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                                                                   EXHIBIT 10.29



"Confidential treatment has been requested for portions of this exhibit.  The
confidential portions are designated by brackets [  ]."
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              COLLABORATIVE DEVELOPMENT AND DISTRIBUTION AGREEMENT


         THIS AGREEMENT is entered into as of November 24, 1997 (the "Effective
Date"), by and between BOEHRINGER INGELHEIM INTERNATIONAL GmbH, a limited
liability company organized under the laws of Germany having its principal place
of business at D-55216 Ingelheim, Rhein, Germany ("BI") and VION
PHARMACEUTICALS, INC., a Delaware corporation having offices at Four Science
Park, New Haven, Connecticut 06511 ("Vion").

         WHEREAS, Vion possesses scientific and technical proprietary technology
and data and resources relating to the compound porfiromycin for the treatment
of cancer in humans pursuant to rights granted by Yale University and Dr. Alan
Sartorelli; and

         WHEREAS, Vion has continued to develop proprietary technology, data and
resources relating to porfiromycin and has received orphan product designation
from the United States Food and Drug Administration for PromycinJ (porfiromycin)
in the treatment of head and neck cancer and cervical cancer; and

         WHEREAS, BI possesses scientific and technical resources relating to
the development and commercialization of drug candidates for the treatment of
cancer; and

         WHEREAS, BI desires to obtain certain rights to commercialize
PromycinJ; and

         WHEREAS, the parties desire and are willing to establish a
collaborative relationship to further develop and commercialize PromycinJ for
the treatment of cancer in humans.

         NOW, THEREFORE, the parties agree as follows:


                             ARTICLE 1. DEFINITIONS

         As used herein, the following terms shall have the following meanings:

         1.1 "Affiliate" means an individual, trust, business trust, joint
venture, partnership, corporation, limited liability 
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company, association or any other entity which owns, is owned by or is under
common ownership with a party. For the purposes of this definition, the term
"owns" (including, with correlative meanings, the terms "owned by" and "under
common ownership with") as used with respect to any party, shall mean the
possession (directly or indirectly) of more than fifty percent (50%) of the
outstanding voting securities of a corporation or comparable equity interest in
any other type of entity.

         1.2 "Agreement" means the present agreement together with all exhibits
and schedules.

         1.3 "BI Technology" means all Know-How and Patent Rights to the extent
necessary or appropriate for the full development, use or sale of the Compound
or the Product in the Field, now or during the term hereof, (a) owned by BI or
one of its Affiliates, or (b) to the extent BI (or its Affiliate) is permitted
to grant a sublicense to Vion, licensed to BI or one of its Affiliates by a
Third Party.

         1.4 "BI Trademarks" means trademarks for use on the Product (other than
the Vion Trademarks) designated by BI from time to time in accordance with
Section 5.4(b) below.

         1.5 "Collaboration" means the activities of Vion and BI encompassed in
their relationship in accordance with the terms and conditions of this
Agreement.

         1.6 "commercially reasonable and diligent efforts" means those efforts
consistent with the exercise of prudent scientific and business judgment, as
applied to other products of similar scientific and commercial potential in the
country in which the Product would be marketed and sold.

         1.7 "Compound" means the compound porfiromycin.

         1.8 "Confidential Information" means all information and materials
received by either party from the other party pursuant to this Agreement and all
information and materials developed in the course of the Collaboration,
including, without limitation, Know-How of each party, subject to the exceptions
set forth in Section 9.2.





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         1.9 "Co-Promotion Agreements" shall have the meaning set forth in
Section 5.8 below.


         1.10 "Co-Promotion Terms" shall have the meaning set forth in Section
5.7 below.


         1.11 "Co-Promotion Territory" shall have the meaning set forth in
Section 5.6 below.


         1.12 "Deductions" means: (a) trade discounts, trade credits or returns,
recalls, chargebacks, rebates and prompt payment discounts, (b) transportation
charges and insurance expenses, (c) medicare, medicaid and managed care rebates,
fees or refunds actually granted to health care organizations, governments and
their agencies, purchasers and reimbursers, all of which are granted in the
ordinary course of BI's business, and (d) sales taxes, use taxes, duties and
other similar taxes borne by BI, its Affiliates, Recognized Agents or permitted
sublicensees provided, in each case, to the extent such items are actually
included in the price charged to such Third Parties for the Product.

         1.13 "Development Plan" means the plan agreed to by the Executive
Committee for clinical development of the Product. The initial Development Plan
is attached hereto as Exhibit A. The Development Plan may be amended from time
to time in writing by the Executive Committee.

         1.14 "Development Work" means the research and clinical development
program performed by the parties as described in the Development Plan under the
direction of the Steering Committee and conducted in accordance with the terms
and conditions of this Agreement.

         1.15 "Executive Committee" means a committee consisting of equal
numbers of representatives appointed by each of Vion and BI, whose
responsibilities include, among other duties as more specifically described
herein, the approval and direction of the Development Plan, identifying which
Development Plan tasks are to be performed by one of the parties or by a third
party, oversight of the Steering Committee and dispute resolution.




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         1.16 "FDA" means the United States Food and Drug Administration (or its
substantial equivalent in any foreign country).

         1.17 "FDC Act" means the United States Food, Drug and Cosmetic Act, as
amended.

         1.18 "Field" means use for the prevention or treatment of cancer in
humans.

         1.19 "First Commercial Sale" of the Product shall mean the first sale
for use or consumption of the Product in a country after required marketing and
pricing approval has been granted by the governing health regulatory authority
of such country. A sale to an Affiliate, Recognized Agent or permitted
sublicensee shall not constitute a First Commercial Sale unless the Affiliate,
Recognized Agent or permitted sublicensee is the end user of the Product.

         1.20 "Invention" means any discovery or invention made by either party
during the course of the Collaboration after the Effective Date.

         1.21 "Joint Technology" means all Know-How and Patent Rights to the
extent necessary or appropriate for the full exploitation of the Compound or the
Product in the Field acquired or made jointly (as determined in accordance with
the rules of inventorship under United States patent law) by or on behalf of
Vion and BI or one of their respective Affiliates in connection with the
Development Work.

         1.22 "Know-How" means techniques; inventions; practices; methods;
knowledge; know-how; skill; experience; and test data, including, without
limitation, pharmacological, toxicological and clinical test data, analytical
and quality control data, having application in the Field.

         1.23 "Licensed Technology" means the BI Technology, the Joint
Technology and the Vion Technology.

         1.24 "Major Country" means any of the following: (i) the European
Union, (ii) Japan, and (iii) the United States.




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         1.25 "NDA" means a New Drug Application (or the equivalent application
in any other country) and all supplements filed pursuant to the requirements of
the FDA, including all documents, data and other information concerning products
which are necessary for or included in NDA Approval.

         1.26 "NDA Approval" means FDA approval of an NDA.

         1.27 "Net Sales" means the gross amounts invoiced by BI, its Affiliates
or to the extent permitted under Section 5.5, Recognized Agents or permitted
sublicensees of BI or its Affiliates, to Third Parties less the Deductions as
determined in accordance with Section 6.5 below. The transfer of the Product by
BI or one of its Affiliates to (i) another Affiliate of BI, (ii) a permitted
sublicensee of BI, or (iii) a Recognized Agent shall not be considered a sale;
in such cases, Net Sales shall be determined based on the gross amounts invoiced
by the Affiliate, permitted sublicense of BI or Recognized Agent to its
customer, less the Deductions.

         1.28 "Other Agreements" means the Supply Agreement, the Co-Promotion
Agreements and the Stock Purchase Agreement.

         1.29 "Patent Rights" means all rights existing during or after the term
of this Agreement under (a) patents (including inventor's certificates) that
include one or more Valid Claims, including without limitation any substitution,
extension, registration, confirmation, reissue, re-examination, renewal,
supplementary protection certificate or the like and (b) pending applications
for patents, including without limitation any continuation, division or
continuation-in-part thereof and any provisional applications.

         1.30 "Product" means a pharmaceutical product, in any form or dosage,
comprised of the Compound.

         1.31 "Recognized Agent" shall mean an entity other than an Affiliate of
BI through which BI regularly distributes and sells its products in a particular
country or region.

         1.32 "Royalty" shall have the meaning set forth in Section 6.4.




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         1.33 "Royalty Term" means, in any country, the period of time equal to
the longer of: (a) if the sale of the Product in such country is covered by a
Valid Claim, the term of such Valid Claim; or (b) ten (10) years from the date
of the First Commercial Sale of the Product in such country.

         1.34 "Royalty Territory" means, unless amended as provided in Section
5.7 below, all countries and territories in the world other than the
Co-Promotion Territory.

         1.35 "Royalty Year" shall have the meaning set forth in Section 6.6.

         1.36 "Steering Committee" means a committee of Vion and BI employees as
described in Article 3 below.

         1.37 "Stock Purchase Agreement" shall have the meaning set forth in
Section 6.2.

         1.38 "Supply Agreement" shall have the meaning set forth in Section
5.7.

         1.39 "Third Party" means any entity other than Vion or BI or an
Affiliate or sublicensee of Vion or BI.

         1.40 "Trademarks" means the Vion Trademarks and the BI Trademarks.

         1.41 "Valid Claim" means, to the extent covering the Compound or the
Product, any of:

         (a) a claim of an issued patent which claim has not lapsed, been
canceled or become abandoned and has not been declared invalid by an unreversed
and unappealable decision or judgment of a court or other appropriate body of
competent jurisdiction, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer;

         (b) a claim of a pending patent application to the extent the invention
described in such claim has not been abandoned or finally disallowed; or



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         (c) a marketing exclusivity right conferred as a result of (i) a
designation as a drug for rare diseases or condition under Sections 526 et. al.
of the FDC Act (or the equivalent rights in any country outside the United
States), (ii) an exclusive right to sell under an NDA pursuant to Section
505(j)(4) of the FDC Act (or the equivalent rights in any country outside the
United States), or (iii) any other applicable law.

         1.42 "Vion Technology" means all Know-How and Patent Rights to the
extent necessary or appropriate for the full development, use or sale of the
Compound or the Product in the Field, now or during the term hereof (a) owned by
Vion or one of its Affiliates, or (b) to the extent Vion (or its Affiliate) is
permitted to grant a sublicense to BI, licensed to Vion or one of its Affiliates
by a Third Party. Vion Technology as of the Effective Date includes, but is not
limited to, the Know-How and Patent Rights listed on Schedule 1 attached hereto,
which Schedule shall be updated from time to time.

         1.43 "Vion Trademarks" means PromycinJ and such other trademarks as may
be agreed to from time to time by the parties.


                            ARTICLE 2. COLLABORATION

         2.1 Scope of Collaboration. BI and Vion will conduct research and
development on a collaborative basis with the goal of further development of the
Compound into Product for commercialization as more specifically provided in the
Development Plan.

         2.2 Exclusivity. Neither Vion nor BI, nor any of their Affiliates,
shall during the term of this Agreement either directly or indirectly, enter
into any agreement, or engage in, with any sublicensee or Third Party, any
research, development or commercialization of the Compound in the Field, other
than as provided in this Agreement or such other agreements as are entered into
between the parties as the result of this Agreement. Subject to Section 5.5
below, nothing herein shall limit the ability of the parties to enter into
agreements with contract research organizations, contract manufacturers, or
other entities for the performance of research, development, manufacturing,
marketing and selling activities relating to the Compound or the Product as



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provided hereunder in the ordinary course of their respective businesses.

         2.3 New Directions. The parties agree that any new direction or
approach not previously contemplated by the Development Plan and outside the
scope of the Field may be brought to the attention of the other party for
possible inclusion in the Collaboration. The parties may desire to change the
scope of the Field in response to such proposals, and the Executive Committee
will then discuss a mutually acceptable written amendment to this Agreement to
accommodate such change.


                          ARTICLE 3. STEERING COMMITTEE

         3.1 Formation of Steering Committee. The Steering Committee shall be
comprised of an equal number of members appointed by each of BI and Vion. Either
party may appoint substitute or replacement members of the Steering Committee to
serve as their representatives. The initial members of the Steering Committee
will be appointed by the parties within 30 days following the Effective Date.

         3.2 Meetings of Steering Committee. The Steering Committee will
initially meet at least four (4) times per year at times to be determined by the
Steering Committee. Such meetings will be at places agreed to by BI and Vion,
alternating between locations in Columbus, Ohio and New Haven, Connecticut, or
such other locations as the parties shall agree, with each party to bear all
travel and related costs for its members.

         3.3 Decision-Making Process. Each member of the Steering Committee
shall have one vote, and decisions by the Steering Committee shall be made by a
majority vote. Any disagreement among members of the Steering Committee will be
resolved within the Steering Committee based on the efficient achievement of the
objectives of the Agreement. Any disagreement which cannot be resolved by the
Steering Committee shall be referred to the Executive Committee for resolution
under Article 14. It is the intent of the parties to resolve issues through the
Steering Committee whenever possible and to refer issues to the Executive
Committee only when resolution through the Steering Committee cannot be
achieved.



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         3.4 Function of Steering Committee. The Steering Committee shall be
responsible for the supervision and coordination of the Development Work as
provided in the Development Plan approved by the Executive Committee, including:

         (a) monitoring the progress of the Development Work, evaluating the
work performed and results obtained, and directing and reviewing the performance
of the tasks under the Development Work; and

         (b) such other matters as the Executive Committee shall assign to the
Steering Committee from time to time.


                 ARTICLE 4. CONDUCT OF RESEARCH AND DEVELOPMENT

         4.1 Research and Development. The parties agree that the research and
development work of BI and Vion relating to the Compound in the Field shall be
conducted in accordance with the Development Plan under the guidance of the
Steering Committee.

         4.2 Allocation of Responsibility. In the United States and Canada, Vion
shall be responsible for the preparation of the NDA, for filing the NDA and for
all expenses for filing and maintaining the NDA once NDA Approval is secured. BI
shall be responsible for the preparation and filing of NDAs in all countries in
the Royalty Territory and for all expenses related to the filing and maintenance
of such NDAs.

         4.3 Research and Development Efforts. Each party shall use commercially
reasonable and diligent efforts to perform its responsibilities under the
Development Plan. The Development Work shall be conducted by the parties in
compliance with all applicable good laboratory practices and other legal
requirements and in good scientific manner to attempt to achieve efficiently and
expeditiously its objectives. Except as expressly provided in the Development
Plan, or as agreed from time to time by the parties, the parties will equally
share all of the clinical development expenses reasonably incurred in connection
with the Development Work, including [] of the clinical development costs
incurred by Vion [], equal to U.S. [], which shall be paid by BI as follows: (i)
[] on the Effective Date and (ii) [] not later 



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than 120 days after the Effective Date, upon receipt of copies of invoices,
canceled checks or other back-up reasonably satisfactory to BI. []In no event
shall BI be obligated to pay any late charges Vion has incurred or may incur for
failure to make any timely payments to its vendors.

         4.4 Availability of Resources. Each party will maintain and, if
necessary secure, additional laboratories, offices and all other facilities
necessary to carry out the Development Work. Each party agrees to make its
employees and non-employee consultants reasonably available at their respective
places of employment and at their own cost to consult with the other party on
issues arising during the Development Work and in connection with any request
from any regulatory agency, including, without limitation, regulatory,
scientific, technical and clinical testing issues. Representatives of Vion and
BI may, upon reasonable notice and at times reasonably acceptable to the other
party (a) visit the facilities where the Development Work is being conducted;
and (b) consult informally, during such visits and by telephone, with personnel
of the other party performing the Development Work.

