Document:

EXHIBIT 10.70

                       LICENSE AND DISTRIBUTION AGREEMENT

This License and  Distribution  Agreement (the  "Agreement") is entered into and
effective this 21st day of December, 1999 ("Effective Date"), by and between

         BIOJECT INC.
         7620 S.W. Bridgeport Rd.
         Portland, Oregon 97224
                                                                     ("Bioject")

AND:

         SERONO LABORATORIES, INC.
         100 Longwater Circle
         Norwell, MA 02061

                                                                      ("Serono")
RECITALS:

A.   Bioject designs, develops, manufactures and markets proprietary needle-free
     drug delivery injection devices and related supplies; and

B.   Serono has  developed a  proprietary  human  growth  hormone and  possesses
     certain  know-how and expertise in the marketing,  selling and distributing
     medical products and supplies, including drug delivery systems; and

C.   Bioject and Serono desire to establish a  relationship  for the license and
     distribution of the needle-free drug delivery injection devices and related
     supplies specified herein, on the terms specified herein.

AGREEMENT:

In consideration of the mutual covenants  contained  herein,  and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the parties hereto agree as follows:

1.   Grant of  License:  License  Fee;  Option.  Subject to all of the terms and
     conditions set forth in this Agreement:

     1.1  License Grant.  Bioject hereby grants to Serono an exclusive right (as
          to Bioject and all other parties) and exclusive license (as to Bioject
          and all other  parties)  under the patents  listed in Schedule 2.1 and
          related technology,  know-how and technical information (collectively,
          the "Licensed  Technology")  during the term of this Agreement to use,
          have used,  sell,  have sold,  import  and have  imported  needle-free
          devices,  syringes  and  supplies  listed  on  Schedule  1.1  of  this
          Agreement (the "Products") for use in the Field (defined below) in the
          United  States,  its  territories  and  possessions  and  Canada  (the
          "Territory").   The  term   Products   shall   include  all  upgrades,
          improvements,  modifications  and  enhancements  to the Products  made
          during the term of this Agreement. The term Products shall not include
          needle-free devices materially

<PAGE>

          different  from the existing  Products in  significant  respects.  The
          specifications  for each Product are set forth on Schedule 1.1 of this
          Agreement (the "Specifications").  The Specifications shall be amended
          from  time  to  time  by  the  parties  for  upgrades,   improvements,
          enhancements  and  other  changes  to the  Products.  New  needle-free
          devices of Bioject that do not constitute Products shall be subject to
          the right of first offer in favor of Serono set forth in Section 21 of
          this Agreement.

     1.2  Changes  to  Products.  Bioject  shall make  changes  to the  Products
          reasonably  requested  by Serono,  provided  that Serono shall pay the
          cost of  engineering  any change to Products  requested by it. Bioject
          shall  promptly  provide  Serono  with an  estimate  of such costs and
          receive  Serono's  approval of such estimate  before  undertaking  any
          change to the  Products.  Bioject  shall not make any other changes to
          the Products without Serono's prior written approval,  which shall not
          be unreasonably withheld or delayed.  Serono may withhold its approval
          in all cases where the  requested  change would impact its  regulatory
          commitments  or  approvals  with  respect to human  growth  hormone or
          delivery of human growth hormone using the Products.

     1.3  Sub-distributors.   Serono   shall   have   the   right   to   appoint
          sub-distributors to assist in the marketing,  sale and distribution of
          the  Products in the  Territory  for use in the Field,  provided  that
          Serono shall be  responsible  for ensuring that such  sub-distributors
          conduct  their  activities  with respect to the Products in compliance
          with Serono's obligations under this Agreement.

     1.4  Definition of Field. "Field" means the use of a needle-free  injection
          device and syringe to administer  human growth hormone to humans,  but
          specifically excluding treatment of AIDS-wasting.

     1.5  No Rights by  Implication.  No rights or licenses  with respect to the
          Products or the  Licensed  Technology  are  granted or deemed  granted
          hereunder  or in  connection  herewith,  other  than  those  rights or
          licenses expressly granted in this Agreement.

     1.6  Option for  Extended  Territory.  Bioject  hereby  grants to Serono an
          option to extend the Territory to ***. This option may be exercised by
          written notice of exercise to Bioject at any time before ***. Prior to
          expiration of this option and in order to preserve the benefit of this
          option to Serono,  Bioject  shall not  market,  distribute  or sell or
          permit any other person to market, distribute or sell the Products for
          use in the Field  anywhere in the ***.  Serono  shall pay Bioject $***
          for  extension of the Territory to ***. The first $*** of such payment
          shall be made upon exercise of the option. The remaining $*** shall be
          paid *** (***) days after  Serono and Bioject  shall have  secured all
          regulatory  approvals  necessary  for  Serono to market and sell human
          growth  hormone for  delivery  with the  Products in *** or ***.  Such
          payment shall be in addition to any other amounts due

                                      -2-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.

<PAGE>

          to Bioject  under this  Agreement.  If this  option is  exercised  and
          payment is made as described in this Section 1.6,  after  exercise and
          payment the term  "Territory"  shall mean ***. If Serono for itself or
          one of its  Affiliates  exercises this option to extend the Territory,
          the parties will  negotiate in good faith any necessary  amendments to
          this   Agreement  to  comply  with   applicable   law  and  regulatory
          requirements  and,  at the  request  of Serono,  one or more  separate
          agreements  between  one or more  Affiliates  of  Serono  and  Bioject
          covering the extension Territory which shall be substantially the same
          as this Agreement.

     1.7  Affiliates of Serono.  This Agreement shall be made for the benefit of
          Serono and its  Affiliates.  Serono may  designate  one or more of its
          Affiliates to exercise its rights, receive its benefits or perform its
          obligations  under this  Agreement in whole or in part,  provided that
          Serono shall remain responsible for all obligations  assigned by it to
          its Affiliates  under this Agreement.  For purposes of this Agreement,
          "Affiliate"  of a party shall mean any  corporation  or other business
          entity controlled by,  controlling,  or under common control with such
          party.

2.   Regulatory Matters.

     2.1  Product  Approvals in the United  States and Canada.  Bioject shall be
          responsible for obtaining and maintaining all approvals,  licenses and
          permits  necessary  for  manufacture  of the Products  and  marketing,
          selling and using the  Products to  administer  Serono's  human growth
          hormone product in the United States and Canada,  provided that Serono
          shall be responsible for all approvals that relate to its human growth
          hormone product generally. Bioject shall diligently pursue and provide
          Serono with copies of the approval of its 510K  application(s) for the
          Products and all other regulatory approvals for the Products issued by
          regulatory authorities in the United States and Canada.

     2.2  Foreign  Regulatory  Approvals.  After any  exercise  by Serono of its
          option pursuant to Section 1.6 to extend the Territory to ***, Bioject
          shall  diligently  obtain and  maintain  all  approvals,  licenses and
          permits necessary for the import,  marketing, sale and use of Products
          to administer  Serono's human growth hormone product in *** of the ***
          and such *** as  designated  by *** from time to time,  provided  that
          Serono shall be responsible for all approvals that relate to its human
          growth hormone product generally.

     2.3  Regulatory  Assistance  by Serono.  Serono  will use all  commercially
          reasonable  efforts to assist Bioject in obtaining and maintaining all
          necessary regulatory approvals with respect to marketing, sale and use
          of the Products to administer  Serono's human growth hormone  products
          in the Territory.

     2.4  Regulatory  Approvals for Serono's Human Growth Hormone.  Serono shall
          be responsible for obtaining and maintaining all necessary

                                      -3-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          regulatory approvals for the manufacture,  market, sale and use of its
          human growth hormone product,  including by means of delivery with the
          Products,  in the United States and Canada and, if the option pursuant
          to Section 1.6 is  exercised,  in ***, *** of the *** and *** in which
          Serono  requests  that  Bioject  pursue  regulatory  approval  for the
          Products.

     2.5  Regulatory  Assistance by Bioject.  Bioject will use all  commercially
          reasonable  efforts to assist Serono in obtaining and  maintaining all
          necessary regulatory approvals with respect to marketing, sale and use
          of human growth  hormone with the Products in the  Territory.  Without
          limiting  the  foregoing,  Bioject  will  provide  Serono  with  (a) a
          reasonable quantity of Products (but not less than ***) for use in any
          required clinical trials at no charge (other than shipping costs), and
          (b)  reasonable  access at no charge to Bioject's  (i) records,  study
          results,  research and other information and materials relating to the
          Products and (ii) personnel for consultation. Bioject will also assist
          Serono  in the  completion  of all  initial  and  periodic  regulatory
          filings  relating to  marketing,  sale or use of human growth  hormone
          with the Products and make its  facilities  and records  available for
          inspection by the United States Food and Drug  Administration  ("FDA")
          and international regulatory agencies.

     2.6  Facility Inspections. Serono shall, upon reasonable notice to Bioject,
          have the right to inspect the  facilities  in which the  Products  are
          manufactured,  tested or stored  at any time  during  the term of this
          Agreement  and to observe the  manufacture  of the  Products.  Bioject
          shall  consult  with Serono  prior to any response to the FDA or other
          regulatory  authority relating to the Products,  this Agreement or the
          manufacture  of the Products.  Bioject will promptly  notify Serono of
          any  FDA or  other  regulatory  inspection  related  to the  Products.
          Bioject  will  promptly  notify  Serono  of the  results  of any  such
          inspection  and furnish  Serono with a written  description of actions
          taken, if any, to remedy conditions cited in any such inspection.

     2.7  Adverse  Reactions  and  Reports.  Bioject  will  be  responsible  for
          completion  and  submission  to the FDA of any form with respect to an
          adverse  reaction or event  involving a Product sold  hereunder or any
          complaint that would require a field alert and all periodic and annual
          reports, as and when appropriate, unless Serono is under any statutory
          or  regulatory  obligation  to make such or similar  report or filing.
          Each party will forward to the other, simultaneously with filing such,
          a copy of each completed  form with respect to an adverse  reaction or
          event or  similar  report or filing  with  respect  to a Product  sold
          hereunder.

3.   Appointment  as Exclusive  Distributor.  Subject to the  provisions of this
     Agreement, Bioject hereby grants Serono the exclusive right to market, sell
     and distribute the Products in the Field within the Territory  directly and
     indirectly,  including through  wholesalers and  sub-distributors.  Bioject
     agrees that,

                                      -4-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

     during the term of this Agreement,  it will not market,  distribute or sell
     or permit any other  person to market,  sell or resell the Products for use
     in the Field in the Territory  and that Bioject will take all  commercially
     reasonable actions to give full effect to the intention of this Section.

