AGRITOPE INC, S-1/A, 1997-12-12

AGRITOPE INC
S-1/A, 1997-12-12
COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH

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REGISTRATION NO. 333-34597

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------

FORM S-1
AMENDMENT NO. 4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------

AGRITOPE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware 8731 93-0820945
(STATE OF INCORPORATION) (PRIMARY STANDARD INDUSTRIAL IRS EMPLOYER IDENTIFICA-
CLASSIFICATION CODE NUMBER) TION NUMBER)

8505 S.W. Creekside Place, Beaverton, Oregon 97008
(503) 641-6115
(ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)

Adolph J. Ferro, Ph.D., Chairman, President and Chief Executive Officer
Agritope, Inc.
8505 S.W. Creekside Place, Beaverton, Oregon 97008
(503) 641-6115
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

Copies to:

Erich W. Merrill, Jr. Brian G. Booth
Miller, Nash, Wiener, Hager Tonkon Torp LLP
& Carlsen LLP Suite 1600
111 S.W. Fifth Avenue 888 S.W. Fifth Avenue
Portland, Oregon 97204-3699 Portland, Oregon 97204
(503) 224-5858 (503) 221-1440

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
DISTRIBUTION TO THE PUBLIC: As soon as practicable
after the effective date of this Registration
Statement.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |-|

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |-| --------

If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |-| --------------------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |-|

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================

<PAGE>

[Epitope letterhead]

[Date]

Dear Shareholder:

We are pleased to inform you that the Board of Directors has authorized
a spin-off of the Company's wholly owned subsidiary, Agritope, Inc. To effect
the spin-off, Epitope, Inc. is distributing the Agritope Common Stock it now
holds to Epitope shareholders as a dividend. After the distribution, Agritope
will operate as an independent public company.

In connection with the spin-off, Agritope is raising working capital by
selling newly issued Agritope common and preferred stock to certain investors
and strategic partners. Agritope could not operate as an independent company
without this additional financing. The shares being distributed to Epitope
shareholders as a dividend are expected to represent between 53 percent and 63
percent of the Agritope voting stock outstanding after the distribution and
sales of common and preferred stock are completed, depending on the extent to
which an option to purchase additional shares of preferred stock is exercised,
as more fully described in the attached Information Statement/Prospectus.

You will receive one share of Agritope Common Stock for every five
shares of Epitope Common Stock that you owned on the record date of December
- ---, 1997. You will receive cash for any fractional share of Agritope Common
Stock that you would have received. The Company has received an opinion of
counsel that the distribution will be tax-free to most shareholders, except for
cash received for any fractional shares. You should consult your own tax advisor
about the tax consequences of the distribution to you.

You do not need to take any action for the spin-off to occur. You do
not have to pay for the shares of Agritope Common Stock that you will receive,
nor do you have to surrender or exchange shares of Epitope Common Stock in order
to receive shares of Agritope Common Stock. The number of shares of Epitope
Common Stock you own will not change as a result of the spin-off.

The attached Information Statement/Prospectus gives detailed
information about Agritope and the spin-off. We encourage you to read it
carefully.

Very truly yours,

Roger L. Pringle
Chairman

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Information Statement/Prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation, or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state.

SUBJECT TO COMPLETION, DATED DECEMBER 5, 1997.

INFORMATION STATEMENT/PROSPECTUS

AGRITOPE, INC.

DISTRIBUTION OF UP TO -------- SHARES OF COMMON STOCK
OF AGRITOPE, INC. TO SHAREHOLDERS OF EPITOPE, INC.

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

This Information Statement/Prospectus is being furnished to the
shareholders of Epitope, Inc. ("Epitope"), in connection with the spin-off of
Epitope's wholly owned subsidiary, Agritope, Inc. ("Agritope" or the "Company").
The spin-off will be accomplished through a dividend distribution (the
"Distribution") to Epitope shareholders of all the Agritope common stock, par
value $.01 per share, including associated preferred stock purchase rights
("Agritope Common"), held by Epitope. As a result of the Distribution, Agritope
will cease to be a subsidiary of Epitope and will operate as an independent
public company. Neither Epitope nor Agritope will receive any cash or other
proceeds from the Distribution.

Epitope will make a distribution to holders of record of Epitope common
stock, no par value ("Epitope Stock"), on December ---, 1997 (the "Record Date")
of one share of Agritope Common for every five shares of Epitope Stock
outstanding. On the Record Date, Epitope had outstanding ------------ shares of
Epitope Stock, its only outstanding class of stock. Therefore, an aggregate of
approximately 2.7 million shares of Agritope Common will be issued in the
Distribution.

In order to finance the operations of Agritope after the Distribution,
Agritope will sell 1,343,704 shares of Agritope Common at a price of $7 per
share in a private placement to certain foreign investors (the "Private
Placement") pursuant to the Regulation S exemption ("Regulation S") under the
Securities Act of 1933, as amended (the "Securities Act"), for an aggregate
price of $9.4 million, immediately following the Distribution.

In connection with a research and development collaboration, Agritope
and Vilmorin & Cie ("Vilmorin"), an affiliate of Groupe Limagrain, have entered
into an agreement for the sale under Regulation S of 214,285 shares of Agritope
Series A Preferred Stock ("Series A Convertible Preferred") at a price of $7 per
share for an aggregate purchase price of $1.5 million (the "Preferred Stock
Sale"). In addition, Agritope has agreed to grant Vilmorin an option (the
"Series A Option"), exercisable by Vilmorin or its designees and expiring
January 15, 1998, to purchase up to 785,715 additional shares of Series A
Convertible Preferred at a price of $7 per share. Series A Convertible Preferred
has preemptive rights and the right to elect a director, but otherwise has
rights substantially equivalent to Agritope Common and is convertible at any
time into shares of Agritope Common, initially on a share-for-share basis.

The Epitope board of directors (the "Epitope Board") believes that the
funds raised in the Private Placement are sufficient to finance the operations
of Agritope as a separate business for a period of not less than two years
following the Distribution, although no assurance to that effect can be given.
Agritope could not operate as an independent entity without such financing.
Following the Private Placement and the Preferred Stock Sale, the Agritope
Common to be issued in the Distribution will represent between 53 percent and 63
percent of outstanding Agritope voting stock, depending on the extent to which
the Series A Option is exercised.

Fractional shares of Agritope Common will not be issued in the
Distribution. If the aggregate number of shares due an Epitope shareholder of
record includes a fraction of a share, Epitope will pay the cash value of the
fractional share to the holder, based on a price of $7 per share of Agritope
Common. Shareholders who own their stock in "street name" through a broker or
other nominee listed as the holder of record will have their fractional shares
handled according to the practices of the broker or nominee.

Currently, no public market for Agritope Common exists. Agritope has
applied to have Agritope Common approved for quotation on The Nasdaq SmallCap
Market under the symbol "AGTO." Agritope Common received in the Distribution
will be freely tradeable by nonaffiliates of Agritope.

----------------------------
<PAGE>

PERSONS RECEIVING THIS INFORMATION STATEMENT/PROSPECTUS SHOULD
CAREFULLY CONSIDER THE FACTORS SPECIFIED UNDER THE CAPTION "RISK FACTORS" ON
PAGE 11.
----------------------------

NO VOTE OF SHAREHOLDERS IS REQUIRED IN CONNECTION WITH THE DISTRIBUTION.
NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT TO SEND A PROXY.
----------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS INFORMATION STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------

The date of this Information Statement/Prospectus is December ---, 1997.

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE

<S> <C>
AVAILABLE INFORMATION......................................................................................... 1

NOTE REGARDING FORWARD-LOOKING STATEMENTS..................................................................... 1

SUMMARY ..................................................................................................... 2
The Distribution..................................................................................... 2
Agritope ............................................................................................ 6
Summary of Risk Factors.............................................................................. 6
Summary Financial Data............................................................................... 9

RISK FACTORS.................................................................................................. 11

INTRODUCTION.................................................................................................. 16

THE DISTRIBUTION.............................................................................................. 17
Reasons for the Distribution......................................................................... 17
Manner of Effecting the Distribution................................................................. 18
Trading of Agritope Common........................................................................... 18
Certain Federal Income Tax Consequences.............................................................. 19

PRIVATE PLACEMENT............................................................................................. 22

SALE OF SERIES A CONVERTIBLE PREFERRED........................................................................ 22

RELATIONSHIP BETWEEN AGRITOPE AND EPITOPE AFTER THE DISTRIBUTION.............................................. 22
Separation Agreement................................................................................. 23
Employee Benefits Agreement.......................................................................... 23
Tax Allocation Agreement............................................................................. 25
Transition Services Agreement........................................................................ 26

SELECTED FINANCIAL DATA....................................................................................... 27

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS............................... 29
Overview ............................................................................................ 29
Results of Operations................................................................................ 30
Liquidity and Capital Resources...................................................................... 31

DESCRIPTION OF BUSINESS....................................................................................... 33
General ............................................................................................ 33
Agritope Biotechnology Program....................................................................... 33
Commercialization Strategy........................................................................... 39
Grants and Contracts................................................................................. 39
Vinifera ............................................................................................ 40
Competition.......................................................................................... 40

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<PAGE>

Government Regulation................................................................................ 40
Patents and Proprietary Information.................................................................. 42
Personnel............................................................................................ 42
Scientific Advisory Board............................................................................ 43
Properties........................................................................................... 43
Legal Proceedings.................................................................................... 43

DIVIDEND POLICY............................................................................................... 43

TRANSFER AGENT................................................................................................ 44

MANAGEMENT.................................................................................................... 45
Directors and Executive Officers..................................................................... 45
Committees of the Board.............................................................................. 47
Compensation of Directors............................................................................ 48
Executive Compensation............................................................................... 48
Grants of Options to Purchase Agritope Common........................................................ 49
Aggregated Option Exercises in Last Fiscal Year and Outstanding Options for Agritope
Common...................................................................................... 50
Employment; Change in Control Agreements............................................................. 50

1997 STOCK AWARD PLAN......................................................................................... 51
General ............................................................................................ 51
Purpose ............................................................................................ 51
Awards and Eligibility............................................................................... 51
New Options.......................................................................................... 51
Description of Terms of Awards....................................................................... 52
Federal Income Tax Consequences...................................................................... 53

1997 EMPLOYEE STOCK PURCHASE PLAN............................................................................. 55
General ............................................................................................ 55
Purpose ............................................................................................ 55
Subscriptions........................................................................................ 55
Federal Income Tax Consequences...................................................................... 56

EMPLOYEE STOCK OWNERSHIP PLAN................................................................................. 56

401(K) PROFIT SHARING PLAN.................................................................................... 57

CERTAIN TRANSACTIONS.......................................................................................... 58

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................................................ 58

SHARES ELIGIBLE FOR FUTURE SALE............................................................................... 60

DESCRIPTION OF AGRITOPE CAPITAL STOCK......................................................................... 61

Agritope Preferred................................................................................... 61

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<PAGE>

Agritope Series A Convertible Preferred.............................................................. 61
Agritope Warrants.................................................................................... 62
Preemptive Rights.................................................................................... 63
Stockholder Rights Plan.............................................................................. 63
Other Anti-takeover Measures......................................................................... 63
Delaware Business Combinations Statute............................................................... 65
Indemnification of Directors and Officers; Limitation of Liability; Insurance........................ 65

LEGAL MATTERS................................................................................................. 66

EXPERTS ..................................................................................................... 66

FINANCIAL STATEMENTS ........................................................................................ F-1

</TABLE>

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<PAGE>

AVAILABLE INFORMATION

After the Distribution of Agritope Common, Agritope will be subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Accordingly, Agritope will file annual, quarterly
and special reports, proxy statements and other information with the Securities
and Exchange Commission (the "Commission"). You may read and copy the
information Agritope files without charge at the Commission's public reference
rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York
10048. You may also obtain the information from commercial document retrieval
services and at the Internet web site maintained by the Commission at
"http://www.sec.gov."

Agritope filed a Registration Statement on Form S-1 (together with all
amendments, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), to register Agritope Common with the Commission.
This Information Statement/Prospectus is part of the Registration Statement. As
allowed by Commission rules, this Information Statement/Prospectus omits some
information included in the Registration Statement. Statements contained in this
Information Statement/Prospectus about contracts or other exhibits to the
Registration Statement are not necessarily complete and are qualified by the
full text of the exhibits. You may read and copy the Registration Statement,
including the exhibits, as described above.

Agritope intends to distribute to shareholders annual reports
containing audited financial statements, but does not plan to furnish
shareholders with quarterly reports containing unaudited interim financial
information for the first three fiscal quarters of each fiscal year.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this Information Statement/Prospectus about future events
or performance are "forward-looking statements." The forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results to be materially different from those expressed or implied by the
forward-looking statements. Certain of these factors are discussed in more
detail under the caption "Risk Factors" and elsewhere in this Information
Statement/Prospectus. Given these uncertainties, shareholders are cautioned not
to place undue reliance on the forward-looking statements. Agritope does not
intend to update any forward-looking statements.

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<PAGE>

SUMMARY

This summary highlights certain information contained elsewhere in this
Information Statement/Prospectus. To better understand the Distribution and
Agritope, you should read this entire document, including the section "Risk
Factors" beginning on page 9. Capitalized terms used but not defined in this
summary have the meanings given elsewhere in this Information
Statement/Prospectus.

THE DISTRIBUTION

<S> <C>
DISTRIBUTING CORPORATION AND BUSINESS ....................... Epitope, Inc., an Oregon corporation. Epitope uses biotech-
nology to develop and market medical diagnostic products.

DISTRIBUTED CORPORATION AND
BUSINESS..................................................... Agritope, Inc., a Delaware corporation, currently a wholly
owned subsidiary of Epitope. Agritope is a biotechnology
company specializing in the development of new fruit and
vegetable plant varieties for sale to the fresh produce industry.
Agritope is also the majority owner of Vinifera, which
management believes offers one of the most technically
advanced grapevine plant propagation and disease screening
and elimination programs available to the wine and table grape
production industry. See "Summary--Agritope" and
"Description of Business."

FINANCING OF AGRITOPE ....................................... In order to finance the operations of Agritope after the
Distribution, Agritope will sell 1,343,704 shares of Agritope
Common at a price of $7 per share in the Private Placement for
an aggregate price of $9.4 million, immediately following the
Distribution. The Epitope Board believes that the funds raised
in the Private Placement are sufficient to finance the
operations of Agritope as a separate business for a period of
not less than two years following the Distribution, although no
assurance to that effect can be given. See "Risk Factors--Need
for Additional Funds." In connection with a research and
development collaboration, Agritope and Vilmorin, an affiliate
of Groupe Limagrain, have entered into an agreement for the
sale under Regulation S of 214,285 shares of Series A
Convertible Preferred at a price of $7 per share for an
aggregate purchase price of $1.5 million. Agritope could not
operate as an independent entity without the financing to be
raised in the Private Placement. See "Private Placement" and
"Sale of Series A Convertible Preferred."

DISTRIBUTION RATIO........................................... Each Epitope shareholder will receive one share of Agritope
Common for every five shares of Epitope Stock held as of the
Record Date.

RECORD DATE.................................................. Close of business on December ---, 1997.

DISTRIBUTION DATE............................................ Five business days following the Record Date.

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<PAGE>

DISTRIBUTION AGENT........................................... ChaseMellon Shareholder Services, L.L.C.

MAILING OF STOCK CERTIFICATES ............................... Certificates representing shares of Agritope Common issued in
the Distribution will be mailed as soon as practicable after the
Distribution Date.

SHARES TO BE DISTRIBUTED..................................... An aggregate of approximately 2.7 million shares of Agritope
Common will be issued in the Distribution. Following the
Distribution, the Private Placement and the Preferred Stock
Sale, approximately 4.2 million shares of Agritope voting
stock will be outstanding, and shares distributed to Epitope
shareholders in the Distribution will represent between 53 and
63 percent of Agritope voting stock outstanding, depending on
the extent to which the Series A Option is exercised.

FRACTIONAL SHARE INTERESTS................................... Fractional shares of Agritope Common will not be issued in
the Distribution. If the number of shares of Agritope Common
to be issued to any record holder of Epitope Stock includes a
fraction of a share, Epitope will pay an amount in cash for the
fractional share. See "The Distribution--Manner of Effecting
the Distribution."

TRADING MARKET............................................... Agritope has applied to include Agritope Common for
quotation on The Nasdaq SmallCap Market under the symbol
"AGTO." There is currently no public market for Agritope
Common. There can be no assurance that an active trading
market in shares of Agritope Common will develop after the
Distribution. See "The Distribution--Trading of Agritope
Common" and "Risk Factors--No Assurance as to Market
Performance of Agritope Common."

PRIMARY PURPOSES OF THE DISTRIBUTION......................... The primary purpose of the Distribution is to enable Agritope
to raise immediately needed working capital through the sale
of its own equity securities. The Distribution also is intended
to permit Epitope and Agritope each to (i) adopt strategies and
pursue objectives appropriate to its specific business;
(ii) enable management to concentrate attention and financial
resources on its core business; (iii) make acquisitions and enter
into transactions with strategic partners by issuing its own
equity securities; (iv) implement incentive compensation
arrangements that are more directly based on results of
operations of its separate business; and (v) be recognized and
evaluated by the financial community as a separate and distinct
business. See "The Distribution--Reasons for the
Distribution."

TAX CONSEQUENCES............................................. Epitope has received an opinion of counsel that the
Distribution will be treated as a tax free transaction to
Epitope's shareholders, with the exception of shareholders who
received their shares of Epitope Stock as compensation, who

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<PAGE>

are not U.S. citizens or residents, or who are otherwise subject
to special tax treatment. Epitope has not applied, and does not
intend to apply, for a ruling from the Internal Revenue Service
to that effect. See "The Distribution--Certain Federal Income
Tax Consequences."

RELATIONSHIP WITH EPITOPE
AFTER THE DISTRIBUTION ...................................... Following the Distribution, Epitope will not own any shares of
Agritope's capital stock, and Epitope and Agritope will be
operated as independent public companies. Epitope will not
make financing of any kind available to Agritope after the
Distribution. Epitope and Agritope will, however, continue to
have a relationship as a result of agreements they have entered
into in connection with the Distribution, which include a
Separation Agreement, an Employee Benefits Agreement, a
Tax Allocation Agreement and a Transition Services and
Facilities Agreement (the "Transition Services Agreement").
In addition, two individuals will continue to serve as directors
of both Agritope and Epitope after the Distribution. Except as
set forth in the agreements listed above or as otherwise
described in this Information Statement/Prospectus, Epitope
and Agritope will cease to have any material relationship with
each other following the Distribution. See "Relationship
Between Agritope and Epitope After the Distribution" and
"Management--Directors and Executive Officers."

CERTAIN ANTI-TAKEOVER
CONSIDERATIONS............................................... Certain provisions of Agritope's Certificate of Incorporation
and Bylaws and of Delaware law could make it more difficult
for a party to acquire, or discourage a party from attempting
to acquire, control of Agritope without approval of the
Agritope board of directors (the "Agritope Board"). Agritope
has adopted a Stockholder Rights Plan (the "Rights
Agreement") designed to protect Agritope and its stockholders
from inequitable offers to acquire Agritope. In addition,
Agritope's Certificate of Incorporation and Bylaws contain
certain provisions designed to deter changes in the composition
of the Agritope Board, and to allow the Agritope Board to
issue Agritope Preferred and Agritope Common without
stockholder approval. Each of these provisions may
discourage tender offers or other bids for Agritope Common.
See "Risk Factors--Anti-takeover Considerations" and
"Description of Agritope Capital Stock."

DIVIDEND POLICY ............................................. Agritope does not anticipate paying dividends in the
foreseeable future.

PRIVATE PLACEMENT ........................................... Agritope will sell 1,343,704 shares of Agritope Common in
the Private Placement at a price of $7 per share for an
aggregate price of $9.4 million, immediately following the

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<PAGE>

Distribution. Subscribers in the Private Placement have
deposited the purchase price for their shares of Agritope
Common in an escrow account pending the completion of the
Distribution and the closing of the Private Placement. See
"Private Placement."

SALE OF SERIES A CONVERTIBLE PREFERRED....................... Agritope has designated 1 million shares of Agritope Preferred
as Series A Convertible Preferred. In connection with a
research and development collaboration, Agritope and Vilmorin
have entered into an agreement for the sale under Regulation S
of 214,285 shares of Series A Convertible Preferred at a price
of $7 per share for an aggregate purchase price of $1.5
million. See "Risk Factors--Dependence on Strategic Partners,"
"Sale of Series A Convertible Preferred," and "Description of
Business--Agritope Biotechnology Program--Vegetable and Flower
Crops." In addition, Agritope has agreed to grant Vilmorin the
Series A Option, exercisable by Vilmorin or its designees
(which may or may not be related to Vilmorin) and expiring
January 15, 1998, to purchase up to 785,715 additional shares
of Series A Convertible Preferred at a price of $7 per share.
Series A Convertible Preferred has preemptive rights and the
right to elect a director, but otherwise has rights
substantially equivalent to Agritope Common and is convertible
at any time into shares of Agritope Common, initially on a
share-for-share basis. See "Description of Agritope Capital
Stock--Agritope Series A Convertible Preferred."
</TABLE>

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<PAGE>

AGRITOPE

Agritope is a biotechnology company specializing in the development of
new fruit and vegetable plant varieties for sale to the fresh produce industry.
The Company is utilizing its patented ethylene control technology to develop a
wide variety of fruits and vegetables that are resistant to the decaying effects
of ethylene. The Company also recently acquired certain rights to certain
proprietary genes from the Salk Institute for Biological Studies (the "Salk
Genes"). Agritope believes that the Salk Genes may have the potential to confer
disease resistance, enhance crop yield, control flowering and enhance gene
expression in plants. Agritope has an option to obtain a worldwide license to
use the Salk Genes in a wide range of fruit and vegetable species.

The Company consists of two units: Agritope Research and Development
and Vinifera. Agritope Research and Development provides biotechnology and
product development capabilities to strategic partners and provides disease
screening and elimination programs to its Vinifera subsidiary. Through Vinifera,
Agritope offers what management believes to be one of the most technically
advanced grapevine plant propagation and disease screening and elimination
programs available to the wine and table grape production industry. Because
Agritope has not achieved commercialization of any of its products, the majority
of its revenues, to date, have resulted from operations of Vinifera.

Agritope was formed under Oregon law in 1987. On December 3, 1997,
Agritope was reincorporated under Delaware law by means of a merger of the
Oregon corporation into Agritope, Inc., a newly formed Delaware corporation,
with the Delaware corporation as the surviving entity.

Agritope has had a history of significant operating losses. Its
accumulated deficit was $41.2 million as of September 30, 1997.

Agritope's principal offices are located at 8505 S.W. Creekside Place,
Beaverton, Oregon 97008. Its telephone number is (503) 641-6115.

SUMMARY OF RISK FACTORS

The following is a summary of certain of the risk factors that Epitope
shareholders who will receive Agritope Common in the Distribution should
carefully consider, together with other information presented elsewhere in this
Information Statement/Prospectus. See "Risk Factors."

No Operating History as an Independent Company. Since 1987, Agritope
has operated as a wholly owned subsidiary of Epitope. Therefore, it does not
have a recent operating history as an independent company. After December 1,
1997, Epitope will not provide any additional operating capital to Agritope,
other than advances to be repaid by Agritope when the Distribution is completed,
and will provide only the limited administrative and other support provided for
in the Transition Services Agreement. Agritope is required to repay any amounts
advanced by Epitope to Agritope between December 1, 1997, and the Distribution.

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<PAGE>

Uncertainties Relating to Patents and Proprietary Information. Agritope
has obtained certain patents, has licensed rights under other patents, and has
filed a number of patent applications. Agritope anticipates filing patent
applications for protection of future products and technology. There can be no
assurance that patents applied for will be obtained, that existing patents to
which Agritope has rights will not be challenged, or that the issuance of a
patent will give Agritope any material advantage over its competitors in
connection with any of its products. Competitors may be able to produce products
competing with a patented Agritope product without infringing on Agritope's
patent rights.

Limited Marketability of Agritope Common. Agritope has applied to have
Agritope Common approved for quotation on The Nasdaq SmallCap Market, beginning
after the Record Date. Prior to the Distribution, there has been no public
market for Agritope Common. There can be no assurance that an active trading
market will develop upon completion of the Distribution or, if it does develop,
that the market will be sustained. The relatively small number of publicly
traded shares of Agritope Common may result in a market in such shares that
lacks liquidity. Also, the market price of Agritope Common could be vulnerable
to significant fluctuations in response to variations in actual and anticipated
operating results, lack of liquidity, failure by the Company to achieve its
growth plans and other events affecting the Company, its competitors or its
industry sector. The market for securities of small market

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<PAGE>

capitalization companies has been highly volatile in recent years, often as a
result of factors unrelated to their operations.

- 8 -
<PAGE>

SUMMARY FINANCIAL DATA
(In thousands, except per share data)

The following table presents summary financial data of Agritope and its
subsidiaries. The balance sheet data at September 30, 1997, and 1996 and the
operating results data for the years ended September 30, 1997, 1996, and 1995
have been derived from audited consolidated financial statements and notes
thereto included in this Information Statement/Prospectus. This information
should be read in conjunction with Agritope's consolidated financial statements
and notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
1997 1996 1995(1)

<S> <C> <C> <C>
CONSOLIDATED OPERATING RESULTS
Revenues......................................... $ 1,551 $ 585 $2,110
Operating costs and expenses..................... 6,089 2,821 9,920
Other expense, net............................... (4,153)(2) (265) (235)
Net loss......................................... (8,691) (2,501) (8,045)
Pro forma net loss per share (3)................. (3.23) ( .93) (2.99)
Pro forma shares used in
per share calculations (3)..................... 2,691 2,691 2,691

SEPTEMBER 30
1997 1996
As Adjusted(4) Actual
pro forma
(unaudited)
CONSOLIDATED BALANCE SHEET
Working capital (deficiency)..................... $11,740 $ 1,659 $(3,163)
Total assets..................................... 17,366 7,285 5,670
Long-term debt................................... 15 15 -
Convertible notes, due 1997...................... - - 3,620
Accumulated deficit.............................. (41,168) (41,168) (32,478)
Shareholder's equity............................. 14,844 4,763 1,008
</TABLE>

(1) Data for 1995 includes revenues of $2.0 million and operating losses of
$3.8 million, attributable to business units which were divested. See
Note 3 to consolidated financial statements.

(2) Includes non-cash charges of $2.3 million, reflecting the permanent
impairment in the value of Agritope's investment in affiliated
companies, and $1.2 million for the conversion of Agritope convertible
notes into Epitope Stock at a reduced price. See Notes 3 and 5 to
consolidated financial statements.

(3) Net loss per share is presented on a pro forma basis assuming that the
Distribution of Agritope Common pursuant to the Agritope spin-off had
occurred on October 1, 1994. Pro forma calculations exclude shares to
be issued in the Private Placement, the Preferred Stock Sale, and upon
the exercise of the Series A Option. See Note 11 to Consolidated
Financial Statements.

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<PAGE>

(4) The capitalization of Agritope as adjusted reflects the effects of the
Private Placement of 1,343,704 shares of Agritope Common and the sale
of 214,285 shares of Series A Convertible Preferred for aggregate
proceeds of $10.9 million, less issuance costs of $825,000.

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<PAGE>

RISK FACTORS

Epitope shareholders who will receive Agritope Common in the
Distribution should carefully consider the following risk factors, as well as
the other information provided elsewhere in this Information
Statement/Prospectus.

History of Losses; Uncertainty of Future Profitability. Agritope has
experienced significant operating losses since inception and, as of September
30, 1997, had an accumulated deficit of $41.2 million. Agritope may continue to
experience significant operating losses as it continues its research and
development programs. Agritope's ability to increase revenues and achieve
profitability and positive cash flows from operations will depend in part on
successful completion of the development and commercialization of its
genetically engineered products. See "Risk Factors--Dependence on Strategic
Partners." Agritope has not at this time achieved commercialization of any of
its products. There can be no assurance that Agritope's development efforts will
result in commercially viable genetically engineered products, that Agritope's
products will obtain required regulatory clearances or approvals or that any
such products will achieve a significant level of market acceptance. As such,
there can be no assurance that Agritope will ever achieve profitability.

Need for Additional Funds. The Distribution was conditioned upon a
determination by the Epitope Board that funds from the Private Placement to be
completed immediately following the Distribution will be sufficient to finance
the operations of Agritope as a separate business for at least two years.
Subscribers in the Private Placement have agreed to purchase a total of $9.4
million of Agritope Common and have deposited the purchase price in an escrow
account, pending the closing of the Private Placement. The Preferred Stock Sale
will generate an additional $1.5 million in proceeds. There can be no assurance
that the determination of Agritope's anticipated cash requirements will prove to
be accurate. Historically, the majority of Agritope's financial requirements
have been met by Epitope. Agritope has also received funding from $5.4 million
principal amount of convertible notes, $1.6 million in investments in Vinifera
by minority shareholders, and $1.0 million of funding from strategic partners
and other research grants. Agritope had an accumulated intercompany balance due
to Epitope of approximately $47.5 million as of September 30, 1997,
substantially all of which will be canceled as part of the Distribution. After
December 1, 1997, Epitope will not provide any financial support to Agritope,
except advances to be repaid by Agritope when the Distribution is completed. The
actual future liquidity and capital requirements of Agritope will depend on
numerous factors, including: the costs and success of development efforts; the
costs and timing of establishment of sales and marketing activities; the success
of its current strategic collaborations; the success of Agritope in securing
additional strategic partners; the extent to which existing and new products
gain market acceptance; competing technological and market developments; product
sales and royalties; the costs involved in preparing, filing, prosecuting,
maintaining, enforcing and defending patent claims and other intellectual
property rights; and the availability of third party funding for research
projects. In any event, Agritope may seek or be required to raise substantial
additional funds through public or private financings, collaborative
relationships or other arrangements. There can be no assurance that financing
will be available on satisfactory terms, if at all. Any additional equity
financing may be dilutive to stockholders, and debt financing, if available, may
involve significant interest expense and restrictive covenants. In addition,
subsequent changes in ownership due to future equity sales could adversely
affect Agritope's ability to utilize existing net operating losses. See Note 7
to consolidated financial statements. Collaborative arrangements, if necessary
to raise additional funds, may require that Agritope relinquish its rights to
certain of its technologies, products or marketing territories. The failure of
Agritope to raise capital could require it to scale back, delay or eliminate
certain of its programs and would have a material adverse effect on its
business, financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

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<PAGE>

Dependence on Strategic Partners. Agritope relies on strategic partners
for access to proprietary plant varieties. In addition, Agritope does not have
or plan to have the capability to grow and distribute genetically engineered
products in commercial quantities. Agritope expects some or all of the
development, manufacturing and marketing of certain of its products to be
performed or paid for by other parties, primarily agricultural companies,
through license agreements, joint ventures or other arrangements. Agritope has
entered into several such arrangements. Agritope and Vilmorin have entered into
a collaborative research and development arrangement. See "Sale of Series A
Preferred Stock" and "Description of Business-Agritope Biotechnology
Program--Vegetable and Flowers Crops." The Company has also entered agreements
with Sweetbriar Development, Inc.; Harris Moran Seed Company, an affiliate
company of Groupe Limagrain; and Sunseeds Company. Commercialization of
Agritope's products will require the assistance of Agritope's current strategic
partners and may require that Agritope enter additional strategic partnerships
with businesses experienced in the breeding, developing, producing, marketing
and distributing of produce varieties. Agritope's future revenues will be
dependent on the success of products developed pursuant to such collaborative
relationships. There can be no assurance that Agritope will be able to establish
additional strategic relationships or maintain its current strategic
relationships or that such relationships will be on terms sufficiently favorable
to permit Agritope to operate profitably. Furthermore, conflicts may arise
between the Company and its partners or among these third parties that could
discourage them from working cooperatively with the Company. Agritope's
commercial success will be dependent in part upon the performance of its
strategic partners. See "Description of Business."

Uncertainties Relating to Patents and Proprietary Information. Agritope
has obtained certain patents, has license rights under other patents, and has
filed a number of patent applications. Agritope anticipates filing patent
applications for protection of future products and technology. There can be no
assurance that patents applied for will be obtained, that existing patents to
which Agritope has rights will not be challenged, or that the issuance of a
patent will give Agritope any material advantage over its competitors in
connection with any of its products. Competitors may be able to produce products
competing with a patented Agritope product without infringing on Agritope's
patent rights. The issuance of a patent to Agritope or to a licensor is not
conclusive as to validity or as to the enforceable scope of claims therein. The
validity and enforceability of a patent can be challenged by litigation after
its issuance and, if the outcome of the litigation is adverse to the owner of
the patent, the owner's rights could be diminished or withdrawn.

The patent laws of other countries may differ from those of the U.S. as
to the patentability of Agritope's products and processes. Moreover, the degree
of protection afforded by foreign patents may be different from that of U.S.
patents.

The technologies used by Agritope may infringe the patents or
proprietary technology of others. The cost of enforcing Agritope's patent rights
in lawsuits that Agritope may bring against infringers or of defending itself
against infringement charges by other patent holders may be high and could
interfere with Agritope's operations.

Trade secrets and confidential know-how are important to Agritope's
scientific and commercial success. Although Agritope seeks to protect its
proprietary information through confidentiality agreements and appropriate
contractual provisions, there can be no assurance that others will not develop
independently the same or similar information or gain access to proprietary
information of Agritope. See "Description of Business--Patents and Proprietary
Information."

Dependence on Key Personnel. Agritope depends to a large extent on the
abilities and continued participation of its principal executive officers and
scientific personnel. The loss of key personnel could have a material adverse
effect on Agritope's business and results of operations. Agritope's key
personnel include, among others, the individuals identified under "Management."
Competition for management and scientific staff in the agricultural
biotechnology field is intense. No assurance can be given that Agritope will be
able to continue to attract and retain personnel with sufficient experience and
expertise to satisfy its needs.

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<PAGE>

Limited Marketability of Agritope Common. Agritope has applied to have
Agritope Common approved for quotation on The Nasdaq SmallCap Market, beginning
after the Record Date. Prior to the Distribution, there has been no public
market for Agritope Common. There can be no assurance that an active trading
market will develop upon completion of the Distribution or, if it does develop,
that the market will be sustained. The relatively small number of publicly
traded shares may result in a market in shares of Agritope Common that lacks
liquidity. Also, the market price of Agritope Common could be vulnerable to
significant fluctuations in response to variations in actual and anticipated
operating results, lack of liquidity, failure by the Company to achieve its
growth plans and other events affecting the Company, its competitors, or its
industry sector. The market for securities of small market capitalization
companies has been highly volatile in recent years, often as a result of factors
unrelated to their operations.

Uncertainty of Product Development. Agritope's genetically engineered
products are at various stages of development. There are difficult scientific
objectives to be achieved in certain product development programs before the
technological or commercial feasibility of the products can be demonstrated.
Even the more advanced programs could encounter technological problems that may
significantly delay or prevent product development or product introduction. See
"Description of Business." There can be no assurance that any of Agritope's
products under development, if and when fully developed and tested, will perform
in accordance with Agritope's expectations, that necessary regulatory approvals
will be obtained in a timely manner, if at all, or that these products can be
successfully and profitably produced, distributed and sold.

Terms for Commercialization of Certain Vegetable and Flower Crops.
Under the proposed terms of the research and development agreement between
Agritope and Vilmorin (the "Vilmorin Research Agreement"), the terms of
agreements for commercializing any covered vegetable and flower crops resulting
from Agritope research funded by Vilmorin are to be determined by "baseball"
style arbitration if the parties are unable to reach agreement. In this style of
arbitration, the arbitrator must choose all terms proposed by one party or the
other, without modification or compromise. Although "baseball" style arbitration
is intended to encourage the parties to make reasonable offers and to compromise
their differences, there can be no assurance that it will do so. Accordingly,
Agritope may not control the terms on which some of its research will be
commercialized, and there can be no assurance that the terms selected by an
arbitrator will be favorable to Agritope or allow it to operate profitably.

Technological Change and Competition. A number of companies are engaged
in research related to plant biotechnology, including other companies that rely
on the use of recombinant DNA as a principal scientific strategy. Technological
advances by others could render Agritope's technologies less competitive or
obsolete. Agritope believes that, despite barriers to new competitors such as
patent positions and substantial research and development lead time, competition
will intensify, particularly from agricultural biotechnology firms and major
agrichemical, seed and food companies with biotechnology laboratories.
Competition in the fresh produce market is intense and is expected to increase
as additional companies introduce products with longer shelf life and improved
quality. Many of Agritope's competitors have substantially greater
financial, technical and marketing resources than Agritope. There can be no
assurance that such competition will not have an adverse effect on
Agritope's business, financial condition and results of operations. See
"Description of Business--Competition."

Need for Public Acceptance of Genetically Engineered Products. The
commercial success of Agritope's genetically engineered products will depend in
part on public acceptance of the cultivation and consumption of genetically
engineered plants and plant products. Public attitudes may be influenced by
claims that genetically engineered plant products are unsafe for consumption or
pose a danger to the environment. There can be no assurance that Agritope's
genetically engineered products will gain public acceptance.

Product Liability and Recall Risk. Agritope could be subject to claims
for personal injury or other damages resulting from its products or services or
product recalls. Agritope carries liability insurance against the negligent acts
of certain of its employees and a general liability insurance policy that
includes coverage for product liability, but not for product recall. In
addition, Agritope may require increased product liability coverage as its
products are commercially developed. Such insurance is expensive and in the
future may not be available on acceptable

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<PAGE>

terms, if at all. Also, no assurance can be given that any product liability
claim or product recall will not have a material adverse effect on Agritope's
business, financial condition and results of operations.

Government Regulation. Many of Agritope's products and activities are
subject to regulation by various local, state, and federal regulatory
authorities in the U.S. and by governmental authorities in foreign countries
where its products may be marketed. Agritope is devoting substantial effort to
the development of genetically engineered plants, using recombinant DNA methods.
Many of Agritope's proposed agricultural products are subject to regulation by
both the U.S. Department of Agriculture ("USDA") and the Food and Drug
Administration ("FDA") and may be subject to regulation by the Environmental
Protection Agency ("EPA") and other federal, state, local and foreign
authorities. The extent of regulation depends on the intended uses of the
products, how they are derived, and how applicable statutes and regulations are
interpreted to apply to new genetic technologies and products thereof. The
regulatory approaches of the USDA, FDA, EPA and other agencies are still
evolving with respect to products of modern biotechnology, such as those derived
from the use of recombinant DNA methods. No assurance can be given that any
regulatory approvals, exemptions, permits or other clearances, if required, can
be obtained in a timely manner, if at all, either for research or commercial
activities. See "Description of Business--Government Regulation."

