Document:

WWW.EXFILE.COM, INC. -- 14077 -- SCHNITZER STEEL INDUSTRIES, INC. -- EXHIBIT 10.2 TO FORM 8-K

    

      
        	  	SCHNITZER
                STEEL INDUSTRIES,
                INC. 
	
              	
                3200
                  NW Yeon
                  Avenue

                Phone
                  (503)
                  224-9900 

              	
                P.O.
                  Box
                  10047
Fax
                (503)
                321-2649 	Portland,
                Oregon 97296-0047 

      

    

     

    Exhibit
      10.2

    
      	
               

            	
              January
                6,
                2006

            

    

     

    Richard
      C. Josephson

    PO
      Box 10047

    Portland,
      OR 97296

     

    Dear
      Rich:

     

    This
      letter serves to outline those areas
      related to your offer of employment as a regular full-time employee with
      Schnitzer Steel Industries, Inc. (the “Company”). Here are the
      particulars:

     

    
      	
              Position:

               

            	
              Vice
                President and General Counsel for
                Schnitzer Steel Industries, Inc.

               

            
	
              Compensation:

               

            	
              Your
                salary will be $450,000 per
                annum.

            
	
              Reporting
                To:

               

            	
              John
                D. Carter, President and Chief
                Executive Officer

              Schnitzer
                Steel Industries,
                Inc.

               

            
	
              Hire
                Date:

            	
              January
                9, 2006 (“Hire
                Date”)

               

            
	
              Bonus
                Eligibility:

               

            	
              You
                are eligible for participation in
                the Company’s Economic Value Added (EVA®) bonus program
                beginning on your Hire Date. Your EVA target is 50% of your EVA earnings
                (that accrue beginning with the Hire Date), which is then adjusted
                by the
                EVA center multiple that you will be assigned. You will participate
                100%
                in the “SSI without Joint Ventures” EVA Center. Bonus amounts, as
                formulated, are payable following the Company’s fiscal year-end on August
                31st, and are based on Company performance and are not
                guaranteed.

               

            
	
              Performance
                and Salary
                Review:

            	
              Normally,
                performance appraisals are
                conducted during the second calendar quarter of each year (usually
                in
                April or May). Salary reviews are normally conducted in June of each
                year.
                Increases, if any, depend upon individual performance and company
                financial considerations and are not automatic in nature. You will
                be
                eligible to participate in the June 2006 salary review.

               

            
	
              Auto
                Allowance:

            	
              You
                will be granted Auto Allowance,
                Level C, Oregon, which is currently at $700 per month. You will also
                receive a Company gas card. The auto allowance and gas card are pursuant
                to Human Resources Policy #640, and are considered taxable income
                to
                employees.

               

            
	
              Long-Term
                Incentive
                Program

            	
              You
                will be eligible for participation
                in the Schnitzer Steel Industries, Inc. Long-Term Incentive Program
                (“LTIP”). The target LTIP award level is anticipated to be $350,000 for
                the performance cycle from September 1, 2005 thru August 31, 2008.
                However, based on your Hire Date, this amount will be pro-rated to
                a
                target award level of $311,000. Final details on this program will
                be
                confirmed following approval of the recent plan amendments by the
                Company’s shareholders at the annual meeting in January, 2006. Actual
                award levels under the LTIP are subject to approval by the Compensation
                Committee of the Board of Directors. 

               

              The
                exercise price for any non-statutory
                stock options granted to you will be established at the closing trading
                price of the underlying stock on or about the date of grant.

               

            

    

     

     

     

    
    

    
      	
              Richard
                C. Josephson

            	
              Page
                2

            

    

     

     

     

     

     

    
      	
              Benefits
                Effective:

               

               

               

               

               

            	
              The
                effective date of your benefits will
                be determined by the waiting periods, if any, contained in each of
                the
                plans for which you are eligible. Other benefits are effective per
                plans
                and coverages as currently exist or as modified in the future for
                the
                salary group of which you are a part. The Company reserves the right
                to
                amend, alter or eliminate coverages. In addition to benefits under
                the
                Schnitzer self-insured health plan, coverage will also be provided
                under
                the Executive medical reimbursement plan. 

