Exhibit 10.26

                                LICENSE AGREEMENT
                                -----------------


         AGREEMENT made this 9th day of February, 1998 (the "Effective Date"),
by and between VION PHARMACEUTICALS, INC., a Delaware corporation located at
Four Science Park, New Haven, Connecticut 06511 ("Vion"), and SAN-MAR
LABORATORIES INC., a New York corporation located at 4 Warehouse Lane, Elmsford,
New York 10523 ("San-Mar").

                              W I T N E S S E T H:

         WHEREAS, Vion is the owner of certain technology related to synthetic
and cosmetic forms of melanin and methods for using melanin;

         WHEREAS, San-Mar wishes to obtain a license to such technology, and
Vion is willing to grant such a license to San-Mar, subject to the terms and
conditions hereof;

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                             ARTICLE I. DEFINITIONS
                             ----------------------


         As used in this Agreement, the following terms shall be defined as set
         forth below:

         1.1 "Affiliate" shall mean any person or entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, a party. "Control" means the direct or indirect
(a) legal or beneficial ownership of more than fifty percent (50%) of the
outstanding voting rights of such person or entity or (b) power or ability to
direct the management or policies of such person or entity.

         1.2 "Field" shall mean cosmetic and non-pharmaceutical uses of the
Product, but including over-the-counter topicals.

<PAGE>


         1.3 "Gross Revenue" shall mean the gross amounts invoiced by San-Mar,
its Affiliates or its permitted sublicensees on the sale of Products to
unaffiliated third parties, without deduction of any kind, except, to the extent
actually paid or allowed: (a) quantity and other normal and customary trade cash
discounts fairly attributable to the Products; (b) freight, postage and
insurance incurred in connection with the shipping of the Products to
unaffiliated third parties; and (c) credits, rebates or adjustments paid or
credited in the same year attributable to the expiration, rejection or return of
Products.

         1.4 "Know-How" shall mean techniques, inventions, practices, methods,
knowledge, know-how, skill, experience and test data, including, without
limitation, clinical test data and efficacy studies, in each case, relating to
synthetic or cosmetic melanins, including future Know-How, if any, in respect to
same.

         1.5 "Patents" shall mean the patents and patent applications listed on
Exhibit A attached hereto, and all additions, continuations,
continuations-in-part, divisional or substitute patents, all reissues or
reexaminations of all such applications or patents, and all extensions and
renewals of any such patents, confirmations, importation or registration patents
thereof or therefor, in whatsoever legal form and/or by whatsoever legal title
they are granted.

         1.6 "Products" shall mean finished products incorporating synthetic or
cosmetic melanins for use in the Field.


         1.7 "Proprietary Information" shall mean: all know-how, inventions, and
trade secrets, whether or not patentable, preclinical and clinical test data,
and technical and marketing information that is disclosed by either party to the
other party, either (i) in writing and marked "Confidential," "Proprietary," or
the like, or (ii) orally, and confirmed in writing within sixty (60) days after
such disclosure, unless such information: (a) is or becomes public knowledge
through no fault of the receiving party; (b) is in the future legally received
by the receiving party from a third party free of any obligation of
confidentiality; or (c) is legally in the possession of the receiving party free
of any

                                       2
<PAGE>

obligation of confidentiality and prior to receipt from the disclosing party,
which possession shall be proven by documentary evidence.

         1.8 "Royalty" shall have the meaning set forth in Section 3.1.1.

         1.9 "Royalty Year" shall mean each twelve month period commencing on
March 1 and ending February 28, except the first Royalty Year shall be the
period commencing on the Effective Date and ending February 28, 1999.

         1.10 "Technology" shall mean all Patents and Know-How to the extent
necessary or appropriate for the development, use or sale of Products in the
Field, now or during the term hereof (a) owned by Vion, or (b) to the extent
Vion is permitted to grant a sublicense to San-Mar, licensed to Vion by a third
party.

         1.11 "Territory" shall mean the entire world.


