

<TABLE>
<CAPTION>
STL ASSET NO. CURRENT ASSET NAME
------------- ------------------
<S> <C>
3211 Greystone Housing

3395 Pavlakos/Mcnair Dev Co

3592 Marsh Lane Self Storage, Inc.

3701 Dunning Partnership

** 540101 Bel Tiara Ventures II
</TABLE>

** Denotes property reported as foreclosure in substance

-4-
<PAGE> 16
EXHIBIT B-2

Loan No. 4553/WA

ASSIGNMENT OF NOTE AND MORTGAGE

STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS )

LOMAS MORTGAGE USA, INC., a Connecticut corporation ("Assignor"), for
Ten Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Assignor, hereby assigns unto ST
LENDING, INC., a Delaware corporation, ("Assignee"), all of its right title and
interest in and to the certain Promissory Note dated January 6, 1989, in the
original principal sum of $9,600,000.00 (the "Loan"), executed on behalf of
BLUME EASTLAKE LIMITED PARTNERSHIP ("Borrower"), and payable to the order of
Assignor together with all of its right, title and interest in and to that
certain Washington Deed of Trust (with Security Agreement and Assignment of
Rents and Leases) dated January 6, 1989 (the "Mortgage") and recorded on
January 13, 1989 in the County of King and the State of Washington, as
Instrument No. 8901131266, as such Mortgage may have been modified or amended
from time to time, covering certain real property located in the County of King
and the State of Washington, being more particularly described on Exhibit A
attached hereto, including any and all extensions, renewals, and modifications
thereof, together with all of the right, title and interest of Assignor in and
to (i) the instruments described on the attached Schedule I, and (ii) any and
all other documents evidencing, securing or pertaining to the Loan, and all
ancillary documents, including, without limitation, all rights under any
applicable mortgagee or loan policy of title insurance issued for the benefit
of Assignor, relating or pertaining to the Loan.

This Assignment of Note and Mortgage is made without recourse and
without any representation or warranty, either express or implied.

TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns
forever.

Assignor hereby further covenants and agrees that Assignor will, at
any time and from time to time, upon written request therefor and at Assignee's
sole expense, execute and deliver to Assignee such other documents and
assurances as Assignee may reasonably request in order to effect the purposes
of this Assignment of Note and Mortgage and carry out the provisions hereof.

1
<PAGE> 17
Loan No. 4553/WA

IN WITNESS WHEREOF, Assignor has duly executed this Assignment
effective as of the ___ day of February, 1995.

LOMAS MORTGAGE USA, INC.,
a Connecticut corporation

By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------

STATE OF TEXAS )
)
COUNTY OF DALLAS )

On February __, 1995, before me, a Notary Public in and for the State
of Texas, personally appeared ________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that _he executed
the same in h__ authorized capacity, and that by h__ signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.

WITNESS my hand and official seal.

-----------------------------------
Notary Public in and for the
State of Texas
Printed Name:
----------------------
My Commission Expires:
-------------

2
<PAGE> 18
EXHIBIT B-2

WHEN RECORDED, RETURN TO:

Audrey Crafton
Lomas Financial Group
Office of the General Counsel
Post Office Box 655644
Dallas, Texas 75265-5644

DOCUMENT PREPARED BY:

Barbara F. Nye
Lomas Financial Group
Office of the General Counsel
Post Office Box 655644
Dallas, Texas 75265-5644

- --------------------------------------------------------------------------------
(Space above line for Recorder's Use Only)

No. 3674/TX

SPECIAL WARRANTY DEED

THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS )

LOMAS MORTGAGE USA, INC., a Connecticut ("Grantor"), whose mailing
address is 1420 Viceroy, P.O. Box 650096, Dallas, Texas 75265, for and in
consideration of (i) the sum of Ten Dollars ($10.00) and other good and
valuable consideration paid by LIBERTE INVESTORS, a Massachusetts business
trust ("Grantee"), whose mailing address is __________________________________
________________________________________________, the receipt and sufficiency
of which consideration are hereby acknowledged, has GRANTED, BARGAINED, SOLD,
and CONVEYED and by these presents does hereby GRANT, BARGAIN, SELL and CONVEY
unto Grantee all of that certain real property located in Bexar County, Texas,
and being more particularly described in Exhibit A attached hereto and made a
part hereof for all purposes, together with all improvements thereon and all
and singular the rights, benefits, privileges, easements, tenements,
hereditaments, and appurtenances thereon or in anywise appertaining thereto
(said real property, together with such improvements and such rights, benefits,
privileges, easements, tenements, hereditaments and appurtenances are
hereinafter collectively referred to as the "Property").

This Special Warranty Deed is made and accepted expressly subject to
those exceptions set forth in Exhibit B attached hereto and made a part hereof
for all purposes, and to all Property Related Liabilities as such term is
defined in that certain Asset Disposition Agreement dated as of February 28,
1995, by and among Liberte Investors, Lomas Management, Inc., and ST Lending,
Inc. (the "Permitted Exceptions").

1
<PAGE> 19
No. 3674/TX

TO HAVE AND TO HOLD the Property, subject to the Permitted Exceptions
as aforesaid, unto Grantee, its successors and assigns, forever, and Grantor
does hereby bind itself, its successors and assigns, to WARRANT AND FOREVER
DEFEND all and singular the Property, unto Grantee, its successors and assigns,
against every person whomsoever lawfully claiming or to claim the same, or any
part thereof by, through, or under Grantor, but not otherwise.

Except as specifically stated herein Grantor hereby specifically
disclaims any warranty, guaranty, or representation, oral or written, past,
present or future, of, as to, or concerning (i) the nature and condition of the
Property, including but not by way of limitation, the water, soil, geology and
the suitability thereof, and of the Property, for any and all activities and
uses which Grantee may elect to conduct thereon or any improvements Grantee may
elect to construct thereon, income to be derived therefrom or expenses to be
incurred with respect thereto, or any obligations or any other matter or thing
relating to or affecting the same; (ii) the manner of construction and
condition and state of repair or lack of repair of any improvements located
thereon; (iii) the nature and extent of any easement, right-of-way, lease,
possession, lien, encumbrance, license, reservation, condition or otherwise;
and (iv) the compliance of the Property, or the operation of the Property with
any laws, rules, ordinances, or regulations of any government or other body. IN
CONNECTION WITH THE CONVEYANCE OF THE PROPERTY AS PROVIDED FOR HEREIN, GRANTOR
HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES OR COVENANTS OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE QUALITY OR CONDITION OF THE PROPERTY, THE SUITABILITY OF THE PROPERTY FOR
ANY AND ALL ACTIVITIES AND USES WHICH GRANTEE MAY CONDUCT THEREON, COMPLIANCE
BY THE PROPERTY WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
APPLICABLE GOVERNMENTAL AUTHORITY OR HABITABILITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, AND SPECIFICALLY, GRANTOR DOES NOT MAKE ANY
REPRESENTATIONS REGARDING HAZARDOUS WASTE, AS DEFINED BY THE LAWS OF THE STATE
OF TEXAS AND THE REGULATIONS ADOPTED THEREUNDER OR THE U.S. ENVIRONMENTAL
PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, OR THE DISPOSAL OF ANY
HAZARDOUS WASTE OR OTHER HAZARDOUS OR TOXIC SUBSTANCES IN OR ON THE PROPERTY.
The conveyance of the Property as provided for herein is made on an "AS IS" and
"WITH ALL FAULTS" basis.

Grantee, by its acceptance hereof, does hereby assume and agree to pay
any and all ad valorem taxes and special assessments pertaining to the Property
for calendar year of Closing and subsequent years, there having been a proper
proration of ad valorem taxes for the current calendar year between Grantor and
Grantee.

2
<PAGE> 20
No. 3674/TX

IN WITNESS WHEREOF, this Special Warranty Deed has been executed and
delivered to be effective for all purposes as of the 28th day of February,
1995.

GRANTOR:

LOMAS MORTGAGE USA, INC.,
a Connecticut corporation

By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------

THE STATE OF TEXAS )
)
COUNTY OF DALLAS )

This instrument was acknowledged before me on ________, 1995, by
________________________________, ________________________ of LOMAS MORTGAGE
USA, INC., a Connecticut corporation, on behalf of said corporation.

