<PAGE>   1

                                                                   EXHIBIT 10.22


                     CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
                 BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT
          PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934
               AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION


                AMENDED AND RESTATED LICENSE AND SUPPLY AGREEMENT

         This Amended and Restated License and Supply agreement ("Agreement")
dated as of November 1, 1999 ("Amendment Date"), amends and restates the License
and Supply Agreement dated as of January 11, 1999 ("Effective Date") between
EPOCH PHARMACEUTICALS, INC., 12277 134th Court NE, Suite 100, Redmond, WA
("Epoch") and PE CORPORATION (formerly known as THE PERKIN-ELMER CORPORATION)
having its PE Biosystems Division at 850 Lincoln Centre Drive, Foster City, CA
94404 ("Perkin-Elmer"), as amended June 30, 1999.

                     ARTICLE I. BACKGROUND OF THE AGREEMENT

1.01     Epoch represents that it has rights under certain patents pertaining to
         oligonucleotides having a minor-groove binding moiety covalently
         attached thereto ("MGB Oligonucleotide"), and methods for making and
         using such MGB Oligonucleotides.

1.02     Perkin-Elmer wishes to acquire exclusive and non-exclusive licenses,
         depending on fields of use, under such patents.

1.03     Epoch represents that it has certain know-how relating to the synthesis
         of MGB Oligonucleotides, and the design of sequence-specific probes
         comprising such oligonucleotides.

1.04     Perkin-Elmer wishes to have Epoch supply (i) intermediate compounds
         useful for making MGB Oligonucleotides, and (ii) information with
         respect to chemical synthesis and purification know-how relating to the
         production of MGB Oligonucleotides using such intermediate compounds.

1.05     Concurrently with this Agreement, which amends and restates the License
         and Supply Agreement by and between Perkin-Elmer and Epoch dated as of
         January 11, 1999, as amended on June 30, 1999 ("Original Agreement"),
         Perkin-Elmer and Epoch will enter into a Know-How Escrow Agreement,
         pursuant to which Epoch will deposit into escrow documentation of
         know-how necessary to enable a person skilled in oligonucleotide
         chemistry to manufacture MGB Intermediates. The Know-How Escrow
         Agreement is being entered into between Epoch and Perkin-Elmer to
         provide that Perkin-Elmer will have access to the know-how required to
         manufacture MGB Intermediates if Epoch should be unable to meet its
         obligations to supply Perkin-Elmer MGB Intermediates pursuant to this
         Agreement.

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1.06     In connection with the Original Agreement, Epoch granted Perkin-Elmer a
         security interest in the Licensed Patent (as hereinafter defined), in
         order to induce Perkin-Elmer to provide a pre-payment of [ * ] Dollars
         ([ * ]) under the Original Agreement. Pursuant to a Stock Purchase
         Agreement between Epoch and the Investors Listed on Schedule A thereto,
         dated November 1, 1999 (the "Stock Purchase Agreement"), Perkin-Elmer
         is using One Million Dollars ($1,000,000) of this pre-payment, and an
         additional One Million Dollars ($1,000,000) in cash, to purchase Eight
         Hundred Thousand (800,000) shares of Common Stock of Epoch, at a
         purchase price of Two Dollars And Fifty Cents ($2.50) per share. Other
         Investors will purchase up to Two Million Six Hundred Thousand
         (2,600,000) shares of the Common Stock of Epoch pursuant to the Stock
         Purchase Agreement at the same purchase price of Two Dollars And Fifty
         Cents ($2.50) per share. It is the parties intent that the Security
         Agreement previously executed by the parties in conjunction with the
         Original Agreement, and attached thereto as Exhibit A, will remain in
         effect to secure any unused portion of the pre-payments made by
         Perkin-Elmer pursuant to Section 5.12 of this Agreement.

                             ARTICLE II. DEFINITIONS

2.01     "Affiliates" means any corporation, firm, partnership or other entity,
         whether de jure or de facto, which directly or indirectly owns, is
         owned by or is under common ownership with a Party to this Agreement,
         as the case may be, to the extent of at least fifty percent of the
         equity (or such lesser percentage which is the maximum allowed to be
         owned by a foreign corporation in a particular jurisdiction) having the
         power to vote on or direct the affairs of the entity.

2.02     "Net Sales" means (1) with respect to sales by a Party, or an Affiliate
         of a Party, to non-affiliated third party purchasers, the actual amount
         of gross sales of Licensed Product(s) to a third party, less: trade,
         cash and quantity discounts granted at the time invoiced, if any,
         actually allowed, amounts refunded for faulty or defective product,
         returns, rejections, freight, insurance and other transportation costs
         (except income taxes), tariffs, duties and similar governmental charges
         paid, to the extent included in gross sales price, (2) with respect to
         sales by a Party made to any Affiliate or to any person, firm or
         corporation enjoying a special course of dealing with a Party, the Net
         Sales will be determined based on the first resale in a bona fide
         arms-length transaction of Licensed Product(s) by such Affiliate,
         person, firm or corporation to third parties, and (3) with respect to
         Licensed Product(s) which are used by a Party, or an Affiliate of a
         Party, to supply services or information to a third party for
         commercial purposes, or are otherwise disposed of, the Net Sales will
         be determined as if such Licensed Product(s) had been sold at the
         average Net Sales for such Licensed Product(s) during the past one
         hundred and twenty days prior to the supply of such services or
         information.

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


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         With respect to Licensed Product comprising Licensed Know-How in the
         form of software embodying algorithms for determining the melting
         temperature of MGB Oligonucleotides, Net Sales for software sold
         separately shall be calculated as set forth above, and Net Sales for
         software sold or otherwise transferred in combination with equipment,
         other software or other products, or otherwise provided by Perkin-Elmer
         to its customers, will be determined as if such software had been sold
         at the average Net Sales price for such software during the past one
         hundred and twenty (120) days prior to such sale, transfer or
         disposition.

2.03     "License Year" means the twelve month period beginning on the first day
         of January, April, July or October next following the Effective Date,
         and each twelve month period thereafter, except that the first License
         Year will include the period from the Effective Date to the first day
         of the twelve month period.

2.04     "Party" means Epoch or Perkin-Elmer and, when used in the plural, will
         mean Epoch and Perkin-Elmer.

2.05     "Licensed Patent" means U.S. Patent No. 5,801,155 titled Covalently
         Linked Oligonucleotide Minor Groove Binder Conjugates, issued September
         1, 1998, including any Related Patent.

2.06     "Related Patent" means any patent or patent application owned, held, or
         otherwise controlled, in whole or in part by Epoch that (1) discloses
         and/or claims substantially the same subject matter as a Licensed
         Patent, (2) discloses and/or claims improvements to inventions
         disclosed or claimed in a Licensed Patent and requires rights under the
         Licensed Patent to exploit such improvements, (3) claims priority to, a
         Licensed Patent, including but not limited to continuation applications
         and patents, continuation-in-part applications and patents, divisional
         applications and patents, reexamination applications and patents,
         reissue applications and patents, and continuing prosecution
         applications and patents, (4) is a parent of U.S. Patent No. 5,801,155,
         and/or (5) any foreign equivalents of a Licensed Patent or any patent
         or patent application in (1), (2), (3) or (4) above.

2.07     "Licensed Product" means any product for use in the Exclusive Licensed
         Field or the Non-Exclusive Licensed Field (i) which, but for the
         license granted hereunder, manufacture, use or sale thereof would
         infringe at least one Valid Claim of a Licensed Patent, or (ii) which
         otherwise uses, incorporates or was developed or manufactured using
         Licensed Know-How.

2.08     "MGB Oligonucleotide" means Licensed Product comprising an
         oligonucleotide having a minor-groove binding moiety covalently
         attached thereto, and, at Perkin-Elmer's option, further comprising a [
         * ]. A Purified MGB Oligonucleotide means an MGB Oligonucleotide that
         is at least [ * ] pure based on the HPLC assay specified in Exhibit B.



*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


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2.09     "MGB Intermediate" means an intermediate useful for the synthesis of an
         MGB Oligonucleotide, including but not limited to [ * ]. The identity
         of a MGB Intermediate will be confirmed based on an assay which shall
         be mutually agreed upon by the parties hereto, and included in an
         amendment to Exhibit B within ninety (90) days from the execution of
         this Agreement.

2.10     "Probe Unit" means that amount of MGB Intermediate required to make [ *
         ] of a Purified MGB Oligonucleotide.

2.11     "Kits" means products containing MGB Oligonucleotides packaged with
         other materials and reagents, such other reagents including but not
         limited to enzymes, reaction buffers and nucleotide triphosphates. Also
         included within the definition of Kits are microfluidic devices
         containing or packaged with MGB Oligonucleotides.

2.12     "Bare Probe" means a MGB Oligonucleotide provided alone.

2.13     "Valid Claim" means a claim of a Licensed Patent (or pending
         application included in the Related Patents) which has not been held
         permanently invalid or otherwise unenforceable by a court of competent
         jurisdiction, unappealable or unappealed within the time allowed for
         appeal, or has not otherwise finally been held unpatentable by an
         appropriate administrative agency, unappealable or unappealed within
         the time allowed for appeal.