                           ARTICLE 2. GRANT OF LICENSE
                           ---------------------------


         2.1 License Grant. Vion hereby grants to San-Mar a non-transferable
exclusive license under the Technology to make, have made, use, or sell the
Products in the Field within the Territory, subject to the rights retained by
Vion described in Section 2.3 below.

         2.2 Sublicense Rights. Subject to Vion's prior written consent which
shall not be unreaonsably withheld or delayed, San-Mar shall have the right to
sublicense the rights granted hereunder to third parties for the purpose of
marketing, distributing and/or selling Products; provided, that, (a) San-Mar
shall remain primarily liable for the performance of such sublicensees; and (b)
each sublicensee shall enter into a written sublicense agreement having
substantially the same obligations toward Vion as those provided herein. All
sublicenses hereunder granted by San-Mar shall be coterminable with this
Agreement. Except as otherwise provided in this Section 2.2. San-Mar shall have
no right to sublicense any of the rights granted hereunder without the prior
written consent of Vion.

                                       3
<PAGE>

         2.3 Retention of Rights. Vion shall retain the right to make, use, and
practice the Technology for all uses outside the Field.

         2.4 Transfer of Documentary Know-How. Vion shall supply to San-Mar all
Know-How that now exists in a written or other tangible medium that Vion now
possesses and owns or controls and that is necessary or useful in the
manufacture and sale of the Products in the Field. Vion shall also furnish,
subject to third parties' rights that may hereafter come, all revisions and
modifications to such Know-How that may be developed or acquired by Vion from
time to time during the term of this Agreement.

                      ARTICLE 3. LICENSE FEE AND ROYALTIES
                      ------------------------------------


        3.1 Royalties.

                  3.1.1 In consideration of the license rights set forth in
Article 2 above, San-Mar shall pay to Vion a royalty equal to ten percent (10%)
of the Gross Revenue invoiced by San-Mar and/or permitted sublicensees (the
"Royalty"), subject to quarterly adjustment and an annual reconciliation based
upon final calculation of Gross Revenue taking into account the permissible
deductions under paragraph 1.3 hereof.

                  3.1.2 A Product shall be deemed to have been sold when
delivered or shipped, sixty (60) days after invoiced, or when paid for,
whichever is earliest. In the event that San-Mar shall transfer Products to a
permitted sublicensee (including an Affiliate), then the price charged by the
sublicensee to third parties shall be included in Gross Revenue.

         3.2 Minimum Royalties. For each Royalty Year during the term hereof,
San-Mar shall pay Vion an annual minimum royalty payment of $50,000 (a "Minimum
Royalty Payment"), irrespective of whether any sales of the Products have been
made which annual Minimum Royalty Payment of $50,000 shall be payable on the
last day of each Royalty Year. San-Mar shall credit payments of Royalty against
such Minimum Royalty Payments for each Royalty Year, and pay Vion the shortfall,
if any, in accordance with Section 4.2 hereof.

                                       4

<PAGE>
         3.3 Minimum Royalties Upon Termination. In the event that this
Agreement is terminated in accordance with the terms of Section 10.3.1 or 10.3.2
hereof, the Minimum Royalty Payment for the year of termination shall be
prorated for that portion of the year that the Agreement is in effect; provided,
however, that if this Agreement is terminated by San-Mar pursuant to the terms
of Section 10.3.1 or 10.3.2 hereof within six (6) months of the Effective Date,
no Minimum Royalty payments shall be due. In all other cases, the aggregate
Minimum Royalties Payments due hereunder shall accrue on termination.


                         ARTICLE 4. PAYMENTS AND REPORTS
                         -------------------------------

         4.1 Royalty Reports. Within thirty (30) days after the end of each
calendar quarter, San-Mar shall furnish to Vion a written report (the "Royalty
Report") setting forth (a) the gross sales of the Products, (b) the deductions
allowable under Section 1.3 in calculating Gross Revenues, (c) the Gross
Revenues, and (d) the Royalty, accompanied by full payment of the Royalty due
and payable thereon.