-----------------------------------
Notary Public, State of Texas
Printed Name:
----------------------
My Commission Expires:
-------------

3
<PAGE> 21
Schedule C
Asset Disposition Agreement

Liberte Exchange Assets

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
--------- ---- ----------
<S> <C> <C>
3382 R Swln, Inc.
3674 R Swln, Inc.
4189 R Ventura Properties, Inc.
4439 R Village Park Homes-Venture II
</TABLE>
<PAGE> 22
EXHIBIT C-1

MASTER ASSIGNMENT

ST LENDING, INC., a Delaware corporation ("Assignor"), for and in
consideration of TEN DOLLARS ($10.00) and other good and valuable consideration
paid to Assignor by LIBERTE INVESTORS, a Massachusetts business trust
("Assignee"), the receipt and sufficiency of which are hereby acknowledged,
hereby CONVEYS, GRANTS, TRANSFERS and ASSIGNS unto Assignee, without recourse
or warranty except as otherwise provided herein, all of the following assets
(the "STL Assets"):

Section 3. The interest of Assignor in and to any and all
participation, servicing, nominee, proceeds or similar agreements related to
the Participated Mortgage Loans and the Participated Owned Property Interests,
including, without limitation, the Participation Agreement dated July 28, 1970
(the "Participation Agreement") between Lomas Financial Corporation ("LFC") and
Assignor (formerly known as Lomas & Nettleton Mortgage Investors) and the
Proceeds Agreement dated August 1, 1990 among LFC, Assignor (formerly known as
Lomas & Nettleton Mortgage Investors) and certain affiliates of LFC (the
"Proceeds Agreement").

-1-
<PAGE> 23
REPRESENTATIONS AND WARRANTIES OF ASSIGNOR

Assignor represents and warrants to Assignee and its
successors and assigns that:

(i) Assignor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware;

GOVERNING LAW

EXECUTED as of February 28, 1995.

ASSIGNOR:

ST LENDING, INC.,
a Delaware corporation

By: /s/ CANEY B. WICKLAND
--------------------------------
Name: Caney B. Wickland
------------------------------
Title: President
-----------------------------

-2-
<PAGE> 24
MASTER ASSIGNMENT BETWEEN
ST LENDING, INC. (ASSIGNOR)
AND LIBERTE INVESTORS (ASSIGNEE)

SCHEDULE I
PARTICIPATED MORTGAGE LOANS

None

-4-
<PAGE> 25
MASTER ASSIGNMENT BETWEEN
ST LENDING, INC. (ASSIGNOR)
AND LIBERTE INVESTORS (ASSIGNEE)

SCHEDULE II
PARTICIPATED OWNED PROPERTY INTERESTS

<TABLE>
<CAPTION>
ASSET NO. CURRENT ASSET NAME
--------- ------------------
<S> <C>
3383 Swln, Inc.

3674 Swln, Inc.

4184 Ventura Properties, Inc.

4439 Village Parks Homes-Venture II
</TABLE>

-5-
<PAGE> 26
EXHIBIT C-2

WHEN RECORDED, MAIL TO:

Audrey Crafton
Lomas Financial Group
Office of the General Counsel
Post Office Box 655644
Dallas, Texas 75265-5644

DOCUMENT PREPARED BY:

Barbara F. Nye
Lomas Financial Group
Office of the General Counsel
Post Office Box 655644
Dallas, Texas 75265-5644

- --------------------------------------------------------------------------------
(Space above this line for Recorder's Use)

No. 3395/FL

SPECIAL WARRANTY DEED

LOMAS MORTGAGE USA, INC. (formerly, The Lomas & Nettleton Company,
also known as, Lomas & Nettleton Company), a Connecticut corporation
("Grantor"), whose mailing address is 1420 Viceroy, P.O. Box 650096, Dallas,
Texas 75265, for and in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration paid by ST LENDING, INC., a Delaware
corporation ("Grantee"), whose mailing address is 1420 Viceroy, P.O. Box
650096, Dallas, Texas 75265, the receipt and sufficiency of which consideration
are hereby acknowledged, has GRANTED, BARGAINED, SOLD, and CONVEYED and by
these presents does hereby GRANT, BARGAIN, SELL and CONVEY unto Grantee all of
that certain real property located in Brevard County, Florida, and being more
particularly described in Exhibit A attached hereto and made a part hereof for
all purposes, together with all improvements thereon and all and singular the
rights, benefits, privileges, easements, tenements, hereditaments, and
appurtenances thereon or in anywise appertaining thereto (said real property,
together with such improvements and such rights, benefits, privileges,
easements, tenements, hereditaments and appurtenances are hereinafter
collectively referred to as the "Property").

<PAGE> 27
No. 3395/FL

Except as specifically stated herein Grantor hereby specifically
disclaims any warranty, guaranty, or representation, oral or written, past,
present or future, of, as to, or concerning (i) the nature and condition of the
Property, including but not by way of limitation, the water, soil, geology and
the suitability thereof, and of the Property, for any and all activities and
uses which Grantee may elect to conduct thereon or any improvements Grantee may
elect to construct thereon, income to be derived therefrom or expenses to be
incurred with respect thereto, or any obligations or any other matter or thing
relating to or affecting the same; (ii) the manner of construction and
condition and state of repair or lack of repair of any improvements located
thereon; (iii) the nature and extent of any easement, right-of-way, lease,
possession, lien, encumbrance, license, reservation, condition or otherwise;
and (iv) the compliance of the Property, or the operation of the Property with
any laws, rules, ordinances, or regulations of any government or other body. IN
CONNECTION WITH THE CONVEYANCE OF THE PROPERTY AS PROVIDED FOR HEREIN, GRANTOR
HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES OR COVENANTS OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE QUALITY OR CONDITION OF THE PROPERTY, THE SUITABILITY OF THE PROPERTY FOR
ANY AND ALL ACTIVITIES AND USES WHICH GRANTEE MAY CONDUCT THEREON, COMPLIANCE
BY THE PROPERTY WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
APPLICABLE GOVERNMENTAL AUTHORITY OR HABITABILITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, AND SPECIFICALLY, GRANTOR DOES NOT MAKE ANY
REPRESENTATIONS REGARDING HAZARDOUS WASTE, AS DEFINED BY THE LAWS OF THE STATE
OF FLORIDA AND THE REGULATIONS ADOPTED THEREUNDER OR THE U.S. ENVIRONMENTAL
PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, OR THE DISPOSAL OF ANY
HAZARDOUS WASTE OR OTHER HAZARDOUS OR TOXIC SUBSTANCES IN OR ON THE PROPERTY.
The conveyance of the Property as provided for herein is made on an "AS IS" and
"WITH ALL FAULTS" basis.

2
<PAGE> 28
No. 3395/FL

IN WITNESS WHEREOF, this Special Warranty Deed has been executed and
delivered to be effective for all purposes as of the 28th day of February,
1995.

GRANTOR:

LOMAS MORTGAGE USA, INC.,
(formerly, The Lomas & Nettleton Company,
Signed, sealed, and also known as, Lomas & Nettleton Company), a
delivered in the Connecticut corporation
presence of:
By:
- ------------------------------ --------------------------------
Name:
- ------------------------------ ------------------------------
Print Name of Witness Title:
-----------------------------

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

- ------------------------------
Print Name of Witness

THE STATE OF TEXAS )
)
COUNTY OF DALLAS )

This instrument was acknowledged before me on ________, 1995, by
________________, ________________ of LOMAS MORTGAGE USA, INC. (formerly, The
Lomas & Nettleton Company, also known as, Lomas & Nettleton Company), a
Connecticut corporation, on behalf of said corporation. He is personally known
to me or has produced ________ as identification and did not take an oath.

-----------------------------------
Notary Public, State of Texas
Printed Name:
----------------------
My Commission Expires:
-------------

3
<PAGE> 29
Schedule D
Asset Disposition Agreement

Non Exchange Assets

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
--------- ---- ----------
<S> <C> <C>
3647 L Ronald Holmes
4137 L Kenwood Homes Inc./Bill Walte
4169 L Israel Fogiel
4391 L Timbercrest Companies Inc.
4545 L Michael A. Howland & Lorraine K.
4571 L Robert K. Utley III
4583 L Gene Eidelman/Yuri Eidelman/
4587 L Ed H. Street Jr.
4604 L Hicks Road Associates L.P.
4609 L Van Holm Brian Eidelman Yuri & G
4624 L Alden Brian
4681 L James R. Stuhmer
4637 L Eddy Brunstein & Israel Fogiel &
3437 R Ike Harris
4630 L Lexington Square-Receivable
</TABLE>
<PAGE> 30
Schedule E
Asset Disposition Agreement

Non Exchange Assets

<TABLE>
<CAPTION>
Asset
Asset No. Type Asset Name
- --------- ---- ----------
<S> <C> <C>
3934 R Porten Sullivan
4401 L Johnny L. Swaim
4402 L Victor R. Means Jr.
4601 R New Worth Jv. (LNCI)
4632 R Lawler (LNCI)
4644 L Highland Plaza Tax Penalty
4645 L Highland Plaza Tax & Cam Tenant
</TABLE>

<PAGE> 1
EXHIBIT 10.10

LIBERTE INVESTORS
1995 EQUITY INCENTIVE PLAN

ARTICLE I
NAME AND PURPOSE

1.1 Name. The name of this Plan is the "Liberte Investors 1995
Equity Incentive Plan."

1.2 Purpose. The purpose of the Plan is to enhance the
profitability and value of the Company for the benefit of its shareholders by
providing equity ownership opportunities and performance based incentives to
better align the interests of Trustees, officers and key employees with those
of shareholders. The Plan is also designed to enhance the profitability and
value of the Company for the benefit of its shareholders by providing equity
and cash awards to attract, retain and motivate Trustees, officers and other
key employees who make important contributions to the success of the Company.

