Document:

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Exhibit 10.1

                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") entered into effective as of
February 1, 2001, by and between Wesley E. Franklin (the "Executive"), and
Touchstone Resources USA, Inc., a Texas corporation having its principal place
of business at 5858 Westheimer, Suite 708, Houston, Texas 77057 (the "Company").

         WHEREAS, the Company wishes to employ the Executive as the Senior Vice
President- Exploration, and to perform services incident to such position for
the Company, and the Executive wishes to be so employed by the Company, all upon
the terms and conditions hereinafter set forth:

         NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations herein set forth, and for other good and valuable consideration,
the receipt, sufficiency and accuracy of which is hereby acknowledged, accepted
and agreed to, the parties hereto, intending to be legally bound, hereby agree
as follows:

1.       Employment and Term. The Company hereby employs the Executive to serve
         as the Senior Vice President - Exploration. The Term of this Agreement
         shall be effective as of the date first written above, and shall
         terminate twelve (12) months from the date hereof (the "Termination
         Date"), unless earlier terminated by either party hereto in accordance
         with the provisions of Section 5 hereof; provided, however, that upon
         the occurrence of a Change of Control (as such term is defined in
         Section 5(g) hereof), the Termination Date shall automatically
         accelerate without any further action by the Company or the Executive.
         During the Term of this Agreement, the terms of the employment shall be
         as set forth herein unless modified by the Executive and the Company in
         accordance with the provisions of Section 1(1) hereof. The Executive
         hereby agrees to accept such employment and to perform the services
         specified herein, all upon the terms and conditions hereinafter set
         forth.

2.       Position and Responsibilities. The Executive shall serve as the Senior
         Vice President - Exploration of the Company, and shall report to, and
         be subject to the general direction and control of, the President
         and/or Chairman of the Board of the Company. The Executive shall have
         the obligations, duties, authority and power to do all acts and things
         as are customarily done by a person holding the same or equivalent
         position or performing duties similar to those to be performed by
         executives in corporations of similar size to the Company and shall
         perform such managerial duties and responsibilities of the Company as
         may be reasonably assigned to him by the President and/or Chairman of
         the Board of the Company. Unless otherwise agreed by the Executive, the
         Executive shall be based at the Company's principal executive offices
         located in the Greater Houston, Texas metropolitan area.
         Notwithstanding the foregoing, it is understood and agreed that the
         Executive will continue to maintain his primary residence in the State
         of Washington and will commute between Houston and Washington on a
         schedule that is mutually agreeable with the President and/or Chairman
         of the Board of the Company.

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3.       Extent of Service. The Executive shall devote no less
         than fifty percent (50%) of his business time and attention to the
         business of the Company.

4.       Compensation.

         (4)1     Consideration of the services to be rendered by the Executive
                  to the Company, the Company will pay the Executive a salary
                  ("Salary") of One Hundred Forty Four Thousand United States
                  Dollars ($144,000.000 USD) per year for the term of this
                  Agreement. Said salary will be payable in conformity with the
                  Company's prevailing practices for executive compensation as
                  such practice shall be established or modified from time to
                  time. Salary payment shall be subject to all applicable
                  federal and state withholding, payroll, and other taxes. From
                  time to time during the Term of this Agreement, the amount of
                  Executive's salary may be increased by and/or at the sole
                  discretion of the Compensation Committee of the Company's
                  Board of Directors, which shall review the Executive's Salary
                  no less regularly than annually.

         (4)2     As additional consideration, upon execution of this Agreement,
                  the Executive shall be assigned and transferred by Mark A.
                  Bush, an option to purchase common shares of the parent
                  corporation of the Company, being Touchstone Resources, Ltd.,
                  which is currently traded on the Canadian Venture Exchange
                  ("CDNX") under symbol ("TUT"). The Executive shall have the
                  option to purchase up to and including Fifty Thousand (50,000)
                  free trading shares of stock at the price of $2.10 Canadian
                  Dollars per share. This option shall continue to be in force
                  and effect for a period of five (5) years beginning from the
                  Effective Date of this Agreement, and notwithstanding anything
                  to the contrary contained herein, shall not terminate upon the
                  Termination of the employment of the Executive.

         (4)3     The Executive will be entitled to participate i any incentive
                  programs of the Company or of Touchstone Resources Ltd,
                  including, without limiting the generality of the foregoing,
                  share option plans, share purchase plans, share bonus plans or
                  financial assistance plans in accordance with and on the same
                  terms and conditions as at the effective date of this
                  Agreement which are in place or as which may from time to time
                  be determined by the Directors in their sole discretion.
                  Executive acknowledges that his participation in these plans
                  or programs will be to such extent and in such amounts as the
                  Directors in their sole discretion may decided from time to
                  time. Any amounts which Executive may be entitled to under any
                  such plan or program shall not, for the purposes of this
                  Agreement, be treated as Salary. Executive agrees that the
                  Company may substitute, reduce, modify, or if necessary,
                  eliminate such plans or programs for good and valid reason.
                  All such plans or programs shall be governed by the policies
                  of the various regulatory bodies which have jurisdiction over
                  the affairs of the Company.

         (4)4     During the term of this Agreement, the Company shall pay or
                  reimburse the Executive for all reasonable out-of-pocket
                  expenses for travel, meal, hotel, accommodations,
                  entertainment, cellular telephone, and the like incurred by
                  him in

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                  connection with the business of the Company upon submission by
                  him with an approved statement documenting such expenses as
                  required by the Internal Revenue Code, as may be amended (the
                  "Code").

         (4)5     The Executive shall be entitled to reasonable paid vacation
                  during each calendar year during the term of this Agreement,
                  and at such time or times convenient to him and the Company.

         (4)6     During the term of this Agreement, the Executiv shall be
                  entitled to participate in and to receive all rights and
                  benefits under any life, disability, medical and dental health
                  and accident profit sharing or deferred compensation plan, or
                  such other plan or plans as may be implemented by the Company
                  during the term of this Agreement. The Executive shall be
                  entitled to participate in and receive all rights and benefits
                  under any plan or program adopted by the Company for any other
                  group or any other executive employees of the Company,
                  including without limitation, rights and benefits under
                  directors and/or officer's liability insurance currently in
                  place under the Company's insurance program for the directors
                  and officers of the Company.