2.14     "Exclusive Licensed Field" means  the  5'-Nuclease Assay Field.

2.15     "Real-Time Nucleic Acid Amplification Monitoring Field" means the
         monitoring of a polymerase chain reaction by detecting a change in a
         magnitude of a detectable signal as a function of reaction cycle
         practiced outside of the HIVD Field only.

2.16     "5'-Nuclease Assay Field" means the detection of a nucleic acid
         sequence based on the cleavage of a nucleic acid probe that is
         hybridized to the nucleic acid sequence by a 5' to 3' nuclease activity
         of a polymerase enzyme, as generally described in U.S. Patent No.
         5,487,972, practiced outside of the HIVD Field only.

2.17     "Non-Exclusive Licensed Field" means (1) use of MGB Oligonucleotides as
         ligation probes in an oligonucleotide ligation assay, generally as
         described in U.S. Patent No. 4,883,750; (2) use of MGB Oligonucleotides
         in an assay employing [ * ]; (3) use of MGB Oligonucleotides as primers
         in a primer extension reaction, including but limited to a PCR reaction
         or a DNA sequencing reaction, and (4) use of MGB Oligonucleotides in
         the Real-Time Nucleic Acid Monitoring Field, to the extent that (1),
         (2), (3) and (4) are practiced outside of the Exclusive Licensed Field
         and practiced outside of the HIVD Field.

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


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2.18     "Human In Vitro Diagnostics Field ("HIVD Field") means products and
         processes for the measurement of attributes, characteristics, diseases,
         traits or other conditions of a human being for the medical management
         of that human being.

2.19     "Licensed Know-How" means trade secrets, technical information,
         experimental data, software and other knowledge now existing and
         controlled by Epoch relating to (1) the chemical synthesis and
         purification of MGB Oligonucleotide using MGB Intermediate, and (2)
         algorithms and related software for determining the melting temperature
         of MGB Oligonucleotide, as described in Section 5.04 and Exhibit C, to
         the extent that such technical information, experimental data, software
         and other knowledge is not publicly available.

2.20     "Confidential Information" means information received by one Party
         (Receiving Party) from the other Party (Disclosing Party) (1) that the
         Receiving Party has a reasonable basis to believe is confidential to
         the Disclosing Party, or is treated by the disclosing Party as
         confidential, (2) is identified at the time of disclosure as
         "CONFIDENTIAL" and, (3) in the case of disclosures in non-written form,
         is identified in writing within thirty (30) days as confidential.
         Notwithstanding the above, Confidential Information will not include
         any information which:

         (1)      can be demonstrated to have been in the public domain as of
                  the Effective Date or comes into the public domain during the
                  term of this Agreement through no act of the recipient; or

         (2)      can be demonstrated to have been independently known to the
                  recipient prior to the receipt thereof, or made available to
                  the recipient as a matter of lawful right by a third party; or

         (3)      can be demonstrated to have been rightfully received by the
                  recipient from a third party who did not require the recipient
                  to hold it in confidence or limit its use and who did not
                  acquire it, directly or indirectly, from the other Party to
                  this Agreement under a continuing obligation of
                  confidentiality; or

         (4)      will be required for disclosure to any governmental regulatory
                  agencies pursuant to approval for use, provided the Disclosing
                  Party is given reasonable notice of such proposed disclosure
                  and, if requested by the Disclosing Party, the Receiving Party
                  uses reasonable efforts to maintain the confidentiality of
                  such information in such governmental submission; or

         (5)      is independently conceived, invented or acquired by
                  researchers of the recipient who have not been personally
                  exposed to the information provided to the recipient
                  hereunder; or

         (6)      is published by a governmental agency as part of the normal
                  patent filing and prosecution process.


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2.21     "Discovery Order" means a sale or other disposition by Perkin-Elmer of
         Bare Probes represented to the customer as containing 2,000 picomols of
         MGB Oligonucleotides.

2.22     "Small Order" means a sale or other disposition by Perkin-Elmer of Bare
         Probes represented to the customer as containing 5,000 picomols of MGB
         Oligonucleotides.

2.23     "Medium Order" means a sale or other disposition by Perkin-Elmer of
         Bare Probes represented to the customer as containing 20,000 picomols
         of MGB Oligonucleotides.

2.24     "Large Order" means a sale or other disposition by Perkin-Elmer of Bare
         Probes represented to the customer as containing more than 75,000 and
         less than 100,000 picomols of MGB Oligonucleotides.

                           ARTICLE III. LICENSE GRANT

3.01     Exclusive License. Epoch hereby grants to Perkin-Elmer a world-wide
         exclusive license under Licensed Patents and Licensed Know-How to make,
         use, offer to sell, sell and import Licensed Products in the Exclusive
         Licensed Field.

3.02     Non-Exclusive License. Epoch hereby grants to Perkin-Elmer a world-wide
         non-exclusive license under Licensed Patents and Licensed Know-How to
         make, use, offer to sell, sell and import Licensed Products in the
         Non-Exclusive Licensed Field.

3.03     Sublicenses. Perkin-Elmer will have no right to sublicense its license
         rights granted hereunder.

3.04     Restrictions. Perkin-Elmer will not knowingly sell, market, make or
         have made, Licensed Products for use outside the Exclusive Licensed
         Field or the Non-Exclusive Licensed Field. In the event that
         Perkin-Elmer does inadvertently sell, market, make or have made,
         Licensed Products for use outside the Exclusive Licensed Field or the
         Non-Exclusive Licensed Field, Perkin-Elmer will within thirty (30) days
         of learning of such activity cease such activity. Epoch will not
         knowingly sell, market, make or have made MGB Intermediate and/or MGB
         Oligonucleotide to third parties in the Exclusive Licensed Field. In
         the event that Epoch does inadvertently sell, market, make or have made
         MGB Intermediate and/or MGB Oligonucleotide to third parties in the
         Exclusive Licensed Field, Epoch will within thirty (30) days of
         learning of such activity cease such activity. Licensed Products
         comprising Licensed Know-How in the form of software embodying
         algorithms for determining the melting temperature of MGB
         Oligonucleotide, as described in Section 5.04 and Exhibit C, will only
         be sold or marketed pursuant to a limited-use non-exclusive license
         agreement consistent with Perkin-Elmer's normal practice for the sale
         and marketing of like software products.


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3.05     Patent Prosecution. To the extent commercially practicable, Epoch will
         file and diligently prosecute patent applications with respect to the
         Licensed Patent in at least the United States, Germany, France,
         Switzerland, United Kingdom, Sweden, Italy, Japan, Australia and
         Canada.

            ARTICLE IV. LICENSE FEE; ROYALTIES; PAYMENT FOR KNOW-HOW

4.01     License Fees. Perkin-Elmer paid to Epoch after the Effective Date, [ *
         ] Dollars ([ * ]), [*]% of which will be creditable against future
         royalties called for under Section 4.02. Perkin-Elmer will use credits
         against future royalties at a rate not to exceed [ * ] Dollars ([ * ])
         per License Year. In addition, upon the first commercial sale of a
         Licensed Product for each of the four uses listed in the definition of
         "Non-Exclusive Licensed Field," Perkin-Elmer will pay to Epoch, within
         ten (10) business days of each such first commercial sale, an
         additional license fee of [ * ] Dollars ([ * ]).

4.02     Royalties.

         (a)      Percentage Royalties. Perkin-Elmer will pay to Epoch
                  percentage royalties on the Net Sales of Licensed Products
                  sold or otherwise disposed of under the license granted under
                  Sections 3.01 and 3.02 of this Agreement as follows:

<TABLE>
<S>                                                                           <C>
                      Bare Probes covered by a Valid Claim                    [ * ]% for Discovery Orders, Small
                                                                              Orders and Medium Orders and [ * ]%
                                                                              for Large Orders
                      Kits covered by a Valid Claim                           [ * ]%

                      Bare Probes not covered by a Valid Claim                [ * ]% for Discovery Orders, Small
                                                                              Orders and Medium Orders and [ * ]%
                                                                              for Large Orders
                      Kits not covered by a Valid Claim                       [ * ]%
                      Software                                                [ * ]%
</TABLE>

                  No percentage royalties will be owed under this Section 4.02
                  (a) for the sale by Perkin-Elmer of any Bare Probes or Kits
                  not covered by a Valid Claim in the event that (i) the
                  Licensed Know-How becomes publicly available, (ii)
                  Perkin-Elmer is placed at a commercial disadvantage as a
                  result of such know-how becoming publicly available, and (iii)
                  such know-how was not made publicly available by Perkin-Elmer.

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


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                  (b) Unit Royalties. In addition to any percentage royalties
                  which may be payable under Section 4.02(a), Perkin-Elmer will
                  pay to Epoch unit royalties on sales or other dispositions of
                  Licensed Products under the license granted under Sections
                  3.01 and 3.02 of this Agreement as follows:

                                 Each Discovery Order               $[ * ]
                                 Each Small Order                   $[ * ]
                                 Each Medium Order                  $[ * ]
                                 Each Large Order                   $[ * ]

         Perkin-Elmer may credit against amounts due under this Section 4.02(b),
         any amounts paid to Epoch for MGB Intermediates under Section 5.03.