No Assurance as to Market Performance of Agritope Common. There can be
no assurance that the combined market values of the Epitope Stock and the
Agritope Common held by a shareholder after the Distribution will equal or
exceed the market value of the Epitope Stock held by the shareholder prior to
the Distribution Date. The trading price of Agritope Common may also be subject
to significant fluctuations. The market prices for securities of agricultural
biotechnology companies historically have been volatile. Many factors such as
announcements of technological innovations or new commercial products by
Agritope or its competitors, governmental regulation, patent or proprietary
rights developments, industry alliances, public concern as to the safety or
other implications of products, and market conditions in general may have a
significant impact on the market price of Agritope Common. In addition, broad
market fluctuations and general economic conditions may adversely affect the
market price of Agritope Common.

Agritope has applied to include Agritope Common for quotation on The
Nasdaq SmallCap Market. In order to maintain its listing on The Nasdaq SmallCap
Market, Agritope will be required to comply with certain Nasdaq listing
maintenance standards including minimum tangible asset value amounts, public
float requirements and minimum stock price amounts. There can be no assurance
that Agritope will be able to comply with the listing maintenance standards of
The Nasdaq SmallCap Market as in effect from time to time.

Possibility of Substantial Sales of Agritope Common. Any sales of
substantial amounts of Agritope Common in the public market, or the perception
that such sales might occur, whether as a result of the Distribution or
otherwise, could materially adversely affect the market price of Agritope
Common. See "The Distribution-- Trading of Agritope Common" and "Shares Eligible
for Future Sale."

Agreements with Epitope; Lack of Arm's-length Negotiations. In
contemplation of the Distribution, Agritope has entered into a number of
agreements with Epitope, including a Separation Agreement, an Employee Benefits
Agreement, and a Transition Services Agreement, for the purpose of defining its
ongoing relationship with Epitope. Although these agreements were not the result
of arm's-length negotiations between independent parties, Agritope believes such
agreements contain terms comparable to those that would have resulted from
negotiations between unaffiliated parties. There can be no assurance, however,
that the terms of the agreements are in fact comparable to those that would have
been negotiated on an arm's-length basis. See "Relationship Between Agritope and
Epitope After the Distribution."

Anti-takeover Considerations. Agritope's Certificate of Incorporation
and Bylaws may have the effect of making an acquisition of control of Agritope
in a transaction not approved by the Agritope Board more difficult. For example,
the Certificate of Incorporation and Bylaws provide for a classified board,
prohibit the removal of directors except for "cause," limit the ability of the
stockholders and directors to change the size of the board, and

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<PAGE>

require advance notice before stockholders are permitted to nominate directors
or submit other proposals at stockholder meetings. The Agritope Board has also
adopted the Rights Agreement. In addition, subject to limitations prescribed by
Delaware law, the Agritope Board has the authority to issue up to 10 million
shares of Agritope Preferred and to fix the rights, preferences, privileges and
restrictions of those shares, and to issue up to a total of 30 million shares of
Agritope Common, all without any vote or action by Agritope's stockholders,
except as may be required by law or any stock exchange or automated securities
interdealer quotation system on which Agritope Common may be listed or quoted.
Agritope is also subject to Delaware statutory provisions governing business
combinations with persons deemed to be "interested stockholders." See
"Description of Agritope Capital Stock." Finally, awards made under the 1997
Stock Award Plan may vest in full immediately in the event of a change in
control of Agritope or similar event. See "1997 Stock Award Plan." The potential
issuance of additional shares of Agritope capital stock and other considerations
referenced above may have the effect of delaying or preventing a change in
control of Agritope, may discourage offers for Agritope Common, and may
adversely affect the market price of, and the voting and other rights of the
holders of, Agritope Common.

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<PAGE>

INTRODUCTION

On --------------------, 1997, the Epitope Board authorized management
to proceed with the distribution to Epitope shareholders of all the Agritope
Common held by Epitope. The Distribution will be made to holders of record of
Epitope Stock at the close of business on the Record Date, in the ratio of one
share of Agritope Common for every five shares of Epitope Stock held.
Shareholders will receive cash in lieu of any fractional shares. Epitope
shareholders participating in the Distribution will not be required to surrender
or exchange shares or pay any consideration for the Agritope Common. After the
Distribution, Agritope will cease to be a subsidiary of Epitope and will operate
as an independent public company.

Agritope will sell 1,343,704 shares of Agritope Common in the Private
Placement and 214,285 shares of the Series A Convertible Preferred in the
Preferred Stock Sale, for an aggregate price of $10.9 million, immediately
following the Distribution. The Epitope Board believes that the proceeds of the
Private Placement are sufficient to finance the operations of Agritope as a
separate business for a period of not less than two years, although no assurance
to that effect can be given. Agritope could not operate as an independent entity
without the financing to be raised in the Private Placement. See "Risk
Factors--Need for Additional Financing."

Agritope has designated 1 million shares of Agritope Preferred as
Series A Convertible Preferred. See "Description of Agritope Capital
Stock--Series A Convertible Preferred Stock." In connection with a research and
development collaboration between Agritope and Vilmorin, Agritope has entered
into an agreement for the sale of 214,285 shares of the Series A Convertible
Preferred to Vilmorin, an affiliate of Groupe Limagrain in the Preferred Stock
Sale, for an aggregate purchase price of $1.5 million. See "Sale of Series A
Convertible Preferred," "Description of Business--Agritope Biotechnology
Program--Vegetable and Flower Crops." In addition, Agritope has agreed to grant
Vilmorin the Series A Option, exercisable by Vilmorin or its designees and
expiring January 15, 1998, to purchase up to 785,715 additional shares of Series
A Convertible Preferred at a price of $7 per share. Series A Convertible
Preferred has preemptive rights and the right to elect a director, but otherwise
has rights substantially equivalent to Agritope Common and is convertible at any
time into shares of Agritope Common, initially on a share-for-share basis.

After giving effect to the Private Placement, the Preferred Stock Sale
and the Distribution, the shares of Agritope Common distributed to Epitope
shareholders in the Distribution will represent between 53 and 63 percent of all
Agritope voting stock outstanding immediately following the Distribution,
depending on the extent to which the Series A Option is exercised.

Agritope will operate separately from Epitope after the Distribution,
but has entered into various agreements with Epitope, including a Separation
Agreement, an Employee Benefits Agreement, a Tax Allocation Agreement, and a
Transition Services Agreement, to facilitate Agritope's transition to
independent operation. In connection with the Transition Services Agreement,
Epitope has agreed to provide office and laboratory facilities and accounting
and human resources services to Agritope for a 3-to-6 month period following the
Distribution. Agritope has leased new office and laboratory facilities under a
lease commencing March 1, 1998. See "Description of Business--Properties."

Epitope's and Agritope's executive offices are at 8505 S.W. Creekside
Place, Beaverton, Oregon 97008, telephone (503) 641-6115. Epitope shareholders
with questions about the Distribution should contact Mary W. Hagen, Investor
Relations Department, at the address or telephone number above. After the
Distribution Date, Agritope shareholders with questions about Agritope or
Agritope Common should contact Gilbert N. Miller, Secretary, at Agritope's
executive offices.

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<PAGE>

THE DISTRIBUTION

REASONS FOR THE DISTRIBUTION

In July 1997, the Epitope Board approved a management proposal to spin
off Agritope, subject to obtaining financing for Agritope and satisfaction of
certain other considerations. The proposal resulted from the Epitope Board's
1996 decision to make changes in corporate structure to enable investors and
management to focus separately on the agricultural and medical products business
units of Epitope.

In November 1996, the Epitope Board proposed creating two separate
classes of Epitope common stock, one to reflect the business and operations of
Epitope and the other to reflect the business and operations of Agritope (the
"Targeted Stock Proposal"). In addition, in December 1996, Epitope acquired
Andrew and Williamson Sales, Co. ("A&W"), a producer and distributor of fruits
and vegetables, as a direct wholly owned subsidiary of Epitope. In May 1997,
prior to a shareholder vote on the Targeted Stock Proposal, the Epitope Board
rescinded its acquisition of A&W and withdrew the Targeted Stock Proposal in
light of events surrounding a Hepatitis A outbreak allegedly associated with
strawberries shipped by A&W prior to its acquisition by Epitope. The potential
liabilities arising out of the outbreak convinced the Epitope Board that a
targeted stock structure presented too great a risk that liabilities of one
business unit could affect the other. In addition, the rescission and events
related to the Hepatitis A outbreak increased pressure on Epitope's available
capital and decreased the funds available for Agritope's operations. The Epitope
Board believed that in light of uncertainties surrounding the outbreak and
subsequent rescission of the purchase of A&W, raising the funds necessary to
fund the operations of both Epitope and Agritope on terms acceptable to Epitope
was unlikely. The Epitope Board ultimately concluded that, in light of the
different risks, operating environments, stages of development and respective
financing requirements of the medical products and agricultural biotechnology
businesses and the current need to raise substantial capital for Agritope, a
complete separation of the two businesses was in the best interests of Epitope
and its shareholders.

The primary purpose of the Distribution is to allow Agritope to raise
immediately needed working capital through the sale of its own equity
securities. See "Private Placement" and "Sale of Series A Preferred." Agritope's
history of operating losses is expected to continue, giving rise to a need for
additional capital that cannot be satisfied in Epitope's current corporate
structure. The Private Placement and the sale of Series A Preferred can only be
accomplished if Agritope becomes an independent public company. The Epitope
Board considered certain disadvantages of a spin-off as compared to a targeted
stock structure, such as a loss of efficiencies gained by sharing a common
administrative framework and management team and a loss of synergies in the two
companies' research and development programs but determined that such
disadvantages were outweighed by the risks that the liability of one business
would affect the value of the other.

The Distribution will separate the businesses of Epitope and Agritope,
each having its own distinct operating, financial, and investment
characteristics, so that each company can adopt strategies and pursue objectives
more appropriate to its specific business than is possible with Agritope
operating as a wholly owned subsidiary of Epitope. The Epitope Board believes
that the Distribution will better enable management of each company to
concentrate attention and financial resources on research and development and
management of growth in each of its respective core businesses, without regard
to the corporate objectives, policies, challenges and investment criteria of the
other. The Distribution is also intended to afford Agritope increased
flexibility to make acquisitions and enter into strategic partnering
transactions, by issuing its own equity securities. Finally, as a separate
company, Agritope will be able to develop incentive-based compensation programs
that are keyed directly to its earnings and performance, enhancing Agritope's
ability to attract, motivate and retain key employees.

The Epitope Board has also been concerned that the investment community
has historically focused principally on the products and business of Epitope and
has not given sufficient recognition to the value of Agritope's business.
Agritope's status as a separate public company after the Distribution will allow
investors to better evaluate the performance and investment characteristics and
the future prospects of its business. There can be no assurance that the
combined market values of Epitope Stock and Agritope Common held by a
shareholder

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<PAGE>

after the Distribution Date will equal or exceed the market value of the
existing Epitope Stock held by the shareholder prior to the Distribution Date.
See "Risk Factors--Limited Marketability of Agritope Common" and "--No Assurance
as to Market Performance of Agritope Common."

MANNER OF EFFECTING THE DISTRIBUTION

The general terms and conditions relating to the Distribution are set
forth in a Separation Agreement between Agritope and Epitope dated December 1,
1997. See "Relationship Between Agritope and Epitope After the
Distribution--Separation Agreement."

Holders of Epitope Stock on the Record Date will not be required to pay
cash or other consideration for the Agritope Common received in the Distribution
or to surrender or exchange certificates representing shares of Epitope Stock in
order to receive Agritope Common in the Distribution.

Under the Separation Agreement, on or before the Record Date, Epitope
will deliver to the Distribution Agent a certificate or certificates
representing all of the then outstanding shares of Agritope Common held by
Epitope. Epitope will then instruct the Distribution Agent to distribute to each
holder of record of Epitope Stock on the Record Date a certificate or
certificates representing one share of Agritope Common for every five shares of
Epitope Stock outstanding. Any shares not distributed on account of the
arrangements made for paying cash in lieu of fractional shares as described
below, will be returned to Agritope for cancellation. A total of approximately
2.7 million shares of Agritope Common will be issued in the Distribution.

Certificates representing shares of Agritope Common will be mailed by
the Distribution Agent as soon as practicable following the Distribution Date.
The distributed shares of Agritope Common will be fully paid and nonassessable
and will not be entitled to preemptive rights. Initially, the preferred stock
purchase rights associated with each share of Agritope Common will be
represented by the certificate for such share of Agritope Common.
See "Description of Agritope Capital Stock--Stockholder Rights Plan."

TRADING OF AGRITOPE COMMON

After the Distribution, Epitope and Agritope will operate as
independent public companies. Immediately after the Distribution and the
consummation of the Private Placement, Agritope expects to have approximately
1,030 holders of record of Agritope Common and 4 million shares of Agritope
Common outstanding, based on the number of holders of record of outstanding
Epitope Stock, the distribution ratio, and the number of investors and amount of
shares involved in the Private Placement. The actual number of shares of
Agritope Common to be distributed will be determined as of the Record Date.

Following the Preferred Stock Sale, Agritope expects to have
outstanding 214,285 shares of Series A Convertible Preferred, and up to 785,715
additional shares of Series A Convertible Preferred that may be issued upon
exercise of the Series A Option. Series A Convertible Preferred is convertible
at any time into shares of Agritope Common, initially on a share-for-share
basis.

Agritope has applied to include Agritope Common for quotation on The
Nasdaq SmallCap Market under the symbol "AGTO." There can be no assurance,
however, that, if accepted, Agritope will meet the requirements

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<PAGE>

for continued inclusion on The Nasdaq SmallCap Market, or that an active trading
market for shares of Agritope Common will develop after the Distribution.

A "when-issued" market in Agritope Common is expected to develop on or
after the Record Date. Prices at which Agritope Common may trade prior to the
Distribution on a "when-issued" basis or after the Distribution cannot be
predicted. The prices at which trading in Agritope Common occurs may be subject
to significant fluctuations, particularly in the period immediately preceding
and immediately after the Distribution and until an orderly trading market
develops, if at all. See "Risk Factors--No Assurance as to Market Performance of
Agritope Common."

The transfer agent and registrar for the Agritope Common will be
ChaseMellon Shareholder Services, L.L.C.

Shares of Agritope Common distributed to Epitope shareholders in the
Distribution will be freely transferable, except for shares received by persons
who may be deemed to be "affiliates" of Agritope under the Securities Act.
Persons who may be deemed to be affiliates of Agritope after the Distribution
generally include individuals or entities that control, are controlled by, or
are under common control with, Agritope, and may include certain officers and
directors of Agritope as well as principal stockholders of Agritope, if any.
Persons who are affiliates of Agritope will be permitted to sell their shares of
Agritope Common only pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements of the
Securities Act, such as the exemption afforded by Rule 144 under the Securities
Act.

In general, under Rule 144, any affiliate of Agritope or any person
owning unregistered Agritope Common (Agritope Common held by any such affiliate
or person referred to as "Restricted Securities") who has beneficially owned
Restricted Securities for at least one year (including the holding period of any
prior owner who is not an affiliate of Agritope) would be entitled to sell
within any three-month period a number of shares that does not exceed the
greater of (i) one percent of the then outstanding shares of Agritope Common
(approximately 40,000 shares immediately after the Distribution and Private
Placement), or (ii) the average weekly trading volume of Agritope Common during
the four calendar weeks preceding the filing of a Form 144 with respect to such
sale. Sales under Rule 144 are also subject to certain manner of sale and notice
requirements and to the availability of current public information about
Agritope.

The shares of Agritope Common being sold in the Private Placement and
the shares of Agritope Common issuable upon the conversion of the Series A
Convertible Preferred have not been registered under the Securities Act.
Pursuant to Regulation S of the Securities Act, shares of Agritope Common
purchased in the Private Placement and the shares of Agritope Common issuable
upon the conversion of the Series A Convertible Preferred may not be sold in the
U.S. without registration under the Securities Act until 40 days following the
closing of the Private Placement and the Preferred Stock Sale respectively. Sale
of a significant number of shares by these holders could adversely affect the
market price of Agritope Common. See "Shares Eligible for Future Sale."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Epitope has received an opinion of Miller, Nash, Wiener, Hager &
Carlsen LLP ("Miller Nash") that (i) the Distribution will be treated as a
tax-free transaction to Epitope shareholders qualifying under Section 355 of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) the following
discussion concerning the material tax consequences of the transaction, insofar
as it relates to statements of tax law or conclusions thereunder, is correct and
complete in all material respects. For a more complete description of the
limitations, analysis and assumptions underlying the opinion of Miller Nash,
refer to the complete opinion filed with the Registration Statement of which
this Information Statement/Prospectus is a part. The opinion of Miller Nash
received by Epitope represents only the best judgment of Miller Nash, and is not
binding on the Internal Revenue Service (the "IRS"). There can be no guarantee
that the IRS will agree with the opinion or that upon challenge by the IRS, a
court will not reach a conclusion contrary to the opinion. Epitope has not
requested, and does not anticipate requesting, a

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<PAGE>

ruling from the IRS with respect to the federal income tax consequences of the
Distribution. Under the provisions of a revenue procedure issued by the IRS in
1996, the IRS has announced that it will not issue advance private letter
rulings for any spin-off transaction if there have been negotiations related to
the sale of stock of the distributed corporation. Accordingly, due to the
Private Placement and Preferred Stock Sale, the IRS would not issue a ruling
with respect to the Distribution. The IRS's refusal to issue rulings with
respect to certain spin-off transactions does not mean that the Distribution
does not qualify as a tax-free transaction. However, because no ruling will be
received, there can be no assurance that the Distribution will qualify as a
tax-free transaction.

Consequences of Qualification as a Tax-Free Distribution. The discussion set
forth below may not be applicable to certain Epitope shareholders who, among
other limitations, received their shares of Epitope Stock as compensation, who
are not citizens or residents of the U.S. or who are otherwise subject to
special treatment under the Code. Subject to such special circumstances that may
apply to certain Epitope shareholders, in the opinion of Miller Nash, the
Distribution will have the following federal income tax consequences:

(1) An Epitope shareholder will not recognize any income, gain or loss
upon the receipt of Agritope Common which is received by the shareholder as a
result of the Distribution, although income and gain or loss will be recognized
in connection with any cash received in lieu of fractional shares, as described
below.

(2) An Epitope shareholder's tax basis in the Epitope Stock with
respect to which Agritope Common is received will be apportioned between the
shareholder's Epitope shares and the shares of Agritope Common received by the
shareholder (including any fractional shares of Agritope Common deemed received)
in proportion to the relative aggregate fair market values of Epitope Stock and
Agritope Common on the Distribution Date.

(3) An Epitope shareholder's holding period for Agritope Common
received in the Distribution will include the period during which the
shareholder held the Epitope Stock with respect to which the Agritope Common is
distributed, provided such Epitope shareholder held the Epitope Stock as a
capital asset at the time of the Distribution.

(4) An Epitope shareholder who receives cash in lieu of a fractional
share of Agritope Common in the Distribution will be treated as if the
fractional share of Agritope Common had been received by the shareholder as part
of the Distribution and then sold by the shareholder for cash. Accordingly, the
shareholder will recognize gain or loss equal to the difference between the cash
so received and the amount of tax basis allocable (as described above) to the
fractional share of Agritope Common. The gain or loss will be capital gain or
loss if the fractional share of Agritope Common would have been held by the
shareholder as a capital asset.

(5) Agritope will not recognize any income, gain or loss as a result of
the Distribution.

Miller Nash has not expressed any opinion concerning the tax
consequences to Epitope of the Distribution. Depending on the number of shares
of Agritope Common issued in the Private Placement and the Preferred Stock Sale
(see "Private Placement" and "Sale of Series A Convertible Preferred"), the
Distribution might result in recognition of taxable gain by Epitope. Epitope
believes that its tax basis in Agritope is greater than the fair market value of
Agritope. Thus, while the Distribution might be deemed to be a taxable
transaction for Epitope, Epitope believes it is more likely than not that the
Distribution will result in the realization of a loss rather than the
recognition of any taxable gain. Epitope will not be allowed to recognize for
income tax purposes any taxable loss realized as a result of the Distribution.
If any taxable gain is recognized, Epitope believes that it has sufficient net
operating loss carryforwards to offset any such gain for regular tax purposes.
However, if any gain is recognized, Epitope would incur an alternative minimum
tax, which amount management believes would be immaterial.

Current U.S. Treasury regulations require that each Epitope shareholder
who receives shares of Agritope Common pursuant to the Distribution attach a
statement to the shareholder's federal income tax return for the taxable year in
which the Distribution occurs, providing certain information with respect to the
applicability of Section 355 of the Code to the Distribution. In a Tax
Allocation Agreement between the parties (discussed below),

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<PAGE>

Epitope has represented that it will provide to each Epitope shareholder of
record as of the Record Date information necessary to comply with this
requirement.

Consequences of Failure to Qualify as a Tax-Free Distribution. If the
Distribution ultimately were determined not to qualify as a tax-free transaction
to Epitope shareholders pursuant to Section 355 of the Code, the following
federal income tax consequences would result:

(1) Each Epitope shareholder would be considered to have received a
distribution in an amount equal to the fair market value, when distributed, of
the shares of Agritope Common received by the shareholder plus the amount of any
cash received in lieu of fractional shares of Agritope Common. Such a
distribution would be taxed as a dividend to the shareholder to the extent of
the shareholder's share of (i) Epitope's current earnings and profits for
federal income tax purposes for the fiscal year ending September 30, 1998 (which
current earnings and profits, if any, will be increased by any gain recognized
by Epitope as a result of the Distribution (which would equal the excess, if
any, of the fair market value of Agritope over Epitope's tax basis in Agritope))
or (ii) Epitope's accumulated earnings and profits through September 30, 1998
(including any gain recognized as a result of the Distribution). To the extent
that the aggregate fair market value of the shares of Agritope Common
distributed exceeds Epitope's earnings and profits, the excess would be treated
first as a non-taxable reduction in the tax basis of a shareholder's Epitope
Stock to the extent of the tax basis, and thereafter as short-term or long-term
capital gain, provided the Epitope Stock is held by the shareholder as a capital
asset. Under Epitope's best current estimates, Epitope will not have sufficient
earnings and profits by September 30, 1998, to treat any part of the
Distribution as a dividend. This estimate is, however, subject to change as
current assumptions may change and future events could materially impact
Epitope's earnings and profits.

(2) An Epitope shareholder's tax basis in the shares of Agritope Common
received in the Distribution would equal the fair market value of the Agritope
Common on the Distribution Date, and the shareholder's holding period for the
shares of Agritope Common would begin the day after that date. An Epitope
shareholder's tax basis in the Epitope Stock would not be affected by the
Distribution, unless, as described above, the amount of the Distribution
exceeded the current and accumulated earnings and profits of Epitope
attributable to the shareholder and was treated as a non-taxable reduction in
tax basis. Upon a subsequent sale of the shares of Agritope Common, a
shareholder would recognize gain or loss measured by the difference between the
amount realized on the sale and the shareholder's tax basis in the shares of
Agritope Common sold.

(3) In general, any amount received by a corporate shareholder that is
taxable as a dividend would be eligible for a 70 percent dividends-received
deduction. However, the 70 percent dividends-received deduction would not be
available with respect to stock unless, among other requirements, certain
holding period requirements were satisfied. In this regard, under Section 246(c)
of the Code, the length of time that a taxpayer is deemed to have held stock is
reduced for periods during which the taxpayer's risk of loss with respect to
such stock is diminished by reason of the existence of certain options to sell,
contracts to sell or other similar arrangements.

In addition, under Section 1059 of the Code, a corporate shareholder
whose holding period, as determined using rules similar to those contained in
Section 246(c) of the Code, is two years or less (as of the Distribution
announcement date) would be required to reduce the tax basis of such Epitope
Stock (but not below zero) by that portion of any "extraordinary dividend," as
defined in the Code, that is not taxed because of the dividends-received
deduction. If the portion exceeded the corporate shareholder's tax basis for its
Epitope Stock, any such excess would be treated as gain on the subsequent sale
or disposition of the stock for the taxable year in which the extraordinary
dividend is received.

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<PAGE>

The summary of federal income tax consequences set forth above is for
general information only and may not be applicable to shareholders who received
their shares of Epitope Stock through the exercise of an option or otherwise as
compensation, who are not citizens or residents of the U.S. or who are otherwise
subject to special treatment under the Code. All shareholders should consult
their own tax advisors as to the particular tax consequences of the Distribution
to them, including the applicability and effect of state, local and foreign tax
laws.

PRIVATE PLACEMENT

Immediately following the Distribution, Agritope will sell 1,343,704
shares of Agritope Common at a price of $7 per share, for an aggregate price of
$9.4 million in the Private Placement. Subscribers in the Private Placement have
entered into stock purchase agreements and have deposited the purchase price for
the shares in an escrow account, pending completion of the Distribution and
closing of the Private Placement. Immediately following the Distribution, the
funds held in escrow will be released to Agritope and shares of Agritope Common
will be issued to investors in the Private Placement. Shares sold in the Private
Placement will not be registered under the Securities Act in reliance upon the
exemption from registration provided by Regulation S.

The Epitope Board believes that the proceeds of the Private Placement
are sufficient to finance the operations of Agritope as a separate business for
a period of not less than two years. There can be no assurance that the
determination of Agritope's anticipated cash requirements will prove to be
accurate. See "Risk Factors-- Need for Additional Funds."

SALE OF SERIES A CONVERTIBLE PREFERRED

Agritope has designated 1 million shares of Agritope Preferred as
Series A Convertible Preferred. In connection with the proposed Vilmorin
Research Agreement, Agritope and Vilmorin have agreed to the Preferred Stock
Sale providing for the sale under Regulation S of 214,285 shares of Series A
Convertible Preferred at a price of $7 per share for an aggregate purchase price
of $1.5 million. See "Description of Business--Agritope Biotechnology
Program--Vegetable and Flower Crops." In addition, Agritope has agreed to grant
Vilmorin the Series A Option, exercisable by Vilmorin or its designees and
expiring January 15, 1998, to purchase up to 785,715 additional shares of Series
A Convertible Preferred at a price of $7 per share. Series A Convertible
Preferred has preemptive rights and the right to elect a director, but otherwise
has rights substantially equivalent to Agritope Common and is convertible at any
time into shares of Agritope Common, initially on a share-for-share basis. For a
description of the Series A Convertible Preferred, see "Description of Agritope
Capital Stock--Agritope Series A Convertible Preferred."

RELATIONSHIP BETWEEN AGRITOPE AND EPITOPE AFTER THE DISTRIBUTION

For purposes of setting forth the conditions to and procedures for the
Distribution, governing the ongoing relationship between Epitope and Agritope
after the Distribution and providing for a more orderly transition of Agritope
to operation as an independent public company, Epitope and Agritope have entered
into various agreements. The agreements summarized in this section are included
as exhibits to the Registration Statement of which this Information
Statement/Prospectus forms a part. The following summary is qualified in its
entirety by reference to the agreements as filed.

Management believes that the administrative costs for Agritope as a
stand-alone company will not be materially different from the administrative
costs incurred and the shared services costs allocated in the historical
financial statements. Additionally, the amounts to be charged to Agritope under
the Transition Services Agreement described below are not expected to differ
materially from what Agritope would incur on a stand-alone basis.

SEPARATION AGREEMENT

Epitope and Agritope have entered into a Separation Agreement, which
provides for, among other things, certain pre-Distribution actions of the
parties, the manner of effecting the Distribution, indemnification rights and
procedures, allocation of expenses prior to and in connection with the
Distribution, insurance matters, access to books and records, and
confidentiality. The Separation Agreement also provides for the cancellation of
approximately $47.5 million of Agritope's intercompany balances due to Epitope,
which has been treated as a capital

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<PAGE>

contribution in the consolidated financial statements included herein. Because
Epitope and Agritope have separately conducted their respective businesses, the
Separation Agreement does not otherwise contemplate either entity transferring
any significant assets or property to the other.

The Separation Agreement sets forth all of the material conditions
precedent to the Distribution, which are: (i) receipt by Agritope of binding
commitments for financing in an amount the Epitope Board deems sufficient to
finance Agritope's operation as an independent public company for a period of
not less than two years; (ii) receipt by Epitope of an opinion of its tax
advisors as to certain tax considerations in connection with the Distribution;
(iii) receipt of all material approvals and consents necessary to consummate the
Distribution and absence of any pending or threatened action with respect to the
Distribution; (iv) effectiveness of the Registration Statement; and (v)
occurrence of no other event or development that, in the judgment of the Epitope
Board, would have a material adverse effect on Epitope or its shareholders. The
Distribution is subject to satisfaction or waiver of each of these material
conditions and certain other conditions set forth in the Separation Agreement.
The Separation Agreement may be terminated, and the Distribution abandoned, at
any time prior to the Record Date by, and in the sole discretion of, the Epitope
Board.

In addition, the Separation Agreement provides for the allocation of
benefits under existing insurance policies between Epitope and Agritope, grants
each of Epitope and Agritope access to certain records and information in the
possession of the other, imposes certain confidentiality obligations on each,
and provides that, except as otherwise set forth therein or in any related
agreement, Epitope and Agritope will each pay its own costs and expenses in
connection with the Distribution.

Pursuant to the Separation Agreement, Agritope has increased its
authorized capital stock to 30 million shares of Agritope Common and 10 million
shares of Agritope Preferred, and taken other corporate actions in anticipation
of its transition to an independent public company.

Each of the parties has agreed to indemnify the other against claims
relating to or arising out of their respective businesses prior to the
Distribution and arising out of the Distribution. Agritope has agreed to assume
responsibility for certain expenses incurred prior to and in connection with the
Distribution.

EMPLOYEE BENEFITS AGREEMENT

It is anticipated that each person who is an Epitope employee or an
Agritope employee immediately prior to the Distribution Date will continue to be
such immediately after the Distribution Date. To address certain employee and
employee benefits matters in connection with the Distribution, Epitope and
Agritope have entered into an Employee Benefits Agreement. Pursuant to the
Employee Benefits Agreement, Agritope will retain or assume, as the case may be,
sole responsibility as employer for all employees of Agritope as of the
Distribution Date, and will cause any Agritope employee who is then a party to
any employment-related agreement with Epitope to terminate such agreement
effective as of the Distribution Date, except as described below.

Epitope currently provides benefits to its employees and employees of
Agritope under the Epitope, Inc. 401-K Profit Sharing Plan (the "Epitope 401(k)
Plan"), the Incentive Stock Option Plan (the "Incentive Plan"), the 1991 Stock
Award Plan (the "1991 Epitope Award Plan"), and the 1993 Employee Stock Purchase
Plan (the "Epitope Purchase Plan"). Pursuant to the Employee Benefits Agreement,
Agritope has amended the Agritope, Inc. 1992 Stock Award Plan (the "1992
Agritope Award Plan") and outstanding options issued thereunder and adopted
other benefit plans to replace the employee benefits provided by Epitope.
Agritope employees will be eligible for the new Agritope plans following the
Distribution. To facilitate the transition, Epitope and Agritope have agreed to
adjust each existing Epitope employee benefit or award in the following manner:

401(k) Plan. The Employee Benefits Agreement provides that Agritope
will establish and administer a new plan named the Agritope 401(k)
Retirement Plan and Trust (the "Agritope 401(k) Plan"), under which
benefits will be provided to all Agritope employees including those who
were

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<PAGE>

eligible for the Epitope 401(k) Plan immediately prior to the
Distribution Date. All Agritope employees who wish to participate in
the Agritope 401(k) Plan will be required to enroll in the Agritope
401(k) Plan in accordance with its terms. Under the Employee Benefits
Agreement, Agritope employees will become fully vested (if not already
fully vested) in their matching accounts under the Epitope 401(k) Plan
as of the Distribution Date, and will be entitled to a distribution
from the Epitope 401(k) Plan of all of their accounts within a
reasonable time after the Distribution Date. The Employee Benefits
Agreement requires the Agritope 401(k) Plan to accept a rollover
contribution from any Agritope employee who elects to have his or her
distribution from the Epitope 401(k) Plan rolled over to the Agritope
401(k) Plan.

Existing Epitope Options. Pursuant to the Employee Benefits Agreement,
Epitope and Agritope have agreed that each unexercised option to
purchase Epitope Stock outstanding as of the Distribution Date
("Existing Epitope Options") will be adjusted as follows as of the
Distribution Date.

The exercise price of Existing Epitope Options will be adjusted
according to a formula provided in the Employee Benefits Agreement that
subtracts the value of Agritope Common from the exercise price. The
value of Agritope Common will be based on the average of the reported
closing prices of Agritope Common on The Nasdaq SmallCap Market during
the five consecutive trading days beginning on the Distribution Date.
Epitope and Agritope believe that the exercise price adjustments to
Existing Epitope Options should not result in the recognition of
taxable income by Epitope or Agritope or their respective optionees.
However, there can be no assurance that such recognition will not
occur. Each holder of an outstanding Existing Epitope Option is urged
to consult with his or her own tax advisor.

Also, for purposes of determining the period that Existing Epitope
Options remain exercisable, employment by Agritope shall be deemed
employment by Epitope. Employment by Agritope or any of its majority
owned subsidiaries after the Distribution will not be deemed employment
by Epitope for vesting and all other purposes relating to Existing
Epitope Options. Accordingly, Existing Epitope Options held by Agritope
employees will continue to vest after the Distribution in accordance
with existing award agreements which provide for continued vesting for
periods ranging from 90 days to one year after the Distribution Date.

Certain Existing Epitope Options are currently intended to qualify as
"incentive stock options" ("ISOs") under the Code. However, continued
ISO status requires that the optionee be employed by the grantor (or a
parent or subsidiary of the grantor) and that the option generally be
exercised within three months after an optionee's termination. Because
the Distribution will terminate the affiliation between Epitope and
Agritope, employees of Agritope holding Existing Epitope Options will
lose any claim to ISO status for such options three months after the
Distribution Date. Such options will thereafter be treated as
nonqualified options.

Agritope has adopted the Agritope, Inc. 1997 Stock Award Plan (the
"Agritope 1997 Award Plan") pursuant to which awards will be made to
Agritope employees as of and following the Distribution. See "1997
Stock Award Plan."

Agritope Options Held by Epitope and Agritope Employees. Agritope has
granted options to certain employees of Epitope and Agritope under the
1992 Agritope Award Plan. The options are denominated in shares of
Agritope Common, but provide for issuance of Epitope Stock upon
exercise so long as Agritope is a wholly owned subsidiary of Epitope.
Agritope has amended the options outstanding under the 1992 Agritope
Award Plan to provide that Epitope Stock will be received upon the
exercise of the options and to provide that such options will be
subject to

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<PAGE>

substantially the restrictions and adjustments provided above for
Existing Epitope Options. No further options will be granted under the
plan.

Purchase Plan. The Epitope Purchase Plan enables participating Epitope
employees to purchase Epitope Stock during offering periods selected by
the Epitope Board. The purchase price per share is the lesser of (i) 85
percent of the fair market value of Epitope Stock on the last trading
day prior to the related Offering Date (as defined in the Epitope
Purchase Plan) or (ii) 100 percent of the fair market value of Epitope
Stock on the last day of the purchase period or on any earlier date of
purchase provided for in the Epitope Purchase Plan. The purchase price
is collected by means of payroll deductions. An employee whose
employment is terminated for any reason other than retirement,
disability, or death may, at his or her election, (i) be refunded the
full amount withheld to date, plus interest at the rate of 6 percent
per year, or (ii) receive the whole number of shares that could be
purchased at the purchase price with that amount together with a cash
refund of any balance.

Pursuant to the Employee Benefits Agreement, the Epitope Purchase Plan
will continue in full force and effect in accordance with its terms.
The Employee Benefits Agreement provides that participants under the
Epitope Purchase Plan will be eligible to participate in the
Distribution and receive shares of Agritope Common only to the extent
that, by operation of the Epitope Purchase Plan or otherwise, they are
shareholders of record on the Record Date, except that participants who
are entitled to receive shares of Epitope Stock under the Epitope
Purchase Plan as of the Record Date but who have not yet been
mechanically recorded as shareholders of record as of the Record Date
will be treated as shareholders of record for purposes of the
Distribution. The Employee Benefits Agreement also provides for certain
adjustments to the Maximum Purchase Price (as defined in the Epitope
Purchase Plan) during the purchase period in which the Distribution
Date occurs in order to reflect the effect of the Distribution.
Agritope has established an Employee Stock Purchase Plan for Agritope
employees. See "1997 Employee Stock Purchase Plan."

The Employee Benefits Agreement also provides for the continuation of
medical, dental and other welfare plans by Epitope and Agritope for the benefit
of their respective employees following the Distribution, and for the allocation
of liability for, and indemnity obligations related to, any employment-related
claims brought against Epitope or Agritope, or both companies jointly.

TAX ALLOCATION AGREEMENT

Epitope and Agritope have entered into a Tax Allocation Agreement
providing for their respective obligations concerning various tax liabilities
and related matters. The Tax Allocation Agreement provides that Epitope will
pay, and will indemnify Agritope with respect to, all federal, state, local and
foreign income, franchise and similar taxes relating to Epitope for all taxable
periods. Epitope has also generally agreed to pay all other taxes (other than
those which are imposed solely on Agritope) that are payable in connection with
the Distribution and transactions related to the Distribution, the liability for
which arises on or before the Distribution Date. The Tax Allocation Agreement
provides that Agritope will pay, and will indemnify Epitope with respect to, all
federal, state, local and foreign income, franchise and similar taxes relating
to Agritope for all taxable periods. Further, the Separation Agreement provides
for cooperation with respect to certain tax matters, including the preparation
of income tax returns, the exchange of information, the handling of tax
controversies, and the retention of records which may affect the income tax
liability of either party.

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<PAGE>

TRANSITION SERVICES AGREEMENT

Epitope and Agritope have entered into a Transition Services Agreement
pursuant to which Epitope has agreed to provide office and laboratory facilities
and accounting and human resources services to Agritope for a 3-to-6 month
period following the Distribution.

