Exhibit 10

 

Real Estate Sales Contract

 

This contract to buy and sell real and personal property is between Seller and
Buyer as identified below and is effective on the date (“Effective Date”) of the
last of the signatures by Seller and Buyer as parties to this contract.  Buyer
must deliver the Earnest Money to Title Company and obtain Title Company’s
signature before the Earnest Money deadline provided in Section A.1.  If the
Earnest Money is paid by check and payment on presentation is refused, Buyer is
in default.

 

Seller:

Lancer Partnership, Ltd.

 

 

 

 

Address:

6655 Lancer Blvd.

 

 

San Antonio, Texas 78219

 

 

 

 

Phone:

(210) 310-7283

 

Fax:

(210) 310-7252

 

 

 

 

Type of entity:

Limited Partnership

 

 

 

Seller’s Attorney:

Stonewall J. Fisher

 

 

 

 

Address:

6655 Lancer Blvd.

 

 

San Antonio, Texas 78219

 

 

 

 

Phone:

(210) 310-7283

 

Fax:

(210) 310-7252

 

 

 

Buyer:

SCHROEDER LAND AND CATTLE COMPANY, INCORPORATED

 

Attn:  Kurt Gransee

 

 

 

 

Address:

310 St. Marys, Suite 1850

 

 

San Antonio, Texas 78205

 

 

 

 

Phone:

(210) 223-9200

 

Fax:

(210) 223-1344

 

 

 

 

Type of entity:

Corporation

 

 

 

Title Company:

Southwest Land Title Company

 

 

 

 

Address:

211 N. Washington

 

 

Beeville, Texas 78102

 

 

 

 

Phone:

(361) 358-3378

 

Fax:

(361) 358-3381

 

 

 

Property:

The land commonly known as Monteola Ranch, and more fully described in Exhibit A
(“Land”), together with improvements to the Land (“Improvements”), and the
personal property described in Exhibit A (“Personal Property”), and the minerals
and royalties associated with the Land.

 

 

Purchase Price:

Seven Hundred Six Thousand, Six Hundred Eighty Seven and 50/100 dollars
($706,687.50)

 

 

Earnest Money:

Ten Thousand Dollars and no/100 dollars ($10,000.00)

 

A.

Deadlines and Other Dates

 

 

 

 

All deadlines in this contract expire at 5:00 P.M. local time where the Property
is located. If a deadline falls on a Saturday, Sunday, or national holiday, the
deadline will be extended to the next day that is not a Saturday, Sunday, or
national holiday. A national holiday is a holiday designated by the federal
government. Time is of the essence.

 

 

 

1.

Earnest Money Deadline:

Three business days after the effective date.

 

 

 

2.

Delivery of Title Commitment:

Twenty-four days after the effective date.

 

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3.

Delivery of legible copies of instruments referenced in the title commitment:

 

 

 

 

 

Twenty-four days after the effective date.

 

 

 

4.

Closing Date:     On or before January 7, 2005

 

 

 

5.

Closing Time: 10:00 a.m.

 

 

Title Commitment; Title Policy.  “Title Commitment” means a Commitment for
Issuance of an Owner Policy of Title Insurance by Title Company, as agent for
its Underwriter, stating the condition of title to the Land.  The “effective
date”; stated in the Title Commitment must be after the Effective Date of this
contract.  “Title Policy” means an Owner Policy of Title Insurance issued by
Title Company, as agent for its Underwriter, in conformity with the last Title
Commitment delivered to and approved by Buyer.  Buyer has until Thirty six days
after the effective date (“Title Objection Deadline”) to review the Title
Commitment and the copies of the title instruments referenced in same and notify
Seller of Buyer’s objections to any of them (“Title Objections”).  Buyer will be
deemed to have approved all matters reflected by the Title Commitment, to which
Buyer has made no Title Objection by the Title Objection Deadline.  The matters
that Buyer either approves or is deemed to have approved are “Permitted
Exceptions.”  If Buyer notifies Seller of any Title Objections, Seller has five
days from receipt of Buyer’s notice to notify Buyer whether Seller agrees to
cure the Title Objections before closing (“Cure Notice”).  If seller does not
timely give its Cure Notice or timely gives its Cure Notice but does not agree
to cure all the Title Objections before closing, Buyer may, within five days
after the deadline for the giving of Seller’s Cure Notice, notify Seller that
either this contract is terminated or Buyer will proceed to close, subject to
Seller’s obligations to remove all exceptions that arise by, through, or under
Seller after the Effective Date, and cure only the Title Objections that Seller
has agreed to cure in the Cure Notice.

 

B.                                    Closing Documents

 

1.                                       At closing, Seller will deliver a
special warranty deed:

 

2.                                       At closing, Buyer will deliver Seven
Hundred Six Thousand, Six Hundred Eighty Seven and 50/100 dollars ($706,687.50),
less the earnest money, in good funds, and plus or minus any prorations provided
herein.