ARTICLE II
DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION

2.1 General Definitions. The following words and phrases, when
used in the Plan, unless otherwise specifically defined or unless the context
clearly otherwise requires, shall have the following respective meanings:

(a) Affiliate. A Parent, or Subsidiary of the Company or
any other entity designated by the Committee in which the Company owns
at least a 50% interest (including, but not limited to, partnerships
and joint ventures).

(b) Agreement. The document which evidences the grant of
any Benefit under the Plan and which sets forth the Benefit and the
terms, conditions and provisions of, and restrictions relating to,
such Benefit.

(d) Board. The Board of Trustees of the Company.

(e) Change of Control. (i) The acquisition at any time
by a "person" or "group" (as that term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) (excluding, for this purpose, the
Company or any Subsidiary or any employee benefit plan of the Company
or any Subsidiary) of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly, of securities
representing 25% or more of the combined voting power in the election
of trustees of the then-outstanding securities of the Company or any
successor of the Company; (ii) the termination of service as trustees,
for any reason other than death, disability or retirement from the
Board during any period of two consecutive years or less, of
individuals who at the beginning of such period constituted a majority
of the Board, unless the election of or nomination for election of
each new trustee during such period was approved by a vote of at least
a majority of the trustees still in office who were trustees at the
beginning of the period; (iii) approval by the shareholders of the
Company of any merger or consolidation or statutory share exchange as
a result of which the Shares of Beneficial Interest shall be changed,
converted or exchanged (other

-1-
<PAGE> 2
than a merger or share exchange with a wholly-owned Subsidiary of the
Company) or liquidation of the Company or any sale or disposition of
50% or more of the assets or earning power of the Company; or (iv)
approval by the shareholders of the Company of any merger or
consolidation or statutory share exchange to which the Company is a
party as a result of which the persons who were shareholders of the
Company immediately prior to the effective date of the merger or
consolidation or statutory share exchange shall have beneficial
ownership of less than 50% of the combined voting power in the
election of directors or trustees of the surviving entity following
the effective date of such merger or consolidation or statutory share
exchange; provided, however, that no Change in Control shall be deemed
to have occurred if, prior to such time as a Change in Control would
otherwise be deemed to have occurred, the Board deems otherwise. A
"Change in Control" shall not include any reduction in ownership of an
Affiliate so long as the entity continues to meet the definition of an
Affiliate as contained in this Section 2.1.

(f) Code. The Internal Revenue Code of 1986, as amended.
Any reference to the Code includes the regulations promulgated
pursuant to the Code.

(g) Company. Liberte Investors, a Massachusetts business
trust.

(h) Committee. The Company's Compensation Committee,
initially consisting of Gene H. Bishop and Edward W. Rose III, or its
successor.

(i) Effective Date. The date that the Plan is approved
by the Board, provided that it is also approved by the shareholders of
the Company within one year after approval by the Board. Any grants of
Benefits prior to the approval by the shareholders of the Company
shall be contingent on such subsequent approval, and shall be
retroactively null and void if such approval is not obtained.

(j) Employee. Any employee, director, general partner,
trustee (of a business trust), officer, consultant or advisor of the
Employer, provided that bona fide services are rendered by such
consultants and advisors and such services rendered by consultants and
advisors are not in connection with the offer or sale of securities in
a capital-raising transaction.

(k) Employer. The Company and all Affiliates.

(l) Exchange Act. The Securities Exchange Act of 1934,
as amended.

(m) Fair Market Value. The closing price of a Share on
the New York Stock Exchange on a given date, or, in the absence of
sales on a given date, the closing price on the New York Stock
Exchange on the last day on which a sale occurred prior to such date.

(n) Fiscal Year. The fiscal year of the Company ending
each June 30.

(o) ISO. An Incentive Stock Option as defined in Section
422 of the Code.

-2-

<PAGE> 3
(p) NQSO. Non-Qualified Stock Option, which is an Option
that does not meet the statutory requirements of an ISO.

(q) Option. An option to purchase Shares granted under
the Plan.

(r) Other Share Based Award. An award under ARTICLE XVII
that is valued in whole or in part by reference to, or is otherwise
based on, Shares.

(s) Parent. Any corporation (other than the Company or a
Subsidiary) in an unbroken chain of corporations ending with the
Company, if, at the time of the grant of an Option or other Benefit,
each of the corporations (other than the Company or a Subsidiary) owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

(t) Participant. An Employee who is granted a Benefit
under the Plan. Benefits may be granted only to Employees.

(u) Performance Share. A Share awarded to a Participant
under ARTICLE XVI of the Plan.

(v) Plan. The Liberte Investors 1995 Equity Incentive
Plan, as amended, modified or supplemented from time to time.

(w) Restricted Shares. Shares issued under ARTICLE XV of
the Plan.

(x) Rule 16b-3. Rule 16b-3 promulgated by the SEC under
the Exchange Act or any successor rule in effect from time to time.

(y) SEC. The Securities and Exchange Commission.

(z) Share. A Share of Beneficial Interest in the Company.

(aa) Share of Beneficial Interest. The Company's Shares
of Beneficial Interest, no par value, or any other interest into which
such shares may be reconstituted.

(bb) SAR. A Stock Appreciation Right, which is the right
to receive an amount equal to the appreciation, if any, in the Fair
Market Value of a Share from the date of the grant of the right to the
date of its payment.

(cc) Subsidiary. Any corporation, other than the Company,
in an unbroken chain of corporations beginning with the Company if, at
the time of grant of an Option or other Benefit, each of the
corporations, other than the last corporation in the unbroken chain,
owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such
chain.

(dd) Trustee. A Trustee of the Company or, if
reconstituted as, or if the successor to the Company is, a
corporation, a director of the Company or such successor.

-3-

<PAGE> 4
2.2 Other Definitions. In addition to the above definitions,
certain words and phrases used in the Plan and any Agreement may be defined in
other portions of the Plan or in such Agreement.

2.3 Conflicts in Plan. In the case of any conflict in the terms of
the Plan, or between the Plan and an Agreement, relating to a Benefit, the
provisions in the ARTICLE of the Plan which specifically grants such Benefit
shall control those in a different ARTICLE or in such Agreement.

ARTICLE III
SHARES OF BENEFICIAL INTEREST

3.1 Number of Shares. The number of Shares which may be issued or
sold or for which Options, SARs, Performance Shares or Other Share Based Awards
may be granted under the Plan shall be 1,500,000. Such Shares may be
authorized but unissued Shares, reacquired Shares, Shares acquired on the open
market specifically for distribution under this Plan, or any combination
thereof.

3.2 Reusage. If an Option or SAR expires or is terminated,
surrendered or canceled without having been fully exercised, if Restricted
Shares or Performance Shares are forfeited, or if any other grant ultimately
results in any Shares not being issued, the unused Shares covered by any such
Benefit shall again be available for grant under the Plan to any Participant.

3.3 Adjustments. If there is any change in the Shares of
Beneficial Interest of the Company by reason of any stock split, stock
dividend, spinoff, split-up, spin-out, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, or any other similar
transaction, the number of shares available for grant under the Plan or subject
to or granted pursuant to a Benefit and the price thereof, as applicable, shall
be appropriately adjusted by the Committee.

ARTICLE IV
ELIGIBILITY

4.1 Determination By Committee. The Participants and the Benefits
they receive under the Plan shall be determined by the Committee in its sole
discretion. In making its determinations, the Committee shall consider past,
present and expected future contributions of Participants and potential
Participants to the Employer. Members of the Committee and any other persons
whose participation in the Plan (i) would cause disqualification of this or any
other benefit plan intended to be qualified under Rule 16b-3 or (ii) would
result in the Company being unable to take advantage of Code Section 162(m) are
ineligible to participate in the Plan. No person shall have any right to
participate in the Plan. Any person selected by the Committee for
participation during any one period will not by virtue of such participation
have the right to be selected as a Participant for any other period. No
Participant shall be granted Benefits under the Plan with respect to more than
1,500,000 Shares in any calendar year (subject to adjustment as provided in
Section 3.3 hereof).