         4.5 Disclosure; Reports. BI and Vion will make available and, upon
request, disclose to each other all Know-How, including Know-How known by BI or
Vion concerning the Compound in the course of the Development Work for use in
accordance with this Agreement. All Know-How, which is significant, will be
disclosed to the other party promptly after the later of the date that it is
learned or its significance is appreciated. The parties will exchange reports
quarterly presenting a complete summary of their research and development work.
In addition, each party will make summary presentations of the development
progress at each meeting of the Steering Committee, and the Executive Committee
will conduct a formal review on a semi-annual basis, once at BI and once at Vion
during each year. Each party will also communicate informally and through the
Steering Committee to inform the other of work done under this Agreement. Each
party will provide the other with raw data in original form or photocopies
thereof for any and all work carried out under this Agreement as reasonably
requested by the other party hereto.


       ARTICLE 5. DISTRIBUTION & LICENSE RIGHTS; COMMERCIALIZATION EFFORTS



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         5.1 Research and Know How Licenses. In conducting the Development Work
and for the purpose of securing regulatory approval, each party shall have a
worldwide non-exclusive, non-transferable, royalty-free license under the
Licensed Technology to the extent necessary for each party to perform its
obligations under this Agreement.

         5.2 Distribution Rights. Subject to Vion's co-promotion rights in the
Co-Promotion Territory set forth in Section 5.6 below, Vion hereby grants to BI
an exclusive, worldwide, royalty-bearing right, with the right to sublicense its
rights subject to Section 5.5 below, to offer for sale and sell the Product for
indications of use in the Field. Except as provided in Section 5.8(b), Vion
reserves the exclusive right to manufacture the Compound and the Product.
Nothing in this Agreement shall limit in any respect the right of either party
to conduct research and development with respect to and market the Product or
other products outside the Field using such party's own Technology or the Joint
Technology, including Know-How and any Patent Rights; however, no license to use
the other party's Technology to do so is granted herein expressly or by
implication.

         5.3 Commercialization Efforts.

         (a) Subject to Section 5.3(b) below, BI and Vion (with respect to the
Co-Promotion Territory) shall use commercially reasonable and diligent efforts
to commercialize the Product. Either party may provide 90 days written notice to
the other party if, in its opinion, the other party is not using commercially
reasonable and diligent efforts, in order for the parties to discuss the
situation. In the event that the parties are unable to resolve their differences
within such 90 day period, such dispute shall be submitted for resolution in
accordance with Article 14.

         (b) []BI shall identify in writing to Vion those countries outside of
the Co-Promotion Territory that neither BI, nor its Affiliates nor its permitted
sublicensees plans to market and sell the Product. Upon receipt of such written
notice, the rights granted in Sections 5.2 and 5.4 shall be considered null and
void for the countries so identified.



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         5.4      Trademarks.

         (a) Subject to Vion's co-promotion rights in the Co-Promotion Territory
set forth in Section 5.6 below, Vion hereby grants to BI an exclusive, worldwide
license to use the Vion Trademarks in connection with the promotion and sale of
the Product in the Field for the duration of the Agreement. Subject to Section
5.4(b) below, the Product shall be marketed and sold only under the Vion
Trademarks. Notwithstanding the foregoing, BI shall, at its option and to the
extent required by law or regulation, and otherwise where practical, be entitled
to have the BI company name or logo or the name or logo of its Affiliate on any
promotional materials (collectively, the "BI Tradenames").

         (b) If BI reasonably objects to one or more of the Vion Trademarks
based on the need for different trademarks necessitated by language or other
factors pertaining to specific countries in the Royalty Territory, the parties
may agree on additional trademarks for use in connection with the promotion and
sale of the Product in the Field in the Royalty Territory (the "BI Trademarks").

         (c) Each party shall own, register and maintain, at its own expense,
its own Trademarks.

         (d) BI acknowledges that it has and will obtain no proprietary interest
in the Vion company name or the Vion logos (collectively, the "Vion Tradenames")
or the Vion Trademarks and agrees that it: (i) will not attempt to register the
Vion Trademarks or Tradenames, or any colorable imitation thereof, or in any way
assist a Third Party to do so; (ii) will not use the same as part of its
corporate or business name; (iii) will not make any representation that it owns
any rights in or to the Vion Trademarks or Tradenames, and to, where practical,
include on all materials which bear the Vion Trademarks a statement that the
Vion Trademarks are trademarks of Vion; (iv) will discontinue all use thereof
immediately upon termination of this Agreement (except as otherwise provided in
this Agreement or the Co-Promotion Agreements); and (v) will use the Vion
Trademarks and Vion Tradenames only as permitted under this Agreement or as
prescribed by Vion.




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         (e) Vion acknowledges that it has and will obtain no proprietary
interest in the BI Trademarks or the BI Tradenames and agrees that it: (i) will
not attempt to register the BI Trademarks or Tradenames, or any colorable
imitation thereof, or in any way assist a Third Party to do so; (ii) will not
use the same as part of its corporate or business name; (iii) will not make any
representation that it owns any rights in or to the BI Trademarks or Tradenames,
and to include, where practical, on all materials which bear the BI Trademarks a
statement that the BI Trademarks are trademarks of BI; and (iv) will discontinue
all use thereof immediately upon termination or expiration of this Agreement.

         (f) To the extent required by law or regulation, and if not required by
law or regulation, where practical, any package, package insert and promotional
material used by BI or its Affiliates for the Product shall include the Vion
logo and legend "the Product is licensed by Vion". Likewise, BI is entitled to
include the BI logo and name on any package, labeling or promotional material
used by BI of its Affiliates.

         (g) BI shall submit, on written request of Vion, but not more than once
per year, to Vion's Quality Assurance Department for review for trademark
purposes, sample packaging of the Product and advertising materials which bear
or show the Vion Trademarks. BI shall not sell any Product or utilize any
advertising or packaging materials bearing or showing the Vion Trademarks which
in any way is inconsistent with this Agreement, or upon expiration of this
Agreement as provided in Section 12.1 below, inconsistent with Vion's generally
applicable trademark use guidelines.

         (h) Vion shall submit, on written request of BI, but not more than once
per year, to BI's Quality Assurance Department for review for trademark
purposes, sample packaging of the Product and advertising materials which bear
or show the BI Trademarks. Vion shall not sell any Product or utilize any
advertising or packaging materials bearing or showing the BI Trademarks which in
any way is inconsistent with this Agreement.



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         5.5 Assignment or Sublicense to Affiliates and Certain Third Parties.

         (a) Either party may assign or sublicense any or all of its rights or
obligations under this Agreement to any of its Affiliates; provided, that such
assignment shall not relieve the assigning party of its responsibilities for
performance of its obligations under this Agreement.

         (b) BI may also sublicense its rights to sell the Product to Recognized
Agents in the Royalty Territory.

         (c) Vion may also assign or sublicense any or all of its rights or
obligations under Section 5.8 to one or more submanufacturers; provided, that
such assignment shall not relieve Vion of its responsibilities for performance
of its obligations under this Agreement.

         (d) Except as otherwise provided in this Section, BI shall have the
right to sublicense its rights under Section 5.1, 5.2 and 5.4 to a Third Party
only with the prior written consent of Vion, which consent shall not be
unreasonably withheld.

         5.6 Co-Promotion Rights. Vion shall have the right to co-promote the
Product with BI in the United States and Canada (the "Co-Promotion Territory")
as described in Section 5.7 below.

         5.7 Co-Promotion Agreements. The parties shall within sixty (60) days
of filing the first NDA for the Product in the United States promptly enter into
one or more separate agreements containing the essential terms set forth in
Exhibit B attached hereto and such modifications or other terms as the parties
may agree are appropriate for the co-promotion of the Product (the "Co-Promotion
Agreements"). BI may assign or sublicense its rights and obligations under the
Co-Promotion Agreements to one or more Affiliates; provided that such assignment
shall not relieve BI of its responsibilities for performance of its obligations
under the Co-Promotion Agreements. It is understood and agreed that additional
terms may be required to be included to implement a co-promotion arrangement to
reflect the then existing market conditions in the Co-Promotion Territory.
Exhibit B reflects the parties' efforts to express the essential terms of the
Co-Promotion Agreements based on the currently expected market 



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<PAGE>   16
conditions in the United States (the "Co-Promotion Terms"). In the event of the
termination of a Co-Promotion Agreement prior to the termination or expiration
of this Agreement, the Royalty Territory shall be amended to include all
countries and territories covered by the terminated Co-Promotion Agreement and
this Agreement shall otherwise continue in full force and effect.

         5.8      Manufacture of Compound and Product.

         (a) Except as provided in the Supply Agreement, Vion has and shall
maintain during the term of this Agreement, responsibility for the manufacture
of the Compound and the Product at the required quality and in quantities
sufficient to conduct the Development Work and for commercial sale. Vion will
provide all documentation regarding manufacture needed to register the Product
and will arrange for pre-approval inspections and Vion and BI shall jointly
determine the appropriate FDA-approvable manufacturing sites. BI shall have the
right to inspect any proposed Vion manufacturing site. The manufacturing site
used by Vion may be changed upon the mutual agreement of Vion and BI. For
commercial sale, Vion shall supply the Product to BI pursuant to the terms and
conditions of a supply agreement to be negotiated in good faith (the "Supply
Agreement"). The Supply Agreement shall contain the essential terms set forth in
the Supply Agreement Term Sheet attached hereto as Exhibit C (the "Supply
Agreement Terms"). BI hereby grants to Vion a worldwide, exclusive, royalty-free
license under the BI and Joint Technology to make or have made the Compound and
the Product as provided in the Supply Agreement.

         (b) Notwithstanding Section 5.8(a), it is the goal of the parties to
have the Product manufactured in the most economical and efficient manner.
Therefore, in the event that BI can produce the Product more economically than
Vion, BI shall have the right to do so, in which event Vion shall grant to BI,
its Affiliate or permitted sublicensee, a royalty-free, non-exclusive, license
under the Vion and Joint Technology as necessary to produce the Product on
mutually agreeable terms consistent with the Supply Agreement Terms. When
otherwise mutually agreed to by the parties that BI or a BI Affiliate or a BI
sublicensee shall manufacture the Product, Vion shall grant to BI, its Affiliate
or sublicensee, a royalty-free, non-exclusive, license under the Vion and Joint
Technology to make or have made the Compound and the Product on mutually
agreeable terms.



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         5.9 Preservation of Licenses in Bankruptcy.

         (a) If Vion should file a petition under bankruptcy laws, or if any
involuntary petition shall be filed against Vion, BI shall be protected in the
continued enjoyment of BI's rights as licensee hereunder to the maximum feasible
extent permitted under the law, including, without limitation, if it so elects,
the protection conferred upon licensees under Section 365(n) of Title 11 of the
United States Code, or any similar provision of any applicable law. Vion shall
give BI reasonable prior notice of the filing of any voluntary petition, and
prompt notice of the filing of any involuntary petition, under any bankruptcy
laws.

         (b) The Vion Technology shall, to the extent permitted under the law,
be deemed to be "intellectual property" as that term is defined in 11 U.S.C.
Section 101 or any successor provision and shall include Patent Rights, if any.


                           ARTICLE 6.  PAYMENT OBLIGATIONS

         6.1 Initial License Fee. As partial consideration of the rights granted
by Vion to BI and the obligations undertaken herein by Vion, on the date hereof,
BI shall pay Vion an initial license fee of U.S. $4.0 million in cash
concurrently with the execution of this Agreement. Vion agrees to use the funds
provided by BI pursuant to this Section 6.1 exclusively for the Development Work
under this Agreement.

         6.2 Equity Investment. Pursuant to the terms of the Stock Purchase
Agreement attached hereto as Exhibit D (the "Stock Purchase Agreement"), on the
Effective Date, BI shall purchase from Vion that number of shares (rounded to
the nearest whole number) of Vion's common stock, par value $.01 per share (the
"Common Stock") that is equal to U.S. $3,000,000.00 divided by a price per share
(the "Purchase Price") equal to the sum of (x) the average closing bid price of
a share of Common Stock on the Nasdaq SmallCap Market for the thirty (30) full
consecutive trading days preceding the Effective Date (the "Average Price"),
plus (y) a premium (the "Premium") equal to twenty-five percent (25%) of the
Average Price; provided, however, that the Purchase Price shall in no event
exceed $10.00 unless the Average Price exceeds $10.00, in 



                                      -16-
<PAGE>   18
which case the Purchase Price shall equal the Average Price without addition of
the Premium. The Premium, to the extent paid, shall be credited against payment,
if any, pursuant to Section 6.3(g) below.

         6.3 Milestone Payments. Upon achievement of each of the following
milestones (in whatever order they occur), BI shall pay to Vion the
nonrefundable milestone payments set forth below:

         (a)      []

         (b)      []

         (c)      []

         (d)      []

         (e)      []

         (f)      []

         (g)      []

         (h)      []

         (i)      []

All such payments shall be made by wire transfer to the bank account designated
by Vion within thirty (30) days after achievement of the applicable milestone.

         6.4 Royalties. BI shall pay to Vion a royalty on the Net Sales of the
Product in the Royalty Territory at a royalty rate of [] of Net Sales (the
"Royalty"). Royalty payments shall continue to accrue and be payable with
respect to sales of the Product and will automatically expire on a
country-by-country basis upon the expiration of the Royalty Term in such
country.

         6.5 Net Sales and Deemed Deductions. For the twelve (12) months
following the First Commercial Sale (hereinafter, the "First Annual Period," and
each twelve (12) month period thereafter, an "Annual Period") in order to
facilitate BI's data collection and payment of Royalties, Deductions for the
First 



                                      -17-
<PAGE>   19
Annual Period shall be deemed to be equal to ten percent (10%) of the
gross invoice amount of Product (the "Deemed Amount"); provided, however, that:
(a) within thirty (30) days following the end of the First Annual Period and
each Annual Period thereafter, BI shall provide Vion with all necessary
information (in sufficient detail) to permit Vion to confirm whether the Deemed
Amount accurately reflects the actual Deductions for the applicable Annual
Period, and (b) within sixty (60) days thereafter, the parties shall: (i)
determine the actual Deductions pertaining to the sale or other disposition of
the Product for the applicable Annual Period; (ii) if the Deemed Amount is
determined to be greater than or less than the actual Deductions by more than
five percent (5%) or $50,000, whichever is larger, make prompt retroactive
adjustments to the Royalty payments made during such Annual Period on the basis
of the Deemed Amount; and (iii) determine, in good faith, any appropriate
adjustments to the Deemed Amount for the following Annual Period, or if the
parties are unable to agree on a Deemed Amount, agree that actual Deductions
shall be used to determine Net Sales thereafter.

         6.6 Minimum Royalties. For each twelve (12) month period commencing
nine (9) months following the first NDA Approval in the European Union or Japan
(a "Royalty Year"), BI shall pay Vion an annual aggregate minimum royalty
payment of [] irrespective of whether any sales of the Product have been made in
the Royalty Territory provided that Vion has furnished an adequate supply of the
Product pursuant to the terms of the Supply Agreement. BI shall credit Royalty
payments against such minimum payment for each Royalty Year, and pay Vion the
short-fall, if any, in accordance with Section 7.2 below.


                       ARTICLE 7. PAYMENT; RECORDS; AUDITS

         7.1 Payment; Reports. All Royalty payments due to Vion under this
Agreement shall be paid within 60 days of the end of each calendar quarter,
unless otherwise specifically provided herein. Each payment of Royalties shall
be accompanied by a report of Net Sales of the Product in the Royalty Territory
in sufficient detail to permit confirmation of the accuracy of the Royalty
payment made.



                                      -18-
<PAGE>   20
         7.2 Minimum Royalty Payments. Except as otherwise provided in this
Agreement, in the event that the aggregate Royalty payments for any Royalty Year
are less than [] for such year, then BI shall include in the last calendar
quarter report furnished under Section 7.1 for such Royalty Year the difference
between the aggregate Royalty payments for such Royalty Year and [], and shall
satisfy its minimum royalty obligation by paying such difference within 60 days
after the end of such last calendar quarter.

         7.3 Exchange Rate; Manner and Place of Payment. Royalty payments and
reports due pursuant to this Agreement shall be calculated and reported for each
calendar quarter. Exchange conversion of foreign payments into U.S. Dollars
shall be made as necessary at the rate of exchange reported by the Deutsche
Bank, Frankfurt am Main, Germany on the date payment is made. All payments owed
under this Agreement shall be made by wire transfer, unless otherwise specified
by Vion.

