MANAGEMENT CONSULTING AGREEMENT

 

THIS MANAGEMENT CONSULTING AGREEMENT is made this 10th day of October, 2019 (the
“Effective Date”), by and between Market Development Consulting Group, Inc.
d/b/a MDC Group (“Consultant”), a Wisconsin corporation with mailing address
7845 N. Links Circle, Fox Point, Wisconsin 53217, and Synthesis Energy Systems,
Inc., (“Company”), a Delaware corporation with principal executive offices
located at One Riverway, Suite 1700, Houston, Texas, 77056.

 

WHEREAS, Consultant provides management consulting services; and

 

WHEREAS, Company wishes to retain Consultant to provide such services to Company
on the terms and conditions set forth herein.

 

NOW THEREFORE, for the mutual promises and other consideration described herein,
the parties hereto agree as follows:

 

1. Information to be furnished by Company. Company shall furnish Consultant with
current public information about Company, including without limitation Company’s
Annual Report on Form 10-K filed with the Securities and Exchange Commission for
Company’s most recently completed fiscal year, its most recent Annual Report to
Shareholders, its most recent Proxy Statement and any other periodic or current
reports filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 since the dates of those documents, and shall
also provide any other public information reasonably requested by Consultant
(“Company Information”). Consultant acknowledges that Company will, from time to
time in the course of consulting with Consultant on press releases and other
communications to the public and to broker/dealer and institutional investor
networks, provide to Consultant nonpublic information. For so long as such
information remains nonpublic or unless and until Company advises Consultant
that such information no longer is material, Consultant shall refrain from
trading in any securities of Company or advising others to do so and shall
refrain from disclosing or disseminating such information to any other party
except as directed and approved by Company.

 

Company shall be responsible to assure Company Information accurately and fairly
presents the financial condition and results of operations of Company as of the
dates indicated thereon. Consultant shall have no liability for any misstatement
or omission in Company Information, and Company shall be obligated to indemnify
and defend Consultant against any claim, action or proceeding brought by any
party against Consultant asserting such third party has been injured as a result
of any such misstatement or omission. The preceding indemnification in favor of
the Consultant solely applies with respect to the Consultant’s use of Company
Information.

 

2. Management Consulting Services. Consultant shall assist Company’s management
in developing and executing its investor relations and corporate communications
strategy, as set forth on Schedule A hereto (the “Scope”). Both Consultant and
Company recognize that the Scope will be a significant undertaking and
commitment of time on both parties. While the relationship between Company and
Consultant is not an employer/employee relationship, and although not exclusive,
Consultant further agrees that the Scope will be a primary focus of Consultant’s
time and effort.

 

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Consultant is an independent contractor and is not an officer, employee,
servant, agent, partner or joint venturer of Company. In the performance of
services under this Agreement, Consultant’s Staff shall not be, and shall not
hold themselves out to be, an officer, employee, servant, agent, partner or
joint venturer of Company and shall have no authority to legally bind Company
unless expressly authorized to do so in writing by an authorized executive
officer of Company. Consultant warrants that the services to be provided
hereunder will not cause a conflict with any other duties or obligations of
Consultant to third parties.

 

3. Term and Termination. This Agreement shall become effective as of the date
written above, and shall remain in effect for one calendar year until the close
of business on September 30, 2020 (“Expiration Date”). Thereafter, this
Agreement automatically shall renew for successive one-year terms, unless either
party provides the other with at least thirty (30) days advance written notice
of non-renewal. Furthermore, Company and Consultant shall complete an annual
review 30 days prior to each 12-month anniversary date of the Effective Date.
During such review, the parties agree to use reasonable efforts to jointly
assess Company’s investor relations and corporate communications performance,
address needs and deficiencies and develop updated objectives for the effort.
Should the parties not reach mutual agreement on the update objectives, then
either party may choose to terminate this Agreement with 30 days written notice.
Upon any such termination, expiration or non-renewal of this Agreement, the
parties hereto shall have no further duty or obligations hereunder; provided
that Company shall remain obligated to defend and indemnify Consultant as
described in paragraph 1 of this Agreement and to make any payments of monthly
retainer fees and reimbursable expenses pursuant to paragraph 4 and paragraph 5
which remain unpaid as of the effective date of expiration or non-renewal.

 

4. Compensation for Services.

 

(a) Consulting Fee. For the initial 6 months of the term of this Agreement or
until the Company’s contemplated Reverse-Merger Transaction between the Company
and Australian Future Energy Pty Ltd, closes (“Reverse-Merger”), Company shall
pay to Consultant a monthly fee of US $10,000.00. Thereafter, the Company shall
pay to Consultant a monthly fee of US $25,000.00. Depending on the
Reverse-Merger closing date, the increase of the monthly fee shall be paid on a
pro-rata basis for the month of the transaction.