ARTICLE V
ADMINISTRATION

5.1 Committee. The Plan shall be administered by the Committee.
The Committee shall consist of two or more members of the Board who are
"disinterested persons" as defined in Rule 16b-3 and are "outside directors" as
defined in Code

-4-

<PAGE> 5
Section 162(m) and the regulations thereunder. The Committee shall initially
consist of Mr. Gene H. Bishop and Mr. Edward W. Rose III.

5.2 Authority. Subject to the terms of the Plan, the Committee
shall have sole discretionary authority to:

(a) determine the individuals to whom Benefits are
granted, the type and amounts of Benefits to be granted and the date
of issuance and duration of all such grants;

(b) determine the terms, conditions and provisions of,
and restrictions relating to, each Benefit granted;

(d) prescribe, amend and rescind rules and regulations
relating to the Plan;

(e) determine the content and form of all Agreements;

(f) determine all questions relating to Benefits under
the Plan;

(g) maintain accounts, records and ledgers relating to
Benefits;

(h) maintain records concerning its decisions and
proceedings; and

(i) do and perform all acts which it may deem necessary
or appropriate for the administration of the Plan and carry out the
purposes of the Plan.

5.3 Decisions of Committee. All decisions made by the Committee
pursuant to the provisions hereof shall be final and binding on all persons.

ARTICLE VI
AMENDMENT OF PLAN

6.1 Power of Committee. Subject to Article VIII hereof, the
Committee shall have the sole right and power to amend the Plan at any time and
from time to time; provided, however, that the Committee may not amend the
Plan, without approval of the shareholders of the Company, in a manner which
would:

(a) cause Options which are intended to qualify as ISOs
to fail to qualify;

(b) cause the Plan to fail to meet the requirements of
Rule 16b-3;

(c) violate any applicable rule, regulation, or procedure
of any national securities exchange or securities association upon
which any securities of the Company are listed (or any listing
agreement with any such securities exchange or securities
association); or

(d) violate applicable law.

-5-

<PAGE> 6
ARTICLE VII
TERM AND TERMINATION OF PLAN

7.1 Term. The Plan shall commence as of the Effective Date. No
Benefit shall be granted pursuant to the Plan on or after the tenth anniversary
date of the Effective Date, but Benefits granted prior to such tenth
anniversary may extend beyond that date to the date(s) specified in the
Agreement(s) covering such Benefits.

7.2 Termination. Subject to ARTICLE VIII, the Plan may be
terminated at any time by the Committee.

ARTICLE VIII
MODIFICATION OR TERMINATION OF BENEFITS

8.1 General. Except as may be provided in an Agreement, any
Benefit granted may be converted, modified, forfeited or canceled,
prospectively or retroactively, in whole or in part, by the Committee in its
sole discretion, but no such action may impair the rights of any Participant
without his or her consent. Except as may be provided in an Agreement, the
Committee may, in its sole discretion, in whole or in part, waive any
restrictions or conditions applicable to, or accelerate the vesting of, any
Benefit.

ARTICLE IX
CHANGE OF CONTROL

9.1 Right of Committee. The occurrence of a Change of Control
shall not limit the Committee's authority to take any action, in its sole
discretion, permitted hereunder. The Committee, in its sole discretion, may
specify in any Agreement the effect a Change of Control will have on such
Agreement.

ARTICLE IX
AGREEMENTS AND CERTAIN BENEFITS

10.1 Grant Evidenced by Agreement. The granting of any Benefit
shall be subject to, and conditioned upon, the recipient's execution of an
Agreement, which shall describe the specific Benefit granted and the terms and
conditions of such Benefit. Except as otherwise provided in an Agreement, all
capitalized terms used in an Agreement shall have the same meaning as in the
Plan, and any Agreement shall be subject to all of the terms of the Plan.

10.2 Provisions of Agreement. Each Agreement shall contain such
provisions as the Committee shall determine in its sole discretion to be
necessary, desirable and appropriate for the Benefit granted which may include,
but not necessarily be limited to, the following: description of the type of
Benefit; the Benefit's duration; its transferability; if an Option, the
exercise price, the exercise period and the person or persons who may exercise
the Option; the effect upon such Benefit of the Participant's death,
disability, change of duties or termination of employment; the Benefit's
conditions; when, if, and how any Benefit may be forfeited, converted into
another Benefit, modified, exchanged for another Benefit, or replaced; and the
restrictions on any Shares purchased or granted under the Plan.

-6-

<PAGE> 7
ARTICLE XI
TANDEM AWARDS

11.1 Tandem Awards. Benefits may be granted by the Committee in
its sole discretion individually or in tandem, provided, however, that no
Benefit except SARs may be granted in tandem with an ISO.

ARTICLE XII
PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING

12.1 Payment. Upon the exercise of an Option or in the case of any
other Benefit that requires a payment by a Participant to the Company, the
amount due the Company is to be paid:

(a) in cash;

(b) by the surrender of all or part of a Benefit
(including the Benefit being exercised);

(c) by the tender to the Company of Shares owned by the
Participant and registered in his or her name having a Fair Market
Value equal to the amount due to the Company;

(d) in other property, rights and credits, deemed
acceptable by the Committee including the Participant's promissory
note; or

(e) by any combination of the payment methods specified
in (a) through (d) above.

Notwithstanding the foregoing, any method of payment other than in
cash may be used only with the consent of the Committee or if and to the extent
so provided in an Agreement.

12.2 Dividend Equivalents. Grants of Benefits may include dividend
or dividend equivalent payments or dividend credit rights, to the extent so
provided in an Agreement.

12.3 Optional Deferral. The right to receive any Benefit under the
Plan may, at the request of the Participant made before any Benefit is
otherwise due or payable, be deferred for such period and upon such terms as
the Committee shall determine, which may include crediting of interest on
deferrals of cash and crediting of dividends on deferrals denominated in
Shares.

12.4 Code Sections 162(m) and 280G. The Committee, in its sole
discretion, may require that one or more Agreements contain provisions which
provide that, in the event Sections 162(m) or 280G of the Code, or any
successor provision relating to employee remuneration, would operate to
disallow a deduction by the Company for all or part of any Benefit under the
Plan, a Participant's receipt of the portion of such Benefit that would not be
deductible by the Company shall be either (a) deferred until the next
succeeding year or years in which the Participant's remuneration does not
exceed the limit set forth in such provision of the Code, or (b) if necessary,
canceled, forfeited, restricted, or limited.

-7-

<PAGE> 8
12.5 Withholding. The Company may, at the time any distribution is
made under the Plan, whether in cash or in Shares, or at the time any Option is
exercised, withhold from such distribution or Shares issuable upon the exercise
of an Option, any amount necessary to satisfy federal, state and local
withholding requirements with respect to such distribution or exercise of such
Option. Such withholding may be satisfied, at the Committee's option, either
by cash, transfer of previously owned Shares or other property acceptable to
the Committee, or the Company's withholding of Shares.

ARTICLE XIII
OPTIONS

13.1 Types of Options. It is intended that both ISOs and NQSOs may
be granted by the Committee under the Plan.

13.2 Option Price. The purchase price for Shares under any ISO
shall be no less than the Fair Market Value of the Shares at the time the
Option is granted. For the purposes of this provision, Fair Market Value shall
be determined without regard to any restriction, other than a restriction which
by its terms will never lapse.

13.3 Other Requirements for ISOs. ISOs may be issued only to bona
fide employees of the Employer, and the terms of each Option which is intended
to qualify as an ISO shall meet all requirements of Section 422 of the Code or
any successor statute in effect from time to time.

13.4 NQSOs. The terms of each NQSO shall provide that such Option
will not be treated as an ISO.

13.5 Determination by Committee. Except as otherwise provided in
Section 13.2 through Section 13.4, the terms of all Options shall be determined
by the Committee.

ARTICLE XIV
SARS

14.1 Grant and Payment. The Committee may grant SARs. Upon
electing to receive payment of an SAR, a Participant shall receive payment in
cash, in Shares, or in any combination of cash and Shares, as the Committee
shall determine.

14.2 Grant of Tandem Award. If SARs are granted in tandem with an
Option, the exercise of the Option shall cause a proportional reduction in SARs
standing to a Participant's credit which were granted in tandem with the
Option, and the payment of SARs shall cause a proportional reduction of the
Shares under such Option. If SARs are granted in tandem with an ISO, the SARs
shall have such terms and conditions as shall be required for the ISO to
qualify as an ISO.