4.03     Acknowledgment for Payment for Know-How. Perkin-Elmer paid Epoch after
         the Effective Date of this Agreement, as additional consideration for
         the transfer of and license under Licensed Know-How and for Epoch
         having made available, after the Effective Date of the First Amendment
         of this Agreement, source code embodying algorithms for determining the
         melting temperature of MGB Oligonucleotide as described in Section 3.04
         and Exhibit C, the following payments: (i) a one time payment of [ * ]
         Dollars ([ * ]), and (ii) three (3) payments totaling [ * ], which
         represented monthly payments of [ * ] Dollars ([ * ]) (adjusted on a
         pro rata basis), paid between June 15, 1999 and August 23, 1999 (the
         date of the first New Product Release of a Licensed Product); as used
         herein, the term "New Product Release" means that point in a
         Perkin-Elmer product development program at which a product is released
         for unrestricted manufacture and sale to customers under PE Biosystems
         ISO 9001 Product Development Procedures. As yet additional
         consideration for the transfer of and license under Licensed Know-How,
         Perkin-Elmer will give to Epoch an ABI PRISM tm Model 7700 Sequence
         Detection System instrument (p/n 7700-01-200/208) [ * ]. The instrument
         provided hereunder will include all installation services and
         warranties typically provided to customers in connection with the
         purchase of such instrument. However, Perkin-Elmer will not provide an
         optional service contract covering the instrument. All reagents will be
         purchased by Epoch using conventional retail distribution channels.

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


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4.04     Payment Dates and Statements. Within forty-five (45) days of the end of
         each calendar quarter in which Net Sales occur, Perkin-Elmer will
         calculate the royalty amount owed to Epoch under this Section 4 and
         will remit such amount to Epoch. Such payment will be accompanied by a
         statement showing the calculation of the amount owed for Licensed
         Products, including the number of Discovery Orders, Small Orders,
         Medium Orders and Large Orders, the Net Sales of Licensed Products for
         that quarter (including the gross invoiced sales and permissible
         deductions therefrom), and the exchange rate (as determined pursuant to
         Section 4.06) used to directly convert any royalty amounts into U.S.
         Dollars.

4.05     Late Payments. Any payment owed to Epoch under this Agreement that is
         not paid on or before the date such payment is due will bear interest,
         to the extent permitted by applicable law, at twelve percent (12%) per
         annum, calculated on the number of days such payment is delinquent.

4.06     Currency of Payments. All payments under this Agreement will be made
         U.S. Dollars by wire transfer to such bank account as Epoch may
         designate from time to time. Any payments due hereunder on Net Sales
         outside of the United States will be payable in U.S. Dollars at the
         average of the rate of exchange of the currency of the country in which
         the Net Sales are made as reported in the New York edition of The Wall
         Street Journal, for the last three (3) business days of the quarter for
         which the royalties are payable.

4.07     Other Taxes. Perkin-Elmer will pay all sales, use, transfer or similar
         taxes, whether foreign, federal (United States), state or local,
         however designated, that are levied or imposed by reason of the sale or
         transfer of Licensed Products contemplated hereby, and any penalties,
         interest and collection or withholding costs associated with any of the
         foregoing items.

4.08     Records, Review. Perkin-Elmer will keep accurate records of all
         operations affecting payments hereunder, and will permit Epoch or its
         duly authorized agent to inspect all such records and to make copies of
         or extracts from such records during regular business hours throughout
         the term of this Agreement and for a reasonable period of not less than
         three (3) years thereafter, provided that the frequency of such
         inspections is no more than once per License Year. If the review
         results in a determination of an underpayment of royalties to Epoch,
         such underpayment will be promptly remitted to Epoch with interest as
         provided in Section 4.05. If such inspection determines that Net Sales
         were more than 105% of the Net Sales reported by Perkin-Elmer for the
         period under review, Perkin-Elmer will pay all of the reasonable costs
         of such review.

4.09     Review and Revision of Agreement Terms. In November 2000, the Parties
         will negotiate in good faith to such revisions to the terms of this
         Agreement, including without limitation, the royalties and the purchase
         price for MGB Intermediates, so that the revenue and profitability to
         Epoch is based on the currently anticipated mix of Discovery Orders,
         Small Orders, Medium Orders and Large Orders sold by Perkin-Elmer, and
         so that Epoch shares in profitability gains from increased
         manufacturing efficiencies of Perkin-Elmer. In furtherance of this
         Section, prior to such negotiation, Perkin-Elmer shall supply to Epoch
         reports which set forth the revenue and gross profit of Perkin-Elmer
         with respect to all Discovery Orders, Small Orders, Medium Orders and
         Large


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         Orders up to that point, so as to allow the parties to fairly evaluate
         the economics of this Agreement.

                                ARTICLE V. SUPPLY

5.01     Purchases. Subject to the terms and conditions of this Agreement, Epoch
         will sell MGB Intermediates to Perkin-Elmer, and Perkin-Elmer will
         purchase such MGB Intermediates from Epoch. Perkin-Elmer will not
         purchase any Licensed Product from any third-party. By March 31, 2000,
         Perkin-Elmer shall purchase [Quantity] of MGB Intermediate which
         represents Perkin-Elmer's forecasted annual requirements. Perkin-Elmer
         shall within [__] days of the beginning of each calendar quarter
         provide to Epoch a revised forecast for the subsequent four (4)
         quarters and during such quarter shall purchase sufficient MGB
         Intermediate to maintain, at all times, an inventory of MGB
         Intermediate equal to its current forecasted annual requirements.
         Notwithstanding anything to the contrary contained herein, it is the
         parties intent that Perkin-Elmer shall at all times, from March 31,
         2000 until this Agreement expires or is terminated pursuant to Article
         VIII, maintain a level of inventory of MGB Intermediate which is equal
         to its current forecasted annual requirements.

5.02     Specifications. MGB Intermediates will meet the product specifications
         set forth in Exhibit A. The Parties will reasonably agree on any
         changes to such specifications, and any such changes will be in
         writing.

5.03     Price. Epoch will charge Perkin-Elmer and Perkin-Elmer will pay Epoch
         [ * ] ([ * ]) per Probe Unit of MGB Intermediate.

5.04     Transfer of Know-How. Epoch will transfer Licensed Know-How to
         Perkin-Elmer to the extent necessary for Perkin-Elmer to make full use
         of MGB Intermediates, MGB Oligonucleotides, and algorithms and related
         software for determining the melting temperature of MGB
         Oligonucleotides. Such Licensed Know-How will include, but not be
         limited to, that information specified in Exhibit C. All Licensed
         Know-How is considered Confidential Information and will only be used
         by Perkin-Elmer in connection with the exploitation of the license
         rights granted in Article III. All Licensed Know-How will remain owned
         by Epoch.

5.05     Contingent Manufacturing Rights for MGB Intermediates. Perkin-Elmer has
         no rights hereunder to manufacture or purchase MGB Intermediates from
         third parties. However, in the event Epoch is unable to supply at least
         ninety-five percent (95%) of Perkin-Elmer's requirements of MGB
         Intermediates for more than four (4) months after receipt of written
         notice from Perkin-Elmer of a material failure to so supply,
         Perkin-Elmer shall have the right to manufacture or purchase from third
         parties its requirements of MGB Intermediates until Epoch demonstrates
         that it can again supply Perkin-Elmer's requirements of MGB
         Intermediates. Epoch shall cooperate in obtaining such alternate supply
         source, including, without limitation, transferring such technology and
         know-how,

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


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         and license rights as are reasonably necessary for Perkin-Elmer or a
         third party to manufacture MGB Intermediates. To facilitate such
         transfer, prior to December 31, 1999, Epoch shall deposit with Heller
         Ehrman White & McAuliffe as escrow agent, pursuant to an Escrow
         Agreement in the form attached as Exhibit C, sufficient documentation
         of the know-how necessary to enable a person skilled in oligonucleotide
         chemistry to manufacture MGB Intermediates. The Escrow Agreement shall
         contain a provision granting the right to the Escrow Agent (as defined
         therein), or a neutral third party mutually agreeable to Perkin-Elmer
         and Epoch, to verify, audit and inspect the documentation to be held or
         held in deposit to confirm that it is sufficient to provide a person
         skilled in oligonucleotide chemistry the know-how necessary to
         manufacture MGB Intermediates.

5.06     Purchase Orders. Perkin-Elmer will purchase MGB Intermediates from
         Epoch by issuing a written purchase order identifying MGB Intermediates
         to be purchased, the quantity, price, shipping instructions, delivery
         dates, and any other special information. To the extent the terms of
         any such purchase order differ from or conflict with the terms of this
         Agreement, the terms of this Agreement will govern. Within thirty (30)
         days of the date hereof and prior to the end of each calendar month
         thereafter, Perkin-Elmer will submit a six-month rolling forecast of
         estimated MGB Intermediates requirements. The forecast for the first
         two (2) months will constitute a binding purchase order and the balance
         of such Perkin-Elmer's forecast will be non-binding.

5.07     Modifications. Perkin-Elmer may modify, defer or cancel a purchase
         order not later than two (2) months prior to the scheduled shipment of
         MGB Intermediates.