5.       Termination.

         (5)1     Termination by Company; Discharge for Cause. The Company shall
                  be entitled to terminate this Agreement and the Executive's
                  employment with the Company at any time for whatever reason;
                  or any time for "cause" by written notice to the Executive.
                  The termination of the Executive's employment by the Company
                  shall constitute a termination for "cause" if such termination
                  is for one or more of the following reasons: (i) the willful
                  failure or refusal of the Executive to render services to the
                  Company in accordance with his obligations under this
                  Agreement, including without limitation, the failure or
                  refusal of the Executive to comply with the work rules,
                  policies, procedures and directives as established by the
                  Board of Directors and consistent with this Agreement. Such
                  failure or refusal to be uncured and continuing for a period
                  of not less than fifteen (15) days after notice outlining the
                  situation is given by the Company to the Executive; (ii) the
                  commission by the Executive of an act of fraud or
                  embezzlement; (iii) the commission by the Executive of any
                  other action with the intent to injure the Company; (iv) the
                  Executive having being convicted of a felony or crime
                  involving moral turpitude; (v) the Executive having
                  misappropriating the property of the Company; (vi) the
                  Executive having engaged in personal misconduct which
                  materially injures the Company; or (vii) the Executive having
                  willfully violated any law or regulation relating to the
                  business of the Company which results in a material injury to
                  the Company. In the event of the Executive's Termination by
                  the Company for cause hereunder, the Executive shall be
                  entitled to no severance or other termination benefits except
                  for any unpaid Salary accrued through the date of Termination.
                  The termination of this Agreement without cause pursuant
                  to this Section 5(a), shall entitle Executive to severance
                  payment when other benefits specified in Section 5 (f) hereof.

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         (5)2     Death. If the Executive dies during the term of this Agreement
                  or while in the employ of the Company, this Agreement shall
                  automatically terminate and the Company shall have no further
                  obligation to the Executive or his estate, except that the
                  Company shall pay to the Executive's estate that portion of
                  his Salary and benefits accrued through the date of the death.
                  All such payments to the Executive's estate shall be made in
                  the same manner and at the same time as the Executive's
                  salary.

         (5)3     Disability. If, through the Term of the Agreement, the
                  Executive shall be prevented from performing his duties
                  hereunder for a period of sixty (60) days by reason of
                  disability, the Company on thirty (30) day's prior notice to
                  the Executive, may terminate this Agreement. For the purposes
                  of this Agreement, the Executive shall be deemed to have
                  become disabled when the Board of Directors of the Company, on
                  verification by a physician designated by the Company, shall
                  have determined that the Executive has become physically or
                  mentally unable (excluding infrequent temporary absences due
                  to ordinary illness) to perform the essential functions of his
                  duties under this Agreement with reasonable accommodation. In
                  the event of a termination pursuant to this Paragraph (c), the
                  Company shall be relieved of all of its obligations under this
                  Agreement, except the Company shall pay to the Executive or
                  his estate, in the event of the subsequent death, that portion
                  of the Executive's salary and benefits accrued through the
                  date of this such Termination. All such payments to the
                  Executive or his estate shall be made in the same manner and
                  at the same time as his salary would have been paid to him had
                  he not become disabled.

         (5)4     Termination for Good Reason. The Executive shall be entitled
                  to terminate this Agreement and his employment with the
                  Company at any time upon thirty (30) days written notice to
                  the Company for "good reason" (as defined below). The
                  Executive's Termination of Employment shall be for "good
                  reason" if such termination is the result of any of the
                  following events: (i) the Executive is assigned any
                  responsibilities or duties materially inconsistent with his
                  position, duties, responsibilities, and status of the Company
                  as in effect as of the date of this Agreement, or as may be
                  assigned to the Executive pursuant to Section 2 hereof; or his
                  title or offices in effect at the date of the Agreement or as
                  Executive may be appointed or elected in accordance with
                  Section 2 are changed; or the Executive is required to report
                  to or direct to any other person other than the President
                  and/or Chairman of the Board of the Company; (ii) there is a
                  reduction in the salary (as such salary shall have been
                  increased from time to time) payable to the Executive pursuant
                  to Section 4(a) hereof; (iii) failure by the Company or any
                  successor of the Company, or its assets, to continue to
                  provide the Executive with any material benefit, bonus, profit
                  sharing, incentive, remuneration or compensation plan, stock
                  ownership or purchase plan, stock option plan, life insurance,
                  disability plan, pension plan or retirement plan which the
                  executive was entitled to participate in as of the date of
                  this Agreement under or pursuant to any such plan, or the
                  failure by the Company to increase or approve such rights or
                  benefits on a basis consistent with the practices in effect at
                  the date of the

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                  Agreement or with practices implemented subsequent to the date
                  of this Agreement with respect to the executive employees of
                  the Company's generally, whichever is more favorable to the
                  Executive, but excluding such action that is required by law;
                  (iv) without Executive's consent, the Company requires the
                  Executive to relocate to a city or community other than one
                  within fifty (50) mile radius of the Greater Houston, Texas
                  metropolitan area, except for required travel on the Company's
                  business to an extent substantially consistent with the
                  Executive's business obligations under this Agreement; or (v)
                  there is a materially breach by the Company of any provision
                  of this Agreement.

                  On the Executive's termination of this Agreement for good
                  reason, the Executive shall be entitled to severance payment
                  and other benefits specified in Section 5(f) hereof.

         (5)5     Voluntary Termination. Notwithstanding anything to the
                  contrary contained herein, the Executive shall be entitled to
                  voluntarily terminate this Agreement and his employment with
                  the Company at his pleasure upon thirty (30) days written
                  notice to such effect. In such event, the Executive shall not
                  be entitled to any further compensation other than any unpaid
                  salary and benefits accrued through the date of Termination.
                  At the Company's option, the Company may pay to the Executive
                  the salary and benefits that Executive would have received
                  during such thirty (30) days, in lieu of requiring the
                  Executive to remain in the employment of the Company for such
                  thirty (30) day period.