ARTICLE XV
RESTRICTED SHARES

15.1 Description. The Committee may grant Benefits in Shares as
Restricted Shares with such terms and conditions as may be determined in the
sole discretion of the Committee. Restricted Shares shall be issued and
delivered at the time of the grant or as otherwise determined by the Committee,
but shall be subject to forfeiture until provided otherwise in the applicable
Agreement or the Plan. Each certificate

-8-

<PAGE> 9
representing Restricted Shares shall bear a legend referring to the Plan and
the risk of forfeiture of the Restricted Shares and stating that such
Restricted Shares are nontransferable until all restrictions have been
satisfied and the legend has been removed. At the discretion of the Committee,
the grantee may or may not be entitled to full voting and dividend rights with
respect to all Restricted Shares from the date of grant. The Committee may
(but is not obligated to) require that any dividends on such shares shall be
automatically deferred and reinvested in additional Restricted Shares subject
to the same restrictions as the underlying Benefit.

15.2 Cost of Restricted Shares. Grants of Restricted Shares shall
be made at such cost as the Committee shall determine and may be issued for no
monetary consideration, subject to applicable state law.

15.3 Nontransferability. Restricted Shares shall not be
transferable until after the removal of the legend with respect to such Shares.

ARTICLE XVI
PERFORMANCE SHARES

16.1 Description. Performance Shares represent the right of a
Participant to receive Shares at a future date in accordance with the terms and
conditions of a grant. The terms and conditions shall be determined by the
Committee, in its sole discretion, but generally are expected to be based
substantially upon the attainment of targeted financial performance objectives.

16.2 Grant. The Committee may grant an award of Performance Shares
at such times, in such amounts and under such terms and conditions as it deems
appropriate.

ARTICLE XVII
OTHER SHARE BASED AWARDS AND OTHER BENEFITS

17.1 Other Share Based Awards. The Committee shall have the right
to grant Other Share Based Awards which may include, without limitation, the
grant of Shares based on certain conditions, the payment of cash based on the
market performance of the Shares (such as phantom share awards), and the grant
of securities convertible into Shares.

17.2 Other Benefits. The Committee shall have the right to provide
other types of Benefits under the Plan in addition to those specifically
listed, if the Committee believes that such Benefits would further the purposes
for which the Plan has been established.

ARTICLE XVIII
MISCELLANEOUS PROVISIONS

18.1 Termination of Employment. If the employment of a Participant
by the Employer terminates for any reason, all unexercised, deferred, and
unpaid Benefits may be exercisable or paid only in accordance with rules
established by the Committee or pursuant to an Agreement. These rules may
provide, as the Committee in its sole discretion may deem appropriate, for the
expiration, forfeiture, or continuation of the Benefit, or for the acceleration
of the vesting thereunder, except as may be provided in an Agreement, of all or
part of the Benefits.

-9-

<PAGE> 10
18.2 Unfunded Status of the Plan. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation.

18.3 Designation of Beneficiary. A Participant may file with the
Committee a written designation of a beneficiary or beneficiaries (subject to
such limitations as to the classes and number of beneficiaries and contingent
beneficiaries as the Committee may from time to time prescribe) to exercise, in
the event of the death of the Participant, to the extent otherwise available
under an Agreement, an Option, or to receive, in such event, any Benefits. The
Committee reserves the right to review and approve beneficiary designations. A
Participant may from time to time revoke or change any such designation of
beneficiary and any designation of beneficiary under the Plan shall be
controlling over any other disposition, testamentary or otherwise; provided,
however, that if the Committee shall be in doubt as to the right of any such
beneficiary to exercise any Option or to receive any Benefit, the Committee may
determine to recognize only an exercise by the legal representative of the
recipient, in which case the Company, the Committee and the members thereof
shall not be under any further liability to anyone in connection therewith.

18.4 Nontransferability. For Participants subject to Section 16 of
the Exchange Act, and for all other Participants, unless otherwise determined
for such other Participants by the Committee or as specified in an Agreement,
(i) no Benefit granted under this Plan may be transferred or assigned by the
Participant to whom it is granted other than by beneficiary designation, will,
pursuant to the laws of descent and distribution, or pursuant to a qualified
domestic relations order (as defined in the Employee Retirement Income Security
Act or the Code), and (ii) a Benefit granted under this Plan may be exercised,
during the Participant's lifetime, only by the Participant or Participant's
guardian or legal representative; except that, no ISO may be transferred or
assigned pursuant to a qualified domestic relations order or exercised, during
the Participant's lifetime, by the Participant's guardian or legal
representative, unless such exercise is permitted by the Internal Revenue
Service pursuant to the Code or otherwise without such ISO losing its status as
an ISO. In the event that the provisions of Rule 16b-3 are amended to allow
transfer of a Benefit to a trust or limited partnership established by a
Participant for estate planning purposes, a Benefit other than an ISO granted
under this Plan may be transferred to such trust or limited partnership, but,
for Participants subject to Section 16 of the Exchange Act (unless otherwise so
provided in an Agreement), only to the extent and on the terms and conditions
of Rule 16b-3 as so amended.

18.5 Rule 16b-3. With respect to Participants subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply
with all applicable provisions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Plan
administrators fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.

18.6 References. The underscored references contained in the Plan
and in any Agreement are included only for convenience, and they shall not be
construed as a part of the Plan or Agreement or in any respect affecting or
modifying its provisions. Unless otherwise indicated, Article and Section
references herein are references to Articles and Sections of this Plan.

18.7 Number and Gender. The masculine, feminine and neuter,
wherever used in the Plan or in any Agreement, shall refer to either the
masculine, feminine or

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<PAGE> 11
neuter; and, unless the context otherwise requires, the singular shall include
the plural and the plural the singular.

18.8 GOVERNING LAW. THIS PLAN AND EACH AGREEMENT SHALL BE
CONSTRUED, INTERPRETED AND ADMINISTERED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT GIVING EFFECT TO PRINCIPLES RELATING TO
CONFLICT OF LAWS.

18.9 Purchase for Investment. The Committee may require each
person purchasing or receiving Shares pursuant to a Benefit to represent to and
agree with the Company in writing that such person is acquiring the Shares for
investment and without a view to distribution or resale. The certificates for
such Shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer. All certificates for Shares delivered
under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under all applicable laws,
rules and regulations, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate references to such
restrictions.

18.10 No Employment Contract. Neither the adoption of the Plan nor
any Benefit granted hereunder shall confer upon any Employee any right to
continued employment or engagement nor shall the Plan or any Benefit interfere
in any way with the right of the Employer to terminate the employment or
engagement of any of its Employees at any time.

18.11 No Effect on Other Benefits. The receipt of Benefits under
the Plan shall have no effect on any benefits to which a Participant may be
entitled from the Employer, under another plan or otherwise, or preclude a
Participant from receiving any such benefits.

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<PAGE> 1
EXHIBIT 10.11

LIBERTE INVESTORS
INCENTIVE STOCK OPTION AGREEMENT

(1995 Equity Incentive Plan)

This Stock Option Agreement ("Agreement") is made and entered
into as of the Date of Grant indicated below by and between Liberte Investors,
a Massachusetts business trust (the "Company"), and the person named below
("Participant").

WHEREAS, Participant is a full-time employee of the Company
and/or one or more of its subsidiaries; and

WHEREAS, pursuant to the Company's 1995 Equity Incentive Plan
(the "Plan"; capitalized terms not defined herein shall have the meanings
ascribed to them in the Plan), the Compensation Committee of the Board of
Trustees of the Company (the "Committee") has approved the grant to Participant
of options to purchase shares of beneficial interest, no par value, of the
Company (the "Shares"), on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants set forth herein, the Company and Participant hereby agree as
follows:

1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The
Company hereby grants to Participant, and Participant hereby accepts, as of the
Date of Grant, options to purchase the number of Shares indicated below (the
"Options") at the Exercise Price per Share indicated below. Subject to certain
anti-dilution adjustments, each Option entitles Participant to purchase one
Share. The Options shall expire at 5:00 o'clock p.m. (local time at the
Company's principal executive office) on the Expiration Date indicated below
(unless earlier terminated pursuant to Section 2 hereof), and shall be subject
to all of the terms and conditions set forth in this Agreement. Subject to
Section 16 hereof, on June 30, 1995, and on each succeeding January 1,
Participant may exercise the Options to purchase that number of Shares
indicated on the Vesting Schedule set forth below.