         4.2 Minimum Royalty Payments. In the event that the Royalties for any
Royalty Year during the term of this Agreement are less than the Minimum Royalty
Payment due for such Year, then San-Mar shall pay the difference between the
Royalty and the applicable Minimum Royalty Payment for such Royalty Year on
March 1, and shall satisfy its minimum royalty obligation by paying such
difference at that time. If San-Mar fails to make the Minimum Royalty Payments
set forth in Section 3.2 above, Vion shall have the option of terminating this
Agreement at any time by providing written notice to San-Mar of its intention to
terminate and giving San-Mar thirty (30) days to make the required Minimum
Royalty Payments. The failure by Vion to exercise such right of termination
shall not be deemed to be a waiver of any such right and shall not preclude Vion
from exercising such right of termination at any time after providing the notice
previously



                                       5
<PAGE>

specified. Such right of termination is not Vion's exclusive remedy and shall
not preclude Vion from pursuing any other rights or remedies available to Vion.

         4.3 Currency. The Royalties shall be paid to Vion in U.S. dollars,
without deductions for taxes, assessments, fees or charges of any kind. If Gross
Revenues are received in foreign currency, the exchange rate used for
calculating Royalty shall be the applicable currency exchange rated published by
the Wall Street Journal on the last business day of the month just prior to the
date payment is required to be made hereunder.

         4.4 Books and Records. San-Mar and its permitted sublicensees shall
keep and maintain complete and accurate records and books of account in
sufficient detail and form so as to enable verification of the Royalty payable
by San-Mar hereunder. Such records and books of account shall be maintained for
a period of no less than three (3) years following the calendar year to which
they pertain. San-Mar shall permit such records and books of account to be
examined by Vion or Vion's duly appointed agent, to enable Vion to verify the
amounts payable hereunder. Such examination shall be made no more than once
annually and shall be at Vion's expense, during normal business hours, and upon
thirty (30) days' prior written notice to San-Mar. In the event that San-Mar
underpaid the amounts due to Vion by more than five percent (5%), San-Mar shall
forthwith pay the cost of such examination, together with the deficiency not
previously paid.

         4.5 Regulatory Responsibility. San-Mar shall comply with all applicable
federal, state, and local laws, regulations, rules, and orders applicable to the
testing, production, transportation, packaging, labeling, promotion, export,
distribution, sale, and use of the Products in the Territory. In addition,
San-Mar shall be solely responsible for assuring compliance with all
applicable export laws and regulations applicable to this Agreement and
San-Mar's activities hereunder.

         4.6 Access. Vion may, upon reasonable prior written notice and at times
reasonably acceptable to San-Mar: (a) visit the facilities where the development
and manufacturing work is being conducted; and (b) consult informally, during
such visits and by telephone, with San-Mar's personnel conducting the
development and manufacturing work.

                                       6
<PAGE>

                  ARTICLE 5. DUE DILIGENCE IN COMMERCIALIZATION
                  ---------------------------------------------

         5.1      Plan of Commercialization.

                  5.1.1 San-Mar agrees to use commercially reasonable efforts
and diligence to (a) proceed with the development, manufacture, and sale of the
Products in the Territory and (b) develop markets for the Products in the Field.
Vion may terminate this Agreement at any time in accordance with Section 10.2.5
if San-Mar fails to exercise such due diligence within thirty (30) days after
notice of the alleged default with respect thereto from Vion. Such right of
termination is not Vion's exclusive remedy and shall not preclude Vion from
pursuing any other rights or remedies available to Vion.

                  5.1.2 As used in this Agreement, "commercially reasonable
efforts and diligence" shall mean that degree of effort, expertise and resources
that a person of ordinary skill, ability and experience in the matters addressed
herein would utilize or otherwise apply with respect to fulfilling its
obligations assumed hereunder, provided, however, that San-Mar shall not be
deemed to have failed to abide by or have failed to perform in accordance with
the foregoing standard to the extent that San-Mar is prevented from performing
or hindered in its performance of such standard by any act or omission of Vion,
or to the extent that San-Mar is prevented from complying with such standard by
reason of force majeure, including, without limitation, fire, flood, explosion,
storm, strike, lockout or other labor dispute, riot, war, accidents, acts of
God, acts of governmental agencies or instrumentalities, or any other cause or
externally induced casualty beyond San-Mar's reasonable control, whether similar
to the foregoing or not.