               

              Based
                on your Hire Date, you will be
                eligible to enroll into the health and welfare medical plans on April
                1,
                2006. As additional consideration, the Company will reimburse you
                for your
                actual COBRA expenses under your current employers plan until you
                are
                eligible for coverage under the Company plan(s). This amount will
                be
                considered to be taxable income to you, and therefore will be included
                on
                your 2006 W-2.

               

            
	
              Other
                Benefits

            	
              The
                Company will pay, or reimburse you
                for all normal and reasonable business expenses, including Oregon
                State
                Bar fees.

               

              The
                Company will reimburse you, or pay
                directly on your behalf, up to $5,000 for your attorney’s fees incurred in
                connection with this agreement.

               

            
	
              Paid
                Time Off
                (“PTO”)

            	
              PTO
                will
                accrue on an accelerated schedule. You will begin accruing PTO at
                the four
                (4) year rate of 6.16 hours per pay period or 160 hours per year.
                Your
                accrual rate will remain the same until at such time in the future
                you
                become eligible for the next highest accrual level, which is currently
                at
                9 years of service. PTO guidelines are provided under Human Resources
                Policy #525.

               

            

    

    
      	
              Severance
                Provisions

            	
              The
                Company
                will be presenting a severance program for certain key executive
                positions
                to the Compensation Committee of the Board of Directors that will
                provide
                a compensation package in the event of a loss of employment related
                to
                change in control and/or termination without cause. Your position
                will be
                included in this evaluation and recommendation, and actual participation
                will be subject to approval by the Compensation Committee. In the
                event
                such a program is not approved, or you are not included within such
                program at substantially the same level as other similarly situated
                senior
                executives of the Company, then the Company will provide you with
                a
                severance program that will be in effect from your Hire Date, and
                for a
                period of three (3) years, to expire on January 2, 2009, as
                follows:

               

              If
                your
                employment terminates (unless by the Company for Cause or voluntarily
                by
                you), you will be eligible for the following severance payments:
                (1) One
                year of salary at your then current base annual salary at the time
                of
                termination; (2) one year equivalent EVA Bonus based on the most
                recently
                completed EVA Bonus Plan year multiplied by your then current EVA
                bonus
                target percentage; (3) one year of medical, dental and vision coverage
                at
                your then-current enrollment, paid by the Company (or an equivalent
                value
                in money to the extent the Company cannot continue your coverage
                past the
                end of the calendar year in which your employment terminates pursuant
                to
                the terms of the coverage plans); and (4) pension plan matching
                contributions to the same level that would have been made had you
                remained
                employed continuously through the 12th month following the month
                of your
                termination. You shall also be entitled to your EVA Bonus Bank balance
                as
                provided in the EVA Bonus Plan. You will be entitled to these severance
                considerations only if you execute a general release of claims in
                a form
                reasonably satisfactory to the Company within 30 days (or such other
                period as the Company, in its reasonable discretion, may specify)
                after
                the date as of which your employment terminates and does not revoke
                that
                release of claims during the

               

            

    

    
       

       

       

      
      

      
        	
                Richard
                  C. Josephson

              	
                Page
                  3

              

      

       

       

       

       

       

      
      

    

    
      	
               

            	
               

              7-day
                period
                (or such other period as the Company, in its reasonable discretion,
                may
                specify) immediately following the date on which you execute such
                release
                of claims (the "Revocation Period"). 

               

              By
                way of
                example and not limitation, the general release of claims will include
                any
                and all claims for wages, EVA Target Bonuses or EVA Bonus Bank, employment
                benefits or damages of any kind whatsoever, arising out of (or under)
                (a)
                any contracts, express or implied, (b) any covenant of good faith
                and fair
                dealing, express or implied, (c) any theory of wrongful discharge,
                (d) any
                legal restriction on Employer's right to terminate employment, (e)
                any
                federal, state or other governmental statute or ordinance, including,
                without limitation, Title VII of the Civil Rights Act of 1964, the
                federal
                Age Discrimination in Employment Act, the Americans with Disabilities
                Act,
                the Family and Medical Leave Act, Employee Retirement Income Security
                Act,
                or (f) any other legal limitation on the employment relationship;
                provided, that the general release of claims will not affect your
                rights
                to receive severance benefits as set forth herein.