 

C.                                    Exhibits

 

The following are attached to and are a part of this contract:

 

Exhibit A—Description of the Land and Personal Property

 

D.                                    Purchase and Sale of Property

 

Seller agrees to sell and convey the Property to Buyer, and Buyer agrees to buy
and pay Seller for the Property. The promises by Buyer and Seller stated in this
contract are the consideration for the formation of this contract.

 

E.                                      Special Condition

 

This section has been intentionally left blank.

 

F.                                      Condition of the Property until Closing;
Cooperation; No Recording of Contract

 

1.                                       Maintenance and Operation. Until
closing, Seller will maintain the Property as it existed on the Effective Date,
except for reasonable wear and tear and casualty damage;

 

2.                                       Casualty Damage. Seller will notify
Buyer promptly after discovery of any casualty damage to the Property. Seller
will have no obligation to repair or replace the Property if it is damaged by
casualty before closing. Buyer may terminate this contract if the casualty
damage that occurs before closing would materially affect Buyer’s intended use
of the Property, by giving notice to Seller within fifteen days after receipt of
Seller’s notice of the casualty (or before closing if Seller’s notice of the
casualty is received less than fifteen days before closing).  If Buyer does not
terminate this contract, Seller will (a) convey the Property to Buyer in its
damaged condition, (b) assign to Buyer all of Seller’s rights under any property
insurance policies covering the Property, and (c) pay to Buyer the amount of the
deductibles and coinsurance provisions under any insurance policies covering the
Property, but not in excess of the cost to repair the casualty damage and less
any amounts previously paid by Seller to repair the Property.  If Seller has not
insured the Property and Buyer does not elect to terminate this contract in
accordance with this section, the Purchase Price will be reduced by the cost to
repair the casualty damage.

 

3.                                       Condemnation. Seller will notify Buyer
promptly after Seller receives notice that any part of the Property has been or
is threatened

 

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to be condemned or otherwise taken by a governmental or quasi-governmental
authority. Buyer may terminate this contract if the condemnation would
materially affect Buyer’s intended use of the Property by giving notice to
Seller within fifteen days after receipt of Seller’s notice to Buyer (or before
closing if Seller’s notice is received less than fifteen days before closing). 
If Buyer does not terminate this contract, (a) Buyer and Seller will each have
the right to appear and defend their respective interests in the Property in the
condemnation proceedings, (b) any award in condemnation will be assigned to
Buyer, and (c) if the taking occurs before closing, the description of the
Property will be revised to delete the portion taken.

 

4.                                       Claims; Hearings. Seller will notify
Buyer promptly of any claim or administrative hearing that is threatened, filed,
or initiated before closing that affects the Property.

 

5.                                       Cooperation. Seller will cooperate with
Buyer (a) before and after closing, to transfer the titles, applications,
permits, and licenses held by Seller and used in the operation of the Property
and to obtain any consents necessary for Buyer to operate the Property after
closing and (b) before closing, with any reasonable evaluation, inspection,
audit, or study of the Property prepared by, for, or at the request of Buyer.

 

6.                                       No Recording. Buyer may not file this
contract or any memorandum or notice of this contract in the real property
records of any county. If, however, Buyer records this contract or a memorandum
or notice, Seller may terminate this contract and record a notice of
termination.

 

J.                                      Termination

 

1.                                       Disposition of Earnest Money after
Termination

 

a.                                       To Buyer.  If Buyer terminates this
contract in accordance with any of Buyer’s rights to terminate, Seller will,
within five days of receipt of Buyer’s termination notice, authorize the Title
Company to deliver the Earnest Money to Buyer, less $100, which will be paid to
Seller as consideration for the right granted by Seller to Buyer to terminate
this contract.

 

b.                                      To Seller.  If Seller terminates this
contract in accordance with any of Seller’s rights to terminate, Buyer will,
within five days of receipt of Seller’s termination notice, authorize the Title
Company to pay and deliver the Earnest Money to Seller.

 

2.                                       Duties after Termination. If this
contract is terminated, Buyer will promptly return to Seller all documents
relating to the Property that Seller has delivered to Buyer and all copies that
Buyer has made of the documents. After return of the documents and copies,
neither party will have further duties or obligations to the other under this
contract, except for those obligations that cannot be or were not performed
before termination of this contract.

 

K.                                    Closing

 

1.                                       Closing. This transaction will close at
the Title Company’s offices at the Closing Date and Closing Time. At closing,
the following will occur:

 

a.                                       Closing Documents. The parties will
execute and deliver the Closing Documents.

 

b.                                      Payment of Purchase Price. Buyer will
deliver the Purchase Price and other amounts that Buyer is obligated to pay
under this contract to Seller in funds acceptable to the Title Company. The
Earnest Money will be applied to the Purchase Price.