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<PAGE>

SELECTED FINANCIAL DATA
(In thousands, except per share data)

The following table sets forth selected historical consolidated income
and balance sheet data of Agritope and its subsidiaries. The balance sheet data
at September 30, 1997 and 1996 and the operating results data for the years
ended September 30, 1997, 1996, and 1995 have been derived from audited
consolidated financial statements and notes thereto included in this Information
Statement/Prospectus. The balance sheet data at September 30, 1995, and
operating results data for the year ended September 30, 1994 are derived from
audited consolidated financial statements and notes thereto not included in this
Information Statement/Prospectus. The balance sheet data at September 30, 1994
and 1993 and operating results data for the year ended September 30, 1993 are
derived from unaudited consolidated financial statements, and notes thereto not
included in this Information Statement/Prospectus and, in the opinion of
management, include all adjustments necessary for fair presentation. This
information should be read in conjunction with the consolidated financial
statements and notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

YEAR ENDED SEPTEMBER 30
1997 1996 1995(1) 1994(1) 1993(1)

CONSOLIDATED OPERATING RESULTS
<S> <C> <C> <C> <C> <C>
Revenues............................................ $ 1,551 $ 585 $ 2,110 $ 2,213 $ 524
Operating costs and expenses........................ 6,089 2,821 9,920 11,703 7,331
Other income (expense), net ........................ (4,153)(2) (265) (235) (314) (151)
Net loss............................................ (8,691) (2,501) (8,045) (9,804) (6,958)
Pro forma net loss per share (3).................... (3.23) ( .93) (2.99) (3.64) (2.59)
Pro forma shares used in per
share calculations (3)............................ 2,691 2,691 2,691 2,691 2,691
</TABLE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET SEPTEMBER 30
1997 1996 1995 1994 1993

As Adjusted(4) ACTUAL
Pro Forma
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Working capital (deficiency)................. $11,740 $ 1,659 $(3,163) $ 846 $ 418 $ 0
Total assets................................. 17,366 7,285 5,670 4,067 4,081 2,091
Long-term debt............................... 15 15 - 22 38 57
Convertible notes, due 1997.................. - - 3,620 3,620 4,070 4,630
Accumulated deficit.......................... (41,168) (41,168) (32,478) (29,976) (21,931) (12,127)
Shareholder's equity (deficit)............... 14,844 4,763 1,008 75 (482) (2,983)

</TABLE>
(1) Data for 1995, 1994, and 1993 include revenues of $2.0 million, $2.1
million, and $482,000, and operating losses of $3.8 million, $5.6
million, and $2.2 million, respectively, attributable to business units
which were divested. See Note 3 to 1997 consolidated financial
statements.

- 27 -
<PAGE>

(4) The capitalization of Agritope as adjusted reflects the effects of the
Private Placement of 1,343,704 shares of Agritope Common and the sale
of 214,285 shares of the Series A Convertible Preferred for aggregate
proceeds of $10.9 million, less issuance costs of $825,000.

- 28 -
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of operations and financial condition should be read in
conjunction with the consolidated financial statements and notes thereto
included elsewhere in this Information Statement/Prospectus. Special Note:
Certain statements set forth below constitute "forward-looking statements." See
"Note Regarding Forward-Looking Statements."

OVERVIEW

Agritope, Inc. (the "Company" or "Agritope"), consists of two units:
Agritope Research and Development and Vinifera, Inc. ("Vinifera"). Agritope
Research and Development uses biotechnology in the development of new fruit and
vegetable plant varieties for sale to the fresh produce industry. To date,
Agritope has not completed commercialization of this technology. A portion of
the research and development efforts conducted by Agritope has been performed
under various research grants and contracts. Vinifera is engaged in the
grapevine propagation and distribution business. During 1995, Vinifera was in
the development stage and generated minimal product sales. Vinifera commenced
commercial stage operations in 1996.

The results of operations for the first three quarters of 1995 include
the activity of Vinifera, then a wholly owned subsidiary of Agritope. Vinifera
was sold in the third quarter of 1995. A majority interest in Vinifera was
reacquired in the fourth quarter of 1996. No gain was recognized upon the sale
of Vinifera in 1995. The 1996 purchase price of $916,000 was allocated to
tangible net assets. As a result of subsequent equity sales to private
investors, Agritope now holds a 61 percent equity interest in Vinifera.
Vinifera's operations are included in results of operations for the fourth
quarter of 1996, and for all of 1997.

Agritope's results of operations for the first three quarters of 1995
also include the activity of Agrimax Floral Products, Inc. ("Agrimax"), a wholly
owned subsidiary, which was engaged in the fresh flower packaging and
distribution business. Agrimax's business was discontinued in 1995. In 1995, a
portion of the operating assets of Agrimax were contributed to UAF Limited
Partnership ("UAF"), an unrelated company, in exchange for a minority equity
interest in UAF. A loss of $500,000 was recognized in 1995 on the discontinuance
of operations at Agrimax and the transaction with UAF. In 1996, the remainder of
the operating assets of Agrimax were contributed to Petals USA, Inc. ("Petals"),
an unrelated company, in exchange for a minority equity interest in Petals. No
gain or loss was recognized on the transaction with Petals and the investment in
Petals was recorded at the net book value of the contributed assets. There are
no operations of Agrimax included in 1996 or 1997 operating results.

The accompanying consolidated financial statements have been prepared
to reflect the operating results and financial condition of Agritope and its
subsidiaries. The operating statements include the cost of certain corporate
overhead services which are provided on a centralized basis for the benefit of
the medical products business conducted by Epitope and the agricultural
biotechnology business conducted by Agritope and its subsidiaries ("Shared
Services"). Such expenses have historically been allocated using activity
indicators which, in the opinion of management, represent a reasonable measure
of the respective business' utilization of or benefit from such Shared Services.

In July 1997, Epitope's board of directors approved a management
proposal to spin off Agritope, subject to obtaining financing for Agritope and
the satisfaction of certain other conditions. Agritope has agreed to sell
1,343,704 shares of Agritope common stock at a price of $7 per share in a
private placement to certain investors, for an aggregate price of $9.4 million,
immediately after the spin-off. In connection with a research and development
collaboration, Agritope has entered into an agreement with Vilmorin & Cie, an
affiliate of Groupe Limagrain, to sell 214,285 shares of the Series A
Convertible Preferred at a price of $7 per share for an aggregate price of $1.5
million. The spin-off will be accomplished by a distribution of Agritope common

- 29 -
<PAGE>

stock to Epitope's shareholders. Epitope will not own or control any shares of
Agritope stock following the spin-off, which is expected to occur in December
1997.

In November 1996, the Epitope Board proposed creating two separate
classes of Epitope common stock, one to reflect the medical products business
and operations of Epitope and the other to reflect the business and operations
of Agritope (the "Targeted Stock Proposal"). In addition, in December 1996,
Epitope acquired Andrew and Williamson Sales, Co. ("A&W"), a producer and
distributor of fruits and vegetables, as a direct wholly owned subsidiary of
Epitope. Agritope and A&W thereby became sister companies, each a wholly owned
subsidiary of Epitope. Agritope had no relationship with A&W other than as a
sister corporation. In May 1997, prior to a shareholder vote on the Targeted
Stock Proposal, the Epitope Board rescinded its acquisition of A&W and withdrew
the Targeted Stock Proposal in light of events surrounding a Hepatitis A
outbreak allegedly associated with strawberries shipped by A&W prior to its
acquisition by Epitope. The accompanying consolidated financial statements do
not include the operations of A&W. The effects of Epitope's ownership of A&W are
reflected solely in Epitope's financial statements and have no impact on
Agritope's financial statements.

RESULTS OF OPERATIONS

Years ended September 30, 1997, 1996 and 1995

Revenues. Total revenues increased by $966,000 or 65 percent from 1996 to 1997,
and decreased by $1.5 million or 72 percent from 1995 to 1996. Revenues by
component are shown below:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 (IN THOUSANDS) 1997 1996 1995

Product sales
<S> <C> <C> <C>
Grapevine plant sales.................................... $ 1,436 $ - $ 84
Wholesale fresh flower sales............................. - - 1,931
---------- ---------- --------
1,436 - 2,015
Grants and contracts
Government research grants.............................. 30 145 16
Research projects with strategic partners............... 53 326 40
Other................................................... 32 114 38
--------- -------- ---------
115 585 94

$ 1,551 $ 585 $ 2,110
</TABLE>

Grapevine plant sales pertain to Agritope's majority owned subsidiary,
Vinifera. Vinifera was sold in the third quarter of 1995, and a majority
interest was reacquired at the end of August 1996. Vinifera had no product sales
in September 1996. Vinifera was in the development stage in 1995, commenced
commercial stage operations in 1996 and continued its marketing efforts and
expansion of its customer base during 1997. Vinifera currently has confirmed
orders exceeding $1.4 million for delivery in the spring and summer of 1998.

Product sales in 1995 included $1.9 million of sales in Agrimax's
unprofitable wholesale fresh flower packaging and distribution operations, which
were discontinued in the third quarter of 1995.

Grant and contract revenues pertain to research projects directed at
developing superior new plants through genetic engineering. Revenue from such
projects can vary significantly from year to year as new projects are started
while other projects may be extended, completed, or terminated. In addition, not
all research projects conducted by Agritope receive grant or contract funding.
Grant and contract revenues in 1996 included three significant contracts with
strategic partners for joint research projects. Grant and contract revenue in
1996 also included SBIR government grants totaling $145,000 which declined to
only $30,000 in 1997. In October 1997, the

- 30 -
<PAGE>

Company was awarded a three-year grant totaling $1.0 million from the U.S.
Department of Commerce to study the application of Agritope's ripening
technology to certain tree fruits and bananas.

Gross margin. Gross margin on product sales was 7.7 percent of sales for 1997.
Gross margin in 1997 was adversely affected by production start-up costs
incurred during the expansion of production capacity at Vinifera. There were no
comparable product sales in 1996. The Company's unprofitable wholesale fresh
flower packaging and distribution operations were primarily responsible for the
negative gross margin in 1995.

Research and development expenses. Research and development expenses in 1997,
1996 and 1995 totaled $1.7 million, $1.3 million and $2.2 million, respectively.
The increase of $343,000 or 26 percent from 1996 to 1997 reflects increased
efforts to develop and propagate crops containing Agritope's patented ethylene
control technology as well as research and development efforts to improve
grapevine plant propagation conducted by Vinifera. The decrease of $866,000 or
39 percent from 1995 to 1996 resulted from the divestitures of the Agrimax and
Vinifera businesses in the third quarter of 1995.

Selling, general and administrative expenses. Selling, general and
administrative expenses in 1997, 1996 and 1995 were $3.1 million, $1.5 million
and $4.5 million, respectively. Expenses in 1997 included $913,000 of costs
incurred by Vinifera, which was not part of Agritope during the first eleven
months of 1996. The increase in 1997 is also attributable to expenses of
$424,000 related to the withdrawn Targeted Stock Proposal to create two classes
of common stock of Epitope. During 1997, Vinifera expanded greenhouse capacity
and continued to establish marketing and administrative functions at its new
headquarters location in Petaluma, California. Such activities contributed to
relatively high selling, general and administrative expenses in comparison to
product sales levels. Expenses in 1995 included $2.8 million of costs incurred
by Agrimax and Vinifera before these businesses were divested.

Selling, general and administrative expenses include $1.4 million, $1.1
million and $1.9 million for the allocation of Shared Services in 1997, 1996 and
1995, respectively. The amount of allocated Shared Services increased by
$334,000 or 31 percent from 1996 to 1997 as a result of the reacquisition of
Vinifera in August 1996, as well as increased corporate costs at Epitope due to
increased administrative personnel. The amount of allocated Shared Services
decreased by $823,000 or 43 percent from 1995 to 1996 largely as a result of the
dispositions of the Agrimax and Vinifera businesses.

Other income (expense), net. Other income (expense), net was affected by three
significant non-recurring charges totaling $4.2 million in 1997. During 1997,
Agritope recorded a non-cash charge to results of operations of $2.3 million,
reflecting the permanent impairment in the value of its investment in affiliated
companies (UAF and Petals). Additionally, conversion of $3.4 million principal
amount of Agritope convertible notes into Epitope common stock at a reduced
conversion price resulted in a charge to results of operations of $1.2 million.
Also in 1997, a charge of $744,000 in recognition of the Company's contingent
liability as primary lessee on two leases pertaining to Agritope's discontinued
wholesale fresh flower packaging and distribution business was recognized.

Interest expense decreased by $240,000 or 90 percent from 1996 to 1997
due to the conversion of $3.4 million principal amount of Agritope notes into
Epitope common stock in the first quarter of 1997, and payment of the remaining
principal amount of $240,000 on June 30, 1997.

<TABLE>
<CAPTION>
LIQUIDITY AND CAPITAL RESOURCES SEPTEMBER 30
1997 1996
(in thousands)

<S> <C> <C>
Cash and cash equivalents.............................................. $ 4 $ 477
Working capital (deficiency)........................................... 1,659 (3,163)
</TABLE>

- 31 -
<PAGE>

At September 30, 1997, Agritope had working capital of $1.7 million as
compared to a working capital deficiency of $3.2 million at September 30, 1996.
The increase in working capital was principally attributable to the conversion
of $3.4 million of convertible notes into 250,367 shares of Epitope common stock
in the first quarter of 1997. Concurrent with the note conversion, Epitope made
a $4.4 million capital contribution to Agritope. Working capital also increased
due to a $1.6 million buildup in Vinifera's inventory of growing grapevine
plants. The grapevine plants are grafted and then kept in greenhouses for
approximately 10 weeks before they are ready for sale. The plants can be
maintained in greenhouses or stored outside for several years during which time
they continue to grow. Inventory on hand at September 30, 1997 represents
grapevine plants expected to be sold in the spring of 1998.

Expenditures for property and equipment were $1.9 million during 1997,
largely as a result of expansion of greenhouse capacity at Vinifera.
Expenditures for patents and proprietary technology in 1997 included a one-time
cash payment of $590,000 to a co-inventor of Agritope's ethylene control
technology who is an officer of Agritope. Agritope has also acquired certain
rights to certain proprietary genes for which it made payments of $171,000 in
1997. Such amounts are included in "Patents and proprietary technology, net."
Agritope's investment in affiliated companies, obtained in connection with the
divestiture of its fresh flower packaging and distribution business, was reduced
by a non-cash charge of $2.3 million in 1997 reflecting the permanent impairment
in the value of these investments.

Cash flows from operating activities improved significantly from 1995
to 1996 largely due to the divestiture of Agrimax and Vinifera. Year-end
inventories increased by $510,000 from 1995 to 1996 due to the reacquisition of
Vinifera in August 1996. Additions to property and equipment increased in 1996
as a result of expansion of greenhouse capacity at Vinifera, which was
reacquired in August 1996. Expenditures for patents and proprietary technology
increased in 1996 primarily due to a one-time cash payment of $365,000 to the
other co-inventor of Agritope's ethylene control technology.

Historically through September 30, 1997, the primary sources of funds
for meeting Agritope's requirements for operations, working capital and business
expansion have been $45.4 million in cash from Epitope, $5.4 million principal
amount of convertible notes, $1.6 million of investments in Vinifera by minority
shareholders, and $1.0 million in funding from strategic partners and other
research grants. Agritope expects to continue to require funds to support its
operations and research activities. Agritope intends to utilize cash reserves,
cash generated from sales of products, and research funding from strategic
partners and other research grants to provide the necessary funds. Agritope may
also rely on the sale of equity securities to generate additional funds.
Agritope has agreed to reimburse Epitope for amounts advanced by Epitope on or
after December 1, 1997.

Immediately following the spin-off and related financing, Agritope is
expected to have $--- million in cash and cash equivalents on hand to finance
its continued operations. Agritope presently anticipates that these funds will
be sufficient to finance operations as a separate business for at least two
years after the spin-off, based on currently estimated revenues and expenses.
Because this estimate is based on a number of factors, many of which are beyond
its control, Agritope cannot be certain that this estimate will prove to be
accurate, and to the extent that Agritope's operations do not progress as
anticipated, additional capital may be required. Agritope currently utilizes a
portion of Epitope's office and research and development facilities and is
allocated a charge representing the cost of such facilities. As soon as
practicable after the spin-off, Agritope intends to relocate its administrative
and research and development activities to separate leased facilities.
Management estimates that the cost to relocate, including leasehold
improvements, will not exceed $2.0 million and that the cash on hand following
the spin-off will be adequate to meet this need. Additional capital may not be
available on acceptable terms, if at all, and the failure to raise such capital
would have a material adverse effect on Agritope's business, financial
condition, and results of operations. See "Risk Factors--Need for Additional
Funds."

Agritope has completed a Year 2000 review of its systems and procedures
to determine the scope of costs or risks Agritope may face in connection with
potential computer problems associated with the Year 2000. The

- 32 -
<PAGE>

Company believes that it will not incur material Year 2000 remedial costs and
that its operations will not be materially affected by any Year 2000 problems.

DESCRIPTION OF BUSINESS

GENERAL

Agritope is a biotechnology company specializing in the development of
new fruit and vegetable plant varieties for sale to the fresh produce industry.
The Company is utilizing its patented ethylene control technology to produce a
wide variety of fruits and vegetables that are resistant to the decaying effects
of ethylene. The Company also recently acquired certain rights to certain
proprietary genes from the Salk Institute for Biological Studies. Agritope
believes that the Salk Genes may have the potential to confer disease
resistance, enhance crop yield, control flowering, and enhance gene expression
in plants. Agritope has an option to obtain a worldwide license to use the Salk
Genes in a wide range of fruit and vegetable species.

The Company consists of two units: Agritope Research and Development
and Vinifera. Agritope Research and Development contributes biotechnology and
product development to strategic partners and provides disease screening and
elimination programs to Vinifera. Through Vinifera, Agritope believes that it
offers one of the most technically advanced grapevine plant propagation and
disease screening and elimination programs available to the wine and table grape
production industry.

AGRITOPE BIOTECHNOLOGY PROGRAM

Historically, Agritope's biotechnology program focused on using the
tools and techniques of plant genetic engineering to regulate the synthesis of
ethylene in ripening fruits and vegetables. Recently, the Company has begun
research into genetically regulating other physiological processes in plants.
Ethylene is a gaseous plant hormone which in higher plant species is responsible
for fruit ripening and vegetable senescence as well as numerous other
physiological effects. The Company has identified and patented a single gene
that can be inserted into plants and expressed to regulate the plant's ability
to produce ethylene. In addition, Agritope is conducting research in the area of
disease control, including screening plants for the presence of disease and
creating genetically engineered plants with resistance to pathogens.

Ripening Control. The fresh produce industry is based largely upon rapid
harvesting, processing and distribution of fruits and vegetables in order to
prevent spoilage and ensure the arrival of product at retail outlets in
acceptable condition for consumer purchase and use. The post-harvest period for
most fruits and vegetables is one of continuous ripening and senescence, as
evidenced by rapid changes in color, texture, flavor, nutrient content, and
other quality attributes. Product losses due to perishability during harvesting,
processing, packing, shipping and distribution can reach substantial portions of
overall crop yield. Growers frequently incur losses resulting from the
abandonment of crops in the field or having shipments refused by receivers
because the produce is overripe. In addition, wholesalers and retailers may be
forced either to discard or sell overripe produce at reduced prices and
consumers often must use produce shortly after purchase to avoid spoilage.
Studies published in the USDA Marketing Research Report have estimated
post-harvest losses of 30 percent and 40 percent, respectively, for strawberries
shipped from Florida to the Chicago and New York markets. In the U.S. fruit and
vegetable markets, post-harvest losses are estimated to amount to several
billion dollars annually.

Post-harvest losses are largely attributable to the effects of
ethylene. Because ethylene is a gas, it not only affects the plant producing it,
but also surrounding plants as well. The physiological effects of ethylene
include initiation and enhancement of ripening, senescence, leaf abscission and
drooping, and flower fading and wilting. Common examples include the ripening
and subsequent rotting of tomatoes and apples, discoloration in lettuce and
broccoli, and the short bloom life of cut flowers.

- 33 -
<PAGE>

The importance of controlling ethylene production in plants has been
recognized for decades, and has been addressed primarily through the use of
controlled atmosphere storage, chemical treatment, and special packaging.
Conventional techniques for controlling ethylene production have serious
disadvantages that include high cost, time-critical handling requirements and
lack of consistent ripening. For example, the majority of product sold in the
fresh tomato market today is composed of "gas-green" tomatoes. These tomatoes
are picked and packed while still green and firm. Prior to shipping to wholesale
customers, green tomatoes are exposed to ethylene gas in order to initiate
ripening of the product. In general, gas-green tomatoes are perceived by
consumers to have less desirable taste and texture than vine ripened tomatoes.

Agritope believes the ability to regulate ethylene and control ripening
through genetic engineering represents an opportunity to provide a superior
product to consumers while also improving profitability for growers and
distributors. Growers may achieve higher marketable yields due to fewer losses
to overripe product in the field and may lower labor costs by decreasing
frequency of harvest. For packer/shippers, better control of product
perishability may result in improved inventory flexibility and control, and more
uniform product quality.

Ethylene Control Technology. Agritope's ethylene control technology is focused
on the use of a patented gene known as SAMase. The expression of SAMase in
plants produces an enzyme that acts to degrade one of the important precursor
compounds (S-adenosylmethionine or "SAM") necessary for the production of
ethylene. Agritope has genetically engineered plants to express the SAMase gene
only when certain levels of rising ethylene concentrations are reached in the
tissues of the fruit or plant. This feature causes the production of greater
levels of the enzyme that degrades SAM in response to a correspondingly higher
level of ethylene. Agritope believes that this technology thus offers a major
advantage over other approaches to ripening control in that the production of
ethylene may be specifically reduced to levels that allow for the initiation of
ripening but that delay the spoiling effects of excess ethylene. Therefore, the
fruit can be maintained at an optimal level of ripeness for an extended period
of time. An additional benefit of Agritope's technology is that the reaction
catalyzed by the SAMase gene results in compounds normally found in plants.
Agritope believes its SAMase technology can be utilized for the control of
ethylene in any plant species where ethylene affects ripening or senescence.

Agritope's application of ethylene control technology to various fruit
and vegetable crops is at different stages, as described below. There are
difficult scientific objectives to be achieved with respect to application of
the technology to certain crops before the technical or commercial feasibility
of the modified crops can be demonstrated. There can be no assurance that the
technology can be successfully applied to particular crops or that the modified
crops can be successfully and profitably produced, distributed, and sold. See
"Risk Factors--Uncertainty of Product Development."

Agritope's ripening control technology is protected by a U.S. patent
covering the use of any gene that encodes S-adenosylmethionine hydrolase (the
enzyme expressed by the SAMase gene) in any plant species. In addition to the
patent on the SAMase gene, utility claims have been allowed on the promoter/gene
combination used by Agritope in applications currently under development as well
as potential applications in all other fruit-bearing plants. In the area of
regulated ripening control, Agritope has four additional U.S. and foreign
patents pending. In addition, Agritope has three U.S. and foreign patent
applications pending in related areas.

The Salk Genes. In addition to its ethylene control technology, Agritope also
recently acquired certain rights to certain proprietary genes discovered by
scientists at the Salk Institute for Biological Studies ("Salk"). The Company
believes that the Salk Genes may have the potential to confer disease
resistance, enhance yield, control flowering and enhance gene expression in
plants. Agritope believes these new technologies will allow Agritope to leverage
its ability to genetically engineer fruits and vegetables and enhance its
ability to broaden its pipeline of new genetically engineered products. U.S. and
international patent filings have been made with respect to each of these genes.
A patent covering one gene, LEAFY, recently issued in the U.S.

Under the terms of the Salk agreement, Agritope has an option to obtain
an exclusive or nonexclusive worldwide license to use the Salk Genes in a wide
range of fruit and vegetable crops. The agreement permits

- 34 -
<PAGE>

Agritope to use each Salk Gene for research and evaluation purposes, for which
Agritope will pay an annual access fee until it elects to license the gene for
commercial purposes. Agritope will pay a license issue fee and royalty for each
Salk Gene it elects to license. Agritope has also agreed to reimburse a
percentage of applicable Salk patent costs. Salk retains ownership of the Salk
Genes, subject to applicable U.S. government rights. Agritope will own any
modified plant species and fruit and vegetable crops it develops using the Salk
Genes, and will therefore have control of the marketing and distribution rights
to such products.

Agritope's work with the Salk Genes to produce desirable fruit and
vegetable crops is at an early stage. There are difficult scientific objectives
to be achieved before the technological or commercial feasibility of the
products can be demonstrated. There can be no assurance that any of Agritope's
products under development using the Salk Genes, if and when fully developed and
tested, will perform in accordance with Agritope's expectations, that necessary
regulatory approvals will be obtained in a timely manner, if at all, or that
these products can be successfully and profitably produced, distributed and
sold.

SAR-1 is a gene that confers systemic acquired resistance ("SAR"). SAR
is the ability of plants to develop a powerful disease resistance state. After
exposure to a non-lethal inoculum of a bacterial, viral or fungal pathogen, a
plant will possess a heightened ability to defend itself against a broad range
of new pathogenic challenges. The phenomenon of SAR has been studied for years
but only recently at the molecular level. Scientists at the Salk Institute for
Biological Studies, in collaboration with those at the Samuel Roberts Nobel
Foundation, have discovered a gene, SAR-1, that appears to play a key role in
the maintenance of SAR. Agritope intends to utilize SAR-1 in the development of
plant varieties that have increased disease resistance to a broad range of plant
pathogens.

DET2 is a gene that controls brassinosteroid synthesis in plants.
Brassinosteroids are compounds that are naturally produced in minute quantities
in plants and play a key role in plant growth and development. In addition to
being difficult to extract (due to their small quantity within the plant),
brassinosteroids are also exceedingly difficult to synthesize using organic
synthesis methods. Nevertheless, research has demonstrated that application of
purified brassinosteroids to crop plants can result in enhanced yields.
Scientists at the Salk Institute have identified the key enzymatic step that
limits brassinosteroid synthesis in plants and cloned the gene, DET2, that
encodes the enzyme. Expression of the gene in transgenic plants has produced
plants with enhanced growth properties due to increased synthesis of
brassinosteroid by the transgenic plant.

BIN1 is a gene that encodes the plant receptor for brassinosteroids.
The BIN1 gene encodes a receptor-like protein kinase involved in brassinosteroid
signaling and provides further opportunities for biotechnological applications
related to yield increase in transgenic plants. In principle, it is possible to
manipulate both hormone biosynthesis with DET2, as described above, as well as
the level of brassinosteroid receptor through BIN1. In addition, it is possible
to generate BIN1 derivatives that have been activated as if brassinosteroid were
bound. Both approaches, either separately or together, have the potential to
greatly stimulate plant growth and yield.

Cyclin is a gene that is involved in regulating cell division. Salk
Institute scientists have expressed the cyclin gene in transgenic plants and
believe it may play a role in accelerating root growth. Furthermore, transgenic
crop plants containing the cyclin gene are also expected to have enhanced
vegetative growth properties. Agritope intends to test the cyclin gene initially
in commercial tomato and carrot varieties.

LEAFY is a gene that is responsible for flower initiation in plants.
Scientists at the Salk Institute have demonstrated that transgenic aspen trees
expressing LEAFY develop flowers within months rather than the 8 to 10 years
that a non-transgenic aspen requires. Agritope intends to investigate uses of
the LEAFY gene for use in tree fruits and grapevines. Alternatively, inhibiting
LEAFY expression in plants may prevent plants from flowering, which could be of
value in some vegetable crops such as lettuce and celery.

Booster Element ("BE") is a genetic element (a small piece of DNA) that
can be added to plant gene promoters to enhance gene expression. The BE
technology is applicable to a range of plant genetic engineering strategies,
including the Company's SAMase ripening control technology, and to other Salk
genes. For example,

- 35 -
<PAGE>

certain crops may need a higher level of SAMase expression to produce a specific
level of ripening control. BE may facilitate manipulation of the promoters
controlling SAMase expression and thus improve the utility of the SAMase
technology.

Additional Technologies. Agritope is also conducting research on several
additional early-stage technologies. For example, Agritope scientists have
devised a genetic engineering strategy to confer seedlessness to fruit crops. In
addition, Agritope has recently been awarded a Phase I Small Business Innovation
Research ("SBIR") grant to develop a novel geminivirus resistance strategy and
to incorporate the approach into commercial tomato varieties. Geminiviruses are
a class of plant viruses that cause widespread damage in several crops including
tomato, pepper, melon and squash.

Existing Development Programs. Agritope's research and development programs are
directed toward several highly perishable fruit and vegetable crops described
below. The development program comprises five stages, including gene isolation,
transformation, product evaluation, seed/plant production and product launch,
defined below.

The following chart shows the approximate progress Agritope has made to
date with various crops, which are described in more detail below.

[Chart titled "Agritope Product Development Program" listing the stages
of development (gene isolation, transformation, product evaluation,
seed/plant production, and product launch). The chart shows that the
following products are in the stages indicated:

Melon Product Evaluation
Tomato Product Evaluation
Raspberry Product Evaluation
Additional Crops Gene Isolation]

Gene Isolation: The initial stage of genetic engineering. Gene
isolation involves the identification and characterization of genes and
gene promoters for use in Agritope's development programs. These
genetic elements are then combined for use in genetically engineered
plants.

Transformation: The stage at which the new genetic material is
introduced into the plant. The transgenic plants which result are then
available for product evaluation.

Product Evaluation: The analysis of transgenic plants in both
laboratory and field settings to determine commercial utility. This
stage also involves the plant breeding and selection process to develop
commercially competitive new varieties that incorporate the Agritope
technology. Regulatory data are also collected and submitted at this
stage.

Seed/Plant Production: Propagation of selected plant material (either
seed or plants) in quantities needed for commercial production.

Product Launch: Commercial production and sale, following regulatory
clearance.

Melon. The U.S. wholesale fresh melon market is estimated to exceed $350 million
annually. Perishability in melons results in substantial product losses during
the processes of production, harvesting, and distribution. Agritope believes
that melons represent a substantial market opportunity for implementation of its
ripening control technology. Recent scientific reports have demonstrated a
dramatic increase in shelf life for specialty type melons in which the ability
to produce ethylene has been impaired. Using proprietary seed varieties supplied
by two units of the French seed company Groupe Limagrain: Clause Semences and
its U.S. affiliate Harris Moran Seed Company ("Harris Moran"), Agritope is
developing commercial melon varieties with controlled ripening and

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<PAGE>

increased post-harvest product life. Transgenic melons containing Agritope's
ethylene control gene are currently being evaluated jointly by Harris Moran and
Agritope technicians.

Tomato. The annual U.S. wholesale fresh market tomato business is estimated at
$1.7 billion. In order to facilitate the commercialization of its ethylene
control technology for this market, Agritope formed Superior Tomato Associates,
L.L.C. ("STA"), a joint venture with Sunseeds Company, the developer and
producer of several leading fresh market tomato varieties.

Agritope provides genetic engineering technology and regulatory
expertise, has responsibility for managing the joint venture, and owns a
two-thirds equity ownership interest in STA. Sunseeds provides elite tomato
germplasm and breeding expertise in the development of transgenic varieties. STA
owns rights to any fresh market cherry, roma and vine-ripened large fruited
tomato varieties developed for the joint venture using Agritope ethylene control
technology and Sunseeds germplasm. STA also owns any technology jointly
developed by Agritope and Sunseeds. The parties otherwise retain all rights to
their respective technologies.

STA is currently in the process of developing and testing transgenic
cherry, roma, and large fruited vine ripe tomato varieties. Agritope has
developed lines of elite tomato germplasm provided by Sunseeds. Recent field
trials have successfully demonstrated the transfer of Agritope's SAMase ripening
control technology to a number of Sunseeds' elite breeding lines. Sunseeds is
conducting further breeding and field trials of these transgenic lines. These
trials will be followed by production scale trials that, if successful, will
lead to regulatory submissions and, if regulatory clearances are received,
commercial-scale seed production. Seeds will then be sold to approved growers,
who will pay STA a royalty on net sales of tomatoes grown from the seed.

Prior to the formation of STA, Agritope submitted safety, nutritional,
and environmental information on a prototype transgenic tomato line to both the
USDA and the FDA. In March 1996, the USDA issued its finding that this line has
no significant environmental impact and would no longer be considered a
regulated article. During the same month the FDA determined that the variety did
not raise issues that would require pre-market review or approval by that
agency. In addition to receiving these U.S. regulatory clearances, Agritope also
conducted field evaluations of SAMase tomato lines in Mexico under permits
granted by the Mexican Ministry of Agriculture. In order to commence sale of
selected varieties, Agritope will be required to make supplemental submissions
to the USDA and FDA that establish that such varieties are comparable to the
previously cleared lines.

Raspberry. The wholesale raspberry market, estimated at $48 million annually in
the U.S., has experienced limited growth because of the extreme perishability of
the fruit. Agritope believes that the successful development of raspberries
containing its ethylene control technology could permit a significant expansion
of the fresh raspberry market.

In a collaboration with Sweetbriar Development, Inc. ("Sweetbriar"),
the largest fresh raspberry producer in the U.S., Agritope has engineered
several of Sweetbriar's proprietary commercial raspberry varieties to contain
the SAMase gene. Initial field trials of transgenic raspberries are currently
underway at Sweetbriar facilities in California and Agritope facilities in
Woodburn, Oregon. Agritope has already demonstrated the ability to reduce
ethylene synthesis in the fruit. Successful development of a commercial
transgenic raspberry, which would be owned by Sweetbriar, will require further
demonstration of improved shelf life as well as additional field trials to
obtain the appropriate regulatory clearances. If these conditions are met,
Sweetbriar would produce the new raspberries for distribution and marketing by
Driscoll Strawberry Associates ("Driscoll"), the largest distributor of fresh
raspberries and strawberries in the U.S. Agritope would receive royalties on
wholesale product sales. Separately, Agritope has integrated its ripening
control technology into several public domain varieties.

Vegetable and Flower Crops. Agritope and Vilmorin have entered into the Vilmorin
Research Agreement covering certain vegetable and flower crops. See "Risk
Factors--Terms for Commercialization of Certain Vegetable and Flower Crops."
Under the terms of the Vilmorin Research Agreement, Vilmorin will provide
certain proprietary seed varieties and germplasm for use by Agritope in research
and development projects to be

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<PAGE>

funded by Vilmorin, in which Agritope technology, and possibly Vilmorin
technology, may be applied to the various covered crops. The specific research
projects to be conducted will be determined by agreement of the parties, taking
into account recommendations of Agritope's Project Advisory Committee, two of
the four members of which are to be designated by Vilmorin. Unless otherwise
agreed, Vilmorin will pay, on a quarterly basis, all Agritope's out-of-pocket
expenses, including employee salaries and overhead, for each selected research
project. See "Risk Factors--Dependence on Strategic Partners."

Agritope and Vilmorin have agreed to negotiate in good faith the terms
of future commercialization agreements applicable to any commercial-stage
products that arise out of such research and development projects. It is the
intent of the parties that Agritope will receive royalties on revenues generated
through sales of modified crops or modified seeds resulting from the research
projects, or that Agritope will receive revenues through participation in
programs providing royalties to Agritope and Vilmorin based on savings realized
by farmers utilizing the modified products. If the parties are unable to agree
on the terms on which a modified crop or seed is to be commercialized, the terms
of commercialization will be determined by "baseball" style arbitration, in
which the arbitrator chooses all of the terms proposed by one party or the other
without modification or compromise. See "Risk Factors--Terms for
Commercialization of Certain Vegetable and Flower Crops."

Each of Agritope and Vilmorin will continue to own its existing
proprietary technology. Any new technology developed in the course of the
research, other than modified crops or seeds, will be jointly owned by the
parties. See "Description of Business--Patents and Proprietary Information."
Each will have a right to commercialize the new technology in designated fields
of use, subject to an obligation to pay royalties for such use to the other
party. See "Risk Factors--Dependence on Strategic Partners."

During the term of the agreement, Vilmorin will have a right of first
refusal to fund and participate in research projects proposed by Agritope
involving the genetic alteration of a covered crop. The agreement provides that
Agritope will deal with Vilmorin as a most favored customer in connection with
research and commercialization agreements. Unless terminated for default, the
agreement will remain in effect until the earlier of (i) expiration of all
patents (and absence of trade secrets) for technology used in modified crops and
seeds for which the parties have entered into commercialization agreements, and
(ii) the date on which Vilmorin ceases to own at least 214,285 shares of
Agritope capital stock.

In connection with the Vilmorin Research Agreement, Vilmorin has agreed
to purchase $1.5 million shares of Series A Convertible Preferred at a price of
$7 per share. See "Sale of Series A Convertible Preferred" and "Description of
Agritope Capital Stock--Agritope Series A Convertible Preferred." Vilmorin also
has an option, expiring on January 15, 1998, to acquire all or any portion of
the remaining 785,715 additional shares of Series A Convertible Preferred at $7
per share. Vilmorin has agreed to provide additional funding totaling $1 million
either by exercising its option to purchase Series A Convertible Preferred or
through the financing of research and development projects.

Vilmorin is majority owned by Groupe Limagrain Holding S.A.
("Limagrain"). Limagrain is in turn owned by Societe Cooperative Agricole de
Semences de Limague, a societe organized under the laws of France
("Cooperative"). Cooperative is a French agricultural cooperative and the third
largest seed company in the world. Its principal business is the production of
seeds for grains, corn, garden vegetables, and oil-producing plants.

Other Crops. Agritope is also pursuing research and development programs to
incorporate its SAMase technology into other crops where perishability causes
significant losses in the production and distribution process. These include
strawberries, bananas, peaches, pears, and apples. The estimated U.S. wholesale
markets for these crops range from $325 million for pears to $2.4 billion for
bananas.

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<PAGE>

COMMERCIALIZATION STRATEGY

Agritope is currently evaluating a number of commercialization
strategies in order to realize the value of its technology. The Company intends
to generate revenues by licensing rights to its technology in exchange for
license fees, royalties and other payments. Agritope intends to focus its
development and licensing efforts primarily toward growers and distributors of
fruits and vegetables who are likely to derive the most benefit from the reduced
costs and spoilage losses that could potentially result from using the Company's
technologies.

As part of the Vilmorin Research Agreement, Agritope and Vilmorin have
agreed to negotiate in good faith the terms of future commercialization
agreements covering any products that reach commercial-stage development.
Agritope anticipates that it will receive royalties on the sale of any products,
including modified crops or seeds, that arise out of research and development
projects conducted by Agritope and funded by Vilmorin.

GRANTS AND CONTRACTS

U.S. Department of Commerce. In October 1997, Agritope was awarded a U.S.
Department of Commerce, National Institutes of Technology ("NIST"), Advanced
Technology Program ("ATP") grant. The award covers a three-year project and
totals $990,000. Agritope was awarded the grant for use in the application of
its proprietary ripening control technology to certain tree fruits and bananas.

The NIST/ATP grant provides cost shared funding for research and
development projects with potential for important broad based economic benefits
to the United States. Agritope will bear $1.8 million of the total costs of the
program, which are estimated at $2.8 million. The awards are made on the basis
of a rigorous competitive review which considers both scientific and technical
merit.