         (5)6     Termination Benefits Upon Involuntary Termination or
                  Termination for Good Reason. In the event that (i) the Company
                  terminates this Agreement and the Executive's employment with
                  the Company for any reason other than for cause (as defined in
                  Section 5(a) hereof) or the death or disability (as defined in
                  Section 5(c) hereof) of the Executive, or (ii) Executive
                  terminates this Agreement and his employment with the Company
                  for good reason (as set forth in Section 5(d) hereof), then
                  the Company shall pay the Executive within thirty (30) days
                  after the date of termination, an amount (the "Severance
                  Payment") equal to two (2) times the Executive's highest
                  annual salary in existence at any time during the last two (2)
                  years of employment immediately preceding the Date of
                  Termination, and two(2) times the highest annual bonus paid to
                  the Executive during any such two (2) year period, minus
                  applicable withholding and authorized salary deductions (the
                  "Severance Payment"). In addition, following other such
                  termination, the Executive shall be entitled to the following
                  benefits (collectively the "Additional Benefits"); (i)
                  immediately vesting of any of Executive's outstanding options
                  to purchase securities in the Company which are now not vested
                  by their own terms on the date of the Termination and
                  existence of the Executive's right to exercise all the
                  Executive's options to purchase securities of the Company for
                  a period equal to the lesser of (a) one (1) year following the
                  Date of Termination, or (b) the remaining term of the
                  applicable options; (ii) continue coverage, at Executive's
                  cost, of the Company's group health plan for the applicable
                  coverage period and under the Consolidated Omnibus Budget
                  Reconciliation Act of 1985, as amended ("COBRA"), but only if

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                  Executive elects such COBRA continuation in accordance with
                  the time limits in the applicable COBRA regulation; and (iii)
                  an amount, in cash, equal to the sum of (a) any unreimbursed
                  expenses incurred by the Executive that performs his duties
                  hereunder through the Date of Termination, plus (b) any
                  accrued and unused vacation time or other unpaid benefits as
                  of the Date of Termination. The parties agree that, because
                  there could be no exact measure of the damages which would
                  occur to the Executive as a result of Termination of
                  employment, such payments contemplated in Section 5(f) shall
                  be deemed to constitute liquidated damages and not a penalty,
                  and the Company agrees that the Executive shall not be
                  required to mitigate his damages. The Termination compensation
                  in this Section 5(f) shall be paid only if the Executive
                  executes a Termination Agreement releasing all legal waivable
                  claims arising from the Executive's employment.

         (5)7     Termination Benefits Upon Change and Control. In the event of
                  a change of control, as defined in Section 5(g), then, in lieu
                  of the Severance Payment contained in Section 5(f) hereof, the
                  Executive is terminated without cause, or the Executive
                  terminates his employment for good reason within the twelve
                  (12) month period immediately following a change in control,
                  the Company shall pay to the Executive a lump sum amount equal
                  to two (2) times the Executive's highest annual salary paid
                  during the last two (2) years immediately preceding the Date
                  of Termination and two (2) times the highest annual bonus paid
                  to the Executive while employed by the Company, minus
                  applicable withholding and authorized salary reductions (the
                  "Payment"). In the event the excise tax relating to the
                  parachute payments under Section 280g of the Code applies to
                  the payment, then the Company shall pay the Executive an
                  additional payment in an amount such that, after payment of
                  the Federal Income Taxes (not the excise tax) will such
                  additional payment, the Executive retains an amount equal to
                  the excise tax originally imposed on the Payment. The
                  Executive shall also be entitled to receive the additional
                  benefits. "Change of Control" means or shall be deemed to have
                  occurred if an when (i) any "person" or "group" (as such terms
                  are used in Section 13(d) and 14(d) of the Exchange Act) is or
                  becomes the "beneficial owner" (as defined in Rule 13(d)-3
                  under the Exchange Act), directly or indirectly, of more of
                  more than 50% of the total voting power of the outstanding
                  voting stock of the Company; (ii) the Company is merged with
                  or into and consolidated with another person and immediately
                  after giving effect to the merger or consolidation, (a) less
                  than 50 % of the total voting power of the outstanding voting
                  stock with the surviving or resulting entity is then
                  "beneficially owned" within the meaning of Rule 13(d)-3 under
                  the Exchange Act, in the aggregate by the stockholders of the
                  Company immediately prior to such merger or consolidation, and
                  (b) any "person" or "group" as defined in Section 13(d)(3) or
                  14(d)(2) of the Exchange Act, or has become the direct or
                  indirect "beneficial owner" (as defined in Rule 13(d)-3 under
                  the Exchange Act of more than 50% of the total voting power of
                  the voting stock of the surviving resulting person/entity;
                  (iii) the Company sells, assigns, conveys, transfers, leases
                  or otherwise disposes of all or substantially all of the
                  Company's assets (either in one transaction or a series of
                  related transactions); (iv) during any consecutive two (2)
                  year period individuals who at the beginning of such period
                  constituted the Board of Directors of the Company (together
                  with any

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                  new directors whose election by such Board of Directors or
                  whose nomination for election by the stockholders of the
                  Company was approved by a vote of the majority of the
                  Directors then still in office who were either Directors at
                  the beginning of such period, or whose election or nomination
                  for election was previously so approved) cease for any reason
                  to constitute a majority of the Board of Directors of the
                  Company then in office; or (v) the liquidation or dissolution
                  of the Company.

         (5)8     Survival. Notwithstanding the Termination Agreement of this
                  Agreement under this Section 5, the provisions of Section 7
                  and 8 of this Agreement, and all other provisions hereof which
                  by their terms are to be performed following the Termination
                  hereof shall survive such Termination and be continuing
                  obligations.

6.       Consent and Waiver by Third Parties. The Executive hereby represents
         and warrants that he has obtained all necessary waivers and/or consents
         from third parties as to enable him to accept employment with the
         Company on the terms and conditions set forth herein, and to execute
         and perform this Agreement without being in conflict with any other
         agreement, obligation, or understanding of any such third party.

