Document:

Exhibit
10.13

 

STOCKHOLDERS’
AGREEMENT

 

This
STOCKHOLDERS’ AGREEMENT (this “Agreement”) is made and entered into effective as of December ____,
2020, among IMPACT BIOLIFE SCIENCE, INC., a Nevada corporation, (the “Company”) and all of the Company’s
stockholders, as listed on the signature page hereto (individually, a “Stockholder” and collectively, the “Stockholders”).

 

PRELIMINARY
STATEMENTS

 

A.
Each Stockholder owns shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”
or “Stock”) in such amounts as of the date hereof as are set forth on Exhibit A hereto.

 

B.
The Stockholders and the Company desire to enter into this Agreement for the purpose of regulating certain aspects of the relationship
between the Stockholders as stockholders of the Company and to, among other things, (i) place certain restrictions on the sale, transfer
or other disposition of the shares of Stock owned by the Stockholders; and (ii) provide for certain rights and obligations with respect
thereto as hereinafter provided.

 

STATEMENT
OF AGREEMENT

 

NOW,
THEREFORE, in consideration of the promises and of the mutual covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE
I

DEFINITIONS

 

1.1
Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Affiliate”
of a Person means any other Person Controlling, Controlled by or under common Control with such Person. An “Affiliate”
of the Company includes each of the Company’s direct or indirect subsidiaries, whether or not in existence on the date hereof.
An “Affiliate” of a Stockholder that is a corporation includes its parent and each of the Stockholder’s
or its parent’s direct or indirect subsidiaries, whether or not in existence on the date hereof. For the purposes hereof, the Company
and its subsidiaries shall not be deemed an Affiliate of any Stockholder.

 

“Agreement”
has the meaning set forth in the preface.

 

“Board”
means the board of directors of the Company.

 

“Common
Stock” has the meaning set forth in the Preliminary Statements.

 

“Company”
has the meaning set forth in the preface.

 

“Company
Representatives” has the meaning set forth in Section 4.1(a) hereof.

 

    	 	 	Initials:___ /___ /____

     

    

 

“Confidential
Information” has the meaning set forth in Section 4.1(a) hereto.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

 

“Director”
means any member of the Board.

 

“Intellectual
Property” means all inventions, patents, pending patent applications, works, copyrights, trademarks (including service
marks), design rights, trade secrets, technology, compositions, formulas, processes, methods, specifications, schematics, mechanical
designs, programs, know-how, software, data, results, information, improvements, modifications, derivatives, financial and business processes,
functionality, and confidential information presented to the Company by GRDG Sciences, LLC, along with all rights in and to any of the
foregoing, whether registered, registerable, or unregistered, and including any application for registration of any of the foregoing
and all rights or forms of protection of a similar nature having equivalent or similar effect to any of these, which may exist anywhere
in the world.

 

“Person”
means any individual, partnership, corporation, limited company, limited liability company, joint venture, trust, association or other
entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Stock”
has the meaning set forth in the Preliminary Statements.

 

“Stockholder”
has the meaning set forth in the preface.

 

ARTICLE
II

MANAGEMENT

 

2.1
Board Composition.

 

(a)
There shall never be less than one nor more than five (5) Directors on the Board and such number shall be determined from time to time
by the Board. A Director need not be a stockholder of the Company or a resident of the State of Nevada. Subject to Section 2.1(b),
the Directors will be elected by the Stockholders of the Company.

 

(b)
Each Stockholder shall vote all of such Stockholder’s Stock and any other voting securities of the Company over which such Stockholder
has voting control and shall take all other reasonably necessary or desirable actions within such Stockholder’s control (whether
in such holder’s capacity as a stockholder, manager, member of a Board committee, officer of the Company or otherwise, and including,
without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and the Company shall take all reasonably necessary or desirable actions within its control (including, without
limitation, calling special Board and Stockholder meetings), to elect such Directors as follows:

 

(i)
GRDG Sciences, LLC shall be entitled to nominate one Director, so long as it shall remain a Stockholder of the Company and each Director
so elected will hold office until his or her successor has been duly elected and qualified or until his or her earlier resignation or
removal.

 

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(ii)
Impact BioMedical, Inc. shall be entitled to nominate the remaining Directors, so long as it shall remain a Stockholder of the Company
and each Director so elected will hold office until his or her successor has been duly elected and qualified or until his or her earlier
resignation or removal. In addition, Impact BioMedical, Inc. shall, so long as it shall remain a Stockholder of the Company, be entitled
to appoint the Company’s Chief Executive Officer, who may, at the discretion of Impact BioMedical, Inc., also be nominated to serve
as a Director, in addition to the three other Directors Impact BioMedical, Inc. shall be entitled to appoint.

 

(iii)
The parties hereto hereby agree that the initial Directors of the Company shall be Heng Fai Ambrose Chan, Frank D. Heuszel and Daryl
Thompson.

 

(iv)
Impact BioMedical, Inc. shall appoint the Chairman of the Company’s Board of Directors. The initial Chairman of the Company’s
Board of Directors shall be Heng Fai Ambrose Chan.

 

(v)
In the event of any tie in any vote of the Company’s Board of Directors, the Chairman of the Board shall be entitled to cast the
tie-breaking vote.

 

ARTICLE
III

ADDITIONAL
AGREEMENTS

 

3.1
Distributions of Licensing Income of the Company. Any licensing income of the Company that may be distributed to the Stockholders
shall be distributed on a pro rata basis, with each Stockholder to receive a percentage of such profits equal to their ownership percentage
in the Company. Any income received by the Company for the licensing or sale of any patent or project or for the sale of any subsidiary
or division of the Company shall be distributed to Stockholders as soon as reasonably and prudently possible, with only such necessary
funds retained by the Company (i) as required to be withheld by applicable law or regulation, or at the advice of the Company’s
counsel or auditors; (ii) as may be required to pay any taxes or government imposed fees owed by the Company or any subsidiary thereof;
and (iii) in connection with amounts expended to promote or complete the sale or licensing of any project or patent of the Company, or
sale of any subsidiary or division of the Company, including any percentage of income, revenue or other consideration to be paid to broker(s),
or any similar commission to be paid to any attorney, broker, investment banker, financial adviser, consultant or similar individual
or entity for their services. The parties hereto acknowledge and agree that the amounts described in items (i) through (iii) above must
be paid, disbursed or retained by the Company as described above prior to any pro rata distribution of profits.

 

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ARTICLE
IV

CONFIDENTIALITY

 

4.1
Confidentiality.

 

(a)
Non-Disclosure. In connection with each Stockholder’s rights hereunder, the Company and its advisors and agents may make
available to such Stockholder certain information that is non-public, confidential or proprietary in nature (the “Confidential
Information”). Each Stockholder agrees to keep the Confidential Information confidential and will not disclose the Confidential
Information to any third party without the Company’s prior written consent. Each Stockholder further agrees to reimburse, indemnify
and hold harmless the Company and its employees, affiliates, officers, directors, managers, partners, agents, advisors and representatives
(collectively, “Company Representatives”) from any damage, loss or expense incurred as a result of the use
of the Confidential Information by such Stockholder or other recipients contrary to the terms of this Agreement.

 

(b)
Confidential Information. Confidential Information includes: (i) information transferred or transmitted in writing, orally, visually,
electronically or by any other means, whether prior to, on or after the date hereof; (ii) information provided to the Stockholder by
third parties under circumstances where such Stockholder has an obligation not to disclose that information; and (iii) any memoranda,
reports, analyses or extracts such Stockholder produces that are based on, reflect or contain any of the Confidential Information.

 

4.2
Remedies. Each Stockholder acknowledges and agrees that the Company would be damaged irreparably if any provision of this Article
IV were not performed in accordance with its specific terms or were otherwise breached. Accordingly, the Company will be entitled
to equitable relief, including, without limitation, an injunction or injunctions to prevent breaches of the provisions of this Article
IV and to enforce specifically this Article IV and its provisions in addition to any other remedy to which the Company may
be entitled, at law or in equity.

 

4.3
Permitted Disclosures.

 

(a)
Agents and Advisors. Each Stockholder shall be allowed to disclose Confidential Information to its agents and advisors as is proper,
with the understanding that they shall keep the information confidential as set forth herein.

 

(b)
Regulatory and Compliance. The provisions of this Article IV shall in no way limit the ability of any Stockholder, or the corporate
parent or affiliate thereof, to make any disclosure regarding any project, research or agreement of the Company, of a kind required to
comply with either (i) the securities laws and regulations of the United States, the Republic of Singapore or any other jurisdiction
in which such entity shall have any securities or reporting obligations; or (ii) the disclosure rules of any securities exchange, market,
quotation system, alternative trading system or similar institution on which the securities of such entity are traded, quoted, marketed
or otherwise listed or available for sale.

 

(c)
Disclosure Required By Legal Proceedings. If a Stockholder is requested to disclose any Confidential Information in connection
with any legal or administrative proceeding or investigation, such Stockholder will notify the Company of the terms and circumstances
surrounding such a request so that the Company may seek a protective order or other appropriate remedy and/or take steps to resist or
narrow the scope of the disclosure sought by such request.

 

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ARTICLE
V

GENERAL
PROVISIONS

 

5.1
Waiver. None of the terms of this Agreement shall be deemed to have been waived by any party hereto, unless such waiver is in
writing and signed by that party. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any other provision of this Agreement or any further breach of the provision so waived.

 

5.2
Notices. All notices that are required or permitted to be given under this Agreement shall be in writing and shall be delivered
by e-mail or overnight courier and addressed, if to a Stockholder, to such Stockholder or his or her personal representative at his or
her last address known as disclosed on the records of the Company. Any notice under this Agreement shall be deemed to have been given
one (1) business day following e-mail transmission or delivery to the courier (as the case may be).

 

5.3
Termination. This Agreement will terminate (a) upon the dissolution and winding up of the Company; (b) on the date as of which
the parties hereto terminate this Agreement by unanimous written consent; (c) the fifth anniversary of the date of this Agreement, unless
the parties hereto shall mutually agree to extend it; or (d) upon six (6) months’ written notice by either party.

 

5.4
Entire Agreement. This Agreement contains the entire agreement, and supersedes all prior agreements and understandings and arrangements,
oral or written, among the parties hereto with respect to the subject matter hereof.

 

5.5
Amendments and Modifications. Any amendment, modification or change to this Agreement must be approved by written consent of the
Stockholders who are a party hereto, or any successor to the Stockholders and the Company.

 

5.6
Binding Effect; Benefits. Except as otherwise provided in this Agreement, no party may assign either this Agreement or any of
its rights, interests or obligations hereunder without the prior written approval of the other parties.