5.08     Shipment. Shipment will be made freight prepaid, F.O.B. Epoch's
         facility, to the address set forth on Perkin-Elmer's purchase order.
         Epoch will invoice Perkin-Elmer on a separate line for all shipping
         charges ("pre-pay and add"). Title and risk of loss will pass from
         Epoch to Perkin-Elmer upon delivery to carrier at the F.O.B. point.

5.09     Invoicing; Payment. Epoch will submit an invoice to Perkin-Elmer with
         each shipment of MGB Intermediates. Each invoice will be due and
         payable net forty five (45) days from the date of shipment.

5.10     Inspection, Rejection. Perkin-Elmer will inspect all MGB Intermediates
         received for defects and for conformance with the purchase order.
         Perkin-Elmer may reject any MGB Intermediates that is defective or that
         fails to conform to the purchase order. Any such rejection must be made
         within ten days (10) of receipt of the MGB Intermediates by
         Perkin-Elmer. To reject any MGB Intermediates, Perkin-Elmer will notify
         Epoch of its rejection and will promptly return the rejected MGB
         Intermediates to Epoch. Epoch will immediately replace the MGB
         Intermediates with conforming goods.


                                       11
<PAGE>   12

5.11     Pre-Payment. In addition to the License Fees paid under 4.01,
         Perkin-Elmer has paid Epoch [ * ] Dollars ([ * ]) as a pre-payment
         towards future purchases of MGB Oligonucleotides and MGB Intermediates.
         Epoch will credit One Million Dollars ($1,000,000) of this pre-payment
         to purchase 400,000 shares of Common Stock of Epoch, at a purchase
         price of Two Dollars And Fifty Cents ($2.50) per share, pursuant to a
         Stock Purchase Agreement dated November 1, 1999. Perkin-Elmer will
         credit purchases of MGB Intermediates against the remaining [ * ]
         Dollars ([ * ]) of this pre-payment at a rate not to exceed [ * ]
         Dollars ([ * ]) per License Year.

5.12     Security Interest. In order to secure any unused portion of the
         pre-payments made under Section 5.11 (up to [ * ] Dollars ([ * ])),
         Epoch has granted to Perkin-Elmer a security interest in the Licensed
         Patent pursuant to a Security Agreement dated December, 1998, which is
         in the form attached hereto as Exhibit A, which the parties agree shall
         remain in force and in effect. Epoch may, at any time, return all or a
         portion of the unused prepayments. In the event the unused balance of
         the prepayments is Fifty Thousand Dollars ($50,000) or less, the
         security interest will terminate.

5.13     Annual Minimum Purchase. Perkin-Elmer will, during each License Year,
         purchase at least [ * ] Dollars ([ * ]) worth of MGB Intermediates from
         Epoch (based on the purchase price set forth in Section5.03). In the
         event that Perkin-Elmer has not, by the end of such License Year,
         purchased such minimum amount, it will promptly, within thirty (30)
         days of the end of such License Year, purchase an amount of MGB
         Intermediates necessary to meet such annual minimum amount. Such
         additional amounts will not be counted towards the annual minimum
         amount in the License Year in which they were purchased.

                   ARTICLE VI. REPRESENTATIONS AND WARRANTIES

6.01     Product Warranty. Epoch warrants to Perkin-Elmer that, upon delivery of
         any MGB Intermediates to Perkin-Elmer, such MGB Intermediates will be
         free from defects in material, workmanship, design and title, and will
         substantially meet the specifications attached hereto as Exhibit A (or
         any mutually agreed upon replacements).

6.02     Documentation Warranty. Epoch further warrants that the MGB
         Intermediates, and all literature, packaging, inserts, accompanying
         materials, and any other documentation supplied by Epoch in connection
         with the MGB Intermediates will not contain any misrepresentation as to
         the nature or performance of the MGB Intermediates.

6.03     Remedies. If any MGB Intermediates fails to meet the foregoing
         warranties, in addition to satisfying any other remedies Perkin-Elmer
         may have, Epoch will replace such deficient MGB Intermediates in the
         most timely manner possible at its own expense or Epoch will refund to
         Perkin-Elmer all costs associated with the purchase and shipping of
         that MGB Intermediates.

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


                                       12
<PAGE>   13

6.04     Disclaimer. EXCEPT FOR THE EXPRESS WARRANTY AGAINST DEFECTS IN DESIGN,
         MATERIALS, TITLE AND WORKMANSHIP CONTAINED HEREIN, EPOCH MAKES NO
         WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, AND ALL WARRANTIES
         OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY
         DISCLAIMED BY EPOCH. Without limitation of the foregoing, Epoch
         expressly disclaims any liability whatsoever for any damages incurred,
         directly or indirectly, in connection with the Licensed Products and/or
         the MGB Intermediates, including without limitation, loss of profits
         and special, incidental or consequential damages.

6.05     Representations and Warranties. Each Party represents, warrants and
         covenants to the other Party that:

         (1)      it has the corporate power and authority and legal right to
                  enter into this Agreement and to perform its obligations
                  hereunder;

         (2)      the execution and delivery of this Agreement and the
                  performance of the transactions contemplated thereby have been
                  duly authorized by all necessary corporate action of such
                  Party;

         (3)      the execution and delivery of this Agreement and the
                  performance by such Party of any of its obligations under this
                  Agreement do not and will not (a) conflict with, or constitute
                  a breach or violation of, any other contractual obligation to
                  which it is a party, any judgment of any court or governmental
                  body applicable to such Party or its properties or, to such
                  Party's knowledge, any statute, decree, order, rule or
                  regulation of any court or governmental agency or body
                  applicable to such Party or its properties, and (b) with
                  respect to the execution and delivery of the Agreement,
                  require any consent or approval of any governmental authority
                  or other person;

         (4)      each Party will to the best of its knowledge without
                  undertaking a special investigation, disclose to the other
                  Party any material adverse proceedings, claims or actions that
                  arise, which would materially interfere with that Party's
                  performance of its obligations under this Agreement; and

         (5)      each Party's employees have executed or will execute
                  agreements whereby all right, title and interest in any
                  technology and invention(s) will be assigned to their
                  respective employers.

                             ARTICLE VII. INDEMNITY

7.01     Indemnification of Epoch. Perkin-Elmer will defend, indemnify and hold
         Epoch harmless against any judgment, damage, liability, loss, cost or
         other expense, including legal fees ("Liability"), resulting from any
         third party claims made or proceedings brought against Epoch to the
         extent that such Liability arises from Perkin-Elmer's use, marketing ,
         distribution or sale of Licensed Product and/or MGB Intermediates,
         except to the extent such claims or proceedings result (1) from Epoch's
         negligence or willful act or


                                       13
<PAGE>   14

         omission in the manufacture, storage, or delivery of Licensed Product
         and/or MGB Intermediates, (2) from Epoch's breach of any warranty set
         forth in Article VI, or (3) infringement of a patent owned or
         controlled by a third party, only to the extent such infringement
         arises from the inclusion in the Licensed Product of inventions claimed
         in a Licensed Patent or the use of the Licensed Know-How.

7.02     Indemnification of Perkin-Elmer. Epoch will defend, indemnify and hold
         Perkin-Elmer harmless against any Liability resulting from any third
         party claims made or proceedings brought against Perkin-Elmer to the
         extent that such Liability arises (1) from Epoch's negligence or
         willful act or omission in the manufacture, storage, or delivery of
         Licensed Product and/or MGB Intermediates or (2) from Epoch's breach of
         any warranty set forth in Article VI.

7.03     Indemnification Procedures. This agreement of indemnity is conditioned
         upon the indemnified Party's obligation to: (1) advise the indemnifying
         Party of any claim or lawsuit, in writing, within ten (10) days after
         the indemnified Party has received notice of said claim or lawsuit, or,
         within such a time frame as not to materially prejudice the rights of
         the indemnifying Party, and (2) assist the indemnifying Party and its
         representatives in the investigation and defense of any lawsuit and/or
         claim for which indemnification is provided. This agreement of
         indemnity will not be valid as to any settlement of a claim or lawsuit
         or offer of settlement or compromise without the prior written approval
         of the indemnifying Party.

                       ARTICLE VIII. TERM AND TERMINATION

8.01     Term. Unless terminated earlier as provided herein, this Agreement will
         commence on the Effective Date and will remain in full force until the
         expiration of the last to expire Licensed Patent.

8.02     Termination.  This Agreement may be terminated as follows:

         (1)      by mutual written agreement of the Parties, effective as of
                  the time specified in such written agreement; or

         (2)      by either Party, (a) in the event the other Party will file in
                  any court or agency pursuant to any statute or regulation of
                  any state or country, a petition in bankruptcy or insolvency
                  or for reorganization or for an arrangement or for the
                  appointment of a receiver or trustee of the Party or of its
                  assets, or if the other Party proposes a written agreement of
                  composition or extension of its debts, or if the other Party
                  will be served with an involuntary petition against it, filed
                  in any insolvency proceeding, and such petition will not be
                  dismissed within sixty days after the filing thereof, or if
                  the other Party will propose or be a Party to any dissolution
                  or liquidation, or if the other Party will make an assignment
                  for the benefit of creditors, or (b) upon any material breach
                  of this Agreement by the other Party, provided that the Party
                  alleging such breach must first give the other Party written
                  notice thereof, which notice must state the nature of the
                  breach in


                                       14
<PAGE>   15

                  reasonable detail and the Party receiving such notice must
                  have failed to cure such alleged breach within sixty (60) days
                  after receipt of such notice.