7.       Confidential Information. The Executive acknowledges that in the course
         of his employment with the Company, he has received and will receive
         access to confidential information of a special and unique value
         concerning the Company and its business, including, without limitation,
         trade secrets, lists of customers, employee records, books and records
         relating to the operations, operating costs, correspondence,
         compilations, data, studies, reports, memoranda, geologic and
         geophysical maps, files, proprietary information, confidential
         information, and any other materials (in whatever form maintained,
         whether documentary, computer storage or otherwise) and knowledge
         concerning the business of the Company and its affiliates (hereafter
         collectively referred to as " Confidential Information") which the
         Company desires to protect. The Executive acknowledges that such
         Confidential Information is confidential and proprietary, and that the
         protection of such confidential information against unauthorized use or
         disclosure is of critical importance to the Company. Executive agrees
         that he will not reveal such information to anyone outside the Company.
         Executive further agrees that during the term of this Agreement and
         thereafter, he will not use or disclose such information. Upon
         termination of his employment hereunder, the Executive shall surrender
         to the Company all papers, documents, writings, and other property
         produced by him or coming into his possession by or through his
         employment hereunder, and relating to the Confidential Information
         referred to in this Section 7, and the Executive agrees that all such
         materials will at all times remain the property of the Company. The
         obligation of confidentially, non-use and non-disclosure of
         Confidential Information set forth in this Section 7 shall not extend
         to information (i) which was in the public domain prior to disclosure
         by the disclosing party, (ii) which comes into the public domain other
         than through a breach of this Agreement, (iii) which is disclosed to
         the Executive after the Termination of this Agreement by a third party
         having legitimate possession thereof and the unrestricted right to make
         such disclosure, or (iv) which is necessarily disclosed in the course
         of the Executive's performance of his duties

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         to the Company as contemplated in this Agreement. This Agreement's
         Section 7 shall survive the Termination of this Agreement for a period
         of one (1) year.

8.       Non-Solicitation. To support the agreements contained i Section 7
         hereof, from the date hereof and for a period of twelve (12) months
         after the Executive's employment with the Company is terminated for any
         reason, the Executive shall not, either directly or indirectly, through
         any person, firm, association or corporation which the Executive is now
         or may hereafter become associated, (i) hire, employ, solicit or engage
         any then current employee of the Company or its affiliates, or (ii) use
         in any competition, solicitation or marketing effort any information as
         to which the Executive has a duty of confidentiality treatment under
         Paragraph 7 herein.

9.       Notices. All notices, requests, consents and other communications under
         this Agreement shall be in writing and shall be deemed to have been
         delivered on the date personally delivered or on the date mailed,
         postage prepaid, by certified mail, return receipt requested, or
         telegraphed and confirmed if addressed to respective parties as
         follows:
                  If to the Executive:  Wesley E. Franklin
                                        561 Mussel Beach Road
                                        Coupeville, Washington 98239

                  If to the Company:    Touchstone Resources USA, Inc.
                                        5858 Westheimer, Suite 708
                                        Houston, Texas 77057
                                        Attn: Chairman, Compensation Committee

         Either party hereto may designate a different address by providing
         written notice of such new address to the other party hereto.

10.      Specific Performance. The Executive acknowledges that a remedy at law
         for any breach or attempted breach of Section 7 or 8 of this Agreement
         will be inadequate, agrees that the Company shall be entitled to
         specific performance and injunctive and other equitable relief in case
         of any such a breach or attempted breach, and further agrees to waive
         any requirement of the securing or posting of any bond in connection
         with the obtaining of any such injunctive or any other equitable
         relief.

11.      Waivers and Modifications. This Agreement may be modified, and the
         rights and remedies of any provision hereof may be waived, only in
         accordance with this Section 11. No modification or waiver by the
         Company shall be effective without the consent of at least a majority
         of the Compensation Committee of the Board of Directors then in office
         at the time of such modification or waiver. No waiver by either party
         of any breach by the other or any provision hereof shall be deemed to
         be a waiver of any later or other breach thereof or as a waiver of any
         other provision of this Agreement. This Agreement sets forth all the
         terms of the understandings between the parties with reference to the
         subject matter set forth herein and may not be waived, changed,
         discharged or terminated orally or by any course of dealing between the
         parties, but only by an instrument in writing signed by the party
         against whom any waiver, change, discharge or termination is sought.

<PAGE>

12.      Governing Law. This Agreement shall be construed in accordance with the
         laws of the State of Texas.

13.      Severability. In case of one or more of the provisions contained in
         this Agreement for any reason shall be held to be invalid, illegal or
         unenforceable in any respect, such invalidity, illegality or
         unenforceability shall not affect any other provision of this
         Agreement, but this Agreement shall be construed as if such invalid,
         illegal or unenforceable provisions had never contained herein.

         Arbitration. In the event that a dispute or controversy should arise
         between the Executive and the Company as to the meaning or application
         of any provision, term or condition of this Agreement, such dispute or
         controversy shall be settled by binding arbitration in Houston, Texas
         and for said purpose each of the parties hereto hereby expressly
         consents to such arbitration in such place. Such arbitration shall be
         conducted in accordance with the existing rules and regulations of the
         American Arbitration Association governing commercial transactions. The
         expense of the arbitrator shall be borne by the Company.

         IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement effective as of the date and year first above written.

                                             COMPANY:

                                             TOUCHSTONE RESOURCES USA, INC.

                                             By: /s/ Mark A. Bush
                                                 -------------------------
                                                 Mark A. Bush, President

                                             EXECUTIVE:

                                             /s/ Wesley E. Franklin
                                             -----------------------------
                                             Wesley E. Franklin

ACCEPTED AND AGREED AS TO
PARAGRAPH 4(2) ONLY.