PARTICIPANT: ROBERT TED ENLOE III

DATE OF GRANT: FEBRUARY 15, 1995

NUMBER OF SHARES PURCHASABLE: 400,000

EXERCISE PRICE PER SHARE: $1.625

EXPIRATION DATE: FEBRUARY 15, 2005

VESTING SCHEDULE:

<TABLE>
<S> <C>
Date Number of Shares Vested
---- -----------------------
June 30, 1995 61,500

January 1, 1996 123,000

January 1, 1997 184,500
</TABLE>

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<PAGE> 2
<TABLE>
<S> <C>
January 1, 1998 246,000

January 1, 1999 307,500

January 1, 2000 369,000

January 1, 2001 400,000
</TABLE>

The Options are intended to qualify as incentive stock options
("Incentive Stock Options" or "ISOs") under Section 422 of the Internal Revenue
Code of 1986, as amended ("Code"). In connection therewith, the Company hereby
represents that (a) the Date of Grant is not more than 10 years after the date
the Plan was adopted by the Board of Trustees of the Company, or the date the
Plan was approved by the shareholders of the Company, whichever is earlier; (b)
Participant is a full-time employee of the Company or one of its subsidiaries
("Employee"); (c) the Expiration Date is not more than 10 years after the Date
of Grant, and (d) the Exercise Price per share is not less than the Fair
Market Value per share on the Date of Grant. Participant hereby represents
that, on the Date of Grant, Participant does not own (after application of the
family and other attribution rules of Section 424(d) of the Code) more than 10%
of the total combined voting power of all classes of stock of the Company or of
its parent or subsidiary corporations.

Moreover, the Options shall not be transferable by Participant
otherwise than by will or the laws of descent and distribution, and shall be
exercisable, during Participant's lifetime, only by Participant.

Finally, to the extent that the aggregate Fair Market Value
(determined as of the date such Options are granted) of the Shares with respect
to which Incentive Stock Options are exercisable for the first time by
Participant during any calendar year (under the Plan and all other stock option
plans of the Company and its Parents and Subsidiaries) exceeds $100,000, then
such excess over $100,000 shall not be considered as subject to Incentive Stock
Options, but rather shall automatically be considered as subject to
non-qualified options. Under this rule, the Company takes into account Shares
subject to Incentive Stock Options that are purchasable for the first time in
the calendar year, in the order in which such Incentive Stock Options were
granted.

2. ACCELERATION AND TERMINATION OF OPTION.

(a) Termination of Employment or Other Status. The
following rules shall apply when Participant ceases to be an Employee (such
event shall be referred to herein as the "Termination" of such Participant or
such Participant being "Terminated") and only to the extent that the Options
have not terminated earlier due to their Expiration Date.

(i) Death. If Participant is Terminated by
reason of his or her death (or if he or she dies
within one year after ceasing to be an Employee
because of his or her "Permanent Disability," or
within three months after ceasing to be an Employee
for other reasons), then the portion of the Options
that has not vested on or prior to the date of such
Termination shall continue to vest in accordance with
the Vesting Schedule set forth in Section 1 hereof,
and the Options may only be exercised by the executor
or

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<PAGE> 3
administrator of Participant's estate or any person
or persons who shall have acquired the ISOs directly
from Participant by bequest or inheritance.

(ii) Permanent Disability. If Participant is
Terminated by reason of his or her "Permanent
Disability," then the Options that have not vested on
or prior to the date of such Termination shall
immediately vest in full, except that if the
aggregate Fair Market Value of the Shares for which
Options are exercisable for the first time in the
calendar year in which such Termination occurs would
exceed $100,000, the Options shall vest only to the
extent that such Fair market Value does not exceed
$100,000. The remainder of such unvested Options, if
any, shall vest in full on the first day of the
calendar year immediately following the calendar year
in which such Termination occurs. All Options held
by Participant may be exercised in accordance with
this Agreement, until one year after such
Termination, at which time the remaining Options
shall terminate. "Permanent Disability" shall be
deemed to have occurred if:

(A) as a result of Participant's incapacity due
to physical or mental illness, Participant shall have
been continuously absent from his or her duties for
at least six (6) consecutive months, and

(B) the Company shall have given Participant
written notice of the termination of the
Participant's employment or other Status on account
of Participant's incapacity, and

(D) the Participant shall not have resumed his or
her duties on a full time basis prior to the
expiration of such thirty (30) day period.

(iii) Other Reasons. Except as provided below, if
Participant is Terminated by the Company for any
reason other than death or Permanent Disability, or
if the Participant's Termination was voluntary due to
normal retirement or after his normal retirement age
(as determined by the Committee), then (A) the
portion of the Options that has not vested on or
prior to the date of such Termination shall vest
immediately and in full on such date, and (B) the
Options shall terminate upon the earlier of the
Expiration Date or the completion of three (3) months
after the date of such Termination. However, if the
Termination was at the election of the Participant,
other than for normal retirement in accordance with
the preceding sentence, or was for "cause," as
defined below, the accelerated vesting shall not
occur and the Options shall terminate immediately
upon such Termination. For purposes hereof, "cause"
shall mean Termination of the Participant's
employment or other status by the Company (or, if
applicable, a Subsidiary thereof) because of: (A)
Participant's conviction for or plea of nolo
contendere to any felony or crime

-3-
<PAGE> 4
involving moral turpitude, (B) Participant's
commission of an act of personal dishonesty or breach
of fiduciary duty involving personal profit in
connection with Participant's employment or other
Status by the Company, (C) Participant's commission
of an act involving intentional misconduct on the
part of Participant in the conduct of his or her
duties, (D) Participant's willful failure to execute
lawful policies of the Company, (E) chronic
alcoholism or any other form of addiction to drugs on
the part of Participant, or (F) a material breach by
Participant of any material provision of any
employment agreement or other agreement with the
Company to which he or she may be a party.

(b) Other Events Causing Acceleration of Options. The
Committee, in its sole discretion, may accelerate the exercisability of the
Options at any time and for any reason. In addition, the Options shall fully
vest upon a Change of Control, the remaining unvested Options shall immediately
vest in full, unless the Fair Market Value of the Shares underlying the Options
so vested pursuant to this Section 2(b), less any applicable excise tax
pursuant to Code Section 4999, does not exceed the Fair Market Value of the
Shares underlying the number of Options that could vest upon a Change in
Control without subjecting Participant to such an excise tax, in which case the
Options shall vest only to the extent that such vesting would not cause the
Participant to become subject to an excise tax pursuant to Code Section 4999.
To the extent any such Options do not vest upon a Change of Control pursuant to
the preceding sentence, and such Options are not otherwise terminated, such
Options shall continue to vest in accordance with the Vesting Schedule set
forth in Section 1 hereof.

(c) Other Events Causing Termination of Options.
Notwithstanding anything to the contrary in this Agreement, the Options shall
terminate upon the consummation of any of the following events or upon such
later date as shall be determined by the Committee: (i) the dissolution or
liquidation of the Company; or (ii) a sale of substantially all of the property
and assets of the Company, unless the terms of such sale shall provide for the
continuance or substitution of such Options.

3. ADJUSTMENTS. If the outstanding securities of the
class then subject to the Options are reclassified, changed into or exchanged
for a different number or kind of securities, or cash, property, and/or
securities are distributed in respect of such outstanding securities, in any
such case as a result of a reorganization, merger, consolidation, or similar
transaction (other than a regular cash dividend), or in the event that
substantially all of the property and assets of the Company are sold, then,
unless such event shall cause the Options to terminate pursuant to Section 2(c)
hereof, the Committee shall make appropriate and proportionate adjustments in
the number and type of shares or other securities or cash or other property
that may thereafter be acquired upon the exercise of the Options; provided,
however, that any such adjustments in the Options shall be made without
changing the aggregate Exercise Price of the then unexercised portion of the
Options.

4. EXERCISE. The Options shall be exercisable during
Participant's lifetime only by Participant, and after Participant's death only
by the person or entity entitled to do so under Participant's last will and
testament or applicable intestate law. The Options may only be exercised by
the delivery to the Company of a written notice of such exercise, which notice
shall specify the number of Shares to be purchased and the aggregate Exercise
Price for such shares, together with payment in full of such aggregate Exercise
Price in cash or by check payable to the Company; provided,

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<PAGE> 5
however, that, with the prior approval of the Committee, payment of such
aggregate Exercise Price may instead be made, in whole or in part:

(a) by the delivery to the Company of a promissory note
in a form and amount satisfactory to the Committee, provided that the principal
amount of such note shall not exceed the excess of such aggregate Exercise
Price over the aggregate par value of the purchased Shares; or

(b) by the delivery to the Company of a certificate or
certificates representing Shares, duly endorsed or accompanied by a duly
executed stock powers, which delivery effectively transfers to the Company good
and valid title to such Shares, free and clear of any pledge, commitment, lien,
claim or other encumbrance (such Shares to be valued on the basis of the
aggregate fair market value thereof on the date of such exercise), provided
that the Company is not then prohibited by any contractual obligation or legal
restriction from purchasing or acquiring such Shares.