 

c.                                       Disbursement of Funds; Recording;
Copies.  Title Company will be instructed to disburse the Purchase Price and
other funds in accordance with this contract, record the deed and the other
Closing Documents directed to be recorded, and distribute documents and copies
in accordance with the parties’ written instructions.

 

d.                                      Delivery of Originals. Seller will
deliver to Buyer the originals of Seller’s Records.

 

e.                                       Possession. Seller will deliver
possession of the Property to Buyer, subject to the permitted exceptions
existing at closing.

 

2.                                       Transaction Costs

 

a.                                                                                      
Seller’s Costs.  Seller will pay the basic charge for the Title Policy; one-half
of the escrow fee charged by Title Company; the costs to prepare the deed; the
costs to obtain, deliver, and record releases of all liens to be released at
closing; the costs to record all documents to cure Title Objections agreed to be
cured by Seller; the costs to obtain the certificates or reports of ad valorem
taxes; the costs to deliver copies of the instruments described in section A.3;
and Seller’s expenses and attorney’s fees.

 

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b.                                                                                     
Buyer’s Costs.  Buyer will pay one-half of the escrow fee charged by Title
company; the costs to obtain, deliver, and record all documents other than those
to be recorded at Seller’s expense; the additional premium for the “survey/area
and boundary deletion” in the Title Policy, if the deletion is requested by
Buyer; the costs of work required by Buyer to have a survey to reflect matters
other than those required under this contract; the costs to obtain financing of
the Purchase Price, including the incremental premium costs of mortgagee’s title
policies and endorsements and deletions required by Buyer’s lender; and Buyer’s
expenses and attorney’s fees.

 

c.                                                                                      
Ad Valorem Taxes. Ad valorem taxes for the Property for the calendar year of
closing will be prorated between Buyer and Seller as of the Closing Date.
Seller’s portion of the prorated taxes will be paid to Buyer at closing as an
adjustment to the Purchase Price. If the assessment for the calendar year of
closing is not known at the Closing Date, the proration will be based on taxes
for the previous tax year, and Buyer and Seller will adjust the prorations in
cash within thirty days of when the actual assessment and taxes are known.
Seller will promptly notify Buyer of all notices of proposed or final tax
valuations and assessments that Seller receives after the Effective Date and
after closing.  All taxes due as of closing will be paid at closing.

 

b.                                                                                     
Income and Expenses. Income and expenses pertaining to operation of the Property
will be prorated as of the Closing Date on an accrual basis and paid at closing
as a credit or debit adjustment to the Purchase Price. Invoices that are
received after closing for operating expenses incurred on or before the Closing
Date and not adjusted at closing will be prorated between the parties as of the
Closing Date, and Seller will pay its share within ten days of notice of Buyer’s
invoice. Any insurance pertaining to the property will be cancelled at closing
by Seller.

 

d.                                                                                     
Postclosing Adjustments. If errors in the prorations made at closing are
identified within ninety days after closing, Seller and Buyer will make
postclosing adjustments to correct the errors within fifteen days of receipt of
notice of the errors.

 

3.                                       Issuance of Title Policy.  Seller will
cause Title Company to issue the Title Policy to Buyer as soon as practicable
after the closing.

 

L.                                     Default and Remedies

 

1.                                       Seller’s Default. If Seller fails to
perform any of its obligations under this contract (“Seller’s Default”), Buyer
may elect either of the following as its sole and exclusive remedy:

 

                                               
a.                                       Termination; Liquidated Damages. Buyer
may terminate this contract by giving notice to Seller on or before the Closing
Date and Closing Time and have the Earnest Money, less $100 as described above,
returned to Buyer.

 

                                               
b.                                      Specific Performance. Buyer may enforce
specific performance of Seller’s obligations under this contract.  If title is
awarded to Buyer, the conveyance will be subject to the matters stated in the
Title Commitment.

 

2.                                       Buyer’s Default. If Buyer fails to
perform any of its obligations under this contract (“Buyer’s Default”), Seller
may elect either of the following as its sole and exclusive remedy:

 

a.                                       Termination; Liquidated Damages. 
Seller my terminate this contract by giving notice to Buyer on or before the
Closing Date and Closing Time, and retain the Earnest Money.

 

b.                                      Specific Performance.  Seller may
enforce specific performance of Buyer’s obligations under this contract.

 

3.                                       Liquidated Damages. The parties agree
that just compensation for the harm that would be caused by a default by either
party cannot be accurately estimated or would be very difficult to accurately
estimate and that the Earnest Money is a reasonable forecast of just
compensation to the nondefaulting party for the harm that would be caused by a
default.