         (3)      Perkin-Elmer may terminate this Agreement at any time upon
                  sixty (60) days advance written notice to Epoch. In the event
                  that Perkin-Elmer terminates the Agreement pursuant to this
                  Section 8.02(3), Perkin-Elmer (1) will release its security
                  interest in the Licensed Patent granted in Section 5.11 and
                  Exhibit A, (2) will forfeit any unused portion of the
                  pre-payments paid to Epoch under Section 5.10, (3) will pay
                  for any orders placed under Article V prior to termination,
                  and (4) return all tangible embodiments of the Licensed
                  Know-How to Epoch.

8.03     Survival. Upon any termination of this Agreement, neither Party will be
         relieved of any obligations incurred prior to such termination.
         Notwithstanding any termination of this Agreement, the obligations of
         the Parties under Articles IV, VI, VII, VIII, X and XI, as well as
         under any licenses which are maintained in effect and any other
         provisions which by their nature are intended to survive any such
         termination, will survive and continue to be enforceable.

                       ARTICLE IX. INFRINGEMENT LITIGATION

9.01     Notification. Each Party will notify the other Party in writing of any
         suspected infringement(s) of Licensed Patents in the Exclusive Licensed
         Field or the Non-Exclusive Licensed Field and will inform the other
         Party of any evidence of such infringement(s).

9.02     Infringement in Exclusive Licensed Field. Perkin-Elmer will have the
         first right to institute suit for infringement(s) in the Exclusive
         Licensed Field. Epoch agrees to join as a party plaintiff in any such
         lawsuit initiated by Perkin-Elmer, if requested by Perkin-Elmer, with
         all costs, attorneys' fees, and expenses to be paid by Perkin-Elmer.
         However, if Perkin-Elmer does not institute suit for infringement(s)
         within ninety (90) days of receipt of written notice from Epoch of
         Epoch's desire to bring suit for infringement in its own name and on
         its own behalf, then Epoch may, at its own expense, bring suit or take
         any other appropriate action.

9.03     Infringement Outside Exclusive Licensed Field. Epoch will have the sole
         right, but not the obligation, to institute suit for infringement and
         to recover damages outside of the Exclusive Licensed Field.

9.04     Recovery. Perkin-Elmer will be entitled to any recovery of damages
         resulting from a lawsuit brought by it pursuant to Section 9.02. Epoch
         will be entitled to recovery of damages resulting from any lawsuit
         brought by Epoch pursuant to Sections 9.02 or 9.03.

9.05     Settlement. Neither Party may settle with an infringer without the
         prior written approval of the other Party if such settlement would
         affect the rights of the other Party under the Licensed Patents.


                                       15
<PAGE>   16

                           ARTICLE X. CONFIDENTIALITY

10.01    Non-Disclosure. Because Epoch and Perkin-Elmer will be cooperating with
         each other under this Agreement, each may reveal Confidential
         Information to the other. The Parties agree, by using the same degree
         of care as each uses for its own information of like importance, but
         not less than a reasonable degree of care, to hold in confidence any
         Confidential Information disclosed by the other Party hereunder, and
         not to disclose any Confidential Information to any third party without
         the express written consent of the other Party. Each Party will
         disclose Confidential Information only to its employees or agents who
         have a need to know. With respect to any Confidential Information that
         is revealed by a Party to the other Party, this confidentiality
         requirement will remain in force for a period of 5 years following the
         date the Confidential Information is revealed.

10.02    Responsibility over Employees and Agents. Each Party will assume
         individual responsibility for the actions and omissions of its
         respective employees, agents and assigns, and to inform same of the
         responsibilities for confidentiality under this Agreement, and to
         obtain their agreement to be bound in the same manner that the Party is
         bound.

10.03    Affiliates. Nothing herein will be construed as preventing either Party
         from disclosing any information to an Affiliate of Perkin-Elmer or
         Epoch, provided such Affiliate has undertaken a similar obligation of
         confidentiality with respect to the Confidential Information.

10.04    Bankruptcy. All Confidential Information disclosed by one Party to the
         other will remain the intellectual property of the disclosing Party.
         The bankrupt or insolvent Party will, to the extent permitted by law,
         take all steps necessary or desirable to maintain the confidentiality
         of the other Party's Confidential Information and to ensure that the
         court or other tribunal maintain such information in confidence in
         accordance with the terms of this Agreement. In the event that a court
         or other legal or administrative tribunal, directly or through an
         appointed master, trustee or receiver, assumes partial or complete
         control over the assets of a Party to this Agreement based on the
         insolvency or bankruptcy of such Party, the bankrupt or insolvent Party
         will promptly notify the court or other tribunal.

         (a)      that Confidential Information received from the other Party
                  under this Agreement remains the property of the other Party;
                  and,

         (b)      of the confidentiality obligations under this Agreement.

10.05    Publication. Neither Perkin-Elmer nor Epoch will submit for written or
         oral publication any manuscript, abstract or the like that includes
         data or other information generated and provided by the other Party
         without first obtaining the prior written consent of the other Party,
         which consent will not be unreasonably withheld or delayed. If written
         consent or written denial is not provided by the other Party within 90
         days, the first Party will have the right to publish. But, the
         foregoing will not apply to customary literature that is


                                       16
<PAGE>   17

         prepared for marketing and sales purposes and that does not contain
         Confidential Information.

10.06    Publicity. Neither Party nor any of its Affiliates will originate any
         news relating to this Agreement without the prior written approval of
         the other Party, which approval will not be unreasonably withheld or
         delayed. However, within 30 days after the execution of this Agreement
         the Parties will mutually agree on a joint press release announcing the
         existence of this Agreement.

                         ARTICLE XI. GENERAL PROVISIONS

11.01    Force Majeure. If the performance of any part of this Agreement by
         either Party, or of any obligation under this Agreement, is prevented,
         restricted, interfered with or delayed by reason of any cause beyond
         the reasonable control of the Party liable to perform, unless
         conclusive evidence to the contrary is provided, the Party so affected
         will, upon giving written notice to the other Party, be excused from
         such performance to the extent of such prevention, restriction,
         interference or delay, provided that the affected Party will use its
         reasonable best efforts to avoid or remove such causes of
         non-performance and will continue performance with the utmost dispatch
         whenever such causes are removed. When such circumstances arise, the
         Parties will discuss what, if any, modification of the terms of this
         Agreement may be required in order to arrive at an equitable solution.

11.02    Governing Law. This Agreement will be deemed to have been made in the
         State of California and its form, execution, validity, construction and
         effect will be determined in accordance with the laws of the State of
         California.

11.03    Informal Dispute Resolution. In an effort to resolve informally and
         amicably any claim, controversy, or dispute arising out of or related
         to the interpretation, performance, or breach of this Agreement (a
         "Dispute") without resorting to litigation, each party will notify the
         other party to the Dispute in writing of any Dispute hereunder that
         requires resolution. Such notice will set forth the nature of the
         Dispute, the amount involved, if any, and the remedy sought. Each party
         will promptly designate an executive-level employee to investigate,
         discuss and seek to settle the matter between them. If the two
         designated representatives are unable to settle the matter within
         thirty (30) days after such notification, the matter will be submitted
         to Epoch's Chief Executive Officer and Perkin-Elmer's President of the
         PE Biosystems Division for consideration. If settlement cannot be
         reached through their efforts within an additional thirty (30) days (or
         such longer time period as they will agree upon in writing), each party
         will have the right to take such action as it deems appropriate. The
         statute of limitations of the State of California applicable to the
         commencement of a lawsuit will be tolled as of initial written
         notification of a dispute to the other party as set forth above for
         sixty (60) days (or such longer time as the parties agree in writing)
         if all interim deadlines have been complied with by the notifying
         party.


                                       17
<PAGE>   18

11.04    Attorneys' Fees. Except as otherwise provided herein, each party will
         bear its own legal fees incurred in connection with the transactions
         contemplated hereby, provided, however, that if any party to this
         Agreement seeks to enforce its rights under this Agreement by legal
         proceedings or otherwise, subject to Section 10.03, the non-prevailing
         party will pay all costs and expenses incurred by the prevailing party,
         including, without limitation, all reasonable attorneys' fees.

11.05    Separability. In the event any portion of this Agreement will be held
         illegal, void or ineffective, the remaining portions hereof will be
         interpreted to maintain the intent of the Parties. If any of the terms
         or provisions of this Agreement are in conflict with any applicable
         statute or rule of law, then such terms or provisions will be deemed
         inoperative to the extent that they may conflict therewith and will be
         deemed to be modified to conform with such statute or rule of law.

11.06    Entire Agreement. This Agreement constitutes the sole agreement between
         the Parties relating to the subject matter hereof and supersedes all
         previous writings and understandings. Confidential disclosures made
         pursuant to previously executed Confidentiality Agreements between
         Epoch and Perkin-Elmer will remain subject to the terms of those
         Confidentiality Agreements. No terms or provisions of this Agreement
         will be varied or modified by any prior or subsequent statement,
         conduct or act of either of the Parties, except that the Parties may
         amend this Agreement by written instruments specifically referring to
         and executed in the same manner as this Agreement.