 

The monthly fee shall be due and payable by the Company upon execution of this
agreement and thereafter in advance on the first (1st) calendar day (or next
business day thereafter) of each calendar month (commencing November 1, 2019)
throughout the term of the Agreement (the “Payment Date”). Failure by Company to
pay the monthly fee on any Payment Date shall entitle Consultant to cease
providing services pursuant to this Agreement unless and until said payment
(together with any applicable late payment fee or penalty) is tendered in full,
in addition to any other rights or remedies Consultant may have under this
Agreement, at law or in equity, on account of such late payment. Payment of the
monthly fee shall be made on each Payment Date pursuant to this agreement,
without further notice or invoice by Federal Funds Wire to Consultant.

 

Any payment made more than thirty (30) days after the Payment Date will be
subject to an interest charge at the rate of 18% per year from the Payment Date
until the date paid or, if less, the maximum legal rate permissible under
applicable law.

 

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(b) Engagement Shares. Upon execution of this Agreement Company shall issue
70,000 Shares of the Company’s common stock to Consultant with all voting rights
thereto and holding periods under Rule 144 to commence upon issuance. Consultant
agrees not to seek registration of these 70,000 shares until the earlier of six
months or closing of the proposed Reverse-Merger. Upon closing of the proposed
Reverse-Merger , Company shall issue an additional 30,000 Shares of the
Company’s common stock to Consultant with all voting rights thereto and holding
periods under Rule 144 to commence upon issuance. Prior to the issuance of the
shares, the Company shall have taken all steps necessary to assure that such
shares will constitute duly authorized, fully-paid upon issuance,
non-assessable, validly issued and outstanding shares of the Company’s Common
Stock. The Company also shall have taken all steps necessary to assure that the
shares have been authorized for issuance by the Board of the Company to the
extent necessary.

 

(c) Common Stock Warrant. Upon execution of this agreement, Company shall grant
to Consultant a common stock warrant (the “Warrant”) entitling Consultant to
purchase up to 300,000 shares of common stock of Company at $3.00 per share. The
Warrant expires on September 30, 2029 and is freely assignable in whole or in
part by Consultant. Said Warrant to contain a mutually acceptable blocker clause
limiting the Consultant’s ability to at any time acquire more than 4.9% of the
Company’s common stock without the Company’s written approval.

 

On each anniversary of this Agreement prior to the Expiration Date, Company
shall further grant to the Consultant an additional common stock warrant
(“Anniversary Warrant Grant”) (which together with the original Warrant shall be
known as the “Warrants”), entitling the Consultant to purchase that number of
shares of Company Common Stock which is equal to 1% of the sum of (a) the number
of then outstanding shares of Company Common Stock, plus (b) the number of
shares of Company Common Stock underlying then outstanding warrants, options and
other derivative rights for the purchase of Company Common Stock which are at
that time both immediately exercisable and in the money. The exercise price of
each such Anniversary Warrant shall be equal to the average closing price over
the twenty consecutive trading days immediately preceding the Anniversary. Each
Warrant shall be fully exercisable immediately, shall have a term of ten years,
and shall be freely assignable in whole or in part by Consultant.

 

Concurrent with the execution of this Agreement and concurrent with the issuance
of any Anniversary Warrant Grants, the parties shall prepare or cause to be
prepared, execute and deliver to each other a mutually acceptable form of Common
Stock Warrant Agreement representing Company’s grant of all warrants described
in the foregoing. The agreement shall contain customary terms and conditions,
including without limitation provisions for cashless exercise.

 

Company shall have reserved from shares of its common stock held in treasury or
from authorized and unissued shares of its common stock, or from a combination
of the two, a sufficient number of shares of common stock to support the
exercise of the Warrants in full, and prior to delivery of the Warrants, Company
shall have taken all steps necessary to assure that such shares, upon issuance
in connection with the exercise of the relevant Warrant, will constitute duly
authorized, fully-paid, non-assessable, validly issued and outstanding shares of
common stock of Company. Company also shall have taken all steps necessary to
assure that the shares underlying the Warrants have been approved upon issuance
for quotation or listing in the quotation system or on the stock exchange on or
through which Company’s common stock is traded. Consultant understands that
Company’s common stock presently is quoted on the NASDAQ Global Market. The
Warrants shall survive the expiration or termination of this Agreement.