         5.2 Reports. San-Mar shall provide periodic status reports to Vion, at
least quarterly, indicating progress and problems to date in development and
commercialization, and a forecast and schedule of major events required to
market the Products in the Territory.

         5.3 Abandonment or Suspension of Commercialization. San-Mar shall use
commercially reasonable efforts to diligently and continuously promote the sale
of Products to


                                       7
<PAGE>

purchasers in each country in the Territory. If at any time San-Mar abandons or
suspends its development, manufacture, marketing, or intent to market the
Products for a period exceeding ninety (90) days, San-Mar shall immediately
notify Vion giving reasons therefore and a statement of its intended actions.

                               ARTICLE 6. PATENTS
                               ------------------

         6.1 Patent Marking. San-Mar shall apply, and shall require sublicensees
to apply, patent marking notices to the extent feasible and practical, and in
accordance with the applicable patent laws of any country where the Products are
made, sold, or used.

         6.2 Enforcement of Patents. Upon learning of the possible infringement
of any of the Patents by a third party, each party shall inform the other party
of that fact, and shall supply the other party with any evidence available to it
pertaining to the infringement. Vion shall have the sole right to defend the
Patents against infringement or interference by any third party in any country
in which a Patent is in effect hereunder, including bringing any legal action
for infringement or defending any counterclaim of invalidity or action of a
third party for declaratory judgment of non-infringement or interference. Vion
may settle any such actions solely at its own expense and through counsel of its
selection; provided, however, that San-Mar shall be entitled in each instance to
participate (but not control) through counsel of its selection at its own
expense. Vion shall bear the expenses of such actions and shall obtain the
benefits in the recoveries, if any, whether by judgment, award, decree or
settlement.

                    ARTICLE 7. REPRESENTATIONS AND WARRANTIES
                    -----------------------------------------

         7.1 Vion Representations. Vion represents and warrants to San-Mar that:

                  7.1.1 Vion (a) has the right to grant the licenses hereunder,
and (b) has not granted licenses to any other entity that would restrict the
rights granted hereunder;

                                       8

<PAGE>

                  7.1.2 Vion has not received any notice or claim asserting, and
has no knowledge of, any infringement, conflict or interference in respect of
the practice, or the proposed practice of the Patents;

                  7.1.3 This Agreement has been duly authorized, executed, and
delivered by Vion and is a valid, binding, and legally enforceable obligation of
Vion, subject to applicable bankruptcy, insolvency, moratorium, and other laws
now or hereafter in effect affecting the rights of creditors generally, and
subject (as to the enforcement of remedies) to equitable principles;

                  7.1.4 No consent, approval, authorization, or order of any
court or governmental agency or body is required for the consummation by Vion of
the transactions contemplated by this Agreement; and

                  7.1.5 The execution, delivery, and performance of this
Agreement will not result in a breach or violation of, or constitute a default
under, any statute, regulation, or other law to which it is a party or by which
it is bound, or any order, rule, or regulation of any court or governmental
agency or body having jurisdiction over it or any of its properties.

         7.2 San-Mar Representations. San-Mar represents and warrants to Vion
that:

                  7.2.1 This Agreement has been duly authorized, executed, and
delivered by it and is a valid, binding, and legally enforceable obligation of
it, subject to applicable bankruptcy, insolvency, moratorium, and other laws now
or hereafter in effect affecting the rights of creditors generally, and subject
(as to the enforcement of remedies) to equitable principles;

                  7.2.2 No consent, approval, authorization, or order of any
court or governmental agency or body is required for the consummation by it of
the transactions contemplated by this Agreement; and

                  7.2.3 The execution, delivery, and performance of this
Agreement will not result in a breach or violation of, or constitute a default
under, any statute, regulation, or other law or agreement or instrument to which
it is a party or by which it is bound, its charter documents, or



                                        9
<PAGE>

any order, rule, or regulation of any court or governmental agency or body
having jurisdiction over it or any of its properties.