11.07    Assignment. This Agreement and the licenses herein granted will be
         binding upon and inure to the benefit of the successors in interest of
         the respective Parties. Neither Party will have the power to assign
         this Agreement nor any interest hereunder without the written consent
         of the other, such consent not to be unreasonably withheld, provided,
         however, that Perkin-Elmer or Epoch may assign this Agreement or any of
         its rights or obligations hereunder to any Affiliate or to any third
         party with which it may merge or consolidate, or to which it may
         transfer all or substantially all of its assets or business to which
         this Agreement relates, without obtaining the consent of the other
         Party, subject to the other Party assuming all liabilities and
         obligations under the Agreement.

11.08    Bankruptcy. All rights and licenses granted under this Agreement by
         Epoch to Perkin-Elmer will be considered for purposes of Section 365(n)
         of the Bankruptcy Code, licenses of rights to "intellectual property"
         as defined under Section 101(56) of the Bankruptcy Code. The parties
         agree that Perkin-Elmer, as a licensee of such rights under this
         Agreement, will retain and may fully exercise all of its rights and
         elections under the Bankruptcy Code. In the event that Epoch seeks or
         is involuntarily placed under the protection of the Bankruptcy Code,
         and the trustee in bankruptcy rejects this Agreement, Perkin-Elmer
         hereby elects, pursuant to Section 365(n), to retain all rights granted
         to it under this Agreement to the extent permitted by the law.

11.09    Counterparts. This Agreement may be executed in any number of
         counterparts, and each such counterpart will be deemed an original
         instrument, but all such counterparts together will constitute but one
         agreement.


                                       18
<PAGE>   19

11.10    Notices. Any notice required or permitted under this Agreement will be
         sent by air mail, postage pre-paid, to the following addresses of the
         Parties:

                 If to Epoch:                          If to Perkin-Elmer:
                 Epoch Pharmaceuticals, Inc.           PE Corporation
                 12277 134th Court NE                  PE Biosystems Division
                 Suite 100                             850 Lincoln Centre Drive
                 Redmond, WA 98052                     Foster City, CA 94404
                 Attn.: President                      Attn.: Legal Department


                                       19
<PAGE>   20

         IN WITNESS WHEREOF, the Parties, through their authorized officers,
have executed this Agreement as of the date first written above.


EPOCH PHARMACEUTICALS, INC.               PE CORPORATION, THROUGH ITS
                                          PE BIOSYSTEMS DIVISION

By:                                       By:
         /s/ William G. Gerber                     /s/ Michael W. Hunkapiller
   ---------------------------------         ---------------------------------

Name:                                     Name:
         William G. Gerber                         Michael W. Hunkapiller
   ---------------------------------         ---------------------------------

Title:                                    Title:
         Chief Executive Officer                   Senior Vice President
   ---------------------------------         ---------------------------------

Date: November 2, 1999                    Date:  November 2, 1999


                                       20
<PAGE>   21

                                    EXHIBIT A

                               SECURITY AGREEMENT


         THIS SECURITY AGREEMENT (the "Security Agreement") is made and entered
into this ___ day of December, 1998 by and between EPOCH PHARMACEUTICALS, INC.,
a Delaware corporation (the "Debtor"), and THE PERKIN-ELMER CORPORATION, a New
York corporation (the "Secured Party").

                                 R E C I T A L S

1.       Pursuant to that certain License and Supply Agreement by and between
         the Company and the Secured Party of even date herewith (the "License
         and Supply Agreement"), Debtor will receive [ * ] from Secured Party as
         pre-payment for certain goods (the "Pre-Payment").

2.       As an inducement to Secured Party to provided the Pre-Payment, Debtor
         has agreed to grant a security interest as set forth herein.

                                A G R E E M E N T

1.       Security Interest. Pursuant to the Uniform Commercial Code, Debtor
         hereby grants to Secured Party a security interest in the property of
         Debtor (the "Collateral") described at Paragraph 2 below to secure the
         Pre-Payment, as described at Paragraph 3 below.

2.       Collateral. The Collateral of Debtor is described as follows: US Patent
         No. 5,801,155 titled Covalently Linked Oligonucleotide Minor Groove
         Binder Conjugates, issued September 1, 1998 (the "Licensed Patent"),
         including any Related Patent. "Related Patent" means any patent or
         patent application owned, held, or otherwise controlled, in whole or in
         part by Epoch that (1) discloses and/or claims substantially the same
         subject matter as a Licensed Patent, (2) discloses and/or claims
         improvements to inventions disclosed or claimed in a Licensed Patent
         and requires rights under the Licensed Patent to exploit such
         improvements, (3) claims priority to, a Licensed Patent, including but
         not limited to continuation applications and patents,
         continuation-in-part applications and patents, divisional applications
         and patents, reexamination applications and patents, reissue
         applications and patents, and continuing prosecution applications and
         patents, (4) is a parent of U.S. Patent No. 5,801,155, and/or (5) any
         foreign equivalents of a Licensed Patent or any patent or patent
         application in (1), (2), (3) or (4) above.

3.       Obligations Secured. The obligations ("Obligations") secured by this
         Security Agreement will be any repayment of any unused portion of the
         Pre-Payment corresponding to goods not received by Secured Party in
         accordance with the terms of the License and Supply Agreement, in
         excess of Fifty Thousand Dollars ($50,000).

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.

<PAGE>   22

4.       Collateral Encumbrances; Covenants of Debtor.

         (a)      Debtor owns the Collateral free and clear of any lien except
                  for the lien created by this Security Agreement, and no
                  effective financing statement or other instrument similar in
                  effect, which covers all or any part of the Collateral, exists
                  or is on file in any recording office.

         (b)      As to the Collateral, Debtor covenants with Secured Party as
                  follows:

                  (i)      Except as otherwise created by this Security
                           Agreement, Debtor will keep the Collateral free of
                           all levies, liens, encumbrances and other security
                           interests of any nature whatsoever.

                  (ii)     Debtor will comply with all laws, statutes and
                           regulations pertaining to the Collateral.

                  (iii)    Debtor will pay when due all taxes, licenses, charges
                           and other impositions on or for the Collateral.

                  (iv)     Debtor, at its own expense, (1) will execute, file
                           and record such assignments, statements, notices and
                           agreements including without limitation Form UCC-1,
                           if applicable, and assignments, statements, notices
                           and agreements to be filed with government patent
                           offices, and (2) take such action and obtain such
                           certificates and documents, in accordance with all
                           applicable laws, statutes, and regulations (whether
                           state, federal or local), as necessary to perfect,
                           evidence and continue Secured Party's security
                           interest in the Collateral, including, without
                           limitation, assignments for security in the U.S.
                           Patent and Trademark Office and corresponding foreign
                           patent offices. This subparagraph (iv) is subject to
                           specific performance and injunctive relief for the
                           benefit of Secured Party in the event of a failure by
                           Debtor to duly comply with a reasonable request for
                           such compliance.

                  (v)      Debtor will deliver to Collateral Agent all
                           instruments and other items of Collateral for which
                           possession is required for perfection.

                  (vi)     Except as otherwise created by this Security
                           Agreement, Debtor will not create, permit or suffer
                           to exist, and will defend the Collateral against and
                           take such other action as is necessary to remove, any
                           lien or encumbrance on the Collateral and will defend
                           the right, title and interest of Secured Party in and
                           to the Collateral and in and to the proceeds thereof
                           against the claims and demands of all persons
                           whomsoever.

5.       Default. In the event of any termination of the License and Supply
         Agreement (other than a termination by Debtor under Section 8.02(2)(b)
         thereof due to a breach thereof by


                                       2
<PAGE>   23

         Secured Party), Debtor will within fifteen (15) days of such
         termination reimburse Secured Party the difference between the then
         unused portion of the Pre-Payment and Fifty Thousand Dollars ($50,000).
         Upon such reimbursement, Secured Party will release its security
         interest in the Collateral. In the event Debtor does not so reimburse
         Secured Party, Secured Party may declare an event of default.

6.       Remedies. Upon the occurrence of an event of default pursuant to
         Section 5 hereof, the Secured Party may exercise any rights or remedies
         that it may have as a secured party under applicable law.

7.       Termination.

         (a)      This Security Agreement and the security interest granted to
                  Secured Party by Debtor hereunder will terminate at such time
                  as the unused portion of the Pre-Payment corresponding to
                  goods not received by Secured Party in accordance with the
                  terms of the License and Supply Agreement is Fifty Thousand
                  Dollars ($50,000) or less.

         (b)      If applicable, and promptly upon termination of this Security
                  Agreement, the Secured Party agrees to execute and file with
                  the Washington Secretary of State a termination statement on
                  Form UCC-2 and a collateral assignment for filing in the
                  Patent and Trademark Office terminating Secured Party's
                  security interest in the Collateral at the expense of the
                  Debtor. This subparagraph (b) is subject to specific
                  performance and injunctive relief for the benefit of Debtor in
                  the event of a failure by the Secured Party to duly comply
                  with a reasonable request for such compliance.