         7.4 Records and Audit. During the term of this Agreement and for a
period of two (2) years thereafter, the parties shall each keep complete and
accurate records pertaining to the development of the Compound and sale or other
disposition of the Product in sufficient detail to permit the other party to
confirm the accuracy of all payments due hereunder. Each party shall have the
right to cause an independent, certified public accountant to audit such records
to confirm Net Sales, Royalty and other payments for the preceding year, as well
as payments to Third Parties for Development Work (e.g., clinical research
organizations) and other obligations required of either party pursuant to the
terms of this Agreement. Such audits may be exercised during normal business
hours once a year upon notice to such other party. The party requesting the
audit shall bear the full cost of such audit unless such audit discloses a
variance of more than 5% or $50,000 (whichever is larger) from the amount of the
Net Sales, Royalties or other payments due under this Agreement. In such case,
the audited party shall bear the actual out-of-pocket cost of such audit. The
terms of this Section 7.4 shall survive any termination or expiration of this
Agreement for a period of two years.

         7.5 Withholding Obligations.



                                      -19-
<PAGE>   21
         (a) Subject to Section 7.5(b), BI shall be entitled to deduct any
required withholding taxes and other statutory duties from the Royalties and the
initial license fee and milestone payments to be made pursuant to Sections 6.1
and 6.3 hereof, and pay such taxes and duties to the proper tax authorities as
required by law applicable at the time of payment.

         (b) The parties shall exercise reasonable efforts to insure that any
withholding taxes are reduced to the extent possible under the provisions of the
current or any future double taxation agreement between the United States of
America and the Federal Republic of Germany, under which current law requires a
certificate of tax exemption from the German Bundesamt fur Finanzen.

         (c) In order to achieve the applicable reduction in withholding, Vion
will provide BI with the application for a certificate of tax exemption for
royalties under the United States - Germany Double Taxation Treaty, on the
official form (Application for Tax Exemption) and signed by Vion. The
Certificate for Filing a tax return (IRS Form 6166) shall be enclosed with the
Application for Tax Exemption. BI will provide Vion with the official forms and
Vion will promptly complete them after the Effective Date.

         (d) Every three (3) years, or on such other schedule as the parties may
agree, Vion will submit a new Application for Tax Exemption that complies with
the requirements set forth in Section 7.5(c) above.


            ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS AND INFRINGEMENT

         8.1 Patentable Inventions. BI shall own all Inventions made solely by
its employees and agents, and all Patent Rights claiming such Inventions. Vion
shall own all Inventions made solely by its employees and agents, and all Patent
Rights claiming such Inventions. All Inventions made jointly by employees or
agents of BI and employees or agents of Vion shall be owned jointly by BI and
Vion ("Joint Inventions").

         8.2 Prosecution and Maintenance of Patent Rights.



                                      -20-
<PAGE>   22
         (a) In the event that an Invention is conceived by either party, the
inventing party shall promptly notify the other party, and the parties shall
discuss such Invention and the desirability of filing patent applications
covering such Invention. Such discussions shall be subject to Article 9. The
inventing party shall have the first right to file patent applications and
prosecute such patents, at its own expense, but such party shall consider in
good faith the requests and suggestions of the other party with respect to
strategies for filing and prosecuting such patent applications. The inventing
party shall keep the other party informed of progress with regard to the filing,
prosecution, maintenance, enforcement and defense of patents and patent
applications subject to this Section 8.2(a). If the inventing party decides not
to pursue protection for any such Invention in any particular country, it shall
give the other party notice to this effect in reasonable time for the other
party to act technically and timely to prosecute. After that notice, the other
party may, at its expense, file, prosecute and maintain a patent application or
patent covering such Invention in such country and shall own such patent
applications or patents. In such case, the inventing party shall also assign, at
no cost, its rights in such patent applications or patents to the other party as
necessary to convey ownership to the other party.

         (b) The parties shall jointly discuss the desirability of filing patent
applications covering Joint Inventions and determine which party shall be
responsible for filing patent applications and prosecuting patents for Joint
Inventions; provided, that the costs incurred in connection therewith shall be
shared on an equal basis. In the event that the parties fail to so determine at
least ninety (90) days prior to the date after which such applications would not
be effective, either party shall have the right, at its expense, to file the
patent applications relating to the Joint Invention, and to take such actions as
are necessary or appropriate to procure patents with respect thereto. In any
event, the party filing the patent applications and prosecuting the patents
shall keep the other informed of progress with regard to the filing,
prosecution, maintenance, enforcement and defense of patents and patent
applications subject to this Section 8.2(b).

         8.3      Infringement by Third Parties.



                                      -21-
<PAGE>   23
         (a) BI and Vion shall promptly notify each other in writing of any
alleged or threatened infringement of the Trademarks or the Licensed Technology
of which they become aware. Both parties shall cooperate with each other in the
defense or prosecution of infringement matters, including if required to bring
such action, the furnishing of a power of attorney.

         (b) Vion shall have the first right to bring and control any action or
proceeding with respect to any alleged or threatened infringement of the Vion
Trademarks, the Joint Technology or the Vion Technology at its own expense and
by counsel of its own choice, and BI shall have the right, at its own expense,
to be represented in any such action by counsel of its own choice. BI shall have
the first right to bring and control any action or proceeding with respect to
any alleged or threatened infringement of the BI Trademarks or BI Technology at
its own expense and by counsel of its own choice, and Vion shall have the right,
at its own expense, to be represented in any such action by counsel of its own
choice.

         (c) If either party with the first right as provided herein fails to
bring an action or proceeding within (i) 90 days following the notice of alleged
infringement or (ii) 10 days before the time limit, if any, set forth in the
appropriate laws and regulations for the filing of such actions, whichever comes
first, the other party shall have the right to bring and control any such action
at its own expense and by counsel of its own choice, and the party with the
first right shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice; provided, however, that Vion shall not
have the right to bring or control any such action with respect to the alleged
infringement of a BI Trademark.

         (d) In the event that the party with the second right elects to bring
an action as provided in Section 8.3(c), such party shall be entitled to: (i)
reimbursement of fifty percent (50%) of its costs and expenses, or (ii) offset
fifty percent (50%) of its costs and expenses against Royalties due hereunder
(in the event that BI brings such action), but in no event shall the Royalty to
Vion be reduced by more than fifty percent (50%) of the amount due in any given
calendar quarter; provided, however, that in the event that the party with the
second right elects to bring an action as provided in Section 8.3(c) with
respect to any alleged 




                                      -22-
<PAGE>   24
or threatened infringement of any of the Trademarks, such party shall be 
entitled to reimbursement of all of its costs and expenses.

         (e) Neither party shall have the right to settle any infringement
litigation under this Section 8.3 in a manner that diminishes the rights or
interests of the other party without the consent of such other party. Except as
otherwise agreed to by the parties as part of a cost sharing arrangement, any
recovery realized as a result of such litigation, after reimbursement of any
litigation expenses of BI and Vion (including, any offset Royalties) shall
belong to the party who brought the action.

         8.4 Infringement of Third Party Rights.

         (a) BI and Vion shall promptly notify each other in writing of any
allegation or claim by a Third Party that the manufacturing, marketing or sale
of the Product in the Field infringes or may infringe the intellectual property
rights of such Third Party.

         (b) Vion shall have the obligation to control any defense of such claim
if it relates to Vion Technology or the Vion Trademarks, and BI shall have the
obligation to control any defense of such claim if it relates to BI Technology
or the BI Trademarks, in each case, at its own expense. In each case, the party
not controlling the defense shall have the right, at its own expense, to be
represented in any such action by counsel of its own choice.

         (c) If such claim relates to Joint Technology, the parties shall
consult and cooperate fully to determine a course of action, including but not
limited to a determination of which party shall have the right to control the
defense of such claim. In each case, the party not controlling the defense shall
have the right to be represented in any such action by counsel of its own
choice, and the reasonable costs incurred by both parties shall be shared on an
equal basis.

         (d) Neither party shall have the right to settle any infringement
litigation under this Section 8.4 in a manner that diminishes the rights or
interests of the other party without the consent of such other party.



                                      -23-
<PAGE>   25
         8.5 Infringement Outside the Field. If either party becomes aware of
any alleged or threatened infringement of the Trademarks or the Licensed
Technology outside the Field, it shall promptly notify the other in writing, and
the parties shall discuss a strategy for responding to such alleged or
threatened infringement. In the absence of agreement between the parties, each
party may take such action as it deems to be in its best interests.


                           ARTICLE 9. CONFIDENTIALITY

         9.1 Nondisclosure. During the term of this Agreement and for a period
of ten (10) years after termination hereof, each party will maintain all
Confidential Information in trust and confidence and will not disclose any
Confidential Information to any Third Party or use any Confidential Information
for any purpose except as expressly authorized by this Agreement, including
Section 9.3. Each party may use such Confidential Information only to the extent
required to accomplish the purposes of this Agreement. Each party will use at
least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its employees, agents,
consultants and other representatives do not disclose or make any unauthorized
use of the Confidential Information. Each party will promptly notify the other
upon discovery of any unauthorized use or disclosure of the Confidential
Information.

         9.2 Exceptions. Confidential Information shall not include any
information that the receiving party can prove by competent evidence:

         (a) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available;

         (b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;

         (c) is hereafter furnished to the receiving party by a Third Party, as
a matter of right and without restriction on disclosure;




                                      -24-
<PAGE>   26
         (d) is independently developed by the receiving party without the aid,
application or use of Confidential Information; or

         (e) is the subject of a written permission to disclose provided by the
disclosing party.

         9.3 Financial Terms. Except as required by applicable law (including,
but not limited to securities laws), the parties agree that the material
financial terms of this Agreement will be considered Confidential Information of
both parties. Notwithstanding the foregoing, either party may disclose such
terms as are required to be disclosed in its financial statements. Either party
shall have the further right to disclose the material financial terms of this
Agreement under strictures of confidentiality to any potential acquiror, merger
partner or other bona fide potential strategic partner.

         9.4 Publications. Each party to this Agreement recognizes that the
publication of papers regarding results of the Development Work hereunder and
other information resulting from the Development Work, including oral
presentations and abstracts, may be beneficial to both parties provided such
publications are subject to reasonable controls to protect Confidential
Information. In particular, it is the intent of the parties to maintain the
confidentiality of any Confidential Information included in any notification on
conceived inventions and patent applications until such foreign patent
application has been published. Accordingly, each party shall have the right to
review and approve any paper proposed for publication by the other party,
including oral presentations and abstracts, which utilizes data generated from
the Development Work and/or includes Confidential Information of the other
party. Before any such paper is submitted for publication, the party proposing
publication shall deliver a complete copy to the other party at least 45 days
prior to submitting the paper to a publisher. The receiving party shall review
any such paper and give its comments to the publishing party within 30 days of
the delivery of such paper to the receiving party. With respect to oral
presentation materials and abstracts, the parties shall make reasonable efforts
to expedite review of such materials and abstracts, and shall return such items
as soon as practicable to the publishing party with appropriate comments, if
any, but in no event later than 30 days 



                                      -25-
<PAGE>   27
from the date of delivery to the receiving party. The publishing party shall
comply with the other party's request to delete references to such other party's
Confidential Information in any such paper and agrees to withhold publication of
same for an additional 90 days in order to permit the parties to obtain patent
protection, if either of the parties deem it necessary, in accordance with the
terms of this Agreement.


              ARTICLE 10. REPRESENTATIONS, WARRANTIES AND COVENANTS

         10.1 Corporate Power. Each party represents and warrants to the other
that: (a) it has the legal right and power to enter into this Agreement and to
extend the rights and licenses granted to the other herein; and (b) the
performance of such obligations will not conflict with its charter documents or
any agreements, contracts or other arrangements to which it is a party.

         10.2 Organization; Due Authorization. BI represents and warrants to
Vion that BI is a limited liability company duly organized, validly existing and
in good standing under applicable German law and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement. Vion
warrants to BI that Vion is a corporation duly organized, validly existing and
in good standing under applicable Delaware law and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement.

         10.3 Binding Agreement. Each party represents and warrants to the other
that, upon the delivery and execution of this Agreement, this Agreement shall
constitute a valid and binding obligation of such party enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

         10.4 Intellectual Property Rights. Vion represents and warrants that,
as of the Effective Date, to the best of its knowledge and belief: (a) there are
no unexpired patents claiming the Compound, its uses or methods for its
manufacture; (b) the 



                                      -26-
<PAGE>   28
manufacture, sale and use of the Product as contemplated in this Agreement, does
not infringe the patent rights of any Third Parties; (c) Vion owns or possesses
adequate licenses or other rights to all Patents and Know-How necessary to grant
the licenses granted to BI under Article 5 hereof and fulfil its other
obligations hereunder. Vion further represents and warrants that, to the best of
its knowledge and belief, there are not now any threatened or pending
proceedings against Vion by any Third Party that would interfere with or prevent
BI from using the Vion Technology, the Compound, its uses or methods for
manufacture or the Vion Trademarks as provided herein; AND (d) NONE OF THE
RESEARCH ON THE COMPOUND CONDUCTED IN DR. ALAN SARTORELLI'S LABORATORY WAS
FUNDED BY THE UNITED STATES GOVERNMENT.

         10.5 Compliance with Laws. Each party hereby represents, warrants,
covenants and agrees that it shall comply with all applicable foreign, federal,
state and local laws and regulations relating to the manufacture, use,
distribution and sale of the Product by such party as contemplated by this
Agreement, the Co-Promotion Agreements and the Supply Agreement. In addition,
Vion will fulfill all Phase IV requirements placed on the Product NDA.

         10.6 Data and Information. Vion represents that, as of the Effective
Date, to the best of its knowledge and belief, all data and information provided
by Vion to BI hereunder concerning the Vion Technology and the Compound are true
and correct in all material respects.

         10.7 Disclaimer of Warranties. The parties understand that the
Collaboration will involve technologies that have not been approved by any
regulatory authority and that neither party guarantees the safety or usefulness
of the Compound or the Product. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER PARTY OF ANY
NATURE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.


                              ARTICLE 11. INDEMNITY

         11.1 Vion Indemnity Obligations. Vion shall indemnify, defend and hold
BI and its Affiliates and their respective 


                                      -27-
<PAGE>   29
employees and agents harmless from and against any and all claims, liability,
damage, loss, cost or expense, including without limitation reasonable legal
fees, in connection with any Third Party claims which (a) arise out of any
breach of any material provision of this Agreement or any representation or
warranty of Vion contained in this Agreement, or (b) arise out of any claim of
infringement of any patent or trademark or unauthorized use of a trade secret
(other than the BI Trademarks or the BI or Joint Technology) in connection with
the use of the Vion Technology or Vion Trademarks as contemplated by this
Agreement, the Co-Promotion Agreements or the Supply Agreement, or (c) arise out
of claims for bodily injury, death or property damage arising from the
manufacture (except when manufactured by BI or a BI Affiliate or a BI
sublicensee), distribution, use or sale of the Product hereunder, to the extent
attributable to: (i) any failure to conform with the warranties set forth in the
Supply Agreement with respect to the manufacture of the Product manufactured by
Vion or its Affiliates or sublicensees pursuant to Section 5.8 hereof, or (ii)
any failure by Vion or its Affiliates to perform their obligations hereunder in
accordance with applicable laws and regulations (except, in each case, to the
extent such claim relates to the negligence or willful misconduct of BI).