               

              Termination
                For Cause: You will not be entitled to any severance provision in
                the
                event you are terminated for Cause. Cause means the following, as
                determined in good faith by the Company's Board of Directors:

               

              a)   Your
                conviction (including a plea of guilty or nolo contendere) of a felony
                involving theft or moral turpitude or relating to the business of
                the
                Company, other than a felony predicated on your vicarious
                liability.

              b)   Your
                continued failure or refusal to perform with reasonable competence
                and in
                good faith any of the lawful duties assigned by (or any lawful directions
                of) the Company that are commensurate with your position with the
                Company
                (not resulting from any illness, sickness or physical or mental
                incapacity), which continues after the Company has given notice thereof
                (and a reasonable opportunity to cure) to you.

              c)   Deception,
                fraud, misrepresentation or dishonesty by you in connection with
                your
                employment with the Company; any incident materially compromising
                your
                reputation or ability to represent the Company with the public; any
                willful misconduct by you that substantially impairs the Company’s
                business or reputation; or any other willful misconduct by you that
                is
                clearly inconsistent with your position or responsibilities.

               

            

       

    

     

    The
      foregoing does not constitute a contract
      since the Company is an "at-will" employer. "At-will" means that employment
      and
      compensation can be terminated, with or without cause and with or without
      notice, at any time, at the option of the Company or yourself, subject to the
      obligations of the Company to pay severance benefits as set forth herein. This
      offer is made contingent on your successfully passing a drug screen provided
      by
      the Company, and finalization of a comprehensive background check conducted
      by
      the Company.

     

    Rich,
      we all join in congratulating you on
      your position with the Company and wish you a continuing successful
      career.

     

    
      	
              Sincerely,

            	
              Accepted,

            

    

     

    
      	
              /S/
                John D. Carter

            	
              /S/
                Richard C.
                Josephson

            

    

     

    
      	
              John
                D. Carter

            	
              Richard
                C. Josephson

            
	
              President
                and Chief Executive
                Officer

            	
              Employee

            	
               

            

    

     

    cc:
      Employee FileEXHIBIT 10.9(a)

                             DISTRIBUTION AGREEMENT

     THIS  AGREEMENT  made and  entered  into  this 9th day of  September,  2003
("Effective  Date"),  by and  between,  Coronado  Industries,  Inc.  having  its
headquarters at 16929 E. Enterprise Drive,  Suite 202,  Fountain Hills,  Arizona
85268 (hereinafter  referred to as "CI"), and EuPharmed s.r.l. having offices at
Via Deglia Ausoni 7/A, Rome 00185, Italy (hereinafter referred to as "EuP").

WITNESSETH

     WHEREAS, CI is engaged in the distribution and sale of a patented Pneumatic
Trabeculoplasty  (PNT) device as described on Schedule A (hereinafter called the
"Products") and desires to appoint EuP, on the terms and conditions  hereinafter
set forth, as exclusive distributor for the sale of the Products within Italy.

     NOW THEREFORE in consideration  of the mutual  covenants herein  contained,
and other good and valuable consideration, it is mutually agreed as follows:

1.   APPOINTMENT AND ACCEPTANCE

     1.1  CI hereby  appoints EuP as CI's exclusive  distributor of the Products
          in the country of Italy (hereinafter called "the Territory").

     1.2  EuP accepts  such  appointment  and agrees to use its best  efforts to
          promote,  develop  and  increase  sales  of the  Products  within  the
          Territory.  Without  limiting the  generality  of the  foregoing,  EuP
          shall:

          (a)  distribute  to the  best  advantage  such  literature  and  other
               advertising  material  as may be agreed to by CI and will not use
               or release any advertising or promotional  materials  (including,
               without   limitation,    labels,    packages,    circulars,   and
               advertisements) without the express prior written approval of CI;

          (b)  solicit  prospective  purchasers  who may  specify or utilize the
               Products;

          (c)  not promote or sell any product or product line which is directly
               or indirectly competitive with the Products;

          (d)  take no action which might impair the goodwill or  reputation  of
               CI or any of its affiliated companies or of the Products;

          (e)  refrain from making  quotations or writing letters under the name
               of CI: the name of CI shall not appear on stationery used by EuP,
               except as a  marginal  note  showing  "Distributor  for  Coronado
               Industries";

          (f)  have  complete  control  over,  and shall pay,  all the costs and
               expenses of its business;