 

5.7
No Third-Party Beneficiaries. This Agreement is made solely and specifically among and for the benefit of the parties hereto,
and their respective successors and assigns subject to the express provisions hereof relating to successors and assigns, and no other
Person will have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third-party
beneficiary or otherwise.

 

5.8
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be unenforceable or invalid under applicable law, such provision shall
be ineffective only to the extent of such unenforceability or invalidity, and the remaining provisions of this Agreement shall continue
to be binding and in full force and effect.

 

5.9
No Strict Construction. The parties hereto jointly participated in the negotiation and drafting of this Agreement. The language
used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their collective mutual intent, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no rule of strict construction shall be applied against
any Person.

 

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5.10
Counterparts. This Agreement may be executed in any number of counterparts, and by facsimile, each of which shall be effective
only upon delivery and thereafter shall be deemed to be an original, and all of which shall be taken to be one and the same instrument
with the same effect as if each of the parties hereto had signed the same signature page.

 

5.11
Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada without
giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction) that would
cause the application of laws of any jurisdiction other than those of the State of Nevada. Any legal suit, action or proceeding arising
out of or related to this Agreement or the matters contemplated hereunder shall be instituted exclusively in the federal courts of the
United States or the courts of the State of Nevada in each case located in the city of Reno and County of Washoe, and each Party irrevocably
submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding and waives any objection based on improper
venue or forum non conveniens.

 

ARTICLE
VI

SPECIFIC
VENTURE PROVISIONS

 

6.1
Contributions.

 

(a)
GRDG SCIENCES, LLC. GRDG Sciences, LLC shall contribute to the Company (i) the Intellectual Property on the terms set forth herein,
and (ii) the advice and services of Daryl Thompson as a scientist during the term of this Agreement in connection with all projects as
the Company may from time to time pursue. GRDG agrees that during the term of this Agreement, Daryl Thompson shall (a) devote substantially
all of his professional time and efforts to the business of the Company, including but not limited to the development of new Intellectual
Property for the Company and (b) not transfer to or develop in or through any person or entity other than GRDG Sciences, LLC, or the
Company any technology other than as contemplated by this Agreement. It is the intent of the parties hereto that the Company shall have
the option to fund, own and develop any Intellectual Property developed by GRDG Sciences, LLC on or subsequent to August 1, 2020 through
the term of the Agreement, as described in further detail in Section 6.2(a), below.

 

(b)
IMPACT BIOMEDICAL, INC. Impact BioMedical, Inc. shall contribute to the Company such reasonable amounts as the Board shall in
future annual periods authorize as the Company’s business plan and budget. Such budget shall include (i) a payment of $35,000.00
per month to GRDG Sciences, LLC (the “Monthly Payment”); and (ii) such other amounts as shall be necessary
to fund the research, development and other scientific operations that the Board shall agree to pursue.

 

(c)
Affiliated Entities. The Stockholders agree that the payment set forth in Section 6.1(b) hereof shall be instead of, and not in
addition to, any amount that any Stockholder, or subsidiary or affiliate thereof, including but not limited to Global BioMedical, Inc.,
would be required to contribute to the monthly or annual budget of GRDG Sciences, LLC, pursuant to the Stockholders’ Agreement
of Global BioLife Inc., dated as of April 26, 2017, as amended, and that Global BioMedical, Inc. shall accordingly not be obligated to
make any further monthly or annual payment to GRDG Sciences, LLC as of the date hereof.

 

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6.2
Intellectual Property Rights.

 

(a)
Intellectual Property Development. GRDG Sciences, LLC shall not be obligated to contribute the items identified on Exhibit
B hereto (including any patents, trademarks, copyrights, already applied for), and the Company shall not be entitled to any royalties
or other payments from those items. Upon the execution of this Agreement, any Intellectual Property (i) which has been developed by GRDG
Sciences, LLC and presented to, approved of, and funded by the Board, on or subsequent to August 1, 2020; or (ii) which are to be developed
by GRDG Sciences, LLC during the term of this Agreement and presented to, approved of, and funded by the Board, shall become the property
of the Company. The management of GRDG Sciences, LLC shall execute such agreements, instruments, affidavits and certifications as shall
be necessary and proper to assign, transfer, convey and deliver to the Company all of its right, title, interest and ownership in such
Intellectual Property, and such agreements, instruments, affidavits and certifications as shall be necessary for the Company to maintain
its right, title, interest and ownership during the life thereof. Should the Board affirmatively decide not to pursue the development
and/or commercialization of any new project, discovery or invention presented by GRDG Sciences, LLC, then the Board shall provide GRDG
Sciences, LLC with a written notification thereof within thirty (30) calendar days of such decision, and GRDG Sciences, LLC shall be
free to develop, market, commercialize and sell the Intellectual Property for its own benefit, free from any payment or other claim from
the Company. GRDG Sciences, LLC shall keep the Board apprised of its research and development on a weekly basis. The Company shall retain
any and all Intellectual Property that it shall acquire from GRDG Sciences, LLC, including in the event of the termination of this Agreement.