8.       Cumulative Rights. The rights, powers and remedies of Secured Party
         under this Security Agreement will be in addition to all rights, powers
         and remedies given to Secured Party by virtue of any statute or rule of
         law, or any other agreement between Debtor and Secured Party or
         otherwise, all of which rights, powers and remedies will be cumulative
         and may be exercised successively or concurrently without impairing
         Secured Party's security interest in the Collateral.

9.       Waiver. Any forbearance or failure or delay by Secured Party in
         exercising any right, power or remedy will not preclude the further
         exercise thereof, and every right, power or remedy of Secured Party
         will continue in full force and effect until such right, power or
         remedy is specifically waived in a writing executed by Secured Party.
         Debtor waives any right to require Secured Party to proceed against any
         person or to exhaust any of the Collateral or to pursue any remedy in
         Secured Party's power.

10.      Binding Upon Successors. All rights of Secured Party under this
         Security Agreement will inure to the benefit of their successors and
         assigns, and all obligations of Debtor will bind its successors and
         assigns.

11.      Entire Agreement; Severability. This Security Agreement, along with the
         associated License and Supply Agreement, contains the entire agreement
         between Secured Party, and Debtor with respect to the subject matter
         hereof. If any of the provisions of this


                                       3
<PAGE>   24

         Security Agreement will be held invalid or unenforceable, this Security
         Agreement will be construed as if not containing those provisions and
         the rights and obligations of the parties hereto will be construed and
         enforced accordingly.

12.      Choice of Law. This Security Agreement will be construed in accordance
         with and governed by the internal laws of the State of Washington, and
         where applicable and except as otherwise defined herein, terms used
         herein will have the meanings given them in the Washington Uniform
         Commercial Code.

13.      Place of Business; Trade Name; Collateral Location; Records. Debtor
         represents that its chief place of business is 12277 134th Court, NE,
         #110, Redmond, WA 98052 and that Epoch Pharmaceuticals, Inc., is the
         only trade name or style used by Debtor and that Debtor's records
         concerning the Collateral are kept at 12277 134th Court, NE, #110,
         Redmond, WA 98052.

14.      Notice. Any written notice, consent or other communication provided for
         in this Security Agreement will be deemed given if delivered by hand,
         by courier against receipt, by certified or registered mail, return
         receipt requested, or by overnight delivery service providing evidence
         of receipt, at the following addresses, or to such other address with
         respect to any party as such party will notify the other in writing:

         Secured Party:             The Perkin-Elmer Corp.
                                    PE Biosystems Division
                                    850 Lincoln Centre Drive
                                    Foster City, CA 94404
                                    Attn.: Legal Department

         Debtor:                    Epoch Pharmaceuticals, Inc.
                                    12277 134th Court NE
                                    Suite 100
                                    Redmond, WA 98052
                                    Attn.: President

15.     Attorneys' Fees. In the event of any controversy, claim or dispute
        between or among the Debtor and the Secured Party arising out of or
        relating to this Security Agreement, or the breach hereof, the
        prevailing party will be entitled to recover from the losing party
        reasonable attorneys' fees, expenses and costs.


                                       4
<PAGE>   25

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


DEBTOR:                                     SECURED PARTY:

EPOCH PHARMACEUTICALS, INC.                 THE PERKIN-ELMER CORPORATION,
                                            THROUGH ITS PE BIOSYSTEMS DIVISION

By:                                         By:
         /s/ Sanford S. Zweifach                     /s/ Michael W. Hunkapiller
-----------------------------------         ------------------------------------

Name:                                       Name:
         Sanford S. Zweifach                         Michael W. Hunkapiller
-----------------------------------         ------------------------------------

Title:                                      Title:
                President                               Senior Vice President
-----------------------------------         ------------------------------------

Date:                                       Date:
         January 11, 1999                            January 11, 1999
-----------------------------------         ------------------------------------


                                       5
<PAGE>   26

                                    EXHIBIT B

                             CERTAIN SPECIFICATIONS


I.       HPLC ASSAY OF MGB OLIGONUCLEOTIDE

1.       Equipment

         a.       Perkin-Elmer UV/Vis Detector or equivalent

         b.       [ * ] Ion Exchange Column [ * ]

         c.       [ * ] Rheodyne sample loop (Alltech Associates Inc. or
                  equivalent)

2.       Reagents

         a.       [ * ] or equivalent

         b.       Water, Milli-Q or HPLC grade

         c.       Standard Buffer Salt is pH [ * ] Fisher P/N [ * ] or
                  equivalent

         d.       [ * ] Filtration Membrane, [ * ] (Alltech Associates Inc. or
                  equivalent)

3.       Mobile Phases

         [ * ]


4.       [ * ]


5.       [ * ]


*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.

<PAGE>   27

II.      PURITY OF MGB OLIGONUCLEOTIDE

         The purity of a MGB Oligonucleotide will be determined based on an area
         percent of a product peak based on the above-described HPLC Method. A
         Purified MGB Oligonucleotide will have a purity of at least [ * ]%.
         However, the value of the required purity of a MGB Oligonucleotide may
         be amended pursuant to Section 10.06 of the Agreement.

III.     YIELD OF MGB OLIGONUCLEOTIDE

         The yield of a MGB Oligonucleotide will be determined based on a
         relative area of a product peak as compared to an appropriate internal
         standard based on the above-described HPLC Method, where the HPLC
         analysis is performed immediately following synthesis of the MGB
         Oligonucleotide. A Purified MGB Oligonucleotide will have a yield of at
         least [ * ].

IV.      IDENTITY OF MGB INTERMEDIATE

         The parties agree that they will amend this Exhibit B to the Agreement
         (the "Exhibit B Amendment") within ninety (90) days from execution of
         the Agreement. The Exhibit B Amendment to define a mutually acceptable
         assay for confirming the identity of MGB Intermediates supplied to
         Perkin-Elmer by Epoch.



*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.



                                       2
<PAGE>   28

                                    EXHIBIT C

                                LICENSED KNOW-HOW

         The Licensed Know-How transferred from Epoch to Perkin-Elmer will
include at least the following information.


1.       Chemical structures of all reagents and probes provided to Perkin-Elmer
         by Epoch to the extent necessary for Perkin-Elmer to make full use of
         such reagents and probes for the synthesis and/or use of MGB
         Intermediates and MGB Oligonucleotides.

2.       Details of Epoch's manufacturing and QC methods to extent necessary for
         Perkin-Elmer to manufacture MGB Oligonucleotides in conformance with
         the specifications set forth in Exhibit B, including at least the
         following:

         a)       detailed description of all DNA synthesis, purification,
                  formulation and analytical instrumentation, including vendors;

         b)       detailed DNA synthesis cycles;

         c)       cleavage conditions;

         d)       deprotection conditions;

         e)       purification methods, including HPLC, OPC and other protocols;

         f)       analytical methods, including HPLC and other protocols;

         g)       formulation and quantitation methods;

         h)       [ * ];

         i)       [ * ];

         j)       stability data of MGB reagents in DNA synthesis reagents and
                  under cleavage/deprotection conditions;

         k)       long term stability data of MGB probes;

         l)       data correlating analytical specs (HPLC, etc.) to performance
                  of probes in relevant applications;

         m)       method used for validating probe manufacturing process;

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.

<PAGE>   29

         n)       method used for monitoring probe manufacturing process; and

         o)       extinction coefficients (at [ * ] nm) for MGB reagents.

3.       Algorithms, object code, source code and any other embodiments of
         methods or processes useful for predicting the melting temperature of
         MGB Oligonucleotides, whether patented, copyrighted or not.

*    CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


                                       2
<PAGE>   30

                                    EXHIBIT D

                            KNOW-HOW ESCROW AGREEMENT

                           EPOCH PHARMACEUTICALS, INC.
                            KNOW-HOW ESCROW AGREEMENT


         This Know-How Escrow Agreement ("Agreement") is effective this 1st day
of November 1999, by and between Heller Ehrman White & McAuliffe ("Escrow
Agent"), PE Corporation, a Delaware corporation (formerly known as The
Perkin-Elmer Corporation) ("Perkin-Elmer") and Epoch Pharmaceuticals, Inc., a
Delaware corporation ("Epoch").

         WHEREAS, concurrently herewith, Perkin-Elmer and Epoch are entering
into that certain Amended and Restated License and Supply Agreement of even date
herewith (the "License Agreement"). Perkin-Elmer and Epoch desire that this
Agreement be supplementary to said License Agreement; and

         WHEREAS, pursuant to Section 5.05 of the License Agreement, Epoch has
agreed to deliver to Escrow Agent documentation of know-how (the
"Documentation") necessary to enable a person skilled in oligonucleotide
chemistry to manufacture MGB Intermediates (as defined in Section 2.09 of the
License Agreement).

         NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the promises, mutual
covenants and conditions contained herein, the parties hereto agree as follows:

         1. DEPOSIT ACCOUNT. Following the execution of this Agreement, Escrow
Agent shall open a "Deposit Account" for the benefit of Epoch and Perkin-Elmer,
said Deposit Account to be entitled the "Epoch/Perkin-Elmer Know-How Escrow
Account".