SBIR Programs. Agritope actively participates in the SBIR programs sponsored by
the USDA. The SBIR programs have two phases. Phase I covers a six-month project
period and a total award not to exceed $100,000. Phase II covers a two-year
project period and a total award not to exceed $750,000. Agritope was awarded a
Phase I grant of $50,000 in 1994 plus a Phase II grant of $198,000 in 1995 for
development of diagnostic tests for the detection of grapevine leafroll virus.
In 1997, Agritope received a $55,000 Phase I grant for work on geminivirus
resistance strategies in tomato.

Cooperative Research and Development Agreements. Agritope has entered into two
Cooperative Research and Development Agreements ("CRADAs") with the U.S.
Department of Agriculture /Agricultural Research Services ("USDA/ARS"). Under
the CRADAs, Agritope will collaborate with USDA/ARS laboratories by providing
research services or partial funding for research projects. In return, Agritope
has been granted a right of first refusal to obtain a license for any resulting
inventions. The first CRADA is to evaluate and confer raspberry bushy dwarf
virus resistance ("RBDVr") in raspberry. This research is a collaborative effort
with the Northwest Center for Small Fruit Research, located in Corvallis,
Oregon. The purpose of the second CRADA is for the evaluation of the ripening
physiology of SAMase transformed melon. This research will be carried out
through the USDA/ARS research station in Weslaco, Texas.

Other Grants and Contracts. Agritope has also been awarded grant support in the
past from the Oregon Strawberry Commission and Oregon Raspberry and Blueberry
Commission for antifungal biocontrol research. Agritope also receives funds for
research and development programs from its strategic partners. Agritope intends
to continue to participate in the SBIR program, similar grant programs and
projects with strategic partners, as it deems appropriate. Agritope regularly
makes application for new grants, but there is no assurance that grant support
will be continued.

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<PAGE>

VINIFERA

Vinifera, Inc. was incorporated in 1993 to participate in the grapevine
nursery business. Through proprietary processes, Vinifera propagates and grafts
grapevine plants for sale to vineyards and to growers of table grapes. All of
Agritope's current product sales are attributable to Vinifera. Industry
sources have estimated that 44 million grafted wine grapevine plants were
produced in California in 1996. This number is expected to increase to between
70 and 90 million by the year 2000.

Traditionally, grapevine plants for sale to vineyards are produced
seasonally using field grown, dormant cuttings that are grafted. In contrast,
Vinifera uses year-round greenhouse propagation and a herbaceous grafting method
that employs very young, actively growing cuttings. As a result of greenhouse
propagation, Vinifera is able to develop in two years a quantity of new plants
that is approximately ten times larger than can be produced with traditional
techniques. In addition, herbaceous grafting with green cuttings could allow a
vineyard to begin commercial production of grapes from a newly planted vineyard
a year sooner than would otherwise be possible. This grafting process also
produces sturdier unions than dormant grafting, resulting in significantly
higher yields of successful grafts, both at the propagation stage and in the
survival of actual plantings in the field. Agritope Research and Development
provides disease testing services for Vinifera.

Vinifera is headquartered in Petaluma, California, with propagation and
production facilities there and in Woodburn, Oregon. Its library of grapevine
plants includes 32 different phylloxera-resistant types of rootstock, 88
different wine varietal clones, and ten different table grape varietal clones.
In addition, several French and Italian varietals are currently passing through
quarantine and, when released, will be available to the U.S. market exclusively
through Vinifera. Vinifera believes that this collection of different grapevine
clones is one of the largest in the world. Vinifera's U.S. customer base
consists of over 80 vineyards in California, Washington and Oregon. In 1995,
Vinifera established a joint venture in Argentina (Vinifera Sudamericana S.A.)
to begin the propagation of plant material in that country. Vinifera is
currently in the process of establishing similar ventures in other countries
with large grape and wine production industries.

COMPETITION

The plant biotechnology industry is highly competitive. Competitors
include independent companies that specialize in biotechnology; chemical,
pharmaceutical and food companies that have biotechnology laboratories;
universities; and public and private research organizations. Agritope believes
that many companies including companies with significantly greater financial
resources, such as Monsanto Company, DNAP Holding and Zeneca Plant Sciences, are
engaged in the development of mechanisms to control the ripening and senescence
of fruit and vegetable products. Technological advances by others could render
Agritope's products less competitive. The Company believes that, despite
barriers to new competitors such as patent positions and substantial research
and development lead time, competition will intensify, particularly from
agricultural biotechnology firms and major agrichemical, seed and food companies
with biotechnology laboratories.

GOVERNMENT REGULATION

Regulation by federal, state and local government authorities in the
U.S. and by foreign governmental authorities will be a significant factor in the
future production and marketing of Agritope's genetically engineered fruit and
vegetable products.

The federal government has implemented a coordinated policy for the
regulation of biotechnology research and products. The USDA has primary federal
authority for the regulation of specific research, product development and
commercial applications of certain genetically engineered plants and plant
products. The FDA has principal jurisdiction over plant products that are used
for human or animal food. The EPA has jurisdiction over the field testing and
commercial application of plants genetically engineered to contain pesticides.
Other federal agencies have jurisdiction over certain other classes of products
or laboratory research.

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<PAGE>

The USDA regulates the growing and transportation of most genetically
engineered plants and plant products. In March 1996 following a request from
Agritope, the USDA issued a determination that permits the growing and shipping
of Agritope's prototype variety of ripening-controlled cherry tomato anywhere in
the U.S. in the same manner as conventionally developed tomatoes.

In May 1992, the FDA announced its policy on foods developed through
genetic engineering (the "FDA Policy"). The FDA Policy provides that the FDA
will apply the same regulatory standards to foods developed through genetic
engineering as applied to foods developed through traditional plant breeding.
Under the FDA Policy, the FDA will not ordinarily require premarket review of
genetically engineered plant varieties of traditional foods unless their
characteristics raise significant safety questions, such as elevated levels of
toxicants, the presence of allergens, or they are deemed to contain a food
additive.

In March 1996, the FDA announced its determination, based on its review
of food safety data submitted by Agritope, that Agritope's prototype variety of
ripening controlled cherry tomato expressing the SAMase gene has not been
significantly altered with respect to food safety or nutritive value when
compared to conventional tomatoes.

Currently, the FDA Policy does not require that genetically engineered
products be labeled as such, provided that such products are as safe and have
the same nutritional characteristics as conventionally developed products.
However, there can be no assurance that the FDA will not reconsider its
position, or that local, state or international authorities will not enact
labeling requirements, any of which could have a material adverse effect on the
marketing of products derived using the tools and techniques of genetic
engineering.

The FDA is considering modifying its policy on foods developed through
genetic engineering to include a Premarket Notification ("PMN") procedure. This
policy modification could require a company that develops genetically engineered
foods to inform the FDA that its safety evaluation is complete and that the
company intends to commercialize the product. The objective of the PMN is to
make the FDA and the public aware of all new genetically engineered food
products entering the market. Agritope believes that any future requirement for
a PMN should not delay plans to commercialize its genetically engineered fruit
and vegetable products.

Agritope's complete range of agribusiness and plant biotechnology
activities are subject to general FDA food regulations and are, or may be,
subject to regulation under various other laws and regulations. These include
but are not limited to the Occupational Safety and Health Act, the Toxic
Substances Control Act, the National Environmental Policy Act, other federal
water, air and environmental quality statutes, import/export control
legislation, and other laws. At the present time most states are generally
deferring to federal agencies (USDA or EPA) for the approval of genetically
engineered plant field trials, although states are provided a review period
prior to the issuance of a field trial permit. Failure to comply with applicable
regulatory requirements could result in enforcement action, including withdrawal
of marketing approval, seizure or recall of products, injunction or criminal
prosecution.

International regulatory policies for genetically engineered plants and
plant products are not complete. Consequently, it is possible that additional
data, labeling or other requirements will be required in countries where
Agritope intends to grow and/or commercialize its genetically engineered
products. Foreign regulatory agencies could require Agritope to conduct further
safety assessments and potentially delay product development programs or
commercialization of resulting products.

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<PAGE>

To date, to the best of its knowledge, Agritope has successfully
functioned within the scope of applicable laws and regulations, including rules
administered by the USDA, the FDA, the Mexican Ministry of Agriculture, and the
Chilean Ministry of Agriculture (Servicio Agricola y Ganadero Departemento
Proteccion Agricola de Chile). Agritope believes it is in substantial compliance
with all applicable laws and regulations pertaining to the development and
commercialization of its products.

PATENTS AND PROPRIETARY INFORMATION

In 1995, Agritope received a U.S. patent relating to its ethylene
control gene. Agritope has also applied for additional U.S. and foreign patent
protection for its ethylene control technology. Agritope's ability to
commercialize products depends in part on the ownership or right to use relevant
enabling technology as well as the ownership or right to use genes of interest.
Agritope anticipates filing patent applications for protection on future
products and technology. U.S. patents generally have a maximum term of 20 years
from the date an application is filed or 17 years from issuance, whichever is
longer.

Much of the technology developed by Agritope is subject to trade secret
protection. To reduce the risk of loss of trade secret protection through
disclosure, Agritope requires its employees and consultants to enter into
confidentiality agreements. Agritope believes that patent and trade secret
protection is important to its business. However, the issuance of a patent or
existence of trade secret protection does not in itself ensure Agritope's
success. Competitors may be able to produce products competing with a patented
Agritope product without infringing on Agritope's patent rights. Issuance of a
patent in one country generally does not prevent others from manufacturing or
selling the patented product in other countries. The issuance of a patent to
Agritope or to a licensor is not conclusive as to validity or as to the
enforceable scope of the patent. The validity or enforceability of a patent can
be challenged by litigation after its issuance, and, if the outcome of such
litigation is adverse to the owner of the patent, the owner's rights could be
diminished or withdrawn. Trade secret protection does not prevent independent
discovery and exploitation of the secret product or technique.

Agritope recently acquired certain rights to five new proprietary genes
discovered by scientists at the Salk Institute for Biological Studies. Agritope
believes the Salk Genes may have the potential to confer disease resistance,
enhanced yield, controlled flowering, and enhanced gene expression in plants.
All of the Salk Gene technologies are covered by pending patent applications.
Agritope has an option to obtain an exclusive worldwide license to the Salk
Genes for a field of use that includes a variety of plant species and nearly all
fruit and vegetable crops.

Agritope and Vilmorin have entered into the Vilmorin Research
Agreement. Under the terms of the agreement, Agritope and Vilmorin will each
continue to own its existing proprietary technology. Any new technologies will
be owned jointly by the parties, with each party having a royalty-bearing right
to commercialize the new technology in the party's field of use.

PERSONNEL

At September 30, 1997, Agritope and its subsidiaries had 46 full-time
employees, including 19 in research and development and 23 at the Vinifera grape
plant nursery operation, which also employs seasonal part-time employees as
needed. Agritope considers its relations with its employees to be excellent.
None of its employees are represented by labor unions.

Agritope employs five persons holding Ph.D. degrees with specialties in
the following disciplines: applied botany, bacteriology and public health,
biochemistry and biophysics, biological sciences, molecular biology, and plant
pathology and molecular virology. From time to time, Agritope also engages the
services of scientists as consultants to augment the skills of its scientific
staff.

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<PAGE>

SCIENTIFIC ADVISORY BOARD

Agritope utilizes the services of a Scientific Advisory Board. The
Scientific Advisory Board meets periodically to review Agritope's research and
development efforts and to apprise Agritope of scientific developments pertinent
to Agritope's business. The Agritope Scientific Advisory Board consists of
Richard K. Bestwick, Agritope Senior Vice President--Research and Development;
Eugene W. Nester, Ph.D., Professor and Chair Department of Microbiology,
University of Washington; Peter R. Bristow, Ph.D., Associate Professor of Plant
Pathology, Washington State University; Roger Beachy, Ph.D., Scripps Family
Chair, Department of Cell Biology, Scripps Research Institute; and Christopher
J. Lamb, Ph.D., Professor, Director, Plant Biology Lab, Salk Institute for
Biological Studies. Drs. Nester and Beachy are members of the National Academy
of Sciences.

After the closing of the Vilmorin Research Agreement, Vilmorin will
have the right to designate a scientist to sit on the Scientific Advisory board.

PROPERTIES

Agritope currently uses a portion of Epitope's office space and
research and development facilities in Beaverton, Oregon, consisting of
approximately 35,600 square feet of office, manufacturing, and laboratory space.
Agritope is charged a monthly fee of $16,000 by Epitope for use of the
facilities.

Agritope has entered into a lease agreement for approximately 11,000
square feet of office and laboratory space in Portland, Oregon. The agreement
requires monthly rental payments on a triple net basis of $10,285 from
commencement of the lease term on March 1, 1998 through May 1, 2001, and
thereafter of $11,210 until expiration of the lease on February 28, 2003.
Agritope intends to relocate its office and research and development operations
to the leased facilities on March 1, 1998, or as soon thereafter as practicable.

Agritope owns a 15-acre farm in Woodburn, Oregon, which it leases to
Vinifera for use in connection with Vinifera's grapevine propagation operations.
Greenhouse capacity at the farm currently totals 60,000 square feet.

In addition to leasing Agritope's Oregon farm and greenhouse, Vinifera
leases 250,000 square feet of greenhouse space in Petaluma, California under a
lease that expires January 31, 2001. The lease provides an option to purchase
the leased premises, exercisable through January 31, 1999, for a price of $1.3
million. The California greenhouse is currently in the final stages of being
upgraded to provide the capacity necessary to meet anticipated 1998 production
requirements.

Agritope believes that its present and new leased facilities are
adequate to meet current requirements.

LEGAL PROCEEDINGS

There are no material legal proceedings pending against Agritope.

DIVIDEND POLICY

Agritope has never declared or paid cash dividends on its common stock.
Agritope currently anticipates that it will retain all future earnings for use
in the operation and growth of its business and does not anticipate paying any
cash dividends in the foreseeable future. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

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<PAGE>

TRANSFER AGENT

The transfer agent and registrar for the Agritope Common is ChaseMellon
Shareholder Services, L.L.C.

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<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Agritope Board consists of seven directors. Under the terms of the
Series A Convertible Preferred, the holders of such shares will be entitled to
elect one director on an annual basis so long as at least 214,285 shares of
Series A Convertible Preferred are outstanding. That director was appointed to
the Agritope Board in December 1997. Because the Agritope Board is a staggered
board, the other six directors have been designated as Class 1, Class 2 and
Class 3 directors. Directors of each class will serve for a term expiring at the
annual meeting of Agritope stockholders in 1998, 1999 and 2000, respectively.

The table below presents the names, ages and positions of Agritope's
executive officers and directors as of the Distribution Date.

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C>
Adolph J. Ferro, Ph.D. 55 Chairman of the Board, President,
Chief Executive Officer and
Class 1 Director.

Gilbert N. Miller 56 Executive Vice President,
Chief Financial Officer,
Secretary and Class 1 Director

Richard K. Bestwick, Ph.D. 43 Senior Vice President--Research
and Development

Matthew G. Kramer 40 Vice President--Product Development

Joseph A. Bouckaert 56 President and Chief Executive
Officer--Vinifera, Inc.

W. Charles Armstrong 52 Class 2 Director

Roger L. Pringle 56 Class 2 Director

Michel de Beaumont 55 Class 3 Director

Nancy L. Buc 53 Class 3 Director

Pierre Lefebvre (1) 46 Director
</TABLE>

(1) Mr. Lefebvre has been elected at the request of the holders of the Series A
Convertible Preferred Stock to be issued in connection with the Vilmorin
Research Agreement entered into between Agritope and Vilmorin.

Adolph J. Ferro, Ph.D., has been President and Chief Executive Officer
of Agritope since 1989, and a director since 1990. He is Chairman of the Board
of Agritope. He was President and Chief Executive Officer of Epitope from 1990
through May 1997, and has been a director of Epitope since 1990. Dr. Ferro was
Senior Vice President of Epitope from 1988 until 1990. From 1987 until 1988, he
was Vice President of Research and Development. He was a cofounder of
Agricultural Genetic Systems, Inc., which Epitope acquired and renamed Agritope
in 1987. Prior to joining Agritope, he was a Professor in the Department of
Microbiology at Oregon State University ("OSU"). From 1981 to 1986, he was an
Associate Professor at OSU, and from 1978 to 1981, he was

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<PAGE>

an Assistant Professor at OSU. From 1975 to 1978, he was Assistant Professor at
the University of Illinois at Chicago in the Department of Biological Sciences.
Dr. Ferro received a B.A. degree from the University of Washington in 1965, an
M.S. degree in biology from Western Washington University in 1970, and a Ph.D.
in bacteriology and public health from Washington State University in 1973.

Gilbert N. Miller has been Chief Financial Officer of Agritope since
1991. He was also Senior Vice President of Agritope from 1992 until February
1996, when he became Executive Vice President. He has been a director of
Agritope since August 1997. He joined Epitope in 1989 as Executive Vice
President and Chief Financial Officer and has served as Epitope's Treasurer
since 1991. He will not serve as Executive Vice President and Chief Financial
Officer of Epitope after the Distribution. From 1987 to 1989, he was Executive
Vice President, Finance and Administration, of Northwest Marine Iron Works, a
privately held ship repair contractor located in Portland, Oregon. From 1986 to
1987, he was Vice President/Controller of the Manufacturing Group of Morgan
Products, Ltd., a manufacturer and distributor of specialty building products
based in Oshkosh, Wisconsin. He also held the position of Senior Vice
President/Finance of Nicolai Company, a Portland wood door manufacturing concern
which became a wholly owned subsidiary of Morgan Products, Ltd., in 1986. Mr.
Miller received a B.S. degree from Oregon State University and a Master of
Business Administration degree from University of Oregon. He is a certified
public accountant.

Richard K. Bestwick, Ph.D., has been a Senior Vice President of
Agritope since 1992. He became Chief Operating Officer--Research and Development
in October 1996 and was named Senior Vice President - Research and Development
in October 1997. He was employed by Epitope from 1987 to 1992. Prior to joining
Epitope, he was a Research Assistant Professor in the Department of Biochemistry
at the Oregon Health Sciences University, where he also completed his
postdoctoral training. Dr. Bestwick received a Ph.D. in Biochemistry and
Biophysics from Oregon State University and a B.S. degree from Evergreen State
College.

Matthew G. Kramer joined Agritope in 1994 as Vice President--Product
Development. From 1987 to 1994, he was Director of Production and Product
Development for Calgene Fresh, Inc., where he was involved in development and
commercialization of the FLAVR SAVR(TM) tomato. Mr. Kramer received an M.S.
degree in Agronomy and a B.S. degree at Montana State University.

Joseph A. Bouckaert joined Vinifera as its President and Chief
Executive Officer when Vinifera began operations in 1993. From 1988 to 1991, he
was Vice Chairman of DNA Plant Technology Corporation, a publicly held
agricultural biotechnology company with offices in Cinnaminson, New Jersey, and
Oakland, California. He also was a co-founder and member of the board of
directors of Florigene, B.V., an agricultural biotechnology company focused on
the flower business and located in the Netherlands. From 1985 to 1988, he served
as President and Chief Executive Officer of Advanced Genetic Sciences Inc. a
publicly held biotechnology company located in Oakland, California. In 1982, Mr.
Bouckaert co-founded Plant Genetic Systems, N.V., a privately held agricultural
biotechnology company located in Brussels, Belgium, and served as its first
Managing Director from 1982 through 1986. Mr. Bouckaert received a Juris Doctor
degree from the University of Leuven in Belgium and postgraduate degrees in
Business Administration from the University of Ghent in Belgium, and the
University of Kentucky in Lexington, Kentucky.

W. Charles Armstrong has been a director of Agritope since August 1997.
He has also been a director of Epitope since 1989 and a director of Pacificorp,
a public utility holding company, since 1996. He served as President and Chief
Executive Officer of Epitope from May 1997 to October 1997. He was Chairman and
Chief Executive Officer of Bank of America Oregon from September 1992 until
September 1996. From April to September 1992, he was Chairman and Chief
Executive Officer of Bank of America Idaho. Mr. Armstrong served as President
and Chief Operating Officer of Honolulu Federal Savings Bank from February 1989
to April 1992. Prior to February 1989, he was President and Chief Executive
Officer of West One Bank, Oregon.

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<PAGE>

Roger L. Pringle has been a director of Agritope since 1990. He has
been a director of Epitope since 1989, and Chairman of the Board of Epitope
since 1990. He is President of The Pringle Company, a management consulting firm
in Portland, Oregon, which he founded in 1975.

Michel de Beaumont was elected a director of the Company in September
1997. Since 1981, Mr. de Beaumont has served as a co-founder and director of
American Equities Overseas (UK) Ltd. of London, England, a wholly owned
subsidiary of American Equities Overseas, Inc. ("American Equities"), a private
securities brokerage and corporate finance firm. Mr. de Beaumont was Vice
President in the London office of American Securities Corp. from 1978 to 1981.
He also served as Vice President, Institutional Sales in the London office of
Smith Barney Harris Upham, Inc. from 1975 to 1978 and as a Vice President at
Oppenheimer & Co. Mr. de Beaumont graduated from the University of Poitiers and
Paris with degrees in Advanced Math, Physics and Chemistry and has earned a
degree in business administration from the University of Paris.

Nancy L. Buc was elected a director of the Company in September 1997.
She has been a partner in the law firm of Buc & Beardsley in Washington, D.C.
since 1994. Prior to 1994, Ms. Buc was a partner at Weil, Gotshal & Manges from
1981 to 1994 and from 1977 to 1980. Ms. Buc served as General Counsel for the
FDA from 1980 to 1981. During an earlier period of government service
(1969-1972), she served successively as Attorney-Advisor to the Chairman of the
Federal Trade Commission and Assistant Director of that agency's Bureau of
Consumer Protection. She is a Director of the Virginia Law School Foundation and
the Women's Legal Defense Fund. Ms. Buc is a graduate of Brown University and
the University of Virginia School of Law. Ms. Buc holds an honorary Doctor of
Laws from Brown and is a fellow emerita of the Brown Corporation, that
university's governing board.

Pierre Lefebvre was elected a director of the Company in December 1997.
He has served as Deputy Chief Executive Officer of Groupe Limagrain Holding and
as chief executive officer of Vilmorin, a subsidiary of Groupe Limagrain
Holding, since 1990. He presently leads both Vilmorin and the Groupe Limagrain
Bio-Health Division. Prior to 1990, Mr. Lefebvre served as chief executive
officer at Harris Moran Seed Company (formerly Ferry-Morse Seed Company), a
California-based subsidiary of Limagrain, specializing in vegetable and flower
seeds, and as controller at Tezier, another subsidiary of Limagrain. Mr.
Lefebvre is a 1975 graduate of Groupe ESSEC School of Management, a French
business school.

COMMITTEES OF THE BOARD

The Agritope Board has established the following standing committees:
Executive Committee, Audit Committee, Compensation Committee and Nominating
Committee. Pursuant to the Bylaws, the Agritope Board may also establish other
committees from time to time in its discretion.

The Executive Committee consists of at least two directors and may
exercise all the authority and powers of the Agritope Board in the management of
the business and affairs of Agritope, except those reserved to the Agritope
Board by the Delaware General Corporation Law. Mr. Pringle (chair), Dr. Ferro
and Mr. Miller are the initial members of the Executive Committee.

The Audit Committee consists of at least two outside directors and,
among other things, recommends the appointment of independent public
accountants, reviews the scope of the annual audit and the engagement letter,
reviews the independence of the independent accountants and reviews the findings
and recommendations of the independent accountants and management's response.
The Audit Committee also reviews the internal audit and control functions of
Agritope and makes recommendations for changes in accounting systems, if
warranted. Mr. Armstrong (chair), Ms. Buc and Mr. Pringle are the initial
members of the Audit Committee.

The Compensation Committee also consists of at least two outside
directors and determines compensation for the officers of Agritope, administers
stock-based compensation plans and other performance-based compensation

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<PAGE>

plans adopted by Agritope, and considers matters of director compensation and
benefits. Ms. Buc (chair) and Mr. Armstrong are the initial members of the
Compensation Committee.

The Nominating Committee which consists of at least two directors will
select and recommend candidates to serve on the Agritope Board, whose names will
be submitted for election at annual meetings of Agritope shareholders. The
Nominating Committee will also review and make recommendations to the Agritope
Board concerning the composition and size of the Agritope Board and its
committees. Mr. de Beaumont (chair), Ms. Buc, Dr. Ferro and Mr. Miller are the
initial members of the Nominating Committee.

COMPENSATION OF DIRECTORS

Nonemployee directors of Agritope will be reimbursed for out-of-pocket
expenses in connection with attending board and committee meetings. Each
nonemployee director is granted an option for 25,000 shares of Agritope Common
upon his or her initial election or appointment to the Agritope Board, plus an
additional option for 5,000 shares of Agritope Common for his or her initial
year of service. On December 1 of each subsequent year on which the director
serves on the Agritope Board, the director will receive an additional option for
5,000 shares of Agritope Common. The options will be nonqualified stock options
with an exercise price equal to 25 percent of the price of Agritope Common on
the date of grant, with the discount being no more than $2 per share. The
options will vest ratably over four years and have an indefinite term. Directors
are also eligible to receive options under Agritope's 1997 Stock Award Plan. See
"1997 Stock Award Plan."

EXECUTIVE COMPENSATION

The following table summarizes the compensation for the last three
fiscal years of the Chief Executive Officer and the three other executive
officers of Agritope whose salary and bonus exceeded $100,000 during the 1997
fiscal year. Information set forth in the table reflects compensation paid for
services rendered for Epitope and/or Agritope.

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<PAGE>

SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards

Annual Compensation Securities All Other
Underlying Compen-
Name and Principal Position Year Salary Bonus Options (1) sation(2)
- -------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Adolph J. Ferro, Ph.D. 1997 $ 240,000 $ - $ 7,354
Chairman of the Board, 1996 214,183 50,000 - 4,237
President and Chief Executive 1995 200,769 113,245 5,390
Officer (3)

Gilbert N. Miller 1997 165,000 - - $ 7,125
Executive Vice President 1996 128,510 33,075 - 3,206
and Chief Financial Officer 1995 130,962 - 5,021

Richard K. Bestwick, Ph.D. 1997 150,000 - - -
Senior Vice President-- 1996 91,385 20,160 - 2,280
Research and Development (4)

Joseph A. Bouckaert 1997 160,000 - - -
President and Chief Executive 1996 160,000 33,600 - -
Officer--Vinifera, Inc. (5) 1995 115,592 40,000 - -
</TABLE>

(1) Represents the number of shares of Agritope Common for which options
were awarded. Excludes options for Epitope Stock received under the
Epitope Award Plan as follows: Dr. Ferro--74,000 options in 1995; Mr.
Miller--34,000 options in 1995; Mr. Bouckaert--50,000 options in 1996.

(2) Represents amounts contributed to Epitope's 401(k) Plan as employer
matching contributions in the form of Epitope Stock.

(3) The information in the above table does not include approximately
$440,000 payable by Epitope to Dr. Ferro, pursuant to his employment
agreement with Epitope, in connection with the termination of Dr.
Ferro's position as President and Chief Executive Officer of Epitope in
May 1997.

(4) Dr. Bestwick was not an executive officer of Agritope during fiscal
1995.

(5) Information for Mr. Bouckaert for 1996 and 1995 includes compensation
paid for periods during which Vinifera was not a subsidiary of
Agritope.

GRANTS OF OPTIONS TO PURCHASE AGRITOPE COMMON

No options to purchase Agritope Common were granted to officers named
in the "Summary Compensation Table" during the fiscal year ended September 30,
1997.

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<PAGE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OUTSTANDING OPTIONS FOR
AGRITOPE COMMON

None of the officers named in the "Summary Compensation Table"
exercised options to purchase Agritope Common during the fiscal year ended
September 30, 1997, and none of such officers held any options exercisable for
Agritope Common at September 30, 1997.

EMPLOYMENT; CHANGE IN CONTROL AGREEMENTS

Pursuant to written employment agreements with Agritope, each of the
executive officers named in the Summary Compensation Table above is entitled to
receive one year of salary in the event of termination without cause (two years
in the case of Dr. Ferro and Mr. Miller) or two years of salary (three years in
the case of Dr. Ferro and Mr. Miller) if terminated without cause within 12
months following a change in control (within the meaning of the Exchange Act) or
sale of substantially all the assets of Agritope, except that Mr. Bouckaert's
agreement does not include a change-of-control provision. The agreements in each
case prohibit the officer from competing with Agritope for one year unless the
officer elects to waive the right to amounts otherwise payable. Mr. Bouckaert's
agreement prohibits him from competing with Vinifera for three years after
termination. The agreements do not expire by their terms, except that Mr.
Bouckaert's agreement terminates on May 31, 2000. The other agreements are
terminable by Agritope on 30 days' notice with cause or, subject to payment of
the salary amounts described above, on 90 days' notice without cause, and may be
terminated by the executive officer on 90 days' notice.

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<PAGE>

1997 STOCK AWARD PLAN

GENERAL

The Agritope, Inc. 1997 Stock Award Plan (the "Award Plan") was adopted
by the Agritope Board and approved by Epitope as Agritope's sole stockholder in
November 1997. The Award Plan will continue in effect until awards have been
granted covering all shares available for issuance under the Award Plan or the
Award Plan is otherwise terminated by the Agritope Board. The Award Plan
provides for the issuance of a total of up to 2,000,000 shares of Agritope
Common, subject to adjustment for changes in capitalization. A summary
description of certain terms and provisions of the Award Plan and options
proposed to be granted thereunder follows. The following summary of the Award
Plan is subject to the detailed terms and provisions of the Plan.

PURPOSE

The purpose of the Award Plan is to promote and advance the interests
of Agritope and its stockholders by enabling Agritope to attract, retain, and
reward key employees, outside advisors, and directors. The Award Plan is
intended to strengthen the mutuality of interests between such employees,
advisors, and directors and Agritope's stockholders by offering equity-based
incentive awards to promote a proprietary interest in pursuing the long-term
growth, profitability, and financial success of Agritope.

AWARDS AND ELIGIBILITY

The Award Plan provides for stock-based awards to (i) employees of
Agritope and its subsidiaries (including individuals who may also be officers or
directors of Agritope or a subsidiary), (ii) members of scientific advisory
committees or other consultants to Agritope or its subsidiaries ("Advisors"),
and (iii) nonemployee directors of Agritope or its subsidiaries. Awards that may
be granted under the Award Plan include stock options, stock appreciation
rights, restricted awards, performance awards, and other stock-based awards
(collectively, " Awards"). The Compensation Committee of the Agritope Board (the
"Committee") will administer the Award Plan and determine the key employees and
Advisors of Agritope and its subsidiaries who are to receive Awards under the
plan and the types, amounts, and terms of Awards. The Award Plan authorizes the
Agritope Board to grant Awards to non-employee directors from time to time in
its discretion in accordance with its fiduciary obligations to Agritope and its
stockholders.

All employees are eligible to receive Awards under the Award Plan,
including each of Agritope's nonemployee directors and executive officers. No
options, stock appreciation rights ("SARs"), restricted awards, performance
awards, or other stock-based awards have been granted under the Award Plan.

NEW OPTIONS

Options ("New Options") to purchase a total of 1,253,394 shares of
Agritope Common have been granted to officers, employees and nonemployee
directors of Agritope under the Award Plan. New Options granted to executive
officers and nonemployee directors have an exercise price of $5.25 per share,
representing 75 percent of the fair market value of Agritope Common at the date
of grant. New Options granted to other employees have an exercise price of $7
per share, representing the fair market value of Agritope Common on the date of
grant. Each New Option becomes exercisable as to 25 percent of the shares
covered by such option on each of the first four anniversaries of the dates of
grant.

The following table shows the New Options that have been granted under
the Award Plan:

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<PAGE>

<TABLE>
<CAPTION>
NEW PLAN BENEFITS
AGRITOPE, INC. 1997 STOCK AWARD PLAN

Number of
New
Name and Position Options

<S> <C>
Adolph J. Ferro, Ph.D. 407,759
Chairman of the Board, President and Chief Executive Officer
Gilbert N. Miller 211,593
Executive Vice President and Chief Financial Officer
Richard K. Bestwick, Ph.D. 143,900
Senior Vice President--Research and Development
Joseph A. Bouckaert 102,071
President and Chief Executive Officer--Vinifera, Inc.
Matthew G. Kramer,
Vice President--Product Development 102,071
All executive officers as a group 967,394
All nonemployee directors as a group 150,000
All employees as a group, excluding executive officers 136,000
</TABLE>

DESCRIPTION OF TERMS OF AWARDS

Following is a brief summary of the various types of Awards that may be
granted under the Award Plan.

Options. Options granted under the Award Plan may be either incentive
stock options, a tax-favored form of stock option meeting the requirements of
Section 422 of the Code, or nonqualified options, which are not entitled to
favorable income tax treatment. ISOs must expire not more than ten years from
the date of grant. The Award Plan does not limit the maximum term for
nonqualified options. The exercise price per share for options granted under the
Award Plan generally must be at least 100 percent (for incentive stock options)
or 75 percent (for nonqualified options) of the fair market value of a share of
Agritope Common on the date the option is granted. The Award Plan authorizes the
Committee (or the Agritope Board, with respect to Awards to nonemployee
directors) to issue nonqualified deferred compensation options with an option
price substantially less than the fair market value of a share of Agritope
Common on the date of grant (but not less than $1 per share) for the purpose of
deferring a specified amount of income for a recipient. The Committee (or the
Agritope Board), in its discretion, may provide in the agreement evidencing an
option that, to the extent that the option is exercised using previously
acquired shares of Agritope Common, the option holder shall automatically be
granted a replacement ("reload") option for a number of shares of Agritope
Common equal to the number of shares delivered upon exercise with an option
price equal to the fair market value of a share of Agritope Common on the date
of exercise and subject to such other terms as the Committee (or the Agritope
Board) determines. The aggregate fair market value of shares for which any
participant may be granted ISOs which are exercisable for the first time during
any calendar year may not exceed $100,000. In addition, no individual
participant may be granted options for more than 500,000 shares during any
fiscal year.

Stock Appreciation Rights. A recipient of SARs will receive, upon
exercise, a payment based on the increase in the price of a share of Agritope
Common between the date of grant and the date of exercise. Payment may be in
cash, in shares of Agritope Common, in the form of a deferred compensation
option or in any other form approved by the Committee (or the Agritope Board).
SARs may be granted in connection with options or other Awards granted under the
Award Plan or may be granted as independent Awards.

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<PAGE>

Restricted Awards. Restricted Awards may take the form of restricted
shares or restricted units. Restricted shares are shares of Agritope Common that
may be subject to forfeiture if the recipient terminates employment or service
as a nonemployee director or Advisor during a specified period (the "Restriction
Period"). Stock certificates representing restricted shares are issued in the
name of the recipient, but are held by Agritope until the expiration of the
Restriction Period. From the date of issuance of restricted shares until any
forfeiture, the recipient is entitled to the rights of a stockholder with
respect to the shares, including voting and dividend rights. Upon expiration of
the Restriction Period and satisfaction of any other applicable conditions,
restricted shares vest and are delivered to the recipient. The Committee (or the
Agritope Board) may permit payment to be in cash, in installments or in the form
of a deferred compensation option.

Restricted units are Awards of units equivalent in value to a share of
Agritope Common, which similarly may be subject to forfeiture if the recipient
terminates employment or service as a nonemployee director or Advisor during a
Restriction Period. At the expiration of the Restriction Period, payment with
respect to restricted units is made in an amount equal to the value of the
number of shares of Agritope Common covered by the restricted units. Payment may
be in cash, unrestricted shares of Agritope Common, or any other form approved
by the Committee (or the Agritope Board).

Performance Awards. Performance Awards are designated in units
equivalent in value to a share of Agritope Common. A performance Award is
subject to forfeiture if or to the extent that Agritope, a subsidiary, an
operating group, or the recipient, as specified by the Committee (or the
Agritope Board) in the Award, fails to meet performance goals established for a
designated performance cycle. Performance Awards earned by attaining performance
goals are paid at the end of a performance cycle in cash, shares of Agritope
Common, or any other form approved by the Committee (or the Agritope Board).

Other Stock-Based Awards. The Committee (or the Agritope Board) may
grant other Awards that involve payments or grants of shares of Agritope Common
or are measured by or in relation to shares of Agritope Common. The Award Plan
thus provides needed flexibility to design future types of stock-based or
stock-related Awards to attract and retain employees, Advisors and directors in
a competitive environment.

The Board may amend or terminate the Award Plan without stockholder
approval, other than amendments that would materially increase the aggregate
number of shares of Agritope Common that may be issued under the Award Plan
(except for adjustments for changes in capitalization).

FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes the principal anticipated federal
income tax consequences of Awards granted under the Award Plan to participants
and to Agritope.

Incentive Stock Options. An optionee does not realize taxable income
upon the grant or exercise of an ISO under the Award Plan.

If no disposition of shares issued to an optionee pursuant to the
exercise of an ISO is made by the optionee within two years from the date of
grant or within one year from the date of exercise, then (a) upon the sale of
the shares, any amount realized in excess of the option price (the amount paid
for the shares) is taxed to the optionee as mid-term (if the disposition is
within 18 months from the date of exercise) or long-term capital gain (if the
disposition is more than 18 months after the date of exercise) and any loss
sustained will be a mid-term or long-term capital loss, and (b) no deduction is
allowed to Agritope for federal income tax purposes. For purposes of computing
alternative minimum taxable income, an ISO is treated as a nonqualified option.

If shares of Agritope Common acquired upon the exercise of an ISO are
disposed of prior to the expiration of the two-year and one-year holding periods

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<PAGE>

described above (a "disqualifying disposition"), then (a) the optionee realizes
compensation taxable at ordinary income tax rates in the year of disposition in
an amount equal to the excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized on sale of the shares) over the
exercise price thereof and (b) Agritope is entitled to deduct such amount. Any
further appreciation or reduction
in value is treated as a short-term, mid-term or long-term capital gain or loss,
as applicable, to the optionee, and does not result in any deduction to
Agritope. A disqualifying disposition in the year of exercise will generally
avoid the alternative minimum tax consequences of the exercise of an ISO.

Nonqualified Options. No income is realized by the optionee at the time
a nonqualified option is granted. Upon exercise, (a) an optionee will generally
realize ordinary income in an amount equal to the difference between the
exercise price and the fair market value of the shares on the date of exercise
and (b) Agritope will receive a tax deduction for the same amount. The
optionee's cost basis in the acquired shares is the fair market value of the
shares on the exercise date. Upon sale of the shares thereafter, any
appreciation or reduction in value is treated as a short-term, mid-term, or
long-term capital gain or loss, as applicable, to the optionee, and will not
result in any deduction to Agritope.