 

[SIGNATURE
PAGE FOLLOWS]

 

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

 

	 	STOCKHOLDERS:
	 	 
	 	IMPACT BIOMEDICAL, INC.,

                                                                                A NEVADA CORPORATION

	 	 	 
	 	By: 	 
	 	Name:	Chan Heng Fai 
	 	Title:	Director 
	 	 	 
	 	GRDG SCIENCES, LLC, A FLORIDA

                                                                                LIMITED LIABILITY COMPANY 

	 	 	 
	 	By: 	 
	 	Name:	Daryl Thompson 
	 	Title:	Director of Scientific Initiatives
    
	 	 	 
	 	COMPANY:
	 	 
	 	IMPACT BIOLIFE SCIENCE, INC.,

                                                                                A NEVADA CORPORATION

	 	 	 
	 	By: 	 
	 	Name:	Chan Heng Fai 
	 	Title:	Director 

 

Signature
Page

 

    	 

    	 

    

 

EXHIBIT
A

 

Stockholder
Ownership

 

	Stockholder Name	 	Number of Shares Owned	 
	 	 	 	 
	Impact BioMedical, Inc.	 	 	800	 
	 	 	 	 	 
	GRDG Sciences, LLC	 	 	200	 

 

    	 	 	Initials:___ /___ /____Exhibit 10.1

 

RETIREMENT AGREEMENT

 

This RETIREMENT AGREEMENT
(this “Agreement”), dated as of June 23, 2022, is entered into by and among Epsilon Energy USA, Inc.
(the “Company”), Epsilon Energy Ltd. (“Parent”) and Michael Raleigh (“Executive”).

 

WHEREAS, Executive
currently serves as Chief Executive Officer (“CEO”) of the Company and Parent and as a member of the Board of
Directors of Parent (the “Board”);

 

WHEREAS, Executive
has indicated that he intends to retire from the Company;

 

WHEREAS, the Board
has determined that it is in the Company’s best interests to enter into this Agreement to ensure a smooth leadership transition
in connection with Executive’s retirement;

 

WHEREAS, Executive
and the Company entered into that certain Executive Employment Agreement dated effective as of January 1, 2021 (the “Employment
Agreement”) pursuant to which Executive may be entitled to certain payments and benefits following a termination of employment;
and

 

WHEREAS, the Company
and Executive desire to enter into this Agreement to provide for the payments and benefits that Executive will be entitled to receive
in connection with his retirement notwithstanding, and in lieu of, any payments and benefits he may have otherwise been entitled to under
the Employment Agreement, and to provide for an orderly succession and transition to the CEO.

 

NOW THEREFORE, in consideration
of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.            SCHEDULED
RETIREMENT DATE. Executive’s Retirement Date shall be June 30, 2022 (the “Retirement Date”).
Executive shall continue to serve as CEO until the Retirement Date and shall perform such duties as are customarily associated with the
position of CEO, consistent with the bylaws of the Company and as required by the Board. Executive shall resign as an officer of the Company
and of the Parent, and resign as a member of the Board of the Parent and the board of directors and all other positions of the Company,
the Parent, and any of their subsidiaries or affiliates, effective upon the Retirement Date. Following the Retirement Date, the Company
will owe no further payments, duties or obligations to Executive other than as provided for in this Agreement.

 

2.            TRANSITION.
Executive shall cooperate in the effort to affect an orderly, smooth, and efficient transition of Executive’s duties and responsibilities
to a successor as CEO (a “Successor”), as the Board or a Successor may reasonably request for up to three months
after the Retirement Date, including consulting with a Successor on matters that arose while Executive served as CEO and providing information
regarding the Company’s operations, practices and policies. Executive shall provide customary and reasonable certifications and
representations in connection with the filing of the Company’s annual and periodic reports with the Securities and Exchange Commission,
as well as the completion of the external audit reviews of the Company’s financial statements and internal controls, regarding any
period in which Executive was employed by the Company consistent with applicable law and as reasonably requested by the Successor, including
but not limited to Executive’s knowledge of any material misstatements or omissions of material fact, ineffective disclosure controls
or procedures, internal control weaknesses, practices or policies inconsistent with Generally Accepted Accounting Principles, or material
violations of law that have not been previously disclosed to the Company’s Audit Committee. The obligations under this Section 2
extend from the date of signing this agreement until six months after the Retirement Date.

 

    	 	1	 

     

    

 

3.            CONSIDERATION.
Subject to the terms and conditions of this Agreement, including the requirements described in or defined under Section 4
below, the Company will provide Executive with the following consideration:

 

(a)            Salary
Payments. The Company shall pay Executive a total amount of $150,000 (i.e., base salary payments for a period of 12 months
at Executive’s current base salary rate), payable in 12 equal monthly installments over the 12 months immediately following the
Release Effective Date (as defined in Section 4 below).

 

(b)            Healthcare
Subsidy. The Company shall continue to pay Executive a monthly payment equal to the monthly employer contribution that the Company
would have made to Executive to cover Executive’s healthcare expenses if Executive had remained employed by the Company until the
first anniversary of the Retirement Date.

 

(c)            Equity
Award Treatment.

 

(i)            In
lieu of receiving an equity award for calendar year 2021, the Company will pay Executive an amount equal to $330,000 in a lump sum payment
within ten business days after the Release Effective Date.

 

(ii)           In
lieu of receiving an equity award for calendar year 2022, the Company will pay Executive an amount equal to $150,000 (i.e., two-times
Executive’s current annual base salary rate pro-rated for the months worked during calendar year 2022) in a lump sum payment within
ten business days after the Release Effective Date.