 

4.                                       Attorney’s Fees. If either party
retains an attorney to enforce this contract, the party prevailing in litigation
is entitled to recover reasonable attorney’s fees and court and other costs.

 

M.                                  Miscellaneous Provisions

 

1.                                       Notices. Any notice required by or
permitted under this contract must be in writing. Any notice required by this
contract will be deemed to be delivered (whether actually received or not) when
deposited with the United States Postal Service, postage prepaid, certified
mail, return receipt requested, and addressed to the intended recipient at the
address shown in this contract. Notice may also be given by regular mail,
personal delivery, courier delivery, facsimile transmission, or other
commercially reasonable means and will be effective when actually received. Any
address for notice may be changed by written notice delivered as provided
herein. Copies of each notice must be given by one of these methods to the
attorney of the party to whom notice is given.

 

2.                                       Entire Contract. This contract,
together with its exhibits, and any Closing Documents delivered at closing
constitute the entire

 

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agreement of the parties concerning the sale of the Property by Seller to Buyer.
There are no oral representations, warranties, agreements, or promises
pertaining to the sale of the Property by Seller to Buyer not incorporated in
writing in this contract.

 

3.                                       Amendment. This contract may be amended
only by an instrument in writing signed by the parties.

 

4.                                       Prohibition of Assignment. Buyer may
not assign this contract and Buyer’s rights under it without Seller’s prior
written consent, and any attempted assignment is void.  This contract binds,
benefits, and may be enforced by the parties and their respective heirs,
successors, and permitted assigns.

 

5.                                       Survival. The obligations of this
contract that cannot be performed before termination of this contract or before
closing will survive termination of this contract or closing, and the legal
doctrine of merger will not apply to these matters. If there is any conflict
between the Closing Documents and this contract, the Closing Documents will
control.

 

6.                                       Choice of Law; Venue; Alternative
Dispute Resolution. This contract will be construed under the laws of the state
of Texas, without regard to choice-of-law rules of any jurisdiction. Venue is in
the Bexar County, except as otherwise provided by applicable law. Time
permitting, the parties will submit in good faith to an alternative dispute
resolution process before filing a suit concerning this contract.

 

7.                                       Waiver of Default. It is not a waiver
of default if the nondefaulting party fails to declare immediately a default or
delays taking any action with respect to the default.

 

8.                                       No Third-Party Beneficiaries. There are
no third-party beneficiaries of this contract.

 

9.                                       Severability. The provisions of this
contract are severable. If a court of competent jurisdiction finds that any
provision of this contract is unenforceable, the remaining provisions will
remain in effect without the unenforceable parts.

 

10.                                 Ambiguities Not to Be Construed against
Party Who Drafted Contract. The rule of construction that ambiguities in a
document will be construed against the party who drafted it will not be applied
in interpreting this contract.

 

11.                                 No Special Relationship. The parties’
relationship is an ordinary commercial relationship, and they do not intend to
create the relationship of principal and agent, partnership, joint venture, or
any other special relationship.

 

12.                                 Counterparts. If this contract is executed
in multiple counterparts, all counterparts taken together will constitute this
contract.  Once signed, any reproduction of this agreement made by reliable
means shall be deemed an original

 

13.                                 Confidentiality. The parties will keep
confidential this contract, this transaction, and all information learned in the
course of this transaction, except to the extent disclosure is required by law
or court order or to enable third parties to advise or assist Buyer to
investigate the Property or either party to close this transaction.

 

14.                                 Reservations. The seller reserves no
interest in any mineral, water, royalty or other interests now owned or acquired
after the closing associated with the Land.

 

15.                                 Mineral Representations. Seller makes no
representations as to its ownership of the mineral, water, or royalty interest,
other than it will convey to Buyer any interest it has or will acquire in the
future.

 

 

LANCER PARTNERSHIP, LTD.

 

By:  Lancer Capital Corporation, General Partner

 

 

 

 

Date: /s/ NOVEMBER 29, 2004

 

By:

/s/ STONEWALL J. FISHER,

 

 

 

Stonewall J. Fisher, III

 

 

Vice President - Legal Affairs

 

 

 

 

 

SCHROEDER LAND AND CATTLE COMPANY, INCORPORATED

 

 

 

 

Date: /s/ NOVEMBER 29, 2004

 

By:

/s/ LANCE M. SCHROEDER

 

 

 

Lance M. Schroeder

 

 

President

 

 

 

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Exhibit A

 

Description of the Land and Personal Property

 

546.65 acres of land consisting of 518.92 acres out of the Sarah Louis Survey. 
Abstract #1239 Bee County and 27.73 acres out of the Carlos Martinez Abstract
#6, Karnes County, Texas

 

All presently owned and after acquired mineral interests and royalties
pertaining to or associated with the 546.65 acres of land.

 

All personal property, not including the cattle, associated with the land and
improvements.

 

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