**Exhibit10.10**

 

**SponsorshipAgreement**

 

                THIS AGREEMENTmade this 16th day of December, 2004, between R. C. BoydEnterprises, LLC, a Texas limitedliability company, whose principal place of business is located at 807Pearl Drive, Southlake,, Texas, referred to in this Agreement as ‘‘Company’’ or “Boyd”, and Cano Petroleum, Inc.,a Delaware corporation qualified to transact business in Texas, whose principalplace of business is located at 309 West 7th, Suite 1600, FortWorth, Texas 76102, referred to in this agreement as “Sponsor” or “Cano”.

 

                WHEREAS, theCompany is the owner of the rights to the television production known as HoneyHole (hereinafter “Honey Hole” or “Show”);

 

                WHEREAS, Sponsordesires to acquire the exclusive right to be the lead sponsor of the Show at anagreed price and under specified terms and conditions;

 

                NOW, THEREFORE,for and in consideration of the premises and the mutual promises, covenants,and agreements set forth in this Agreement, the Company and Cano agree asfollows:

 

                1.             Required Production.  The Company shall produce no less than forty(40) original episodes of the Show per year;

 

                2.             Lead Sponsorship.  The Company agrees that Cano shall beidentified as the lead sponsor, by having a thirty second lead-in promotion atthe beginning of each episode; a thirty second trailer promotion at the end ofeach episode; and two thirty second commercials during each episode.

 

                3.             Signage at Public Appearances.  The Company agrees that Cano shall beentitled to place signage, up to 6 feet x 10 feet at each public appearancemade by Honey Hole, including four (4) “Kids Corner” children’s benefits duringthe initial term of this Agreement.

 

                4.             Use of Logo.  The Company agrees that the Cano logo andslogan shall appear on the primary boat and vehicle used in each episode.  Cano recognizes and agrees that it does notand will not have exclusive rights and that other sponsor’s logos may appear onthe primary boat and vehicle.  TheCompany agrees that Cano’s logo shall be substantially the same size as othersuch sponsors;

 

                5.             Featured Guests.  The Company agrees to feature not less thantwo (2) persons designated by Cano as guests on not less than six (6) separateepisodes per year.

 

                6.             Provision of Lead in and Trailer.  Cano agrees to provide the Company with voiceover lead-in(s) and trailers of a quality satisfactory to the Company andcontent that meets the Company’s minimum standards as set out in Section 9below no later than sixty (60) days following the Commencement Date.

 

 

----

 

 

                7.             Provision of Commercials.  Cano agrees to provide at least two (2**)** professionally produced thirty (30)second commercials of a quality satisfactory to the Company.  Such commercial will be provided in theformat designated by the Company.

 

                8.             Sales and Other Taxes.  The Company will add sales, excise and anyother tax or surcharge to its invoices which it is obligated to collect andremit under the laws of the State of Texas, the United States or any otherjurisdiction.

 

                9.             Notice.  Any notice provided for under the terms ofthis Agreement by either party to the other shall be in writing and may beeffected by personal delivery in writing or registered or certified mail,return receipt requested. Notice to Boyd shall be sufficient if made oraddressed to 807 Pearl Drive, Southlake, Texas 76092. Notice to Cano shall besufficient if made or addressed to Cano Petroleum, Inc., 309 West 7th Street,Suite 1600, Fort Worth, Texas 76102.  Each party may change the address at which notice may be sent to thatparty by giving notice of such change to the other party in accordance with theprovisions of this Paragraph.

 

                10.           Term and Renewal.  The initial term of this Agreement shall beone (1) year, commencing January 1, 2005 and ending on December 31, 2005.  This Agreement may be renewed by Cano on thefirst, second, and third anniversaries of the Agreement in the followingmanner: Cano shall give written notice of its intention to renew this contractfor a period of an additional one (1) year to Boyd, such notice to be given notmore than ninety (90) days nor less than thirty (30) days before the expirationof the initial term and each subsequent term of this Agreement.  The consideration for the second year shallbe $250,000.00 (Two Hundred Fifty Thousand Dollars), the third year shall be$350,000.00 (Three Hundred Thousand Dollars).

 

                In the event thateither party shall be prevented from performing any of its obligations dueunder the terms of this Agreement by an act of God, by acts of war, riot, orcivil commotion, by an act of State, by strikes, fire, flood, or by theoccurrence of any other event beyond the control of the parties hereto, thatparty shall be excused from any further performance of the obligations andundertakings set forth under the terms of this Agreement.

 

                11.           Governing Law.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Texas and venue for anylegal action brought in State Court shall lie exclusively in Tarrant County,Texas and venue for any action brought in federal court shall lie exclusivelyin the Northern District of Texas, Fort Worth Division.