 

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During the term of this Agreement and for so long thereafter during which there
remain outstanding any Warrants granted to Consultant under this Agreement or
any shares of Company Common Stock acquired through the exercise of any such
Warrants which at that time remain subject to resale restrictions on account of
having been issued in an unregistered transaction(s), the holder(s) of such
Warrant(s) and shares shall have piggyback registration rights with respect to
all such outstanding shares and all shares underlying such unexercised Warrants
(together the “Outstanding Warrant Shares”). More specifically, if at any time
during which any Warrant Shares remain outstanding and are subject to resale
restrictions on account of having been issued in an unregistered transaction(s),
Company files any registration statement for the issuance, sale and/or resale of
any shares of its capital stock of the same class as the such Warrant Shares,
then Company shall be obligated to include in such registration statement the
resale of all such Warrant Shares by the holder(s) thereof. These piggyback
registration rights shall be explicitly provided for in the Common Stock Warrant
Agreement(s) described above.

 

Consultant’s exercise of any such piggyback registration rights shall be subject
to the following conditions and restrictions:

 

(i) If such rights are exercised in connection with an underwritten offering of
shares of capital stock of Company, then Company shall not be required to
include any Warrant Shares in such underwritten offering unless Consultant
accepts the terms of the underwriting as agreed upon between Company and its
underwriters, and then only in such quantity as the underwriters in their sole
discretion determine will not jeopardize the success of Company’s capital stock
offering;

 

(ii) For the avoidance of doubt, in no event shall Company be required to file a
post-effective amendment to any registration statement currently in effect as of
the date of this Agreement in order to accommodate Consultant’s exercise of the
piggyback registration rights granted pursuant to this Section 4 of this
Agreement; and

 

(iii) The piggyback registration rights described in this Section 4 of this
Agreement shall not apply with respect to any Warrant Shares which Consultant
may sell pursuant to Rule 144(k) or which Consultant otherwise may sell in
compliance with the Securities Act of 1933, as amended, and applicable state
securities laws without volume, manner of sale or other limitations or
restrictions.

 

5. Reimbursement for Expenses. Company shall reimburse Consultant for reasonable
out-of-pocket expenses incurred by Consultant in connection with performing
services pursuant to this Agreement, including without limitation travel, meals,
lodging, mobile telephone, and long distance telephone. Notwithstanding the
forgoing, any individual expenses in excess of $2,000 or monthly expenses in the
aggregate in excess of $5,000 must be pre-approved by Company in writing or such
expense may be disallowed. Company agrees to make reimbursement payments for
out-of-pocket expenses upon receipt of Consultant’s invoice. Any reimbursement
payments owed but not made within fifteen (15) days following the Company’s
receipt of invoice shall accrue interest from the invoice date at the rate of
18% per year, or, if less, the maximum rate permitted under applicable law.

 

6. Consultant’s Representations and Warranties. Consultant represents and
warrants to Company that Consultant has all requisite power and authority and
has taken all actions necessary to authorize the execution, delivery and
performance by it of this Agreement. This Agreement constitutes the valid and
binding obligations of Consultant, enforceable against Consultant in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to the rights of creditors generally and for general principles of
equity.

 

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EXCEPT AS STATED IN THE PRECEEDING PARAGRAPH, CONSULTANT MAKES NO
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE QUALITY OF SERVICES TO BE
PROVIDED HEREUNDER OR ANY RESULTS TO BE ACHIEVED, AND HEREBY EXPRESSLY DISCLAIMS
THE EXISTENCE OF ANY SUCH REPRESENTATIONS AND WARRANTIES, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. CONSULTANT SHALL HAVE NO LIABILITY FOR ANY INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY COMPANY OTHER THAN SUCH DAMAGES
WHICH RESULT FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD ON THE PART OF
CONSULTANT.

 

7. Company’s Representations and Warranties. Company represents and warrants to
Consultant that except as specifically provided for in the next paragraph,
Company has all requisite corporate or other power and authority, and has taken
all corporate or other actions necessary to authorize, the execution, delivery
and performance by it of this Agreement. This Agreement constitutes, and upon
execution and delivery the Warrant will constitute, the valid and binding
obligations of Company, enforceable against Company in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to the rights of creditors generally and for general principles of
equity.

 

8. Termination for Cause. This Agreement may be terminated by Company prior to
the Expiration Date only for Cause, as defined below. Such termination for Cause
shall not affect:

 

(a) Consultant’s rights or Company’s obligations with respect to any Warrants
granted to Consultant prior to such termination, as described in paragraph 4(b)
of this Agreement;

 

(b) Company’s obligation to indemnify Consultant as described in paragraph 1 of
this Agreement; or

 

(c) Company’s obligation to reimburse Consultant for expenses pursuant to
paragraph 4 and paragraph 5 of this Agreement which remain unpaid as of the
effective date of such termination.

