Memorandum of Understanding



 





Exhibit 10.1




MEMORANDUM OF UNDERSTANDING




BETWEEN:




SINO -TOP TECHNOLOGIES, LTD.




AND




BREAM VENTURES, INC.




AND




THOSE PARTIES SIGNING AS CONCURRING WITH ITS TERMS AND CONDITIONS




DATED the 27th day of November 2004




 









 








MEMORANDUM OF UNDERSTANDING (“MOU”)




     THIS
MOU made as of the 27th day of November, 2004.



B E T W E E N :




     Bream Ventures, Inc.

     a
corporation incorporated under the laws of the

     state of Nevada.



     (hereinafter called “Bream”)



     -and-



     Sino-Top
Technologies, Ltd. a corporation

     incorporated
under the laws of the People’s Republic of China



     (hereinafter called “Sino Top”)



     -and-



     those signatories listed on the signature page as concurring with its
terms and conditions



     WHEREAS, Sino Top, its affiliated entities and those individuals or
entities executing this agreement have been granted licensing rights to explore
a total of ten properties in the People’s Republic of China and has been
granted a mining license for one additional property; and



     WHEREAS, Bream Ventures will agree to invest a total of $1 million to
acquire the four mining properties listed on Schedule B and an additional $2
million pursuant to the terms and conditions of this MOU provided that those
properties listed on Schedule B have been contributed to the Joint Venture; and



     WHEREAS, Bream’s capital contribution is subject to the execution of a
definitive joint venture agreement in order to explore and develop the
properties; and



     WHEREAS, the parties hereto wish to establish an equity joint venture to
participate in the exploration and evaluation, and if feasible, the development
and mining of mineral resources within the mining properties more specifically
set forth on the attached Schedule A and to further expand operations pursuant
to those properties listed on Schedule B;



     NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants, conditions and agreements herein contained, the parties
hereto agree as follows:



ARTICLE 1

FORMATION OF EQUITY JOINT VENTURE




     Bream and Sino Top hereby agree to associate and participate in an equity
joint venture for the purposes hereinafter stated and agree that all of their
rights and all of the operations or in connection with the Properties described
in Schedule A shall be subject to and governed by this MOU and the execution of
a definitive joint venture agreement. Subject to compliance with all conditions
precedent as set forth in this MOU and the execution of a definitive joint
venture agreement which will reflect the terms and conditions set forth herein
and include customary warranties and representations of a nature typically
included in such an agreement, the parties agree as follows:



 









 





     (a) The parties will form an equity joint venture to be called Sino Silver
China, Ltd. (the “Joint Venture”).



     (b) Sino-Top (and any affiliated entity) will contribute to the Joint
Venture all exploratory and licensing rights, together with any other interest
of any kind or nature, identified on Schedule A free and clear of all liens and
encumbrances.



     (c) Bream will contribute to the Joint Venture a total of $1 million (the
“Capital Contribution”) for the properties identified on Schedule A. Payment of
the $1 million shall be pursuant to the following schedule:



     On or before the later of December 15, 2004, or within five days of
execution of this MOU by those individuals or entities who are owners of
property rights identified on Schedule B, Bream will deposit with an Escrow
Agent acceptable to both parties the sum of $100,000. Said monies will be held
in trust and delivered to Sino-Top concurrently with the delivery of an
additional $400,000 (U.S.) at Closing. If Sino-Top cannot comply with any
conditions precedent to Closing, then the $100,000 shall be returned to Bream.
If Sino-Top satisfies all conditions precedent then in that event the $100,000
shall be released by the Escrow Agent and delivered to Sino-Top if Bream fails
to Close.



     Within 60 days of the issuance of the new License approving the Joint
Venture Bream shall contribute to the Joint Venture a total of $500,000 (U.S.)
inclusive of the $100,000 held in escrow.



     On or before the second anniversary date of Closing, Bream shall
contribute to the Joint Venture an additional $250,000 (U.S.).



     On or before the third anniversary date of Closing, Bream shall contribute
to the Joint Venture an additional $250,000 (U.S.).



     (d) If the Joint Venture shall require additional funding, Bream may, but
shall not be obligated to, provide said funding. If Bream provides said
funding, the parties may agree to reallocate the equity interests of each party
in the Joint Venture but in no event will the Sino-Top shareholders be the
holders of less than 30% of the outstanding equity interests in the Joint
Venture.



     (e) In consideration for its capital contribution, Bream shall be issued
share certificates, which upon issuance will represent 60% of the outstanding
equity securities in the Joint Venture.