5. PAYMENT OF WITHHOLDING TAXES.

(a) If the Company is obligated to withhold an amount on
account of any federal, state, or local tax, including, but not limited to, any
income tax, F.I.C.A. tax, disability insurance tax, or other employment tax,
imposed for any reason, including, without limitation, upon the exercise of the
Options or subsequent disposition of the underlying shares of beneficial
interest, then the Participant, upon the occurrence of the taxable event and
providing the Participant is still an Employee, shall pay the applicable
withholding liability (the "Withholding Liability") to the Company in cash or
by check payable to the Company; provided, however, that, in the discretion of
the Committee, Participant may, pursuant to an irrevocable election of
Participant (a "Withholding Election") made on or prior to the date of the
occurrence of such taxable event, instead pay all or any part of the
Withholding Liability by the delivery to the Company of a share certificate or
certificates representing Shares, duly endorsed or accompanied by a duly
executed stock power, which delivery effectively transfers to the Company good
and valid title to such shares, free and clear of any pledge, commitment, lien,
claim, or other encumbrance (such shares to be valued on the basis of the
aggregate Fair Market Value thereof on the date of such exercise), provided
that the Company is not then prohibited by any contractual obligation or legal
restriction from purchasing or acquiring such Shares.

(b) The Committee, in its sole discretion, may (1) impose
such additional conditions under Sections 4 and 5 as may be required to comply
with Rule 16b-3 promulgated under the Exchange Act, and (2) waive any of the
restrictions in Sections 4 and 5 in the event that either (A) the transaction
would not result in liability under Section 16(b) of the Exchange Act, or (B)
the Participant consents to liability thereunder and consents to disgorge any
profits relating thereto to the Company.

(c) The Committee shall have sole discretion to approve
or disapprove any Withholding Election and may adopt such rules and regulations
as are consistent with and necessary to implement the foregoing. The Committee
may permit Participant to make a Withholding Election to pay withholding taxes
in excess of the minimum amount required by law, provided that the amount of
withholding taxes so paid does not exceed the estimated total federal, state,
and local tax liability of Participant attributable to such exercise.

-5-
<PAGE> 6
6. STOCK EXCHANGE REQUIREMENTS. Notwithstanding
anything to the contrary in this Agreement, no Shares purchased upon exercise
of the Option, and no certificate representing all or any part of such shares,
shall be issued or delivered if (a) such shares have not been admitted to
listing upon official notice of issuance on each stock exchange or the National
Association of Securities Dealers Automated Quotation System upon which the
Shares are then listed, or (b) in the opinion of counsel to the Company, such
issuance or delivery would cause the Company to be in violation of or to incur
liability under any federal, state or other securities law, or any requirement
of any listing agreement to which the Company is a party, or any other
requirement of law or of any administrative or regulatory body having
jurisdiction over the Company.

7. STATE OF RESIDENCE. Participant represents to the
Company that Participant is a bona fide resident of the State of Texas (the
"State"). Notwithstanding anything to the contrary herein, this Agreement
shall not become effective until the making of all applicable securities
filings under the laws of the State and the effectiveness thereof. Participant
shall promptly notify the Company in writing if the Participant becomes a bona
fide resident of any jurisdiction other than the State.

8. NONTRANSFERABILITY. Neither the Options nor any
interest therein may be sold, assigned, conveyed, gifted, pledged, hypothecated
or otherwise transferred in any manner other than by will or the laws of
descent and distribution.

9. SALE RESTRICTIONS. Except as otherwise permitted
under Section 16 of the Exchange Act (including any Rules promulgated
thereunder), no Participant, if he or she is subject to liability under Section
16 of the Exchange Act, may sell any Option Share issued hereunder until the
expiration of the six (6) month period commencing on the Date of Grant, unless
the same would either not result in liability under said Section 16 or the
Participant consents to such liability and consents to disgorge any profits
relating thereto to the Company.

10. PLAN. The Options are granted pursuant to the Plan,
as in effect on the Date of Grant, and is subject to all the terms and
conditions of the Plan, as the same may be amended from time to time; provided,
however, that (a) no such amendment shall deprive any Participant of any
Options theretofore granted (or rights thereunder) under the Plan without the
consent of such Participant; and (b) without the approval of a majority of the
shareholders of the Company, the Board may not amend the Plan to make any other
change requiring shareholder approval under (i) any applicable rule,
regulation, or procedure of any national securities exchange or securities
association upon which any securities of the Company are listed (or any listing
agreement with any such securities exchange or securities association), (ii)
Rule 16b-3 promulgated under the Exchange Act, or (iii) other applicable law.

The interpretation and construction by the Committee of the
Plan, this Agreement, the Options granted hereunder, and such rules and
regulations as may be adopted by the Committee for the purpose of administering
the Plan, shall be final and binding upon Participant. Until the Options shall
expire, terminate, or be exercised in full, the Company shall, upon written
request therefor, send a copy of the Plan, in its then-current form, to
Participant or any other person or entity then entitled to exercise the
Options.

11. STOCKHOLDER RIGHTS. No person or entity shall be
entitled to vote, receive dividends, or be deemed for any purpose the holder of
any Shares until the

-6-
<PAGE> 7
Options shall have been duly exercised in accordance with the provisions of
this Agreement.

12. STATUS. No provision of this Agreement or of the
Options granted hereunder shall (a) confer upon Participant any right to
continue in his or her Status with the Company or any of its subsidiaries, (b)
affect the right of the Company and each of its subsidiaries to Terminate the
Status of Participant, with or without cause, or (c) confer upon Participant
any right to participate in any employee benefit plan or other program of the
Company or any of its subsidiaries other than the Plan. Participant hereby
acknowledges and agrees that the Company and each of its subsidiaries may
terminate the employment of Participant at any time and for any reason, or for
no reason, unless Participant and the Company or such subsidiary are parties to
a written employment agreement that expressly provides otherwise.

13. NOTICES. Any notice to be given to the Company shall
be personally delivered to or addressed to the Secretary of the Company, at its
principal office, and any notice to be given to the Participant shall be
addressed to him or her at the address given beneath his or her signature
hereto, or at such other address as the Participant may hereafter designate in
writing to the Company. Any notice to the Company is deemed given when
received by the Company. Any notice to the Participant is deemed given when
enclosed in a properly sealed envelope addressed as aforesaid, and deposited,
postage prepaid, in a post office or branch post office regularly maintained by
the United States.

14. SUCCESSOR AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the Company and Participant, Participant's
beneficiaries, heirs, executors, and administrators, and the Company's
successors and assigns.

15. GOVERNING LAW. THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS SHALL GOVERN THIS AGREEMENT AND THE OPTIONS GRANTED HEREUNDER,
EXCEPT TO THE EXTENT THAT THE FEDERAL LAW OF THE UNITED STATES OF AMERICA
PREEMPTS SUCH LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL APPLY.

16. AGREEMENT CONTINGENT ON SHAREHOLDER APPROVAL.
Notwithstanding the Vesting Schedule set forth in Section 1 hereof, the Options
granted hereunder are granted contingent on the shareholders of the Company
approving the Plan within one year from Board approval of the Plan. No Options
shall vest until the Plan is duly approved by the shareholders of the Company,
and in the event the shareholders do not approve the Plan within one year from
such Board approval, this Agreement (and all Options granted hereunder) shall
be null and void. Upon such shareholder approval, the Vesting Schedule in
Section 1 shall become effective, except that if Options would have previously
vested thereunder but for lack of shareholder approval, the vesting date of
such Options shall be the date of such shareholder approval.

[SIGNATURES ON NEXT PAGE]

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<PAGE> 8
IN WITNESS WHEREOF, the Company and Participant have duly
executed and delivered this Agreement effective as of the Date of Grant.