Payment of Exercise Price in Shares. The Committee may permit
participants to pay all or a portion of the exercise price using previously
acquired shares of Agritope Common. If an option is exercised and payment is
made in previously held shares, there is no taxable gain or loss to the
participant other than any gain recognized as a result of exercise of the
option, as described above.

Stock Appreciation Rights. The grant of a SAR to a participant will not
cause the recognition of income by the participant. Upon exercise of a SAR, the
participant will realize ordinary income equal to the amount of cash payable to
the participant plus the fair market value of any shares of Agritope Common or
other property delivered to the participant. Agritope will be entitled to a
deduction equal to the amount of ordinary income realized by the participant in
connection with the exercise of a SAR.

Restricted Awards and Performance Awards. Generally, a participant will
not recognize any income upon issuance of a restricted Award or performance
Award that is subject to forfeiture during a Restriction Period or performance
cycle. Dividends paid with respect to Awards during a Restriction Period or
performance cycle prior to the vesting of the Awards will be taxable as ordinary
income to the participant. Generally, a participant will recognize ordinary
income upon the vesting of restricted Awards or performance Awards in an amount
equal to the amount of cash payable to the participant plus the fair market
value of shares of Agritope Common or other property delivered to the
participant. However, a participant may elect to recognize ordinary income upon
the grant of restricted shares, based on the fair market value of the shares of
Agritope Common subject to the Award at the date of grant. If a participant
makes such an election, dividends paid with respect to the restricted shares
will not be treated as ordinary income, but rather as dividend income, and the
participant will not recognize additional income when the restricted shares
vest. Agritope will be entitled to a deduction equal to the amount of ordinary
income recognized by the participant. If a participant who receives an Award of
restricted shares makes the special election described above, Agritope will not
be entitled to deduct dividends paid with respect to the restricted shares.

Limitation on Deductibility of Certain Compensation. Section 162(m) of
the Code generally makes nondeductible to Agritope taxable compensation paid to
a single individual in excess of $1 million in any calendar year if the
individual is the Chief Executive Officer or one of the next four highest-paid
executive officers, unless the excess compensation is considered to be
"performance based." Awards of options that are granted with an option price
equal to fair market value on the date of grant are considered performance based
for this purpose. Among other requirements contained in Section 162(m), the
material terms of a compensation plan must be approved by stockholders. Agritope
may in the future consider structuring other Awards to attempt to meet the
requirements of Section 162(m) if it determines the action to be advisable.

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<PAGE>

1997 EMPLOYEE STOCK PURCHASE PLAN

GENERAL

The Agritope, Inc. 1997 Employee Stock Purchase Plan (the "Agritope
Purchase Plan") was adopted by the Agritope Board and approved by Epitope as
sole stockholder of Agritope in November 1997. The Agritope Purchase Plan
provides for the issuance of up to 250,000 shares of Agritope Common. The
Compensation Committee of the Agritope Board (the "Committee") will administer
the Agritope Purchase Plan. The following summary of the Agritope Purchase Plan
is subject to the detailed terms and provisions of the plan.

PURPOSE

The purpose of the Agritope Purchase Plan is to give employees of
Agritope the opportunity to subscribe for shares of Agritope Common on an
installment basis through payroll deductions.

SUBSCRIPTIONS

The Agritope Purchase Plan provides for offering and purchase periods
to be set by the Committee, but no more than three regular offering periods may
be set during each fiscal year. The number of offering periods, the number of
shares offered, and the length of each period will be set by the Committee. The
Agritope Purchase Plan also provides for special offerings as described below.
Shares not subscribed for in any offering period and shares subscribed for that
cease to be subject to a subscription agreement will be available for
subscription in connection with a later offering period established by the
Committee.

The subscription price per share for each purchase period will be the
lesser of (i) 85 percent of the mean between the reported high and low sales
prices of shares of Agritope Common on the stock exchange or automated
securities interdealer quotation system on which the stock was traded on the
last trading day before the Offering Date (as defined in the Agritope Purchase
Plan) for the offering period (the "initial subscription price") and (ii) 85
percent of the mean between the reported high and low sales prices for the
shares on the date the purchase period ends, or on any earlier date of purchase
provided for in the Agritope Purchase Plan.

The total value of shares that may be subscribed for by an individual
in one or more regular offering periods within any calendar year is limited to
$21,250. Subject to this limitation, the Committee may set a minimum, a maximum,
or both a minimum and a maximum number of shares that may be subscribed for
during any offering period.

The Agritope Purchase Plan also provides for monthly special offering
dates pursuant to which any employee of Agritope may receive a one-year
subscription for a number of shares of Agritope Common equal to the amount by
which the employee's annual compensation would otherwise be increased during the
one-year period following the employee's annual compensation review divided by
the initial subscription price for the special offering date that occurs on or
immediately following the effective date of the increase in compensation. The
subscription may be provided to the employee at Agritope's discretion or
pursuant to the employee's irrevocable election in lieu of any increase in cash
compensation for the ensuing year.

An employee may terminate his or her subscription at any time before
the full purchase price for the subscribed shares has been paid and be refunded
the full amount withheld, plus interest at the rate of 6 percent per year. An
employee may also reduce the number of subscribed shares and (i) receive a
refund of the amount withheld that is in excess of the amount that would have
been withheld if his or her subscription had been for the reduced number of
shares, plus interest on the refund at the rate of 6 percent per year, or (ii)
have the excess applied to reduce the amount of future installments of the
purchase price.

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<PAGE>

An employee whose employment is terminated for any reason other than
retirement, disability or death (or the personal representative of an employee
who dies after such termination) may, at his or her election, (i) be refunded
the full amount withheld, plus interest at the rate of 6 percent per year or
(ii) receive the whole number of shares that could be purchased at the purchase
price with that amount together with a cash refund of any balance. An employee
who retires or is permanently disabled (or the personal representative of an
employee who dies while employed, retired or disabled) at any time before the
full purchase price of the subscribed shares has been paid has the rights
described above and in addition may prepay the entire unpaid balance for the
subscribed shares in a lump sum of cash and receive the shares. Any such
election must be made within three months following any termination of
employment and prior to the end of the respective purchase period.

The Agritope Board may amend or terminate the Agritope Purchase Plan
without stockholder approval, other than amendments that materially increase the
number of shares that may be issued under the plan or decrease the purchase
price of shares under the plan (except for adjustments for changes in
capitalization).

When the Agritope Purchase Plan becomes effective upon consummation of
the Distribution, approximately 50 employees are expected to be eligible to
participate in the Agritope Purchase Plan. Numbers of shares that may be subject
to future individual subscriptions under the Agritope Purchase Plan are not now
determinable.

FEDERAL INCOME TAX CONSEQUENCES

The Agritope Purchase Plan is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Code. Participants do not realize
taxable income at the commencement of an offering or at the time shares are
purchased under the Agritope Purchase Plan.

If no disposition of shares purchased under the Agritope Purchase Plan
is made by the participant within two years from the offering commencement date
or within one year from the purchase date, then (a) upon sale of the shares, 15
percent of the fair market value of the shares at the commencement of the
offering period (or, if less, the amount of gain realized on sale of the shares)
is taxed to the participant as ordinary income, with any additional gain taxed
as a mid-term or long-term capital gain, as applicable, and any loss sustained
treated as a mid-term or long-term capital loss, as applicable, to the
participant, and (b) no deduction is allowed to Agritope for federal income tax
purposes.

If shares purchased under the Agritope Purchase Plan are disposed of
prior to the expiration of the two-year and one-year holding periods described
above, then (a) the participant realizes ordinary income in the year of
disposition in an amount equal to the excess (if any) of the fair market value
of the shares on the date of purchase (or, if less, the amount realized on sale
of the shares) over the purchase price thereof, and (b) Agritope is entitled to
deduct that amount. Any further gain realized is taxed as a short-term,
mid-term, or long-term capital gain to the participant and will not result in
any deduction to Agritope.

EMPLOYEE STOCK OWNERSHIP PLAN

The Agritope, Inc. Employee Stock Ownership Plan ("ESOP"), which covers
Agritope and those of its affiliates which elect to participate (the
"employers"), provides that all employees (including officers), other than
excluded classes (leased, union, nonresident alien, temporary and seasonal
employees) are eligible to participate immediately upon commencement of
employment. The ESOP is an "employee stock ownership plan" under Section
4975(e)(7) of the Code, designed to invest primarily in Agritope Common.

The employers' contribution to the ESOP each year is determined by the
Agritope Board, and may be made either in Agritope Common or in cash.
Contributions are allocated to participants in proportion to their compensation.

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<PAGE>

Each participant has a separate account attributable to employer
contributions. Participants will become fully vested in their accounts if they
attain age 65, die or become disabled prior to termination of employment. If
termination of employment occurs before age 65, death or disability, the vesting
in the accounts is based on the number of years of service (and the nonvested
portion is forfeited):

<TABLE>
<CAPTION>
Years of Service Percentage Vested

<S> <C>
Less than 2 years 0
At least 2 years, but less than 3 years 20
At least 3 years, but less than 4 years 40
At least 4 years, but less than 5 years 60
At least 5 years, but less than 6 years 80
At least 6 years 100
</TABLE>

Each participant may direct the voting of Agritope Common allocated to
the participant's account.

The participants' accounts are distributable at termination of
employment. Distribution must be in Agritope Common unless both the participant
and the trustees elect cash distribution.

401(K) PROFIT SHARING PLAN

The Agritope, Inc. 401(k) Profit Sharing Plan ("401(k) Plan") which
covers Agritope and those of its affiliates which elect to participate, provides
that all employees (including officers), other than excluded classes (leased,
union, nonresident alien, temporary and seasonal employees) are eligible to
participate immediately upon commencement of employment. The 401(k) Plan
includes a salary reduction feature under Section 401(k) of the Code.

All participants in the 401(k) Plan may contribute on a before-tax
basis a whole number percentage of their cash compensation each year up to a
maximum fixed by the Agritope Board not to exceed 17 percent, subject to an
annual maximum which is adjusted for the cost of living ($9,500 for 1997).
However, only the first 5 percent of a participant's compensation is eligible
for a pro-rata matching contribution by the employers. The aggregate amount of
the annual matching contribution is determined by the Agritope Board.

Matching contributions are invested in Agritope Common. Employee
contributions are pooled for investment at the direction of the employee in one
or more of the various investment funds established by Agritope, one of which
may provide for investment in Agritope Common.

Participants are at all times fully vested in their employee
contributions. Participants will become fully vested in their matching
contributions if they attain age 65, die or become disabled prior to termination
of employment. If termination of employment occurs before age 65, death or
disability, the vesting of matching contributions is based on the number of
years of service (and the nonvested portion is forfeited):

Years of Service Percentage Vested

Less than 2 years 0
At least 2 years, but less than 3 years 20
At least 3 years, but less than 4 years 40
At least 4 years, but less than 5 years 60
At least 5 years, but less than 6 years 80
At least 6 years 100

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<PAGE>

Withdrawals of employee contributions are permitted prior to
termination of employment in the case of hardship. Matching contributions and
any remaining amounts of employee contributions are distributable at termination
of employment; matching contributions, and any employee contributions which are
invested in Agritope Common at the participants' election, are customarily
distributed in Agritope Common.

CERTAIN TRANSACTIONS

On November 11, 1996, the Company amended an agreement pursuant to
which it acquired its patented ethylene control technology in 1987. Dr. Ferro, a
co-inventor of the technology, relinquished all rights to future payments under
the agreement in exchange for a one-time cash payment of $590,000. The amount is
included in Agritope's consolidated balance sheet under the caption "Patents and
proprietary technology (net)" and will be amortized over 15 years, the remaining
life of the related patent.

In November 1996, Agritope agreed to exchange $3.4 million principal
amount of Agritope 4 percent Convertible Notes Due 1997 for 250,367 shares of
Epitope Stock at a reduced exchange price of $13.50 per share. The original
terms of the notes permitted the holders to exchange them for Epitope Stock at
an exchange price of $19.53 per share. Holders exchanging their notes at the
reduced exchange price included Groupe des Assurances Nationales, the beneficial
owner of more than 5 percent of the outstanding Epitope Stock, which exchanged
$2,500,000 principal amount of notes for 185,185 shares of Epitope Stock.

American Equities has been engaged by the Company to act as placement
agent in connection with the Private Placement and the Preferred Stock Sale.
Michel de Beaumont is a co-founder and director of American Equities. Mr. de
Beaumont was elected to serve as a director of Agritope in September 1997.
American Equities will receive commissions equal to 5 percent of the gross
proceeds of the Private Placement and the sale of Series A Convertible
Preferred. In addition, American Equities or its designees will receive warrants
to purchase an aggregate of 500,000 shares of Agritope Common in consideration
for its services as placement agent. See "Shares Eligible for Future Sale."

Pierre Lefebvre, a director of Agritope, is chief executive officer of
Vilmorin. Agritope and Vilmorin have entered into the Vilmorin Research
Agreement, under which Vilmorin will fund certain research and development
projects of Agritope and receive certain rights in resulting technology.
Vilmorin has agreed to purchase 214,285 shares of Series A Convertible Preferred
for $7 per share in the Preferred Stock Sale, and has been granted the Series A
Option, to purchase up to an additional 785,715 shares of Series A Convertible
Preferred at that price. Holders of Series A Convertible Preferred will have the
right to elect one director to the Agritope Board so long as at least 214,285
shares of Series A Convertible Preferred remain outstanding. See "Description of
Business-Agritope Biotechnology Program--Vegetable and Flower Crops" and
"Description of Agritope Capital Stock-Agritope Series A Convertible Preferred."

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the anticipated
beneficial ownership of Agritope Common as of the Distribution Date after giving
effect to the Private Placement, the Preferred Stock Sale and the Distribution
by (a) each person who is expected by Agritope to be the beneficial owner of
more than 5 percent of Agritope Common outstanding after the Distribution, the
Private Placement and the Preferred Stock Sale, (b) each director of Agritope,
(c) each executive officer of Agritope named in the Summary Compensation table
above and (d) the executive officers and directors of Agritope as a group. The
table gives pro forma effect to the conversion of all Series A Convertible
Preferred. Except in the case of subscribers in the Private Placement and the
Preferred Stock Sale, this information is based on the Epitope Stock
beneficially owned by such persons as of December 1, 1997.

- 58 -
<PAGE>

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
NAME NUMBER (1) PERCENT

<S> <C> <C>
Greenacres Enterprises, Inc. 428,572 10.1%
74 Aeulestrasse
9490 Vaduz
Liechtenstein

Vilmorin & Cie 1,000,000(2) 19.9%
71 Rue de Beaubourg
Paris 75003
France

W. Charles Armstrong - *

Michel de Beaumont

Richard K. Bestwick, Ph.D. 233(3)(4) *

Joseph A. Bouckaert - *

Nancy L. Buc

Adolph J. Ferro, Ph.D. 421(4) -

Pierre Lefebvre -(5) -

Gilbert N. Miller 566(4) -

Roger L. Pringle 3,525(6) *
</TABLE>

All directors and executive
officers as a group
(10 persons)
- ---------------
*Less than 1 percent

(1) Subject to community property laws where applicable, beneficial
ownership consists of sole voting and investment power except as
otherwise indicated. Information is based on Epitope's records and a
review of statements filed with the Commission under Sections 13(d) and
13(g) of the Exchange Act with respect to Epitope Stock.

(2) Includes 214,285 shares of Series A Convertible Preferred that Vilmorin
has agreed to purchase plus 785,715 shares issuable pursuant to the
Series A Option. Series A Convertible Preferred is initially
convertible into Agritope Common on a share-for-share basis. Shares of
Series A Convertible Preferred subject to the option have been included
for purposes of calculating the percent of capital stock beneficially
owned by Vilmorin but have been excluded for purposes of calculating
the percent of capital stock beneficially owned by other persons.

(3) Includes 60 shares of Agritope Common allocated to Dr. Bestwick's
spouse under the Epitope 401(k) plan.

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<PAGE>

(4) Includes the following shares allocated to each person's individual
accounts under the Epitope 401(k) plan: Dr. Bestwick - 173 shares, Dr.
Ferro - 253 shares, and Mr. Miller - 233 shares.

(5) Mr. Lefebvre is chief executive officer of Vilmorin and may have voting
power with respect to Agritope capital stock of which Vilmorin is the
beneficial owner. If Mr. Lefebvre is deemed to have such voting power,
he would be deemed the owner of the 1 million shares of Series A
Convertible Preferred beneficially owned by Vilmorin, constituting 19.9
percent of the Agritope capital stock, and all directors and executive
officers as a group would be deemed the beneficial owners of -------
shares, constituting ---- percent of Agritope capital stock.

(6) Includes 600 shares held by Mr. Pringle's spouse.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Distribution, there has not been any public market for
Agritope Common and there can be no assurance that a significant public market
for Agritope Common will be developed or be sustained after the Distribution.
Sales of substantial amounts of Agritope Common in the public market after the
Distribution, or the possibility of such sales occurring, could adversely affect
prevailing market prices for Agritope Common or the future ability of Agritope
to raise capital through an offering of equity securities.

After the Distribution, the Private Placement and the Preferred Stock
Sale, approximately 4.0 million shares of Agritope Common and 214,285 shares of
Series A Convertible Preferred will be outstanding. Pursuant to the Series A
Option, an additional 785,715 shares of Series A Convertible Preferred will be
subject to issuance and sale upon exercise. Shares distributed in the
Distribution will be freely tradeable in the public market without restriction
under the Securities Act, unless the shares are held by "affiliates" of the
Company, as that term is defined in Rule 144 under the Securities Act. See "The
Distribution--Trading of Agritope Common." The Agritope Common to be issued in
the Private Placement may not be sold in the U.S. without registration under the
Securities Act until 40 days following the closing of the Private Placement. The
Agritope Common issuable upon conversion of the Series A Convertible Preferred
may not be sold without registration under the Securities Act until 40 days
after issuance of the Series A Convertible Preferred Stock. See "Private
Placement" and "The Distribution--Trading of Agritope Common." Agritope has
granted purchasers in the Private Placement certain registration rights with
respect to their shares. Purchasers of the Series A Preferred will also be
granted certain registration rights effective upon conversion of their shares
into Agritope Common. Series A Convertible Preferred is initially convertible
into Agritope Common on a share-for-share basis.

As of the Record Date, options to purchase 1,253,394 shares of Agritope
Common were outstanding. As of the Record Date, 746,606 shares were available
for future grants of awards under Agritope's Award Plan, and 250,000 shares were
available for future issuance under Agritope's Purchase Plan.

Agritope intends to file after the Distribution Date Registration
Statements on Form S-8 to register an aggregate of 2,250,000 shares of Agritope
Common reserved for issuance under its Award Plan and Purchase Plan. The
Registration Statements will become effective automatically upon filing. Shares
issued under the foregoing plans, after the filing of the Registration
Statements on Form S-8, may be sold in the open market, subject, in the case of
certain holders, to the Rule 144 limitations applicable to affiliates and
vesting restrictions imposed by Agritope.

Epitope has retained Vector Securities International, Inc. ("Vector
Securities") as Epitope's exclusive financial advisor. In partial consideration
for services rendered in connection with the Distribution and the Epitope
Targeted Stock Proposal as well as strategic advice, Vector Securities will
receive warrants to purchase an aggregate of 83,333 shares of Agritope Common
and 416,667 shares of Epitope Stock, exercisable at a price equal to 110 percent
of the average closing price of the respective shares on the five consecutive
trading days beginning on the

- 60 -
<PAGE>

Distribution Date. Epitope and Agritope expect to grant Vector Securities
certain registration rights with respect to the warrants.

Agritope has engaged American Equities to serve as placement agent in
connection with the Private Placement and sale of Series A Convertible
Preferred. American Equities or its designees will receive warrants to purchase
an aggregate of 500,000 shares of Agritope Common at $7 per share in partial
consideration for its services. Such warrants may be exercised at any time
within the three years following the closing of the Private Placement. Agritope
has granted certain registration rights with respect to the warrants.

DESCRIPTION OF AGRITOPE CAPITAL STOCK

Agritope's Certificate of Incorporation authorizes the issuance of up
to 30 million shares of Agritope Common and 10 million shares of Agritope
Preferred issuable in series. The following description of Agritope's capital
stock is qualified in all respects by reference to the Certificate of
Incorporation.

AGRITOPE COMMON

The holders of Agritope Common are entitled to one vote per share on
all matters on which stockholders are entitled to vote. Holders of Agritope
Common are entitled to receive dividends when and as declared by the Agritope
Board out of any funds lawfully available therefor and, in the event of
liquidation or distribution of assets, are entitled to participate ratably in
the distribution of such assets remaining after payment of liabilities, in each
case subject to any preferential rights granted to any series of Agritope
Preferred that may then be outstanding. Holders of Agritope Common do not have
cumulative voting rights with respect to any matter.

AGRITOPE PREFERRED

Subject to limitations prescribed by Delaware law, the Certificate of
Incorporation authorizes the Agritope Board, without further stockholder
authorization, to issue Agritope Preferred in one or more series and to fix the
terms and provisions of each series, including dividend rights and preferences,
conversion rights, voting rights, redemption rights, and rights on liquidation,
including preferences over Agritope Common, all of which could adversely affect
the rights of holders of Agritope Common. The issuance of a series of Agritope
Preferred under certain circumstances could have the effect of delaying or
preventing a change of control of Agritope, could adversely affect the rights of
the holders of Agritope Common, may discourage offers for the Agritope Common at
a premium over market price and may adversely affect the market price of, and
the voting and other rights of the holders of, the Agritope Common.

The Agritope Board has designated 1 million shares of Agritope
Preferred as Series A Convertible Preferred. Vilmorin has agreed to purchase
214,285 shares of Series A Convertible Preferred immediately after the
Distribution Date, and also has acquired the Series A Option. For a description
of the terms of the Series A Convertible Preferred, see "--Agritope Series A
Convertible Preferred," below.

The Agritope Board has adopted a Stockholder Rights Plan, as described
below, which enables holders of Agritope Common, under certain circumstances, to
purchase fractional shares of a series of Agritope Preferred. See "--Stockholder
Rights Plan," below. No Agritope Preferred is currently outstanding, and
Agritope has no present plans to issue any shares of Agritope Preferred other
than Series A Convertible Preferred.

AGRITOPE SERIES A CONVERTIBLE PREFERRED

Agritope has designated 1 million shares of Agritope Preferred as
Series A Convertible Preferred, which are being offered for sale at a price of
$7 per share. See "Sale of Series A Convertible Preferred" and "Description of
Business--Agritope Biotechnology Program--Vegetable and Flower Crops." The
following description of the

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<PAGE>

Series A Convertible Preferred is qualified by reference to the Certificate of
Designation, Preferences and Rights of the Series A Convertible Preferred (the
"Certificate of Designation").

Each share of Series A Convertible Preferred is convertible at any time
initially into one share of Agritope Common at the election of the holder of the
Series A Convertible Preferred, with the kind and/or number of shares issuable
upon conversion subject to adjustment in the event of stock splits, stock
dividends, reclassifications and other corporate reorganizations.

The Certificate of Designation prohibits Agritope from declaring,
setting aside or paying dividends or other distributions on Agritope Common
unless Agritope declares, sets aside or pays a dividend or other distribution
with respect to each outstanding share of Series A Convertible Preferred at
least equal to the amount the holders would have received if their shares of
Series A Convertible Preferred had then been converted into Agritope Common.

In the event of a liquidation, dissolution or winding up of Agritope,
the holders of outstanding shares of Series A Convertible Preferred would be
entitled to be paid, out of Agritope's distributable assets, an amount
equivalent to the amount they would have received if their Series A Convertible
Preferred had then been converted into Agritope Common.

So long as not less than 214,285 shares of Series A Convertible
Preferred are outstanding, the holders of Series A Convertible Preferred are
entitled to elect one director to the Agritope Board annually. Pierre Lefebvre
has been elected as the initial director representing the holders of Series A
Convertible Preferred. In addition, the holders of Series A Convertible
Preferred have equal voting rights with the holders of Agritope Common, with the
Series A Convertible Preferred having the number of votes equal to the number of
shares of Agritope Common into which the Series A Convertible Preferred is then
convertible. The holders of Series A Convertible Preferred and Agritope Common
will vote together as one class, except as otherwise required by law.

Subject to certain exceptions, the holders of Series A Convertible
Preferred have preemptive rights to acquire their pro rata share of any equity
security proposed to be issued by Agritope, at the same price and on the same
terms as other parties. Exceptions to these preemptive rights include, but are
not limited to: securities issued in mergers and other acquisition transactions;
securities issued upon exercise of warrants currently authorized for issuance to
Vector Securities and to American Equities and its designees; securities issued
to Agritope employees, directors or consultants pursuant to plans approved by
Agritope stockholders; securities issued in connection with a registered public
offering; securities issued to underwriters, brokers and financial institutions
in connection with certain Agritope financings; and securities issued in
connection with the Stockholder Rights Plan.

AGRITOPE WARRANTS

Vector Securities has provided advisory services to Epitope with
respect to the Distribution as well as strategic and advisory services in
connection with Epitope's Targeted Stock Proposal. In partial consideration for
services rendered in connection with the Distribution and the Epitope Targeted
Stock Proposal, Vector Securities will receive warrants to purchase 83,333
shares of Agritope Common and 416,667 shares of Epitope Stock, exercisable at a
price equal to 110 percent of the average closing price of the respective shares
on the five trading days beginning on the Distribution Date.

Agritope has also issued to American Equities or its designees warrants
to purchase an aggregate of 500,000 shares of Agritope Common in partial
consideration for its services as placement agent in connection with the Private
Placement and the sale of Series A Convertible Preferred. Each warrant entitles
the holder to purchase one share of Agritope Common at $7 per share at any time
within three years of the closing of the Private Placement.

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<PAGE>

PREEMPTIVE RIGHTS

The Certificate of Incorporation provides that no holder of any of
Agritope's shares is entitled to any preferential or preemptive rights to
acquire any securities of Agritope, except as such rights may be provided for by
contract or pursuant to the terms of any series of Agritope Preferred. Holders
of Series A Convertible Preferred have certain preemptive rights. See
"--Agritope Series A Convertible Preferred," above.

STOCKHOLDER RIGHTS PLAN

In November 1997, Agritope adopted the Rights Agreement. Accordingly,
each share of Agritope Common distributed in the Distribution will be issued
with one preferred stock purchase right ("Right").

Each Right represents the right to purchase, if and when the Rights are
exercisable, 1/1,000 of a share of Series A Junior Participating Preferred Stock
at an exercise price of $25. The exercise price and the number of shares
issuable upon exercise of the Rights are subject to adjustment in certain cases
to prevent dilution. The Rights are evidenced by the Agritope Common
certificates and are not exercisable, or transferable apart from the Agritope
Common, until 10 business days after (i) a person acquires 15 percent or more of
the Agritope Common; (ii) a person commences a tender offer which would result
in the ownership of 15 percent or more of the Agritope Common; or (iii) the
Agritope Board declares a person beneficially owning at least 10 percent of the
Agritope Common to be an Adverse Person (the "Rights Distribution Date"). In the
event any person becomes the beneficial owner of 15 percent or more of the
Agritope Common or the Agritope Board determines that a person is an Adverse
Person, each of the Rights (other than Rights held by the party triggering the
Rights and certain of their transferees, all of which will be voided) becomes a
discount right entitling the holder to acquire Agritope Common having a value
equal to twice the Right's exercise price. Vilmorin has been exempted from
triggering the Stockholder Rights Plan under certain circumstances.

In the event Agritope is acquired in a merger or other business
combination transaction (including one in which Agritope is the surviving
corporation), each Right will entitle its holder to purchase, at the then
current exercise price of the Right, that number of shares of common stock of
the surviving company which at the time of such transaction would have a market
value of two times the exercise price of the Right. The Rights do not have any
voting rights and are redeemable, at the option of Agritope, at a price of $.01
per Right at any time until 10 business days after a person acquires beneficial
ownership of at least 15 percent of the Agritope Common.

The Rights expire on November 14, 2007. So long as the Rights are not
separately transferable, Agritope will issue one Right with each new share of
Agritope Common issued.

The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Agritope on
terms not approved by the Agritope Board. The Rights should not interfere with
any merger or other business combination approved by the Agritope Board because
the Rights may be redeemed by Agritope until the tenth business day following
the first public announcement that a person or group has become the beneficial
owner of 15 percent or more of the outstanding Agritope Common.

OTHER ANTI-TAKEOVER MEASURES

Agritope's Certificate of Incorporation and Bylaws contain certain
provisions that may have the effect of delaying, deferring or preventing a
change in control of Agritope. Such provisions include requirements for: (i) a
classified Board of Directors, with each class containing as nearly as possible
one-third of the total number of directors elected by the Agritope Common and
the members of each class serving for staggered three-year terms; (ii) removal
of directors only for cause; (iii) changing the size of the Agritope Board only
with supermajority approval of the directors then in office; (iv) notice not
less than 60 days prior to the anniversary date of the preceding annual meeting
of stockholders with respect to nominations of directors or other matters to be
voted on

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<PAGE>

by stockholders other than by or at the direction of the Agritope Board; and (v)
approval of the holders of at least two-thirds of the outstanding Agritope
Common to approve certain provisions of the Certificate of Incorporation.

Classified Board of Directors. The Certificate of Incorporation
provides that those members of the Agritope Board that are elected by the
Agritope Common will be divided into three classes (Class 1, Class 2 and Class
3) with each class containing as nearly as possible one-third of the total
number of directors and the members of each class serving for staggered
three-year terms. The initial designation of directors to each of the three
classes has been made. See "Management." At each annual meeting of Agritope
stockholders, the number of directors equal to the number of the class whose
term expires at the time of such meeting will be elected to hold office until
the third succeeding annual meeting of Agritope stockholders.

Removal of Directors. Directors of Agritope may be removed only for
cause.

Changes in the Number of Directors. The Certificate of Incorporation
specifies that the Agritope Board will consist of no less than six nor more than
thirteen members, with the exact number to be set from time to time by the
Board. The Agritope Board is authorized to increase or decrease the size of the
Board (within the specified range) by the affirmative vote of two-thirds of the
directors then in office. Without the consent of all the directors then in
office: (i) no more than two additional directors may be added to the Agritope
Board within any 12-month period; and (ii) no person who is affiliated as an
owner, director, officer or employee of a company or business deemed by the
Board of Directors to be competitive with that of Agritope is eligible to serve
on the Agritope Board.

Nominations of Directors and Other Matters Brought by Stockholders. The
Bylaws require that, generally, in addition to other applicable requirements, in
order for an Agritope stockholder to (i) nominate a person for election to the
Agritope Board at an annual meeting of stockholders or (ii) properly bring a
matter before an annual meeting of stockholders, such stockholder must notify
Agritope of his or her intentions not less than 60 days prior to the anniversary
date of the preceding annual meeting of stockholders (with respect to the 1998
meeting of shareholders, not later than December 15, 1997). Moreover, in order
to be valid, any such notice must be in proper written form as more specifically
described in the Bylaws.

Amendment of Certificate of Incorporation. The Certificate of
Incorporation requires the approval of the holders of at least two-thirds of the
outstanding Agritope Common to amend certain provisions of the Certificate of
Incorporation, including certain of the anti-takeover measures described above.

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<PAGE>

DELAWARE BUSINESS COMBINATIONS STATUTE

Agritope is subject to certain provisions of the Delaware General
Corporation Law that govern business combinations between corporations and
interested stockholders (the "Business Combinations Statute"). The Business
Combinations Statute generally provides that, if a person or entity acquires 15
percent or more of the outstanding voting stock of a Delaware corporation (an
"Interested Stockholder"), the corporation and the Interested Stockholder, or
any affiliated entity of the Interested Stockholder, may not engage in certain
business combination transactions for three years following the date the person
became an Interested Stockholder. Business combination transactions for this
purpose include: (a) certain mergers and consolidations; (b) certain
transactions involving the sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 10 percent or more of the assets of the corporation; (c)
certain transactions which result in the issuance or transfer of stock to the
Interested Stockholder; (d) certain transactions which result in an increase in
the proportionate share of stock of the corporation which is owned by the
Interested Stockholder; and (e) certain transactions which result in the receipt
by the Interested Stockholder of the benefit of any loans, advances, guarantees,
pledges or financial benefits provided by or through the corporation.

These restrictions do not apply if: (a) the board of directors approves
the business combination or share acquisition before the Interested Stockholder
acquires 15 percent or more of the corporation's outstanding voting stock (as
has been the case with Vilmorin); (b) the Interested Stockholder, as a result of
the transaction in which such person became an Interested Stockholder, owns at
least 85 percent of the outstanding voting stock of the corporation
(disregarding shares owned by directors who are also officers and shares owned
by certain employee stock plans); or (c) the board of directors and, at a
meeting of stockholders, the holders of at least two-thirds of the outstanding
voting stock of the corporation (disregarding shares owned by the Interested
Stockholder) approve the transaction at the time or after the Interested
Stockholder acquires 15 percent or more of the corporation's outstanding voting
stock.

INDEMNIFICATION OF DIRECTORS AND OFFICERS; LIMITATION OF LIABILITY; INSURANCE

As permitted by Delaware law, Agritope's Certificate of Incorporation
permits, and its Bylaws require, the indemnification of a director or officer
made or threatened to be made a party to a proceeding (other than a proceeding
by or in the right of Agritope to procure a judgment in its favor) because such
person is or was a director or officer of Agritope or one of its subsidiaries
against certain liabilities and expenses, if the director or officer acted in
good faith and in a manner he or she reasonably believed was in or not opposed
to the best interests of Agritope, and, with respect to any criminal action or
proceeding, the director or officer, in addition, had no reasonable cause to
believe his or her conduct was unlawful. In the case of any proceeding by or in
the right of Agritope, a director or officer is entitled to indemnification of
certain expenses if he or she acted in good faith and in a manner he or she
reasonably believed was in or not opposed to the best interests of Agritope.

However, pursuant to Delaware law, the Bylaws and indemnity agreements
Agritope has entered into with its directors and officers, Agritope generally
will not indemnify its directors and officers: (i) in connection with a
proceeding by or in the right of Agritope in which the director or officer is
adjudged liable to Agritope; (ii) in connection with any other proceeding
charging improper personal benefit to the director or officer in which the
director or officer is adjudged liable on the basis that personal benefit was
improperly received by him or her; (iii) in connection with any claim made
against any director or officer for which payment is required to be made to or
on behalf of the director or officer under any insurance policy; (iv) in
connection with any claim made against any director or officer if a court having
jurisdiction in the matter determines that indemnification is not lawful under
any applicable statute or public policy; (v) in connection with any proceeding
(or part of any proceeding) initiated by the director or officer or any
proceeding by the director or officer against Agritope or its directors,
officers, employees or other agents; and (vi) for an accounting of profits made
from the purchase and sale by the director or officer of securities of Agritope
within the meaning of Section 16(b) of the Exchange Act or similar provision of
any state statutory law or common law. Agritope may also provide indemnification
to persons other than its directors or officers under certain circumstances.

- 65 -
<PAGE>

As permitted by Delaware law, the Certificate of Incorporation also
provides that no director will be liable to Agritope or its stockholders for
monetary damages for breach of fiduciary duty as a director, except that
personal liability may exist for any: (i) breach of the director's duty of
loyalty to Agritope or its stockholders; (ii) act or omission not in good faith
or that involves intentional misconduct or a knowing violation of the law; (iii)
unlawful distribution to stockholders; (iv) transaction from which the director
derives an improper personal benefit; or (v) profits made from the purchase and
sale by the director of securities of Agritope within the meaning of Section
16(b) of the Exchange Act or similar provision of any state statutory law or
common law.

As stated above, Agritope has entered into agreements to indemnify its
directors and officers. The agreements are generally intended to provide the
maximum indemnification permitted by Delaware law. The agreements, among other
provisions, will indemnify each of Agritope's directors and officers in any
action or proceeding for certain expenses (including attorney fees) and (other
than in an action or proceeding by or in the right of Agritope) judgments, fines
and settlement amounts incurred on account of such person's services as a
director or officer of Agritope or, at Agritope's request, as a director,
officer, employee or agent of another enterprise. The agreements also limit the
liability of Agritope's directors and officers in respect of their conduct in
serving Agritope to the extent permitted by Delaware law, as described above.

Agritope understands that the current position of the Commission is
that any indemnification of liabilities arising under the Securities Act is
against public policy and is, therefore, unenforceable.

Agritope intends to obtain insurance insuring its directors and
officers against certain liabilities, including liabilities under federal and
state securities laws.

LEGAL MATTERS

The validity of the Agritope Common will be passed upon by Tonkon Torp
LLP, Portland, Oregon. Miller, Nash, Wiener, Hager & Carlsen LLP has provided
the tax opinion in connection with the Distribution.

EXPERTS

The financial statements as of September 30, 1997 and 1996 and for each
of the three years in the period ended September 30, 1997 included in this
Information Statement/Prospectus have been so included in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

- 66 -
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS PAGE

<S> <C>
Report of Independent Accountants...............................................................................F-1

Consolidated Balance Sheets
at September 30, 1997 and September 30, 1996............................................................F-2

Consolidated Statements of Operations
for the years ended September 30, 1997, 1996, and 1995 .................................................F-3

Consolidated Statements of Changes in Shareholder's Equity
for the years ended September 30, 1997, 1996, and 1995 .................................................F-4

Consolidated Statements of Cash Flows
for the years ended September 30, 1997, 1996, and 1995..................................................F-5

Notes to Consolidated Financial Statements......................................................................F-6
</TABLE>
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Epitope, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of changes in shareholder's equity and of
cash flows present fairly, in all material respects, the financial position of
Agritope, Inc. (as described in Note 1 to these financial statements) and its
subsidiaries at September 30, 1997 and 1996, and the results of their operations
and their cash flows for each of the three years in the period ended September
30, 1997, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

As described in Note 2, the basis of presentation of these financial statements
differs from previously issued Agritope Group financial statements in that
certain cash and cash equivalents and the related interest income that were
previously allocated to Agritope have not been allocated to Agritope in these
financial statements.