4.   Purchase of Products by Serono.

     4.1  Purchase and Sale.  Subject to Section 4.2, Bioject agrees to sell the
          Products to Serono in  accordance  with purchase  orders  submitted by
          Serono,  and Serono  agrees to  purchase  the  Products  from  Bioject
          subject to the provisions of this Agreement.

     4.2  Forecasts; Orders. On or before the *** (***) day of the months of ***
          during the term of this Agreement,  Serono will provide Bioject with a
          written  good-faith,  non-binding  *** (***)  calendar  month  rolling
          forecast of the *** that  Serono  expects to *** of the next *** (***)
          calendar  months.  The first *** (***) calendar months of each rolling
          forecast  shall be binding.  Serono  will  provide  Bioject  with firm
          purchase  orders from time to time setting  forth the  quantities  and
          forms of Products  ordered and  required  delivery  dates (a "Purchase
          Order").  The  quantities  ordered in Purchase  Orders will be no more
          than *** (***) of the amount  covered in  Serono's  binding  forecast.
          Bioject will use its reasonable  commercial efforts to supply Products
          in excess of such amount.  Subject to the  provisions  of this Section
          with respect to orders in excess of *** of Serono's forecast,  Bioject
          shall meet fully the  requirements  of each  Purchase  Order placed by
          Serono  hereunder.  To the degree  that  either or both of the parties
          find it convenient to employ their standard forms of purchase order or
          acknowledgment  of order in administering the terms of this Agreement,
          it or they may do so but none of the terms and  conditions  printed or
          otherwise  appearing on such forms shall be  applicable  except to the
          extent that it specifies information,  such as quantities and delivery
          dates,   required  to  be  furnished   by  either   party   hereunder.
          Notwithstanding  the  foregoing  or anything in this  Agreement to the
          contrary, the parties agree that Serono shall submit its first rolling
          forecast after  approval by the FDA of Bioject's  510K  application(s)
          for the Products and that Bioject shall have a period of up to 90 days
          to fill the  first  order  for  Products  submitted  by  Serono  after
          approval by the FDA of Bioject's 510K application(s) for the Products.

          The terms and  conditions  set  forth in this  Agreement  shall be the
          exclusive  contract terms between the parties with respect to Serono's
          purchase of the Products.

     4.3  Return.  Serono  may not  return  any  Products  ordered by it without
          Bioject's express written consent.  Such consent shall not be withheld
          for return of  defective  Products or Products  being  returned  under
          Warranty  provisions  set forth in Section 12 (each,  a  "Pre-approved
          Return").  Provision by Bioject of a return goods authorization number
          ("RGA#") to Serono shall constitute express written consent to return

                                      -5-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          Products but only for the Products and in the quantities and serial or
          lot numbers specified by such RGA#.  Except for Pre-approved  Returns,
          Products  returned  for  credit are  subject  to a minimum  restocking
          charge of 20% of the original purchase price.  Except for Pre-approved
          Returns,  used,  opened or customer  damaged products are not eligible
          for credit.

     4.4  Not a Requirements Contract.  Serono has no obligation to purchase all
          of its requirements of needle-free drug delivery  injection devices or
          related supplies from Bioject. Without limiting the foregoing,  Serono
          may qualify  other  sources of supply for  needle-free  drug  delivery
          injection  devices and related  supplies,  purchase  such  devices and
          related  supplies from others and/or  produce such devices and related
          supplies for itself.

5.   License Fees and Quotas.  Serono  agrees to pay to Bioject the license fees
     set forth in  Schedule  5.  Serono  agrees to  purchase  from  Bioject  the
     quantities  of  Product  described  in  Schedule  5 in  order  to  maintain
     exclusivity for the Territory.  If Serono *** at the ***, Serono may *** by
     making *** to Bioject in accordance with the ***.

6.   Prices and Discounts.

     6.1  Prices. Serono shall purchase Products F.O.B. Bioject's factory at the
          prices set forth in Schedule  6.1, plus any  applicable  insurance and
          taxes.  Bioject shall ship and insure Products with transportation and
          insurance  carriers  selected  by  Serono.  Freight  costs,  handling,
          insurance,  sales or  other  taxes  and  export  or  import  fees,  as
          applicable,  will be prepaid by Bioject and added to the invoice to be
          paid by Serono.  Bioject's *** at the option of Bioject upon *** (***)
          days'  written  notice to Serono but not before the *** of the date of
          this  Agreement  or more often than *** in any *** (***) month  period
          thereafter. Any price increase shall not exceed ***.

     6.2  Most Favored  Customer.  The *** to Serono under this Agreement  shall
          *** taking into  account any ***  resulting  from such *** to Bioject,
          including,  without  limitation,  any ***.  If Bioject  shall enter in
          arrangements  with any *** taking into account any *** resulting  from
          such *** to Bioject,  then this  Agreement  shall  thereupon be deemed
          amended to provide  *** to Serono,  and notice  thereof  and *** shall
          promptly be given to Serono by Bioject. All other terms and conditions
          of sale to Serono,  including warranty  provisions with respect to the
          Products,  shall at all  times be at least as  favorable  to Serono as
          those  terms  offered to any other  customer  with  respect to similar
          products, including any wholesaler or distributor. In the event of any
          shortages or capacity  limitations,  Bioject shall supply  Products to
          Serono  to the best of its  ability  and  shall  not  favor  any other
          customer over Serono.

     6.3  Customer Prices and Terms.  Serono shall be solely responsible for the
          prices  and other  terms  and  conditions  upon  which it  resells  or
          otherwise

                                      -6-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          disposes of the Products,  and Serono hereby acknowledges that Bioject
          has no control  whatsoever with respect to such resale prices or other
          terms and  conditions  of resale  but  Bioject  reserves  the right to
          advertise its list prices for similar products from time to time.

7.   Payment for Products.

     7.1  Product  Purchase  Price.  The full  price of all  Products  including
          applicable  shipping,  insurance  and taxes along with payment for any
          other items for which Serono owes payment to Bioject  shall be paid in
          U.S. Dollars no later than 45 days after Serono's receipt of Bioject's
          invoice or on such other terms  agreed to in writing by the parties in
          advance of the obligation  for such payments.  Bioject shall not issue
          any invoice  prior to  performing  the service  billed or shipping the
          Products billed.

     7.2  Late  Charge.  Any  amount  not paid when  within 45 days of  Serono's
          receipt of Bioject's invoice shall accrue a late payment charge at the
          rate of one percent (1%) per month  thereafter,  provided that the fee
          charged shall not exceed the highest rate permitted  under  applicable
          law.   The  late   payment   charge   shall  be   payable   by  Serono
          notwithstanding  any  other  remedy  elected  by  Bioject  under  this
          Agreement,  including without limitation  termination of the Agreement
          in accordance with Section 20.4, below.

8.   Delivery, Shipment and Inspection.

     8.1  Delivery; Shipment. Delivery of the Products purchased by Serono shall
          be made F.O.B. Bioject's factory in the continental United States, and
          Bioject  will give  Serono firm  shipment  dates of all  shipments  in
          accordance  with  Serono's  Purchase  Orders.  Products at the time of
          delivery  will be in good  condition  and  packaged  for  shipment  in
          accordance with standard commercial  practices and Serono's reasonable
          instructions.  Serono  shall  take  title to the  Products  upon  such
          delivery  and all risks of loss and  expenses in  connection  with the
          Product  shall   thereafter  rest  upon  Serono   including,   without
          limitation,  all risks and expenses  incurred in the storage,  cartage
          and  transportation of the Products,  as well as all insurance,  fees,
          charges, taxes, customs, duties and governmental charges or levies and
          all other  charges and expenses  whatsoever  thereafter  incurred with
          respect to the  Products.  At the  request of Serono,  but at the sole
          expense  of Serono,  Bioject  shall  procure  insurance  coverage  for
          shipments of the Products.

     8.2  Inspection.   Serono  shall  promptly   perform  an  external   visual
          inspection of shipping cartons containing  Products following receipt.
          Serono shall also perform quality assurance testing on a sample basis.
          Serono  shall notify  Bioject in writing  within sixty (60) days after
          arrival  of any  packing  shortages  or of any  other  failure  of the
          Products to conform to this  Agreement  based on its  external  visual
          inspection of the shipping

                                      -7-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          cartons  and  actual  sample  testing.  Subject  to Section 12 hereof,
          Serono  further shall notify  Bioject in writing of any other failures
          of the  Product  to conform to the  Agreement  within  sixty (60) days
          after the date of Serono's actual discovery thereof. All notifications
          shall be  accompanied  by packing  slips,  inspection  reports and all
          other documents supporting Serono claims.

     8.3  Partial  Shipments.  Bioject shall,  if requested by Serono,  have the
          right to make partial shipments; each partial shipment shall be deemed
          a separate sale and payment  therefore  shall become due in accordance
          with the provisions of this Agreement.

9.   Assistance and Training.  Bioject shall, as reasonably requested by Serono,
     render advice to Serono in  connection  with  Serono's  soliciting  orders,
     familiarize  Serono  with  the  operation  of  the  Products,   and  render
     assistance  to Serono in training  Serono's  employees in  connection  with
     soliciting orders for the Products.

     Any training and assistance  requested by Serono which necessitates  travel
     or other  additional  out-of-pocket  costs to Bioject  shall be at Serono's
     expense and shall be due and payable within 45 days of invoicing.

10.  Additional Obligations of Serono.

     10.1 Personnel.  Serono  shall  engage  qualified  representatives  who are
          familiar with the Products and their uses to sell the Products.

     10.2 Promotions.  Serono shall  refrain from false or  misleading  sales or
          promotions concerning the Products.

     10.3 Territory.  Serono shall refrain from  establishing or maintaining any
          branch, warehouse or distribution facility for the Products outside of
          the  Territory.   Serono  shall  not  engage  in  any  advertising  or
          promotional  activities relating to the Products directed primarily to
          customers  outside the  Territory.  Serono  shall not  solicit  orders
          directly from any  prospective  purchaser with its principal  place of
          business located outside the Territory.

          If  Serono  receives  any order  from a  prospective  purchaser  whose
          principal  place of business is known to Serono to be located  outside
          the  Territory,  Serono  shall  promptly  refer that order to Bioject.
          Serono  shall not  knowingly  accept any such  orders.  Serono may not
          deliver or tender (or cause to be delivered  or tendered)  any Product
          outside of the Territory.