          (g)  build and  maintain a sales  organization  commensurate  with the
               sales potential of the Products in the Territory and employ sales
               personnel  trained with sufficient  product knowledge to sell the
               Products adequately within the Territory;

Page 1  EuPharmed Distribution Agreement   9 September 2003

<PAGE>

          (h)  interface with customers and potential  customers on behalf of CI
               for  inquiries  with  respect  to  the  Products  and  use of the
               Products;

          (i)  not make claims with respect to indications for the Products that
               are not  approved by the  appropriate  Health  Authority or other
               appropriate regulatory body;

          (j)  purchase  sufficient  quantities of the Products from CI so as to
               be  able  to  maintain  an  adequate  supply  for  resale  of the
               Products;

          (k)  comply  with  all  applicable   Italian  and  European  laws  and
               regulations,  including any reporting  requirements in regards to
               complaints or incidents;

          (l)  promptly  report to CI, or its European  representative  which is
               currently

                  Medical Device Safety Services
                  Burchardtstrasse 1
                  D-30163 Hannover Germany
                  +49 411 69 69 8630

               all complaints, incidents or problems it receives relating to the
               Products;

          (m)  follow all CI sales policies communicated by CI from time to time
               in the promotion and sale of Products;

          (n)  handle and store all  Products  in  accordance  with  Italian and
               European laws and the labeling and instructions of CI.

2.   PRICE, RETURNS, PURCHASE OBLIGATIONS, PRODUCT SUPPLY

     2.1  The supply price of the Products,  except for samples, to EuP shall be
          as outlined below;

          (a)  PNT controllers at  [CONFIDENTIAL  INFORMATION  OMITTED AND FILED
               SEPARATELY WITH THE COMMISSION] per controller.

          (b)  PNT  rings  at  [CONFIDENTIAL   INFORMATION   OMITTED  AND  FILED
               SEPARATELY  WITH THE  COMMISSION]  per single ring  packaged in a
               sterile  sachet.  Rings will be  provided  to EuP in units of 100
               sterile sachets/carton.

          (c)  CI will arrange for shipment of product from their  manufacturing
               facility to EuP's  warehouse.  The cost of  shipping  the product
               from  CI's  distribution  facility  to  EuP's  central  receiving
               facility in Italy will be the responsibility of CI.

          (d)  The  above  supply  prices  will be fixed  until  December  2007.
               Beginning in January 2008 CI can adjust the supply price based on
               a  reported  U.S.   manufacturing   inflation  index,  with  such
               adjustment using 2003 as the base year.

          (e)  The above pricing reflects the current controller and ring design
               and manufacturing  processes. In the event the United States Food
               and Drug  Administration  (USFDA) or any other governmental heath

Page 2  EuPharmed Distribution Agreement   9 September 2003

<PAGE>

               authority  (HA)  requires  modifications  to the  PNT  controller
               and/or  ring  in  order  to  allow  continuing  sale  within  the
               Territory  which would lead to an  increase in the  manufacturing
               costs to CI of more than 10%,  the Parties  agree to  negotiate a
               new supply price.

     2.2  EuP will have the following minimum purchase requirements

          ----------------------------------------------------------------------
          March 2004 to December 2005                   * per month
          ----------------------------------------------------------------------
          January 2006 to December 2006                 * per month
          ----------------------------------------------------------------------
          January 2007 to December 2007                 * per month
          ----------------------------------------------------------------------
          *  [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
             COMMISSION]

     2.3  Terms of payment shall be AS FOLLOWS:

          2.3.1  Minimum Purchase Obligations  -  Payment  due upon  receipt  of
          merchandise by EuP. Anticipated delivery to commence on March 1, 2004.

          2.3.2  Additional Controllers  Purchased  in  Excess  of  the  Monthly
          Minimum - Payment net 30 days upon receipt of merchandise by EuP.

          2.3.3  PNT Rings - Payment for quantities above any  minimum  purchase
          obligations net 60 days upon receipt by EuP.

     2.4  EuP shall make the payments described herein by bank wire transfer per
          instructions  to be provided by CI. Time shall be of the essence  with
          respect to the payment monies by EuP pursuant to this Agreement.