         7.3 Limitations. EXCEPT AS PROVIDED IN SECTIONS 7.1.1 AND 7.1.2, VION
DISCLAIMS ALL WARRANTIES WHATSOEVER WITH RESPECT TO THE PATENTS, THE TECHNOLOGY,
AND THE PRODUCT, EITHER EXPRESS OR IMPLIED. THERE IS NO EXPRESS OR IMPLIED
WARRANTY: (a) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR (b)
THAT ANY PATENT IS VALID, OR (c) THAT THE USE OF THE PRODUCT WILL NOT INFRINGE
ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS, OR ANY OTHER EXPRESS OR
IMPLIED WARRANTIES. San-Mar shall make no statements, representations, or
warranties whatsoever to any third parties inconsistent with this Section 7.3.

                      ARTICLE 8. INDEMNIFICATION; INSURANCE
                      -------------------------------------

         8.1 Indemnification.

                  8.1.1 Except to the extent that the same results from the
gross negligence or willful acts of Vion, or the non-disclosure of any material
fact known to Vion relating to the Know-How and/or Technology, San-Mar shall
defend, indemnify and hold harmless Vion and its agents, from and against any
and all third party claims, demands, damages, suits, actions, judgments, awards,
fines, liabilities, losses, and all costs and expenses incurred in connection
therewith (including attorneys' fees) (collectively, "Losses") arising from or
in connection with any of the following: (a) the use by San-Mar, its Affiliates,
or permitted sublicensees of any method or process related to the Technology;
(b) the development, manufacture, handling, storage, labeling, use, promotion,
sale, or other disposition of the Products by San-Mar, its Affiliates or
permitted sublicensees, or other transferees; (c) failure by San-Mar to comply
with all applicable rules and regulations in the Territory in the manufacture,
handling, labeling, and sale of the Products; (d) failure to provide adequate
warnings; (e) the exposure to, or administration or use of, the Products by any
person; (f) a breach of any warranty or
representation by San-Mar herein; or (g) any willful act or omission or


                                       10
<PAGE>

negligence of San-Mar, its Affiliates, or permitted sublicensees, or their
respective employees, agents, or other contractors. Vion shall reasonably
cooperate with San-Mar in defending any such claim. Vion shall be entitled to
receive information regarding the status of any such matter and shall be
entitled to retain advisory counsel on its own behalf and at its own expense.

                  8.1.2 Vion shall defend, indemnify and hold harmless San-Mar,
from and against any and all Losses arising from or in connection with any of
the following: (a) a breach of any warranty or representation by Vion herein;
(b) any willful act or omission or negligence of Vion; or (c) the exercise by
Vion of its rights retained in Section 2.3 of this Agreement.

         8.2 Insurance. From the Effective Date and thereafter, San-Mar shall
purchase and maintain in effect and shall require any sublicensees to purchase
and maintain in effect a policy of general comprehensive products liability
insurance covering all claims with respect to the Products developed, tested,
manufactured or sold within the term of any license granted hereunder, which
policy shall (a) be in an amount of not less than $5 million combined single
limit for each occurrence of bodily injury and property damage; (b) provide that
such policy is primary and not excess or contributory with regard to other
insurance San-Mar may have; (c) provide at least thirty (30) days notice to Vion
of cancellation or material change, (d) include Vion as an additional insured,
and (e) be written to cover all claims made during or after the termination or
expiration of this Agreement. San-Mar shall furnish a certificate of such
insurance to Vion on the Effective Date and annually thereafter.


                                       11
<PAGE>

                               ARTICLE 9. SECRECY
                               ------------------

         9.1 Non-Disclosure. Except as otherwise provided in Section 9.2 below,
no party shall disclose to a third party any Proprietary Information. Each party
shall take all reasonable steps to minimize the risk of disclosure of
Proprietary Information or transfer, including without limitation, if
applicable: (a) ensuring that only its employees whose duties require them to
possess such information or materials have access thereto; (b) exercising at
least the same degree of care that it uses for its own proprietary information;
and (c) providing proper and secure storage for the Proprietary Information.

         9.2 Disclosure. Upon prior notice to the disclosing party, the
receiving party may disclose Proprietary to any governmental agency or judicial
authority that requires or legally requests such Proprietary Information;
provided, that protective orders or other assurances of confidentiality are
obtained to the extent reasonably available from such agency or authority.