 

For purposes of this Agreement, “Cause” means any of the following: (i)
Consultant or its President breaches any provision(s) of this Agreement and
Consultant fails to cure such breach to the reasonable satisfaction of Company
within thirty (30) calendar days following Consultant’s receipt of written
notice from Company specifying the asserted breach; (ii) the conviction (or plea
of nolo contendere or equivalent plea) of a felony by Consultant or its
President (which, through lapse of time or otherwise, is not subject to appeal);
(iii) Consultant or its President commits fraud, willful misconduct or gross
negligence while providing the Services or fulfilling its obligations under this
Agreement; (iv) an act of personal dishonesty taken by Consultant or its
President that is intended to result in personal enrichment of Consultant or its
President at the expense of Company or a Company affiliate; or (vi) any
representation made by Consultant in this Agreement proves to be materially
inaccurate and Consultant fails to cure (if curable) such misrepresentation to
the reasonable satisfaction of Company within thirty (30) calendar days of
Consultant’s receipt of written notice from Company specifying the asserted
misrepresentation.

 

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9. Confidentiality Covenant of Consultant

 

(a) Consultant acknowledges that his relationship with Company is one of high
trust and confidence and that in the course of Consultant’s service to Company
its Staff will have access to and contact with Proprietary Information, as
defined below. Consultant agrees that they will not, during the term of this
Agreement or at any time thereafter, disclose to others, or use for Consultant’s
benefit or the benefit of others, any Proprietary Information. Notwithstanding
the foregoing, Consultant’s obligations under this Section 9 shall not apply to
any information that (i) is or becomes known to the general public under
circumstances involving no breach by Consultant or others of the terms of this
Section 9, (ii) is generally disclosed to third parties by Company without
restriction on such third parties, or (iii) is approved for release by written
authorization of the President and Chief Executive Officer of Company.

 

(b) Upon the termination or expiration of this Agreement for any reason,
Consultant shall deliver to Company business records in Consultant’s possession
which contain Proprietary Information.

 

(c) For purposes of this Agreement, “Proprietary Information” means information
which is used in the business of Company and (i) is designated as Proprietary
Information by Company; (ii) is known by Consultant to be considered
confidential by Company; (iii) from all the relevant circumstances should
reasonably be assumed by Consultant to be confidential and proprietary to
Company, or (iv) relates to the SES Gasification Technology based on U-GAS® coal
gasification technology and its use in the manufacture of synthesis gas and
other energy products (and any work product resulting from or related thereto),
any Invention, formula, vendor information, customer or client information,
trade secret, process, methodology, research, report, technical data, know how,
computer program, software, software documentation, design, technology,
marketing or business plan, forecast, unpublished financial statements or
budgets, or license, price, cost or employee list that is communicated to,
learned of, developed or otherwise acquired by Consultant in the course of his
service as a consultant to Company. Failure to mark any writing as proprietary
or confidential shall not affect the proprietary or confidential nature of such
writing or the information contained therein.

 

10. Insurance. Company shall include Consultant as a named insured under the
director and officer insurance policy it maintains for its directors and
officers.

 

11. Miscellaneous. Neither party may assign its rights or duties under this
Agreement without the express prior written consent of the other party, except
that (i) either party may assign all of its rights hereunder together with all
of its obligations hereunder to any third party with which it may merge or
consolidate or to a purchaser of substantially all of the assets of such party
and (ii) Consultant may, without Company’s consent, assign to any party
affiliated with Consultant or to any independent contractor who renders services
to Consultant in connection with Consultant’s performance of this Agreement
Consultant’s right to receive all or any portions of the Monthly Consulting Fee,
Warrants and reimbursable expenses due and owing to Consultant.

 

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“Company” as used in this Agreement, shall mean Synthesis Energy Systems, Inc.
and all of its wholly owned subsidiaries.

 

This Agreement contains the entire understanding of the parties with respect to
the subject matter hereof. The terms of this Agreement may be altered only by
written agreement between the parties. The failure of either party to object to
or take affirmative action with respect to any conduct of the other which is in
violation of the terms of this Agreement shall not be construed as a waiver of
the violation or breach, or of any future similar violation or breach.

 

This Agreement shall be construed, interpreted and enforced in accordance with
the laws of the State of Delaware, without regard to its provisions governing
choice of law.

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its duly authorized officer as of the Effective Date.

 

Synthesis Energy Systems, Inc.   MDC Group           By: /s/ Robert Rigdon   By:
/s/ David E. Castaneda   Robert Rigdon, President & CEO     David E. Castaneda,
President

 

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SCHEDULE A

 

Scope of Consultant's Responsibilities

 

(a) Responsible for effective, efficient and comprehensive communications
strategy to current and potential shareholders;     (b) Serve as advisor to
Company management and primary point of contact for media and shareholder
relations;     (c) Maintain, update and expand investor roster;     (d) Manage
the process around earnings releases and investor conference calls such as
introductions and Safe Harbor Statements;     (e) Overall management and
guidance for Company market and investor awareness initiatives; and     (f)
Participate either in person or by conference call with Company management and
possibly outside counsel for frequent information updates on Company activities.

 

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