     2.5  CI  will  provide  to  EuP,  free  of  charge,   up  to  [CONFIDENTIAL
          INFORMATION  OMITTED AND FILED  SEPARATELY  WITH THE  COMMISSION]  PNT
          controllers,  along with [CONFIDENTIAL  INFORMATION  OMITTED AND FILED
          SEPARATELY  WITH THE  COMMISSION]  rings per  controller  (the starter
          packs) in order to  accelerate  the  introduction  and adoption of PNT
          within the Territory.  Delivery of the controllers and rings described
          under this subsection will be agreed to by the Parties.  The intent is
          to provide  devices to key opinion  leaders within the Territory,  who
          are not involved in the EuP Clinical  Trial (see Section 8 below),  so
          as to  allow  them to gain  experience  with  PNT.  EuP  will not sell
          materials which are provided to them free of charge.

     2.6  EuP may  return  goods,  including  vacuum  units  which  may  require
          service,  to CI only in accordance with CI's published  returned goods
          policy. Used rings cannot be returned to CI

     2.7  CI will be responsible for the production,  including  sourcing of raw
          materials,  for all  commercial  and clinical  supplies.  All Products
          shipped to EuP will be in  compliance  with  relevant  regulatory  and
          governmental requirements,  including compliance with the requirements
          of an EU 2a  device  classification  and will have  sufficient  expiry
          dating to allow for distribution through normal distribution channels.
          This  manufacturing  obligation  will expire upon  termination of this
          Agreement.

Page 3  EuPharmed Distribution Agreement   9 September 2003

<PAGE>

3.   RELATIONSHIP OF THE PARTIES

     EuP shall be an  independent  contractor  of CI.  This  Agreement  does not
create any employer-employee,  agency, joint venture or partnership relationship
between CI and EuP.  EuP is not  authorized  or empowered to act as agent for CI
for any  purpose and shall not on behalf of CI either  enter into any  contract,
undertaking,  or agreement of any kind whatever, or make any promise,  warranty,
or representation  with respect to the Products other than those published by CI
in the advertising and sales promotional material provided to EuP.

4.   NOTICES

     Any notices will be sent via  facsimile  and by a  recognized  express mail
carrier:

     If to EuP:            EuPharmed s.r.l.
                           Via Deglia Ausoni 7/A
                           Rome 00185
                           ITALY
                           Attn: Dr. Alberto Aiuto
                           Facsimile # +39 06 49 27 08 30

     If to CI:             Coronado Industries
                           16929 E. Enterprise Drive, Suite 202
                           Fountain Hills, Arizona  85268
                           Attention: CEO
                           CC: Director of Operations
                           Facsimile +1 480 837 6870

or to such other  address as either party may  hereafter  designate by notice to
the other  party.  The date of giving  of any such  notice  shall be on the date
received from an express mail carrier.

5.   FORCE MAJEURE

     Neither party hereto will be liable to the other for its failure to perform
hereunder due to act of God,  accident,  fire,  flood,  storm,  riot,  sabotage,
explosion, strike, labor disturbance, national defense requirement, governmental
law,  ordinance,   rule  or  regulation,   whether  valid  or  invalid,  defense
requirement,  governmental law, ordinance, rule or regulation,  whether valid or
invalid, inability to obtain electricity or other type of energy, raw materials,
labor,  equipment  or  transportation,  or  any  other  contingency  beyond  its
reasonable control which would make performance commercially  impracticable.  In
the event of a shortage  of  Products,  CI reserves  the right to  allocate  its
inventory of Products as it may determine in its sole discretion.

6.   TRADEMARKS AND PROPRIETARY INFORMATION

     6.1  CI will be responsible for registering and maintaining all Patents and
          Trademark(s) relating to the Products in the Territory at CI's costs.

     6.2  By virtue of the Agreement and EuP's performance hereunder,  EuP shall
          acquire no interest in CI trademarks or corporate names, label designs
          or other identifying  marks used to distinguish CI's Products.  Except
          for undertaking  such activities as are directly  related to promoting
          the sale of the Product under this  Agreement,  EuP shall not make use
          of the name CI, or make use of any  trademark  or trade  name which in

Page 4  EuPharmed Distribution Agreement   9 September 2003

<PAGE>

          the judgment of CI is confusingly  similar thereto without the written
          consent of CI.