     10.5 Compliance  With  Laws.   Serono  shall  comply  with  all  applicable
          requirements of law, including without limitation  requirements of the
          FDA and of any similar non-U.S. government agency; shall obtain at its
          own  expense  all  licenses,   permits,   certificates  or  regulatory
          clearances

                                      -8-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          which are required under applicable law to conduct its business and to
          resell the Products as contemplated  herein; and shall comply with all
          other laws, rules and regulations applicable to such business.

     10.6 Customer  Complaints.  Serono shall provide,  upon Bioject's  request,
          copies  of  customer  complaints  received  by Serono  concerning  the
          Products.  Serono shall  cooperate  fully with Bioject in dealing with
          customer  complaints  concerning the Products and shall,  at Bioject's
          cost and expense,  take such action as Bioject  reasonably may request
          to resolve such complaints.

     10.7 Training.  Serono also shall provide ongoing training  services to its
          customers who are medical professionals  administering  Serono's human
          growth  hormone  product with the Products to the extent  necessary to
          assure  that such  personnel  are  adequately  trained to utilize  the
          Products.

     10.8 Inventory.   Serono  shall  have  the  system  capabilities  to  trace
          shipments  of Products by customer  via product  code and lot.  Serono
          agrees to maintain  inventory levels of Bioject  Products  appropriate
          for the Field and the Territory.

11.  Advertising, Demonstration and Training Materials.

     11.1 Materials.  Bioject will furnish to Serono, at its own cost, copies of
          all  sales  and  promotional   materials  such  as  sales  literature,
          technical data,  instruction  manuals,  technical journal reprints and
          training videos, with respect to the Products as Serono may reasonably
          request from time to time. All such materials shall be in such formats
          as Serono may  reasonably  request to permit Serono to develop its own
          custom version of the materials for use in marketing the Products as a
          delivery  system for Serono's  human growth hormone  product.  Bioject
          shall cooperate with Serono to produce versions of Bioject's  standard
          materials  which are  appropriate  for use by Serono in marketing  the
          Products  as a  delivery  system for  Serono's  human  growth  hormone
          product.  Any  materials  loaned to Serono such as film or artwork for
          the purpose of Serono  preparing its own promotional  material must be
          promptly  returned  to  Bioject no later  than the date  specified  in
          writing  by Bioject  or, if not  specified,  30 days after  being made
          available by Bioject for such use.  Should  Serono fail to return such
          items to Bioject after written  request,  Bioject will invoice  Serono
          for the  replacement  cost of such items and  Serono  will pay for the
          cost of such items in accordance with Section 7.1 of this Agreement.

     11.2 Translation.  Serono shall translate, at its own expense, all user and
          technical manuals, and advertising and marketing information, into the
          languages  of its  customers  accurately.  Serono  agrees  to  provide
          Bioject  with  copies  of  such  materials   prior  to  their  use  or
          dissemination by

                                      -9-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          Serono.  Serono further agrees to provide  Bioject with advance copies
          of  any  other  promotional  and  technical  materials  regarding  the
          Products  prepared by Serono for review and approval by Bioject,  such
          approval not to be unreasonably withheld or delayed.

     11.3 Demonstration Units. Bioject agrees to furnish to Serono, at Bioject's
          own  cost,  a  reasonable  number of  Products  necessary  to  provide
          demonstrations  to interested,  potential  customers.  The quantity of
          Products  supplied  by Bioject to Serono  for  demonstration  purposes
          shall  be  not  less  than  ***  needle-free  devices  and  associated
          supplies. As of the date of this Agreement,  *** demonstration devices
          have been delivered by Bioject to Serono.

12.  Warranties,   Limitation   and  Disclaimer  of  Warranties  and  Limitation
     Remedies.

     12.1 Warranty.  Bioject  represents  and  warrants  to  Serono  (and to its
          distributors,  customers and users of the Products)  that the Products
          shall be free from defects in materials and  workmanship  for a period
          of  eighteen  (18)  months  from the date of delivery by Serono or its
          distributors  or  wholesalers  to  the  end  user.   Serono  shall  be
          responsible for providing  reasonable proof of the shipment date. This
          Warranty does not apply to Products which have been altered,  used for
          a purpose other than one for which they were manufactured,  or used in
          any manner inconsistent with Bioject's written instructions.

          This  Warranty  expires  absolutely at the end of eighteen (18) months
          following  sale of the  Products  by  Serono  or its  distributors  or
          wholesalers  to the end user. No defects  discovered  after the end of
          such period are covered by this Warranty.

          The Warranty set forth in Section 12.1 herein applies to demonstration
          Products only so long as they are used as  demonstration  Products and
          shall  terminate  upon the earlier of 18 months from the date of first
          use or the time of the first use for other than demonstration purpose.

     12.2 Claim for Breach of Warranty. Serono (or its distributor,  customer or
          any end user)  shall  notify  Bioject in writing of any defect  within
          sixty (60) days following the time  prescribed in Section 12.1 and, at
          Bioject's  request,  shall  send  the  part  or  item  believed  to be
          defective  to  Bioject,   F.O.B.  Bioject's  designated  facility  for
          examination and inspection.  Serono (or its  distributor,  customer or
          any end user) shall  furnish in writing the serial number of each such
          Product and a description of the alleged defect.  Bioject shall not be
          responsible  for any defect due to  alteration  or improper use of the
          Products.  Bioject  will return any repaired or  replacement  items to
          Serono  (or  its  distributor,  customer  or  any  end  user),  F.O.B.
          Bioject's facility.  Bioject will provide  reimbursement or credit for
          shipping costs with respect to Products found to have a defect covered
          by this Warranty. With respect to Products that are defective,  but do
          not cause personal injury, death or a

                                      -10-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          recall and  provided  that the defects are not so frequent or numerous
          so as to  constitute  a  substantial  failure  to supply  Products  in
          accordance with Serono's  forecasts and Purchase Orders, the exclusive
          remedy  for  breach  of  Bioject's  Warranty  hereunder  shall  be, at
          Bioject's option, repair or replacement of the units of Products which
          were not as  warranted  or refund of the  purchase  price with respect
          thereto.

     12.3 Product  Meets   Specifications  and  cGMPs.  Bioject  represents  and
          warrants that all Products  delivered to Serono  hereunder  shall: (i)
          have been manufactured in accordance with this Agreement, current Good
          Manufacturing  Practices  and all  applicable  laws,  regulations  and
          rules,  all as in  effect  from  time  to  time;  and  (ii)  meet  the
          Specifications for the Products and all commitments made in regulatory
          filings for the Products. Bioject further represents and warrants that
          no Product shall be  adulterated or misbranded as those terms are used
          under the Federal Food, Drug and Cosmetic Act, as amended,  due to any
          action or omission of Bioject.

     12.4 Product Approvals; Licensing. Bioject has secured (or will secure) and
          will maintain in effect all approvals,  licenses and permits necessary
          for  the  manufacture,  marketing,  sale  and use of the  Products  to
          administer  Serono's human growth hormone product in the United States
          and  Canada  and,  after and  exercise  of the  option  to extend  the
          Territory  to  ***,  in *** and *** and  such  ***  requested  by ***.
          Bioject represents and warrants that it has obtained and will maintain
          on a current  basis and will  comply  with all  licenses,  permits and
          approvals of applicable  governmental  agencies as may be required for
          its facilities and the  manufacture of the Products and to perform its
          obligations hereunder. Bioject represents and warrants that it has not
          received any notice of adverse findings or similar  regulatory letters
          from  regulatory  agencies  with  respect to the  Products  or similar
          products or the facilities in which the Products will be manufactured.
          Bioject has disclosed to Serono all information relevant to the safety
          and efficacy of the Products and similar products in its possession as
          of the date  hereof,  and will  disclose to Serono  promptly  and on a
          continuous  basis all  additional  such  information  obtained  in the
          future.

     12.5 Compliance  with Laws.  Bioject  represents and warrants that it shall
          comply in all  respects  with all  federal,  state,  and  local  laws,
          regulations and other requirements  applicable to the Products and the
          performance of Bioject's obligations under this Agreement.

     12.6 DISCLAIMER  OF  WARRANTY.  EXCEPT AS  EXPRESSLY  PROVIDED IN THE ABOVE
          WARRANTY,  BIOJECT  MAKES NO  REPRESENTATION  OR WARRANTY OF ANY KIND,
          EXPRESS  OR  IMPLIED,  WITH  RESPECT  TO THE  PRODUCTS,  WHETHER AS TO
          MERCHANTABILITY,  FITNESS  FOR A  PARTICULAR  PURPOSE,  OR  ANY  OTHER
          MATTER.  NO AGENT,  EMPLOYEE  OR  REPRESENTATIVE  OF  BIOJECT  HAS ANY
          AUTHORITY

                                      -11-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          TO BIND BIOJECT TO ANY AFFIRMATION, REPRESENTATION OR WARRANTY, EXCEPT
          AS STATED HEREIN.

     12.7 Maximum Liability. The maximum liability of one party to the other for
          economic losses under this Agreement, including with respect to claims
          under Section 13  (Indemnification),  shall be $***.  This  limitation
          shall not apply to  recalls  of a  Product,  claims,  costs and losses
          arising from personal injury or death caused by use of the Products or
          Serono's growth hormone  product,  or any breach of Sections 1.6, 3 or
          17.

     12.8 Warranties  of  Serono.  Any  warranties  or  representations,  or any
          remedies for breach thereof, which Serono may provide to its customers
          which are different from or in addition to the warranties and remedies
          provided  by  Bioject  under  this  Agreement   shall  be  solely  the
          responsibility  of Serono,  and Bioject  shall not be bound thereby in
          any manner whatsoever.

13.  Indemnification.

     13.1 Definition of Claims.  For purposes of this Agreement,  "Claims" shall
          mean  any and all  claims,  demands,  losses,  liabilities,  lawsuits,
          proceedings,  damages,  settlement  amounts  and costs  and  expenses,
          including, without limitation, attorneys' fees and costs.

     13.2 Indemnification by Bioject. Bioject shall indemnify,  defend, and hold
          Serono,  its wholesalers and distributors and their Affiliates and the
          officers,   directors,    employees,   agents,   representatives   and
          independent contractors of each of them, harmless from and against any
          and all Claims arising from or related to: (i) injury,  death or other
          loss  caused by use of the  Products;  or (ii)  Bioject's  negligence,
          willful  misconduct  or breach of this  Agreement or any  undertaking,
          covenant,  representation  or warrant  contained  herein.  The Parties
          acknowledge  and agree  that  acceptance  by Serono of any  Product or
          expiration  of any  warranty  set forth in Section 12 shall not affect
          its rights to indemnification hereunder.