         11.2 BI Indemnity Obligations. BI shall indemnify, defend and hold
Vion, its Affiliates and their respective employees and agents harmless from and
against any and all claims, liability, damage, loss, cost or expense, including
without limitation reasonable legal fees, in connection with any Third Party
claims which: (a) arise out of any breach of any material provision of this
Agreement or any representation or warranty of BI contained in this Agreement,
or (b) arise out of any claim of infringement of any patent or trademark or
unauthorized use of a trade secret (other than the Vion Trademarks or the Vion
or Joint Technology) in connection with the use of the BI Technology or BI
Trademarks as contemplated by this Agreement, the Co-Promotion Agreements or the
Supply Agreement, or (c) arise out of claims for bodily injury, death or
property damage arising from the distribution, use or sale of the Product
hereunder or manufacture or labeling of the Product when manufactured or labeled
by BI or a BI Affiliate or a BI sublicensee, to the extent attributable to any
failure by BI, its Affiliates or sublicensees to perform their obligations
hereunder in accordance with applicable laws and regulations 



                                      -28-
<PAGE>   30
(except, in each case, to the extent such claim relates to the negligence or
willful misconduct of Vion).

         11.3 Procedure. A party or any of its Affiliates or their respective
employees or agents (the "Indemnitee") that intends to claim indemnification
under this Article 11 shall promptly notify the other party (the "Indemnitor")
of any loss, claim, damage, liability or action in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor shall
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that the Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Article 11 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 11, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
11. The Indemnitee under this Article 11, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action, claim or liability covered by this indemnification.

         11.4 Insurance. BI and Vion shall each maintain appropriate product
liability insurance with respect to the development, manufacture and sales of
the Product by BI and Vion, respectively, in such amount as BI and Vion,
respectively, customarily maintain with respect to the manufacture or sales of
its other products.


                        ARTICLE 12. TERM AND TERMINATION

         12.1 Term. Unless terminated earlier pursuant to Section 12.2, this
Agreement shall expire and the licenses granted by Vion 



                                      -29-
<PAGE>   31
to BI pursuant to Sections 5.1, 5.2 and 5.4 (subject to the terms and conditions
set forth therein) shall become fully-paid and non-exclusive, on a country by
country basis, upon the expiration of the Royalty Term in such country.

         12.2 Termination for Cause. Either party may terminate this Agreement
upon the occurrence of any of the following:

         (a) upon or after the bankruptcy, insolvency, dissolution or winding up
of the other party (other than dissolution or winding up for the purposes of
reconstruction or amalgamation);

         (b) upon the material breach of any material provision of this
Agreement by either party (a "Material Breach"), which has not been cured within
sixty (60) days after written notice from the other party (a "Default"). The
non-Defaulting party may, in its discretion, terminate this Agreement
immediately upon written notice of such Default and proceed against the other
party for all applicable damages. Without limiting the generality of the
foregoing, the parties hereto expressly agree that in the event of a Default by
either of them, in addition to all other remedies available at law or in equity,
which may be available to the other, it is agreed that the non-Defaulting party
may, at its option, notify the Defaulting party that it wishes to proceed with
the development of the Product in the Field on an exclusive basis. []

         (c) if no NDA for the Product has been filed in the United States or
Europe by December 31, 2003; or

         (d) if the Executive Committee determines, based upon scientific and
regulatory prospects, that an NDA for the Product is not supportable in the
United States or Europe.

[]

         12.3 Effect of Expiration or Termination.

         (a) Expiration or termination of this Agreement, for whatever reason,
shall not affect any rights or obligations accrued by either party prior to the
effective date of expiration or termination, including without limitation, the
obligation to pay Royalties on Product sold prior to expiration or termination.




                                      -30-
<PAGE>   32
         (b) Termination of this Agreement under Section 12.2 shall not
prejudice any claim for damages a party may have under this Agreement or the
Other Agreements.

         (c) Except as otherwise provided in Article 12, upon expiration or
termination of this Agreement both parties shall immediately cease using the
other party's Licensed Technology and Confidential Information.

         (d) The obligations and rights of the parties under Articles 9, 11, 14
and 15, and Sections 5.4(g), 7.4, 10.4, 12.1 and 12.3 shall survive termination
or expiration of this Agreement.

         12.4 []. In order to avoid any future disruption or delay in the
progress of the Development Work which may result from Vion's inability to meet
its financial obligations under this Agreement, the parties have agreed that
from and after the Effective Date, until Vion receives NDA approval for the
Product, Vion shall provide to BI its financial statements (including a
Statement of Cash Flow) contained in its Forms 10-KSB and 10-QSB (or any similar
form) as filed with the Securities and Exchange Commission. []

         12.5 []




                              ARTICLE 13. PUBLICITY

         13.1 Publicity Review. BI and Vion will jointly discuss and agree on
any statement to the public regarding the execution or the subject matter of
this Agreement or the Other Agreements, except with respect to disclosures
required by law or regulation. Promptly following the Effective Date, the
Parties shall issue a mutually acceptable press release. All statements made
shall be consistent with the goals of compliance with law and maximizing sales
and distribution of the Product.


                         ARTICLE 14. DISPUTE RESOLUTION




                                      -31-
<PAGE>   33
         14.1 Disputes. The parties recognize that disputes as to certain
matters may from time to time arise during the term of this Agreement that
relate to either party's rights and/or obligations hereunder or thereunder. It
is the objective of the parties to establish procedures to facilitate the
resolution of disputes arising under this Agreement in an expedient manner by
mutual cooperation and without resort to litigation. To accomplish this
objective, the parties agree to follow the procedures set forth in this Article
14 if and when a dispute arises under this Agreement between the parties or
among the Steering Committee.

         14.2 Dispute Resolution Procedures. If the parties or the Steering
Committee cannot resolve any dispute within thirty (30) days of formal request
by either party to the other, either party may, by written notice to the other,
have such dispute referred to the Executive Committee, for attempted resolution
by good faith negotiations within 30 days after such notice is received. If any
such dispute arising out of or relating to this Agreement is not resolved
between the parties or the Steering Committee or the Executive Committee, then
the parties shall submit to non-binding mediation in New York, New York (or
another mutually acceptable location) using a neutral mediator having experience
with the industry in accordance with the rules of the Center for Public
Resources (costs to be shared equally) as a last resort to resolve such dispute
before submission to a court of competent jurisdiction. The parties hereby
submit to the jurisdiction of the federal courts located within the State of
Connecticut for the conduct of any suit, action or proceeding arising out of or
relating to this Agreement. The parties each hereby waive any and all right to a
jury trial in any such action.



                                      -32-
<PAGE>   34
                            ARTICLE 15. MISCELLANEOUS

         15.1 Assignment.

         (a) Notwithstanding any provision of this Agreement to the contrary,
either party may assign any of its rights or obligations under this Agreement:
(i) in any country to any Affiliates; provided, however, that such assignment
shall not relieve the assigning party of its responsibilities for performance of
its obligations under this Agreement; or (ii) in connection with the sale of all
or substantially all of its assets.

         (b) Except as otherwise provided in Section 15.1(a) above, neither
party may assign any of its rights or obligations under this Agreement without
the prior written consent of the other party.

         (c) This Agreement shall survive any merger of either party with or
into another party and no consent for a merger or similar reorganization shall
be required hereunder; provided, that in the event of such merger or in the
event of a sale of all assets, no intellectual property rights of the acquiring
corporation shall be included in the technology licensed hereunder.

         (d) This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the parties. Any assignment not in
accordance with this Agreement shall be void.

         15.2 Force Majeure. Neither party shall lose any rights hereunder or be
liable to the other party for damages or losses on account of failure of
performance by the defaulting party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the control of the defaulting party, provided
that the party claiming force majeure has exerted all reasonable efforts to
avoid or remedy such force majeure.

         15.3 Payment in U.S. Dollars. All payments due to either party under
this Agreement shall be paid in U.S. Dollars.

         15.4 Notices. Any notices or communications provided for in this
Agreement to be made by either of the parties to the other 


                                      -33-
<PAGE>   35
shall be in writing, in English, and shall be made by prepaid air mail with
return receipt or by overnight or similar courier service, addressed to the
other at its address set forth below. Any such notice or communication may also
be given by hand, or facsimile to the appropriate designation. Notices shall be
sent:

If to BI, to:                       Boehringer Ingelheim International GmbH
                                    Postbox 200
                                    D-55216 Ingelheim, Rhein
                                    Germany
                                    Attention: Corporate Licensing
                                    Telephone:  011 49 61 32 77 34 08
                                    Facsimile:  011 49 61 32 77 35 83

         with a copy to:

                                    Boehringer Ingelheim International GmbH
                                    Postbox 200
                                    D-55216 Ingelheim, Rhein
                                    Germany
                                    Attention: Head of Legal Department
                                    Telephone:  011 49 61 32 77 2106
                                    Facsimile:  011 49 61 32 77 3583


If to Vion, to:                     Vion Pharmaceuticals, Inc.
                                    Four Science Park
                                    New Haven, Connecticut 06511
                                    Attention:  President and CEO
                                    Telephone:  1 203 498 4210
                                    Facsimile:  1 203 498 4211

         with a copy to:

                                    Terence Jones, Esq.
                                    Wiggin & Dana
                                    One Century Tower
                                    P.O. Box 1832
                                    New Haven, Connecticut   06508-1832
                                    Telephone:  1 203 498 4324
                                    Facsimile:  1 203 782 2889



                                      -34-
<PAGE>   36
Either party may by like notice specify or change an address to which notices
and communications shall thereafter be sent. Notices sent by mail, facsimile or
cable shall be effective upon receipt and notices given by hand shall be
effective when delivered.

         15.5 Governing Law. This Agreement shall be governed by the laws of the
State of Connecticut, as such laws are applied to contracts entered into and to
be performed within such state without giving effect to conflicts of laws
principles.

         15.6 Waiver. Except as specifically provided for herein, the waiver
from time to time by either of the parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of same or of any other of such party's rights or remedies provided in
this Agreement.

         15.7 Severability. If any term, covenant or condition of this Agreement
or the application thereof to any party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (a) the remainder of this Agreement,
or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the parties that the basic purposes of this Agreement are to be effectuated.

         15.8 Independent Contractors. It is expressly agreed that Vion and BI
shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership or agency of any kind. Neither Vion
nor BI shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior written authorization of the party to do so.




                                      -35-
<PAGE>   37
         15.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         15.10 Entire Agreement. This Agreement and the Other Agreements between
the parties of even date herewith set forth all of the covenants, promises,
agreements, warranties, representations, conditions and understandings between
the parties hereto and supersede and terminate all prior agreements and
understanding between the parties. There are no covenants, promises, agreements,
warranties, representations conditions or understandings, either oral or
written, between the parties other than as set forth herein and therein. No
subsequent alteration, amendment, change, agreement or addition to this
Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by the respective authorized officers of the parties.

         IN WITNESS WHEREOF, the parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first above
written.


BOEHRINGER INGELHEIM                VION PHARMACEUTICALS, INC.
 INTERNATIONAL GmbH


By: /s/ Dr. H. Peter Gieseler       By: /s/ John Spears
    --------------------------          --------------------
Name:    Dr. H. Peter Gieseler      Name:  John Spears
Title:  Authorized Signatory        Title:  President & CEO


By: /s/ Hans-Peter Muller
    ------------------------
Name:  Hans-Peter Muller
Title:  Authorized Signatory






                                      -36-
<PAGE>   38
                                      -37-
<PAGE>   39
                                                                     SCHEDULE 1

                                 VION TECHNOLOGY

To the extent relating to the Compound or Product:

1.       All clinical data generated by Vion or Yale University which Vion has
         rights to, as such clinical data relates to the Product.

2        All preclinical formulation, manufacturing information or Know-How
         related to proprietary formulations or manufacturing processes to which
         Vion has rights.

3.       All IND or equivalent regulatory approvals to which Vion has rights.

4.       Orphan drug status applied for and received, or future orphan drug
         requests; head and neck (received); cervical (received).

5.       All Know-How regarding product development by Vion or Yale University
         which Vion has rights to relating to the use of the Product in
         combination with other treatment modalities or in other indications in
         the Field.

6.       Any invention disclosures regarding the Product which lead to patent
         applications by Vion or Yale University which are owned by Vion, or to
         the extent Vion is permitted to grant a sublicense to BI, licensed to
         Vion by a Third Party.

7.       The following specific intellectual property associated with the
         development of the Compound:

         a.     Bulk Pharmaceutical Manufacturing Process
         b.     Stability Data for Bulk
         c.     Analytical Methods for Bulk
         d.     Complete Characterization Data package for Bulk Substance
         e.     Finished Product Manufacturing Process
         f.     Stability Data for Finished Drug Product
         g.     Analytical Methods for Finished Drug Product
         h.     Complete Characterization Data package for Finished Drug Product
         i.     Animal Pharmacokinetic Data
         j.     In vitro and In vivo metabolism data
         k.     Animal Toxicological Data
<PAGE>   40
         l.       IND for US Regulatory Submission
         m.       Clinical Trial Application (CTX) with Medicines Control Agency
                  (MCA) in United Kingdom
         n.       Clinical Trial Applications for Spain, France, Belgium, and
                  Germany
         o.       Data on Phase I/II Trial
         p.       Interim Toxicity Data for ongoing Phase III trial at Yale
         q.       Clinical Investigator's Brochure
         r.       Phase III, Global Clinical Protocol using Porfiromycin as an
                  adjuvant to Radiation
         s.       List of 40 centers involved with the Phase III Trial in the US
                  and Europe
         t.       Copy of Orphan Status Designation by the FDA for the Compound
                  for treatment of head and neck cancer
         u.       Copy of Orphan Status Designation by the FDA for the Compound
                  for treatment of Cervical Cancer


                                      -39-
<PAGE>   41
                                                                       EXHIBIT A

                                DEVELOPMENT PLAN

                                  SEE ATTACHED




                                      -40-
<PAGE>   42
DEVELOPMENT PLAN FOR PROMYCIN

The following is a summary of a possible development plan for Promycin. While
there is evidence that Promycin may be effective when used in combination with
chemotherapy we should seek to establish Promycin as the drug to be added to any
radiation therapy regimen. []While it would be possible to perform additional
studies in earlier stage (i.e. resectable) head and neck cancer I believe it
would be advantageous to extend its use into other tumor types. Should we obtain
approval in other tumors it would suggest that Promycin should be used whenever
radiation therapy is employed.

The table below summarizes the current and potential development plan for North
America and European countries. Once Vion and BI have entered into an agreement
we will need to set up a steering committee to discuss these options and develop
a detailed plan for recruitment of investigators, development protocols etc.

<TABLE>
<CAPTION>
--------------------- --------------------------- -------- ------------ ----------------- --------------
Indication            Study                       No.      Time to      Estimated         Initiation
                                                  Pts.     Complete     Costs             Date
--------------------- --------------------------- -------- ------------ ----------------- --------------
<S>                   <C>                         <C>      <C>          <C>               <C> 
Head and              Randomized trial of XRT     []       [] yrs       []                underway
Neck                  +/- Promycin
--------------------- --------------------------- -------- ------------ ----------------- --------------
[]                    Pilot trial of XRT +        []       [] yr        $[]               []
                      Promycin
                      --------------------------- -------- ------------ ----------------- --------------
                      Randomized trial of XRT     []       [] yrs       []                []
                      +/- Promycin
--------------------- --------------------------- -------- ------------ ----------------- --------------
[]                    Pilot trial of XRT +        []       [] yr        []                []
                      Promycin
                      --------------------------- -------- ------------ ----------------- --------------
                      Randomized trial of XRT     []       [] yrs       []                []*
                      +/- Promycin
--------------------- --------------------------- -------- ------------ ----------------- --------------
TOTAL PATIENTS                                    []
--------------------- --------------------------- -------- ------------ ----------------- --------------
</TABLE>


*Pending pilot and interim pivotal head and neck trial analysis


Issues relevant to Proposed Clinical Development

1.       Trial Initiation -

         *        [] Cancer - The pilot trial in [] cancer should begin [].
                  Eligible patients will be those with stage [] cancer.  
                  The pilot trial in [] cancer could begin in [].

