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Item 1.01
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Entry into a Material
Definitive Agreement.
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Restructuring Agreement with THVOW and ICCDI
On August 18, 2017, SES Asia Technologies Limited,
an indirect subsidiary of Synthesis Energy Systems, Inc. (“SES”), entered into a Restructuring Agreement (the “Restructuring
Agreement”) with Suzhou THVOW Technology Co., Ltd. (“THVOW”), formerly known as Zhangjiagang Chemical Machinery,
and Innovative Coal Chemical Design Institute (Shanghai) Co., Ltd. (“ICCDI”), with respect to their joint venture Jiangsu
Tianwo-SES Clean Energy Technologies Co., Ltd. (“Tianwo-SES”). Pursuant to the Restructuring Agreement, SES will transfer
a 10.0% ownership interest in Tianwo-SES to ICCDI in exchange for RMB 11,150,000 (approximately USD $1.7 million). As a result
of the transaction, SES will own 25% of Tianwo-SES. The transaction will be effective upon receipt of the funds by SES. In addition,
for 26 months after the effective date, SES has a right of first offer on any ownership interest in Tianwo-SES that either THVOW
and ICCDI desires to sell to a third party, provided that SES shall not exceed 50% ownership of Tianwo-SES.
In connection with entering into the Restructuring
Agreement, on August 18, 2017, but effective upon effectiveness of the Restructuring Agreement, SES entered into a Share Transfer
Agreement with ICCDI respecting the ownership transfer contemplated by the Restructuring Agreement.
Joint Venture Contract
On August 18, 2017, but effective upon effectiveness
of the Restructuring Agreement, in connection with entering into the Restructuring Agreement, SES, THVOW and ICCDI entered into
an amended Joint Venture Contract (the “JV Contract”) respecting Tianwo-SES. The JV Contract replaces in its entirety
the prior joint venture contract between SES and THVOW dated February 14, 2014 as described in the Current Report on Form 8-K filed
by SES on February 14, 2014 (the “2014 8-K”). The primary purpose of the JV Contract was to add ICCDI as a party. Except
as noted below, the material terms of the JV Contract remain unchanged from what was described in the 2014 8-K.
In addition to the ownership changes described
above, Tianwo-SES will now be managed by a board of directors (the “Board”) consisting of eight directors, four appointed
by THVOW, two appointed by ICCDI and two appointed by SES. Certain acts as described in the JV Contract require the unanimous approval
of the Board. If the Board becomes deadlocked on any issue, it will be resolved through binding arbitration in Shanghai. Each of
THVOW and SES also now has the right to appoint a supervisor, which will supervise the management of Tianwo-SES, including through
(i) inspecting accounting records, vouchers, books and statements of Tianwo-SES; (ii) supervising the actions of directors and
management; and (iii) attending meetings of the Board to raise questions or suggestions regarding matters to be resolved by the
Board. The general manager, which will serve as the principal executive of the Joint Venture, will now be appointed by ICCDI. Certain
other members of management will now be appointed by both SES and THVOW.
Technology Usage and Contribution Agreement
On August 18, 2017, but effective upon effectiveness
of the Restructuring Agreement, in connection with entering into the Restructuring Agreement, SES, THVOW and ICCDI entered into
an amended Technology Usage and Contribution Agreement (the “TUCA”) respecting Tianwo-SES. The TUCA replaces in its
entirety the prior technology usage and contribution agreement between SES and THVOW dated February 14, 2014 as described in the
2014 8-K. The material terms of the TUCA remain unchanged from what was described in the 2014 8-K.
The foregoing descriptions are qualified in
its entirety by reference to the full text of the Restructuring Agreement, the Share Transfer Agreement, the JV Contract and the
TUCA which are filed with this Current Report on Form 8-K as Exhibit 10.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4, respectively.