     6.3  The Parties will use their best  efforts to discover any  infringement
          of any Patent,  Trademark or corporate name of Coronado Industries and
          will promptly  notify each other of any such  infringement or wrongful
          use.  Any  Proprietary  Information  provided  shall be and remain the
          property of CI, and CI will impose any conditions with respect thereto
          which it deems  reasonably  necessary  to  preserve  the  confidential
          nature thereof. EuP will retain all Proprietary  Information in strict
          confidence as trade secrets of CI and will not disclose, or permit any
          employee or agent of EuP to disclose,  any Proprietary  Information to
          anyone without the prior written  approval of CI,  provided,  however,
          that  such  disclosure  may be made to any  employee  of EuP who has a
          reasonable need for access thereto. For the purpose of this Agreement,
          the term "Proprietary Information" shall mean all formulae, processes,
          and other information  relating to the distribution,  sale, and use of
          any Product  which has been or may  hereafter  be furnished to EuP and
          which would not be  available  to the general  public  otherwise  than
          through violation of this Agreement.

     6.4  Upon the expiration or prior  termination of this Agreement,  EuP will
          exercise  all  necessary  precautions  to  safeguard  the  secrecy  of
          Proprietary  Information  and to prevent the  unauthorized  disclosure
          thereof,  EuP will consult CI as to the  procedures  established by it
          for this  purpose  and will from  time to time,  if  requested  by CI,
          advise CI of the procedures which it then has in effect.

7.   REGISTRATIONS AND HEALTH AUTHORITY INTERACTIONS

     7.1  CI will be responsible for all  interactions  with the relevant Health
          Authorities  (HA's)  and  will  bear  the  costs  associated  with the
          registration(s) in the Territory.

     7.2  EuP, as reasonably  requested by CI, will assist and provide expertise
          as required in dealing with the relevant HA's in the Territory.

     7.3  CI and EuP agree that a Type 2a device  classification  is required to
          allow the sale of the Products in the  Territory.  CI agrees to supply
          EuP with Products meeting this classification.

8.   EUPHARMED CLINICAL TRIAL ("ECT")

     8.1  EuP will conduct a one (1) year, prospective, randomized trial of PNT,
          involving  five (5) to seven (7)  centers  in Italy  and a minimum  of
          one-hundred  and  twenty  (120)  patients,  with the  intent  being to
          further  demonstrate  the long-term  efficacy and safety of PNT in the
          agreed upon glaucoma population (the "ECT").

     8.2  As   partial    consideration   for   being   granted   an   exclusive
          distributorship within the Territory,  EuP will be responsible for all
          costs,  except the costs of the controllers and PNT rings,  associated
          with conducting the ECT in the Territory.

     8.3  EuP will consult with CI on the design of the ECT.

Page 5  EuPharmed Distribution Agreement   9 September 2003

<PAGE>

     8.4  EuP  will  own the  clinical  trial  data  generated  as a  result  of
          performing the ECT, but will allow CI to utilize the data to assist in
          registrations   both  within  and  outside  the   Territory   and  for
          discussions with other potential distributors. The clinical trial data
          generated  by the ECT  will be  provided  to CI,  in  compliance  with
          Italian and European clinical trial regulations, on a quarterly basis.
          All reports will comply with all applicable  European and Italian laws
          concerning Privacy

     8.5  CI will supply to EuP,  free of charge,  a sufficient  quantity of PNT
          controllers and rings to perform the ECT.

     8.6  EuP  agrees  to use  best  efforts  to  initiate  the  ECT,  including
          recruitment  of  investigators,   protocol   preparation  and  patient
          enrollment.  The  current  planning  envisions  an  ECT  Investigators
          Meeting during the second half of September,  2003, which will then be
          immediately followed by submission of the ECT protocol to the relevant
          Ethics Committees and/or  Institutional  Review Boards for approval to
          allow initiation of the ECT.

     8.7  In the event the results of the ECT  demonstrate  a  reduction  in the
          intraocular  pressure of less than 2 mm of Hg, the Parties  will agree
          to negotiate in good faith and revise this Agreement accordingly.

     8.8  Coronado will make available, if necessary,  either Dr. Leo Bores, Dr.
          John  LiVeccia  or  another  physician  with  suitable  experience  in
          performing the PNT treatment to train the study physicians.

9.   TERM AND TERMINATON

     9.1  The term of this  Agreement  shall be for a period  of five (5)  years
          from the date first above  written.  EuPharmed may extend the term for
          an  additional  two (2) years by  agreeing  to a minimum  purchase  of
          [CONFIDENTIAL  INFORMATION  OMITTED  AND  FILED  SEPARATELY  WITH  THE
          COMMISSION]  in year six (6) and seven (7).  Following  the  initial 7
          year  term  outlined  above,  this  Agreement  will  be  automatically
          renewable on an annual basis, unless either Party notifies the other 6
          months  prior  to  expiration  of the  initial  term,  or each  annual
          extension, of their intention not to renew,

     9.2  This  Agreement  shall  immediately  terminate  upon ninety (90) days'
          notice if EuP assigns, transfers, or hypothecates this Agreement or if
          ownership  or control  of EuP is  transferred  to a third  party or if
          either Party is adjudged  bankrupt,  files or has filed against it any
          petition  under any  bankruptcy  or  insolvency  law,  has a  receiver
          appointed for its business or property,  or makes a general assignment
          for the benefit of its creditors.

     9.3  EuP hereby accords CI upon termination or expiration of this Agreement
          an option to repurchase from EuP all or any part of EuP's inventory of
          Products at the price paid therefore by EuP (the "Repurchase  Price"),
          pursuant to the following procedures:

          9.3.1 Within five (5) days after the  effective  date of  termination,
          EuP shall submit to CI a written schedule reflecting all Products then
          owned by or in EuP's  possession.  Said schedule  shall  identify each
          Product and shall indicate the quantity thereof on hand.

Page 6  EuPharmed Distribution Agreement   9 September 2003

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          9.3.2  Within ten (10) days after the receipt of such  schedule by CI,
          CI shall have the right to inspect  the  inventory  reflected  on such
          schedule.

          9.3.3 Within ten (10) days after completion of CI's inspection of said
          inventory,  CI shall give written notice of its election to repurchase
          all or any part of the inventory.

          9.3.4 Upon receipt of said notice of repurchase,  EuP shall  forthwith
          deliver  such  Products  as  may be  specified  therein  to a  carrier
          designated  by CI.  Payment  of the  Repurchase  Price as  hereinabove
          provided  shall be made by CI to EuP either by (1) the issuance to EuP
          of a credit corresponding to the Repurchase Price to be applied in the
          reduction  of any  indebtedness  of EuP to CI or by (2) payment of the
          excess  of the  Repurchase  Price  over any such  indebtedness  of EuP
          within ten (10) days after the delivery of said Products to CI.

     9.4  Upon   termination  or  expiration  of  this   Agreement,   EuP  shall
          immediately cease to represent itself as an authorized  distributor of
          CI with respect to the  Products;  provided,  however,  that EuP shall
          have the right to sell, only in accordance with the provisions of this
          Agreement  notwithstanding  the  termination  or  expiration  of  this
          Agreement,  those  Products  which are in its inventory on the date of
          such  termination  and which CI has not  repurchased  pursuant  to the
          provisions of Subsection 9.3 hereof.

     9.5  The  termination or expiration of this Agreement shall not release EuP
          from the obligation to pay any sum that may be owning to CI or operate
          to  discharge  any  liability  that had been  incurred by either Party
          prior to any such termination.

     9.6  Failure  by a Party to  comply  with any of its  material  obligations
          contained in this Agreement,  including  minimum  purchase and payment
          term obligations,  shall entitle the  non-defaulting  Party to give to
          the  defaulting  Party  written  notice  specifying  the nature of the
          default and requiring the defaulting  Party to make good such default.
          If such  default is not cured within sixty (60) days after the receipt
          of such  notice  (or,  if such  default is not  capable of being cured
          within such sixty (60) day  period,  within such amount of time as may
          be reasonably necessary to cure such breach, as long as the Defaulting
          Party is  making  diligent  efforts  to do so,  except  in the case of
          payment  default,  as to which the defaulting  Party shall have only a
          sixty  (60)  day  cure  period),  the  non-defaulting  Party  shall be
          entitled  immediately  to terminate  this  agreement by giving written
          notice to the defaulting Party. The right of a Party to terminate this
          Agreement,  as hereinafter provided,  shall not be affected in any way
          by its waiver or failure to take action with  respect to any  previous
          default.

     9.7  The  Parties  may  agree in a  writing,  signed  by both  Parties,  to
          terminate  this  agreement  in its  entirety.  In such an  event,  the
          Parties shall agree to the effects of such termination at that time

Page 7  EuPharmed Distribution Agreement   9 September 2003

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10.  ASSIGNMENT

     This Agreement shall be binding upon the successors and assignees of CI and
     EuP.  This  Agreement  shall not be  assignable  by EuP  without  the prior
     written  consent of CI. CI may at any time assign this  Agreement to any of
     its affiliated companies or to an unrelated third party.

11.  INDEMNIFICATION

     11.1 So long as EuP is not negligent in storing and  otherwise  maintaining
          the Products and relabels and  repackages  the Products in  compliance
          with  procedures  agreed  to in  writing  by  CI,  and  complies  with
          applicable laws and its obligations  under this Agreement with respect
          to promotion of the Products,  CI will  indemnify EuP from any and all
          liability,  loss,  or damage  EuP may  suffer  as a result of  claims,
          demands,  costs, or judgment  against it arising from the sale of said
          Products supplied by CI . The limits of insurance will be a minimum of
          USD $1.0  million per  incidence  and $1.0 million in total which will
          also be the limits of this indemnification. This indemnification shall
          commence  from the execution of this  Agreement and shall  continue in
          full  force and  effect so long as there may be any  claims,  demands,
          costs or  judgments  arising  against  EuP from EuP's sale of Products
          supplied by CI.

     11.2 EuP will  indemnify CI from any and all  liability,  loss or damage CI
          may suffer as a result of claims,  demands, costs or judgments against
          it arising from EuP's  negligence in storing,  maintaining or handling
          the Products or from not  relabeling  or  repackaging  the Products in
          compliance with the agreed to written  procedure or otherwise  failing
          to comply with  applicable  laws and regulations and the terms of this
          Agreement.  The limits of insurance  will be a minimum USD 1.0 million
          per incidence and $1 million in total which will also be the limits of
          this  indemnification.  Said  indemnification  shall commence from the
          execution  hereof and shall  continue in full force and effect so long
          as  there  may be any  claims,  demands,  costs or  judgments  arising
          against CI as a result of EuP's conduct as aforesaid.

     11.3 Each Party will  maintain,  at each  Party's  own  expense,  insurance
          coverage from a reputable insurance carrier, so as to adequately cover
          the dollar amounts outlined in the above referenced indemnifications.

12.  MISCELLANEOUS

     12.1 The  provisions  of  this   Agreement   shall  be  construed  and  the
          performance  thereof governed in accordance with the laws of the State
          of Arizona.

     12.2 The article  headings in this  Agreement are inserted for  convenience
          only  and  shall  not be  deemed  to be  part  of  this  Agreement  or
          considered in construing this Agreement.

     12.3 This  Agreement  constitutes  the  entire  understanding  between  the
          Parties and  supersedes  any previous  written or oral  agreements  or
          understandings between the Parties.

Page 8  EuPharmed Distribution Agreement   9 September 2003

<PAGE>

     12.4 No modification  to or waiver of the terms or conditions  hereof shall
          be  binding  upon  either  Party  unless  approved  in  writing  by an
          authorized  representative  and no  modification  can be  made  by the
          acknowledgment  of  acceptance  or by the use of purchase  order forms
          containing other or different terms or conditions.

     12.5 This  Agreement may be executed in one or more  counterparts,  each of
          which  shall be deemed an original  but all of which shall  constitute
          one and the same instrument.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first written above.

CORONADO INDUSTRIES                         EuPharmed s.r.l.

By:     /s/ Gary R. Smith                   By:    /s/ Alberto Aiuto
    --------------------------                  ---------------------------
Name:   Gary R. Smith                       Name:  Alberto Aiuto
Title:  President                           Title: Managing Director

Page 9  EuPharmed Distribution Agreement   9 September 2003

<PAGE>

                                   SCHEDULE A

(1)  PNT Vacuum Controller - Model 1000

(2)  PNT  Sterilized/Single  Use/Disposable Ring - pre-sterilized  polypropylene
     3-port PNT ring.  One (1)  sterilized  ring per sealed  Tyvek(R)pouch.  100
     rings per carton

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