/s/ Mark A. Bush
----------------
Mark A. Bush<PAGE>

Exhibit 10.2

                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") entered into effective as of
February 1, 2001, by and between D. Chris Barden (the "Executive"), and
Touchstone Resources USA, Inc., a Texas corporation having its principal place
of business at 5858 Westheimer, Suite 708, Houston, Texas 77057 (the "Company").

         WHEREAS, the Company wishes to employ the Executive as the Senior Vice
President- Production, and to perform services incident to such position for the
Company, and the Executive wishes to be so employed by the Company, all upon the
terms and conditions hereinafter set forth:

         NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations herein set forth, and for other good and valuable consideration,
the receipt, sufficiency and accuracy of which is hereby acknowledged, accepted
and agreed to, the parties hereto, intending to be legally bound, hereby agree
as follows:

1.       Employment and Term. The Company hereby employs the Executive to serve
         as the Senior Vice President - Production. The Term of this Agreement
         shall be effective as of the date first written above, and shall
         terminate twelve (12) months from the date hereof (the "Termination
         Date"), unless earlier terminated by either party hereto in accordance
         with the provisions of Section 5 hereof; provided, however, that upon
         the occurrence of a Change of Control (as such term is defined in
         Section 5(g) hereof), the Termination Date shall automatically
         accelerate without any further action by the Company or the Executive.
         During the Term of this Agreement, the terms of the employment shall be
         as set forth herein unless modified by the Executive and the Company in
         accordance with the provisions of Section 1(1) hereof. The Executive
         hereby agrees to accept such employment and to perform the services
         specified herein, all upon the terms and conditions hereinafter set
         forth.

2.       Position and Responsibilities. The Executive shall serve as the Senior
         Vice President - Production of the Company, and shall report to, and be
         subject to the general direction and control of, the President and/or
         Chairman of the Board of the Company. The Executive shall have the
         obligations, duties, authority and power to do all acts and things as
         are customarily done by a person holding the same or equivalent
         position or performing duties similar to those to be performed by
         executives in corporations of similar size to the Company and shall
         perform such managerial duties and responsibilities of the Company as
         may be reasonably assigned to him by the President and/or Chairman of
         the Board of the Company. Unless otherwise agreed by the Executive, the
         Executive shall be based at the Company's principal executive offices
         located in the Greater Houston, Texas metropolitan area.
         Notwithstanding the foregoing, it is understood and agreed that the
         Executive will continue to maintain his primary residence in the State
         of Washington and will commute between

<PAGE>

         Houston and Washington on a schedule that is mutually agreeable with
         the President and/or Chairman of the Board of the Company.

3.       Extent of Service. The Executive shall devote no less than fifty
         percent (50%) of his business time and attention to the business of the
         Company.

4.       Compensation.

         (4)1     In consideration of the services to be rendered by the
                  Executive to the Company, the Company will pay the Executive a
                  salary ("Salary") of One Hundred Twenty Thousand United States
                  Dollars ($120,000.000 USD) per year for the term of this
                  Agreement. Said salary will be payable in conformity with the
                  Company's prevailing practices for executive compensation as
                  such practice shall be established or modified from time to
                  time. Salary payment shall be subject to all applicable
                  federal and state withholding, payroll, and other taxes. From
                  time to time during the Term of this Agreement, the amount of
                  Executive's salary may be increased by and/or at the sole
                  discretion of the Compensation Committee of the Company's
                  Board of Directors, which shall review the Executive's Salary
                  no less regularly than annually.

         (4)2     As additional consideration, upon execution of this Agreement,
                  the Executive shall be assigned and transferred by Mark A.
                  Bush, an option to purchase common shares of the parent
                  corporation of the Company, being Touchstone Resources, Ltd.,
                  which is currently traded on the Canadian Venture Exchange
                  ("CDNX") under symbol ("TUT"). The Executive shall have the
                  option to purchase up to and including Fifty Thousand (50,000)
                  free trading shares of stock at the price of $2.10 Canadian
                  Dollars per share. This option shall continue to be in force
                  and effect for a period of five (5) years beginning from the
                  Effective Date of this Agreement, and notwithstanding anything
                  to the contrary contained herein, shall not terminate upon the
                  Termination of the employment of the Executive.

         (4)3     The Executive will be entitled to participate i any incentive
                  programs of the Company or of Touchstone Resources Ltd.,
                  including, without limiting the generality of the foregoing,
                  share option plans, share purchase plans, share bonus plans or
                  financial assistance plans in accordance with and on the same
                  terms and conditions as at the effective date of this
                  Agreement which are in place or as which may from time to time
                  be determined by the Board of Directors in their sole
                  discretion. Executive acknowledges that his participation in
                  these plans or programs will be to such extent and in such
                  amounts as the Board of Directors in their sole discretion may
                  decided from time to time. Any amounts which Executive may be
                  entitled to under any such plan or program shall not, for the
                  purposes of this Agreement, be treated as Salary. Executive
                  agrees that the Company may substitute, reduce,

<PAGE>

                  modify, or if necessary, eliminate such plans or programs fro
                  good and valid reason. All such plans or programs hall be
                  governed by the policies of the various regulatory bodies
                  which have jurisdiction over the affairs of the Company.

         (4)4     During the term of this Agreement, the Company shall pay or
                  reimburse the Executive for all reasonable out-of-pocket
                  expenses for travel, meal, hotel, accommodations,
                  entertainment, cellular telephone, and the like incurred by
                  him in connection with the business of the Company upon
                  submission by him with an approved statement documenting such
                  expenses as required by the Internal Revenue Code, as may be
                  amended (the "Code").

         (4)5     The Executive shall be entitled to reasonable paid vacation
                  during each calendar year during the term of this Agreement,
                  and at such time or times convenient to him and the Company.

         (4)6     During the term of this Agreement, the Executiv shall be
                  entitled to participate in and to receive all rights and
                  benefits under any life, disability, medical and dental health
                  and accident profit sharing or deferred compensation plan, or
                  such other plan or plans as may be implemented by the Company
                  during the term of this Agreement. The Executive shall be
                  entitled to participate in and receive all rights and benefits
                  under any plan or program adopted by the Company for any other
                  group or any other executive employees of the Company,
                  including without limitation, rights and benefits under
                  directors and/or officer's liability insurance currently in
                  place under the Company's insurance program for the directors
                  and officers of the Company.