     13.3 Indemnification  by Serono.  Except with respect to any matter covered
          by Section  13.1  above,  Serono  shall  indemnify,  defend,  and hold
          Bioject and its  Affiliates and the  directors,  officers,  employees,
          agents,  representatives and independent  contractors or each of them,
          harmless  from and against any and all Claims  arising from or related
          to: (i) injury,  death or other loss  caused by use of Serono's  human
          growth  hormone  product;   or  (ii)  Serono's   negligence,   willful
          misconduct or breach of this Agreement or any  undertaking,  covenant,
          representation or warranty contained herein.

     13.4 Procedures.   Any  party  seeking   indemnification   hereunder   (the
          "Indemnified  Party")  shall give the other  party (the  "Indemnifying
          Party") prompt written notice of the Claims for which  indemnification
          is sought.

                                      -12-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          Failure of an  Indemnified  Party to provide  notice of a Claim to the
          Indemnifying  Party  shall  affect the  Indemnified  Party's  right to
          indemnity  only to the  extent  such  failure  shall  have a  material
          adverse effect on the  Indemnifying  Party's  ability to defend or the
          nature  or  amount  of  liability.  Claims  shall be  defended  by the
          Indemnifying  Party with counsel selected by it. The Indemnified Party
          shall have the right to be represented  by advisory  counsel and other
          representatives, at its own expense. The Indemnifying Party shall keep
          the  Indemnified  Party  reasonably  informed  as to the status of the
          Claim.  The Parties shall render to each other such  assistance as may
          be reasonably required for the proper and adequate defense of a Claim.
          Except as otherwise  provided in Section 13.4, the Indemnifying  Party
          shall not make any settlement of any Claim without the written consent
          of the  Indemnified  Party,  which consent  shall not be  unreasonably
          withheld or delayed.  Notwithstanding the foregoing,  the Indemnifying
          Party may make any  settlement  which  solely  involves the payment of
          money and which the Indemnifying Party actually pays.

14.  Mandatory Insurance.

     14.1 By Bioject.

          (a) During  the term of this  Agreement,  Bioject  shall  procure  and
     maintain in full force and effect,  at its own cost and expense,  insurance
     against the risks  specified in this Agreement in amounts not less than the
     amounts specified in (b), below.

          (b) Bioject  shall  maintain  the  following  minimum  coverages  with
     respect to the matters covered by this Agreement:

               (1)  Worker's  Compensation  insurance  in  compliance  with  the
               Worker's  Compensation  laws of the  state  or  states  in  which
               Bioject has employees  performing work under this Agreement,  and
               employer's  liability  insurance  with respect to such  employees
               with a minimum limit of $100,000/occurrence.

               (2) Commercial general liability  insurance  including  premises,
               broad  form  property  damage,  contractual,   products/completed
               operations  coverage,  with a minimum  limit of  $5,000,000  each
               occurrence.

          (c) Terms of such  coverage  shall be  evidenced  by  certificates  of
     insurance  issued by a  recognized  insurer  rated by A.M.  Best  A-(XV) or
     better,  to be  furnished  by  Bioject to Serono at the  inception  of this
     Agreement and as may be reasonably requested thereafter.  Such certificates
     shall  name  Serono  and its  Affiliates  or  their  agents,  employees  or
     directors,  as  additional  insured,  as their  interests  may appear,  and
     provide  that thirty  (30) days'  written  notice  shall be given to Serono
     prior to  cancellation,  modification  or expiration of any of the terms of
     coverage of any policy.

                                      -13-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

     14.2 By Serono.

          (a)  During  the  Term of this  Agreement  Serono  shall  procure  and
     maintain in full force and effect,  at its own cost and expense,  insurance
     against the risks  specified in this Agreement in amounts not less than the
     amounts specified in (b), below.

          (b) Serono shall maintain the following minimum coverages with respect
     to the matters covered by this Agreement:

               (1)  Workers'  Compensation  insurance  in  compliance  with  the
               Worker's Compensation laws of the state or states in which Serono
               has  employees   performing  work  under  this   Agreement,   and
               employer's  liability  insurance  with respect to such  employees
               with a minimum limit $100,000/occurrence.

               (2) Commercial general liability  insurance  including  premises,
               broad  form  property  damage,  contractual,   products/completed
               operations  coverage,  with a minimum  limit of  $5,000,000  each
               occurrence.

          (c) Terms of such  coverage  shall be  evidenced  by  certificates  of
     insurance  issued by a  recognized  insurer  rated by A.M.  Best  A-(XV) or
     better,  to be  furnished  by Serono to  Bioject at the  inception  of this
     Agreement and as may be reasonably requested thereafter.  Such certificates
     shall name  Bioject  and its  Affiliates,  or their  agents,  employees  or
     directors as an additional  insured,  as their  interests  may appear,  and
     provide  that thirty (30) days'  written  notice  shall be given to Bioject
     prior to  cancellation,  modification  or expiration of any of the terms of
     coverage of any policy.

15.  Recall of Product.

     15.1 Notice.  In the event  either  party has  reason to  believe  that any
          Product should be recalled or withdrawn from  distribution  such party
          shall   immediately   inform  the  other  in  writing  in  a  factual,
          non-judgmental manner.

     15.2 Decision.  The  decision as to whether or not to initiate a recall may
          be made by  Serono  after  consultation  with  Bioject.  Serono  shall
          conduct any recall.

     15.3 Bioject's Liability.  If such recall is required because of failure of
          a Product  to conform  to the  warranties  in Section 12 or due to any
          other defect relating to the Products,  then the costs and expenses of
          such recall  shall be paid or  reimbursed  by Bioject and, at Serono's
          option, Bioject shall replace such recalled Products or issue a credit
          in favor of Serono  or  refund  the  purchase  price of such  recalled
          Products.

                                      -14-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

     15.4 Serono's Liability.  If such recall is required because of a negligent
          act or omission by Serono in the handling,  storage or distribution of
          a Product,  then such recall  shall be conducted by Serono at its sole
          cost and expense and Serono shall not be entitled to any such credits,
          replacements or refunds from Bioject.

16.  Independent  Contractor.  This Agreement does not designate either party as
     an  agent,  employee,   joint  venturer,   partner,   franchisee  or  legal
     representative of the other party for any purpose whatsoever. Neither party
     is  granted,  and at no time shall  imply or claim that it  possesses,  any
     right or authority to assume or create any obligation or  responsibility on
     behalf  or in the  name of the  other  party  or to  bind it in any  manner
     whatsoever.  The Products purchased by Serono shall be owned by Serono, and
     Serono  shall  handle  the  same at its own  risk,  assuming  directly  all
     responsibility for its costs and expenses related to this Agreement and all
     contingencies  of profit and loss with  respect to its  performance  of its
     responsibilities  and duties  under this  Agreement,  Serono shall have the
     sole right to control the manner in which it performs its  responsibilities
     and duties under this Agreement, subject to no control by Bioject except as
     otherwise expressly provided in this Agreement and shall not be entitled to
     any assistance  from Bioject with respect to the performance of such duties
     except as otherwise expressly provided in this Agreement.  Serono is solely
     responsible  for  making,   and  represents  that  it  has  made,  its  own
     determination  concerning the  availability of a market for the Product and
     acknowledges that Bioject has made no claims, representations or statements
     to the  effect  (a) that  there is a market  for the  Products;  (ii)  that
     Bioject will locate customers for Serono;  or (iii) that Serono will earn a
     profit in the business of  distributing  the  Products.  Serono and Bioject
     shall each  indemnify  and save each other  harmless  from and  against all
     claims,  damages,  losses,  liabilities,   expenses  and  costs  (including
     reasonable  attorneys'  fees)  related to or  arising  out of any action of
     conduct, or failure to act, of or by Serono and Bioject, their employees or
     agent,  including those purported but not actually authorized in writing by
     any authorized officer of Bioject or Serono.

17.  Protection of Confidential Information and Trademarks.

     17.1 Information. Serono and Bioject acknowledge that they may acquire from
          the other, certain trade secrets and confidential information relating
          to  know-how,  technical  data,  service,  promotion  and  sale of the
          Products or human growth  hormone,  and the identity of customers  and
          potential customers. Serono and Bioject agree that the foregoing is of
          substantial  value in their  respective  businesses and each agrees to
          keep the same confidential and not to disclose it to any person during
          or after  the term  hereof.  Notwithstanding  the  foregoing,  Bioject
          acknowledges that Serono possesses  substantial  information regarding
          the  market,   customers  and   potential   customers  for  and  other
          information  about  human  growth  hormone  and human  growth  hormone
          delivery  systems.  All  of  this  existing   information,   including
          additional  information  obtained or  developed  by Serono  during the
          course of this Agreement,

                                      -15-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          shall be the confidential  information of Serono and Bioject shall not
          acquire any interest therein.

     17.2 Exceptions to Mutual  Confidentiality  Obligations.  The obligation to
          maintain in confidence all confidential  information shall survive the
          termination of this Agreement, but shall not apply to any information:
          (a) which was known to the receiving  party at or prior to the time of
          its disclosure by the  disclosing  party as evidenced by the receiving
          party's  written  records;  (b) which  becomes  lawfully  known to the
          receiving party without any obligation of  confidentiality at any time
          through  a  third   party  not  in   breach   of  an   obligation   of
          confidentiality;  (c) which is or becomes known to the general  public
          through no fault of the receiving  party;  (d) which is  independently
          developed by the receiving  party;  (e) which the  receiving  party is
          required by law to disclose,  provided notice of such disclosure shall
          be  given  promptly  to the  disclosing  party  so  that  it may  take
          reasonable   actions  to  avoid  and   minimize  the  extent  of  such
          disclosure.

     17.3 Regulatory Exception of Serono. Serono shall be entitled to submit and
          disclose to any regulatory authority and in any regulatory application
          any  and  all  information,   including  confidential  information  of
          Bioject,  required by law or regulation or deemed  necessary by Serono
          to  obtain  approvals  for the  marketing,  sale and use of its  human
          growth hormone product with the Products in the Territory.

     17.4 Bioject's   Trademarks.   Bioject  hereby  authorizes  Serono  to  use
          Bioject's  trademarks  and  trade  names  for the  Products  solely in
          connection  with  advertising,  promoting,  selling,  or servicing the
          Products  during  the term of this  Agreement.  Serono may not use the
          name  "Bioject"  in its  corporate or business  name,  or in any other
          manner which Bioject deems adverse to its interest.

