Exhibit 10.11
 

  PLAN OF MERGER BY AND BETWEEN
PETRON ENERGY II, INC., A NEVADA CORPORATION AND
PETRON ENERGY SPECIAL CORP., A NEVADA CORPORATION

THIS PLAN OF MERGER (“Plan”) is entered into on January 3, 2012, by Petron
Energy Special Corp. (“Acquired Corporation”), a corporation incorporated under
the laws of Nevada and Petron Energy II, Inc. (“Surviving Corporation”), a
corporation incorporated under the laws of Nevada and the wholly-owned
subsidiary of Acquired Corporation.
 
ARTICLE 1
 
PLAN OF MERGER
 
Adoption of Plan
 
1.01.           A plan of merger of Acquired Corporation and Surviving
Corporation under the provisions of Nevada Revised Statutes Section 92A.180 and
Section 368(a)(1)(A) of the Internal Revenue Code is adopted as follows:
 
(a)           On the effective date of the merger as set forth in Article 1.02
of the Plan of Merger, Acquired Corporation will be merged into Surviving
Corporation, to do business and be governed by the laws of Nevada.
 
(b)           Surviving Corporation's name will be: Petron Energy II, Inc.
 
(c)           When this Plan becomes effective, the existence of Acquired
Corporation as a distinct entity will cease. At that time, Surviving Corporation
will succeed to all the rights, title, and interests to all property owned by
Acquired Corporation, without reversion or impairment, without any further act,
and without any transfer or assignment having occurred, but subject to any
existing liens or other encumbrances on the property. Surviving Corporation also
will be subject to all the debts and obligations of Acquired Corporation as the
primary obligor, except as otherwise provided by law or contract, and only
Surviving Corporation will be liable for the debt or obligation.
 
(d)           Surviving Corporation will carry on business with the assets of
the parties to the merger, as these corporations existed immediately prior to
the merger.
 
(e)           The shareholders of Acquired Corporation will surrender all of
their shares or other securities in the manner set forth in this Plan.
 
(f)           In exchange for the securities of Acquired Corporation surrendered
by the shareholders of Acquired Corporation, Surviving Corporation will issue
and transfer to the shareholders of Acquired Corporation, on the basis set forth
in this Plan, shares of its common stock or other securities (as described
below).
 
(g)           Prior to the Plan, Surviving Corporation is a wholly-owned
subsidiary of Acquired Corporation.
 
Effective Date
 
1.02.           The effective date of the merger (“Effective Date”), will be the
later of (a) December 26, 2011; and (b) the date when the Articles of Merger in
the form of Exhibit A attached hereto are filed by the Secretary of State of
Nevada.
 
 
 

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ARTICLE 2
 
REPRESENTATIONS AND WARRANTIES
 
Acquired Corporation
 
2.01.           As a material inducement to Surviving Corporation to execute
this Plan and perform its obligations under this Plan, Acquired Corporation
represents and warrants to Surviving Corporation as follows:
 
(a)           Acquired Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, with corporate power
and authority to own, lease, and operate property and carry on its business as
it is now being conducted.  A copy of the articles of incorporation and the
bylaws of Acquired Corporation, including all amendments, effective as of the
date of this Plan, have been delivered to Surviving Corporation, and are
complete and correct.
 
 (b)           To its knowledge, no actions, suits, or other legal proceedings
are pending or threatened against Acquired Corporation before or by any federal,
state, or municipal court, department, board, bureau, or agency.
 
Surviving Corporation
 
2.02.           As a material inducement to Acquired Corporation to execute and
perform its obligations under this plan, Surviving Corporation represents and
warrants to Acquired Corporation as follows:
 
(a)           Surviving Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, with corporate power
and authority to own property and carry on its business as it is now being
conducted.
 
(b)           As of the date of this Plan, one (1) share of the common stock of
the Surviving Corporation is validly issued and outstanding, fully paid, and
non-assessable, which share will be cancelled concurrently with the parties’
entry into this Plan of Merger.
 
Securities Law
 
2.03.           The parties to the merger desire to arrange mutually for and
manage all necessary procedures under the requirements of federal, Nevada and
Nevada securities laws and the related supervisory commissions to ensure that
this Plan is properly processed to comply with all federal and state
registration requirements, or to take full advantage of any lawful and
applicable exemptions from registration.
 
Right to Dissent
 
2.04.           Shareholders of the Acquired Corporation may be entitled, if
they comply with the provisions of the Nevada Revised Statutes, to be paid the
fair value of their shares.
 