         (4)7     The Executive shall be provided with a reserved parking space
                  that shall be provided by the Company.

5.       Termination.

         (5)1     Termination by Company; Discharge for Cause. The Company shall
                  be entitled to terminate this Agreement and the Executive's
                  employment with the Company at any time for whatever reason;
                  or any time for "cause" by written notice to the Executive.
                  The termination of the Executive's employment by the Company
                  shall constitute a termination for "cause" if such termination
                  is for one or more of the following reasons: (i) the willful
                  failure or refusal of the Executive to render services to the
                  Company in accordance with his obligations under this
                  Agreement, including without limitation, the failure or
                  refusal of the Executive to comply with the work rules,
                  policies, procedures and directives as established by the
                  Board of Directors and consistent with this Agreement. Such
                  failure or refusal to be uncured and continuing for a period
                  of not less than fifteen (15) days after notice outlining the
                  situation is given by the Company to the Executive; (ii) the
                  commission by the Executive of an act of fraud or
                  embezzlement; (iii) the

<PAGE>

                  commission by the Executive of any other action with the
                  intent to injure the Company; (iv) the Executive having being
                  convicted of a felony or crime involving moral turpitude; (v)
                  the Executive having misappropriating the property of the
                  Company; (vi) the Executive having engaged in personal
                  misconduct which materially injures the Company; or (vii) the
                  Executive having willfully violated any law or regulation
                  relating to the business of the Company which results in a
                  material injury to the Company. In the event of the
                  Executive's Termination by the Company for cause hereunder,
                  the Executive shall be entitled to no severance or other
                  termination benefits except for any unpaid Salary accrued
                  through the date of Termination. The termination of this
                  Agreement without cause pursuant to this Section 5(a), shall
                  entitle Executive to severance payment when other benefits
                  specified in Section 5 (f) hereof. .

         (5)2     Death. If the Executive dies during the term of this Agreement
                  or while in the employ of the Company, this Agreement shall
                  automatically terminate and the Company shall have no further
                  obligation to the Executive or his estate, except that the
                  Company shall pay to the Executive's estate that portion of
                  his Salary and benefits accrued through the date of the death.
                  All such payments to the Executive's estate shall be made in
                  the same manner and at the same time as the Executive's
                  salary.

         (5)3     Disability. If, through the Term of the Agreement, the
                  Executive shall be prevented from performing his duties
                  hereunder for a period of sixty (60) days by reason of
                  disability, the Company on thirty (30) day's prior notice to
                  the Executive, may terminate this Agreement. For the purposes
                  of this Agreement, the Executive shall be deemed to have
                  become disabled when the Board of Directors of the Company, on
                  verification by a physician designated by the Company, shall
                  have determined that the Executive has become physically or
                  mentally unable (excluding infrequent temporary absences due
                  to ordinary illness) to perform the essential functions of his
                  duties under this Agreement with reasonable accommodation. In
                  the event of a termination pursuant to this Paragraph (c), the
                  Company shall be relieved of all of its obligations under this
                  Agreement, except the Company shall pay to the Executive or
                  his estate, in the event of the subsequent death, that portion
                  of the Executive's salary and benefits accrued through the
                  date of this such Termination. All such payments to the
                  Executive or his estate shall be made in the same manner and
                  at the same time as his salary would have been paid to him had
                  he not become disabled.

         (5)4     Termination for Good Reason. The Executive shall be entitled
                  to terminate this Agreement and his employment with the
                  Company at any time upon thirty (30) days written notice to
                  the Company for "good reason" (as defined below). The
                  Executive's Termination of Employment shall be for "good
                  reason" if such termination is the result of any of the
                  following events: (i) the Executive is

<PAGE>

                  assigned any responsibilities or duties materially
                  inconsistent with his position, duties, responsibilities, and
                  status of the Company as in effect as of the date of this
                  Agreement, or as may be assigned to the Executive pursuant to
                  Section 2 hereof; or his title or offices in effect at the
                  date of the Agreement or as Executive may be appointed or
                  elected in accordance with Section 2 are changed; or the
                  Executive is required to report to or direct to any other
                  person other than the President and/or Chairman of the Board
                  of the Company; (ii) there is a reduction in the salary (as
                  such salary shall have been increased from time to time)
                  payable to the Executive pursuant to Section 4(a) hereof;
                  (iii) failure by the Company or any successor of the Company,
                  or its assets, to continue to provide the Executive with any
                  material benefit, bonus, profit sharing, incentive,
                  remuneration or compensation plan, stock ownership or purchase
                  plan, stock option plan, life insurance, disability plan,
                  pension plan or retirement plan which the executive was
                  entitled to participate in as of the date of this Agreement
                  under or pursuant to any such plan, or the failure by the
                  Company to increase or approve such rights or benefits on a
                  basis consistent with the practices in effect at the date of
                  the Agreement or with practices implemented subsequent to the
                  date of this Agreement with respect to the executive employees
                  of the Company's generally, whichever is more favorable to the
                  Executive, but excluding such action that is required by law;
                  (iv) without Executive's consent, the Company requires the
                  Executive to relocate to a city or community other than one
                  within fifty (50) mile radius of the Greater Houston, Texas
                  metropolitan area, except for required travel on the Company's
                  business to an extent substantially consistent with the
                  Executive's business obligations under this Agreement; or (v)
                  there is a materially breach by the Company of any provision
                  of this Agreement.

                  On the Executive's termination of this Agreement for good
                  reason, the Executive shall be entitled to severance payment
                  and other benefits specified in Section 5(f) hereof.

         (5)5     Voluntary Termination. Notwithstanding anything to the
                  contrary contained herein, the Executive shall be entitled to
                  voluntarily terminate this Agreement and his employment with
                  the Company at his pleasure upon thirty (30) days written
                  notice to such effect. In such event, the Executive shall not
                  be entitled to any further compensation other than any unpaid
                  salary and benefits accrued through the date of Termination.
                  At the Company's option, the Company may pay to the Executive
                  the salary and benefits that Executive would have received
                  during such thirty (30) days, in lieu of requiring the
                  Executive to remain in the employment of the Company for such
                  thirty (30) day period.