     17.5 Serono's  Trademarks.  The Products  shall be  "private-labeled"  with
          tradenames and trademarks  designated by Serono.  Serono shall own and
          have  the  exclusive  right,  title  and  interest  in and to all such
          tradenames and trademarks during and after the term of this Agreement.
          Bioject  shall  have no  right to use such  tradenames  or  trademarks
          except as directed by Serono during the term of this Agreement.

     17.6 Termination.  The  authorization  to use names,  trademarks  and trade
          names owned by Bioject shall terminate  effective upon  termination of
          this Agreement for any reason,  and Serono  thereupon  shall cease all
          use of names,  trademarks,  or trade  names  owned or used by Bioject,
          except for a Product already owned by Serono.

     17.7 Patent  Prosecution  and  Infringement.  Bioject  shall,  at its cost,
          prepare and  diligently  prosecute  patent  applications  covering the
          Products in the

                                      -16-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          Territory and continuations, divisions, renewals and reissues thereof.
          Bioject shall diligently enforce its patent rights.

18.  Inventions and Indemnitees.

     18.1 Inventions,   Modifications,   and  Improvements  in  the  Field.  New
          techniques,  inventions,  processes,  and know-how  (hereinafter  "New
          Developments")  relating to the Products or the Field may be developed
          by  Serono,  Bioject  or by Serono  and  Bioject  jointly  during  the
          performance of this Agreement.  Serono shall own any New  Developments
          which are developed solely by Serono.  To the extent that any such New
          Developments  are created by Bioject or jointly by Bioject and Serono,
          in either  case,  at the  direction  or expense of Serono  pursuant to
          Section 1.2, then Serono shall have ownership of such New Developments
          and   Bioject   shall   have   a   non-transferable,    non-exclusive,
          royalty-free,  worldwide,  perpetual  license  to make and use the New
          Developments  as long as Bioject's  use does not  compromise  Serono's
          proprietary or confidential information.  Notwithstanding the grant of
          such  license,  Bioject  shall  not use any  such New  Development  to
          compete,  or assist third parties to compete,  directly or indirectly,
          with Serono in the sale of human  growth  hormone for any  therapeutic
          use.  Bioject agrees to cooperate in the filing and prosecution of all
          New Development  patent  applications  owned by Serono and to take all
          other  actions  requested  by  Serono  to  vest  ownership  of all New
          Developments in Serono.

     18.2 Indemnity by Bioject. Bioject shall indemnify, defend and hold Serono,
          its Affiliates and their respective officers,  directors and employees
          from  and  against  any  damages,  liabilities,   costs  and  expenses
          (including  reasonable attorneys' fees and court costs) (collectively,
          "Damages")  arising out of claims  that proper use of the  Products in
          the  Field,  in  accordance  with  its  instructions  infringe  on the
          intellectual  property  rights of third  parties;  provided,  however,
          that:  (a) Serono shall have  promptly  provided  Bioject with written
          notice thereof and reasonable cooperation, information, and assistance
          in connection  therewith;  and (b) Bioject shall have sole control and
          authority  with  respect to the  defense,  settlement,  or  compromise
          thereof;  provided,  however,  that any settlement or compromise  that
          would impose  liability on Serono shall require Serono's prior written
          consent.

     18.3 Indemnity by Serono. Serono shall indemnify,  defend and hold Bioject,
          its Affiliates and their respective officers,  directors and employees
          from  and  against  any  damages,  liabilities,   costs  and  expenses
          (including  reasonable attorneys' fees and court costs) (collectively,
          "Damages")  arising out of claims that proper use of any human  growth
          hormone,   in  accordance  with  its  instructions   infringe  on  the
          intellectual  property  rights of third  parties;  provided,  however,
          that:  (a) Bioject  shall have promptly  provided  Serono with written
          notice thereof and reasonable cooperation, information, and assistance
          in  connection  therewith;  and

                                      -17-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          (b) Serono shall have sole control and  authority  with respect to the
          defense,  settlement, or compromise thereof;  provided,  however, that
          any  settlement or compromise  that would impose  liability on Bioject
          shall require Bioject's prior written consent.

     18.4 Notification   of  Suit.  Each   indemnified   party  shall  give  the
          indemnifying  party written notice of any suit or action  described in
          Section 18.2 or 18.3 wherein  indemnification is claimed.  Such notice
          shall be given  within 30 days after  acquiring  such  knowledge or at
          least  five days prior to the  expiration  of time in which a response
          must be filed with a court or other judicial body,  whichever is first
          to occur.

19.  Initial Term and Renewal. Unless sooner terminated as hereinafter provided,
     this  Agreement  shall continue in force for three years from the Effective
     Date.  Thereafter,  this Agreement may be renewed only by written agreement
     of the parties.

20.  Termination. This Agreement may be terminated as set forth below.

     20.1 Mutual Termination. This Agreement may be terminated by mutual written
          agreement executed by both parties.

     20.2 Termination by Serono.  Serono may terminate  this  Agreement  without
          cause or reason at any time upon 90 days notice to Bioject.

     20.3 Delay  in  Regulatory  Approval.   Either  party  may  terminate  this
          Agreement  at any time  after *** if  Bioject  shall not have  secured
          approval from the FDA of the  marketing,  sale and use of the Products
          as a delivery system for Serono's human growth hormone.

     20.4 Breach.   Either  Serono  or  Bioject  may  terminate  this  Agreement
          effective upon sending  written notice to the other,  if a party fails
          to pay the other any amount  when due or commits  any other  breach or
          default  hereunder or otherwise  fails to perform any of its duties or
          responsibilities hereunder;  provided that such failure to pay or such
          other breach,  default or  nonperformance  shall have  continued for a
          period of thirty (30) business days following  receipt by a party of a
          written notice from the other specifying the nature of such failure to
          pay or such other breach,  default or nonperformance.  Notwithstanding
          such termination,  Serono shall continue to be obligated to accept and
          pay for any of the Product  ordered by Serono  prior to the sending of
          such notice.  Similarly, any late payment charges accruing pursuant to
          Section 7.3 above, survive such termination.

     20.5 Insolvency.  If  (a) a  party  becomes  insolvent;  or a  petition  in
          bankruptcy  is  filed  by or  against  a  party;  or a party  makes an
          assignment for the benefit of its creditors;  or a receiver or trustee
          is appointed  for any of a party's  property;  or (b) a party fails to
          cure or  remedy  any  breach,  default  or  non-performance  for which
          written 30-day notice has been sent by a

                                      -18-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

          party,  then  the  other  party  may  (i)  terminate  this  Agreement,
          effective upon the sending of written notice of such termination; (ii)
          suspend its  performance  hereunder and stop any shipments in transit;
          (iii)  declare  all  amounts  unpaid  hereunder  to be due and payable
          immediately;  or (iv) exercise any and all other remedies  provided by
          applicable law.

21.  New Needle Free Devices.  Bioject shall inform Serono on a quarterly  basis
     of  each  needle-free  device  that  Bioject  or any of its  Affiliates  is
     developing or has acquired rights. If Serono *** to *** to the *** pursuant
     to Section *** then,  thereafter,  as Bioject *** in or to *** which is not
     *** and which could be ***, Bioject shall promptly provide Serono with ***.
     The *** shall propose terms on which Serono may *** to *** and *** for ***,
     and,  alternatively,  ***. Upon receipt of a ***,  Serono shall have *** to
     either  *** of *** in the *** for the *** or provide a *** to  Bioject.  If
     Serono *** of the *** for the ***, the parties shall prepare and execute an
     agreement  reflecting the terms of their arrangement.  If Serono provides a
     ***,  Bioject shall *** and *** for a *** to establish  ***. If Serono does
     not accept the terms of Bioject's *** and the parties do not agree on terms
     pursuant  to  which  Serono  could  ***,  then  Bioject  may,  at any  time
     thereafter,  grant *** with respect to *** to *** on ***. Bioject shall not
     discuss or negotiate for the *** with respect to a *** for *** until it has
     provided any *** to Serono and the applicable time periods have expired.

22.  Remedies Cumulative.  The remedies provided herein to Bioject and to Serono
     shall be  cumulative  and in  addition to all other  remedies  which it may
     exercise in equity or at law,  and its  exercise of any one or more of such
     remedies, or a waiver of its right to exercise any other remedy or remedies
     at the same time or at any other time shall not be deemed to be a waiver of
     any other remedy of Bioject or Serono.

23.  Duties  Upon  Termination.  Upon  termination,  at the  request  of Serono,
     Bioject shall fill all of Serono's  orders for the Products as set forth in
     the binding  portion of its rolling  forecast and Serono shall purchase and
     pay for all Products  subject to such  orders.  Serono may continue to sell
     Products until it has disposed of its inventory.

24.  Survival.   Termination  shall  not  affect  the  continued   operation  or
     enforcement of the following Sections of this Agreement:  12, 13, 15, 17.1,
     17.2, 17.5, 18, 22, 23, 25, 27, 29, 30 and 31.

25.  Nonliability  for  Termination.   If  either  party  shall  terminate  this
     Agreement in accordance with the terms hereof,  then such terminating party
     shall not be  liable  to the  terminated  party  for any  losses,  damages,
     expenditures,  investments or  commitments  made by such  terminated  party
     pursuant to or in connection with this  Agreement,  whether related to such
     terminated party's lost business, lost profits, lost goodwill or otherwise.

26.  Force  Majeure.  Neither  party  shall be deemed to be in breach  hereof or
     liable to other  party or any other  person in any manner on account of any
     delay in  delivery or other  performance  caused in whole or in part by, or
     otherwise

                                      -19-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

     materially related to the occurrence of any contingency beyond such party's
     reasonable  control,  including  without  limitation,  fire,  flood,  riot,
     hostilities,   strikes  or  other  labor  disputes,  freight  embargoes  or
     transportation delays; shortage of labor; inability to secure fuel, energy,
     materials,  supplies or power at reasonable  prices from regular sources or
     on account of shortages thereof;  delays or failures of any of such party's
     suppliers to deliver;  acts of God or of a public enemy; or any existing or
     future laws,  acts or  regulations  of the Federal or of any state or local
     government (including specifically but not exclusively any orders, rules or
     regulations issued by an official,  court or agency of any such government)
     affecting the conduct of such party's  business  with which such party,  in
     its  judgment  and  discretion,  deems it  advisable to comply as its legal
     duty.