 ARTICLE 3
 
TERMS, CONDITIONS, AND PROCEDURES PRIOR TO EFFECTIVE DATE
 
Submission to Shareholders and Filing
 
3.01.           Acquired Corporation is the parent company of Surviving
Corporation, holding 95% of the outstanding shares of Surviving Corporation, and
Shareholders holding at least two-thirds (2/3rd) of the voting power of and the
sole Director of Acquired Corporation have approved this Plan.  One (1) share
out of the one (1) outstanding share or 95% of the shares eligible to vote of
the Surviving Corporation has approved this Plan.  Shareholders holding at least
two-thirds (2/3rd) of the voting power of and the sole Director of Acquired
Corporation have approved this Plan.
 
 
 

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Conditions Precedent to Obligations of Acquired Corporation
 
3.02.           Except as expressly waived in writing by Acquired Corporation,
all of the obligations of Acquired Corporation are subject to Surviving
Corporation's satisfaction of each of the following conditions on or before the
Effective Date:
 
(a)           The representations and warranties made by Surviving Corporation
to Acquired Corporation in Article 2 of this Plan will be deemed to have been
repeated on the Effective Date and will on that date be true and correct in all
material respects. If Surviving Corporation discovers any material error,
misstatement, or omission in those representations and warranties on or before
the Effective Date, it must report that discovery immediately to Acquired
Corporation and must either correct the error, misstatement, or omission or
obtain a written waiver from Acquired Corporation.
 
(b)           Surviving Corporation must have performed and complied with all
applicable covenants, agreements and conditions required by this Plan on or
before the Effective Date.
 
(c)           No action or proceeding by any governmental body or agency must
have been threatened, asserted, or instituted to restrain or prohibit the
carrying out of the transactions contemplated by this Plan.
 
(d)           All corporate and other proceedings and actions taken in
connection with the transactions contemplated and all certificates, opinions,
agreements, instruments, and documents must be satisfactory in form and
substance to counsel for the Acquired Corporation.
 
Conditions Precedent to Obligations of Surviving Corporation
 
3.03.           Except as waived in writing by Surviving Corporation, all of the
obligations of Surviving Corporation under this Plan are subject to fulfillment
of each of the following conditions on or before the Effective Date:
 
(a)           The representations and warranties of Acquired Corporation in this
Plan and in any document delivered under this Plan are deemed to have been
repeated in full on the Effective Date and must on that date be true and correct
in all material respects. If Acquired Corporation discovers any material error,
misstatement, or omission in those representations and warranties on or before
the Effective Date, it must report that discovery immediately to Surviving
Corporation and must either correct the error, misstatement, or omission or
obtain a written waiver from Surviving Corporation.
 
(b)           Acquired Corporation must have performed and complied with all
applicable covenants, agreements and conditions in this Plan on or before the
Effective Date.
 
(c)           No action or proceeding by any governmental body or agency will
have been threatened, asserted, or instituted to restrain or prohibit the
completion of the transactions contemplated by this Plan.
 
Interim Conduct of Business; Limitations
 
3.04.    (a)                      Except as limited by this paragraph 3.04,
pending consummation of the merger, each of the parties to the merger will carry
on its business in substantially the same manner as prior to the date of this
Plan and will use its best efforts to maintain its business organization intact,
to retain its present employees, and to maintain its good will in relationships
with suppliers and others transacting business with the entity.
 
 
 

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(b)           Except with the prior consent in writing of Surviving Corporation,
pending consummation of the merger, Acquired Corporation will not enter into any
transaction other than those involved in carrying on its ordinary course of
business.
 
Expenses
 
3.05.           (a)           If the merger set forth in this Plan is
consummated, Surviving Corporation will pay all costs and expenses of the
merger.
 
   (b)           If the merger set forth in this Plan is not consummated, each
party to this Plan will pay its own costs and expenses incident to the
contemplated merger.
 
ARTICLE 4
 
MANNER AND BASIS OF CONVERTING SHARES AND SECURITIES
 
Manner of Converting Shares and Securities
 
4.01.           The holders of shares and convertible securities (warrants or
options) of Acquired Corporation will surrender their securities to the
President of Surviving Corporation promptly after the Effective Date, in
exchange for securities of Surviving Corporation to which they are entitled
under this Article 4.
 
Basis of Converting Shares and other Securities
 
4.02.           (a)           The Preferred Stock shareholders of Acquired
Corporation will be entitled to receive shares of common stock of Surviving
Corporation, par value $0.01 per share, to be distributed on the basis of two
(2) shares of common stock of the Surviving Corporation for each one (1) share
of Preferred Stock of Acquired Corporation.
 
(b)           Warrant and option holders of Acquired Corporation will be
entitled to receive warrants and options, as applicable, entitling them to
purchase securities of Surviving Corporation on substantially similar terms as
the warrants or options they hold in the Acquired Corporation.
 
Capital Structure of Surviving Corporation
 
4.03.           (a)           There is currently one outstanding share of common
stock of Surviving Corporation, which will be cancelled concurrently with the
transactions contemplated herein.
 