 

                12.           Rights Cumulative.  The rights and remedies granted in thisagreement to Cano in the event of default are cumulative, and the exercise ofsuch rights shall be without prejudice to the enforcement of any other right orremedy authorized by law or this agreement.

 

 

----

 

 

                13.           Attorneys’ Fees.  If any legal action is brought by either ofthe parties hereto, it is expressly agreed that the prevailing party in suchlegal action shall be entitled to recover from the other party reasonableattorney’s fees in addition to any other relief that may be awarded. For thepurposes of this clause, the prevailing party is the party in whose favor finaljudgment is entered. In the event that declaratory or injunctive relief aloneis granted, the court may determine which, if either, of the parties shall beconsidered to be the prevailing party. The amount of reasonable attorney’s feesshall be determined by the court, in the trial of such action or in a separateaction brought for that purpose. Attorney’s fees awarded under the provisionsof this paragraph shall be in addition to any other relief that may be awarded.

 

                14.           Multiple Counterparts.  This Agreement is executed in duplicatecopies, each of which shall be considered a true and original copy of thisAgreement.

 

                15.           Payment of Money.  In consideration of the services to berendered under this Agreement as set forth *above*,the Company shall be entitled to compensation in the amount of $ $100,000.00(One Hundred Thousand Dollars), to be paid in equal installments of $25,000.00(Twenty Five Thousand Dollars) on January 1, 2005, April 1, 2005, July 1, 2005and October 1, 2005.  Payments due insubsequent years covered by renewals of the Agreement, if any, shall also bepaid in equal quarterly installments.  IfCano fails to make any payment when required by this Agreement, the Companyshall have the option of canceling this Agreement following the passage of ten(10) days after having given Cano written notice of its default.  While the Company shall have no furtherobligation to Cano following cancellation of the Agreement, Cano shall remainliable for all unpaid installments for the then current term of the Agreement,which installments shall be immediately due and payable.

 

                16.           Exculpatory Clause.  The parties agree that Cano will not beliable to the Company or any third party for any injury sustained by theCompany, its employees, independent contractors, invitees or any other thirdparty while preparing for, filming or working on post production of anyepisode.

 

                17.           Place of Performance.  All sums payable under this Agreement shallbe paid to the Company at Southlake, Tarrant County, Texas.

 

                18.           Time For Performance.  The obligation of Boyd to commence productionof original episodes must begin within ninety days of the Commencement Date ofthis Agreement.

 

                19.           Assignment.  This Agreement may be assigned by eitherparty on notice in writing to the other party not less than 90 (ninety) daysbefore the effective date of such assignment. This notice shall be delivered bypersonal service or registered mail to the respective party.

 

                This Agreementsupersedes any and all other agreements, either oral or in writing, between theparties with respect to the subject matter of this contract, and contains allof the covenants and agreements between the parties with respect to the 

 

 

----

 

 

subject matter. Each party to this contract acknowledges that norepresentations, inducements, promises, or agreements, orally or otherwise,have been made by any party, or anyone acting on behalf of any party, that arenot set forth in this contract, and that no agreement, statement, or promisenot contained in this contract shall be valid or binding.

 

                20.           Partial Invalidity.  If any term or provision of this Agreement isheld by a court of competent jurisdiction to be invalid, void, orunenforceable, the remainder of the provisions of this agreement shall remainin full force and effect and shall in no way be affected, impaired, orinvalidated.

 

                21.           Government Regulation.  This Agreement is subject to all applicablefederal, state and municipal laws, regulations and ordinances, whether existingor enacted hereafter, including the rules and regulations of all governmentalagencies or commissions having jurisdiction in matters covered by thisAgreement or either of the parties hereto.

 

                This Agreement isexecuted in duplicate on the 16th day of December, 2004, at                            .Fort Worth, Tarrant County, Texas, to be effective January 1, 2005.

 

 
|   | R. C. BOYD ENTERPRISES, LLC |
|--------|-----------------------------|
|   |                        |   |
|   |                        |   |
|   |                        |   |
|   | By:                         | /s/ R. C. Boyd |
|   |                        |   |
|   | Printed Name:               | R. C. Boyd |
|   |                        |   |
|   | Title:                      | President |
|   |                        |   |
|   |                        |   |
|   |                        |   |
|   |                        |   |
|   |                        |   |
|   | CANO PETROLEUM, INC.        |   |
|   |                        |   |
|   |                        |   |
|   | By:                         | /s/ Jeff Johnson |
|   |                        |   |
|   | Printed Name:               | Jeff Johnson |
|   |                        |   |
|   | Title:                      | CEO |
|   |                        |   |
|   |                        |   |
|        |                             |  |  |  |  |

 

 

----