         2. INITIAL DEPOSIT. Concurrently with the opening of the Deposit
Account, Epoch shall deliver an "Initial Deposit" to Escrow Agent, which shall
consist of the Documentation. The Initial Deposit materials, as updated,
changed, supplemented or replaced, as may be necessary, shall hereinafter be
referred to as the "Deposit."

         3. CONFIDENTIALITY OBLIGATIONS OF ESCROW AGENT.

                  (a) Escrow Agent agrees to retain and properly dispose of the
Deposit in accordance with this Agreement. Escrow Agent shall not be liable for
any act or omission to act under this Agreement except for its own gross
negligence or willful misconduct.

                  (b) Escrow Agent acknowledges Epoch's assertion that the
Deposit shall contain confidential information and proprietary data of Epoch and
that Escrow Agent has an obligation to preserve and protect that
confidentiality.

                  (c) Escrow Agent may duplicate the Deposit only as necessary
to preserve and safely store the Deposit, and to provide copies thereof, as
authorized herein. Escrow Agent shall

<PAGE>   31

reproduce on all copies of the Deposit made by Escrow Agent any proprietary or
confidentiality notices contained in the Deposit. Except as expressly provided
in this Agreement, Escrow Agent agrees that it shall not divulge, disclose,
otherwise make available to Perkin-Elmer or any third parties, or make any use
whatsoever of the Deposit, or of any information provided to it by Epoch in
connection with this Agreement, without the express prior written consent of
Epoch. This obligation will continue indefinitely notwithstanding any
termination of this Agreement.

         4. TERM OF AGREEMENT. This Agreement will commence on the effective
date of this Agreement and will terminate concurrently with the termination of
the License Agreement, as provided for in Section 8.01 and 8.02 of the License
Agreement.

         5. RELEASE OF DEPOSIT. Upon notice to Escrow Agent by Perkin-Elmer (in
the form of an affidavit or declaration by an officer of Perkin-Elmer) of the
occurrence of the Release Condition defined in Section 6, Escrow Agent shall
immediately notify Epoch with a copy of the notice from Perkin-Elmer. If Epoch
provides contrary instruction within ten (10) working days of Epoch's receipt of
the notice, Escrow Agent shall not deliver the Deposit to Perkin-Elmer except as
provided below. "Contrary instruction" means the filing of an affidavit or
declaration with Escrow Agent by an officer of Epoch stating that the Release
Condition has not occurred, has been cured, or there is some other dispute or
issue which necessitates that the Deposit not be delivered to Perkin-Elmer. Upon
receipt of contrary instruction, Escrow Agent shall (i) immediately deliver a
copy of the affidavit or declaration containing the contrary instruction to
Perkin-Elmer, (ii) not deliver a copy of the Deposit to Perkin-Elmer and (iii)
and continue to store the Deposit until otherwise directed by Perkin-Elmer and
Epoch jointly, or until resolution of the dispute pursuant to Section 7.

         6. RELEASE CONDITION. As used herein, the term "Release Condition"
shall mean the failure of Epoch, pursuant to Article V of the License Agreement,
to supply at least ninety-five percent (95%) of Perkin-Elmer's requirements of
MGB Intermediates for more than four (4) months after receipt of written notice
from Perkin-Elmer (pursuant to the terms of the License Agreement) of a material
failure to so supply.

         7. GOVERNING LAW; INFORMAL DISPUTE RESOLUTION; ATTORNEYS' FEES. This
Agreement will be deemed to have been made in the State of California and its
form, execution, validity, construction and effect will be determined in
accordance with the laws of the State of California. In the event of a dispute
arising under this Agreement, Escrow Agent shall so notify Perkin-Elmer and
Epoch in writing. Upon receipt of such notice, Perkin-Elmer and Epoch will
attempt to resolve such dispute informally pursuant to the terms and provisions
of Section 11.03 of the License Agreement. The non-prevailing party in any legal
proceedings brought under this Agreement will pay all costs and expenses
incurred by the prevailing party, including, without limitation, all reasonable
attorneys' fees.

         8. INDEMNIFICATION. Perkin-Elmer and Epoch agree to defend and
indemnify Escrow Agent and hold Escrow Agent harmless from and against all
claims, actions and suits, whether in contract or in tort, and from and against
any and all liabilities, losses, damages, costs, charges, penalties, counsel
fees, and other expenses of any nature (including, without limitation,
settlement costs) incurred by Escrow Agent as a result of performance of this
Agreement except in the event of a judgment or arbitration decision which
specified that Escrow Agent acted with gross negligence or willful misconduct.


                                       2
<PAGE>   32

         Escrow Agent may decline to act and shall not be liable for failure to
act if in doubt as to its duties under this Agreement. Escrow Agent may act upon
any instrument or signature reasonably believed by it to be genuine and may
assume that any person purporting to give any notice or instruction pursuant to
this Agreement reasonably believed by it to be authorized, has been duly
authorized to do so. Escrow Agent's duties shall be determined only with
reference to this Agreement and applicable laws, and Escrow Agent is not charged
with knowledge of or any duties or responsibilities in connection with any other
document or agreement, including, but not limited to, the License Agreement. In
the event Escrow Agent shall be uncertain as to its duties or rights under this
Agreement, it shall be entitled to refrain from taking any action, other than to
keep safely the Deposit, until it shall (i) receive written instructions signed
by Perkin-Elmer and Epoch or (ii) is directed otherwise by a court of competent
jurisdiction.

         In the event Escrow Agent should at any time be confronted with
inconsistent or conflicting claims or demands by the parties to this Agreement,
Escrow Agent shall have the right to interplead the parties in any court of
competent jurisdiction and request that the court determine the respective
rights of the parties with respect to this Agreement and, upon doing so, Escrow
Agent shall be released from any obligations or liability to any party as a
consequence of any claims or demands.

         Escrow Agent may execute any of its powers, rights, or responsibilities
under this Agreement either directly or by or through its agents or attorneys.
Escrow Agent shall not be responsible for and shall not be under a duty to
examine, inquire into, or pass upon the validity, binding effect, execution, or
sufficiency of this Agreement or of any amendment or supplement to this
Agreement.

         9. NOTICES. Any notice required or permitted under this Agreement will
be sent by Federal Express or certified mail to the following addresses of the
parties:


If to Epoch:                                   If to Perkin-Elmer:

Epoch Pharmaceuticals, Inc.                    PE Biosystems Division
12277 134th Court NE                           850 Lincoln Centre Drive
Suite 100                                      Foster City, California 94404
Redmond, Washington 98052                      Attn.: Legal Department
Attn.: President

If to Escrow Agent:

Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, California 94104-2878
Attention:  Brett Dick


                                       3

<PAGE>   33

         10. VERIFICATION RIGHTS. Epoch grants to Escrow Agent, or a neutral
third party mutually agreeable to Perkin-Elmer and Epoch and who shall be bound
by the confidentiality provisions set forth in Section 3 of this Agreement, the
right to verify, audit and inspect the Deposit to confirm that the Documentation
contains sufficient documentation and information to provide a person skilled in
oligonucleotide chemistry the know-how necessary to manufacture MGB
Intermediates.

         11. ESCROW FEES. Perkin-Elmer and Epoch agree to jointly pay all escrow
fees due Escrow Agent pursuant to its services under this Agreement. All such
fees shall be those specified in Escrow Agent's standard Schedule of Fees in
effect at the time of this Agreement, which are attached hereto as Exhibit A,
except as otherwise agreed. For any increase in Escrow Agent's standard fees,
Escrow Agent shall notify Perkin-Elmer and Epoch at least ninety (90) days prior
to any renewal of this Agreement. For any service not listed on the Schedule of
Fees, Escrow Agent shall provide a quote prior to rendering such service.

         12. SUCCESSOR ESCROW AGENTS. Escrow Agent may resign at any time upon
giving at least 30 days' written notice to the parties; provided, however, that
no such resignation shall become effective until the appointment of a successor
escrow agent which shall be accomplished as follows: The parties shall use their
best efforts to mutually agree on a successor escrow agent within 30 days after
receiving such notice. If the parties fail to agree upon a successor escrow
agent within such time, Escrow Agent shall have the right to appoint a successor
escrow agent authorized to do business in the state of California. The successor
escrow agent shall execute and deliver an instrument accepting such appointment,
and it shall, without further acts, be vested with all the rights, powers and
duties of the predecessor Escrow Agent as if originally named as Escrow Agent.
Upon such appointment, the predecessor Escrow Agent shall be discharged from any
further duties and liability under this Agreement, except for obligations or
liabilities arising by reason of the prior gross negligence or willful
misconduct on the part of Escrow Agent.


                                       4
<PAGE>   34

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

PE CORPORATION,                            EPOCH PHARMACEUTICALS, INC.,
a Delaware corporation                     a Delaware corporation



-------------------------------------      -------------------------------------

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

Its:                                       Its:
    ---------------------------------          ---------------------------------


ESCROW AGENT
Heller Erhman White & McAuliffe



-------------------------------------

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

Its:
     --------------------------------


                                       5

<PAGE>   35

                                    EXHIBIT A

                    ESCROW AGENT'S STANDARD SCHEDULE OF FEES

Standard hourly rates of Escrow Agent.