         *        [] Cancer - The pilot study in [] cancer could begin [] and
                  would aim to accrue [] patients. This should be a multi-center
                  trial to lend greater credence to the results. There would be
                  no immediate plan to initiate a pivotal trial in [] cancer
                  until the Vion and BI Executive Committee have had the
                  opportunity to review the results of the pilot [] cancer study
                  and the interim analysis of the pivotal head and neck trial.





2.   Ease of initiating and completing new trials - In the course of initiating
     the H&N trial for Vion, Covance has recruited 40 clinical centers (28 in
     Europe, 12 in US). This has provided Vion 
<PAGE>   43
     with access to these centers for additional clinical trials. For trials in
     [] patient accrual should be [] from the majority of the centers. The
     accrual of [] cancer patients will be []. []

3.   []

4.   Study design - Study design in the [] additional indications should
     parallel the head and neck studies.


5.   Patients required - For the phase III pivotal studies randomization between
     XRT and XRT + Promycin would require []

6.   Development in Japan - This will require additional evaluation of market,
     regulatory, and cost issues. If development appears to be feasible and
     attractive clinical development would begin in []. Costs for the
     development in Japan are estimated to be about [].

7.   Countries in need of local clinical trials before approval - The execution
     of local trials in those countries i.e. Mexico, China, Taiwan etc.) will be
     evaluated separately and the work would be initiated only if financially
     attractive.
<PAGE>   44
                                                                       EXHIBIT B

                               CO-PROMOTION TERMS



                                      -41-
<PAGE>   45
                                                                       EXHIBIT B

  THE PARTIES CONTEMPLATE A SEPARATE CO-PROMOTION AGREEMENT FOR CANADA BASED ON
                 THIS TERM SHEET WHICH IS APPLICABLE FOR THE USA

                             CO-PROMOTION TERM SHEET

THIS CO-PROMOTION AGREEMENT is effective as of ___, by and between ROXANE
LABORATORIES, INC., a Delaware corporation having offices at 1809 Wilson Road,
Columbus, Ohio 43228 ("RLI") and VION PHARMACEUTICALS, INC., a Delaware
corporation having offices at Four Science Park New Haven, Connecticut 06511
("VION").

                                   WITNESSETH

WHEREAS, BII GmbH and VION entered into a Collaborative Development and
Distribution Agreement on _______ ("Collaborative Agreement") relating to the
development and commercialization of the pharmaceutical product porfiromycin for
head and neck cancer and other cancers (hereinafter referred to as "Product");
and

WHEREAS, the terms and conditions of the Collaborative Agreement provide for
VION to enter into a Co-promotion Agreement with an Affiliate of BII GmbH for
the marketing of Product in the United States; and

WHEREAS, VION and BII GmbH, acting through its indirect wholly owned subsidiary
RLI wishes to enter into an agreement to market and promote Promycin(TM) in the
United States in exchange for a share of the commercial benefits of such an
undertaking.

NOW, THEREFORE, the Parties hereby agree as follows:

DEFINITIONS

All definitions shall be those set forth in the Collaboration Agreement between
VION and BII GmbH dated __________ unless specifically modified herein.

"Agreement" shall mean this Co-promotion Agreement or as it may hereafter be
supplemented or amended from time to time.

"Co-promote" or "Co-promotion" shall mean the act of marketing and Detailing the
Product in the Co-Promotion Territory during the Term.

"PSR" shall mean those professional sales representatives comprising RLI's or
VION's dedicated sales forces, who have been assigned to the promotion and
Detailing of the Product to the healthcare community.
<PAGE>   46
"Detail", "Detailed" or "Detailing" shall mean the personal, face to face
discussion by a PSR during a call wherein the Product is promoted directly to a
healthcare practitioner capable of prescribing the Product.

"Marketing Plan" shall mean the plan of action developed annually by RLI with
the assistance and cooperation of VION and reviewed and approved by the Joint
Marketing Committee to promote the Product including, but not limited to, sales
plans, pricing, allocation of Detailing, total number and identity of
institutions and prescribing practitioners targeted for promotion, advertising
and other promotional material and aids, symposia, phase IV studies, and the
preparation of various promotion programs.

"Territory" shall mean the fifty (50) states of the United States and the
District of Columbia and Puerto Rico.

"Joint Marketing Committee" shall mean the group of individuals from RLI and
VION responsible for communicating the Marketing Plan between the two companies,
and coordinating their respective field force activities to ensure the proper
implementation of the Marketing Plan. For the purpose of coordinating
promotional and marketing activities of each Party with respect to the Product
in the Territory, the Parties will set up a Joint Marketing Committee in which
both Parties will be represented. The Joint Marketing Committee will be composed
of three (3) representatives from RLI, and two (2) from VION, and will be
chaired by a representative from RLI.

OBJECTIVES

RLI and VION wish to cooperate in the promotion of the Product in the Territory
by providing Details and performing promotional activities in order to maximize
the sales of the Product to the mutual profit and advantage of both Parties as
specified in the Marketing Plan.

Structure

Nature of the Cooperation:

The cooperation between the Parties as set forth In this Agreement will not
constitute nor be construed as constituting a partnership or a relationship of
agent and principal. Neither Party shall, under any circumstances act as or
represent itself to be a partner, agent or a representative of the other.
Neither Party shall have any responsibility for the firing, compensation, or
employee benefits of the other Party's employees. No employee or representative
of either Party shall have any authority to bind or obligate the other Party to
this Agreement for any sum or in any manner whatsoever, or to create or impose a
contractual or other liability on the other Party without said Party's
authorized written consent. For all purposes, and notwithstanding 



                                       2
<PAGE>   47
any other provision of this Agreement to the contrary, the legal relationship of
the Parties under this Agreement shall be that of independent contractors.



                                       3
<PAGE>   48
Joint Marketing Committee:

During the first year of this Agreement, the Joint Marketing Committee shall
meet every three months at alternating sites. Thereafter, meetings will be held
twice per year, at alternating sites. Each party shall bear the expenses for its
representatives to attend the Joint Marketing Committee meetings.

Strategy/Role of Parties/Commitments

Strategy

The Parties agree that the most efficient strategy to achieve the objectives of
their cooperation is through the joint promotion of the Product by their sales
forces, using a centrally coordinated marketing approach, under the trademark
Promycin(TM) with identical packaging and promotional literature. When feasible,
the logos and company names of both parties will appear on all promotional
materials.

RLI's Role

RLI shall use its reasonable efforts, consistent with accepted business
practices and legal requirements, to train, deploy, motivate through appropriate
incentives, and use it's PSRs and the PSR's of VION to promote and Detail the
Product in the Territory in accordance with the promotional programs described
In the Marketing Plan, and in a such a manner and as expeditiously as RLI
normally adopts in launching, promoting and Detailing a pharmaceutical product
having commensurate commercial potential.

RLI shall have the responsibility and authority to []

RLI shall have responsibility for []

RLI shall have authority and responsibility for []

RLI shall have authority and responsibility for []

RLI shall have authority and responsibility for []. The [] VION in accordance
with the terms of the Supply Agreement.

RLI shall have authority and responsibility for handling all []. However, VION
shall have responsibility for maintaining [].

RLI shall have authority and responsibility for handling [].

RLI shall have authority and responsibility for [].



                                       4
<PAGE>   49
RLI staff have authority and responsibility for handling development and
production of promotional materials.

RLI shall have authority and responsibility for [].

VION's Role

VION will provide at [] sufficient supplies of the Product in finished package
form to fulfill all orders from customers in accordance with the terms of the
Supply Agreement.

VION shall use its reasonable efforts, consistent with accepted business
practices and legal requirements, to hire, train, deploy, motivate through
appropriate incentives, and use its PSRs to promote and Detail the Product in
the Territory in accordance with the promotional programs described in the
Marketing Plan, and in a manner sufficient to carry out its responsibilities
under that plan and this Agreement.

VION shall cooperate with RLI in providing information about the product and in
reviewing the Marketing Plan to permit the maximization of sale.

VION will have members of its sales training department meet with RLI as
required to gain knowledge about the Product and the promotional and marketing
strategies (an initial training program for the Product for each of VION's
PSR's, will be conducted by RLI at its facilities, with VION assuming the costs
of its own personnel).

VION will cooperate with RLI and conduct such testing as may be necessary to
 assist in responding to questions or complaints about the Product.




                                        5
<PAGE>   50
Obligations of the Parties

Government Contact Reporting

VION shall promptly notify RLI upon being contacted by the FDA or any
governmental agency relating to the manufacture, promotion and/or sale of the
Product. VION will, to the extent practical, consult with RLI so that a
coordinated response is given.

Promotional Materials

RLI shall provide VION with all required sales and promotional material in
quantities sufficient to allow VION's representatives to Detail the Product in
accordance with the Marketing Plan then in effect. VION shall use only those
sales and promotional materials provided by RLI and shall not in any manner
after such material provided by RLI or use any material not approved by the
Joint Marketing Committee.

Sales Training

RLI shall provide VION with initial training and training materials in
sufficient quantity to allow VION to maintain a trained sales force
knowledgeable in the appropriate methods for Detailing the Product. VION shall
have members of its sales training department meet with RLI to acquire knowledge
about the Product and the promotional plan and marketing strategies to
facilitate training of its representatives. VION shall, at its own cost ensure
that its representatives receive additional training as may be necessary so that
they remain effective and knowledgeable about future developments of the
Product.

Product Orders

VION shall promptly refer any orders for the Product from third parties to RLI
so that such orders can be processed on a timely basis.

Information Requests

In addition to adverse reaction reports, all questions and inquiries regarding
the Product received by VION, and all questions requiring a written response
shall be forwarded by VION to RLI as soon as practical after receipt.

Sales Incentive

Each Party shall incorporate the promotion of the Product into its own incentive
plan for its own sales force in order to foster promotion of the Product. Each
party shall use its own discretion in deciding the level of incentive
compensation to be paid for the Product. Each Party will advise its PSRs that
they are [].




                                        6
<PAGE>   51
Label and Printed Materials

RLI represents and warrants that all sales, advertising, promotional and
training materials provided to VION by RLI will conform to the Product's
approved labeling.

Government Contact

Each party will provide to the other written notice of any inquiries from, or
positions taken by the FDA or any other government agency which may affect the
manufacture, marketing or sale of the Product.

Compensation

Profit Sharing

[] For purposes hereof, "Net Sales" shall have the meaning assigned to such term
in Section 1.27 of the Collaboration Agreement. RLI shall pay VION its
percentage of Net Sales within thirty (30) days after the end of each calendar
quarter.

Field Force Activities

Detailing Efforts

Each party's sales force shall promote the Product in a way that is both cost
efficient yet provides coverage of the target prescriber population as set forth
in the Marketing Plan.

Call Reporting

Each party will generate and maintain their own internal call reporting system
which shall be the basis for generating reports on Detailing activity to
designated institution and physician targets within 45 business days after the
end of each calendar quarter. The parties will exchange reports displaying the
call frequency by institution and target physician specialty.




                                       7
<PAGE>   52
Institution and Physician Target Lists

In order to better manage and coordinate Detailing, RLI and VION will identify
the institutions and physicians for the purposes of optimizing the Detailing
efforts, and determining which Institutions and physicians each Party will
Detail the Product to.


Managed Health Care and VA Accounts

[            ]

Governmental Rebate Programs

[            ]

Accounting Reports and Payments

Quarterly Reports

Sales

Within 30 days after the end of each calendar quarter, RLI will provide VION
with an accounting report of the prior quarter's sales activity, including Gross
Sales, Net Sales, and VION's [] share of Net Sales.

Audits

During the term of this Agreement and for a period of two (2) years thereafter,
the parties shall each keep complete and accurate records directly related to
the sale and promotion of the Product in order to determine the accuracy of any
reports and to verify the computation of the amounts due and performance under
the Marketing Plan. Each party shall have the tight to cause an independent
certified public accountant to audit such records. Such audits may be exercised
during normal business hours once a year upon notice to such other party. The
party requesting the audit shall bear the full cost of such audit unless such
audit discloses a variance of more than 5% or $50,000 (whichever is larger). In
such case, the audited party shall bear the actual out-of-pocket cost of such
audit. The terms of this section shall survive any termination or expiration of
this Agreement.

Product Recall



                                       8
<PAGE>   53
In the event that either Party determines that an event incident or circumstance
has occurred which may result in the need for a "recall" or "market withdrawal",
as such terms are defined in a 21 CFR 7.3, of the Product, or any lots thereof,
such Party shall advise the other and the Parties shall consult with respect
thereto.

Tradedress and Packaging

Trademark and Tradedress

The Product will bear the Trademark Promycin(R) which was registered by VION in
the US on May 20, 1997, Registration Number 2,064,076 and the tradedress of RLI
(ROXANE(R)). VION shall have the sole responsibility for maintaining the
Trademark's registration. RLI shall have the sole responsibility for maintaining
its trademarks and tradedress.

Name and Logo

Both RLI's and VION's names will appear on all promotion materials (except where
prohibited by law or regulation). Each party shall have the right to review and
approve the use of its name and/or logo on any promotional and advertising
materials. Such materials shall be furnished to the other party in reasonable
time to permit review and comment prior to final publications.

VION may use the name Roxane Laboratories, Inc., and its logo solely to the
extent required to fulfill, its obligations under this Agreement. RLI and its
Affiliates may use the name VION Pharmaceuticals, and its logo solely to the
extent required to fulfill its obligations under this Agreement or the
Collaboration Agreement.

Term and Termination

Term - This Agreement shall be effective as of the Agreement's effective date
and shall continue for a term of ten (10) years with automatic renewal for
periods of five (5) years each unless either party terminates on eighteen (18)
months prior notice.

Default - This Agreement may be terminated by written notice by either party in
the event that the other has defaulted in any manner which would materially
illustrate the purpose and continuation of this Agreement and shall have failed
to remedy such default within sixty (60) days after notice thereof from the
non-defaulting party.

Debtor Proceedings - If either party shall commence as debtor any proceedings
under any insolvency, reorganization, readjustment of debt, dissolution or
liquidation law or statute of the Federal Government or any State Government or
any subdivision of either now or hereafter in effect or if any such proceedings
shall be commenced against either party, or any trustee or receiver in respect
of either parry shall be appointed in any such proceedings, and any such party
shall by any act or failure to act indicate approval of, or consent to, or
acquiescence in 



                                       9
<PAGE>   54
such proceedings or in the appointment of any such trustee or receiver, or if
any such proceedings brought against either party shall be approved by any court
or shall remain undismissed for ninety (90) days; or if any warrant of
attachment shall be issued against all the assets of either party and shall not
be released within ninety (90) days after its levy, then, in any such case, such
other party not involved in such proceedings shall have the option to terminate
this Agreement by written notice and upon the giving of such notice this
Agreement shall Immediately terminate.

In the event of a material breach by VION of its obligations under the
Co-Promotion Agreement, RLI, at its option. may terminate the Co-Promotion
Agreement. BI or RLI would have an immediate right to continue selling the
Product on the same terms as provided in the Collaboration Agreement for the
Royalty Territory. RLI would pay VION a [] royalty on Net Sales as defined in
the Collaborative Agreement and VION would continue to supply the Product as set
forth in the Supply Agreement at cost plus []. VION would also have a continuing
obligation to use its best efforts to maintain the Products NDA and the Products
Orphan Drug Status.

A material breach under this Agreement would be VION's failure to fulfill its
obligations under the Marketing Plan or its use of promotional materials which
have not been authorized by the Joint Marketing Committee. Upon written notice
from RLI, VION would have sixty (60) days to cure a material breach resulting
from its failure to fulfill its obligations under the Marketing Plan.

Miscellaneous

Force-Majeure

The performance by either party of any covenants or obligations on its part to
be performed hereunder (other than an obligation of either to pay money to the
other) shall be excused by reason of strikes or other labor disturbances, riots,
fires, floods, accidents, wars, embargoes, delays of carriers, inability to
obtain materials from sources of supply or acts, injunctions. or restraints of
governments (whether or not now threatened), or any cause preventing such
performance whether similar or dissimilar to the foregoing and being beyond the
reasonable control of the party bound by rauch covenant or obligation, provided
however, that the party affected shall exert its reasonable diligent efforts to
eliminate or cure or overcome any of such causes and to resume performance of
its covenants with all reasonable speed.