PRICE WATERHOUSE LLP

Portland, Oregon
October 31, 1997, except for Note 11, as to which the date is December 5, 1997

F-1
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
SEPTEMBER 30 1997 1996

ASSETS
Current assets
<S> <C> <C>
Cash and cash equivalents (Note 2)............................ $ 4,384 $ 476,512
Trade accounts receivable, net (Note 2)....................... 617,359 264,986
Other accounts receivable..................................... 5,554 32,337
Inventories (Note 2).......................................... 2,081,295 509,745
Prepaid expenses.............................................. 276,224 812
-------------- ---------------
Total current assets.......................................... 2,984,816 1,284,392

Property and equipment, net (Notes 2 and 4)................... 2,749,788 1,286,197
Patents and proprietary technology, net (Note 2).............. 1,276,692 510,244
Investment in affiliated companies (Note 3)................... 246,962 2,448,623
Other assets and deposits (Note 5)............................ 26,797 140,513
-------------- ---------------
$ 7,285,055 $ 5,669,969

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Accounts payable............................................... $ 100,945 $ 91,474
Current portion of installment notes payable................... 4,255 -
Convertible notes (Note 5)..................................... - 3,620,003
Current portion of lease liability (Note 9).................... 341,304 -
Salaries, benefits and other accrued liabilities............... 879,504 735,478
-------------- ---------------
Total current liabilities...................................... 1,326,008 4,446,955

Long-term portion of installment notes payable................. 14,569 -
Long-term portion of lease liability (Note 9).................. 450,805 -
Minority interest (Note 3)..................................... 730,947 215,407

Commitments and contingencies (Note 9)......................... - -

Shareholder's equity (Note 6)
Preferred stock, no par value
1,000,000 shares authorized;
no shares issued and outstanding............................. - -
Common stock, no par value
20,000,000 shares authorized;
2,000,000 shares issued and outstanding...................... 45,930,932 33,485,214
Accumulated deficit............................................ (41,168,206) (32,477,607)
-------------- ---------------
4,762,726 1,007,607

$ 7,285,055 $ 5,669,969
</TABLE>

The accompanying notes are an integral part of these statements.

F-2
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
FOR THE YEAR ENDED SEPTEMBER 30 1997 1996 1995

Revenues
<S> <C> <C> <C>
Product sales.............................................. $ 1,436,498 $ - $ 2,015,318
Grants and contracts (Note 8).............................. 114,692 585,485 94,370
---------- ---------- ---------
1,551,190 585,485 2,109,688

Costs and expenses
Product costs.............................................. 1,326,163 - 3,235,675
Research and development costs (Note 8).................... 1,681,646 1,338,703 2,204,993
Selling, general and administrative expenses
(Note 2)................................................. 3,081,074 1,482,694 4,479,498
--------- --------- ---------
6,088,883 2,821,397 9,920,166

Loss from operations.................................. (4,537,693) (2,235,912) (7,810,478)
---------- ---------- ----------

Other income (expense), net
Interest income....................................... - - 7,535
Interest expense...................................... (25,307) (265,356) (241,775)
Valuation loss........................................ (2,258,080) - -
Debt conversion ...................................... (1,216,654) - -
Other, net (Note 9)................................... (927,234) - (500)
---------- ---------- ----------
(4,427,275) (265,356) (234,740)

Minority interest in subsidiary net loss.............. 274,369 - -
---------- ---------- ----------

Net loss.............................................. $ (8,690,599) $ (2,501,268) $ (8,045,218)

Net loss per share.................................... $ (4.35) $ (1.25) $ (4.02)

Weighted average number
of shares outstanding .............................. 2,000,000 2,000,000 2,000,000
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

<TABLE>
COMMON ACCUMULATED
STOCK DEFICIT TOTAL

<S> <C> <C> <C>
Balances at September 30, 1994 ............................... $ 21,449,141 $ (21,931,121) $ (481,980)
Compensation expense for stock awards (Note 6)................ 69,998 - 69,998
Compensation expense for stock option grants
(Note 6).................................................... 318,375 - 318,375
Capital contributed by Epitope, Inc., upon exchange of
convertible notes (Note 5) ................................. 449,991 - 449,991
Equity issuance costs (Note 5) ............................... (22,487) - (22,487)
Cash from Epitope, Inc. ...................................... 7,786,338 - 7,786,338
Net loss for the year ........................................ - (8,045,218) (8,045,218)
------------ ----------- ----------
Balances at September 30, 1995 ............................... 30,051,356 (29,976,339) 75,017

Compensation expense for stock awards (Note 6)................ 14,500 - 14,500
Compensation expense for stock option grants (Note 6) ........ 229,164 - 229,164
Cash from Epitope, Inc. ...................................... 3,190,194 - 3,190,194
Net loss for the year ........................................ - (2,501,268) (2,501,268)
------------ ----------- -----------
Balances at September 30, 1996 ............................... 33,485,214 (32,477,607) 1,007,607

Compensation expense for stock awards (Note 6)................ 33,063 - 33,063
Compensation expense for stock option grants (Note 6)......... 20,832 - 20,832
Capital contributed by Epitope, Inc., upon exchange of
convertible notes (Note 5) ................................. 4,529,009 - 4,529,009
Equity issuance costs (Note 5)................................ (86,134) - (86,134)
Minority interest investment in subsidiary (Note 6)........... 742,752 - 742,752
Cash from Epitope, Inc. ...................................... 7,206,196 - 7,206,196
Net loss for the year ........................................ - (8,690,599) (8,690,599)
------------ ----------- -----------
Balances at September 30, 1997 ............................... $ 45,930,932 $ (41,168,206) $ 4,762,726

Note: There were 2,000,000 shares of common stock outstanding during all periods presented.
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
FOR THE YEAR ENDED SEPTEMBER 30 1997 1996 1995

CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss......................................................$ (8,690,599) $ (2,501,268) $ (8,045,218)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization................................. 566,813 294,045 663,379
Compensation expense for stock awards......................... 33,063 14,500 69,998
Compensation expense for stock option grants ................. 20,832 229,164 318,375
Minority interest in subsidiary operating results............. (274,369) - -
Valuation loss................................................ 2,258,080 - -
Non-cash portion of cost of debt conversion................... 1,149,054 - -
Decrease (increase) in receivables............................ (325,590) 832,333 (945,501)
Decrease (increase) in inventories............................ (1,571,550) (509,745) 88,737
Decrease (increase) in prepaid expenses....................... (275,412) 55,252 (55,639)
Decrease (increase) in other assets and deposits.............. 21,462 (36,219) 9,137
Increase (decrease) in accounts payable and
accrued liabilities......................................... 945,606 494,633 (104,680)
Other......................................................... - - 500
--------- --------- ----------
Net cash used in operating activities (6,142,610) (1,127,305) (8,000,912)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment........................... (1,927,209) (886,646) (238,558)
Proceeds from sale of property................................ - - 13,258
Expenditures for patents and proprietary
technology.................................................. (870,910) (411,943) (178,208)
Investment in affiliated companies............................ (56,419) (473,790) 610,146
---------- ---------- ----------
Net cash (used in) provided by investing activities (2,854,538) (1,772,379) 206,638

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt.................................... 20,887 - -
Principal payments on long-term debt ......................... (242,063) (39,508) (16,137)
Minority interest investment in subsidiary (Note 6)........... 1,540,000 215,407 -
Cash from Epitope, Inc........................................ 7,206,196 3,190,194 7,786,338
--------- --------- ---------
Net cash provided by financing activities 8,525,020 3,366,093 7,770,201

Net increase (decrease) in cash and cash equivalents.......... (472,128) 466,409 (24,073)
Cash and cash equivalents at beginning of year................ 476,512 10,103 34,176
---------- --------- -----------
Cash and cash equivalents at end of year $ 4,384 $ 476,512 $ 10,103
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 THE COMPANY

Agritope, Inc. (the "Company" or "Agritope") is an Oregon corporation utilizing
biotechnology to develop and market superior new plants and related products.
Through its 61 percent owned subsidiary, Vinifera, Inc. ("Vinifera"), Agritope
is also engaged in the business of propagation, growing, and distribution of
grapevine plants. Agrimax Floral Products, Inc. ("Agrimax") is an inactive
subsidiary that holds minority interests in two flower distribution businesses.
See Note 3, Investment in Affiliated Companies. Agritope is a wholly owned
subsidiary of Epitope, Inc. ("Epitope"), an Oregon corporation engaged in the
development and marketing of medical diagnostic products.

Agritope Spin-off. In July 1997, Epitope's board of directors approved a
management proposal to spin off Agritope, subject to obtaining financing for
Agritope and the satisfaction of certain other conditions. Agritope has agreed
to sell 1,343,704 shares of Agritope common stock in a private placement to
certain investors for an aggregate price of $9,406,000, immediately after the
spin-off. The spin-off will be accomplished by a distribution of Agritope common
stock to Epitope's shareholders. Epitope will not own or control any shares of
Agritope stock following the spin-off, which is expected to occur in December
1997.

Agritope and Epitope will enter into certain agreements governing the ongoing
relationship between the companies after the spin-off, including a Separation
Agreement, a Tax Allocation Agreement, a Transition Services and Facilities
Agreement and an Employee Benefits Agreement. Pursuant to the Employee Benefits
Agreement, Agritope has agreed to establish replacement plans that effectively
continue to provide benefits available under current Epitope benefit plans.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation. The accompanying consolidated financial statements
include the assets, liabilities, revenues and expenses of Agritope and its
majority owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. Minority-owned investments and
joint ventures are accounted for using the equity method. Investments of less
than 20 percent are carried at cost or estimated net realizable value, whichever
is lower. Intercompany balances with Epitope have been reflected as capital
contributions (common stock) in the accompanying consolidated financial
statements because they will be converted into a permanent capital contribution
in conjunction with the spin-off.

The basis of presentation of these financial statements differs from the
previously issued Agritope Group financial statements contained in Epitope's
most recent Form 10-K and 10-Q filings. In the previously issued financial
statements, cash and cash equivalents and the related interest income were
allocated to Agritope in connection with a contemplated targeted stock
transaction. The targeted stock proposal was subsequently withdrawn by the
Epitope board of directors. With respect to the spin-off, these items will not
be transferred to Agritope and therefore have not been allocated to Agritope in
these financial statements.

Certain corporate overhead services such as accounting, annual meeting costs,
annual report preparation, audit, executive management, facilities, finance,
general management, human resources, information systems, investor relations,
legal services, payroll and SEC filings are provided by Epitope on a centralized
basis for the benefit of Agritope ("Shared Services"). Such expenses have been
allocated to Agritope in the accompanying financial

F-6
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

statements using activity indicators which, in the opinion of management,
represent a reasonable measure of Agritope's utilization of such Shared
Services. These activity indicators, which are reviewed periodically and
adjusted to reflect changes in utilization, include number of employees, number
of computers, and level of expenditures. Management believes that the amount
allocated for these Shared Services is not materially different from the amount
which would be incurred by Agritope for such services provided on a stand-alone
basis. Allocated Shared Services of $1,402,895, $1,069,249 and $1,892,370,
respectively, for 1997, 1996 and 1995 are included under the caption "Selling,
general and administrative expenses."

Cash and Cash Equivalents. For purposes of the consolidated balance sheets and
statements of cash flows, all highly liquid investments with maturities at time
of purchase of three months or less are considered to be cash equivalents.

Inventories. Inventories, consisting principally of growing grapevine plants at
Vinifera, are recorded at the lower of average cost or market. Average cost
includes all direct and indirect costs attributable to the growing grapevine
plants. Inventory is summarized as follows:

<TABLE>
SEPTEMBER 30 1997 1996
<S> <C> <C>
Work-in-process ................................................................ $ 1,387,706 $ 471,208
Finished goods ................................................................. 693,589 38,537
----------- ---------
$ 2,081,295 $ 509,745
</TABLE>

Depreciation and Capitalization Policies. Property and equipment are stated at
cost less accumulated depreciation. Expenditures for repairs and maintenance are
charged to operating expense as incurred. Expenditures for renewals and
betterments are capitalized. Depreciation and amortization of property and
equipment are calculated primarily under the straight-line method over the
estimated useful lives of the related assets (three to seven years). Leasehold
improvements are amortized over the shorter of estimated useful lives or the
terms of the related leases. When assets are sold or otherwise disposed of, cost
and related accumulated depreciation or amortization are removed from the
accounts and any resulting gain or loss is included in operations.

Accounting for Long-Lived Assets. The Company reviews its long-lived assets for
impairment periodically or as events or circumstances indicate that the carrying
amount of long-lived assets may not be recoverable. If the estimated net cash
flows are less than the carrying amount of the long-lived assets, the Company
recognizes an impairment loss in an amount necessary to write down long-lived
assets to fair value as determined from expected discounted future cash flows.
This accounting policy is consistent with Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." See Note 3, Investment in Affiliated
Companies.

Patents and Proprietary Technology. Direct costs associated with patent
submissions and acquired technology are capitalized and amortized over their
minimum estimated economic useful lives, generally five years.

In August 1996, the Company amended the 1987 agreement pursuant to which it
acquired its patented ethylene control technology. A co-inventor of the
technology relinquished all rights to future compensation under the agreement in
exchange for a one-time cash payment of $365,000, a research grant and a limited
non-exclusive license to use the technology for one crop. The amount is included
under the caption "Patents and proprietary technology" and is being amortized
over 15 years, the remaining life of the related patent.

On November 11, 1996, the Company further amended the ethylene control
technology agreement. A co-inventor

F-7
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of the technology who is an officer of the Company relinquished all rights to
future payments under the agreement in exchange for a one-time cash payment of
$590,000. The amount is included under the caption "Patents and proprietary
technology" and is being amortized over 15 years, the remaining life of the
related patent.

Amortization and accumulated amortization are summarized as follows:

<TABLE>
1997 1996 1995
<S> <C> <C> <C>
Amortization for the year ended September 30,............. $ 63,489 $ 42,456 $ 23,964
Accumulated amortization ................................. 143,396 79,907 37,451
</TABLE>

Fair Value of Financial Instruments. The carrying amounts for cash equivalents,
accounts receivable, and accounts payable approximate fair value because of the
immediate or short-term maturity of these financial instruments. The carrying
amount for installment notes payable and convertible notes approximates fair
value because the related interest rates are comparable to rates currently
available to the Company for debt with similar terms and maturities.

Revenue Recognition. Product sales are recognized when the related products are
shipped. Grant and contract revenues include funds received under research and
development agreements with various entities. These grants and contracts
generally provide for progress payments as expenses are incurred and certain
research milestones are achieved. Revenue related to such grants and contracts
is recognized as research milestones are achieved. Accounts receivable are
stated net of an allowance for doubtful accounts of $57 as of September 30, 1997
and $19,571 as of September 30, 1996.

Research and Development. Research and development expenditures are comprised of
those costs associated with Agritope's ongoing research and development
activities to develop superior new plants. Expenditures for research and
development also include costs incurred under contracts to develop certain
products, including those contracts resulting in grant and contract revenues.
All research and development costs are expensed as incurred.

Income taxes. The Company accounts for certain revenue and expense items
differently for income tax purposes than for financial reporting purposes. These
differences arise principally from methods used in accounting for stock options
and depreciation rates. Deferred tax assets and liabilities are recognized based
on temporary differences between the financial statement and the tax bases of
assets and liabilities using enacted tax rates in effect for the year in which
the temporary differences are expected to reverse.

Stock-based Compensation. In October 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). SFAS 123 allows companies which have
stock-based compensation arrangements with employees to adopt a fair-value basis
of accounting for stock options and other equity instruments or to continue to
apply the existing accounting rules under Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees ("APB 25"), but with additional
financial statement disclosure. In November 1997, the Company adopted two
stock-based compensation plans for employees. When options or other securities
are issued under these plans, the Company expects to continue to apply the
existing accounting rules under APB 25.

Net Loss Per Share. In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128, Earnings Per Share
("SFAS 128"). This new standard is effective for interim and annual periods
ending after December 15, 1997. SFAS 128 will require the reporting of "basic"
and "diluted" earnings per share ("EPS") instead of "primary" and "fully
diluted" EPS as required under current accounting principles. Basic EPS
eliminates the common stock equivalents considered in calculating primary EPS.
Diluted

F-8
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EPS is similar to fully diluted EPS. Since Agritope had no common stock
equivalents during the periods presented, basic EPS would have been the same as
primary EPS and there would be no diluted EPS calculation.

Supplemental Cash Flow Information. Non-cash financing and investing activities
not included in the consolidated statements of cash flows are summarized as
follows:

<TABLE>
YEAR ENDED SEPTEMBER 30 1997 1996 1995

<S> <C> <C> <C>
Conversion of notes to equity (Note 5)............... $ 3,380,000 $ - $ 472,478
Minority interest contribution of capital (Note 6)... 742,752 - -
Investment in affiliated companies (Note 3) ......... - - 2,584,979
</TABLE>

Management Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
relating to assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could vary from these
estimates.

Reclassifications. Certain reclassifications have been made to prior years' data
to conform with the current year's presentation. These reclassifications had no
impact on previously reported results of operations or shareholders' equity.

NOTE 3 INVESTMENT IN AFFILIATED COMPANIES

Agrimax. Agritope's investment in affiliated companies includes two investments
owned by Agrimax; a 9 percent interest in UAF, Limited Partnership ("UAF"), a
fresh flower distribution operation in Charlotte, North Carolina, and a 19.5
percent interest in Petals USA, Inc. ("Petals"), an affiliate of a Canadian
fresh flower wholesaler.

In May 1995, Agritope's wholly owned subsidiary, Agrimax, ceased operations as
an independent entity. Agrimax had been engaged in the fresh flower packaging
and distribution business. Also in May 1995, the Company surrendered control of
its Charlotte facility and contributed inventory and operating supplies to a
limited liability company ("LLC") 60 percent owned by Universal American
Flowers, Inc. and 40 percent owned by the Company pursuant to an Operating and
Transition Agreement (the "Agreement"). Pursuant to the Agreement, on October
27, 1995, the assets and liabilities of LLC and of Universal American Flowers,
Inc., together with the Company's equipment and leasehold improvements located
at the Charlotte facility, were transferred to a newly formed entity, UAF. UAF
also assumed the liability for the lease of the Charlotte facility. In fiscal
1995, the Company removed the assets transferred to LLC from its books and
recorded the cost of such assets as "Investment in affiliated companies," less a
charge of $500,000, representing the Company's share in the losses of LLC during
the intervening period in which a 40 percent interest was held, and estimated
costs to discontinue the Agrimax business. Until May 1995, the Agrimax business
was included in the Company's financial statements. From May 1995 through
October 27, 1995, the Company followed the equity method of accounting for its
investment in UAF in accordance with Accounting Principles Board Opinion No. 18
("APB 18"). Since October 27, 1995, the investment in UAF has been accounted for
under the cost method in accordance with APB 18. In 1996, the equity interest of
Agrimax in UAF was reduced to 9 percent as the result of a recapitalization of
UAF.

In 1996, Agrimax contributed the operating assets of its discontinued St. Paul,
Minnesota operations to Petals, an

F-9
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

unrelated company, in exchange for a 19.5 percent equity interest in Petals. No
gain or loss was recognized on the transaction with Petals and the investment in
Petals was recorded at the net book value of the contributed assets.

Based on information that became available on December 26, 1996, including
information related to continued operating losses at UAF in the four months
ended October 31, 1996, coupled with a shortfall in sales and larger operating
loss than expected at Petals in the fourth quarter of calendar 1996, the Company
recorded a non-cash charge to results of operations of $1,900,000 during the
first quarter of fiscal 1997, reflecting the permanent impairment in the value
of its investment in affiliated companies, and reducing the carrying value of
the assets to management's estimate of the net realizable value.

In October 1997, the majority owner of Petals informed the Company that it had
entered into negotiations to sell Petals to an unrelated third party. Under the
proposed terms of sale, the Company's interest in Petals would be reduced to
less than 10 percent. The Company was further informed that the majority owner
did not intend to advance additional funds to Petals and that if a sale could
not be consummated, intended that Petals would cease operations and liquidate
its assets. Based on this information, the Company believes that its investment
in Petals has more than temporarily declined and, accordingly, recorded an
additional charge to operations of $358,080 in the fourth quarter of 1997.

The Company's investment in affiliated companies is summarized as follows:

<TABLE>
SEPTEMBER 30 1997 1996

<S> <C> <C>
Investment in UAF...................................................... $ - $ 1,847,148
Investment in Petals................................................... - 410,932
Vinifera Sud Americana................................................. 200,000 -
Other investments...................................................... 46,962 190,543
--------- -----------
Investment in affiliated companies..................................... $ 246,962 $ 2,448,623
</TABLE>

For the year ended September 30, 1995, the accompanying financial statements
include revenue of $1,914,000 and an operating losses of $3,299,000 attributable
to Agrimax. The accompanying statement of operations for the year ended
September 30, 1995 includes the results of operations of Agrimax through May
1995 and also includes a charge of $500,000 to selling, general and
administrative expenses attributable to the disposition of Agrimax's business.

Vinifera. In June 1995, Agritope agreed to sell its wholly owned grapevine plant
propagation subsidiary, Vinifera, to VF Holdings, Inc. ("VF"), an affiliate of a
Swiss investment group, pursuant to a stock purchase agreement. VF subsequently
failed to make the payments required under the VF Agreement. As part of a
settlement of claims based on VF's default, VF retained a 4 percent minority
interest in Vinifera and relinquished the remaining interest to Agritope in
August 1996. Additional minority investors in Vinifera reduced Agritope's
ownership to 76 percent as of September 30, 1996, and to 61 percent as of
September 30, 1997.

The reacquisition of Vinifera in August 1996 has been accounted for under the
purchase method. The net purchase price of $916,000 has been allocated to
tangible net assets. Vinifera's results of operations are included in the
consolidated statements of operations from October of 1994 through May of 1995,
for the month of September 1996 and for all of 1997. The following summarized,
unaudited pro forma results of operations are presented as if the reacquisition
had occurred on the first day of each period shown.

F-10
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
YEAR ENDED SEPTEMBER 30
1996 1995
Pro forma Pro forma
Historical adjustments Pro forma Historical adjustments Pro forma

<S> <C> <C> <C> <C> <C> <C>
Revenues...................$ 585,485 $ 833,949 $1,419,434 $2,109,688 $276,588 $2,386,276
Net loss...................(2,501,268) (1,464,002) (3,965,270) (8,045,218) (460,296) (8,505,514)
Net loss per share (1.25) (.73) (1.98) (4.02) (.23) (4.25)
</TABLE>

In 1997, Vinifera made a $200,000 investment in Vinifera Sudamericana, S.A.
("VSA"), an Argentina joint venture established to propagate and market
grapevine plants to the growing South American wine industry. Vinifera owns a 20
percent interest in VSA and accounts for this investment under the cost method.

NOTE 4 PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

<TABLE>
SEPTEMBER 30 1997 1996

<S> <C> <C>
Land .................................................................. $ 30,020 $ 30,020
Grapevine propagation blocks .......................................... 1,160,430 384,063
Production equipment................................................... 79,289 38,075
Buildings and improvements ............................................ 2,127,237 717,508
Research and development laboratory equipment ......................... 353,380 220,919
Office furniture and equipment ........................................ 191,290 140,452
Leasehold improvements................................................. 23,962 23,962
Construction in progress .............................................. 10,000 499,981
------------- ------------
3,975,608 2,054,980
Less accumulated depreciation and amortization ........................ (1,225,820) (768,783)
------------- ------------
$ 2,749,788 $ 1,286,197
</TABLE>

NOTE 5 LONG-TERM DEBT

On June 30, 1992, Agritope completed a private placement with several European
institutional investors pursuant to which $5,495,000 of convertible notes were
issued. The notes were unsecured, matured on June 30, 1997 and bore interest at
the rate of 4 percent per annum which was payable on each June 30 and December
31. The notes were convertible into common stock of Epitope at a conversion
price of $19.53 per share.

During the year ended September 30, 1995, investors exchanged $449,991 principal
amount of convertible notes for Epitope common stock at a price of $19.53 per
share. Following these conversions, Epitope made a capital contribution to
Agritope equal to the amount of Epitope stock issued. In conjunction with the
exchange, unamortized debt issuance costs of $22,487 related to such notes were
recognized as equity issuance costs during 1995.

F-11
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 1996, Epitope exchanged $3,380,000 principal amount of Agritope
convertible notes for 250,367 shares of common stock of Epitope at a reduced
exchange price of $13.50 per share. The exchange price had previously been fixed
at $19.53 per share. Accordingly, Agritope recognized a charge to results of
operations of $1,216,654 in the first quarter of fiscal 1997 representing the
conversion expense. In conjunction with the exchange, unamortized debt issuance
costs of $86,134 related to such notes were recognized as equity issuance costs
during 1997. Concurrent with the note conversion, Epitope made a $4,529,009
capital contribution to Agritope. On June 30, 1997, Agritope paid in full the
remaining $240,000 principal amount outstanding.

Debt issuance costs were included in other assets and were being amortized over
the five-year life of the notes. Amortization expense of debt issuance costs for
the years ended September 30, 1997, 1996 and 1995, respectively, totaled $2,687,
$108,257 and $96,136.

NOTE 6 SHAREHOLDER'S EQUITY

Authorized Capital Stock. At September 30, 1997, Agritope's amended articles of
incorporation authorized 1,000,000 shares of preferred stock and 20,000,000
shares of common stock. The Company's board of directors has authority to
determine preferences, limitations and relative rights of the preferred stock.

Common Stock. Cash and cash equivalents provided to Agritope by Epitope have
been reflected in common stock. Also reflected in common stock are certain
transactions in Epitope common stock. The exchange of shares of Epitope common
stock for Agritope convertible debt and the related write-off of debt issuance
costs have been reflected as Agritope common stock.

As employees of a wholly owned subsidiary of Epitope, the employees of Agritope
and its subsidiaries have participated in stock award, employee stock purchase
and other benefit plans of Epitope. Compensation expense recognized for Epitope
stock grants and awards to Agritope employees totaling $53,895 in 1997, $243,664
in 1996 and $388,373 in 1995, has been recognized as operating expenses and
common stock of Agritope.

In the first quarter of fiscal 1997, a minority shareholder in Vinifera
contributed $100,000 to Vinifera in satisfaction of a stock subscription
agreement. In the third quarter of fiscal 1997, Agritope sold 770,000 shares of
common stock of Vinifera to outside parties for $1,540,000 in cash. In
accordance with the terms of the related stock purchase agreements, Agritope
contributed the proceeds of these stock sales to Vinifera's capital. These sales
of previously issued shares of Vinifera common stock reduced percentage
ownership of Vinifera voting stock from 76 percent to 61 percent.

F-12
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 INCOME TAXES

As of September 30, 1997, Agritope had net operating loss carryforwards of
approximately $34.1 million and $21.2 million, respectively, to offset federal
and Oregon state taxable income. These net operating loss carryforwards will
expire if not used by Agritope, as follows:

<TABLE>
YEAR OF EXPIRATION FEDERAL OREGON

<S> <C> <C>
2004................................................................... $ 111,000 $ 111,000
2005................................................................... 317,000 317,000
2006................................................................... 941,000 941,000
2007................................................................... 2,620,000 2,620,000
2008................................................................... 6,733,000 4,847,000
2009................................................................... 8,327,000 2,179,000
2010................................................................... 8,477,000 3,765,000
2011................................................................... 2,249,000 2,168,000
2012................................................................... 4,279,000 4,279,000
------------- --------------
$ 34,054,000 $ 21,227,000

Significant components of Agritope's deferred tax asset were as follows:

SEPTEMBER 30 1997 1996

Net operating loss carryforwards....................................... $ 12,215,000 $ 10,862,000
Deferred compensation.................................................. 513,000 493,000
Research and experimentation credit carryforwards...................... 418,000 339,000
Accrued expenses....................................................... 805,000 15,000
Other.................................................................. 622,000 59,000
------------- --------------
Gross deferred tax assets.............................................. 14,573,000 11,768,000
Valuation allowance.................................................... (14,573,000) (11,768,000)
------------- -------------
Net deferred tax asset................................................. $ - $ -
</TABLE>

No benefit for Agritope's deferred tax assets has been recognized in the
accompanying financial statements as they do not satisfy the recognition
criteria set forth in SFAS 109. The valuation allowance increased by $2.8
million in 1997. The research and experimentation tax credit carryforwards will
generally expire from 2004 through 2011 if not used by Agritope. Net operating
loss and tax credit carryforwards incurred by Agritope through the date of the
spin-off (see Note 1, The Company--Agritope Spin-off) will continue as
carryforwards of Agritope after the date of distribution. The issuance of voting
stock in future years may result in a change of ownership under federal tax
rules and regulations. Upon occurrence of such a change in ownership,
utilization of existing tax loss and tax credit carryforwards would be subject
to cumulative annual limitations.

The expected federal statutory tax benefit of $3.0 million for the year ended
September 30, 1997 is increased by approximately $323,000 for the effect of
state and local taxes (net of federal impact), and decreased by approximately
$2.8 million for the effect of the increase in valuation allowance, and by
$433,000 for permanent differences consisting primarily of debt to equity
conversion costs.

The 1997 consolidated financial statements include the financial results of
Vinifera, a 61 percent owned subsidiary

F-13
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(see Note 3). However, the tax disclosures above do not include the deferred tax
assets and related valuation allowance for Vinifera's carryforwards since
Vinifera is not included in the consolidated group for tax purposes. Vinifera
files its tax return separately on a stand-alone basis.

NOTE 8 RESEARCH AND DEVELOPMENT ARRANGEMENTS

Agritope performed research work in 1997, 1996 and 1995 with respect to
grapevine disease diagnostics funded by a grant from the U.S. Department of
Agriculture under the Small Business Innovation Research Program and in 1996 and
1995 with respect to raspberries which was partially funded by Sweetbriar
Development, Inc. under a License Agreement dated October 18, 1994. Agritope has
also received grant support from the U.S. Department of Agriculture, Oregon
Strawberry Commission, and Oregon Raspberry & Blackberry Commission for
antifungal biocontrol research and from several strategic partners.

Revenues from research and development arrangements are included in the
accompanying consolidated statements of operations under the caption "Grants and
contracts." Expenses related to such arrangements are included under the caption
"Research and development costs." The activity related to these arrangements is
summarized as follows:

<TABLE>
YEAR ENDED SEPTEMBER 30 1997 1996 1995

<S> <C> <C> <C>
Government research grants................................ $ 30,228 $ 144,987 $ 16,358
Research projects with strategic partners................. 52,770 326,462 40,000
Other..................................................... 31,694 114,036 38,012
----------- ----------- -----------
$ 114,692 $ 585,485 $ 94,370

Project related expenses.................................. $ 272,309 $ 461,460 $ 318,401
</TABLE>

In October 1997, Agritope was awarded a U.S. Department of Commerce grant
totaling $990,000 and covering a three-year period. Agritope was awarded the
grant for use in the application of its proprietary ripening control technology
to certain tree fruits and bananas.

NOTE 9 COMMITMENTS AND CONTINGENCIES

Vinifera leases office and greenhouse facilities under operating lease
agreements which require minimum annual payments as follows:

YEAR ENDING SEPTEMBER 30

F-14
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Agritope also occupies office, greenhouse and laboratory facilities which are
leased by Epitope. The occupancy costs associated with these facilities are
allocated to Agritope on the basis of square footage utilized. Rent expense
incurred by Agritope, including amounts allocated by Epitope, aggregated
$326,388, $218,100 and $353,816 for the years ended September 30, 1997, 1996 and
1995, respectively.

Agritope is also contingently liable for a lease which has been assigned to UAF
and the lease of property which has been subleased to Petals in the following
amounts:

YEAR ENDING SEPTEMBER 30

During 1997, the Company accrued its contingent obligation under these leases as
both UAF and Petals have defaulted on the related subleases. A charge of
$744,109 is reflected in other expense in 1997.

NOTE 10 PROFIT SHARING AND SAVINGS PLAN

Epitope established a profit sharing and deferred salary savings plan in 1986
and restated the plan in 1991. All Agritope employees are eligible to
participate in the plan. In addition, the plan permits certain voluntary
employee contributions to be excluded from the employees' current taxable income
under the provisions of Internal Revenue Code Section 401(k) and the regulations
thereunder. Effective October 1, 1991, Epitope replaced a discretionary profit
sharing provision with a matching contribution (either in cash, shares of
Epitope common stock, or partly in both forms) equal to 50 percent of an
employee's basic contribution, not to exceed 2.5 percent of an employee's
compensation. The board of directors of Epitope has the authority to increase or
decrease the 50 percent match at any time. During 1997, 1996 and 1995,
respectively, Agritope was charged $33,063, $14,500 and $29,877 by Epitope for
its share of the matching contribution under the plan.

NOTE 11 SUBSEQUENT EVENTS

Delaware Reincorporation; Recapitalization. In November 1997, in connection with
the spin-off of Agritope by Epitope, Agritope agreed to merge with Agritope,
Inc., a newly formed Delaware corporation. The purpose of the merger is to
change the Company's domicile from Oregon to Delaware and increase the Company's
authorized capital stock to 30 million shares of common stock, par value $.01
per share, and 10 million shares of preferred stock, par value $.01 per share.

On November 25, 1997, the Agritope board of directors declared a stock dividend
of approximately 690,866 shares of Agritope common stock to the sole Agritope
stockholder, with the exact number of shares to be issued as a dividend to be
the number needed to effect the spin-off based on a distribution ratio of one
share of Agritope common stock for each five shares of Epitope common stock
outstanding on the record date for the spin-off. Thus, approximately 2,690,866
shares of Agritope common stock will be distributed to the shareholders of
Epitope in the spin-off.

F-15
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Award Plan. In November 1997, the Agritope, Inc. 1997 Stock Award Plan
(the "Award Plan") was adopted by Agritope's board of directors and approved by
Epitope as Agritope's sole stockholder. The Award Plan provides for stock-based
awards to employees, outside directors, members of scientific advisory
committees and other consultants. Awards which may be granted under the Award
Plan include incentive stock options, nonqualified stock options, stock
appreciation rights, restricted awards, performance awards and other stock-based
awards.

The Award Plan provides for the issuance of a total of up to 2,000,000 shares of
Agritope common stock, subject to adjustment for changes in capitalization.
Options to purchase a total of 1,253,394 shares, having exercise prices of $5.25
to $7.00 per share, have been granted to officers, employees and nonemployee
directors of Agritope under the Award Plan. In connection with the grants,
Agritope will incur compensation expense of $1,995,440, which will be amortized
over the four-year vesting period of the options.

Employee Stock Purchase Plan. Also in November 1997, Agritope's board of
directors and Epitope, as Agritope's sole stockholder, approved the Agritope,
Inc. 1997 Employee Stock Purchase Plan (the "Purchase Plan"), covering up to
250,000 shares of Agritope common stock which Agritope employees may subscribe
to purchase during offering periods to be established from time to time. The
Compensation Committee of Agritope's board of directors was granted authority to
determine the number of offering periods, the number of shares offered, and the
length of each period. No more than three offering periods (other than Special
Offering Subscriptions as defined in the Purchase Plan) may be set during each
fiscal year. The purchase price for stock purchased under the Purchase Plan is
the lesser of 85 percent of the fair market value of a share on the last trading
day before the offering date established for the offering period and 85 percent
of the fair market value of a share on the date the purchase period ends (or any
earlier purchase date provided for in the Purchase Plan).

Employee Stock Ownership Plan. Agritope's board of directors adopted the
Agritope, Inc. Employee Stock Ownership Plan ("ESOP") in November 1997. After
the spin-off, all employees, except excluded classes, of Agritope and those of
its affiliates which elect to participate will be eligible to participate in the
ESOP. The employers' contribution to the ESOP each year will be determined by
the Agritope board of directors, and may be made either in Agritope common stock
or in cash. Contributions are allocated to participants in proportion to their
compensation. Contributions vest over a six -year period, or upon the
participant's earlier death, disability, or attainment of age 65.

401(k) Profit Sharing Plan. Agritope established the Agritope, Inc. 401(k)
Profit Sharing Plan (the "401(k) Plan") in November 1997. After the spin-off,
all employees (including officers), other than excluded classes, will be
eligible to participate. Participants may contribute up to 17 percent of their
cash compensation on a before-tax basis, subject to an annual maximum amount
which is adjusted for the cost of living ($9,500 for 1997). The first 5 percent
of a participant's compensation is eligible for a discretionary, pro-rata
employer matching contribution which will be invested in Agritope common stock.
Agritope has not yet made any contributions to the 401(k) Plan and the plan does
not hold any shares of Agritope common stock.

Research and Development Agreement. As of December 5, 1997, Agritope and
Vilmorin & Cie ("Vilmorin") had entered into a research and development
agreement covering certain vegetable and flower crops. Under the terms of the
research agreement, Vilmorin will provide certain proprietary seed varieties and
germplasm for use by Agritope in research and development projects to be funded
by Vilmorin, in which Agritope technology, and possibly Vilmorin technology,
will be applied to the various covered crops. The specific research projects to
be conducted will be determined by agreement of the parties. Unless otherwise
agreed, Vilmorin will pay, on a quarterly basis, all Agritope's out-of-pocket
expenses, including employee salaries and overhead, for each selected

F-16
<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

research project.

Agritope and Vilmorin have agreed to negotiate in good faith the terms of future
commercialization agreements applicable to any commercial-stage products that
arise out of Vilmorin-funded research. If the parties are unable to agree,
commercialization terms will be determined by binding arbitration.

Agritope's board of directors has designated 1 million shares of Agritope
preferred stock, par value $.01 per share, as Series A Preferred Stock ("Series
A Convertible Preferred"). Series A Convertible Preferred has preemptive rights
and the right to elect a director, but otherwise has rights substantially
equivalent to Agritope common stock and is convertible at any time into shares
of Agritope common stock, initially on a share-for-share basis. In connection
with the research agreement, Vilmorin has agreed to purchase 214,285 shares of
Series A Convertible Preferred at a price of $7 per share. Agritope has also
agreed to grant Vilmorin an option, expiring on January 15, 1998, to acquire all
or any portion of the remaining 785,714 shares of Series A Convertible Preferred
at $7 per share. Vilmorin has agreed to provide additional funding totaling $1
million either by exercising its option to purchase Series A Convertible
Preferred or through the financing of research and development projects.

F-17
<PAGE>

PART II

INFORMATION NOT REQUIRED IN INFORMATION STATEMENT/PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.
- -------- --------------------------------------------

Amount
------

SEC Registration Fee............................... $ 1,550

Accounting Fees and Expenses*...................... $ 25,000

Legal Fees and Expenses*........................... $ 150,000

Blue Sky Fees and Expenses*........................ $ 4,900

Printing, including Registration Statement, $ 50,000
Information Statement/Prospectus, etc.*..........