 

(iii)          All
unvested equity awards previously granted to Executive by the Company under the Epsilon Energy LTD Share Compensation Plan (the “Equity
Plan”) that are outstanding as of the Retirement Date, including both performance-based restricted stock awards and restricted
stock award (“Outstanding Equity Awards”), shall immediately accelerate and vest as of the Release Effective
Date, with any performance vesting conditions or criteria being deemed met at target levels. All Outstanding Equity Awards are forth on
Exhibit A to this Agreement. All Outstanding Equity Awards will otherwise remain subject to the terms and conditions of the
Equity Plan and the applicable award agreements.

 

    	 	2	 

     

    

 

In addition, and notwithstanding whether Executive
signs or revokes his acceptance of this Agreement, Executive shall continue to be entitled to (i) the portion of any unpaid base
salary accrued and earned by Executive up to and including the date of employment termination, (ii) benefits under the Company’s
employee benefit plans vested as of the date of employment termination as required under applicable law, payable or deliverable as provided
under applicable plan terms, (iii) any unreimbursed expenses properly incurred by Executive under the applicable Company policy,
as may be in effect from time to time, prior to the date of employment termination; and (iv) the rights and benefits to continued
coverage under the directors’ and officers’ liability insurance policy coverage referenced in Section 3(d) of the
Executive Employment Agreement as well as to indemnification under the indemnification agreement referenced in Section 3(d) of
the Executive Employment as well as under state or other law or the governing documents of the Company and Parent, in each case relating
to the period when he was a director, officer, or employee of the Company or Parent. The payments and benefits just referenced in (i)-(iv) shall
constitute the “Accrued Benefits” and shall be paid when due under this Agreement, the plans and policies of
the Company and Parent, and applicable law.

 

4.            RESTRICTIVE
COVENANTS AND GENERAL RELEASE. The obligation of the Company to pay any and all amounts under this Agreement (other than the Accrued
Benefits) after Executive’s termination of employment, whether such termination occurs on the Retirement Date or a different date,
shall be contingent upon Executive (a) entering into a written agreement with the Company (in the form attached hereto as Exhibit B)
in which Executive agrees to a general release of any claims against the Company and its affiliates (the “Release Agreement”)
on or within twenty-one days after employment termination (or such longer period of time as required under applicable law to have a binding
release of one or more claims) that has become irrevocable (such date on which such release agreement becomes irrevocable, the “Release
Effective Date”) and (b) complying with the confidentiality and non-disparagement provisions in Section 5
and Section 6 below. For avoidance of doubt, all rights to receive or continue to receive the payments and benefits referred
to in Section 3 (other than the Accrued Benefits) shall cease if Executive does not enter into the Release Agreement, revokes
the Release Agreement or materially breaches any of the covenants referred to in this Section 4. The form of general release
to be signed by Executive pursuant to this Section 4 shall in no way prohibit Executive from reporting possible violations
of law to any governmental agency or entity in accordance with applicable whistleblower protection provisions including, without limitation,
the rules promulgated under Section 21F of the Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002, or require
Executive to notify the Company (or obtain its prior approval) of any such reporting. The Company acknowledges that the Board does not
have knowledge of any facts or circumstances that would form the basis of a claim or action by the Company against the Executive under
federal or state law for damages, injuries, losses, contributions, indemnities or otherwise.

 

5.            NON-DISPARAGEMENT.
Executive agrees that prior to and at any time after the Retirement Date he will not make statements to clients, customers and suppliers
of the Company (or any of its affiliates) or to other members of the public, the media or the investment community that are in any way
disparaging or negative towards the Company, any of its affiliates, or the products, services, representatives or employees of any of
the foregoing. Company agrees to instruct its directors and executive officers to not make statements to clients, customers and suppliers
of the Company (or any of its affiliates) or to other members of the public, the media or the investment community that are in any way
disparaging or negative towards Executive. This Section 5 does not, in any way, restrict or impede either party from exercising
protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation
or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed
that required by the law, regulation, or order. Executive shall promptly provide written notice of any such order to the Board.

 

    	 	3	 

     

    

 

6.             CONFIDENTIAL
INFORMATION.

 

(a)            Confidential
Information. As used in this Agreement, the term “Confidential Information” means information of any kind,
nature, or description, that (i) relates to the Company’s business (for purposes of this Section 6, references
to the Company shall include the Company’s parents, subsidiaries, predecessors, successors, members, the Board, and affiliates),
including, information that relates to the Company’s business that is or was learned or developed by Executive as a direct or indirect
result, or during the course, of Executive’s employment with the Company (ii) provides the Company economic value or any business
advantage and (iii) is not generally known to the public. Additionally, Confidential Information includes: (x) the Company’s
trade secrets and inventions; (y) all information concerning operational matters involving the business of the Company; and (z) all
notes, analyses, compilations, studies, summaries, and other material prepared by the Company or its representatives to the extent that
it contains or is based, in whole or in part, upon any information noted above. Confidential Information shall not include any information
in the public domain, through no disclosure or wrongful act of Executive, to such an extent as to be readily available to competitors.

 

(b)            Non-Disclosure
of Confidential Information. Executive agrees not to, directly or indirectly, participate in the unauthorized use, disclosure, or
conversion of any Confidential Information. Specifically, but without limitation, Executive agrees not to use Confidential Information
for his sole benefit, or for the benefit of any person or entity in any way that harms the Company or diminishes the value of the Confidential
Information to the Company. However, nothing in this Agreement prohibits Executive from reporting or otherwise disclosing possible violations
of federal law or regulation to any government agency or entity, or from receiving an award or monetary recovery in connection therewith.
Executive does not need prior authorization to make reports or disclosures to any government agency or entity and is not required to notify
the Company if Executive has made or will make any such report or disclosure.