Public Statements - Except as required by applicable law neither VION nor RLI
nor any of their Affiliates shall publicly disclose the specific terms of this
Agreement. Except as required by applicable law, the transactions contemplated
hereby or performance hereunder shall not be without first obtaining the written
consent of the other party hereto unless there has been a prior public
disclosure of the information being disclosed by the other party or with the
other party's consent.




                                       10
<PAGE>   55
Notices - Except as otherwise provided herein, any notice or other
communications sent or delivered hereunder shall be in writing and shall be
effective if hand delivered or if sent by telex, facsimile transmission,
overnight courier or certified or registered mail, postage prepaid.



                                       11
<PAGE>   56
If to RLI, to:

Roxane Laboratories, Inc.
1809 Wilson Road
Columbus, Ohio 43216-6532

ATTENTION:

If to VION, to:
Four Science Park
New Haven, Connecticut 06511

ATTENTION: President & CEO

Copy to:      Terence Jones, Esq.
              Wiggin & Dana
              One Century Tower
              PO Box 1832
              New Haven, CT 06508-1832

or to such address as either party shall hereafter designate by notice to the
other party. A notice shall be deemed to have been given on the date of receipt
by the party.

Assignability - This Agreement shall not be assignable nor its rights hereunder
transferred in any way by either party except by prior written consent of the
other party, which consent may be withheld in such other party's sole
discretion, and except that either party may assign its rights and obligations
to any Affiliate of such party for the period it remains an Affiliate, although
no such assignment shall relieve the contracting party of its primary
responsibility for performance hereunder.

Change of Ownership - In the event of a substantial change in the ownership
control, including, but not limited to the sale, transfer or contribution to any
Third Party or Third Parties of VION's rights to the Product or all or
substantially all of the assets of VION's business or the sale or spin-off,
directly or indirectly. to any Third Party or Third Parties, of a beneficial
interest in fifty percent (50%) or more of the outstanding equity securities or
other ownership interests of VION or any affiliate of VION which owns all or
substantially all of the assets of VION's business (each, a "Change of
Control"), RLI may, (i) at its option in the absence of VION notifying RLI as
provided in the Approval Procedures or (ii) if pursuant to the Approval
Procedures RLI chooses to exercise its option to terminate in accordance with
the Approval Procedures (as defined below), terminate the Co-Promotion Agreement
and RLI would have an immediate right to use the Promycin trademark in the USA
as provided in the Collaborative Agreement for the Royalty Territory. RLI would
pay VION a [] royalty on Net Sales as defined in the Collaborative Agreement and
VION would continue to supply the Product on the terms 



                                       12
<PAGE>   57
set forth in the Supply Agreement. VION would also have a continuing obligation
to use its best efforts to maintain the Products NDA and the Products Orphan
Drug Status. For purposes hereof, a "Third Party" or 'Third Parties" shall mean
any person or entity which engages in a transaction with VION resulting in a
Change of Control of VION.

For purposes of the foregoing paragraph, "Approval Procedures" shall mean the
following: (i) VION may notify RLI in writing in advance of any proposed
Transaction (the "VION Notice") which would constitute a Change of Control, such
notice to contain the identify of the proposed acquirer(s) in the proposed
Transaction and such additional information about the proposed Transaction as
would reasonably permit RLI to assess whether it wishes to exercise its rights
to terminate hereunder, (ii) upon receipt of the VION Notice, RLI shall notify
VION in writing not later than ten (10) business days whether it would exercise
its option to terminate the Co-Promotion Agreement in the event of such
Transaction (the "RLI Response"). If RLI determines not to exercise its right of
termination, such RLI Response shall be considered binding for a period of one
(1) year from the date thereof, provided the relative relationship between VION
and such Third Party remained substantially as contemplated in the VION Notice.

Headings - The headings of the Articles or Paragraphs of this Agreement are for
the convenience of the parties only and shall not be deemed a substantive part
of this Agreement.

Waive - The failure of any party hereto at any time to require performance by
the other party of any provision of this Agreement shall not affect the right of
such aggrieved party to require future performance of that provision, and any
waiver by any party of any breach of any provision of this Agreement must be in
writing to be effective and shall not be construed as a waiver of any continuing
or succeeding breach of such provision, a waiver of the provision itself, or a
waiver of any right under this Agreement.

Governing Law - This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut.

Partial Invalidity - In case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated herein to be impossible and provided that the performance required
by this Agreement with such clause deleted remains substantially consistent with
the intent of the parties.

Execution in Counterparts - This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become a binding agreement when one or more counterparts have been signed
by each of the parties and delivered to the other party.




                                       13
<PAGE>   58






                                       14
<PAGE>   59
                                                                       EXHIBIT C

                             SUPPLY AGREEMENT TERMS


                                      -42-

                                       
<PAGE>   60
                                                                       EXHIBIT C

                               SUPPLY AGREEMENT TERM SHEET

The following terms shall be contained in one or more separate supply agreements
that shall be entered into pursuant to Section 5.8 of the Collaborative
Development and License Agreement (the "Collaboration Agreement").

1.       Vion shall manufacture or have manufactured the Product in finished,
         packaged form, and supply the Product to BI for sale and distribution.
         Manufacturing, processing, testing, packaging, labeling and delivering
         ("Production") of the Product shall be in accordance with all
         applicable specifications, as agreed to by both the parties as well as
         any applicable governmental laws and regulations.

2.       At the beginning of each quarter, BI shall provide Vion with
         projections of its needs for Product in various geographic areas for
         the next four quarters (the Quarterly Projection). Projections for the
         first quarter shall be binding orders for the Product; projections for
         the last three quarters of the Quarterly Projection shall be
         non-binding estimates of Product demand. In the event the projection
         for the first quarter of the current Quarterly Projection differs from
         that in the previous Quarterly Projection by more than 50%, the parties
         will cooperate to facilitate the change in demand, but will not be
         obligated to supply more than 150% of the prior Quarterly Projection.

3.       Vion shall deliver Product to BI designated receiving points at Vion's
         risk and expense, per directions in BI's purchase orders, which
         directions shall not conflict with terms in this Supply Agreement.

4.       Vion shall be responsible, at its sole expense for compliance with all
         applicable regulatory requirements relating to the Production of
         Product, as well as storage and export of Product until it is received
         by BI or its Affiliate or sub-licensee.

5.       Supply of Product from Vion to BI or its Affiliates in the Co-Promotion
         Territory shall be at []. Supply of Product from Vion to BI or its
         Affiliates in the Royalty Territory shall be at a price equal to []. BI
         affiliates will provide Production services to Vion at a price equal to
         BI's []. The price for the product shall be reviewed and adjusted []
         and any new price shall be applicable for all orders received [].

6.       In the event that Vion cannot supply Product within 90 days of BI's
         requested delivery date, the parties shall cooperate to qualify another
         source(s) for Product, and Vion will take whatever steps are necessary
         to maintain that source of supply once it is approved. 
<PAGE>   61
         No source shall be selected without BI's approval which shall not be
         unreasonably withheld. BI consents to Vion's current source of supply
         of Product.

7.       The Term, and Termination provisions in this Supply Agreement shall be
         reflective of similar provisions in the Collaboration Development
         Agreement.

8.       Vion, the licensor and party responsible for Production, shall warrant
         that the Product conforms to current Specification including production
         and storage under CGMPs, and that neither Product nor Production
         infringes any patents or rights of third parties as provided in the
         Collaboration Agreement. Vion will bear responsibility and liability
         for any real or alleged failures or actions claiming failure or
         infringement, and indemnify BI from any loss, except when such failure
         or infringement results directly from actions of BI as provided in the
         Collaboration Agreement.

9.       "Specifications" shall mean all of the specifications for the Product,
         including without limitation the material, formulation, manufacturing,
         packaging, labeling, testing and quality control specifications agreed
         to between the parties, which shall be the same attached to the
         agreement and made a part hereof, as may be amended from time to time.
         The Specifications may be amended as the parties may mutually agree in
         a writing dated and signed by each of them.

10.      Vion shall manufacture, test, label and package the Product in
         accordance with: (a) the Specifications: and (b) oil Current Good
         Manufacturing Practices ("CGMPs") now in place or hereafter established
         by the FDA or any other regulatory authority that are applicable to the
         Product. all governmental laws and regulations as may be applicable to
         Vion's manufacturing, processing, packing or storage of the Product.

11.      For each batch of the Product manufactured, Vion shall assign lot
         control numbers, apply (lot numbers and expiry dates (as required) to
         the labeling, retention samples and stability samples. Vion shall test,
         or have tested, each batch of finished Product using analytical testing
         methodologies appropriate to the Product which are acceptable to BI.
         Vion shall certify to BI that each batch of finished Product conforms
         to the Specifications and shall provide BI with a Certificate of
         Analysis for each batch of Product produced. Vion also shall perform
         such other functions as required by the Specifications and any
         applicable FDA regulations and FDA requirements with respect to the
         Product.

12.      Vion shall prepare and maintain such written procedures and records as
         are required by the FDA, CGMP regulations or similar governmental
         regulations, as applicable. Certified true copies of each of such
         procedures or records shall be prepared by Vion and delivered to BI
         upon request.




                                        2
<PAGE>   62
13.      Subject to applicable confidentiality provisions and third party
         consents, BI, or its authorized representative, shall be permitted to
         monitor all aspects of Vion's work under this Agreement and all
         procedures or records relative to Vion's work under this Agreement
         shall be made readily available to BI's authorized representatives by
         Vion. Such monitoring shall include without limitation the right, at
         reasonable time intervals and upon reasonable prior notice, (a) to
         physically inspect all manufacturing, storage and testing laboratory
         facilities used in connection with the Product and (b) to conduct
         quality assurance audits. Vion shall, and shall cause each of its
         officers, employees, agents and subcontractors to, cooperate fully with
         all such monitoring activities. Vion shall, and shall cause each of its
         officers, employees, agents and subcontractors to, use their best
         efforts to correct any deficiencies that are discovered as a result of
         any such monitoring activities.

14.      The presence of BI monitors shall not be construed, as approval of or
         acquiescence to any procedures utilized by Vion. Any "approval"
         required or permitted to be given shall be in writing, dated and signed
         by an authorized BI representative.

15.      BI shall have the right to approve oil subcontractors, including
         without limitation all contract manufacturers and testing laboratories,
         that Vion utilizes in connection with the manufacture and testing of
         the Product which will be unreasonably withheld. Vion agrees that it
         shall not use any subcontractor that is not reasonably acceptable to BI
         in connection with the manufacture and testing of the Product.

16.      BI or its designee may test or cause to be tested the Product after
         receipt. If after receipt of the Product by BI or its designee, BI
         notifies Vion in writing that the Product does not meet Specifications,
         Vion shall with reasonable promptness replace all such non-conforming
         Product, with Product meeting Specifications at no cost to BI. Vion
         shall bear freight. tax, insurance and any actual out-of-pocket cost
         incurred by BI in transporting such replacement Product.
         Notwithstanding the foregoing, it is understood and agreed by the
         parties that BI or its designee shall have no obligation to test each
         batch of the Product provided to it by Vion. Non-conforming Product
         shall, upon mutual agreement and at Vion's sole expense, either (i) be
         returned to Vion within a reasonable period of time and relabeled or
         reworked as permitted in the NDA or if permitted by the FDA or other
         governmental agency, or (ii) when appropriate, credit shall be issued
         by Vion within thirty (30) days of agreement that the Product is
         nonconforming or if such determination of non-conformance is made by an
         independent testing laboratory.

         If the analysis or assay of a sample of the Product performed by either
         party differs from the other party's analysis or assay of its sample
         from the same shipment or batch, the parties shall conduct a joint
         investigation to determine whether the Product met Specifications or
         the cause of the Product not meeting Specifications.



                                       3
<PAGE>   63


17.      Vion shall promptly notify BI of any problems or unusual production
         situations which have the potential to adversely affect production of
         the Product, or its timely delivery to BI.

18.      The party responsible for the registration of the product in a country
         shall be the party responsible for reporting any adverse drug
         experience associated with the Product to the appropriate governmental
         authorities in such country.

19.      If either party receives any reports of adverse drug experience
         associated with the Product, or other complaints about the Product,
         such party shall provide the other with a copy of such report(s) within
         three (3) business days of the receipt of same, except that reports of
         serious injury or death shall be reported within two (2) business days,
         with a written report to follow promptly thereafter. The parties shall
         cooperate fully with each other to investigate adverse events or
         product complaints involving the manufacture of the Product. The cost
         of any testing undertaken by BI at Vion's request with respect to
         responding to product complaints or to investigate the possible cause
         of adverse drug reactions shall be paid by Vion.

20.      Product shall be ordered on BI or its designees' standard purchase
         order forms (the "Purchase Order"). The only function of the purchase
         order is to set forth the quantities of Product desired by package size
         and the desired delivery dates for the quantity of Product ordered and
         destination of the Product. Vion will either acknowledge receipt of
         BI's purchase order on Vions standard acknowledgment form, or contact
         BI about Vion's ability to supply quantities of Product in excess of
         the forecast, and/or alternative ship dates which shall be agreed to in
         writing using the purchase order form and acknowledgment form. Except
         as otherwise set forth above, the only function of Vion's
         acknowledgment form is to acknowledge receipt of BI's purchase order.
         All other terms and conditions of either the purchase orders or the
         acknowledgment forms are void and of no effect, and the terms and
         conditions of this Agreement shall control.

21.      Effective throughout the term of this Agreement and thereafter, for a
         period of not less than [], the parties shall each carry and maintain
         in full force and effect insurance, or maintain adequate self-insurance
         reserves, insuring themselves for Commercial General Liability,
         including Product Liability. In any such insurance policy from an
         insurance company, each party shall include the other as an additional
         insured thereon, said insurance policies shall be obtained from on
         insurance company having a Best's rating of B+, Class IV or higher. []
         Each party shall furnish the other with certificates of said Commercial
         General Liability and Product Liability insurance policy naming the
         other as an additional insured thereon, which shall provide to each
         party that thirty (30) days prior written notice of cancellation or
         material changes in said insurance policies shall be given to such
         other party. The indemnification obligations herein shall apply on a
         first 



                                       4
<PAGE>   64
         dollar basis without limitation or reduction due to any deductible or
         self-insured retention which either party may have under their
         respective insurance coverage.

 22.     Vion shall reimburse BI for any provable actual damages incurred by BI
         resulting from a recall, stop sale or governmental action or direction
         resulting from a breach of this Agreement by Vion or its designee or
         early termination, by Vion or as the result of the removal of the
         Product from the market, or the cessation of sale of the Product prior
         to the expiry date of this Agreement.

 23.     Force majeure provisions, customary disclaimers of implied and other
         express warranties, customary limitations of liabilities and mutual
         disclaimers of consequential damages, payment terms, appropriate
         incoterm references, governing law and other miscellaneous provisions
         consistent with Collaboration Agreement



                                       5
<PAGE>   65
                                                                  ATTACHMENT A-1

                       ELEMENTS OF PRODUCTION IN OVERHEAD

The following departments support the production processes in the plant:

[]



                                       6
<PAGE>   66
                                                                       EXHIBIT D

                        FORM OF STOCK PURCHASE AGREEMENT


    

                                      -43-
<PAGE>   67
                            STOCK PURCHASE AGREEMENT

         THIS STOCK PURCHASE AGREEMENT, dated as of November 24, 1997 (the
"Effective Date"), by and between VION PHARMACEUTICALS, INC., a Delaware
corporation having its principal offices at Four Science Park, New Haven,
Connecticut 06511 ("Vion"), and BOEHRINGER INGELHEIM INTERNATIONAL, GmbH, a
limited liability company organized under the laws of Germany having its
principal place of business at D-55216 Ingelheim/Rhein, Germany ("BI").