Miscellaneous Expenses*............................ $ 34,550
--------

TOTAL EXPENSES*.................. $ 266,000

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

*Estimated

Item 14. Indemnification of Directors and Officers.
- -------- ------------------------------------------

Indemnification. Generally, the Delaware General Corporation Law (the
"DGCL") requires the indemnification of an individual made a party to a
proceeding because the individual is or was a director, officer, employee or
agent of the corporation against reasonable expenses incurred by the director,
officer, employee or agent in the proceeding if the individual is wholly
successful on the merits or otherwise. In addition, the DGCL allows a
corporation to indemnify a director, officer, employee or agent of the
corporation if:

(a) The conduct of the individual was in good faith;

(b) The individual reasonably believed that the individual's
conduct was in the best interests of the corporation, or at least not
opposed to its best interests;

(c) In the case of any criminal proceeding, the individual had
no reasonable cause to believe that the individual's conduct was
unlawful; and

(d) In the case of any proceeding by or in the right of the
corporation, the individual was not adjudged liable to the corporation.

The DGCL provides that the indemnification described above is not
exclusive of any other rights to which directors, officers, employees or agents
may be entitled under the corporation's bylaws, or under any agreement, vote of
stockholders or disinterested directors or otherwise.

Article 8 of the certificate of incorporation of the Registrant permits
the Registrant to indemnify its directors, officers, employees, and agents to
the fullest extent permitted by law. Article 8 of the bylaws of the

II-1
<PAGE>

Registrant requires such indemnification as to directors and officers, against
expenses and liability (other than in a proceeding by or in the right of the
Registrant), including attorney fees, actually and reasonably incurred by such
individual in connection with any threatened, pending, or completed action,
suit, or proceeding to which the individual is a party because of service to the
Registrant. Article 8 of the bylaws further provides that the foregoing right of
indemnification is not exclusive of any other rights to which the individual may
be entitled under the DGCL, certificate of incorporation, bylaws, agreement,
vote of stockholders or disinterested directors or otherwise. The Registrant
may, but is not required to, offer the same rights of indemnification, on a
case-by-case basis, to its employees and agents.

In addition to the foregoing right of indemnity, the Registrant will
enter into indemnification agreements with all of its officers and directors,
the forms of which are filed as Exhibits 10.11 and 10.12 hereto. Each
indemnification agreement makes provisions of the DGCL relating to permissive
indemnification mandatory and therefore restates the Registrant's obligation as
set forth in the bylaws, as discussed above. In addition, each indemnification
agreement sets forth the Registrant's obligation to indemnify the party to the
agreement in the event that the indemnitee is entitled to indemnification of
some but not all liability and expenses. The indemnification agreements and the
bylaws also set forth procedures for the defense of claims by the Registrant.

Section 174 of the DGCL provides in substance that any director held
liable pursuant to that section for the unlawful payment of a dividend or other
distribution of assets of a corporation shall be entitled to contribution from
the stockholders who accepted the dividend or distribution, knowing the dividend
or distribution was made in violation of the DGCL. The section also provides
that any such director shall be entitled to contribution from the other
directors who voted for or concurred in the unlawful dividend, stock purchase or
stock redemption.

The Registrant understands that the current position of the Securities
and Exchange Commission is that any indemnification of liabilities arising under
the Securities Act of 1933, as amended, is against public policy and is,
therefore, unenforceable.

The general effect of these provisions is to indemnify directors and
officers of the Registrant against all costs and expenses of liability incurred
by them in connection with any action, suit or proceeding in which they are
involved by reason of their affiliation with the Registrant, to the fullest
extent permitted by law.

Insurance. The Registrant intends to carry insurance protecting
officers and directors against certain liabilities that they may incur in their
capacities as such.

Item 15. Recent Sales of Unregistered Securities.
- -------- ----------------------------------------

Agritope will sell 1,343,704 shares of Agritope Common at a price of $7
per share in the Private Placement to certain foreign investors for an aggregate
price of $9.4 million, immediately following the Distribution. Agritope and
Vilmorin have also agreed to the Preferred Stock Sale for the sale of 214,285
shares of Agritope Series A Convertible Preferred at a price of $7 per share for
an aggregate purchase price of $1.5 million. In addition, Agritope has agreed to
grant Vilmorin the Series A Option, exercisable by Vilmorin or its designees and
expiring January 15, 1998, to purchase up to 785,715 additional shares of Series
A Convertible Preferred at a price of $7 per share. Subscribers in the Private
Placement have entered stock purchase agreements and have deposited the purchase
price in an escrow account, pending completion of the Distribution and the
closing of the Private Placement. Shares sold in the Private Placement and the
sale of Series A Convertible Preferred will not be registered under the
Securities Act in reliance upon the exemption from registration provided by
Regulation S.

To facilitate the December 1997 merger (the "Merger") of Agritope,
Inc., an Oregon corporation, with and into the Registrant, on November 14, 1997,
the Registrant issued one share of its common stock, par value $.01 per share,
to Epitope, Inc., an Oregon corporation, in consideration for Epitope's payment
to the Registrant of $100. The share will be canceled when the Merger takes
effect.

II-2
<PAGE>

Item 16. Exhibits and Financial Statement Schedules.
- -------- -------------------------------------------

(a) The exhibits to the Registration Statement required by Item 601 to
Regulation S-K are listed in the accompanying index to exhibits.

(b) No financial statement schedules have been filed because the
requested information is not applicable or is provided as part of the
consolidated financial statements in the Information Statement/Prospectus
included in this Registration Statement.

Item 17. Undertakings.
- -------- -------------

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 4 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Beaverton, state of Oregon, on December 11, 1997.

AGRITOPE, INC.

By /s/ Gilbert N. Miller
Gilbert N. Miller, Executive Vice President
and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 4 to the Registration Statement has been signed on December 11,
1997, by the following persons in the capacities indicated.

Signature Title

* ADOLPH J. FERRO, PH.D. Chairman of the Board, President, Chief
Adolph J. Ferro, Ph.D. Executive Officer and Director
(Principal Executive Officer)

/s/ Gilbert N. Miller Executive Vice President,
Gilbert N. Miller Chief Financial Officer,
Secretary and Director
(Principal Financial Officer and
Principal Accounting Officer)

*W. CHARLES ARMSTRONG Director
W. Charles Armstrong

*ROGER L. PRINGLE Director
Roger L. Pringle

*NANCY L. BUC Director
Nancy L. Buc

*MICHEL de BEAUMONT Director
Michel de Beaumont

*By /s/ Gilbert N. Miller
Gilbert N. Miller
(Attorney-in-Fact)

II-4
<PAGE>

EXHIBIT INDEX

Number Description
- ------ -----------

2.* Separation Agreement between Epitope, Inc. ("Epitope"), and Agritope,
Inc. ("Agritope"), dated as of December 1, 1997.

3.1* Certificate of Incorporation of Agritope.

3.2* Bylaws of Agritope.

3.3* Certificate of Designation, preferences and rights of the Series A
Preferred Stock

4.1** Form of Common Stock Certificate.

4.2* Form of Rights Agreement between Agritope and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, which includes as Exhibit A the
form of the Designation of Terms of the Series B Junior Participating
Preferred Stock and as Exhibit B the form of Rights Certificate.

4.3 Form of stock purchase agreement in connection with the Private
Placement.

4.4 Series A Preferred Stock Purchase Agreement between Agritope and
Vilmorin dated December 5, 1997.

5.* Form of Opinion of Tonkon Torp LLP.

8.* Form of Opinion of Miller, Nash, Wiener, Hager & Carlsen LLP.

10.1* Transition Services and Facilities Agreement between Epitope and
Agritope, dated as of December 1, 1997.

10.2* Tax Allocation Agreement between Epitope and Agritope, dated as of
December 1, 1997.

10.3* Employee Benefits Agreement between Epitope and Agritope, dated as of
December 1, 1997.

10.4* Agritope, Inc. 1997 Stock Award Plan.

10.5* Agritope, Inc. 1997 Employee Stock Purchase Plan.

10.6* Form of Employment Agreement between Agritope and Adolph J. Ferro,
Ph.D.

10.7* Form of Employment Agreement between Agritope and Gilbert N. Miller.

10.8* Form of Employment Agreement between Agritope and Richard K.
Bestwick, Ph.D.

II-5
<PAGE>

10.9* Form of Employment Agreement between Agritope and Matthew G. Kramer.

10.10* Employment Agreement between Vinifera, Inc. and Joseph A. Bouckaert.

10.11* Form of Indemnification Agreement for directors.

10.12* Form of Indemnification Agreement for officers.

10.13* Lease of Land and Certain Improvements located at 4288 Bodega Avenue
entered into by and between Gianni Neve and Maria Neve, Landlord, and
Vinifera, Inc., Tenant, dated as of February 1, 1996.

10.14* Option to License and Research Support Agreement between the Salk
Institute for Biological Studies and Epitope dated February 25, 1997,
including Amendment dated July 25, 1997, and Assignment between
Agritope and Epitope. Portions of this exhibit have been omitted
pursuant to a request for confidential treatment.

10.15* Superior Tomato Associates, L.L.C. Operating Agreement dated February
19, 1996.

10.16* Placement Agent Agreement between American Equities Overseas, Inc.,
and Agritope, dated October 15, 1997.

10.17** Form of Warrant Agreement to be issued to Vector Securities in
partial consideration for services in connection with the
Distribution.

10.18* Form of Warrant Agreement to be issued in connection with the Private
Placement.

10.19 Research and Development Agreement between Agritope and Vilmorin &
Cie, dated as of December 5, 1997. Portions of this exhibit have been
omitted pursuant to a request for confidential treatment.

10.20* Assignment and Modification of Lease dated November 7, 1997 among
Pacific Realty Associates, L.P. ("Pacific"), American Show
Management, Inc. ("ASM"), and Agritope, Lease Amendment dated June 3,
1996, between Pacific and ASM, and Lease dated October 4, 1995,
between Pacific and ASM.

21. The subsidiaries of Agritope are Vinifera, Inc., an Oregon
corporation, and Agrimax Floral Products, Inc., a Minnesota
corporation. Agritope owns a 66 2/3 percent interest in Superior
Tomato Associates, L.L.C.

23.1* Consent of Price Waterhouse LLP.

23.2* Consent of Tonkon Torp LLP (included in Exhibit 5).

23.3* Consent of Miller, Nash, Wiener, Hager & Carlsen LLP (included in
Exhibit 8).

24.* Powers of attorney

II-6
<PAGE>

27.* Financial Data Schedule.

Other exhibits listed in Item 601 of Regulation S-K are not applicable.

* Previously filed

** To be filed by amendment

II-7

STOCK PURCHASE AGREEMENT

Between

AGRITOPE, INC. ("Agritope") --------------------------------- ("Purchaser")
8505 S. W. Creekside Place -----------------------------------------------
Beaverton, Oregon 97008 -----------------------------------------------
Fax: 503.520.6196 Fax:-------------------------------------------

Purchaser agrees to purchase, and Agritope agrees to sell, Agritope common
stock, no par value, including associated preferred stock purchase rights (the
"Shares") on the terms and conditions stated in this Stock Purchase Agreement.

1. Number of Shares:

2. Total Purchase Price:

3. Domicile of Purchaser:
(Country of organization, if a corporation or other entity; country of
residence, if an individual.)

4. Exhibits. The following exhibits are part of this Stock Purchase
Agreement:

Exhibit A: General Terms
Exhibit B: Certain Definitions under Regulation S
Exhibit C: Rights to Acquire Shares

Dated: ------------------------, 1997

AGRITOPE, INC. ------------------------------------
(Purchaser)

By ----------------------------------- By----------------------------------
Gilbert N. Miller (Signature)
Executive Vice President
and Chief Financial Officer ------------------------------------
(Print or type name)

------------------------------------
(Title)

<PAGE>

EXHIBIT A

STOCK PURCHASE AGREEMENT

GENERAL TERMS

THE SHARES OF COMMON STOCK BEING SOLD PURSUANT TO THIS
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT"), AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED
OF, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE
UNITED STATES OR TO A U.S. PERSON, AS SUCH TERMS ARE DEFINED
IN REGULATION S UNDER THE 1933 ACT ("REGULATION S"), UNLESS
(i) THE TRANSACTION IS REGISTERED UNDER THE 1933 ACT AND ANY
APPLICABLE SECURITIES LAWS OF ANY STATE, TERRITORY OR
POSSESSION OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA
("STATE ACT"), OR (ii) AN EXEMPTION FROM REGISTRATION UNDER
THE 1933 ACT AND ANY APPLICABLE STATE ACT IS AVAILABLE AND
THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL TO SUCH EFFECT
REASONABLY SATISFACTORY TO IT.

<PAGE>

TABLE OF CONTENTS

<TABLE>
Page

<S> <C> <C>
ARTICLE 1 - PURCHASE AND SALE OF SHARES.....................................................................5
1.1 Sale of Shares..............................................................................5
1.2 Placement Agent.............................................................................5
1.3 Payment and Delivery........................................................................5

ARTICLE 2 - CLOSING.........................................................................................6
2.1 Closing.....................................................................................6
2.2 Actions at Closing..........................................................................6

ARTICLE 3 - RESTRICTIONS ON TRANSFER........................................................................6
3.1 General.....................................................................................6
3.2 Certificate Legends.........................................................................8

ARTICLE 4 - INVESTMENT MATTERS..............................................................................7
4.1 Investment Representations..................................................................8
(a) Domicile............................................................................8
(b) Access to Information...............................................................9
(c) Experience..........................................................................9
(d) Investment Intent...................................................................9
4.2 Certain Restrictions........................................................................9
(a) United Kingdom......................................................................9
(b) France..............................................................................9
4.3 Disclosure Document........................................................................10

ARTICLE 5 - REGISTRATION OF SHARES.........................................................................11
5.1 Definitions................................................................................11
5.2 Requested Registration.....................................................................11
5.3 Registration Procedure.....................................................................11
5.4 Deferral for Material Events...............................................................12
5.5 Furnish Information; Expenses..............................................................12
5.6 Expenses of Registration...................................................................12
5.7 Indemnification............................................................................12
(a) Indemnification by Agritope........................................................12
(b) Indemnification by Holders of the Shares...........................................13
(c) Notice, Defense and Counsel........................................................14
(d) Survival of Rights and Obligations.................................................14

ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF AGRITOPE.....................................................12
6.1 Organization, Etc..........................................................................14
6.2 Authority..................................................................................14
6.3 Capitalization.............................................................................15
6.4 Valid Issuance; Title......................................................................15
6.5 Disclosure Document........................................................................15

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<PAGE>

6.6 Tax Matters................................................................................15
6.7 Assets Needed for Business.................................................................15
6.8 Litigation and Other Contingent Liabilities................................................15
6.9 Absence of Certain Adverse Effects.........................................................15
6.10 No Brokers................................................................................15
6.11 Disclosure................................................................................15

ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF PURCHASER....................................................13
7.1 Corporate Existence; Execution and Performance of Agreement................................16
7.2 Binding Obligations; Due Authorization.....................................................16
7.3 No Brokers.................................................................................16
7.4 Litigation.................................................................................16
7.5 Disclosure.................................................................................16

ARTICLE 8 - COVENANTS......................................................................................13
8.1 Best Efforts...............................................................................16
8.2 Right of Access............................................................................16
8.3 Preservation of Business; Notice of Change.................................................17

ARTICLE 9 - CONDITIONS.....................................................................................14
9.1 Conditions Precedent to Obligations of Purchaser...........................................17
9.2 Conditions Precedent to Obligations of Agritope............................................17

ARTICLE 10 - OTHER MATTERS.................................................................................18
10.1 Notices...................................................................................18
10.2 Amendments and Waiver.....................................................................15
10.3 Expenses..................................................................................15
10.4 Headings..................................................................................15
10.5 Counterparts..............................................................................15
10.6 Parties in Interest; Assignment...........................................................19
10.7 Entire Agreement..........................................................................19
10.8 Severability..............................................................................19
10.9 Attorney Fees.............................................................................19
10.10 Survival.................................................................................19
10.11 Form of Public Disclosures...............................................................19
10.12 Cumulative Rights and Remedies...........................................................19
10.13 No Third-Party Beneficiaries.............................................................20
10.14 Dispute Resolution.......................................................................16
(a) Conduct............................................................................16
(b) Decision...........................................................................16
(c) Costs..............................................................................20
10.15 Governing Law............................................................................20
</TABLE>

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<PAGE>

STOCK PURCHASE AGREEMENT

GENERAL TERMS

(European Purchaser)

RECITALS

A. Agritope is currently a wholly-owned subsidiary of Epitope, Inc., an
Oregon corporation that is publicly held ("Epitope"). The board of directors of
Epitope has authorized the spin-off of Agritope (the "Spin-off") to its
shareholders. The Spin-off will be accomplished through a dividend distribution
to Epitope shareholders of all the Agritope common stock, no par value,
including associated preferred stock purchase rights ("Agritope Common Stock"),
held by Epitope. After the distribution, Agritope will cease to be a subsidiary
of Epitope and will operate as an independent public company.

B. The Spin-off is contingent upon Agritope having received binding
commitments for financing from investors in an aggregate amount the Epitope
board of directors deems sufficient to support the operations of Agritope as a
separate business for a period of not less than two years.

C. Purchaser wishes to invest in Agritope by purchasing newly issued
shares of Agritope Common Stock after the Spin-off occurs. Purchaser is only
willing to invest in Agritope if Agritope is an independent company and the
Agritope Common Stock is publicly traded. Although Purchaser intends to hold the
Agritope Common Stock for investment, a significant factor in Purchaser's
investment decision is the liquidity provided by a publicly traded security.
Purchaser is not willing to become a minority shareholder in Agritope while it
is a privately held company.

D. After the Spin-off, Purchaser wishes to purchase from Agritope the
number of shares listed on the cover page (the "Shares") of Agritope Common
Stock for $7 per share. Agritope wishes to sell the Shares to Purchaser on the
terms and conditions set forth below.

AGREEMENT

The parties agree as follows:

ARTICLE 1
PURCHASE AND SALE OF SHARES

1.1 Sale of Shares. Upon the terms and conditions of this Agreement,
Agritope shall issue and sell the Shares to Purchaser and Purchaser shall
purchase the Shares from Agritope for the total purchase price listed on the
cover page (the "Purchase Price").

1.2 Placement Agent. American Equities Overseas, Inc. acting through
American Equities Overseas (UK) Ltd. (the "Placement Agent") has agreed to act
as placement agent in connection with the

- 5 -
<PAGE>

offering of the Shares pursuant to the terms of a Placement Agent Agreement
between Agritope and Placement Agent.

1.3 Payment and Delivery. On or before October 15, 1997, Purchaser shall
pay the Purchase Price by wire transfer in United States dollars to Placement
Agent or other agent designated by Agritope (the "Designated Agent") who shall
hold the Purchase Price until Closing. At or prior to Closing, Agritope shall
deliver to the Placement Agent or Designated Agent stock certificates
representing the Shares. In the event that Closing does not occur on or before
December 31, 1997, the Placement Agent or Designated Agent shall return the
Purchase Price to Purchaser and any stock certificates to Agritope.

ARTICLE 2
CLOSING

2.1 Closing. The sale of the Shares shall be consummated at a closing
(the "Closing"), in escrow unless otherwise agreed, on the first business day
after the day the Spin-off occurs (the "Closing Date"). Within five business
days after Agritope confirms receipt by the Placement Agent or Designated Agent
of the aggregate amount described in recital B above and after the Disclosure
Document, as defined below, has been declared effective by the U.S. Securities
and Exchange Commission, Agritope will set the record date and distribution date
for the Spin-off and will notify the Placement Agent or Designated Agent and
Purchaser of the Closing Date.

2.2 Actions at Closing. At the Closing:

(a) The Placement Agent or Designated Agent shall pay Agritope
the Purchase Price by wire transfer in United States dollars.

(b) Agritope shall deliver to the Placement Agent or Designated
Agent a stock certificate representing the Shares, which will be
delivered to Purchaser following the Closing.

(d) The parties shall take all other actions that they deem
necessary or desirable to consummate the purchase and sale of the Shares
hereunder.

ARTICLE 3
RESTRICTIONS ON TRANSFER

3.1 General.

(a) PURCHASER SHALL NOT SELL, OFFER TO SELL, PLEDGE, OR
OTHERWISE TRANSFER ANY SHARES TO ANY OTHER PERSON EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF REGULATION S AS IN EFFECT ON THE DATE OF
TRANSFER, PURSUANT TO REGISTRATION UNDER THE 1933

- 6 -
<PAGE>

ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. AGRITOPE
SHALL REFUSE TO REGISTER ON ITS BOOKS ANY PURPORTED TRANSFER MADE IN
VIOLATION OF THIS SECTION 3.1, AND ANY SUCH PURPORTED TRANSFER SHALL BE
VOID.

(b) PURCHASER SHALL NOT ENGAGE IN ANY HEDGING TRANSACTIONS
INVOLVING THE SHARES UNLESS IN COMPLIANCE WITH THE 1933 ACT.

- 7 -
<PAGE>

(c) THE SHARES HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT, AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF,
IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO
A U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE 1933
ACT), UNLESS (i) THE TRANSACTION IS REGISTERED UNDER THE 1933 ACT AND
ANY APPLICABLE STATE ACT, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER
THE 1933 ACT AND ANY APPLICABLE STATE ACT IS AVAILABLE AND THE ISSUER
RECEIVED AN OPINION OF COUNSEL TO SUCH EFFECT REASONABLY SATISFACTORY TO
IT.

(d) PURCHASER AGREES TO BE BOUND BY AND COMPLY WITH ALL
RESTRICTIONS PROVIDED FOR IN THIS AGREEMENT ON TRANSFER OF THE SHARES,
AND FURTHER AGREES THAT IT SHALL NOT OFFER, SELL, TRANSFER, PLEDGE OR
OTHERWISE DISPOSE OF THE SHARES IN VIOLATION OF ANY APPLICABLE
SECURITIES OR OTHER LAWS AND REGULATIONS OF A GOVERNMENTAL AUTHORITY
HAVING JURISDICTION OVER SUCH DISPOSITION.

3.2 Certificate Legends. Certificates for the Shares shall bear the
following legends:

"THESE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT"), AND MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, UNLESS (i) THE TRANSACTION IS
EFFECTED IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE
1933 ACT, (ii) THE TRANSACTION IS REGISTERED UNDER THE 1933 ACT AND ANY
APPLICABLE SECURITIES LAWS OF ANY STATE, TERRITORY OR POSSESSION OF THE
UNITED STATES OR THE DISTRICT OF COLUMBIA ("STATE ACT"), OR (iii) AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT AND ANY APPLICABLE STATE
ACT IS AVAILABLE AND THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL TO
SUCH EFFECT REASONABLY SATISFACTORY TO IT."

"HEDGING TRANSACTIONS INVOLVING THESE SHARES OF COMMON STOCK MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT."

ARTICLE 4
INVESTMENT MATTERS

4.1 Investment Representations. Purchaser represents and warrants to
Agritope as follows:

(a) Domicile. PURCHASER IS NOT A U.S. PERSON, AS THAT TERM IS
DEFINED ON EXHIBIT B.

- 8 -
<PAGE>

(b) Access to Information. Purchaser has been given, a
reasonable time before execution of this Agreement, the opportunity to
ask questions and receive answers concerning Agritope, and the terms and
conditions of the offering of the Shares and to obtain any additional
information that Agritope possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy of
information furnished to Purchaser. Purchaser has received any such
additional information that Purchaser has requested.

(c) Experience. Purchaser has sufficient knowledge and
experience in financial and business matters to be capable of evaluating
the merits and risks of an investment in the Shares and has the ability
to bear the economic risk of that investment.

(d) Investment Intent. Purchaser is acquiring the Shares for
Purchaser's own account and not on behalf of any other person. Purchaser
is not acquiring the Shares with a view to distribution or with the
intent to divide Purchaser's participation with others by reselling or
otherwise distributing the Shares, either directly or indirectly through
a sale of its own capital stock.

4.2 Certain Restrictions. Purchaser acknowledges the following
restrictions:

(a) United Kingdom. If the attached documents and this Agreement
are issued, circulated, or distributed to Purchaser in the United
Kingdom, Purchaser hereby acknowledges that the offer of the Shares
pursuant to this Agreement is effected by private placing and that,
accordingly, no steps have been taken in any jurisdiction that would
permit the issue of any prospectus, application form, notice, circular,
or other invitation offering the Shares to the public for subscription
or purchase Purchaser hereby represents and warrants that (a) it is a
person falling within Article 11(3) of the Financial Services Act of
1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person
to whom such materials may otherwise be lawfully issued or passed on and
(b) it is a person whose ordinary activities involve it in acquiring,
holding, managing, or disposing of investments (as principal or agent)
for the purposes of its business or otherwise it has been offered the
Shares in circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995.

(b) France. If the attached documents and this Agreement are
issued, circulated, or distributed to Purchaser in France, Purchaser
hereby acknowledges that these documents have been supplied in the
context of a private placing and that the placing of the Shares has not
been effected through "demarchage" (solicitation) within the meaning of
the Law No. 72-6 of 3 January 1972. Purchaser hereby undertakes not to
transfer or assign directly or indirectly the Shares in France
subsequent to subscription other than in compliance with applicable laws
and regulations. The attached documents and this Agreement (together
with any further information) are made available to Purchaser on the
condition that these materials are for use only by

- 9 -
<PAGE>

Purchaser in connection with the proposed investment and shall neither
be passed on by Purchaser to any further person nor reproduced in whole
or in part. Purchaser has been notified by Agritope to ensure that the
terms of this undertaking are strictly adhered to.

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<PAGE>

ARTICLE 5
REGISTRATION OF SHARES

5.1 Definitions.

(a) "Eligible Shares" refers to the Shares and all other
Agritope Common Stock sold by Agritope for cash without registration
under the 1933 Act on or about the Closing Date.

(b) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration
statement or similar document in compliance with the 1933 Act and the
declaration or ordering of effectiveness of such registration statement
or document.

5.2 Requested Registration. If at any time before the first anniversary
of the Closing Date, Agritope shall be requested by a holder or holders of
Eligible Shares to effect a registration under the 1933 Act covering at least 20
percent of the Eligible Shares then outstanding, Agritope shall promptly give
written notice of such proposed registration to all persons who purchased
Eligible Shares from Agritope. Upon such a request, Agritope shall as
expeditiously as possible use its best efforts to file a registration statement
(the "Registration Statement") under the 1933 Act with respect to the resale of
the Eligible Shares which Agritope has been requested to register (a) in such
request and (b) in any response to such notice received by Agritope within 20
days after the effective date of such notice. Agritope shall have an obligation
to file a Registration Statement under this Section 5.2 only once. Agritope
shall not have any obligation to file a Registration Statement unless the
initial request for registration is received before the first anniversary of the
Closing Date.

5.3 Registration Procedure. If obligated to file a Registration
Statement under Section 5.2, Agritope shall follow the registration procedures
set forth in this Section 5.3. Agritope shall use its best efforts to cause the
Registration Statement to become effective under the 1933 Act and to maintain
the effectiveness of the Registration Statement for a period of 90 days. If
required to permit resale of the Eligible Shares in the state of New York,
Agritope shall use its best efforts to register or qualify the Eligible Shares
covered by the Registration Statement under the blue sky laws of the state of
New York, provided that Agritope shall not be required in connection therewith
or as a condition precedent thereto to qualify to do business or to file a
general consent to service of process in the state of New York. If required by
applicable law, Agritope shall furnish to the holders of the registered Shares
such reasonable number of copies of a prospectus, in conformity with the
requirements of the 1933 Act, and any amendments or supplements thereto and such
other documents as the holders of the registered Shares may reasonably request
in order to facilitate the disposition of the registered Shares after the
Registration Statement has been declared effective. Agritope shall use
reasonable efforts to notify the holders of the registered Shares when a
prospectus relating to the Shares is required to be delivered under the 1933
Act, to notify the holders of the registered Shares of the happening of any
event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing, to file as promptly as may be practicable under the circumstances such
amendments and supplements as may be required on account of such event, and to
use its best efforts to cause each such amendment to become effective. The
holders of the registered Shares shall not effect sales of Eligible Shares after
receipt of notice from Agritope that any such amendment or supplement is
required on account of any such event, until the amendment becomes effective or
the supplement has been filed. Agritope's obligations under this Section 5.3
shall expire at such

- 11 -
<PAGE>

time as Agritope is no longer required to maintain the effectiveness of the
Registration Statement as provided for above.

5.4 Deferral for Material Events. If, because of a proposed material
acquisition or any other material event, the Agritope board of directors
determines that the filing or effectiveness of a Registration Statement or of a
supplement or amendment to the prospectus pursuant to this Article 5 would be
detrimental to Agritope, Agritope may defer such filing or effectiveness for a
period of up to 90 days after such filing or effectiveness would otherwise
ordinarily have occurred. For the purposes of the preceding sentence, it shall
be presumed that a Registration Statement would ordinarily be filed 45 days
after request under Section 5.2, that a supplement or amendment to the
prospectus would ordinarily be filed 10 days after notice referred to in Section
5.3 and that the Registration Statement or any amendment to the prospectus would
ordinarily become effective five business days after filing an acceleration
request.

5.5 Furnish Information; Expenses. It shall be a condition precedent to
the obligations of Agritope in regard to the Eligible Shares to be registered
pursuant to Section 5.2 that the holders of the Eligible Shares shall furnish to
Agritope such information regarding themselves, the Eligible Shares held by
them, and the intended method of disposition of the Eligible Shares as shall be
required to effect the registration of their Eligible Shares, and shall agree to
be bound by the terms of this Article 5 if such holders are not already parties
to this Agreement.

5.6 Expenses of Registration. All expenses relating to registration of
the Eligible Shares (other than underwriting discounts and commissions, transfer
taxes, if any, and fees and disbursements of counsel to the holders of the
Eligible Shares) incurred in connection with the registrations, filings or
qualifications pursuant to Section 5.3 above, including without limitation all
registration, filing and qualification fees, printing and accounting fees, and
fees and disbursements of counsel for Agritope, shall be borne by Agritope.

5.7 Indemnification.

(a) Indemnification by Agritope. To the extent permitted by law,
Agritope shall indemnify and hold harmless each holder of the Eligible
Shares, the officers, directors, partners, agents, and employees of each
holder or any underwriter (as defined in the 1933 Act) for such holder,
and each person, if any, who controls such holder or underwriter within
the meaning of the 1933 Act or the United States Securities Exchange Act
of 1934, as amended (the "1934 Act"), against any losses, claims
damages, or liabilities (joint or several) to which they may become
subject under the 1933 Act, the 1934 Act, or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (a "Violation"):

(i) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto,

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<PAGE>

(ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or

(iii) any violation or alleged violation by Agritope of
the 1933 Act, the 1934 Act, any state securities law, or any
rule or regulation promulgated under the 1933 Act, the 1934 Act,
or any state securities law.

Agritope shall reimburse each such holder, officer, director, partner,
agent, employee, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or
action. The indemnity agreement contained in this subsection 5.7(a)
shall not apply to amounts paid in settlement of any loss, claim,
damage, liability, or action if such settlement is effected without the
consent of Agritope (which consent shall not be unreasonably withheld),
nor shall Agritope be liable to a holder in any such case for any such
loss, claim, damage, liability, or action (A) to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use
in connection with such registration by or on behalf of such holder,
underwriter or controlling person or (B) in the case of a sale directly
by a holder of the Eligible Shares (including a sale of such Eligible
Shares through any underwriter retained by such holder to engage in a
distribution solely on behalf of such holder), if such untrue statement
or alleged untrue statement or omission or alleged omission was
contained in a preliminary prospectus and corrected in a final or
amended prospectus, and such holder failed to deliver a copy of the
final or amended prospectus at or prior to the confirmation of the sale
of the Eligible Shares to the person asserting any such loss, claim,
damage or liability in any case where such delivery is required by the
1933 Act.

(b) Indemnification by Holders of the Shares. To the extent
permitted by law, each holder of the Eligible Shares shall indemnify and
hold harmless Agritope, each of its directors, each of its officers who
have signed the Registration Statement, each person, if any, who
controls Agritope within the meaning of the 1933 Act, each agent and
underwriter for Agritope, each other holder of shares selling securities
covered by the Registration Statement, each director, officer, partner,
agent, employee of such other holder or underwriter, and each person, if
any, who controls such other holder or underwriter, against any losses,
claims, damages, or liabilities (joint or several) to which Agritope or
any such director, officer, partner, agent, employee, controlling
person, underwriter, or other holder may become subject, under the 1933
Act, the 1934 Act, or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by or on behalf of such
holder expressly for use in connection with such registration; and each
such holder shall reimburse any legal or other expenses reasonably
incurred by Agritope or any such director, officer, partner, agent,
employee, controlling person, underwriter, or other holder, in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the

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<PAGE>

indemnity agreement contained in this subsection 5.7(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent
of such holder, which consent shall not be unreasonably withheld; and
provided, further, that the indemnification obligation of each holder
shall be limited to the aggregate public offering price of the Eligible
Shares sold by such holder pursuant to such registration.

(c) Notice, Defense and Counsel. Promptly after receipt by an
indemnified party under this Section 5.7 of notice of the commencement
of any action (including any governmental action), such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 5.7, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnif party so desires, jointly with any other indemnifying party
similarly noticed, to assume and control the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 5.7 to the extent of such
prejudice, but the omission so to deliver written notice to the
indemnifying party shall not relieve it of any liability that it may
have to any indemnified party otherwise than under this Section 5.7.

(d) Survival of Rights and Obligations. The obligations of
Agritope and the holders of the Eligible Shares under this Section 5.7
shall survive the completion of any offering of the Shares covered by
the Registration Statement.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF AGRITOPE

To induce Purchaser to purchase the Shares, Agritope represents and
warrants to Purchaser as follows:

6.1 Organization, Etc. Agritope is a corporation duly organized and
validly existing under the laws of the state of Oregon. Agritope has all
requisite corporate power and authority to own its properties and carry on its
business as now conducted.

6.2 Authority. Agritope has all requisite corporate power and authority
to execute, deliver, and perform this Agreement. This Agreement has been duly
executed and delivered by Agritope and is the valid, legal, and binding
agreement of Agritope, enforceable against Agritope in accordance with its
terms. No consent of, approval by, filing with, or notice to any governmental
authority or any other person or entity is required for Agritope to execute,
deliver, and perform this Agreement, other than those that have been obtained,
made, or given.

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<PAGE>

6.3 Capitalization. The authorized capital stock of Agritope as of the
Closing Date will consist of 40,000,000 shares of common stock and 10,000,000
shares of preferred stock. Immediately following the Closing Date and the
Vinifera Exchange (as defined in the Disclosure Document), between 4,750,000 and
5,250,000 shares of common stock and no shares of preferred stock will be
outstanding. No right to purchase or acquire shares of any unissued capital
stock of Agritope or shares convertible into or exchangeable for such capital
stock is authorized or outstanding, other than as set forth on Exhibit C.

6.4 Valid Issuance; Title. When issued and paid for in accordance with
the terms of this Agreement, the Shares will be validly issued, fully paid, and
nonassessable. Upon delivery to Purchaser of the certificates representing the
Shares pursuant to this Agreement, Purchaser will have valid, marketable title
to the Shares, free and clear of all encumbrances, other than restrictions on
transfer described in this Agreement.

6.5 Disclosure Document. The financial statements contained in the
Disclosure Document (except as otherwise noted therein) were prepared in
conformity with U.S. generally accepted accounting principles, consistently
applied, and fairly present the financial position and the results of operations
at the date and for the year or period indicated.

6.6 Tax Matters. Agritope has filed all required federal, state, and
other tax returns in a timely fashion and is not delinquent with respect to the
payment of any federal, state, or other taxes.

6.7 Assets Needed for Business. Agritope owns, leases, or otherwise has
the right to use all assets necessary for its present business.

6.8 Litigation and Other Contingent Liabilities. There are no actions or
proceedings pending or to the best of Agritope's knowledge threatened against
Agritope or any of its properties or assets or outstanding judgments or orders
to which Agritope is subject, which adversely affect Agritope's business,
operations, or financial condition. There is no action or proceeding pending or
to the best of Agritope's knowledge threatened against Agritope to restrain or
prohibit the sale of the Shares to Purchaser.

6.9 Absence of Certain Adverse Effects. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (a) conflict with, result in any violation of, constitute a default
under, or give rise to a right of acceleration or termination under, any
provision of the articles of incorporation or bylaws of Agritope or any
agreement, mortgage, bond, indenture, agreement, franchise, or other instrument
or obligation to which Agritope is a party or by which it is bound, (b) result
in the creation of any encumbrance upon any of the assets or properties of
Agritope, (c) violate any judgment or order against, or binding upon, Agritope
or upon the Shares, assets, properties, or business of Agritope, or (d)
constitute a violation by Agritope of any law.

6.10 No Brokers. Agritope has not hired any broker or finder or incurred
any liability for fees or commissions to any such person in connection with this
Agreement, other than American Equities Overseas (UK) Ltd.

6.11 Disclosure. Except as disclosed herein, no representation or
warranty by Agritope contained in this Agreement contains any untrue statement
of a material fact, or omits to state any material fact required to make the
statements herein contained not misleading.

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<PAGE>

ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Agritope as follows:

7.1 Corporate Existence; Execution and Performance of Agreement. If
Purchaser is a corporation, Purchaser is duly organized and validly existing
under the laws of the country listed on the cover page and has all requisite
corporate power and authority to execute, deliver, and perform this Agreement.
The execution, delivery, and performance of this Agreement by Purchaser will not
conflict with any provision of its articles of incorporation or bylaws or
similar charter documents (if Purchaser is a corporation) or with any
undertaking, agreement, indenture, decree, order, or judgment by which it is
bound and will not violate any law applicable to Purchaser.

7.2 Binding Obligations; Due Authorization. This Agreement constitutes
the valid, legal, and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms. If Purchaser is a corporation, the
execution, delivery, and performance of this Agreement by Purchaser has been
duly and validly authorized by its board of directors and no other corporate
proceedings on the part of Purchaser are necessary to authorize its execution,
delivery, and performance of this Agreement. Purchaser is not required to obtain
any consent of or approval by, to make any filing with, or to give any notice
to, any governmental authority or any other person or entity for Purchaser to
execute, deliver, and perform this Agreement.

7.3 No Brokers. Purchaser has not hired any broker or agent or incurred
any liability for fees or commissions to any such person in connection with this
Agreement.

7.4 Litigation. There is no action or proceeding pending or threatened
against Purchaser before any court, other governmental body or arbitrator to
restrain or prohibit the purchase of the Shares.

7.5 Disclosure. No representation or warranty by Purchaser contained in
this Agreement contains any untrue statement of a material fact, or omits to
state any material fact required to make the statements herein not misleading.

ARTICLE 8
COVENANTS

8.1 Best Efforts. Each party shall use such party's good faith efforts
to cause the transactions contemplated hereby to be consummated as soon as
practicable.