LIBERTE INVESTORS

By: /s/ Bradley S. Buttermore
----------------------------------------

Name: Bradley S. Buttermore
Title: Senior Vice President, Treasurer
and Secretary

/s/ Robert Ted Enloe III
-------------------------------------------
Robert Ted Enloe III

-------------------------------------------
Social Security Number

Address: 8823 Briarwood Lane
Dallas, TX 75209

-8-

<PAGE> 1
EXHIBIT 10.12

LIBERTE INVESTORS
INCENTIVE STOCK OPTION AGREEMENT

(1995 EQUITY INCENTIVE PLAN)

WHEREAS, Participant is a full-time employee of the Company
and/or one or more of its subsidiaries; and

NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants set forth herein, the Company and Participant hereby agree as
follows:

1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The
Company hereby grants to Participant, and Participant hereby accepts, as of the
Date of Grant, options to purchase the number of Shares indicated below (the
"Options") at the Exercise Price per Share indicated below. Subject to certain
anti-dilution adjustments, each Option entitles Participant to purchase one
Share. The Options shall expire at 5:00 o'clock p.m. (local time at the
Company's principal executive office) on the Expiration Date indicated below
(unless earlier terminated pursuant to Section 2 hereof), and shall be subject
to all of the terms and conditions set forth in this Agreement. Subject to
Section 16 hereof, beginning on January 1, 1996, and on each anniversary
thereof, Participant may exercise the Options to purchase that number of Shares
(rounded to the nearest whole Share) equal to the total number of Shares
multiplied by the Annual Vesting Rate indicated below.

PARTICIPANT: BRADLEY S. BUTTERMORE

DATE OF GRANT: FEBRUARY 15, 1995

NUMBER OF SHARES PURCHASABLE: 246,000

EXERCISE PRICE PER SHARE: $1.625

EXPIRATION DATE: FEBRUARY 15, 2005

ANNUAL VESTING RATE: 25%

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<PAGE> 2
Company, whichever is earlier; (b) Participant is a full-time employee of the
Company or one of its subsidiaries ("Employee"); (c) the Expiration Date is not
more than 10 years after the Date of Grant, and (d) the Exercise Price per
share is not less than the Fair Market Value per share on the Date of Grant.
Participant hereby represents that, on the Date of Grant, Participant does not
own (after application of the family and other attribution rules of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or subsidiary corporations.

2. ACCELERATION AND TERMINATION OF OPTION.

(i) Death. If Participant is Terminated by
reason of his or her death (or if he or she dies
within one year after ceasing to be an Employee
because of his or her "Permanent Disability," or
within three months after ceasing to be an Employee
for other reasons), then the portion of the Options
that has not vested on or prior to the date of such
Termination shall continue to vest in accordance with
the Annual Vesting Rate in Section 1 hereof, and the
Options may only be exercised by the executor or
administrator of Participant's estate or any person
or persons who shall have acquired the ISOs directly
from Participant by bequest or inheritance.

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<PAGE> 3
the first day of the calendar year after the calendar
year in which such Termination occurs. All Options
held by the Participant may be exercised in
accordance with this Agreement, until one year from
the date of such Termination, at which time the
remaining Options shall terminate. "Permanent
Disability" shall be deemed to have occurred if:

(A) as a result of Participant's incapacity due
to physical or mental illness, Participant shall have
been continuously absent from his or her duties for
at least six (6) consecutive months, and

(B) the Company shall have given Participant
written notice of the termination of the
Participant's employment or other Status on account
of Participant's incapacity, and

(D) the Participant shall not have resumed his or
her duties on a full time basis prior to the
expiration of such thirty (30) day period.

(iii) Other Reasons. Except as provided below, if
Participant is Terminated by the Company for any
reason other than death or Permanent Disability, or
if Participant's Termination was voluntary due to
normal retirement on or after his normal retirement
age (as determined by the Committee), then (A) the
portion of the Options that has not vested on or
prior to the date of such Termination shall vest
immediately and in full on such date, and (B) the
Options shall terminate upon the earlier of the
Expiration Date or the completion of three (3) months
after the date of such Termination. However, if the
Termination was at the election of the Participant,
other than for normal retirement in accordance with
the preceding sentence, or was for "cause," as
defined below, the accelerated vesting shall not
occur and the Options shall terminate immediately
upon such Termination. For purposes hereof, "cause"
shall mean Termination of the Participant's
employment or other status by the Company (or, if
applicable, a Subsidiary thereof) because of: (A)
Participant's conviction for or plea of nolo
contendere to any felony or crime involving moral
turpitude, (B) Participant's commission of an act of
personal dishonesty or breach of fiduciary duty
involving personal profit in connection with
Participant's employment or other Status by the
Company, (C) Participant's commission of an act
involving intentional misconduct on the part of
Participant in the conduct of his or her duties, (D)
Participant's willful failure to execute lawful
policies of the Company, (E) chronic alcoholism or
any other form of addiction to drugs on the part of
Participant, or (F) a material breach by Participant
of any material provision of any employment agreement
or other agreement with the Company to which he or
she may be a party.

-3-
<PAGE> 4
(b) Other Events Causing Acceleration of Options. The
Committee, in its sole discretion, may accelerate the exercisability of the
Options at any time and for any reason. In addition, upon a Change of Control,
the remaining unvested Options shall immediately vest in full, unless the Fair
Market Value of the Shares underlying the Options so vested pursuant to this
Section 2(b), less any applicable excise tax pursuant to Code Section 4999,
does not exceed the Fair Market Value of the Shares underlying the number of
Options that could vest upon a Change in Control without subjecting Participant
to such an excise tax, in which case the Options shall vest only to the extent
that such vesting would not cause the Participant to become subject to an
excise tax pursuant to Code Section 4999. To the extent any such Options do
not vest upon a Change of Control pursuant to the preceding sentence, and such
Options are not otherwise terminated, such Options shall continue to vest in
accordance with the Annual Vesting Rate set forth in Section 1 hereof.

-4-
<PAGE> 5
free and clear of any pledge, commitment, lien, claim or other encumbrance
(such Shares to be valued on the basis of the aggregate fair market value
thereof on the date of such exercise), provided that the Company is not then
prohibited by any contractual obligation or legal restriction from purchasing
or acquiring such Shares.

5. PAYMENT OF WITHHOLDING TAXES.

6. STOCK EXCHANGE REQUIREMENTS. Notwithstanding
anything to the contrary in this Agreement, no Shares purchased upon exercise
of the Option, and no certificate representing all or any part of such shares,
shall be issued or delivered if (a) such shares have not been admitted to
listing upon official notice of issuance on each stock exchange or the National
Association of Securities Dealers Automated Quotation System upon which the
Shares are then listed, or (b) in the opinion of counsel to the Company, such
issuance or delivery would cause the Company to be in violation of or to incur
liability under any federal, state or other securities law, or any requirement
of any listing agreement to which the Company is a party, or any other
requirement of law or of any administrative or regulatory body having
jurisdiction over the Company.

-5-
<PAGE> 6
7. STATE OF RESIDENCE. Participant represents to the
Company that Participant is a bona fide resident of the State of Texas (the
"State"). Notwithstanding anything to the contrary herein, this Agreement
shall not become effective until the making of all applicable securities
filings under the laws of the State and the effectiveness thereof. Participant
shall promptly notify the Company in writing if the Participant becomes a bona
fide resident of any jurisdiction other than the State.

11. STOCKHOLDER RIGHTS. No person or entity shall be
entitled to vote, receive dividends, or be deemed for any purpose the holder of
any Shares until the Options shall have been duly exercised in accordance with
the provisions of this Agreement.

-6-
<PAGE> 7
reason, or for no reason, unless Participant and the Company or such subsidiary
are parties to a written employment agreement that expressly provides
otherwise.

16. AGREEMENT CONTINGENT ON SHAREHOLDER APPROVAL.
Notwithstanding the Annual Vesting Rate set forth in Section 1 hereof, the
Options granted hereunder are granted contingent on the shareholders of the
Company approving the Plan within one year from Board approval of the Plan. No
Options shall vest until the Plan is duly approved by the shareholders of the
Company, and in the event the shareholders do not approve the Plan within one
year from such Board approval, this Agreement (and all Options granted
hereunder) shall be null and void. Upon receiving such shareholder approval,
the Annual Vesting Rate in Section 1 shall become effective, except that if
Options would have previously vested thereunder but for lack of shareholder
approval, the vesting date of such Options shall be the date of such
shareholder approval.

[SIGNATURES ON NEXT PAGE]

-7-
<PAGE> 8
IN WITNESS WHEREOF, the Company and Participant have duly
executed and delivered this Agreement effective as of the Date of Grant.

LIBERTE INVESTORS

By: /s/ R. Ted Enloe III
---------------------------------------------

Name: R. Ted Enloe III
Title: President and Chief Executive Officer

/s/ Bradley S. Buttermore
------------------------------------------------
Bradley S. Buttermore

------------------------------------------------
Social Security Number

Address: 322 Harbor Landing
Rockwall, TX 75087

-8-

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