                                 R E C I T A L S


         A. Vion is developing and conducting research on pharmaceutical
products comprising porfiromycin for the treatment of cancer in humans; and

         B. Both parties wish to enter into a collaboration with each other for
the worldwide development and marketing of such products on the terms and
conditions set forth in the Collaborative Development and License Agreement of
even date between Vion and BI (the "Collaboration Agreement").

         NOW THEREFORE, the parties hereto mutually agree as follows:


         1.  Purchase and Sale of Stock.

         1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, Vion agrees to issue and sell to BI, and BI agrees
to purchase from Vion, that number of shares (rounded to the nearest whole
number) of Vion's common stock, par value $.01 per share (the "Common Stock")
that is equal to U.S. $3,000,000.00 divided by a price per share (the "Purchase
Price") equal to the sum of (x) the average closing bid price of a share of
Common Stock on the Nasdaq SmallCap Market for the thirty (30) full consecutive
trading days preceding the Effective Date (the "Average Price"), plus (y) a
premium (the "Premium") equal to twenty-five percent (25%) of the Average Price;
provided that the Purchase Price shall in no event exceed $10 unless the Average
Price exceeds $10, in which case the Purchase Price shall equal the Average
Price without addition of the Premium. The shares of Common Stock purchased by
BI hereunder are referred to herein as the "Shares".
<PAGE>   68
         1.2 Closing. The purchase and sale of the Shares shall take place at
the offices of Wiggin & Dana located at One Century Tower, 265 Church Street,
New Haven, Connecticut 06510-7001, on November 24, 1997 at 10:00 a.m., or such
other time (the "Closing Date") and place as Vion and BI shall mutually agree
(which time and place are designated as the "Closing"). At the Closing, Vion
shall deliver to BI a certificate representing the Shares which BI is purchasing
against delivery to Vion by BI of a check or wire transfer in the amount of U.S.
$3,000,000 payable to Vion's order.

         1.3 No Registration of Shares. The Shares will be issued to BI without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on Regulation D ("Regulation D") promulgated thereunder by
the Securities and Exchange Commission (the "SEC").


         2.  Representations, Warranties and Covenants of Vion. Vion hereby
represents, warrants and covenants that:

         2.1 Organization and Qualification. Vion: (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (b) has all requisite corporate power and authority to conduct its
business as currently conducted; and (c) is qualified and is in good standing as
a foreign corporation in all jurisdictions in which the nature of its business
or properties require such qualification.

         2.2 Authorization; Consents. All corporate action on the part of Vion
and its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
Vion hereunder and the authorization, issuance and delivery of the Shares has
been taken, or will be taken, on or prior to the Closing. Vion's execution,
delivery and performance of this Agreement does not require any consent of any
person under, constitute or result (upon notice or lapse of time or both) in a
breach of any term, condition or provision of, or constitute a default or give
rise to any right of termination or acceleration under any material indenture,
mortgage, agreement, contract or other material instrument, or result in the
creation or imposition of any lien, security interest, mortgage, pledge, charge
or other encumbrance, of any material nature whatsoever, upon any properties or
assets of Vion or any of its subsidiaries. Upon due execution and delivery by
BI, this Agreement shall constitute a valid and legally binding obligation of
Vion, enforceable against Vion in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).



                                       2
<PAGE>   69
         2.3 Authorized Capital Stock. The authorized capital stock of Vion
consists of 35,000,000 shares of Common Stock and 5,000,000 shares of preferred
stock, $0.01 par value per share (the "Preferred Stock"). At the close of
business on November 19, 1997: (a) 9,374,447 shares of Common Stock were issued
and outstanding; and (b) 761,646 shares of Class A Convertible Preferred Stock
and 4,592 shares of Class B Convertible Preferred Stock were issued and
outstanding. Except as described in Exhibit 1 attached hereto, there are no
outstanding options, warrants or other convertible securities of Vion.

         2.4 Issuance, Sale and Delivery of the Shares. When issued and paid for
in accordance with the terms of this Agreement, the Shares to be sold hereunder
by Vion will be validly issued, fully paid and non-assessable and issued in full
compliance with federal and state securities laws.

         2.5 Additional Information. Vion has filed all required reports and
other documents with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All reports
filed by Vion with the SEC pursuant to the reporting requirements of the
Exchange Act, when filed, did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstance in which
they were made, not misleading, except to the extent such statements have been
modified or superseded by a later report or document filed with the SEC.

         2.6 Non-Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate any constitution, statute, regulation, rule, injunction, order,
decree, ruling, charge, or other restriction of any government agency, or court
to which Vion is subject or any provision of any of the charter or bylaws of
Vion, or (b) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel or require any notice under any agreement, contract,
lease, license, instrument or other arrangement to which Vion is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any security interest upon any of its assets), except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or security interest would not have a
material adverse effect on the financial condition of Vion or on the ability of
BI to consummate the transactions contemplated by this Agreement. Vion need not
give any notice to, make any filing with, or obtain any authorization, consent
or approval of any government agency in order for Vion and BI to consummate the
transactions contemplated by this Agreement.

         2.7 Financial Statements. The audited financial statements (balance
sheet and related statements of operations, shareholders' equity and cash flows)
of Vion as of and for the year ended December 31, 1996, incorporated in Vion's
SEC Form 10-KSB for the year ended 



                                       3
<PAGE>   70
December 31, 1996, and the unaudited financial statements (balance sheet and
related statements of operations, shareholders' equity and cash flows) of Vion
as of and for the six months ended June 30, 1997, incorporated in Vion's SEC
Form 10-QSB for the quarter ended June 30, 1997, including the notes thereto,
have been prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods covered thereby, and present fairly
the financial condition of Vion as of such dates and the results of operation of
Vion for such periods provided however that the June 30, 1997 unaudited
statements are subject to normal year end adjustments and may lack footnotes and
other presentation items.

         2.8 Material Changes. Since December 31, 1996 and June 30, 1997, Vion
has operated its business in the ordinary course, and there has not been:

                  (a) any change in the business of Vion that has had or could
reasonably be expected to have a material adverse effect on the condition,
financial or otherwise, of Vion, other than on-going losses in the ordinary
course of business which have been disclosed in applicable filings with the SEC
and which, for the period since December 31, 1996 to date are estimated to be
$8,700,000;

                  (b) any damage, destruction or loss (whether or not covered by
insurance) that has had or could reasonably be expected to have, individually or
in the aggregate, a material adverse effect on the condition, financial or
otherwise, of Vion;

                  (c) any material change in the accounting methods or
principles of Vion;

                  (d) any material transaction made by Vion other than in the
ordinary course of business consistent with past practice (which ordinary course
of business includes raising equity financing) or as otherwise permitted or
contemplated by this Agreement;

                  (e) any entering into, amendment or termination of any
contract, agreement, lease, franchise, security, instrument, permit or license
between Vion and any party that has had or could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the condition,
financial or otherwise, of Vion; or

                  (f) any agreement or arrangement made by Vion to take any
action that would cause any representation or warranty in this Agreement to be
untrue or incorrect.

         2.9 Legal Compliance. Vion has complied with all applicable laws of
federal, state, local and foreign governments except where the failure to
comply, individually or in the aggregate, would not have a material adverse
effect upon the condition, financial or otherwise of Vion.



                                       4
<PAGE>   71
         2.10 Other Information. The information concerning Vion set forth in
this Agreement, including all schedules and exhibits hereto, and in all other
written information provided to BI by Vion regarding Vion, including without
limitation the Collaborative Development and License Agreement and all schedules
and exhibits thereto, does not contain any untrue statement of material fact or
omit to state a material fact required to be stated herein necessary to make the
statements and facts contained herein, in light of the circumstances in which
they are made, not false or misleading.


         3.   Representations, Warranties and Covenants of BI. BI hereby
represents, warrants and covenants that:

         3.1  Authorization. BI has full power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby. BI
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement, and upon due execution and delivery by Vion, this
Agreement shall constitute a valid and binding obligation of BI enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

         3.2  Securities Laws Representations.

                  (a) Purchase Entirely for Own Account. The Shares are being
acquired for investment for BI's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and BI has no
present intention of selling, granting any participation in, or otherwise
distributing the same. BI does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Shares.

                  (b) Disclosure of Information. BI believes it has received all
information it considers necessary or appropriate for deciding whether to
purchase the Shares. BI has had an opportunity to ask questions and receive
answers from Vion regarding the terms and conditions of the offering of the
Shares.

                  (c) Investment Experience. BI has previously invested in
companies in the development stage, can bear the economic risks of the
investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of its investment
in the Shares.




                                       5
<PAGE>   72
                  (d) Accredited Investor. BI is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act by
the SEC.

                  (e) Restricted Securities. BI understands that the Shares it
is purchasing pursuant to this Agreement are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from Vion in a transaction not involving a public offering and that
under such laws and applicable regulations the Shares may be resold without
registration under the Securities Act only in certain limited circumstances. In
this connection, BI is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.

                  (f) Disposition of Shares. BI will not dispose of any of the
Shares (other than pursuant to SEC Rule 144 or any similar or analogous rule or
rules) unless and until (i) BI shall have notified Vion of the proposed
disposition and, if reasonably requested by Vion, BI shall have furnished Vion
with an opinion of counsel reasonably satisfactory in form and substance to Vion
to the effect that such disposition will not require registration under the
Securities Act; or (ii) there is in effect a registration statement under the
Securities Act covering the proposed disposition and the proposed disposition is
made in accordance with such registration statement.

         3.3 Legends. The certificates evidencing the Shares may bear the
restrictive legends set forth below, except that such certificates shall not
bear such legends if the transfer was made in compliance with Rule 144 or if the
opinion of counsel, if any, referred to in Section 3.2(f)(i) is to the effect
that such legend is not required in order to establish compliance with any
provisions of the Securities Act.

                  (a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"). THE
SECURITIES MAY NOT BE TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT
IS IN EFFECT AS TO SUCH TRANSFER OR SUCH TRANSFER IS MADE PURSUANT TO RULE 144
OF THE ACT OR AN EXEMPTION TO THE REGISTRATION REQUIREMENTS OF THE ACT."

                  (b) Any legend required by the laws of any applicable state or
other jurisdiction governing the Shares.

         3.4 Non-Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, order, decree,
ruling, charge, or other restriction of any government agency or court to which
BI is subject or any provision of any of the charter or bylaws of BI, except
where the violation would not have a material adverse effect on the ability of
BI to 



                                       6
<PAGE>   73
consummate the transactions contemplated by this Agreement. BI need not
give any notice to, make any filing with, or obtain any authorization, consent
or approval of any government agency in order for Vion and BI to consummate the
transactions contemplated by this Agreement, except where the failure to give
notice, to file, or to obtain any authorization, consent, or approval would not
have a material adverse effect on the ability of BI to consummate the
transactions contemplated by this Agreement.


         4.  Agreement Not to Sell. Notwithstanding anything to the contrary
contained herein, BI agrees that, during the period beginning on the date of the
Closing and ending on the second anniversary of the date of the Closing, BI
shall not, without the prior written consent of Vion, directly or indirectly
sell, contract to sell (including, without limitation, any short sale), grant
any option to purchase or otherwise transfer or dispose of any securities of
Vion held by it at any time during such period. In order to enforce the
provisions of this Section 4, Vion may impose stop-transfer instructions with
respect to the securities held by BI that are subject to the foregoing
restriction until the end of such period.


         5.  Conditions to Closing.

         5.1 Conditions to BI's Obligations. The obligations of BI under this
Agreement are subject to the fulfillment, or the waiver by BI, of the conditions
set forth in this Section 5.1 on or before the Closing Date.

                  (a) Accuracy of Representations and Warranties. Each
representation and warranty of Vion contained in this Agreement shall be true on
and as of the Closing Date with the same effect as though such representation
and warranty had been made on and as of that date.

                  (b) Performance. Vion shall have performed and complied with
all agreements and conditions contained in this Agreement required to be
performed or complied with by Vion prior to or at the Closing.

                  (c) Opinion of Counsel. BI shall have received an opinion from
Wiggin & Dana, counsel to Vion, dated as of the Closing Date, addressed to BI,
in form and substance satisfactory to BI in its sole discretion.

                  (d) Execution of the Collaboration Agreement. The
Collaboration Agreement between Vion and BI shall have been executed in a form
mutually acceptable to Vion and BI.

                  (e) Certificates and Documents. Vion shall have delivered to
BI:



                                       7
<PAGE>   74
                           (i) a certificate of the Secretary or Assistant
Secretary of Vion dated as of the Closing Date, certifying as to (i) the
incumbency of officers of Vion executing this Agreement and all other documents
executed and delivered in connection herewith, (ii) a copy of the By-Laws of
Vion, as in effect on and as of the Closing Date, and (iii) a copy of the
resolutions of the Board of Directors of Vion authorizing and approving Vion's
execution, delivery and performance of this Agreement, all matters in connection
with this Agreement, and the transactions contemplated thereby.

                           (ii) a certificate, executed by the President of Vion
as of the Closing Date, certifying to the fulfillment of all of the conditions
to BI's obligations under this Agreement, as set forth in this Section 5.

                  (f) Other Matters. All corporate and other proceedings in
connection with the transactions contemplated at the Closing by this Agreement,
and all documents and instruments incident to such transactions, shall be
reasonably satisfactory in substance and form to BI and its counsel, and BI and
its counsel shall have received all such counterpart originals or certified or
other copies of such documents as they may reasonably request.

         5.2 Conditions to Vion's Obligations. The obligations of Vion under
this Agreement are subject to the fulfillment, or the waiver by Vion, of the
conditions set forth in this Section 5.2 on or before the Closing Date.

                  (a) Accuracy of Representations and Warranties. Each
representation and warranty of BI contained in this Agreement shall be true on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of that date.

                  (b) Execution of the Collaboration Agreement. The
Collaboration Agreement between Vion and BI shall have been executed in a form
mutually acceptable to Vion and BI.


         6.  Survival; Indemnification.

         6.1 Survival. Notwithstanding any investigation made by any party to
this Agreement, all covenants, agreements, representations and warranties made
by Vion and BI herein shall survive the execution of this Agreement and the
Closing; provided, that such representations and warranties shall speak only as
of the date of this Agreement and the Closing, as applicable.



                                       8
<PAGE>   75
         6.2 Indemnification by Vion. Vion shall indemnify and hold harmless BI,
its directors, officers, stockholders, partners and beneficial owners from and
against all claims, liabilities, losses, costs, deficiencies and expenses
(including reasonable attorneys' fees and expenses) in connection with any third
party claim (collectively, "Losses") which may be sustained by BI, its
directors, officers, stockholders, partners and beneficial owners, and arise
from the breach of any agreement, covenant, representation, warranty, or other
obligation of Vion made or incurred under or pursuant to this Agreement.
Notwithstanding the foregoing, Vion's obligations under this Section 6.2 shall
not exceed the amount of the Purchase Price paid by BI for the Shares pursuant
to Section 1.1 hereof.

         6.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 6 shall promptly notify Vion (the
"Indemnitor") of any Losses in respect of which the Indemnitee intends to claim
such indemnification, and the Indemnitor shall assume the defense thereof with
counsel satisfactory to the Indemnitee; provided, however, that the Indemnitee
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the Indemnitor, if representation of such Indemnitee by the counsel
retained by the Indemnitor would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other party represented by
such counsel in such proceedings. The indemnity agreement in this Article 6
shall not apply to amounts paid in settlement of any Losses if such settlement
is effected without the consent of the Indemnitor, which consent shall not be
withheld unreasonably. The failure to deliver notice to the Indemnitor within a
reasonable time after the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Article 6, but the omission so to deliver notice to
the Indemnitor will not relieve it of any liability that it may have to the
Indemnitee otherwise than under this Article 6. The Indemnitee under this
Article 6 shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability covered
by this indemnification.