(b)           After the Effective Date, Surviving Corporation will have a total
of 1,010,000,000 shares of authorized stock, which are divided into
1,000,000,000 shares of common stock which are of a par value of $0.01 per share
and 10,000,000 shares of preferred stock which are of a par value of $0.01 per
share.  After the Effective Date, Surviving Corporation will have 121,067,086
shares of common stock issued and outstanding and zero shares of Series A
Preferred Stock issued and outstanding notwithstanding the rights of any
Dissenting Shareholders (as described below).
 
(c)           At the Effective Date, each outstanding option and warrant to
acquire shares of Acquired Corporation shall automatically become an option or
warrant to acquire an equivalent number of shares of Surviving Corporation.
 
 
 

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Dissenting Shareholders
 
4.04           (a) Shares of common stock and Series A Preferred Stock of
Acquired Corporation which are issued and outstanding immediately prior to the
Effective Date and which are held by persons who are entitled to and have
properly exercised, and not withdrawn or waived, appraisal or dissenters rights
with respect thereto in accordance with the Nevada Revised Statutes (the
“Dissenting Shares” and the “Dissenting Shareholders”), will not be converted
into securities of Surviving Corporation as provided above and will be entitled,
in lieu thereof, to receive payment of the appraised value of such shares in
accordance with the provisions of the Nevada Revised Statutes, unless and until
such holders fail to perfect or effectively withdraw or lose their rights to
appraisal, dissent and payment under the Nevada Revised Statutes.  If, after the
Effective Date, any such holder fails to perfect or effectively withdraws or
loses such right, such securities of Acquired Corporation will thereupon be
treated as if they had been converted at the Effective Date into the right to
receive securities of Surviving Corporation, as described above, without any
interest thereon.
 
 ARTICLE 5
 
DIRECTORS AND OFFICERS
 
Directors and Officers of Surviving Corporation
 
5.01.           The present sole Director of Acquired Corporation will serve as
the sole Director of Surviving Corporation until the next annual meeting or
until his successor has been elected and qualified.
 
5.02.           All persons who on the Effective Date are executive or
administrative officers of Acquired Corporation will become officers of
Surviving Corporation until its sole Director determines otherwise. Surviving
Corporation's sole Director may elect or appoint additional officers as he deems
necessary.
 
ARTICLE 6
 
ARTICLES OF INCORPORATION AND BYLAWS
 
Articles of Incorporation of Surviving Corporation
 
6.01.           The Articles of Incorporation of the Surviving Corporation shall
replace the Articles of Incorporation of the Acquired Corporation at the
Effective Date.  Such Articles of Incorporation, as existing on the Effective
Date, will continue in full force until altered, amended, or repealed as
provided in such Articles of Incorporation, the Bylaws or as provided by
law.  The Articles of Incorporation of the Acquired Corporation will cease to
exist.
 
Surviving Corporation's Bylaws
 
6.02.           The Bylaws of the Surviving Corporation shall replace the Bylaws
of the Acquired Corporation at the Effective Date.  Such Bylaws, as existing on
the Effective Date, will continue in full force until altered, amended, or
repealed as provided in such Bylaws, the Articles of Incorporation or as
provided by law.  The Bylaws of the Acquired Corporation will cease to exist.
 
ARTICLE 7
 
SURVIVAL OF WARRANTIES AND INDEMNIFICATION
 
Nature and Survival of Representations and Warranties
 
7.01.           All statements contained in any memorandum, certificate, letter,
document, or other instrument delivered by or on behalf of Acquired Corporation,
Surviving Corporation, or the shareholders of any party to the Plan of Merger
will be deemed representations and warranties made by such parties,
respectively, to each other under this Plan. The representations and warranties
of the parties and the shareholders will survive for a period of three years
following the Effective Date and will survive despite any inspections,
examinations, or audits made on behalf of the parties and the shareholders.
 
 
 

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ARTICLE 8
 
ABANDONMENT
 
Circumstances Allowing Termination and Abandonment
 
8.01.           This Plan may be terminated and the merger may be abandoned at
any time before the Effective Date, even after the Articles of Merger have been
filed with the Nevada Secretary of State.
 
(a)           The board of directors of any party to the merger may abandon this
Plan before the Articles of Merger are filed with the Nevada Secretary of State.
 
(b)           To abandon this Plan after the Articles of Merger have been filed
with the Nevada Secretary of State, an officer or authorized representative must
file a statement with the Secretary of State executed on behalf of each party to
the merger declaring that the Plan has been abandoned in accordance with the
terms of this Plan and Section 92A.180 of the Nevada Revised Statutes. The
statement must be filed before the Effective Date of the merger.
 