         9.3 Equitable Remedies. Each party acknowledges that if any party
discloses Proprietary Information in violation of this Agreement, the other
parties shall have no adequate remedy in arbitration or at law and may seek such
equitable relief as it deems appropriate, including but not limited to
preliminary and permanent injunctive relief.

                        ARTICLE 10. TERM AND TERMINATION
                        --------------------------------

         10.1 Term. The term of this Agreement shall commence upon the date
San-Mar receives a fully executed counterpart of this Agreement and shall
continue in full force and effect until March 1, 2001, unless sooner terminated
as set forth in Sections 10.2 and 10.3. Upon the expiration of the initial term,
the term of this Agreement shall be renewed and extended automatically for a
second three (3) year term, unless either party notifies the other party in
writing at least sixty (60) days prior to the expiration of the initial term.


                                       12
<PAGE>

         10.2 Termination for Cause by Vion. Without prejudice to any other
rights it may have hereunder or at law or in equity, Vion may terminate this
Agreement immediately upon notice to San-Mar, upon the occurrence of any of the
following:

                  10.2.1 San-Mar becomes insolvent, an order for relief is
entered against San-Mar under any bankruptcy or insolvency laws or laws of
similar import (and in the case of an involuntary action only, such order of
relief is not discharged within thirty (30) days), or San-Mar fails generally to
pay its debts as they become due;

                  10.2.2 San-Mar makes an assignment for the benefit of its
creditors or a receiver or custodian is appointed for it or its business is
placed under attachment, garnishment or other process involving a significant
portion of its business;

                  10.2.3 After thirty (30) days' notice from Vion (stating its
intent to so terminate), San-Mar fails to make all payments due and owing
pursuant to Articles 3 and 4 hereof;

                  10.2.4 After sixty (60) days' notice from Vion (stating its
intent to so terminate), San-Mar fails to commence and diligently pursue to
remedy any material breach (other than breach for payment referred to in Section
10.2.3 hereof) of this Agreement; and

                  10.2.5 San-Mar fails to exercise due diligence in bringing the
Products to market in accordance with Section 5.1, and such failure is not
remedied within thirty (30) days after written notice as provided in Section
5.1.

         10.3     Termination by San-Mar.

                  10.3.1 Without prejudice to any other rights it may have
hereunder or at law or in equity, San-Mar may terminate this Agreement
immediately upon notice to Vion if, after sixty (60) days' notice from San-Mar
(stating its intent to so terminate), Vion fails to commence and diligently
pursue to remedy any material breach of this Agreement.

                  10.3.2 Notwithstanding anything to the contrary contained in
Section 10.3.1, San-Mar may terminate this Agreement without breach by Vion, if
in San-Mar's reasonable business





                                       13
<PAGE>

judgment, San-Mar is unable to develop and/or market a commercially viable
product or the continuation of such development and/or marketing is impractical.

         10.4     Rights and Duties Upon Termination.

                  10.4.1 Upon expiration or termination of this Agreement and
except as otherwise expressly provided herein, (a) all licenses granted to
San-Mar under this Agreement and, at Vion's option, any sublicenses granted by
San-Mar, shall terminate, (b) except as provided in this Section 10.4.1, both
parties shall immediately cease using the other party's Proprietary Information,
and (c) San-Mar shall provide Vion with all available Know-How in San-Mar's
possession or control and the right to use such Know-How.

                  10.4.2 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 such termination, including but not limited
to San-Mar's obligation to pay the Royalty and Minimum Royalty Payments
specified by Articles 3 and 4.

                  10.4.3 The following provisions shall survive expiration or
termination of this Agreement: Sections 3.3, 4.4, 7.3 and 10.4 and Articles 8
and 9.