27.  Entire Agreement;  Modification and Waiver.  This Agreement,  together with
     the Schedules  attached hereto,  constitute the complete  understanding and
     contract with respect to the subject  matter  hereof.  Neither  Bioject nor
     Serono shall be bound by any purported rescission,  addition, modification,
     or waiver of any provision  hereof,  or any purported waiver, or any breach
     hereof  unless such  rescission,  addition,  modification  or waiver is set
     forth in a writing  signed by an  authorized  agent of  either  Bioject  or
     Serono, respectively.

28.  Nonassignment. Except as provided in Section 1.7, neither party may assign,
     transfer  or sell  all or any part of its  right,  benefits  or  privileges
     hereunder  without the other party's prior written consent.  Any attempt to
     do so without such prior consent shall be wholly void.  This Agreement will
     be transferred  and assigned on all legal  successors of Bioject and Serono
     and (i) any successor to Serono's  business of selling human growth hormone
     for the treatment of growth deficiencies or (ii) any successor to Bioject's
     business of selling needle-free devices.

29.  Public  Announcements.  Neither  Serono  nor  Bioject  will  originate  any
     publicity, news release, or other public announcement or comments,  written
     or oral, whether to the press,  stockholders or otherwise,  related to this
     Agreement without the consent of the other party, except as may be required
     by law. The party making any announcement  which it reasonably  believes to
     be required by law will first give the other party an opportunity to review
     the form and content of any such announcement and comment upon it before it
     is made.

30.  Notices.  Any notice  required or  permitted to be made or given under this
     Agreement  shall be in writing and transmitted by hand,  prepaid  certified
     mail,  air courier or telecopier  addressed to the party to whom the notice
     is given at its address or  telecopier  number shown below or at such other
     address as the addressee shall have theretofore furnished in writing to the
     other party.

                                      -20-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

     Until changed, the address of Bioject shall be as follows:

              Bioject, Inc.
              7620 S.W. Bridgeport Road
              Portland, Oregon 97224
              Attention:  President
              Telecopier:  (503) 624-9002

         with a copy to:

              Michael Redmond
              Bioject Inc.
              7620 S.W. Bridgeport Road
              Portland, Oregon   97224
              Telecopier:  (503) 624-9002

         Until changed, the address of Serono shall be:

              Serono Laboratories, Inc.
              100 Longwater Circle
              Norwell, MA 02001
              Attention:  President
              Telecopier:  (781) 982-9478

         with a copy to:

              Serono Laboratories, Inc.
              100 Longwater Circle
              Norwell, MA 02001
              Attention:  General Counsel
              Telecopier:  (781) 878-6954

     Notices or written communications shall be deemed to have been sufficiently
made or  given  (i) if by  in-hand  delivery  or by  telecopier  with  confirmed
transmission,  when  performed,  (ii) if  mailed,  five  (5)  days  after  being
deposited in the mail, postage prepaid; or (iii) if by air courier,  one (1) day
after delivery to the air courier company.

31.  Construction of Agreement,  Controlling  Law. This  Agreement,  which is in
     English,  shall be interpreted in accordance  with the commonly  understood
     meaning of the words and  phrases  hereof in the United  States of America,
     and it and  performance  of the  parties  hereto  shall  be  construed  and
     governed  according  to the laws of the  State of New  York  applicable  to
     contracts made to be fully performed therein.

SCHEDULES  1.1  (Specifications)  2.1  (Patents),  5 (License  Fees and Purchase
Quotes) AND 6.1 (Product  Pricing)  ATTACHED  HERETO ARE A MATERIAL PART OF THIS
AGREEMENT AND ARE INCORPORATED HEREIN BY THIS REFERENCE.

                                      -21-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in the manner appropriate to each, effective as of the date entered on the first
page hereof.

BIOJECT, INC.                                 SERONO LABORATORIES, INC.

By: ----------------------------              By: ------------------------------

Title: -------------------------              Title: ---------------------------

                                      -22-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.

<PAGE>

                                  SCHEDULE 1.1

                                 SPECIFICATIONS

***:                                          ***.
***:                                          ***
***:                                          ***
***:                                          ***
***:                                          ***
***:                                          ***
***:                                          ***
***:                                          ***

                                      -23-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.

<PAGE>

                                  SCHEDULE 2.1

                                LICENSED PATENTS

United States Patent No. 5,782,802

     Any other U.S. or foreign  patents  applicable  to the Products  held by or
     licensed to Bioject.

                                      -24-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.

<PAGE>

                                   SCHEDULE 5

                        LICENSE FEES AND PURCHASE QUOTAS

License Fees

o    Serono  shall pay Bioject a one-time  $***  license  fee for the  exclusive
     license and distribution  right of the Products for the Field in the United
     States,  its  territories and possessions and Canada upon execution of this
     agreement.

o    Serono  shall pay  Bioject a one-time  $***  additional  license fee in two
     installments  pursuant to Section 1.6 if it elects to extend the  exclusive
     license in the Field to *** .

Annual Purchase Quotes

o    For  each  twelve  month  period  after  FDA  approval  of  Bioject's  510K
     application  for  marketing,  sale and use of the  Products  as a  delivery
     system for Serono's human growth  hormone,  Serono shall make the following
     purchases of Products in order to maintain exclusivity in the United States
     and Canada:

           ***
           ***
           ***
           ***
           ***

     Notwithstanding the foregoing,  if Serono's purchase of Products during any
such twelve month period is less than the quota, Serono may make a payment equal
to one-half of the shortfall and maintain exclusivity.

     Serono shall purchase $*** of Products within *** after written notice from
Bioject that Bioject has received FDA approval of its 510K  application  for the
marketing,  sale and use of the Products as a delivery system for Serono's human
growth hormone product.

o    For each twelve month period after the first anniversary of any exercise by
     Serono  of its  option to  extend  the  Territory  to *** and  approval  of
     Bioject's  application  for  marketing,  sale and use of the  Products as a
     delivery system for Serono's human growth hormone in ***, Serono shall make
     the following purchases of Products in order to maintain exclusivity in ***
     (including the United States and Canada):

           ***
           ***
           ***
           ***
           ***

                                      -25-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
<PAGE>

     Notwithstanding  the  foregoing,  if  Serono's  ***  during any *** is ***,
Serono  may *** to ***.  The ***  shall be *** of the *** the *** and the *** by
Serono  during  the  applicable  period.  Bioject  shall  have  ***  to  ***  in
consideration of *** because the purpose of *** is to *** for *** to ***.

                                      -26-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.

<PAGE>

                                  SCHEDULE 6.1

                                 PRODUCT PRICING

           Product                   Price

             ***                     $***

          Supplies                   Price

***                           $***
***                           $***

                                                              Serono: ----------
                                                             Bioject: ----------
                                                                Date: ----------

                                      -27-

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.<PAGE>   1
REVISED August 27, 1999

Gunther International, Ltd.
One Winnenden Road
Norwich, Connecticut  06360

Attention:  Marc Perkins and Michael Vehlies

Re:  PEOPLE'S BANK
     $200,000 Credit Line Relative
              to Standby Letters of Credit
     $500,000 Revolving Credit Line

Dear Mr. Perkins and Mr. Vehlies:

In response to your request for certain credit line facilities to support the
business operations of GUNTHER INTERNATIONAL, LTD, a corporation duly organized,
in good standing and registered to do business in the State of Connecticut, we
are pleased to advise you that People's Bank ("Lender" or "Bank"), agrees to
loan to Borrower the maximum principal sum of $700,000.00 under two credit
facilities as follows: a $200,000.00 Credit Line in support of Bank's
undertaking to issue certain short term standby letters of credit as more
particularly described herein (the "$200k Line"); and a $500,000.00 Revolving
Line of Credit as more particularly described herein (the "$500k Line"); both
facilities being sometimes hereafter collectively referred to as the "Loan".
Bank's commitment to make the Loan and the Loan itself is subject to the
following terms, provisions, limitations and conditions:

1. Purpose of the $200k Loan.

         The $200k Loan shall be made to Borrower for the purpose of
facilitating the issuance of certain Standby Letters of Credit in the maximum
aggregate principal balance at any time outstanding of Two Hundred Thousand and
no/100 ($200,000.00) Dollars. Said Letters of Credit shall be issued at the
request of Borrower to such third parties as Borrower shall direct in
furtherance of the customary business purposes of Borrower upon terms and
conditions
<PAGE>   2
as Bank may from time to time impose on similar financing accommodations to its
commercial borrowers similarly situated.

2. Purpose of the $500k Loan.

   The $500k Loan shall be made to Borrower to support its short term commercial
borrowing needs for the conduct of its regular business. The $500k Loan shall be
in the form of a revolving commercial credit line as herein after described.

3. Interest, Repayment and Term.

   The Loan shall be evidenced by documentation in form and content acceptable
to Bank in the exercise of its reasonable lending discretion and shall provide,
inter alia, for the following terms and conditions:

3.1 The outstanding principal of the Loan shall bear interest at a floating per
annum rate (the "Note Rate") equal to Bank's Prime Rate (as hereafter defined
and from time to time in effect) PLUS One and One Half (1.50%) percentage points
(the "Margin"). The Note Rate shall vary as and when the Prime Rate varies,
effective as of the date of each such variance in the Prime Rate.

3.2 The term "Prime Rate" means the per annum rate of interest from time to time
determined by Bank's Financial Division in the exercise of its sole and
exclusive judgment based upon rate information provided by funding sources
ordinarily used by Bank and/or upon national or regional indices as made
generally known by Bank's Financial Division to Bank's lending staff. The Prime
Rate is an interest rate of general application by Bank but it is not
necessarily the best or lowest interest rate made available to its customers.

3.3 Interest shall be computed on a daily basis and calculated on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed.

3.4 Monthly payments of interest as same accrues at the Note Rate shall commence
on the first day of the month immediately following the advance of principal
under either of the Loans. All principal then outstanding under the $500k Loan,
all accrued but unpaid interest and all other sums which may then be due Bank

                                     - 2 -
<PAGE>   3
relative to the $500k Loan, shall be due and payable in full on August 31, 2000
(the "Maturity Date"). All principal under the $200k Loan shall be due and
payable UPON DEMAND and if not sooner demanded, all principal then outstanding
under the $200k Loan, all accrued but unpaid interest and all other sums which
may then be due Bank relative to the $200k Loan, shall be due and payable in
full on the Maturity Date.

3.5 The Loan documents shall provide that after maturity of the Loan howsoever
occasioned and/or during the continuance of any default under the Loan documents
beyond any applicable grace period expressly therein provided for, the interest
rate shall be five (5.00%) percentage points above the otherwise applicable
rate.