         7.  Registration Rights.

         7.1 Certain Definitions. As used in this Section, the following terms
shall have the following respective meanings:

                  (a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

                  (b) "Form S-3" shall mean Form S-3 issued by the Commission or
any substantially similar form then in effect.



                                       9
<PAGE>   76
                  (c) The terms "Register," "Registered" and "Registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act ("Registration Statement"), and
the declaration or ordering of the effectiveness of such Registration Statement.

                  (d) "Registrable Securities" shall mean (I) the Shares and
(II) all shares of Common Stock issued pursuant to stock splits, stock dividends
and similar distributions with respect to the Shares.

                  (e) "Registration Expenses" shall mean all expenses incurred
by Vion in complying with Sections 7.2 and 7.3 of this Agreement, including,
without limitation, all federal and state registration, qualification and filing
fees, printing expenses, fees and disbursements of counsel for Vion, blue sky
fees and expenses, fees and expenses of any management road show, and the
expense of any special audits incident to or required by such registration, but
shall not include Selling Expenses.

                  (f) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

                  (g) "Selling Expenses" shall mean all underwriting discounts,
selling commissions and fees and disbursements of counsel for BI, applicable to
the sale of Registrable Securities pursuant to this Agreement.

         7.2      Demand Registration.

                  (a) Request for Registration on Form S-1. Unless all of the
Registrable Securities have previously been sold by BI pursuant to an effective
Registration Statement prepared and filed by Vion or may be sold immediately
upon the second anniversary of the Closing pursuant to a then-effective
Registration Statement, BI may at any time following the Closing request in
writing that Vion effect a Registration on Form SB-2, Form S-1 or Form S-2 (or
any successor form) of some or all of the Registrable Securities owned by BI
immediately upon the second anniversary of the Closing (or at such other time
following such second anniversary as BI may designate in its written request);
provided, however, that Vion need not effect such a Registration covering fewer
than 25% of the Shares purchased hereunder. Thereupon, Vion shall use its best
efforts to effect the Registration, on Form SB-2, Form S-1 or Form S-2 (or any
successor form), of all Registrable Securities which Vion has been requested to
so Register on the date specified in BI's written request. BI may exercise the
demand rights provided in this Section 7.2(a) no more than once; provided,
however, that if for any reason (other than the request of BI) the number of
Registrable Securities to be included in the 



                                       10
<PAGE>   77
underwriting in accordance with the foregoing is less than the total number of
shares which BI has requested to be included, then such underwriting shall not
count as BI's demand right provided in this Section 7.2(a).

                  (b)      Request for Registration on Form S-3 Unless all of
the Registrable Securities have previously been sold by BI pursuant to an
effective Registration Statement prepared and filed by Vion or may be sold
pursuant to a then-effective Registration Statement, subject to the terms of
this Agreement , if Vion receives from BI a written request that Vion effect any
Registration on Form S-3 (or any successor form to Form S-3 regardless of its
designation) at a time when Vion is eligible to register securities on Form S-3
(or any successor form to Form S-3 regardless of its designation) for an
Offering of Registrable Securities, Vion will as soon as practicable use its
best efforts to effect a registration of the Registrable Securities specified in
such request; provided, however, that Vion need not effect such registrations
which individually cover fewer than 25% of the Shares purchased hereunder.

                  (c)      Underwriting in Registration.

                           (1) Notice of Underwriting. If BI intends to
distribute the Registrable Securities covered by its request by means of an
underwriting, it shall so advise Vion as a part of its request made pursuant to
this Section 7.2.

                           (2) Selection of Underwriter. Vion shall, together
with BI, enter into an underwriting agreement with the representative
("Underwriter's Representative") of the underwriter or underwriters selected for
such underwriting by BI and agreed to by Vion, which agreement shall not be
unreasonably withheld provided such underwriter is experienced and reputable.

                  (d)      Blue Sky in Registration. In the event of any
Registration pursuant to this Section 7.2, Vion will exercise its best efforts
to Register and qualify the securities covered by the Registration Statement
under such other securities or Blue Sky laws of such jurisdictions as BI shall
reasonably request and as shall be reasonably appropriate for the distribution
of such securities; provided, however, that Vion shall not be required to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.

         7.3      Piggyback Registration.

                  (a)      Notice of Piggyback Registration and Inclusion of
Registrable Securities. In the event Vion decides to Register any of its Common
Stock (either for its own account or the account of a selling shareholder or
other security holder exercising demand registration rights), other than (i) a
Registration Statement which exclusively relates to the Registration of
securities 



                                       11
<PAGE>   78
under an employee stock option, purchase, bonus or other benefit plan, or (ii)
Registration relating solely to a transaction under Rule 145 promulgated by the
Commission, Vion will: (1) promptly give BI written notice thereof, and (2)
include in such Registration (and any related qualification under Blue Sky laws
or other compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request delivered to Vion by BI
within 15 days after delivery of such written notice from Vion.

                  (b) Underwriting in Piggyback Registration. If the
Registration of which Vion gives notice is a Registered public offering
involving an underwriting, Vion shall so advise BI as a part of the written
notice given pursuant to Section 7.3(a). BI shall, together with Vion, enter
into an underwriting agreement with the Underwriter's Representative for such
offering.

                  (c) Blue Sky in Piggyback Registration. In the event of any
Registration of Registrable Securities pursuant to Section 7.3(a), Vion will
exercise its best efforts to Register and qualify the securities covered by the
Registration Statement under such other securities or Blue Sky laws of such
jurisdictions as BI shall reasonably request and as shall be reasonably
appropriate for the distribution of such securities; provided, however, that
Vion shall not be required to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.

         7.4      Expenses of Registration. All Registration Expenses incurred
in connection with all Registrations pursuant to Section 7.2 and Section 7.3
shall be borne by Vion. All Selling Expenses incurred in connection with all
Registrations pursuant to Section 7.2 and Section 7.3, and which relate to the
Registrable Securities, shall be borne by BI.

         7.5      Registration Procedures. Vion will keep BI advised as to the
initiation and completion of such Registration. At its expense Vion will (a) use
its best efforts to keep such Registration effective for a period of 180 days or
until BI has completed the distribution described in the Registration Statement
relating thereto, whichever first occurs, and (b) furnish such number of
prospectuses (including preliminary prospectuses) and other documents as BI from
time to time may reasonably request.

         7.6      Indemnification.

                  (a) Vion's Indemnification of BI. To the extent permitted by
law, Vion will indemnify BI and each of its directors, officers, stockholders,
partners or other beneficial owners, and each person controlling BI, with
respect to which Registration, qualification or compliance of Registrable
Securities has been effected pursuant to this Agreement, against all claims,
losses, damages or liabilities (or actions in respect thereof) to the extent
such claims, losses, damages or liabilities arise out of or are based upon any
untrue statement (or alleged untrue statement) of a 




                                       12
<PAGE>   79
material fact contained in any Registration Statement, prospectus, offering
circular or other document incident to any such Registration, qualification or
compliance, or are based on any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by Vion of any rule or
regulation promulgated under the Securities Act applicable to Vion and relating
to action or inaction required of Vion in connection with any such Registration,
qualification or compliance; and Vion will reimburse BI and each of its
directors, officers, stockholders, partners or other beneficial owners, and each
person who controls BI, for any legal and any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability, or action; provided, however, that Vion will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based upon any untrue statement or omission based upon
written information furnished to Vion by BI and stated to be for use in
connection with the offering of securities of Vion.

                  (b) BI's Indemnification of Vion. To the extent permitted by
law, BI will, if Registrable Securities held by BI are included in the
securities as to which such Registration, qualification or compliance is being
effected pursuant to this Agreement, indemnify Vion, each of its directors and
officers, each underwriter, if any, of Vion's securities covered by such a
Registration Statement, each person who controls Vion or such underwriter within
the meaning of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) to the extent only that such claims,
losses, damages or liabilities arise out of or are based upon any untrue
statement (or alleged untrue statement) of a material fact contained in any such
Registration Statement, prospectus, offering circular or other document incident
to such Registration, qualification or compliance or are based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by BI of any rule or regulation promulgated under the Securities Act
applicable to BI and relating to action or inaction required of BI in connection
with any such Registration, qualification or compliance; and will reimburse
Vion, such directors, officers, partners, persons, underwriters or control
persons for any legal and any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such Registration Statement, prospectus, offering circular or other
documents in reliance upon and in conformity with written information furnished
to Vion by BI and stated to be specifically for use in connection with the
offering of securities of Vion; provided, however, that the obligations of BI
hereunder shall be limited to an amount equal to the proceeds to BI of
Registrable Securities sold as contemplated herein.

                  (c) Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 7.6 of notice of the commencement of any
action, such indemnified 



                                       13
<PAGE>   80
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7.6 notify the indemnifying party in writing of a
commencement thereof and generally summarize such action. The indemnifying party
shall have the right to participate in and to assume the defense of such claim;
provided, however, that the indemnifying party shall be entitled to select
counsel for the defense of such claim with the approval of any parties entitled
to indemnification, which approval shall not be unreasonably withheld; provided,
further, that if any party reasonably determines that there may be a conflict
between the position of Vion and BI in conducting the defense of such action,
suit or proceeding by reason of recognized claims for indemnity under this
Section 7.6, then counsel for such party shall be entitled to conduct the
defense to the extent reasonably determined by such counsel to be necessary to
protect the interest of such party. The failure to notify an indemnifying party
promptly of the commencement of any such action, if prejudicial to the ability
of the indemnifying party to defend such action, shall relieve such indemnifying
party, to the extent so prejudiced, of any liability to the indemnified party
under this Section 7.6, but the omission so to notify the indemnifying party
will not relieve such party of any liability that such party may have to any
indemnified party otherwise other than under this Section 7.6. No indemnifying
party shall settle any claim for which indemnification could be sought hereunder
without the consent of the indemnified party unless the settlement includes an
unconditional release of the indemnified party.

         7.7 Market Stand-Off. Except for such shares as are required or
permitted hereunder to be included in any Registration Statement, BI hereby
agrees that, if so requested by the Underwriter's Representative, BI shall agree
not to sell or otherwise transfer any Registrable Securities of Vion during a
maximum of 90 days following the effective date of a Registration Statement of
Vion filed under the Securities Act and relating to an underwritten offering,
provided that all shareholders holding not less than one percent (1%) of the
aggregate number of shares of Common Stock outstanding (including shares of
Common Stock issuable upon the conversion of any convertible securities or upon
the exercise of options or warrants, or other rights) and all officers and
directors of Vion enter into similar agreements.

         7.8 Current Public Information. Vion will timely file all reports
required under the Securities Act or the Securities Exchange Act of 1934 and the
rules and regulations thereunder, and will take such further action as may be
reasonably required to cause Vion to be eligible to register securities on Form
S-3 and to enable any holder of "restricted securities" (as defined in Rule 144
adopted by the Commission under the Securities Act) to sell such securities
pursuant to Rule 144, as amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.


         8.  Miscellaneous.



                                       14
<PAGE>   81
         8.1 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addresser and shall be effective upon receipt by the
addressee.

If to Vion:                    Vion Pharmaceuticals, Inc.
                               Four Science Park
                               New Haven, Connecticut  06511
                               Telephone:  203-498-4210
                               Facsimile No.: 203-498-4211
                               Attention: President & Chief Executive Officer

with a copy to:                Terence Jones, Esq.
                               Wiggin & Dana
                               One Century Tower
                               P.O. Box 1832
                               New Haven, Connecticut  06508-1832
                               Telephone: 203-498-4324
                               Facsimile No.: 203-782-2889

If to BI:                      Boehringer Ingelheim International GmbH
                               Postbox 200
                               D-55216 Ingelheim, Rhein
                               Germany
                               Telephone:  011-49-6132-773-408
                               Facsimile No.: 011-49-6132-773-583
                               Attention: Corporate Licensing

with a copy to:                Boehringer Ingelheim International GmbH
                               Postbox 200
                               D-55216 Ingelheim, Rhein
                               Germany
                               Telephone:  011-49-6132-772-106
                               Facsimile No.:  011-49-6132-773-583
                               Attention: Head of Legal Department




                                       15
<PAGE>   82
         8.2 Entire Agreement. This Agreement, together with the Collaboration
Agreement and any agreements that the parties may execute pursuant to the
Collaboration Agreement, contains the entire understanding of the parties with
respect to the subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly superseded
by this Agreement.

         8.3 Assignment. Neither this Agreement nor any of the rights and
obligations contained herein may be assigned or otherwise transferred by either
party without the consent of the other party; provided, however, that either
Vion or BI may, without such consent, assign its rights and obligations under
this Agreement (a) in connection with a corporate reorganization, to any
Affiliate, all or substantially all of the equity interest of which is owned and
controlled by such party or its direct or indirect parent corporation, or (b) in
connection with a merger, consolidation or sale of substantially all of such
party's assets to an unrelated third party; provided, however, that such party's
rights and obligations under this Agreement shall be assumed by its successor in
interest in any such transaction and shall not be transferred separate from all
or substantially all of its other business assets, including those business
assets that are the subject of the Collaboration Agreement. Any permitted
assignee shall assume all obligations of its assignor under this Agreement.

         8.4 Amendments and Waivers. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by Vion and BI. The
waiver by either party hereto of any right hereunder or the failure to perform
or of a breach by the other party shall not be deemed a waiver of any other
right hereunder or of any other breach or failure by said other party whether of
a similar nature or otherwise.

         8.5 Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.

         8.6 Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

         8.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut (without giving effect to
the choice of law provisions thereof) and the federal law of the United States
of America. The parties hereby submit to the jurisdiction of the federal or
state courts located within the State of Connecticut for the conduct of any
suit, action or proceeding arising out of or relating to this Agreement.

         8.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute 



                                       16
<PAGE>   83
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other parties.

         8.9 Expenses. Except as otherwise specifically provided herein, each
party shall bear its own expenses in connection with this Agreement.

         8.10 Publicity. Neither party hereto shall issue any press releases or
otherwise make any public statement with respect to the transactions
contemplated by this Agreement without the prior written consent of the other
party, except as may be required by applicable law or regulation.

         8.11 Confidentiality. (a) BI acknowledges and agrees that any
information or data it has acquired from Vion, not otherwise properly in the
public domain, was received in confidence. BI agrees not to divulge, communicate
or disclose, except as may be required by



                                       17
<PAGE>   84
law or for the performance of this Agreement, or use to the detriment of Vion or
for the benefit of any other person or persons, or misuse in any way, any
confidential information of Vion.

                           (b) Vion acknowledges and agrees that any information
or data it has acquired from BI, not otherwise properly in the public domain,
was received in confidence. Vion agrees not to divulge, communicate or disclose,
except as may be required bylaw or for the performance of this Agreement, or use
to the detriment of BI or for the benefit of any other person or persons, or
misuse in any way, any confidential information of BI.

         8.12 Brokers. Except for Vion's engagement of Vector Securities
International which has been previously disclosed to BI, each party represents
and warrants to the other that it has not engaged any broker or other person who
would be entitled to any fees or commissions in respect to the execution of this
Agreement or the Collaboration Agreement or the consummation of the transactions
contemplated hereby and thereby. Each party agrees to indemnify, defend and hold
harmless the other from and against any and all claims, actions, damages, costs
and expenses which may be incurred or suffered by the other as a result of any
arrangement or agreements made or alleged to have made by the indemnifying party
with any broker, finder or other agent.

                  IN WITNESS WHEREOF, the parties hereto have cause this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.


VION PHARMACEUTICALS, INC.

By:_____________________________________________

John A. Spears,

President and Chief Executive Officer


BOEHRINGER INGELHEIM INTERNATIONAL GmbH

By:_____________________________________________

Name:

Title:


BOEHRINGER INGELHEIM INTERNATIONAL GmbH

By:_____________________________________________





                                       18
<PAGE>   85
Name:

Title:










                                       19