 

(c)            The
Company’s Property. All documents and things, including Confidential Information, provided to Executive by the Company for use
in connection with Executive’s employment, or created by Executive in the course and scope of Executive’s employment with
the Company, are the sole property of the Company and shall be held by Executive as a fiduciary on behalf of the Company. Immediately
upon termination of Executive’s employment—without the requirement of a prior demand by the Company—Executive shall
surrender to the Company all such documents and things, including all Confidential Information or other Company property, together with
all copies, recordings, abstracts, notes, reproductions, or electronic versions of any kind made from or about the documents and things
and the information they contain.

 

(d)            Notice
of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016 (“DTSA”).
Executive will not be held criminally or civilly liable under any federal or state law for any disclosure of a trade secret that: (i) is
made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and solely for
the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is
filed under seal in a lawsuit or other proceeding. If Executive files a lawsuit for retaliation by the Company for reporting a suspected
violation of law, Executive may disclose the Company’s trade secrets to his attorney and use the trade secret information in the
court proceeding if Executive files any document containing the trade secret under seal and does not disclose the trade secret, except
pursuant to court order.

 

    	 	4	 

     

    

 

7.            cooperation.
During and after Executive’s employment, and at reasonable times, Executive shall cooperate
fully with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the
future against or on behalf of the Company which relate to events or occurrences that transpired while Executive was employed by the Company,
and (ii) the investigation, whether internal or external, of any matters about which the Company believes Executive may have knowledge
or information. Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be
limited to, being available to meet with counsel to answer questions or to prepare for discovery or trial and to act as a witness on behalf
of the Company at mutually convenient and reasonable times. During and after Executive’s employment, the Executive also shall at
reasonable times cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company.
The Company shall reimburse Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance
of obligations pursuant to this Section 7.

 

8.            NOTICE.
Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and either delivered in person or
sent by first class, certified or registered mail, postage prepaid, if to the Company at the Company’s principal place of business
addressed to the General Counsel, and if to Executive, at his home address most recently filed with the Company, or to such other address
as either party shall have designated in writing to the other party.

 

9.            GOVERNING
LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to
principles of conflicts of laws that would apply the laws of another jurisdiction. All claims arising out of or relating to this Agreement
shall be heard and determined exclusively in any federal or state court sitting in Houston, Texas. Consistent with the preceding sentence,
the Parties irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, any claim that it is not subject personally
to the jurisdiction of the aforementioned courts, that its property is exempt or immune from attachment or execution, that the claim is
brought in an inconvenient forum, that the venue of the claim is improper, or that this Agreement or the transactions contemplated by
this Agreement may not be enforced in or by any of the aforementioned courts.

 

10.           SEVERABILITY
AND CONSTRUCTION. If any provision of this Agreement is declared by any court of competent jurisdiction to be void or unenforceable
or against public policy, such provision shall be deemed severable and severed from this Agreement and the balance of this Agreement shall
remain in full force and effect. If a court of competent jurisdiction determines that any restriction in this Agreement is overbroad or
unreasonable under the circumstances, such restriction shall be modified or revised by such court to include the maximum reasonable restriction
allowed by law.

 

    	 	5	 

     

    

 

11.           WAIVER.
Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition. Any waiver of rights under this Agreement shall be in writing. If either party should waive any breach of any provisions
of this Agreement, such party shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision
of this Agreement.

 

12.            ENTIRE
AGREEMENT. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes
all prior agreements, oral and written, between the parties hereto with respect to the subject matter hereof, including the Employment
Agreement. For avoidance of doubt, the compensation defined or described in this Agreement shall be in lieu of any payments defined or
described in the Employment Agreement. In the event of any inconsistency between any provision of this Agreement and any provision of
the Employment Agreement, any plan, employee handbook, personnel manual, program, policy, arrangement or agreement of the Company or any
of its subsidiaries, the provisions of this Agreement shall control. This Agreement may be modified or amended only by an instrument in
writing signed by both parties. Each of the parties hereto has relied on his or its own judgment in entering into this Agreement.

 

13.            WITHHOLDING.
All payments made to Executive pursuant to this Agreement will be subject to withholding of employment taxes and other lawful deductions,
as applicable.

 

14.            SURVIVAL.
Provisions of this Agreement which by their terms must survive the termination of this Agreement in order to effectuate the intent of
the parties will survive any such termination, whether by termination of Executive’s employment, or otherwise, for such period as
may be appropriate under the circumstances. For avoidance of doubt, the Company’s obligations to make payments and provide benefits
under Section 3 and Executive’s obligations defined in or described under Section 4 shall survive termination
of this Agreement. In the event of the Executive’s death, this Agreement shall be enforceable by his estate, executors, or legal
representatives.

 

15.            Consultation
with Counsel. Executive acknowledges that he has had a full and complete opportunity to consult
with counsel or other advisers of his own choosing concerning the terms, enforceability and implications of this Agreement and the Release
Agreement, that the Company has not made any representations or warranties to Executive concerning the terms, enforceability and implications
of this Agreement other than as are reflected in this Agreement, and that Executive’s execution of this Agreement is knowing and
voluntary.