3.6 The Loan documents shall provide that the Loan shall become due and payable
on demand if Lender in good faith determines that the prospect of payment or
performance by Borrower or any guarantor under the Loan documents, or any
collateral securing the Loan, is impaired or if the Borrower or any guarantor
shall default under any other loan obligation to the Bank.

4. Advances of Principal.

   The principal amount of the $500k Loan shall be advanced in the normal course
of Bank's revolving credit line commercial financing facilities pursuant to the
terms of a Commercial Revolving Loan Agreement by and between Bank and Borrower
in form and content acceptable to Bank. The principal amount of the $200k Loan
shall be deemed advanced when and if any draw or demand for a draw is made
pursuant to the terms of any Standby Letter of Credit issued by Bank pursuant to
the $200k Loan. All advances of principal under the Loan are subject to the
prior satisfaction by Borrower of all conditions precedent herein provided for.

5. Commitment Fee.

   Borrower shall pay to Lender a non-refundable commitment fee and other fees
of $5,000.00.

   Borrower shall pay all customary and then applicable fees incident to the
issuance and maintenance of any Letter of Credit made pursuant to the $200k
Loan. The non-refundable commitment

                                     - 3 -
<PAGE>   4
fee shall be paid at the time and as a condition of Borrower's acceptance of
this commitment and as consideration for the issuance of this commitment. Such
fee shall be considered earned whether or not the Loan closes.

6.  Guaranty.

    The $500k Loan shall be partially guaranteed by the Connecticut Development
Authority pursuant to the terms of its June 16, 1999 Commitment Letter, a copy
of which is attached hereto as Exhibit A and incorporated herein by reference.
It shall be a condition precedent to the making of the Loan that said Guaranty
is in full force and effect as of the Closing.

7.  Prepayment.

    The Borrower may prepay the Loan at any time in whole or in part without fee
or penalty.

8.  Security.

    In addition to other items of collateral or security as provided elsewhere
herein, the Loan shall be secured as follows:

8.1 $200K Loan.

    The $200K Loan shall be secured by the pledge and delivery of cash deposits
in an amount or amounts equal to the face amount of any Standby Letters of
Credit issued by Bank at the direction of Borrower under the terms of the $200K
Loan facility. Said deposits shall be released to Borrower in accordance with
Bank's customary procedures but in no event shall the sum total of cash pledged
and held by Bank be less than Bank's aggregate exposure under such Letters of
Credit at any one time outstanding.

8.2 $500K Loan.

    (a) A first priority, valid and perfected lien upon all accounts receivable
of Borrower.

    (b) A second priority valid and perfected lien as to all other personal
property of Borrower.

                                     - 4 -
<PAGE>   5
    (c) The Guaranty as set forth in paragraph 6 of this Commitment Letter.

9.  Loan Documents.

9.1 $200,000 Credit Line

    The $200K Loan shall be documented by the following, all in form and content
acceptable to Bank in its sole and absolute discretion:

    a. Promissory Note.

    b. Customary internal People's Bank documentation evidencing the obligation
to issue, and the issuance of, Standby Letters of Credit to be secured by cash
collateral. All such letters of credit to be issued shall expire by their terms
not more than six months from date of issuance or one month before the expiry of
the credit facility, whichever is earlier. The $200K Loan shall be cross
defaulted with the $500K Loan.

    c. Subordination of any other creditor of Borrower who asserts a security
interest in the Borrower's cash.

9.2 $500,000 Revolving Credit Line

    The $500K Loan shall be documented by the following, all in form and content
acceptable to Bank in its sole and absolute discretion:

    a. Promissory Note.

    b. Commercial Revolving Credit Line Agreement which shall provide, inter
alia, for certain financial performance criteria as follows:

    Debt Service Coverage Ratio of 1.25x as determined by Bank on a rolling four
quarter basis, commencing June 30, 1999 and continuing during the term of the
$500K loan.

Said Agreement shall further provide that at no time during the term of the
$500K Loan shall the principal then advanced and outstanding exceed eighty (80%)
percent of the value of the

                                     - 5 -
<PAGE>   6
Eligible Receivables as determined by Bank based upon Borrower's timely monthly
reporting of the status of same to Bank. "Eligible Receivables" are all accounts
receivable of Borrower EXCEPTING receivables more than sixty (60) days past
invoice date, all receivables of the United States government and all unearned
service contract receivables. No advances shall be made unless the above ratio
is met and the failure of Borrower to reduce the principal at any time advanced
and outstanding upon Bank's DEMAND to conform to said ratio shall be a default
of the $500K Loan.

    c. Security Agreement as to all assets of Borrower with Financing Statements
as above described.

    d. A subordination of all secured creditors of record with respect to the
accounts receivable, only, of the Borrower. Said creditors shall further waive
payment on account of Borrower's obligations thereby secured in the event, and
during the continuance of a default of Borrower's financial covenants set forth
in paragraph 9.2 b, above.

    e. An intercreditor/marshalling agreement as hereinabove described.

    f. Connecticut Development Authority Guaranty and compliance with all
conditions precedent to the execution and delivery of same, all as above
described.

9.3 As to Both Credit Facilities

    Prior to closing, Borrower shall provide Bank the following:

    a. An up to date Uniform Commercial Code search of the Borrower.

    b. Certificate of Legal Existence of the Borrower.

    c. Copies of relevant incorporation documents of Borrower including any
share holder agreements.

    d. Copies of all documentation evidencing or securing Investor Creditor
interests.

    e. An opinion of legal counsel to each Investor Creditor

                                     - 6 -
<PAGE>   7
as to authority binding effect and due execution.

   f. An opinion of legal counsel to the Borrower in the normal course.

   g. At closing, an affidavit, by Mr. Perkins and Mr. Vehlies, personally and
as officers of Borrower, as to the following:

      i.    the balance sheet as of 12/31/98 (the "Balance Sheet") is true and
            accurate;

      ii.   there is no litigation pending nor contingent liabilities except as
            disclosed on the Balance Sheet;

      iii.  all federal, state and local tax filings have been made, all tax
            obligations and assessments are current and no claims have been
            asserted, all other than as shown on the Balance Sheet;

      iv.   there has been no material adverse change in the Borrower's
            financial condition since the date of the Balance Sheet;

      v.    the proposed Loan, as evidenced by the Loan documents, does not
            violate any corporate bylaw or provision nor would result in a
            default under any other agreement or obligation to which the
            Borrower is a party or by which it is bound;

      vi.   there is no current default by the Borrower in the performance of,
            or compliance with any covenant or condition of any agreement or
            obligation to which the Borrower is a party or by which it is bound.

   h. Evidence of casualty and liability insurance reasonably acceptable to
People's Bank. All insurance policies shall be in the form and substance, for
amounts and in companies "A" rated and acceptable to the Bank, with annual
premiums prepaid by the Borrower, shall contain lender's loss payable clauses
(as Lender may require) effective as of the closing date, providing for any loss
payable thereunder to be paid to the Lender, shall provide

                                     - 7 -
<PAGE>   8
that the policy may not be canceled without 30 days prior written notice to the
mortgagee and shall be deposited with the Lender throughout the life of the
Loan. The Lender's obligations under this commitment shall be conditioned upon
receipt at closing of such insurance policies complying with this paragraph
together with evidence of premium payment. All policies and endorsements shall
be endorsed as follows: People's Bank/its successors and assigns/ATIMA, P.O. Box
7097, Bridgeport, Connecticut 06601, Loan #00-0000660. All notices required to
be sent to Lender shall be sent by registered mail, postage prepaid, to the
address above set forth.

9.4 As to Both Credit Facilities

    Borrower shall further comply with any other requirement as People's Bank
may reasonably impose in the sole exercise of its commercial underwriting
discretion pursuant to its established underwriting criteria and shall be
responsible for all fees and costs of People's Bank, whether or not the loan
facilities close.

    The condition of the title to all collateral, the form and substance of all
documents, agreements, or other instruments shall be such as Lender shall deem
necessary or require and shall be satisfactory to Lender and its counsel.
Without limiting the foregoing, the Loan documents shall include such covenants,
representations and warranties and default provisions as Lender may deem
necessary or desirable.

    Borrower shall duly execute and/or deliver such instruments, documents,
certificates, opinions, assurances and shall do such other acts and things as
Lender may reasonably request to provide Lender with such information and
assurances Lender may require with respect to the Loan and operation of the
property and to effect the intent and purpose of the Loan and this Commitment
Letter.

10.  Financial Statements.

10.1 Current signed financial statements of Borrower must be submitted to and
approved by the Lender prior to Loan closing.

10.2 The Loan documents shall provide that Borrower and the Guarantor under the
Guaranty annually shall furnish to the Lender or cause to be furnished, (a)
quarterly during the term of the Loan financial statements of the Borrower, all
in such detail as the Lender may reasonably require and certified by a certified
public accountant acceptable to the Bank if the Bank so requests,

                                     - 8 -
<PAGE>   9
(b) within (15) days of filing, copies of Borrower's and Guarantor's federal,
state, and local tax returns together with all supporting schedules, and (c)
such other financial information in such detail as the Bank may require within
ten (10) days of the Bank's request for same.

11. Late Charge/Default Rate.

    The note evidencing the Loan will provide that the Borrower will be assessed
by the Lender a late charge equal to five (5.00%) percent of the aggregate
monthly payment of interest, principal for each payment not paid within fifteen
(15) days of the due date to cover the expenses to the Lender resulting from
such delinquent payment. During the continuance of any default under the note
evidencing the Loan, the mortgage securing the note or any related documents
beyond any applicable grace period contained therein, the interest rate under
the note shall be five (5.00%) percentage points above the then otherwise
applicable interest rate.

12. Prejudgment Remedy and Jury Trial Waivers.

    The Loan documents will provide for a waiver by Borrower of such rights as
may exist under state or federal law to a hearing prior to Lender's exercise of
any right to take legal action to enforce its rights under the Loan documents
after a default thereunder and a waiver by Borrower of the right to a jury
trial.

13. Secondary Financing.

    Excepting only such financings as are disclosed by Borrower to Bank prior to
closing and accepted by Bank in its sole and absolute discretion, no secondary
financing shall be permitted without Lender's prior written consent, to be given
or withheld in Lender's sole discretion. Any secondary financing obtained by the
Borrower and/or secured by the collateral or any part thereof or interest
therein without such consent shall be a default under the Loan documents
causing, at Lender's option, the entire amount of the Loan and all other
indebtedness of the Borrower to Lender to be immediately due and payable.