         (5)6     Termination Benefits Upon Involuntary Termination or
                  Termination for Good Reason. In the event that (i) the Company
                  terminates this Agreement and the Executive's employment with
                  the Company for any reason other than for cause (as

<PAGE>

                  defined in Section 5(a) hereof) or the death or disability (as
                  defined in Section 5(c) hereof) of the Executive, or (ii)
                  Executive terminates this Agreement and his employment with
                  the Company for good reason (as set forth in Section 5(d)
                  hereof), then the Company shall pay the Executive within
                  thirty (30) days after the date of termination, an amount (the
                  "Severance Payment") equal to two (2) times the Executive's
                  highest annual salary in existence at any time during the last
                  two (2) years of employment immediately preceding the Date of
                  Termination, and two(2) times the highest annual bonus paid to
                  the Executive during any such two (2) year period, minus
                  applicable withholding and authorized salary deductions (the
                  "Severance Payment"). In addition, following other such
                  termination, the Executive shall be entitled to the following
                  benefits (collectively the "Additional Benefits"); (i)
                  immediately vesting of any of Executive's outstanding options
                  to purchase securities in the Company which are now not vested
                  by their own terms on the date of the Termination and
                  existence of the Executive's right to exercise all the
                  Executive's options to purchase securities of the Company for
                  a period equal to the lesser of (a) one (1) year following the
                  Date of Termination, or (b) the remaining term of the
                  applicable options; (ii) continue coverage, at Executive's
                  cost, of the Company's group health plan for the applicable
                  coverage period and under the Consolidated Omnibus Budget
                  Reconciliation Act of 1985, as amended ("COBRA"), but only if
                  Executive elects such COBRA continuation in accordance with
                  the time limits in the applicable COBRA regulation; and (iii)
                  an amount, in cash, equal to the sum of (a) any unreimbursed
                  expenses incurred by the Executive that performs his duties
                  hereunder through the Date of Termination, plus (b) any
                  accrued and unused vacation time or other unpaid benefits as
                  of the Date of Termination. The parties agree that, because
                  there could be no exact measure of the damages which would
                  occur to the Executive as a result of Termination of
                  employment, such payments contemplated in Section 5(f) shall
                  be deemed to constitute liquidated damages and not a penalty,
                  and the Company agrees that the Executive shall not be
                  required to mitigate his damages. The Termination compensation
                  in this Section 5(f) shall be paid only if th Executive
                  executes a Termination Agreement releasing all legal waivable
                  claims arising from the Executive's employment.

         (5)7     Termination Benefits Upon Change and Control. In the event of
                  a change of control, as defined in Section 5(g), then, in lieu
                  of the Severance Payment contained in Section 5(f) hereof, the
                  Executive is terminated without cause, or the Executive
                  terminates his employment for good reason within the twelve
                  (12) month period immediately following a change in control,
                  the Company shall pay to the Executive a lump sum amount equal
                  to two (2) times the Executive's highest annual salary paid
                  during the last two (2) years immediately preceding the Date
                  of Termination and two (2) times the highest annual bonus paid
                  to the Executive while employed by the Company, minus
                  applicable withholding and authorized salary reductions (the
                  "Payment"). In the event the excise tax relating to the
                  parachute payments under Section 280g of the Code applies to
                  the payment, then the Company shall pay the

<PAGE>

                  Executive an additional payment in an amount such that, after
                  payment of the Federal Income Taxes (not the excise tax) will
                  such additional payment, the Executive retains an amount equal
                  to the excise tax originally imposed on the Payment. The
                  Executive shall also be entitled to receive the additional
                  benefits. "Change of Control" means or shall be deemed to have
                  occurred if an when (i) any "person" or "group" (as such terms
                  are used in Section 13(d) and 14(d) of the Exchange Act) is or
                  becomes the "beneficial owner" (as defined in Rule 13(d)-3
                  under the Exchange Act), directly or indirectly, of more of
                  more than 50% of the total voting power of the outstanding
                  voting stock of the Company; (ii) the Company is merged with
                  or into and consolidated with another person and immediately
                  after giving effect to the merger or consolidation, (a) less
                  than 50 % of the total voting power of the outstanding voting
                  stock with the surviving or resulting entity is then
                  "beneficially owned" within the meaning of Rule 13(d)-3 under
                  the Exchange Act, in the aggregate by the stockholders of the
                  Company immediately prior to such merger or consolidation, and
                  (b) any "person" or "group" as defined in Section 13(d)(3) or
                  14(d)(2) of the Exchange Act, or has become the direct or
                  indirect "beneficial owner" (as defined in Rule 13(d)-3 under
                  the Exchange Act of more than 50% of the total voting power of
                  the voting stock of the surviving resulting person/entity;
                  (iii) the Company sells, assigns, conveys, transfers, leases
                  or otherwise disposes of all or substantially all of the
                  Company's assets (either in one transaction or a series of
                  related transactions); (iv) during any consecutive two (2)
                  year period individuals who at the beginning of such period
                  constituted the Board of Directors of the Company (together
                  with any new directors whose election by such Board of
                  Directors or whose nomination for election by the stockholders
                  of the Company was approved by a vote of the majority of the
                  Directors then still in office who were either Directors at
                  the beginning of such period, or whose election or nomination
                  for election was previously so approved) cease for any reason
                  to constitute a majority of the Board of Directors of the
                  Company then in office; or (v) the liquidation or dissolution
                  of the Company.

         (5)8     Survival. Notwithstanding the Termination Agreement of this
                  Agreement under this Section 5, the provisions of Section 7
                  and 8 of this Agreement, and all other provisions hereof which
                  by their terms are to be performed following the Termination
                  hereof shall survive such Termination and be continuing
                  obligations.