                            ARTICLE 11. MISCELLANEOUS
                            -------------------------

         11.1 Notices. All notices, requests, demands, waivers, consents,
approvals, or other communications to any party hereunder shall be in writing
and shall be deemed to have been duly given if sent to such party by facsimile,
by registered or certified mail return receipt requested, postage prepaid, or by
commercial courier requiring receipt, to the following addressees:

         to Vion:
         --------

                  Vion Pharmaceuticals, Inc.
                  Four Science Park
                  New Haven, Connecticut  06511
                  Attention: President and Chief Executive Officer





                                       14
<PAGE>

         to San-Mar:
         -----------

                  San-Mar Laboratories, Inc.
                  4 Warehouse Lane
                  Elmsford, New York 10523
                  Attention: President

or to such other address as the addressee may have specified in notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval, or other communication will be deemed to have been given as
of the date so delivered by reputable, overnight courier requiring receipt, or
five (5) days after so mailed.

         11.2 Force Majeure. Failure by either party to perform its obligations
under this Agreement (excepting the obligation to make payments) shall not
subject such party to any liability to the other if such failure is caused or
occasioned by act of God, fire, explosion, flood, drought, war, riot, sabotage,
embargo, strikes or other labor trouble, compliance with any order, regulation
or request of government, or by any other event or circumstance of like or
different character to the foregoing beyond the reasonable control of such
party, provided such party uses reasonable efforts to remove such circumstance
and gives the other party prompt notice of the existence of such circumstance.

         11.3 Amendment and Entire Agreement. This Agreement may not be amended
or modified except by written agreement signed by all of the parties hereto.
This Agreement constitutes the entire agreement of the parties relating to the
subject matter hereof, and all prior representations and understandings are
merged into and superseded hereby.

         11.4 Governing Law. This Agreement shall be governed and interpreted,
and all rights and obligations of the parties shall be determined, in accordance
with the laws of the State of Connecticut, without regard to its principles of
conflicts of law.

         11.5 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach hereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the


                                       15
<PAGE>

arbitrator(s) may be entered in any court having jurisdiction thereof. Such
arbitration proceedings shall take place in New York, New York. The decision of
the arbitration proceeding shall be final and binding upon the parties.

         11.6 Assignment; Binding Effect. This Agreement shall not be assigned
by San-Mar without the prior written consent of Vion. Any attempted assignment
in contravention of this Section 11.6 without Vion's prior consent shall be null
and void. This Agreement and the rights herein granted shall be binding upon and
shall inure to the benefit of the parties and their respective successors,
heirs, and permitted assigns.

         11.7 Severability. The provisions of this Agreement shall be deemed
separable. In the event any provision of this Agreement is found in any
jurisdiction to be in violation of public policy or illegal or unenforceable in
law or equity, such finding shall in no event invalidate any other provision of
this Agreement in that jurisdiction, and this Agreement shall be deemed amended
to the minimum extent required to comply with the law of such jurisdiction.

         11.8 No Waiver. The failure of any party hereto to enforce at any time,
or for any period of time, any provision of this Agreement shall not be
construed as a waiver of either such provision or the right of such party
thereafter to enforce each and every provision of this Agreement.

         11.9 Counterparts. This Agreement may be executed in any number of
counterparts and any party may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first set forth above.

                           VION PHARMACEUTICALS, INC.


                           /s/ John Spears



                                       16
<PAGE>
                           By:     John Spears
                           Title:  President and Chief Executive Officer



                           SAN-MAR LABORATORIES, INC.


                           /s/ Marvin Berkrot
                           By:    Marvin Berkrot
                           Title: President


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                                                                       EXHIBIT A
                                                                       ---------


                                     PATENTS
                                     -------


TITLE OF PATENT                                       PATENT NUMBER
---------------                                       -------------

1.       Soluble Melanin                               5,216,116

2.       Soluble Melanin                               5,218,079

3.       Soluble Melanin                               5,225,435

4.       Synthetic Melanin                             5,227,459

5.       Soluble Melanin                               5,618,519

6.       Synthetic Melanin As a Subscreen And          5,384,116
         Tanning Agent

7.       Cosmetic Melanins                             5,744,125

8.       Decreasing the Melanin Content in Mammalian   5,126,125
         Skin and Hair using 5,6 dihydroxindole
         derivatives

9.       Composition and Method for Whitening Skin     5,523,077


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