14. Lender's Counsel - Closing Procedure.

    Lender's counsel for this transaction shall be Karl-Erik Sternlof of Brown,
Jacobson, Tillinghast, Lahan & King, P.C., 22

                                     - 9 -
<PAGE>   10
Courthouse Square, Norwich, Connecticut 06360, who shall represent Lender in
this transaction, prepare the Loan documents and review all closing exhibits.

    Lender's counsel is generally in a position to complete the closing within
fifteen (15) business days after satisfaction of all pre-closing requirements of
this commitment letter and receipt of acceptable closing exhibits.

    All fees and disbursements of Lender's counsel in connection with the Loan,
including, without limitation, preparation of this commitment, loan
documentation, negotiation and closing of the Loan, are the responsibility of
the Borrower, whether or not the Loan closes.

15. Costs and Expenses.

    The Loan transaction shall be made without cost to the Lender. Whether or
not this commitment is terminated for any reason, and whether or not the Loan
transaction closes or portion thereof is disbursed, Borrower agrees to pay all
expenses, fees and out of pocket charges paid or payable to third parties with
respect to the Loan transaction or in any way connected therewith, including,
without limiting the foregoing, legal fees of counsel for Borrower legal fees of
counsel for the Lender, costs of recording, documentary stamps, taxes, and such
other customary and reasonable expenses (whether incurred prior to or after the
date of closing) as are normally and reasonably incurred in connection with the
processing and/or consummation of the Loan transaction, or such similar expenses
as may be incurred in connection with the submission of any instruments and
documents after the date of closing or the modification of loan document as may
occur or be required after the date of closing.

16. Consideration for Commitment.

    In consideration of the expenses incurred by Lender in processing this Loan,
for the issuance of this commitment, and for the holding of funds for
disbursement at the future date, the Borrower agrees that upon acceptance of
this commitment and payment of the commitment fee specified above this
commitment shall become binding and that the provisions hereof shall govern the
closing of the Loan and the terms of this commitment shall survive the closing
except to the extent inconsistent with the

                                     - 10 -
<PAGE>   11
Loan documents.

17. Borrower's Representations.

    This commitment is issued in reliance on the representations made by the
Borrower in connection with its application for the Loan. By acceptance of this
commitment, the Borrower represents that all such representations remain true
and correct and that it has not accepted any other commitment for a mortgage
loan on the Property.

18. Sale of Participation(s) by Lender.

    Lender may sell one or more participation interests in the Loan. Lender
shall have the right to disclose any information in its possession or available
to it relative to the Property, the Borrower and/or the Guarantor of the Loan as
Lender deems necessary or desirable in connection with the solicitation and sale
of participation interests in the Loan.

19. Brokerage.

    No brokerage commission or compensation is to be paid by the Lender in
connection with the Loan, and by acceptance hereof the Borrower and each
guarantor of the Loan, agrees to indemnify the Lender against any claim for a
brokerage commission or compensation. Lender and Borrower each warrant and
represent to the other that they have not dealt with any broker with regard to
this transaction.

20. Assignment.

    The identity of the Borrower is of material importance to the Lender, and
this commitment may not be assigned by the Borrower, and the Lender shall have
no obligation hereunder to any third party, without the Lender's prior written
consent, which may be given or withheld in Lender's sole discretion.

21. Contingencies.

    Lender's obligations to close and make any advance under the Loan discussed
in this commitment are subject to the following:

    (a) There being no material adverse change in the financial

                                     - 11 -
<PAGE>   12
condition of Borrower at the closing date from that shown on financial
statements and other materials heretofore submitted to Lender, and there being
no litigation at the closing date involving those parties, except litigation
previously disclosed in writing to, and accepted by, the Lender. Any failure of
the Borrower to notify Lender of any such material adverse change or of any such
litigation shall constitute a representation by the Borrower to the Lender that
none has occurred;

    (b) Borrower shall not be subject to a bankruptcy, insolvency or
reorganization proceeding;

    (c) There exists no default under the Loan documents and no event or
condition which could become a default with the passage of time or giving of
notice;

    (d) Borrower accepting this commitment on or before August 31, 1999, by
signing and returning the enclosed copy of this letter to Lender together with
the commitment fee discussed in Section 3 which sum shall be a non-refundable
fee to be retained by the Bank, whether or not the Loan closes; and

    (e) Satisfaction of all other conditions and requirements for both the $200K
Loan and the $500K Loan, all as set forth in this commitment letter.

    (f) That Borrower agrees in writing at Closing, in form and content
acceptable to Lender, to maintain all operating accounts relative to its
business in an account or accounts at Lender to which recourse may be had in the
event of Borrower's default.

22. Reliance.

    Neither this commitment nor any obligation or undertaking of Lender set
forth in this commitment letter, may be relied on by third parties without the
express consent of Lender to such reliance.

23. Effect.

    This commitment is issued in response to Borrower's request. Where terms and
provisions of this commitment differ from terms and conditions of the Loan as
requested, this commitment shall prevail. All representations inclusive of
correspondence,

                                     - 12 -
<PAGE>   13
applications or commitment letters related to this Loan and dated prior to the
date hereof shall be superseded by this Commitment and be of no further force or
effect. This Commitment shall survive the closing of the Loan and all terms
hereof to the extent the same are not inconsistent with the terms of the Loan
Documents shall continue to apply, and Borrower in the event of a violation
shall be deemed to be in default thereunder which shall entitle Lender to any
and all rights or remedies referred to herein or under the Loan Documents, or
available to Lender under law or in equity.

24. Time of Closing.

    The closing on this Loan in accordance with the terms hereof, must take
place on or before thirty (30) days after acceptance, otherwise the commitment
shall become null and void. The Lender must be given at least five (5) business
days' written notice prior to closing or advance of any funds.

    If there are any questions in connection with the terms of this commitment,
please call us at (860) 889-2621.

Very truly yours,

PEOPLE'S BANK

By Arthur C. Barton
Its Vice President
Duly Authorized

The undersigned hereby accepts this Commitment as set forth above and agrees to
be bound to its terms.

Borrower:
                                    Gunther International, Ltd

Date:                               By: /s/ Marc I. Perkins
      ---------------------             ----------------------------
                                        ---------------------------,
                                        Its President
                                        ----------------------------
                                        Duly Authorized
                                        Subject to attached letter
                                        dated September 2, 1999 from
                                        Marc I. Perkins to Arthur C. Barton

                                     - 13 -
<PAGE>   14
                                    GUNTHER

September 2, 1999

Mr. Arthur C. Barton
People's Bank
4 Broadway
Norwich, Connecticut 06360-5725

Dear Mr. Barton:

In reference to your letter dated August 27, 1999, in which People's Bank agrees
to loan Gunther International, Ltd. a maximum principal sum of $700,000 under
two credit facilities subject to certain terms and conditions ("People's
Commitment Letter"), please find a signed copy of the Commitment Letter subject
to the changes noted below and a signed copy of the commitment letter from the
Connecticut Development Authority ("CDA Commitment"). Other than the changes
noted below, all terms and conditions of the People's Commitment Letter and the
CDA Commitment letter remain the same.

The following changes are incorporated into the Commitment Letter:

         Section 3.6 is replaced in its entirety by:

         "The Loan documents shall provide that the Loan shall become due and
         payable on demand if Lender in good faith determines that the prospect
         of payment or performance by Borrower or any guarantor under the Loan
         documents is impaired, if the Borrower or any guarantor shall default
         under any other loan obligation to the bank, or should the collateral
         securing the loan become impaired to the extent that the conditions set
         forth in paragraph 9.2 are not met."

         Section 4 is amended as follows:

         "....Commercial Revolving Loan Agreement by and between Bank and
         Borrower in form and content acceptable to Bank AND BORROWER. The
         ........."

         Section 14, third paragraph is amended as follows:

         "....the responsibility of the Borrower, whether or not the loan
         closes, SUBJECT TO A CAP ON THE ATTORNEY FEES FOR THE LENDER OF
         $2,000."

         Section 15 is amended as follows:

         ".......legal fees of counsel for the Lender SUBJECT TO THE CAP OF
         $2,000 AS STATED IN SECTION 14......"

Please indicate your acceptance of the changes noted above by signing in the
space provided below. The commitment fees required by the bank will be paid by
Gunther International, Ltd. upon the receipt of a signed copy of this letter.

Sincerely,

/s/ Marc I. Perkins
-------------------------
Marc I Perkins
Chief Executive Officer

The undersigned hereby accepts the changes to the People's Commitment Letter as
set forth above and agrees to be bound to its terms.

Lender: People's Bank

By:

Its Vice President
Duly Authorized
<PAGE>   15
                    [GUNTHER INTERNATIONAL, LTD. LETTERHEAD]

                                                          As of October 23, 1999
People's Bank
4 Broadway
Norwich, Connecticut  06360

         Re:      People's Bank Commitment Letter to Gunther International, Ltd.
                  dated Revised August 27, 1999 as Modified by Gunther
                  International, Ltd. Letter to People's Bank dated September 2,
                  1999

Ladies and Gentlemen:

         This letter is to confirm our understanding with respect to a change to
the above-captioned Commitment Letter with respect to the financial information
which is to be delivered by Gunther International, Ltd. (the "Borrower") to
People's Bank (the "Bank") during the existence of the two loan facilities
described in the Commitment Letter. It has been agreed that Section 10.2 of the
Commitment Letter shall be replaced by the following: "The Loan documents shall
provide that Borrower shall timely submit to Bank the following financial
information: internally prepared financial statements (balance sheet, statement
of income and retained earnings) on a monthly basis within thirty (30) days
following the end of the preceding month; audited financial statements annually
within one hundred twenty (120) days after the end of Borrower's fiscal year;
and notice of all filings made to the Securities and Exchange Commission, with
copies of such filings upon written request of Bank within twenty days of such
filing or request.

         Please confirm your agreement with the foregoing change to the
Commitment Letter by signing a copy of this letter in the place indicated and
returning it to us.

                                           Very truly yours,

                                           GUNTHER INTERNATIONAL, LTD.

                                           By: /s/ Michael M. Vehlies
                                               ----------------------------
                                               Name: Michael M. Vehlies
                                               Title:  Chief Financial Officer
ACKNOWLEDGED AND AGREED TO
as of the 23rd day of October, 1999

PEOPLE'S BANK

By: /s/ Arthur C. Barton
    ----------------------------
    Name: Arthur C. Barton
    Title:   Vice President

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