 

16.            SUCCESSORS
AND ASSIGNS. This Agreement shall bind and shall inure to the benefit of the Company and any and all of its successors and assigns.
This Agreement is personal to Executive and shall not be assignable by Executive. The Company may assign this Agreement to any entity
which (i) purchases all or substantially all of the assets of the Company or (ii) is a direct or indirect successor (whether
by merger, sale of stock or transfer of assets) of the Company. Any such assignment shall be valid so long as the entity which succeeds
to the Company expressly assumes the Company’s obligations hereunder and complies with its terms.

 

    	 	6	 

     

    

 

17.            SECTION HEADINGS.
The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.

 

18.            COUNTERPARTS.
This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all
of which taken together will constitute one and the same agreement.

 

19.            Section 409a
compliance. The intent of the parties is that payments and benefits under this Agreement comply
with, or be exempt from, Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively
 “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted
to be in compliance therewith. Any payments under this Agreement that may be excluded from Code Section 409A, either as separation
pay due to an involuntary separation from service, as a short-term deferral, or as a settlement payment pursuant to a bona fide legal
dispute shall be excluded from Code Section 409A to the maximum extent possible. For purposes of Code Section 409A, Executive’s
right to receive payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.
Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made
within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the
sole discretion of the Company. Any payments to be made under this Agreement upon a termination of employment shall only be made upon
a “separation from service” under Code Section 409A. Notwithstanding any provision to the contrary in this Agreement,
if Executive is deemed by the Company at the time of his “separation from service” to be a “specified employee”
for purposes of Section 409A(a)(2)(B)(i) of the Code, and if any of the payments upon “separation from service”
set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation”, then to the extent
delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution in violation of Code Section 409A,
such payments shall not be provided to Executive prior to the earliest of (i) the expiration of the six-month period measured from
the date of Executive’s “separation from service” with the Company, (ii) the date of Executive’s death or
(iii) such earlier date as permitted under Code Section 409A without the imposition of adverse taxation (the “Delayed
Payment Period”). Upon the first business day following the Delayed Payment Period, all payments deferred pursuant to this
Section 19 shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided herein
or in the applicable agreement. No interest shall be due on any amounts so deferred. All expenses or other reimbursements as provided
herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on
or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive. Nothing contained
in this Agreement shall constitute any representation or warranty by the Company regarding compliance with Code Section 409A. The
Company has no obligation to take any action to prevent the assessment of any tax under Code Section 409A on any person and neither
the Parent, Company nor their subsidiaries, nor any of their employees or representatives shall have any liability to Executive with respect
thereto. In no event whatsoever shall the Parent, Company or any of their subsidiaries be liable for any additional tax, interest or penalties
that may be imposed on Executive by Code Section 409A or any damages for failing to comply with Code Section 409A or this Section 19.

 

    	 	7	 

     

    

 

20.            FURTHER
ASSURANCES. The Company and Executive agree to execute and deliver any additional documents and instruments and perform any additional
acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and the transaction contemplated
by this Agreement.

 

The Remainder of this Page is Left Intentionally
Blank

 

    	 	8	 

     

    

 

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

 

	 	EPSILON ENERGY USA, INC.
	 	 
	 	BY: EPSILON
    ENERGY LTD.
	 	ITS: SOLE SHAREHOLDER
	 	 	                     
	 	 	 
	 	By:	 /s/ John Lovoi
	 	Name:	 John Lovoi
	 	Title:	 Chairman of the Board of Directors
	 	 	 
	 	 	 
	 	EPSILON ENERGY LTD.
	 	 	 
	 	 	 
	 	By:	 /s/ John Lovoi
	 	Name:	  John Lovoi
	 	Title:	  Chairman of the Board of Directors
	 	 	 
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	 	 
	 	/s/ Michael Raleigh
	 	Michael Raleigh

 

    	 	9	 

     

    

 

exhibit
A

 

outstanding
equity AWARDS

 

Set forth below are the number of unvested shares under the Outstanding
Equity Awards that are eligible to vest under Section 3 of the Retirement Agreement.

 

Performance Vesting Restricted Stock - TSR

 

10,417 shares subject to award agreement with a September 1,
2020 [revised grant date]

 

20,833 shares subject to award agreement with a September 1,
2020 [revised grant date]

 

20,750 shares subject to award agreement with a December 31, 2020
[revised grant date]

 

Performance Vesting Restricted Stock – CFDAS Growth

 

10,416 shares subject to award agreement with a September 1,
2020 [revised grant date]

 

20,834 shares subject to award agreement with a September 1,
2020 [revised grant date]

 

20,750 shares subject to award agreement with a December 31, 2020
[revised grant date]

 

Time Vested Restricted Stock

 

19,167 shares granted to Executive pursuant to award agreement dated
December 31, 2019.

 

31,000 shares granted to Executive pursuant to award agreement dated
December 31, 2020.

 

Grand Total of Unvested Shares under Outstanding Equity Awards = 154,167
shares

 

    	 	A-1	 

     

    

 

EXHIBIT B

 

RELEASE
AGREEMENT

 

1.            I,
Michael Raleigh, have served as Chief Executive Officer (“CEO”) of Epsilon Energy USA, Inc. (the “Company”)
and Epsilon Energy Ltd. (“Parent”) and serve as a member of the Board of Directors of Parent (the “Board”).
The Company and I entered the Retirement Agreement dated as of June [__], 2022 (the “Retirement Agreement”).
I will cease to serve as CEO of the Company and Parent and as a member of the Board and the board of directors of any of its subsidiaries
as of June 30, 2022 (the “Separation Date”).