     (f) All equity interests in the Joint Venture shall be issued to the
respective parties on execution of the definitive joint venture agreement.
Except as set forth herein, no other party shall have any equity interest in
the Joint Venture or claim to any of the assets of the Joint Venture.



     (g) The joint venture shall be formed for the following purposes:




	(i)	 	to conduct Exploration of the Property;
	 
	(ii)	 	to evaluate the possible Development of and
Mining on the Property;
	 
	(iii)	 	to engage in Development and Mining on the
Property;
	 
	(iv)	 	to perform any other activity necessary,
appropriate, or incidental to any of the foregoing.




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Notwithstanding anything else contained herein to the contrary, the obligation
of Bream to pay the full purchase price is contingent upon the Sino-Top audit
(or stub period financial statements as of a date prepared within 30 days of
closing) indicates that the net worth of the properties listed on Schedule A,
will be a minimum of $100,000. In the event the Net Worth is less than
$100,000, Bream’s obligation to make the capital contribution shall be reduced
on a dollar for dollar basis with said offset to be first applied against the
payment due on the second year anniversary date and any other amounts shall be
offset against monies due on the third anniversary date.




ADDITIONAL MEMBERS TO THE JOINT VENTURE



Those individuals executing the Joint Venture Agreement and who represent the
owner of the properties set forth on Schedule B, shall be permitted to become
members of the Joint Venture subject to the following terms and conditions.



The Signatories will contribute from time to time their property rights to the
Joint Venture. Upon the transfer of any property identified on Schedule B to
the Joint Venture, Bream shall contribute to the Joint Venture for each
property transferred an additional $286,000 payable as follows:



$96,000 on the transfer of each property to the Joint Venture:




     An additional $95,000 on the second anniversary date of Closing.



     An additional $95,000 on the third anniversary date of the Closing.


Any shares to be issued to the new joint venture partners shall be transferred
from those shares owned by Sino-Top shareholders. Bream shall retain a 60%
non-dilutable right to the Joint Venture until such time as all eleven (11)
properties have been transferred.



Upon transfer of any property to the Joint Venture, the owner of the property
will be required to execute the then existing joint venture agreement between
Sino-Top and Bream and agree to be bound by its terms and conditions.



Without the prior written consent of Bream, none of the signatories hereto may
transfer, assign or in any way encumber any of the properties listed on
Schedule B and agree to maintain applicable licenses in good standing.




ARTICLE 2

OPERATIONS OF THE JOINT VENTURE




     (a) The Joint Venture will be managed by a five member Board of Directors.
Three of the Board Members will be appointed by Bream and two of the Board
members will be appointed by Sino-Top. Ian Park shall serve as chairman of the
Board and Sino-Top shall be permitted to name two members. The initial
designees shall be Mr. Duan Huan Chun and Mr. Chen Xiang Ping. A quorum will be
present if at least a majority of the Board members are present. Board meetings
may be conducted either in person or via telephone provided at least five days
written notice is provided.



     (b) The Board of Directors will have the power to appoint officers to the
Joint Venture.



     (c) Mr. Chen agrees that for a period of one year following execution of
the definitive agreement, he will devote as much time as may be requested by
the Board of Directors to facilitate operations in China.



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     (d) The Board of Directors will meet monthly to establish a monthly budget
and review operations. All expenditure during the following month may only be
made pursuant to the budget. Issues to be discussed at any budgetary meeting
may include:




	(i)	 	general estimates of capital costs for the
exploration or development or exploration;
	 
	(ii)	 	reasonable estimates of all material expenditures
required to purchase, construct and install all material
machinery, equipment and other facilities and infrastructure
(including contingencies) required to bring a mine into
commercial production;
	 
	(iii)	 	reasonable estimates of material expenditures
required to perform all other related work required to
commence commercial production of Products (including
reasonable estimates of working capital requirements, if any);
and
	 
	(iv)	 	reasonable estimates of all other material direct
and indirect costs and general and administrative expenses
that may be required for an evaluation of the proposed
production levels;
	 
	(v)	 	capital cost estimates shall include a schedule
of the timing of the estimated material capital requirements
for such proposal;





     (e) The Joint Venture will establish a bank account at such banking
facility as determined by Bream. The bank account will require the signature of
at least two individuals for all expenditures in excess of $1,000(U.S.).



     (f) The Board of Directors will have the authority to authorize the Joint
Venture to enter into contractual joint ventures with both Chinese and foreign
companies to develop and exploit any exploratory or mining opportunities.



     (g) The Board of Directors will have the authority to authorize the
distribution of profits. Distributions may be made in kind or in cash. Any
distributions shall be in proportion to the party’s equity ownership in the
Joint Venture.



ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SINO-TOP




Representations and Warranties




     Sino-Top and its Shareholders warrant and represent as follows:



     (a) that it is a validly existing Corporation, in good standing under the
laws of the jurisdiction in which it was incorporated;



     (b) that it has the capacity to enter into this MOU and all transactions
contemplated herein and that all other actions required to authorize it to
enter into and perform this MOU have been properly taken;



     (c) that it will not breach any other agreement or arrangement by entering
into or performing this Agreement;



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     (d) that this Agreement has been duly executed and delivered by it and is
valid and binding upon it in accordance with its terms;



     (e) each property and license being contributed as part of Sino-Top’s
capital contribution is owned free and clear of all liens, charges,
encumbrances, security interests and adverse claims;



     (f) pending execution of a definitive agreement, Sino-Top will not
transfer or in any way encumber any of the Property or licenses;



     (g) pending execution of a definitive joint venture agreement, Sino-Top
will conduct its normal business operations and not engage in any transaction
outside of the normal course of business or enter into any agreement requiring
payment in excess of $5,000 without the prior written consent of Bream.
Sino-Top shall also, at its own cost and expense take such steps as necessary
in order to preserve and maintain all mineral and mining rights;



     (h) Sino-Top and its officers and directors will execute at closing an
agreement which will provide in part that all mining activities which they may
pursue in China must be first brought to the attention of the Joint Venture at
which time the Board will then have 60 days to determine if the Joint Venture
chooses to pursue the opportunity.



ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BREAM




Representations and Warranties




     Bream warrants and represents as follows:



     (a) that it is a validly existing Corporation, in good standing under the
laws of the jurisdiction in which it was incorporated.



     (b) that it has the capacity to enter into this MOU and all transactions
contemplated herein and that all other actions required to authorize it to
enter into and perform this MOU have been properly taken;



     (c) that it will not breach any other agreement or arrangement by entering
into or performing this Agreement.;



     (d) that this Agreement has been duly executed and delivered by it and is
valid and binding upon it in accordance with its terms;



ARTICLE 5

CONDITIONS TO CLOSING




     The Closing of this transaction is subject to the following conditions
precedent:



     (a) The parties have executed a definitive equity joint venture agreement
which will set forth with more specificity the terms and conditions identified
in this MOU.



     (b) Sino-Top shall deliver to Bream audited financial statements for its
most recent year end, and stub period financial statements as of a date within
30 days of the anticipated closing. Said audit to be performed by a nationally
recognized public accounting firm in conformity with Generally Accepted




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Accounting Principles and the rules and regulations of the United States
Securities and Exchange Commission. The cost of the audit shall be borne by
Bream.




     (c) The Chinese government will have approved the formation of the equity
joint venture, and the capital contribution of both parties.



     (d) All shareholders of Sino-Top must approve the formation of the equity
joint venture and approve their dilutive interest as a result of the Joint
Venture and their respective equity ownership shall be adjusted
proportionately.



     (e) Sino-Top or those parties transferring mining rights to the Joint
Venture must receive a license from the Provincial Branch of Ministry of Land &
Resources in Inner Mongolia Autononomous Region approving the transfer of the
properties listed on Schedule B.



     (f) Sino-Top has complied with all due diligence requests including but
not limited to delivery to Bream of all geological and technical data related
to any of the properties as well as maps and surveys . Sino-Top shall also
prepare any requested geological studies.



ARTICLE 6

CLOSING




     The Closing of the transaction (as to the four properties listed on
Schedule A) will take place on February 15, 2005 if all conditions precedent
have been satisfied. If all conditions precedent have not been satisfied by
February 15, 2005, Closing will take place within 30 days following
satisfaction of all conditions precedent, but in no event later than April 1,
2005, unless extended by the mutual consent of the parties.



     Subject to compliance with all conditions precedent as set forth herein,
the closing (as to the properties listed on Schedule B) will take place within
ten days following notice to Bream that all conditions precedent have been
satisfied and the property has been transferred to the joint venture.



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     IN WITNESS WHEREOF the Participants hereto have executed this Agreement as
of the date first above written.



	 	 	 	 	 
	WITNESS
	 	 	 	 
	 
	 	 	 	 
	 	 	BREAM VENTURES, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Ian Park
	


	 	 	 	

	

	 	 	 	Ian Park, Chairman
	 
	 	 	 	 
	 	 	SINO-TOP TECHNOLOGIES LTD.
	 
	 	 	 	 
	

	 	By:	 	/s/ Duan Huan Chun
	


	 	 	 	

	

	 	 	 	Mr. Duan Huan Chun, Chairman







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