6.       Consent and Waiver by Third Parties. The Executive hereby represents
         and warrants that he has obtained all necessary waivers and/or consents
         from third parties as to enable him to accept employment with the
         Company on the terms and conditions set forth herein, and to execute
         and perform this Agreement without being in conflict with any other
         agreement, obligation, or understanding of any such third party.

7.       Confidential Information. The Executive acknowledges that in the course
         of his employment with the Company, he has received and will receive
         access to confidential information of a special and unique value
         concerning the Company and its business,

<PAGE>

         including, without limitation, trade secrets, lists of customers,
         employee records, books and records relating to the operations,
         operating costs, correspondence, compilations, data, studies, reports,
         memoranda, geologic and geophysical maps, files, proprietary
         information, confidential information, and any other materials (in
         whatever form maintained, whether documentary, computer storage or
         otherwise) and knowledge concerning the business of the Company and its
         affiliates (hereafter collectively referred to as " Confidential
         Information") which the Company desires to protect. The Executive
         acknowledges that such Confidential Information is confidential and
         proprietary, and that the protection of such confidential information
         against unauthorized use or disclosure is of critical importance to the
         Company. Executive agrees that he will not reveal such information to
         anyone outside the Company. Executive further agrees that during the
         term of this Agreement and thereafter, he will not use or disclose such
         information. Upon termination of his employment hereunder, the
         Executive shall surrender to the Company all papers, documents,
         writings, and other property produced by him or coming into his
         possession by or through his employment hereunder, and relating to the
         Confidential Information referred to in this Section 7, and the
         Executive agrees that all such materials will at all times remain the
         property of the Company. The obligation of confidentially, non-use and
         non-disclosure of Confidential Information set forth in this Section 7
         shall not extend to information (i) which was in the public domain
         prior to disclosure by the disclosing party, (ii) which comes into the
         public domain other than through a breach of this Agreement, (iii)
         which is disclosed to the Executive after the Termination of this
         Agreement by a third party having legitimate possession thereof and the
         unrestricted right to make such disclosure, or (iv) which is
         necessarily disclosed in the course of the Executive's performance of
         his duties to the Company as contemplated in this Agreement. This
         Agreement's Section 7 shall survive the Termination of this Agreement
         for a period of one (1) year.

8.       Non-Solicitation. To support the agreements contained in Section 7
         hereof, from the date hereof and for a period of twelve (12) months
         after the Executive's employment with the Company is terminated for any
         reason, the Executive shall not, either directly or indirectly, through
         any person, firm, association or corporation which the Executive is now
         or may hereafter become associated, (i) hire, employ, solicit or engage
         any then current employee of the Company or its affiliates, or (ii) use
         in any competition, solicitation or marketing effort any information as
         to which the Executive has a duty of confidentiality treatment under
         Paragraph 7 herein.

9.       Notices. All notices, requests, consents and other communications under
         this Agreement shall be in writing and shall be deemed to have been
         delivered on the date personally delivered or on the date mailed,
         postage prepaid, by certified mail, return receipt requested, or
         telegraphed and confirmed if addressed to respective parties as
         follows:

                  If to the Executive:  D. Chris Barden
                                        305 Clearview Avenue
                                        Friendswood, Texas  77546

<PAGE>

                  If to the Company:    Touchstone Resources USA, Inc.
                                        5858 Westheimer, Suite 708
                                        Houston, Texas 77057
                                        Attn: Chairman, Compensation Committee

         Either party hereto may designate a different address by providing
         written notice of such new address to the other party hereto.

10.      Specific Performance. The Executive acknowledges that a remedy at law
         for any breach or attempted breach of Section 7 or 8 of this Agreement
         will be inadequate, agrees that the Company shall be entitled to
         specific performance and injunctive and other equitable relief in case
         of any such a breach or attempted breach, and further agrees to waive
         any requirement of the securing or posting of any bond in connection
         with the obtaining of any such injunctive or any other equitable
         relief.

11.      Waivers and Modifications. This Agreement may be modified, and the
         rights and remedies of any provision hereof may be waived, only in
         accordance with this Section 11. No modification or waiver by the
         Company shall be effective without the consent of at least a majority
         of the Compensation Committee of the Board of Directors then in office
         at the time of such modification or waiver. No waiver by either party
         of any breach by the other or any provision hereof shall be deemed to
         be a waiver of any later or other breach thereof or as a waiver of any
         other provision of this Agreement. This Agreement sets forth all the
         terms of the understandings between the parties with reference to the
         subject matter set forth herein and may not be waived, changed,
         discharged or terminated orally or by any course of dealing between the
         parties, but only by an instrument in writing signed by the party
         against whom any waiver, change, discharge or termination is sought.

12.      Governing Law. This Agreement shall be construed in accordance with the
         laws of the State of Texas.

13.      Severability. In case of one or more of the provisions contained in
         this Agreement for any reason shall be held to be invalid, illegal or
         unenforceable in any respect, such invalidity, illegality or
         unenforceability shall not affect any other provision of this
         Agreement, but this Agreement shall be construed as if such invalid,
         illegal or unenforceable provisions had never contained herein.

         Arbitration. In the event that a dispute or controversy should arise
         between the Executive and the Company as to the meaning or application
         of any provision, term or condition of this Agreement, such dispute or
         controversy shall be settled by binding arbitration in Houston, Texas
         and for said purpose each of the parties hereto hereby expressly
         consents to such arbitration in such place. Such arbitration shall be
         conducted in accordance with the existing

<PAGE>

         rules and regulations of the American Arbitration Association governing
         commercial transactions. The expense of the arbitrator shall be borne
         by the Company.

         IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement effective as of the date and year first above written.

                                             COMPANY:

                                             TOUCHSTONE RESOURCES USA, INC.

                                             By: /s/ Mark A. Bush
                                                 -------------------------
                                                 Mark A. Bush, President

                                             EXECUTIVE:

                                             /s/ D. Chris Barden
                                             -----------------------------
                                             D. Chris Barden

ACCEPTED AND AGREED AS TO
PARAGRAPH 4(2) ONLY.

/s/ Mark A. Bush
----------------
Mark A. Bush

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