 

2.            I
agree to the terms, commitments, covenants, conditions and general release of claims contained in this Release Agreement (this “Agreement”),
in consideration for the compensation set forth in Section 3 of the Retirement Agreement. I understand this Agreement must
be returned to the Company no later than 21 calendar days after the day I received this Agreement and this Agreement may be revoked by
written notice to the Company for 7 days after it is signed. The Company has advised me to consult with an attorney prior to signing this
Agreement.

 

3.            I
acknowledge and agree that other than as specifically set forth in Section 3 of the Retirement Agreement, following the Separation
Date, I am not and will not be due any additional compensation and will not be eligible to earn or accrue additional benefits under
the benefit plans of the Company after the Separation Date. My participation (if any) in any of the compensation or benefit plans of the
Company as of and after the Separation Date shall be subject to and determined in accordance with the terms and conditions of such plans
as they may be amended from time to time.

 

4.            I,
on behalf of myself, my heirs, administrators, representatives, executors, successors, and assigns, hereby irrevocably and unconditionally
release, acquit, and forever discharge the Company and Parent and each of their respective predecessors, parents, subsidiaries, affiliates,
divisions, any related entity, successors and assigns, and all of their current and former agents, officers, directors, shareholders,
employees, members, trustees, fiduciaries, representatives, attorneys and all persons acting by, through, under or in concert with any
of them (the “Released Parties”) from any and all charges, complaints, claims, liabilities, obligations, promises,
agreements, damages, causes of action, suits, demands, losses, debts, and expenses of any nature whatsoever, known or unknown (“Claims”)
which I have, had or claim to have against any Released Party up to and including the date I sign this Agreement. This general release
of Claims shall include, without limitation, Claims relating to my employment and retirement from employment with the Company, Claims
of discrimination under the common law or any federal or state statute (including, without limitation, the Civil Rights Act of 1964, the
Americans with Disabilities Act and the Age Discrimination in Employment Act, all as amended), Claims for wrongful discharge, Claims for
the payment of any salary, wages, bonuses, commissions, vacation pay, severance pay or benefits, Claims of detrimental reliance, and all
other statutory, common law or other Claims of any nature whatsoever, to the extent permitted by law. This general release of Claims does
not apply to any Claims concerning a breach of the Retirement Agreement, claims for indemnification (including without limitation pursuant
to the directors’ and officers’ liability insurance policy coverage referenced in Section 3(d) of the Executive
Employment Agreement or the indemnification agreement referenced in Section 3(d) of the Executive Employment as well as under
state or other law or the governing documents of the Company and Parent, in each case relating to the period when I was a director, officer,
or employee of the Company or Parent), claims for Accrued Benefits (as defined in the Retirement Agreement) or any claims arising after
the date I sign this Agreement, or any Claims for or related to my continuing ownership of the Outstanding Equity Awards or any equity
awards of the Company, Parent, or their affiliates which I owned as of the date my employment terminated. With respect to the Claims I
am waiving herein, I acknowledge that I am waiving my right to receive money or any other relief in any action instituted by me or
on my behalf by any other person, entity or government agency.

 

    	 	A-2	 

     

    

 

5.            To
the maximum extent permitted by law, I covenant not to sue or to institute or cause to be instituted any action in any federal, state,
or local agency or in court against any of the Released Parties, including, without limitation, any of the Claims released by this Agreement.
Notwithstanding the foregoing, nothing herein shall prevent me or any of the Released Parties from filing a charge with an administrative
agency related to the validity of this Agreement, from instituting any action required to enforce the terms of this Agreement, or from
challenging whether the release outlined in Section 4 above is knowing and voluntary. However, I may not recover monetary
damages resulting from any charge filed with an administrative agency related to the validity of this Agreement. In addition, nothing
herein shall be construed to prevent me from enforcing any rights I may have to recover vested benefits under the Employee Retirement
Income Security Act of 1974, as amended.

 

6.            I
understand that notwithstanding any other provision of this Agreement, nothing contained in this Agreement limits my ability to file a
charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state
or local governmental agency or commission (collectively, “Government Agencies”), or prevents me from providing
truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in this Agreement shall (1) prohibit
me from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the
Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities
Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions
of federal law or regulation, or (2) require notification or prior approval by the Company of any such report; provided that I am
not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal
advice or that are protected by the attorney work product or similar privilege. Further, this Agreement does not limit my ability to communicate
with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency,
including providing documents or other information, without notice to the Company. This Agreement does not limit my right to seek an award
pursuant to Section 21F of the Securities Exchange Act of 1934. In addition, for the avoidance of doubt, pursuant to the federal
Defend Trade Secrets Act of 2016, I shall not be held criminally or civilly liable under any federal or state trade secret law for
the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local government official, either
directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of
law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

 

    	 	A-3	 

     

    

 

7.            I
acknowledge by signing this Agreement that I have read and understand this document, that I have conferred with or had opportunity to
confer with my attorney regarding the terms and meaning of this Agreement, that I have had sufficient time to consider the terms provided
for in this Agreement, that no representations or inducements have been made to me except as set forth in this Agreement, and that I have
signed the same KNOWINGLY AND VOLUNTARILY.

 

8.            In
the event that any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement are held to be excessively broad as to duration, scope, activity or subject, such provisions will
be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.

 

	 	 	 
	John Lovoi	 	Michael Raleigh
	Chairman of the Board	 	 

 

Date:____________________,
2022

 

    	 	A-4

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