Item
1.01 Entry into a Material Definitive Agreement.
On April
4, 2008, TAO Minerals, Ltd. (the “Company”) and Outboard Investments
Ltd. entered into a Promissory Note Conversion Agreement (the
“Conversion Agreement), pursuant to which the Company agreed to provide for
certain conversion provisions related to that certain promissory note (the
“Promissory Note”) issued by the Company. The Promissory Note originally
evidenced an interest free loan received by the Company from Epsom Investment
Services N.V. in the amount of $620,000. On April 4, 2008, the Promissory Note
was transferred to Outboard Investments Ltd. (“Outboard”) pursuant to that
certain Debt Sale Agreement. Pursuant to the Conversion Agreement, the
Promissory Note is convertible into shares of the Company’s common stock at a
price equal to 30% of the lowest closing bid price of the shares of the
Company’s common Stock during the five trading days immediately preceding the
conversion date. In the event of a failure by the Company to honor any
conversion requests by Outboard, Outboard shall have the right to demand payment
of all outstanding amounts under the Promissory Note which amounts shall be paid
within 5 days.
The
Promissory Note Conversion Agreement also provides that Outboard may have the
right to require the Company to redeem the Promissory Note in cash at 110% of
the outstanding principal amount, together with all accrued and unpaid interest
in the event (A) the Company challenges, disputes or denies the right of
Outboard to effect the conversion of the Promissory Note or otherwise dishonors
or rejects a conversion request, and (B) any third party asserts any claim which
seeks to challenge, deny, enjoin, limit, modify or dispute the right of Outboard
to effect any conversions under the Promissory Note.
Outboard
shall not be obligated to effect conversions under the Conversion Agreement in
the event such conversion will result in Outboard being deemed to be the
beneficial owner of more than 4.99%
Item
9.01 Financial Statements and Exhibits.
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(c)
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Exhibits.
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Exhibit
Number
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Description
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10.1
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Promissory
Note Conversion Agreement between Tao Minerals, Ltd and Outboard
Investments
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| TAO Minerals, Ltd. | |||
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Date:
June 5, 2008
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By:
|
/s/ James Sikora | |
| James Sikora | |||
| Chief Executive Officer | |||