Exhibit 10.6
TOUCHSTONE RESOURCES USA, INC.
March ___, 2006
Touchstone Resources USA, Inc.
1600 Smith Street
Houston, Texas 77002
     Re: Touchstone Resources USA, Inc. (the “Company”) – Lock-Up Agreement
Dear Sirs:
     In connection with the issuance of the Common Stock, par value $0.001 per
share, of the Company (each a “Security” and collectively, the “Securities”)
pursuant to the Securities Purchase Agreement entered by and among the Company
and the investors named on the Schedule of Buyers attached thereto (the
“Buyers”), on March ___, 2006 (the “Securities Purchase Agreement”), the
undersigned agrees that, commencing on the date hereof and during the period
specified below (the “Lock-Up Period"), the undersigned will not offer, sell,
contract to sell, hypothecate, pledge, grant any option to purchase, make any
short sale or otherwise dispose of, directly or indirectly, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities and Exchange Act of
1934, as amended (the “Exchange Act”) and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to any
shares of the Company’s common stock, par value $.001 per share (the “Common
Stock”), owned directly by the undersigned (including holding as a custodian) or
with respect to which the undersigned has beneficial ownership within the rules
and regulations of the Securities and Exchange Commission (collectively the
“Undersigned’s Shares”).
     The foregoing restriction is expressly agreed to preclude the undersigned
or any affiliate of the undersigned from engaging in any hedging or other
transaction which is designed to or which reasonably could be expected to lead
to or result in a sale or disposition of the Undersigned’s Shares even if the
Undersigned’s Shares would be disposed of by someone other than the undersigned.
Such prohibited hedging or other transactions would include, without limitation,
any short sale or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any of the Undersigned’s
Shares or with respect to any security that includes, relates to, or derives any
significant part of its value from the Undersigned’s Shares.
     The Lock-Up Period will commence on the date hereof and continue until six
(6) months after the Effective Date (as defined in the Registration Rights
Agreement); provided, however, that notwithstanding the foregoing, commencing
thirty days after the Effective Date, the undersigned shall be permitted to sell
the Undersigned’s Shares at a price greater than 175% of the Conversion Price
(as defined in the Securities Purchase Agreement); and provided further, that
(x) the Lock-Up Period will terminate upon the consummation of a Fundamental
Transaction (as defined in the Notes) and (y) Stephen P. Harrington shall be
permitted to sell during the Lock-Up Period a number of shares of Common Stock
that does not exceed the number of Conversion Shares (as defined in the
Securities

 

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Purchase Agreement) previously delivered to Kings Road Holdings II LLC.
     Notwithstanding the foregoing, the undersigned may transfer the
Undersigned’s Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for
value, or (iii) if the undersigned is or becomes subject to the reporting
requirements of Section 16 of the Exchange Act, pursuant to the terms of written
trading plans in existence on the date hereof or entered into after the date
hereof designed to comply with Rule 10-b5-1(c) of the Exchange Act, provided no
sales or other dispositions may occur under such plans until after the closing
of trading on the date six months from the Effectiveness Date. For purposes of
this Lock-Up Agreement, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. The undersigned now
has, and, except as contemplated by clauses (i) and (ii) above, for the duration
of this Lock-Up Agreement will have, good and marketable title to the
Undersigned’s Shares, free and clear of all liens, encumbrances, and claims
whatsoever. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against
the transfer of the Undersigned’s Shares except in compliance with the foregoing
restrictions.
     The undersigned understands and agrees that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors, and assigns.
     This Lock-Up Agreement may be executed in two counterparts, each of which
shall be deemed an original but both of which shall be considered one and the
same instrument.
     This Lock-Up Agreement will be governed by and construed in accordance with
the laws of the State of New York, without giving effect to any choice of law or
conflicting provision or rule (whether of the State of New York, or any other
jurisdiction) that would cause the laws of any jurisdiction other than the State
of New York to be applied. In furtherance of the foregoing, the internal laws of
the State of New York will control the interpretation and construction of this
Lock-Up Agreement, even if under such jurisdiction’s choice of law or conflict
of law analysis, the substantive law of some other jurisdiction would ordinarily
apply.
     The Buyers shall be intended third party beneficiaries of this Agreement to
the same extent as if they were parties hereto, and shall be entitled to enforce
the provisions hereof.

            Very truly yours,
                     

 

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            Roger Abel
                       

Agreed to and Acknowledged:
TOUCHSTONE RESOURCES USA, INC.

         
By:
       
 
 
 
Name:    
 
  Title:    

 

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            Stephen P. Harrington
                       

Agreed to and Acknowledged:
TOUCHSTONE RESOURCES USA, INC.

         
By:
       
 
 
 
Name:    
 
  Title:    

 

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            Stephen C. Haynes
                       

Agreed to and Acknowledged:
TOUCHSTONE RESOURCES USA, INC.

         
By:
       
 
 
 
Name:    
 
  Title: