EPOCH BIOSCIENCES INC
EXHIBIT 10.41
<DOCUMENT>
<TYPE>EX-10.41
<SEQUENCE>3
<FILENAME>a01113exv10w41.txt
<DESCRIPTION>EXHIBIT 10.41
<TEXT>
<PAGE>

                                                                   exhibit 10.41

          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.

                                LICENSE AGREEMENT

This license agreement ("Agreement") is made as of May 14, 2001 ("Effective
Date") by and between EPOCH BIOSCIENCES, INC., having a principal place of
business at 21720 23rd Road SE, Bothell, Washington 98021 ("EBI"), and PE
CORPORATION (NY), through its Applied Biosystems Group, having a principal place
of business at 850 Lincoln Centre Drive, Foster City, California 94404 ("ABG").

                                    AGREEMENT

1.    DEFINITIONS

      1.1   "Affiliate" means

            (A)   an organization of which 50% or more of the voting stock or
                  participating profit interest is controlled or owned directly
                  or indirectly by either Party;

            (B)   an organization that directly or indirectly owns or controls
                  50% or more of the voting stock of a Party;

            (C)   an organization, the majority ownership of which is directly
                  or indirectly common to the majority ownership of either
                  Party; or

            (D)   an organization under (A), (B), or (C) immediately above in
                  which the amount of the ownership is less than 50% and that
                  amount is the maximum amount permitted by law.

      1.2   "Authorized Oligonucleotide Synthesizer" means an Instrument whose
            use for automated oligonucleotide synthesis is covered by the
            up-front fee component of a license under the Process Patents. That
            up-front fee component may be obtained through the purchase of
            Instruments bearing a valid label conveying that up-front component,
            such Instruments being available from ABG (all ABG synthesizers are
            Authorized) or from other suppliers who have contracted with ABG to
            pay that up-front fee component on behalf of their customers.
            Alternatively, that up-front fee component may be purchased from
            ABG.

      1.3   "Authorized Support" means a column or support whose use for the
            solid phase synthesis of oligonucleotides is covered by the
            running-royalty component of a license under the Process Patents.
            That running-royalty component may be obtained through the purchase
            of columns or supports bearing a valid label conveying that
            component,

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            such columns or supports being available from ABG (all ABG columns
            and supports are Authorized) or from other suppliers who have
            contracted with ABG to pay that running-royalty component on behalf
            of their customers. Alternatively, that running-royalty component
            may be purchased from ABG.

      1.4   "Cleavage Assay" means an assay in which the detection of a nucleic
            acid sequence includes the cleavage of a nucleic acid probe,
            including, but not limited to, the TaqMan assay.

      1.5   "Collaboration Agreement" means the Second Amended and Restated
            Collaboration, License and Supply Agreement between EBI and ABG
            having an effective date of August 17, 2000.

      1.6   "Instrument" means an oligonucleotide synthesis system, instrument,
            machine, device, prototype, bread-board, or apparatus, including
            associated controls, computers, hardware and software, but not
            including columns or supports, the use of which, when used together
            with an Authorized Support, falls within the claims of the Process
            Patents.

      1.7   "Licensed Field" means nucleic acid analysis techniques that do not
            comprise a Cleavage Assay.

      1.8   "Licensed Know-How" means any Confidential Information (as defined
            in the Collaboration Agreement) transferred by ABG to EBI in
            connection with activities performed pursuant to the Collaboration
            Agreement.

      1.9   "Licensed Patents" means U.S. Patent Nos. 6,030,787; 5,723,591; and
            5,876,930, including any Related Patent and any rights added
            pursuant to Section 4.3 below.

      1.10  "Licensed Product" means any product for use in the Licensed Field,
            (A) that does not comprise a nucleic acid probe that is susceptible
            to the 5'-nuclease activity of a polymerase and, (B) (a) which, but
            for the license granted herein, manufacture, use or sale thereof
            would infringe at least one Valid Claim of a Licensed Patent, and/or
            (b) which otherwise uses, incorporates or was developed or
            manufactured using Licensed Know-How.

      1.11  "Net Sales" means

            (A)   with respect to sales by EBI, or an Affiliate of EBI, to
                  non-affiliated third party purchasers, including
                  non-affiliated distributors, the actual amount of gross sales
                  of Licensed Product to a third party, less: (i) trade, cash
                  and quantity discounts granted at the time invoiced, if any,
                  actually allowed, (ii) amounts refunded, allowed or credited
                  for faulty or defective product, returns, rebates, or
                  rejections, (iii) freight, insurance and other transportation
                  costs (except income taxes), tariffs, duties and similar
                  governmental charges paid, to the extent included in gross
                  sales price, and (iv) adjustments for bad debt;

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            (B)   with respect to Licensed Product which are used by EBI, or an
                  Affiliate of EBI, 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
                  had been sold at the average Net Sales for such Licensed
                  Product during the past 120 days prior to the supply of such
                  services or information.

      1.12  "Party" means EBI or ABG and, when used in the plural, means EBI and
            ABG.

      1.13  "Process Patents" means U.S. Patent Nos. 4,458,066, 5,132,418,
            5,153,319, and/or 4,973,679.

      1.14  "Related Patent" means any patent or patent application that:

            (A)   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;

            (B)   is a parent or descendant of a Licensed Patent; or

            (C)   any foreign equivalents of a Licensed Patent or any patent or
                  patent application set forth in subsections (A) or (B) of this
                  Section 1.14;

            (D)   except that, notwithstanding subsections (A), (B), and (C) of
                  this Section 1.14, Related Patent will not include U.S. Patent
                  No. 5,538,848 or any other patent claiming a method comprising
                  a Cleavage Assay, or claiming a probe composition that is
                  susceptible to cleavage by a 5'-nuclease activity of a
                  polymerase.

      1.15  "Valid Claim" means a claim of a Licensed Patent that 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.

2.    GRANT

      2.1   Non-Exclusive License. Subject to the terms and conditions of this
            Agreement, ABG hereby grants to EBI, a royalty-bearing, worldwide,
            non-exclusive, non-transferable, license under Licensed Patents and
            Licensed Know-How, to make (not including have made), import,
            export, use, offer to sell, and sell Licensed Products in the
            Licensed Field.

      2.2   Sublicenses. EBI will have no right to sublicense its license rights
            granted in Section 2.1 beyond the right to pass on to EBI's
            customers the right to use Licensed Products within the Licensed
            Field, provided however, that EBI may sublicense the right to make
            Licensed Products to its Affiliates and the right to offer to sell
            and sell Licensed Products to its Affiliates, distributors,
            representatives and other marketing partners.

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      2.3   No Other Rights. No license other than that expressly granted in
            Sections 2.1 and 2.2 is granted hereunder, whether express, implied,
            or by estoppel, to any other patent rights, or any other
            intellectual property, owned, used, licensed to, or otherwise
            controlled by, ABG.

      2.4   Restrictions. EBI, without undertaking a special investigation, will
            not knowingly sell, market, make or have made, Licensed Products for
            use outside the Licensed Field. In the event that EBI does
            inadvertently sell, market, make or have made, Licensed Products for
            use outside the Licensed Field, EBI will within 30 days of learning
            of such activity cease such activity.

3.    PAYMENTS

      3.1   Running Royalty. EBI will pay to ABG a non-refundable running
            royalty of [*] % based on Net Sales of Licensed Products in
            countries in which such sale (in the case of Net Sales under Section
            1.11(A)) or use in the case of Net Sales under Section 1.11(B))
            would infringe a Valid Claim of a Licensed Patent except for the
            license granted herein.

            If EBI is required to pay a non-Affiliate third party amounts with
            respect to a Licensed Product under agreements for patent rights or
            other technologies which are necessary to license or acquire with
            respect to such Licensed Product, EBI may deduct the amount actually
            paid to such non-Affiliate third parties, from the running royalty
            owing to ABG for such Licensed Product. Notwithstanding the
            foregoing provisions, in no event shall the amounts due to ABG
            pursuant to Section 3.1 be so reduced to less than fifty percent
            (50%) of the amount that would otherwise be due ABG hereunder.

            In the event that any third party is making, using or selling
            products in a country competitive with any Licensed Product(s), and
            such manufacture, use or sale infringes any of the Licensed Patents
            (absent a license from ABG), the royalty under this Section 3.1
            shall be [*] percent ([*]%) of Net Sales of such Licensed Product(s)
            in such country.

      3.2   Payment Dates and Statements. With respect to royalties due under
            Section 3.1, within 45 days of the end of each calendar quarter in
            which Net Sales occur, EBI will calculate the royalty amount owed to
            ABG under Section 3.1 and will pay such amount to ABG. Such payment
            will be accompanied by a statement showing the calculation of the
            amount owed for Net Sales for that quarter (including the gross
            invoiced sales and permissible deductions therefrom), and the
            exchange rate (as determined pursuant to Section 3.4) used to
            directly convert any royalty amounts into U.S. Dollars.

      *     CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.

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      3.3   Late Payments. Unless otherwise specified, all payments due under
            this Agreement will be due 45 days following the end of the relevant
            period. Any payment owed to ABG 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 10% per annum,
            calculated based on the number of days such payment is delinquent.

      3.4   Currency of Payments. All payments under this Agreement will be made
            in U.S. Dollars by wire transfer to such bank account as ABG may
            designate from time to time, or by check. Any payments due hereunder
            on Net Sales outside of the United States will be payable in U.S.
            Dollars at 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 business day of the quarter for
            which the royalties are due, provided however, in the event that
            such rate of exchange on the last business day is more than 10%
            above or below the exchange rate on the first business day of such
            quarter, then the rate of exchange shall be the rate of exchange on
            the first business day, plus or minus 10%, as the case may be.

      3.5   Other Taxes. EBI 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.

      3.6   Records, Inspection. Using EBI's customary practices and procedures
            in accordance with United States generally accepted accounting
            principles, EBI will keep and maintain proper and complete records
            and books of account sufficient in detail to enable the verification
            of monies received by EBI in connection with EBI's obligations under
            this Agreement. The books and records will be retained for a period
            of at least 4 years after the end of the period for which such books
            and records pertain. ABG will have the right from time to time (not
            to exceed two times per calendar year) during normal business hours
            and upon 2 weeks written notice, to inspect in confidence, or have
            an agent, accountant or other representative inspect in confidence,
            the books and records. ABG will bear the costs of the inspection
            unless the inspection reveals a discrepancy unfavorable to ABG of at
            least 10%, in which case EBI will pay the costs of the inspection.
            If the inspection results in a final determination that amounts have
            been overstated or understated, the applicable amount will be
            refunded or paid promptly by the appropriate Party. ABG will hold in
            strict confidence all information learned in the course of any
            inspection, except to the extent necessary for ABG to reveal such
            information in order to enforce its rights under this Agreement, or
            if disclosure is required by operation of law. The public accounting
            firm employees will sign a customary confidentiality agreement as a
            condition precedent to their inspection, and will report to the
            inspecting Party only that information which would be contained in a
            properly prepared royalty report.

4.    REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS

      4.1   Each Party represents, warrants and covenants to the other Party
            that:

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

            (B)   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 the
                  Party;

            (C)   the execution and delivery of this Agreement and the
                  performance by the Party of any of its obligations under this
                  Agreement do not and will not:

                  (1)   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 the Party or its properties, or, to the
                        Party's knowledge, any statute, decree, order, rule or
                        regulation of any court or governmental agency or body
                        applicable to the Party or its properties, and

                  (2)   require any consent or approval of any governmental
                        authority or other person;

            (D)   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 that would materially interfere with that Party's
                  performance of its obligations under this Agreement; and

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

      4.2   Disclaimer. Nothing contained in this License Agreement will be
            construed as:

            (A)   a warranty or representation by either of the Parties to this
                  License Agreement as to the validity or scope of any patent;

            (B)   a warranty or representation that any manufacture, sale, offer
                  for sale, lease, import, use or other disposition of Licensed
                  Products hereunder will be free from infringement of patent,
                  copyright or other intellectual property rights of third
                  parties;

            (C)   a warranty or representation by any of the Parties with
                  respect to their enforcement of any patent including without
                  limitation the prosecution, defense or conduct of any action
                  or suit concerning infringement, validity or enforceability of
                  any such patent;

            (D)   unless expressly stated otherwise, conferring any right to use
                  in advertising, publicity, or otherwise, any trademark, trade
                  name or names, or any contraction, abbreviation or simulation
                  thereof, of either Party;

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            (E)   an obligation upon either Party to make any determination as
                  to the applicability of any of its patents to any product;

            (F)   an inducement by one Party to the other to use the patents or
                  to make, use, or sell products covered by the Licensed
                  Patents, or an inducement of the other Party's customers to
                  purchase or otherwise use products covered by the Licensed
                  Patents; or

            (G)   an admission by either Party that any of its products infringe
                  any patents of the other Party.

      4.3   ABG Representation and Warranty, Additional Licensed Patents. ABG
            represents and warrants that it does not own or control any Blocking
            Patents, and if it does subsequently acquire any Blocking Patents,
            such patents shall become Licensed Patents hereunder. As used in
            this Section 4.3, the term "Blocking Patents" means a patent that
            would be necessarily infringed by EBI as a direct result of EBI's
            exploitation of the license granted in Section 2.1 [*].

5.    INDEMNIFICATION; LIMITATION OF LIABILITY

      5.1   EBI's Indemnification of ABG. EBI agrees to indemnify, hold
            harmless, and defend ABG and its officers, directors, employees, and
            agents against any and all claims for infringement of third party
            patent rights, death, illness, personal injury, property damage and
            improper business practices ("Liability") arising out of the
            manufacture, use, sale, or other disposition of Licensed Product by
            EBI. Notwithstanding the foregoing, EBI will have no obligation
            under this Section 5 with respect to Liability to the extent the
            Liability is caused by the gross negligence or willful misconduct of
            ABG.

      5.2   ABG's Indemnification of EBI. ABG agrees to indemnify, hold
            harmless, and defend EBI and its officers, directors, employees, and
            agents against any and all Liabilities arising out of the gross
            negligence or willful misconduct of ABG or claims that the practice
            of the Licensed Patents or the Licensed Know How infringes the
            patent or proprietary rights of a third party.

      *     CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.


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      5.3   Notice; Choice of Attorney. If either party (the "Indemnified
            Party") intends to claim indemnification under this Section 5, it
            will promptly notify the other party (the "Indemnifying Party") of
            any Liability in respect of which it intends to claim
            indemnification. The Indemnifying Party, after it determines that
            indemnification is required of it, but within a reasonable time,
            will assume the defense and settlement thereof with counsel of its
            choice, such counsel being reasonably satisfactory to Indemnified
            Party. Indemnified Party will have the right to retain its own
            counsel, with the fees and expenses to be paid by Indemnifying Party
            if Indemnifying Party does not assume the defense; or, if
            representation of ABG by the counsel retained by Indemnifying Party
            would be inappropriate due to actual or potential conflicting
            interests between ABG and any other party represented by counsel.
            ABG's failure to deliver notice to Indemnifying Party within a
            reasonable time after the commencement of any such action, if
            prejudicial to Indemnifying Party's ability to defend the action,
            will relieve the Indemnifying Party of any liability to ABG under
            this Section 5, but the omission to deliver notice to Indemnifying
            Party will not relieve Indemnifying Party of any liability that it
            may have to Indemnified Party otherwise than under this Section 5.

      5.4   Consent Required. The indemnity provisions in this Section 5 will
            not apply to amounts paid in settlement of any Liability if the
            settlement is effected without the consent of the Indemnifying
            Party.

      5.5   Cooperation. Indemnified Party under this Section 5, its employees,
            and agents, will cooperate fully with the Indemnifying Party and its
            legal representatives in the investigations of any action, claim or
            liability covered by this indemnification.

      5.6   LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS
            LICENSE AGREEMENT OR OTHERWISE, NEITHER PARTY WILL BE LIABLE TO THE
            OTHER PARTY OR TO ANY OTHER PERSON OR ENTITY WITH RESPECT TO ANY
            SUBJECT MATTER OF THIS LICENSE AGREEMENT, UNDER ANY EQUITY, COMMON
            LAW, TORT, CONTRACT, ESTOPPEL, NEGLIGENCE, STRICT LIABILITY OR OTHER
            THEORY, FOR ANY (A) INCIDENTAL, SPECIAL, CONSEQUENTIAL OR INDIRECT
            DAMAGES, OR (B) DAMAGES RESULTING FROM LOSS OF SALE, BUSINESS,
            PROFITS, OPPORTUNITY OR GOODWILL, EVEN IF THE REMEDIES PROVIDED FOR
            IN THIS LICENSE AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN
            IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY OF THE
            FOREGOING DAMAGES.

6.    MARKING

      All Licensed Product (or to the extent not practicable, the packaging
thereof), and all promotional, marketing, and advertising material associated
with Licensed Product, will carry the following statement:

            "Purchase of this product carries with it a limited,
            non-transferable, non-exclusive (without the right to resell,
            repackage, or sublicense)

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            license under U.S. Patent Nos. 6,030,787; 5,723,591; and 5,876,930,
            and corresponding foreign patents, solely to use this product in an
            assay in which the detection of a nucleic acid sequence does not
            include the cleavage of a nucleic acid probe, and for no other
            purpose. No other license under these patents or any other patents
            is granted expressly, impliedly, or by estoppel. No license under
            the PCR process is conveyed through purchase of this product."

Upon 60 days prior written notice to EBI, ABG may require EBI to change this
statement at any time during the term of this Agreement.

7.    AUTHORIZED MANUFACTURE

      EBI will use only Authorized Supports (if and only if Authorized Supports
      satisfactory to effectively manufacture Licensed Products are commercially
      available in sufficient quantities, at commercially reasonable prices) and
      Authorized Oligonucleotide Synthesizers for the synthesis of
      polynucleotides used in Licensed Products. EBI will be entitled to rely on
      the written representations of its suppliers as to the "Authorized" status
      of such supports and synthesizers.

8.    TERM

      Unless terminated earlier as provided in Section 9, this Agreement will
      commence on the Effective Date and will remain in full force until the
      expiration, abandonment, or final determination of invalidity or
      unenforceability, of the last Valid Claim of the last to expire Licensed
      Patent.

9.    TERMINATION

      9.1   This Agreement may be terminated by either Party,

            (A)   in the event the other Party files in any court or agency
                  under any statute or regulation of any state or country, a
                  petition in bankruptcy or insolvency or for reorganization or
                  for the appointment of a receiver or trustee of the other
                  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 the
                  petition is not dismissed within 60 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;
                  except that,

                  (1)   the Party alleging such breach must first give the other
                        Party written notice thereof, which notice must state
                        the nature of the breach in reasonable detail and the
                        other Party must have failed to cure such alleged breach
                        within 60 days after receipt of the notice; and

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                  (2)   the Party alleging the breach terminates the Agreement
                        within 1 year of first giving the other Party such
                        written notice.

                  (3)   For avoidance of doubt, it is understood and agreed by
                        the Parties that a failure to pay royalties when due
                        will constitute a material breach of this Agreement.

      9.2   Termination by EBI. EBI may terminate this Agreement at any time
            upon 60 days notice to ABG.

      9.3   Survival of Obligations. Upon any termination of this Agreement, by
            expiration of the term or otherwise, neither Party will be relieved
            of any obligations incurred prior to such termination. Despite any
            termination of this Agreement, the obligations of the Parties under
            Sections 3 (to the extent such royalties have accrued), 5, 6, 9.3,
            and 10 as well as any other provisions that by their nature are
            intended to survive any termination, will survive and continue to be
            enforceable.

      9.4   Sale of Inventory. In the event of any termination, EBI shall have
            the right to sell any remaining Licensed Product in inventory or in
            process for up to 6 months following the date of termination,
            subject to the payment of royalties thereon.

10.   GENERAL PROVISIONS

      10.1  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 the performance to the extent of the prevention,
            restriction, interference or delay; provided, however, the affected
            Party will use its reasonable best efforts to avoid or remove the
            causes of non-performance and will continue performance with the
            utmost dispatch whenever the causes are removed. When the
            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.

      10.2  Governing Law; 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 that any
            Party commences any proceeding to enforce or interpret the
            provisions of this Agreement, the prevailing party in any such
            action or proceeding shall be entitled to recover reasonable
            attorneys' fees and costs incurred in connection with such suit,
            action or proceeding in addition to whatever other remedies may also
            be available.

      10.3  Severability. If a court or an arbitrator of competent jurisdiction
            holds any provision of this Agreement to be illegal, unenforceable,
            or invalid, in whole or in Part for any reason, the validity and
            enforceability of the remaining provisions, or portions thereof,
            will not be affected.

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      10.4  Entire Agreement. This Agreement constitutes the final, complete,
            and exclusive statement of the terms of the agreement between the
            Parties pertaining to the subject matter of this Agreement and
            supersedes all prior and contemporaneous understandings or
            agreements of the Parties. No Party has been induced to enter into
            this Agreement by, nor is any Party relying on, any representation
            or warranty outside those expressly set forth in this Agreement.

      10.5  Modification of Agreement. No terms or conditions 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 supplement, amend, or modify this Agreement by written
            instruments specifically referring to and executed in the same
            manner as this Agreement.

      10.6  Assignment. This Agreement is binding upon, and will inure to the
            benefit of, ABG, its successors and assigns, but will be personal to
            EBI and will not be assigned by EBI without the express written
            consent of ABG, provided however, that EBI may assign this Agreement
            (i) to one or more Affiliates and (ii) subject to payment to ABG of
            $100,000, in connection with any sale or transfer of the business to
            which it relates.

      10.7  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.

      10.8  Construction.

            10.8.1 Headings; Sections and Exhibits. Headings contained in this
                   Agreement are for convenience only and will not be used in
                   the interpretation of this Agreement. References herein to
                   sections and exhibits are to the sections and exhibits,
                   respectively, of this Agreement. Any exhibits are hereby
                   incorporated herein by reference and made a part of this
                   Agreement. Should any inconsistency exist or arise between a
                   provision of this Agreement and a provision of any exhibit,
                   schedule, or other incorporated writing, the provision of
                   this Agreement will prevail.

            10.8.2 No Construction Against Drafter. Each Party and its counsel
                   have participated fully in the review and revision of this
                   Agreement. Any rule of construction to the effect that
                   ambiguities are to be resolved against the drafting party
                   will not apply in interpreting this Agreement.

            10.8.3 Certain Words and Terms. Unless the context clearly requires
                   otherwise,

                  (A)   the plural and singular numbers will each be deemed to
                        include the other;

                  (B)   the masculine, feminine, and neuter genders will each be
                        deemed to include the others;

                  (C)   "will," "will agree," or "agrees" are mandatory, and
                        "may" is permissive;

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                  (D)   "or" is not exclusive; and

                  (E)   "includes" and "including" are not limiting.

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

      10.9  Notices.

            10.9.1 Sufficient Notice. All notices, requests, demands, or other
                   communications under this Agreement will be in writing.
                   Notice will be sufficiently given for all purposes as
                   follows:

            (A)    when personally delivered to the recipient, notice is
                   effective on delivery;

            (B)    when mailed certified mail, return receipt requested, notice
                   is effective on receipt, if delivery is confirmed by a return
                   receipt;

            (C)    when delivered by Federal Express/Airborne/United Parcel
                   Service/DHL WorldWide, or United States Express Mail, charges
                   prepaid or charged to the sender's account, notice is
                   effective on delivery, if delivery is confirmed by the
                   delivery service; or

            (D)    when sent by telex or fax to the last telex or fax number of
                   the recipient known to the Party giving notice, notice is
                   effective on receipt, provided that

                   (1)  a duplicate copy of the notice is promptly given by
                        first-class or certified mail or by overnight delivery,
                        or

                   (2)  the receiving Party delivers a written confirmation of
                        receipt. Any notice given by telex or fax will be deemed
                        received on the next business day if it is received
                        after 5:00 p.m. (recipient's time) or on a nonbusiness
                        day.

            10.9.2 Notice Refused, Unclaimed, Or Undeliverable. Any correctly
                   addressed notice that is refused, unclaimed, or undeliverable
                   because of an act or omission of the Party to be notified
                   will be deemed effective as of the first date that said
                   notice was refused, unclaimed, or deemed undeliverable by the
                   postal authorities, messenger, or overnight delivery service.

            10.9.3 Addresses. Addresses for purpose of giving notice are as
                   follows:

            If to EBI:   Epoch Biosciences, Inc. Attn.:[Chief Executive Officer]
                         21720 23rd Road SE
                         Bothell, WA  98021
                         FAX No.: 425-282-5550

            If to ABG:   Applied Biosystems Group [Attn.: Legal Department]

                                       12
<PAGE>

                         850 Lincoln Centre Drive
                         Foster City, CA 94404
                         FAX No.: 650-638-6677

[Signature Page Follows]

                                       13
<PAGE>

The Parties , through their authorized officers, have executed this Agreement as
of the Effective Date.

EPOCH BIOSCIENCES, INC.                   PE CORPORATION (NY), THROUGH ITS
                                          APPLIED BIOSYSTEMS GROUP

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

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

Title: Chief Executive Officer            Title: Senior Vice President

Date:  May 10, 2001                       Date:  Mary 23, 2001

                                       14

</TEXT>
</DOCUMENT>