(c)           Regardless of whether the Articles of Merger have been filed with
the Nevada secretary of state, this Plan may be abandoned under the following
conditions:
 
 
 
(i)
The number of shareholders dissenting from the merger is so large that the
merger is deemed inadvisable or undesirable in the opinion of the board of
directors of either party to the merger.

 
(ii)           Any material litigation or proceeding has been instituted or
threatened against another party to the merger or any of its assets, that
renders the merger inadvisable or undesirable in the opinion of the board of
directors of either party to the merger.
 
(iii)           Any legislation has been enacted that, in the opinion of the
board of directors of either party to the merger, renders the merger inadvisable
or undesirable.
 
(iv)           After the date of execution of this Plan there has been, in the
opinion of the board of directors of either party to the merger, any materially
adverse change in the business or condition, financial or otherwise, of another
party to the merger.
 
(d)           At the election of Surviving Corporation's board of directors if,
without the prior consent in writing of Surviving Corporation, Acquired
Corporation has entered into any transaction other than those involved in the
ordinary course of business.
 
Notice of and Liability on Termination of Plan
 
8.02.           If an election is made to abandon this Plan under paragraph
8.01:
 
(a)           An officer or authorized representative of the party whose board
of directors has made the election must give immediate written notice of the
election to the other party to the merger.
 
(b)           When notice has been properly effected as provided in subparagraph
(a), and when an appropriate statement has been filed with the Secretary of
State as provided in section 8.02(b), this Plan will terminate and the proposed
merger will be abandoned. Except for payment of its own costs and expenses
incident to this Plan, there will be no liability on the part of either party to
the merger as a result of the abandonment.
 
 
 

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 ARTICLE 9
 
ENFORCEMENT AND INTERPRETATION
 
Further Assurances and Assignments
 
9.01.           Acquired Corporation agrees that when requested by Surviving
Corporation or by its successors or assigns, Acquired Corporation will execute
and deliver or cause to be executed and delivered all deeds and other
instruments necessary to consummate the transaction that is the subject of this
Plan. Acquired Corporation also agrees to take or cause to be taken any further
actions, assignments, or assurances that are necessary to vest, perfect, and
conform title of Surviving Corporation to all the property, rights, privileges,
powers, and franchises referred to in Article 1 of this Plan, and otherwise
necessary to carry out the intent and purposes of this Plan.
 
Notices
 
9.02.           Any notice or other communication required or permitted by this
Plan, with the exception of the filing of a statement of abandonment under
paragraph 8.01(b), will be deemed to be given when deposited in the United
States mails for transmittal by certified or registered mail, postage prepaid,
or when deposited with a public telegraph company for transmittal, charges
prepaid, addressed:
 
(a)           In the case of Acquired Corporation, to: 17950 Preston Rd., Ste.
960, Dallas, Nevada 75252, or to any other person or address that Acquired
Corporation may designate in writing on proper notice to Surviving Corporation.
 
(b)           In the case of Surviving Corporation, to: 17950 Preston Rd., Ste.
960, Dallas, Nevada 75252, or to any other person or address that Surviving
Corporation may designate in writing on proper notice to Acquired Corporation.
 
Entire Agreement and Counterparts
 
9.03.           This instrument and any exhibits attached to and incorporated
into the instrument contain the entire agreement between the parties with
respect to the transaction contemplated by this Plan. It may be executed in any
number of counterparts; however, all counterparts taken together will constitute
one original.
 
Controlling Law
 
9.04.           The validity, interpretation, and performance of this Plan is
controlled by and construed under the laws of Nevada.
 
Faxed Copies
 
9.05.           For purposes of this plan, a faxed signature will constitute an
original signature, and a copy of this plan will constitute an original for all
purposes.
 
 
 

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Construction

9.06           The captions and sections of this Plan are for convenience of
reference only and shall not affect the meaning or construction of any of the
terms or provisions of this Plan. Whenever the context so requires, all words
used herein in any gender shall include the masculine, feminine, and neuter
gender, all singular words shall include the plural, and all plural words shall
include the singular.

 

 
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IN WITNESS WHEREOF, (i) the Surviving Corporation has caused this Plan to be
signed by the President of the Surviving Corporation pursuant to authorization
contained in a resolution adopted by the Directors of and majority shareholders
of the Surviving Corporation approving this Plan and (ii) the Acquired
Corporation has caused this Plan to be signed by the President of the Acquired
Corporation pursuant to authorization contained in a resolution adopted by the
Directors of and shareholders of the Acquired Corporation approving this Plan.
 

 
PETRON ENERGY SPECIAL CORP.
 
a Nevada corporation
ATTEST:
   
/s/  Floyd L. Smith
 
Floyd L. Smith, President
         
PETRON ENERGY II, INC.,
 
a Nevada corporation
ATTEST:
   
/s/ Floyd L. Smith
 
Floyd L. Smith, President

 
 
 
 
 

 
 
 

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