8.2 Right of Access. Throughout the period from the date hereof through
the Closing Date, Agritope shall give Purchaser and its representatives,
including its counsel and accountants, on reasonable notice, full access during
normal business hours to all of Agritope's properties, documents, contracts,
books and records and such other information with respect to Agritope's business
affairs and properties as Purchaser may reasonably request.

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<PAGE>

8.3 Preservation of Business; Notice of Change. From the date hereof
through the Closing Date, (a) Agritope shall use its best efforts to conduct its
business in the usual and ordinary course consistent with past practice and all
applicable laws and in a manner that will not breach any of Agritope's
representations, warranties, and covenants in this Agreement and (b) Agritope
shall preserve its business organization intact.

ARTICLE 9
CONDITIONS

9.1 Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser to effect the Closing is subject to the satisfaction, or waiver by
Purchaser, of each of the following conditions on or prior to the Closing:

(a) The Spin-off shall have occurred no later than December 31,
1997.

(b) Agritope shall have delivered certificates representing the
Shares to the Placement Agent or Designated Agent.

(d) No action or proceeding shall have been instituted or
threatened before any court, other governmental body or arbitrator (i)
to restrain or prohibit the transactions contemplated by this Agreement,
(ii) that might restrict the operation of Agritope's business in any
material respect if the purchase and sale of the Shares hereunder is
consummated, (iii) that might restrict the ownership of the Shares or
the exercise of any rights with respect thereto by Purchaser, or (iv)
that might subject any of the parties hereto, to any liability, fine,
forfeiture or penalty on the ground that any of the parties hereto has
violated or will violate any applicable law in connection with the
transactions contemplated hereby.

(e) Purchaser shall have received an opinion of Agritope's
counsel to the effect that when issued and paid for in accordance with
the terms of this Agreement, the Shares will be validly issued, fully
paid, and nonassessable.

9.2 Conditions Precedent to Obligations of Agritope. The obligation of
Agritope to effect the Closing is subject to the satisfaction, or waiver by
Agritope, of each of the following conditions on or prior to the Closing:

(a) The Spin-off shall have occurred.

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<PAGE>

(b) Purchaser shall have paid the Purchase Price in immediately
available funds to the Placement Agent.

(c) All representations and warranties of Purchaser and Agritope
contained in this Agreement shall be true and correct in all respects as
of the Closing with the same effect as if such representations and
warranties had been made or given at and as of the Closing, and all
agreements, covenants and conditions to be performed or met by Purchaser
on or prior to the Closing have been so performed or met in all
respects.

(d) No action or proceeding shall have been instituted or
threatened before any court, other governmental body or arbitrator to
restrain or prohibit the transactions contemplated in this Agreement or
that might subject any of the parties hereto to any liability, fine,
forfeiture or penalty on the ground that any of the parties hereto has
violated or will violate any applicable law in connection with the
transactions contemplated hereby.

(e) The issuance and sale of the Shares shall not violate any
applicable state, federal, or foreign securities laws.

ARTICLE 10
OTHER MATTERS

10.1 Notices. Any notice, request, or demand under this Agreement shall
be in writing and shall be deemed to have been duly given (i) upon personal
delivery, (ii) upon fax transmission to the recipient at the fax number listed
below, provided that a copy of the fax is promptly deposited for delivery by one
of the methods listed in (iii) or (iv) below, (iii) ten days after deposit in
the mails, if sent certified or comparable form of mail with return receipt
requested, addressed to the recipient at the address listed below, or (iv) five
days after deposit if deposited for delivery with a reputable courier or express
service, addressed to the recipient at the address listed below:

If to Agritope: Agritope, Inc.
8505 S.W. Creekside Place
Beaverton, Oregon 97008
U.S.A.
Attention: President
Fax: 503-520-6196

If to Purchaser: Purchaser's address listed on the cover page

A party may change its address or fax number for purposes of this Section 10.1
by giving the other parties notice of the change.

10.2 Amendments and Waiver. This Agreement may be amended or modified
by, and only by, a written instrument executed by each of the parties hereto.
The terms of this Agreement may be waived

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<PAGE>

by, and only by, a written instrument executed by the party or parties against
whom such waiver is sought to be enforced.

10.3 Expenses. Each party to this Agreement shall pay its own expenses
(including, without limitation, the fees and expenses of such party's counsel
incidental to the preparation of and consummation of this Agreement).

10.4 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not in any way affect the meaning or
interpretation of this Agreement.

10.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument. A facsimile transmission of a signed
original shall have the same effect as delivery of the signed original.

10.6 Parties in Interest; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement shall not be assigned by any
party hereto without the prior written consent of the other party.

10.7 Entire Agreement. This Agreement, together with all exhibits
hereto, constitutes the entire agreement and understanding between the parties
hereto relating to the subject matter hereof and supersedes any prior agreements
and understandings relating to such subject matter.

10.8 Severability. If any restriction in this Agreement exceeds that
permitted under applicable law, it shall be deemed modified to include the
maximum permissible restriction. If any provision is nonetheless held
unenforceable in any jurisdiction, the enforceability of this Agreement in any
other jurisdiction and the enforceability of the remaining provisions in that
jurisdiction shall not be affected.

10.9 Attorney Fees. In the event any party shall seek enforcement of any
covenant, warranty, indemnity, or other term or provision of this Agreement, the
party that prevails in such enforcement proceeding shall be entitled to recover
such reasonable costs and attorney fees which shall be determined by the
arbitrator or court (including any appellate court).

10.10 Survival. All the respective representations, warranties,
covenants, and other agreements of the parties hereunder or contained in any
schedule or certificate given in connection herewith or contemplated hereby
shall survive the Closing Date, except as they may be fully performed prior to
or at the Closing Date.

10.11 Form of Public Disclosures. Purchaser shall not make any public
disclosure concerning this Agreement and the transactions contemplated herein
unless Agritope has approved in advance the form and substance thereof.

10.12 Cumulative Rights and Remedies. All the rights and remedies
provided to the parties under this Agreement are cumulative, and none is
exclusive of any other right or remedy a party may have hereunder or under
applicable law.

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<PAGE>

10.13 No Third-Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person or entity other than the parties hereto and their
respective successors and permitted assigns.

10.14 Dispute Resolution.

(a) Conduct. Any dispute arising in connection with this
Agreement shall be finally settled by arbitration referred to and
conducted in accordance with the International Arbitration Rules of the
American Arbitration Association, except as such rules may conflict with
the provisions of this section in which event the provisions of this
section shall control. Any party may be represented by counsel therein.
Any such arbitration shall be conducted by a panel of one or more
arbitrators selected in accordance with the International Arbitration
Rules of the American Arbitration Association. The arbitration shall be
conducted in English in Portland, Oregon, U.S.A.

(b) Decision. Any decision or award of the arbitral tribunal
shall be final and binding upon the parties to the arbitration
proceeding. The arbitral tribunal's decision shall include a reasonably
detailed statement of the basis for the decision and computation of the
award, if any. The parties waive any rights to appeal such award to or
have it reviewed by any court or tribunal. The parties further agree to
exclude any right of application or appeal to any court in connection
with an question of law arising in the course of the arbitration. The
award may be enforced against the parties to the arbitration proceeding
or their assets wherever they may be found. Judgment upon the award may
be entered in any court having jurisdiction thereof or an application
may be made to such court for judicial acceptance of the award and an
order of enforcement, as the case may be.

(c) Costs. Except as the arbitral tribunal may otherwise
determine in its discretion, a party substantially prevailing in the
arbitration shall be entitled to recover its attorney fees and costs,
including the costs and expenses of its witnesses, and the other parties
shall pay the fees, costs and expenses of the arbitral tribunal and the
administering and appointing authority.

10.15 Governing Law. This Agreement shall be governed by and construed
in accordance with the substantive law (but not the conflict of law rules) of
the state of Oregon.

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<PAGE>

EXHIBIT B

CERTAIN DEFINITIONS UNDER REGULATION S

Set forth below is the text of Rule 902(o) promulgated under the
1933 Act which defines "U.S. person" as follows:

(o) U.S. Person.

(1) "U.S. person" means:

(i) Any natural person resident in the United States;

(ii) Any partnership or corporation organized or incorporated
under the laws of the United States;

(iii) Any estate of which any executor or administrator is a
U.S. person;

(iv) Any trust of which any trustee is a U.S. person;

(v) Any agency or branch of a foreign entity located in the
United States;

(vi) Any nondiscretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary for the benefit
or account of a U.S. person;

(vii) Any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States; and

(viii) Any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction; and (B) formed
by a U.S. person principally for the purpose of investing in shares not
registered under the 1933 Act, unless it is organized or incorporated,
and owned, by accredited investors (as defined in Rule 501(a)) who are
not natural persons, estates or trusts.

(2) Notwithstanding paragraph (o)(1) of this rule, any
discretionary account or similar account (other than an estate or trust) held
for the benefit or account of a non-U.S. person by a dealer or other
professional fiduciary organized, incorporated, or (if an individual) resident
in the United States shall not be deemed a "U.S. person."

(3) Notwithstanding paragraph (o)(1), any estate of which any
professional fiduciary acting as executor or administrator is a U.S. person
shall not be deemed a U.S. person if:

(i) An executor or administrator of the estate who is not a U.S.
person has sole or shared investment discretion with respect to the
assets of the estate; and

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<PAGE>

(ii) The estate is governed by foreign law.

(4) Notwithstanding paragraph (o)(1), any trust of which any
professional fiduciary acting as trustee is a U.S. person shall not be deemed a
U.S. person if a trustee who is not a U.S. person has sole or shared investment
discretion with respect to the trust assets, and no beneficiary of the trust
(and no settlor if the trust is revocable) is a U.S. person.

(5) Notwithstanding paragraph (o)(1), an employee benefit plan
established and administered in accordance with the law of a country other than
the United States and customary practices and documentation of such country
shall not be deemed a U.S. person.

(6) Notwithstanding paragraph (o)(1), any agency or branch of a
U.S. person located outside the United States shall not be deemed a "U.S.
person" if:

(i) The agency or branch operates for valid business reasons;
and

(ii) The agency or branch is engaged in the business of
insurance or banking and is subject to substantive insurance or banking
regulation, respectively, in the jurisdiction where located.

(7) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans shall not be deemed
"U.S. persons."

Set forth below is the text of Rule 9.02(p) promulgated under
the 1933 Act which defines "United States" as follows:

(p) "United States" means the United States of America, its
territories and possessions, any State of the United States, and the District of
Columbia.

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<PAGE>

EXHIBIT C

RIGHTS TO ACQUIRE SHARES

Preferred Stock Purchase Rights, as described in the Information
Statement/Prospectus included in the Registration Statement on Form S-1 filed
with the Securities and Exchange Commission (File No. 333-34597) ( the "Form
S-1").

Options to purchase Agritope Common Stock issued or issuable under the 1997
Stock Award Plan, which provides for issuance of options to purchase up to
2,000,000 shares of Agritope Common Stock.

Rights to purchase Agritope Common Stock under the 1997 Employee Stock Purchase
Plan, which provides for the issuance of up to 250,000 shares of Agritope Common
Stock.

Warrants to be issued to Vector Securities International, Inc., in connection
with the Spin-off, as described in the Form S-1.

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SERIES A PREFERRED STOCK PURCHASE AGREEMENT

Between

AGRITOPE, INC. ("Agritope") Vilmorin & Cie ("Purchaser")
8505 S. W. Creekside Place 71 Rue de Beaubourg
Beaverton, Oregon 97008 75003 Paris
Fax: 503.520.6196 Fax: (33) 142 7158 96

Purchaser agrees to purchase, and Agritope agrees to sell, Agritope Series A
Preferred Stock, $.01 par value per share, on the terms and conditions stated in
this Stock Purchase Agreement.

1. Number of Shares: 214,285

2. Total Purchase Price at $7.00 per share: $1,499,995

3. Domicile of Purchaser: France
(Country of organization, if a corporation or other entity; country of
residence, if an individual.)

4. Exhibits. The following exhibits are part of this Stock Purchase
Agreement:

Exhibit A: General Terms
Exhibit B: Certain Definitions under Regulation S
Exhibit C: Rights to Acquire Shares
Exhibit D: Certificate of Designation

Dated: December 5, 1997

AGRITOPE, INC. VILMORIN & CIE
(Purchaser)

By /s/ Gilbert N. Miller By /s/ Pierre Lefebvre
Gilbert N. Miller (Signature)
Executive Vice President
and Chief Financial Officer Pierre Lefebvre
(Print or type name)

C.E.O.
(Title)

<PAGE>
EXHIBIT A

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

GENERAL TERMS

NEITHER THE SHARES OF SERIES A PREFERRED STOCK BEING SOLD PURSUANT TO
THIS AGREEMENT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF THE SERIES A PREFERRED STOCK HAVE BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT"). SUCH SHARES MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF,
IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO
A U.S. PERSON, AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE 1933
ACT ("REGULATION S"), UNLESS (i) THE TRANSACTION IS REGISTERED UNDER
THE 1933 ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE, TERRITORY
OR POSSESSION OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA ("STATE
ACT"), OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT AND
ANY APPLICABLE STATE ACT IS AVAILABLE AND THE ISSUER HAS RECEIVED AN
OPINION OF COUNSEL TO SUCH EFFECT REASONABLY SATISFACTORY TO IT.

<PAGE>

TABLE OF CONTENTS

<TABLE>
Page

ARTICLE I
<S> <C> <C>
PURCHASE AND SALE OF SHARES.......................................................... 2
1.1 Sale of Shares............................................................................. 2
1.2 Payment and Delivery....................................................................... 2

ARTICLE II
CLOSING.................................................................... 2
2.1 Closing.................................................................................... 2
2.2 Actions at Closing......................................................................... 2

ARTICLE III
RESTRICTIONS ON TRANSFER............................................................ 2
3.1 General.................................................................................... 2
3.2 Certificate Legends........................................................................ 3

ARTICLE IV
INVESTMENT MATTERS............................................................... 4
4.1 Investment Representations................................................................. 4
(a) Domicile.............................................................................. 4
(b) Access to Information................................................................. 4
(c) Experience............................................................................ 4
(d) Investment Intent..................................................................... 4
4.2 Certain Restrictions....................................................................... 4
(a) United Kingdom........................................................................ 4
(b) France................................................................................ 4
4.3 Disclosure Document........................................................................ 5

ARTICLE V
REGISTRATION RIGHTS.............................................................. 5
5.1 Definitions................................................................................ 5
5.2 Requested Registration..................................................................... 5
5.3 Registration Procedure..................................................................... 6
5.4 Deferral for Material Events............................................................... 6
5.5 Furnish Information; Expenses.............................................................. 6
5.6 Expenses of Registration................................................................... 7
5.7 Indemnification............................................................................ 7
(a) Indemnification by Agritope........................................................... 7
(b) Indemnification by Holders of the Shares.............................................. 8
(c) Notice, Defense and Counsel........................................................... 8
(d) Survival of Rights and Obligations.................................................... 9

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF AGRITOPE.................................................... 9
6.1 Organization, Etc.......................................................................... 9
6.2 Authority.................................................................................. 9

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<PAGE>

6.3 Capitalization............................................................................. 9
6.4 Valid Issuance; Title...................................................................... 9
6.5 Disclosure Document........................................................................ 9
6.6 Tax Matters................................................................................ 10
6.7 Assets Needed for Business................................................................. 10
6.8 Litigation and Other Contingent Liabilities................................................ 10
6.9 Absence of Certain Adverse Effects......................................................... 10
6.10 Business Plan.............................................................................. 10
6.11 No Brokers................................................................................. 10
6.12 Disclosure................................................................................. 10

ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER.................................................. 10
7.1 Corporate Existence; Execution and Performance of Agreement................................ 10
7.2 Binding Obligations; Due Authorization..................................................... 11
7.3 No Brokers................................................................................. 11
7.4 Litigation................................................................................. 11
7.5 Disclosure................................................................................. 11

ARTICLE VIII
COVENANTS................................................................... 11
8.1 Best Efforts............................................................................... 11
8.2 Right of Access............................................................................ 11
8.3 Preservation of Business; Notice of Change................................................. 11

ARTICLE IX
CONDITIONS................................................................... 12
9.1 Conditions Precedent to Obligations of Purchaser........................................... 12
9.2 Conditions Precedent to Obligations of Agritope............................................ 13

ARTICLE X
PURCHASE OPTION................................................................ 14
10.1 Grant of Option............................................................................ 14
10.2 Exercise of Option......................................................................... 14

ARTICLE XII
OTHER MATTERS................................................................. 14
11.1 Notices.................................................................................... 14
11.2 Amendments and Waiver...................................................................... 15
11.3 Expenses................................................................................... 15
11.4 Headings................................................................................... 15
11.5 Counterparts............................................................................... 15
11.6 Parties in Interest; Assignment............................................................ 15
11.7 Entire Agreement........................................................................... 15
11.8 Severability............................................................................... 15
11.9 Attorney Fees.............................................................................. 15
11.10 Survival................................................................................... 15
11.11 Form of Public Disclosures................................................................. 15
11.12 Cumulative Rights and Remedies............................................................. 15

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11.13 No Third-Party Beneficiaries............................................................... 16
11.14 Dispute Resolution......................................................................... 16
(a) Conduct............................................................................... 16
(b) Decision.............................................................................. 16
(c) Costs................................................................................. 16
11.15 Governing Law.............................................................................. 16
</TABLE>

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<PAGE>

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

GENERAL TERMS

(European Purchaser)

RECITALS

A. Agritope is currently a wholly-owned subsidiary of Epitope, Inc., an
Oregon corporation that is publicly held ("Epitope"). The board of directors of
Epitope has authorized the spin-off of Agritope (the "Spin-off") to its
shareholders. The Spin-off will be accomplished through a dividend distribution
to Epitope shareholders of all the Agritope common stock, par value $.01 per
share, including associated preferred stock purchase rights ("Agritope Common
Stock") held by Epitope. After the distribution, Agritope will cease to be a
subsidiary of Epitope and will operate as an independent public company.

C. Purchaser wishes to invest in Agritope by purchasing newly issued
shares of Agritope Series A Preferred Stock, par value $.01 per share ("Agritope
Series A Preferred Stock") after the Spin-off occurs. Purchaser is only willing
to invest in Agritope if Agritope is an independent company and the Agritope
Common Stock is publicly traded. Although Purchaser intends to hold the Agritope
Series A Preferred Stock and the shares of Agritope Common Stock issuable upon
conversion of the Series A Preferred Stock for investment, a significant factor
in Purchaser's investment decision is the liquidity provided by a publicly
traded security. Purchaser is not willing to become a minority shareholder in
Agritope while it is a privately held company.

D. After the Spin-off, Purchaser wishes to purchase from Agritope the
number of shares listed on the cover page (the "Purchased Shares") of Agritope
Series A Preferred Stock for $7 per share. Agritope wishes to sell the Purchased
Shares to Purchaser on the terms and conditions set forth below.

E. As part of the sale terms, Agritope is granting Purchaser an option
to purchase additional shares of Agritope Series A Preferred Stock (the "Option
Shares") on the terms of this Agreement. The Purchased Shares and the Option
Shares are collectively referred to as the "Preferred Shares."

AGREEMENT

The parties agree as follows:

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<PAGE>

ARTICLE I
PURCHASE AND SALE OF SHARES

1.1 Sale of Shares. Upon the terms and conditions of this Agreement,
Agritope shall issue and sell the Purchased Shares to Purchaser and Purchaser
shall purchase the Purchased Shares from Agritope for the total purchase price
listed on the cover page (the "Purchase Price").

1.2 Payment and Delivery. On the Closing date, Purchaser shall pay the
Purchase Price by wire transfer in United States dollars to Agritope. At
Closing, Agritope shall deliver to the Purchaser stock certificates representing
the Purchased Shares.

ARTICLE II
CLOSING

2.1 Closing. The sale of the Purchased Shares shall be consummated at a
closing (the "Closing") on the third business day after the day the Spin-off
occurs (the "Closing Date"). Agritope shall notify Purchaser of the occurrence
of the Spin-off and sale of Agritope Common Stock to investors, and shall
simultaneously notify Purchaser of the Closing Date.

2.2 Actions at Closing. At the Closing:

(a) The Purchaser shall pay Agritope the Purchase
Price by wire transfer in United States dollars.

(b) Agritope shall deliver to Purchaser stock
certificates representing the Purchased Shares.

(d) The parties shall enter into a Research
Agreement on mutually agreeable terms negotiated by them.

(e) The parties shall take all other actions that
they deem necessary or desirable to consummate the purchase
and sale of the Purchased Shares hereunder.

ARTICLE III
RESTRICTIONS ON TRANSFER

3.1 General.

(a) PURCHASER SHALL NOT SELL, OFFER TO SELL, PLEDGE,
OR OTHERWISE TRANSFER ANY PREFERRED SHARES OR ANY SHARES OF
AGRITOPE COMMON STOCK ISSUED UPON CONVERSION OF THE PREFERRED
SHARES (THE "CONVERSION SHARES") TO ANY OTHER PERSON EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S AS IN
EFFECT ON THE DATE OF TRANSFER, PURSUANT TO REGISTRATION
UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION.

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<PAGE>

AGRITOPE SHALL REFUSE TO REGISTER ON ITS BOOKS ANY PURPORTED
TRANSFER MADE IN VIOLATION OF THIS SECTION 3.1, AND ANY SUCH
PURPORTED TRANSFER SHALL BE VOID.

(b) PURCHASER SHALL NOT ENGAGE IN ANY HEDGING
TRANSACTIONS INVOLVING THE PREFERRED SHARES OR THE CONVERSION
SHARES UNLESS IN COMPLIANCE WITH THE 1933 ACT.

(c) NEITHER THE PREFERRED SHARES NOR THE CONVERSION
SHARES HAVE BEEN REGISTERED UNDER THE 1933 ACT. THE PREFERRED
SHARES AND CONVERSION SHARES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO A
U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER
THE 1933 ACT), UNLESS (i) THE TRANSACTION IS REGISTERED UNDER
THE 1933 ACT AND ANY APPLICABLE STATE ACT, OR (ii) AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT AND ANY
APPLICABLE STATE ACT IS AVAILABLE AND THE ISSUER HAS RECEIVED
AN OPINION OF COUNSEL TO SUCH EFFECT REASONABLY SATISFACTORY
TO IT.

(d) Purchaser agrees to be bound by and comply with
all restrictions provided for in this Agreement on transfer
of the Preferred Shares or the Conversion Shares, and further
agrees that it shall not offer, sell, transfer, pledge or
otherwise dispose of the Preferred Shares or the Conversion
Shares in violation of any applicable securities or other
laws and regulations of a governmental authority having
jurisdiction over such disposition.

3.2 Certificate Legends. Certificates for the Preferred Shares and the
Conversion Shares shall bear substantially the following legends:

"THESE SHARES HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
("1933 ACT"), AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, UNLESS (i) THE TRANSACTION IS
EFFECTED IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
S UNDER THE 1933 ACT, (ii) THE TRANSACTION IS REGISTERED
UNDER THE 1933 ACT AND ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, TERRITORY OR POSSESSION OF THE UNITED STATES
OR THE DISTRICT OF COLUMBIA ("STATE ACT"), OR (iii) AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT AND ANY
APPLICABLE STATE ACT IS AVAILABLE AND THE ISSUER HAS
RECEIVED AN OPINION OF COUNSEL TO SUCH EFFECT REASONABLY
SATISFACTORY TO IT."

"HEDGING TRANSACTIONS INVOLVING THESE SHARES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT."

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ARTICLE IV
INVESTMENT MATTERS

4.1 Investment Representations. Purchaser represents and warrants to
Agritope as follows:

(a) Domicile. PURCHASER IS NOT A U.S. PERSON, AS THAT TERM IS
DEFINED ON EXHIBIT B.

(b) Access to Information. Purchaser has been given, a
reasonable time before execution of this Agreement, the opportunity to
ask questions and receive answers concerning Agritope and the terms and
conditions of the offering of the Preferred Shares and the Conversion
Shares, and to obtain any additional information that Agritope
possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of information furnished to Purchaser.
Purchaser has received any such additional information that Purchaser
has requested.

(c) Experience. Purchaser has sufficient knowledge and
experience in financial and business matters to be capable of
evaluating the merits and risks of an investment in the Preferred
Shares and the Conversion Shares, and has the ability to bear the
economic risk of that investment.

(d) Investment Intent. Purchaser is acquiring the Preferred
Shares and the Conversion Shares for Purchaser's own account and not on
behalf of any other person. Purchaser is not acquiring the Preferred
Shares or the Conversion Shares with a view to distribution or with the
intent to divide Purchaser's participation with others by reselling or
otherwise distributing the Preferred Shares or the Conversion Shares,
either directly or indirectly through a sale of its own capital stock.

4.2 Certain Restrictions. Purchaser acknowledges the following
restrictions:

(a) United Kingdom. If this Agreement and any
related documents are issued, circulated, or distributed to
Purchaser in the United Kingdom, Purchaser hereby
acknowledges that the offer of the Preferred Shares and the
Conversion Shares pursuant to this Agreement is effected by
private placing and that, accordingly, no steps have been
taken in any jurisdiction that would permit the issue of any
prospectus, application form, notice, circular, or other
invitation offering the Preferred Shares and the Conversion
Shares to the public for subscription or purchase, and
Purchaser hereby represents and warrants that (a) it is a
person falling within Article 11(3) of the Financial Services
Act of 1986 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom such materials may otherwise be
lawfully issued or passed on and (b) it is a person whose
ordinary activities involve it in acquiring, holding,
managing, or disposing of investments (as principal or agent)
for the purposes of its business or otherwise in
circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995.

(b) France. If this Agreement and any related
documents are issued, circulated, or distributed to Purchaser
in France, Purchaser hereby acknowledges that

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<PAGE>

this Agreement has been supplied in the context of a private
placing and that the placing of the Preferred Shares and the
Conversion Shares has not been effected through "demarchage"
(solicitation) within the meaning of the Law No. 72-6 of 3
January 1972. Purchaser hereby undertakes not to transfer or
assign directly or indirectly the Preferred Shares or the
Conversion Shares in France subsequent to their subscription.
This Agreement and any related documents (together with any
further information) are made available to Purchaser on the
condition that they are for use only by Purchaser in
connection with the proposed investment and shall neither be
passed on by Purchaser to any further person nor reproduced
in whole or in part. Purchaser has been notified by Agritope
to ensure that the terms of this undertaking are strictly
adhered to.

4.3 Disclosure Document. Purchaser acknowledges receipt of a
Registration Statement on Form S-1 filed by Agritope under the 1933 Act with
respect to the Spin-off, without exhibits, together with all amendments filed
with the U.S. Securities and Exchange Commission to the date hereof. Agritope
shall furnish to the Purchaser any additional amendments filed before the
Closing Date. As so amended, the Registration Statement is referred to herein as
the "Disclosure Document."

ARTICLE V
REGISTRATION RIGHTS

5.1 Definitions.

(a) "Eligible Shares" refers to shares of Agritope
Common Stock issuable upon conversion of Agritope Series A
Preferred Stock, other than shares that are not "restricted
securities" for purposes of Rule 144 promulgated under the
1933 Act.

(b) The terms "register," "registered," and
"registration" refer to a registration effected by preparing
and filing a registration statement or similar document in
compliance with the 1933 Act and the declaration or ordering
of effectiveness of such registration statement or document.

5.2 Requested Registration. If Agritope shall be requested by Purchaser
or an affiliated holder of Agritope Series A Preferred Stock or Eligible Shares
to effect a registration under the 1933 Act covering the Eligible Shares,
Agritope shall promptly give written notice of such proposed registration to all
persons who purchased Agritope Series A Preferred Stock from Agritope. Any
holders of Series A Preferred Stock who wish to participate in the offering must
respond within 10 days after receipt of such notice. Upon such a request,
Agritope shall as expeditiously as possible use its best efforts to file a
registration statement (the "Registration Statement") under the 1933 Act with
respect to the resale of Eligible Shares. If the request is made at a time when
Agritope is not eligible to use Form S-3, Agritope shall use its best efforts to
file the Registration Statement with respect to the Eligible Shares which
Agritope has been requested to register (a) in such request and (b) in any
response to such notice received by Agritope, within 60 days after the date by
which holders must respond to Agritope's notice. If the request is made at a
time when Agritope is eligible to use Form S-3, the Registration Statement shall
be filed with respect to all Eligible Shares as expeditiously as is practicable.
Agritope shall have an obligation to file a Registration Statement under this
Section 5.2 only once, except that if the Registration Statement filed is not on
Form S-3, and is not filed with respect to all Eligible Shares, Agritope shall

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<PAGE>

have an obligation to file a Registration Statement on Form S-3 with respect to
the remaining Eligible Shares if a later request is made under this section at a
time when Agritope is entitled to use Form S-3.

5.3 Registration Procedure. If obligated to file a Registration
Statement under Section 5.2, Agritope shall follow the registration procedures
set forth in this Section 5.3. Agritope shall use its best efforts to cause the
Registration Statement to become effective under the 1933 Act and to maintain
the effectiveness of the Registration Statement for a period of 90 days or, if
the Registration Statement is on Form S-3, two years. If required to permit
resale of the Eligible Shares in the state of New York, Agritope shall use its
best efforts to register or qualify the Eligible Shares covered by the
Registration Statement under the blue sky laws of the state of New York,
provided that Agritope shall not be required in connection therewith or as a
condition precedent thereto to qualify to do business or to file a general
consent to service of process in the state of New York. If required by
applicable law, Agritope shall furnish to the holders of the registered Eligible
Shares such reasonable number of copies of a prospectus, in conformity with the
requirements of the 1933 Act, and any amendments or supplements thereto and such
other documents as the holders of the registered Eligible Shares may reasonably
request in order to facilitate the disposition of the registered Eligible Shares
after the Registration Statement has been declared effective. Agritope shall use
reasonable efforts to notify the holders of the registered Eligible Shares when
a prospectus relating to the Eligible Shares is required to be delivered under
the 1933 Act, to notify the holders of the registered Eligible Shares of the
happening of any event as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, to file as promptly as may be practicable under the
circumstances such amendments and supplements as may be required on account of
such event, and to use its best efforts to cause each such amendment to become
effective. The holders of the registered Eligible Shares shall not effect sales
of Eligible Shares after receipt of notice from Agritope that any such amendment
or supplement is required on account of any such event, until the amendment
becomes effective or the supplement has been filed. Agritope's obligations
under this Section 5.3 shall expire at such time as Agritope is no longer
required to maintain the effectiveness of the Registration Statement as provided
for above.

5.4 Deferral for Material Events. If, because of a proposed material
acquisition or any other material event, the Agritope board of directors
reasonably determines that the filing or effectiveness of a Registration
Statement or of a supplement or amendment to the prospectus pursuant to this
Article V would be detrimental to Agritope, Agritope may defer such filing or
effectiveness for a period of up to 90 days after such filing or effectiveness
would otherwise ordinarily have occurred. For the purposes of the preceding
sentence, it shall be presumed that a Registration Statement would ordinarily be
filed 45 days after request under Section 5.2, that a supplement or amendment to
the prospectus would ordinarily be filed 10 days after notice referred to in
Section 5.3 and that the Registration Statement or any amendment to the
prospectus would ordinarily become effective five business days after filing an
acceleration request.

5.5 Furnish Information; Expenses. It shall be a condition precedent to
the obligations of Agritope in regard to the Eligible Shares to be registered
pursuant to Section 5.2 for any holder of such shares that the holder shall
furnish to Agritope such information regarding itself, the Eligible Shares held
by it, and the intended method of disposition of its Eligible Shares as shall be
required to effect the registration of its Eligible Shares, and shall agree to
be bound by the terms of this Article V if such holder is not already a party to
this Agreement.

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<PAGE>

5.7 Indemnification.

(a) Indemnification by Agritope. To the extent
permitted by law, Agritope shall indemnify and hold harmless
the Purchaser, each other holder of Eligible Shares being
registered, and the officers, directors, partners, agents,
and employees of each holder or any underwriter (as defined
in the 1933 Act) of such Eligible shares, and each person, if
any, who controls the Purchaser, each other such holder or
such underwriter within the meaning of the 1933 Act or the
United States Securities Exchange Act of 1934, as amended
(the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become
subject under the 1933 Act, the 1934 Act, or other federal or
state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or
violations (a "Violation"):

(i) any untrue statement or alleged
untrue statement of a material fact contained
in the Registration Statement, including any
preliminary prospectus or final prospectus
contained therein or any amendments or
supplements thereto,

(ii) the omission or alleged omission
to state therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading, or

(iii) any violation or alleged
violation by Agritope of the 1933 Act, the 1934
Act, any state securities law, or any rule or
regulation promulgated under the 1933 Act, the
1934 Act, or any state securities law.

Agritope shall reimburse the Purchaser and each such holder,
officer, director, partner, agent, employee, underwriter or
controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action.
The indemnity agreement contained in this subsection 5.7(a)
shall not apply to amounts paid in settlement of any loss,
claim, damage, liability, or action if such settlement is
effected without the consent of Agritope (which consent shall
not be unreasonably withheld), nor shall Agritope be liable
to the Purchaser or such other holder in any such case for
any such loss, claim, damage, liability, or action (A) to the
extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with
such registration by or on behalf of the Purchaser, such
other holder, or such underwriter or controlling person or
(B) in the case of a sale directly by the Purchaser or such
other holder of the Eligible Shares (including a sale of such
Eligible Shares through any underwriter retained by the
Purchaser or such other holder to engage in a distribution

- 7 -
<PAGE>

solely on behalf of the Purchaser or such other holder), if
such untrue statement or alleged untrue statement or omission
or alleged omission was contained in a preliminary prospectus
and corrected in a final or amended prospectus, and the
Purchaser or such other holder failed to deliver a copy of
the final or amended prospectus at or prior to the
confirmation of the sale of the Eligible Shares to the person
asserting any such loss, claim, damage or liability in any
case where such delivery is required by the 1933 Act.

(b) Indemnification by Holders of the Shares. To the
extent permitted by law, the Purchaser and each other holder
of Eligible Shares being registered shall indemnify and hold
harmless Agritope, each of its directors, each of its
officers who have signed the Registration Statement, each
person, if any, who controls Agritope within the meaning of
the 1933 Act, each agent and underwriter for Agritope, each
other holder of shares selling securities covered by the
Registration Statement, each director, officer, partner,
agent, and employee of such other holder or underwriter, and
each person, if any, who controls such other holder or
underwriter, against any losses, claims, damages, or
liabilities (joint or several) to which Agritope or any such
director, officer, partner, agent, employee, controlling
person, underwriter, or other holder may become subject,
under the 1933 Act, the 1934 Act, or other federal or state
law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by or on
behalf of the Purchaser or such other holder expressly for
use in connection with such registration; and the Purchaser
or such other holder shall reimburse any legal or other
expenses reasonably incurred by Agritope or any such
director, officer, partner, agent, employee, controlling
person, underwriter, or other holder, in connection with
investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity
agreement contained in this subsection 5.7(b) shall not apply
to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected
without the consent of such holder, which consent shall not
be unreasonably withheld; and provided, further, that the
indemnification obligation of the Purchaser or such other
holder shall be limited to the aggregate public offering
price of the Eligible Shares sold by the Purchaser or such
other holder pursuant to such registration.

(c) Notice, Defense and Counsel. Promptly after
receipt by an indemnified party under this Section 5.7 of
notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a
claim in respect thereof is to be made against any
indemnifying party under this Section 5.7, deliver to the
indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly
noticed, to assume and control the defense thereof with
counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to
retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential
differing interests between such indemnified party and any
other party represented by such counsel in such proceeding.
The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any
such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying

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<PAGE>

party of any liability to the indemnified party under this
Section 5.7 to the extent of such prejudice, but the omission
so to deliver written notice to the indemnifying party shall
not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 5.7.

(d) Survival of Rights and Obligations. The
obligations of Agritope, the Purchaser, and any other holders
of Eligible Shares under this Section 5.7 shall survive the
completion of any offering of the Eligible Shares covered by
the Registration Statement.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF AGRITOPE

To induce Purchaser to purchase the Shares, Agritope represents and
warrants to Purchaser as follows:

6.1 Organization, Etc. As of the Closing Date, Agritope will be a
corporation duly organized and validly existing under the laws of the state of
Delaware. Agritope has all requisite corporate power and authority to own its
properties and carry on its business as now conducted.

6.3 Capitalization. The authorized capital stock of Agritope as of the
Closing Date will consist of 30,000,000 shares of common stock and 10,000,000
shares of preferred stock. Immediately following the Closing Date, the number of
shares of capital stock outstanding or issuable pursuant to options to purchase
Agritope Series A Preferred Stock shall not be more than 5,250,000, and shall
consist only of Agritope Common Stock and Agritope Series A Preferred Stock. No
right to purchase or acquire shares of any unissued capital stock of Agritope or
shares convertible into or exchangeable for such capital stock is authorized or
outstanding, other than as set forth on Exhibit C.

6.4 Valid Issuance; Title. When issued and paid for in accordance with
the terms of this Agreement, the Purchased Shares and the Option Shares will be
validly issued, fully paid, and nonassessable. Upon delivery to Purchaser of the
certificates representing the Purchased Shares and the Option Shares pursuant to
this Agreement, Purchaser will have valid, marketable title to the Purchased
Shares and the Option Shares, respectively, free and clear of all encumbrances,
other than restrictions on transfer described in this Agreement.

- 9 -
<PAGE>

6.6 Tax Matters. Agritope has filed all required federal, state, and
other tax returns in a timely fashion and is not delinquent with respect to the
payment of any federal, state, or other taxes.

6.7 Assets Needed for Business. Agritope owns, leases, or otherwise has
the right to use all assets necessary for its present business.

6.8 Litigation and Other Contingent Liabilities. There are no actions
or proceedings pending or to the best of Agritope's knowledge threatened against
Agritope or any of its properties or assets or outstanding judgments or orders
to which Agritope is subject, which adversely affect Agritope's business,
operations, or financial condition. There is no action or proceeding pending or
to the best of Agritope's knowledge threatened against Agritope to restrain or
prohibit the sale of the Preferred Shares to Purchaser.

6.9 Absence of Certain Adverse Effects. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (a) conflict with, result in any violation of, constitute a default
under, or give rise to a right of acceleration or termination under, any
provision of the articles of incorporation or bylaws of Agritope or any
agreement, mortgage, bond, indenture, agreement, franchise, or other instrument
or obligation to which Agritope is a party or by which it is bound, (b) result
in the creation of any encumbrance upon any of the assets or properties of
Agritope, (c) violate any judgment or order against, or binding upon, Agritope
or upon the Preferred Shares, assets, properties, or business of Agritope, or
(d) constitute a violation by Agritope of any law.

6.10 Business Plan. Agritope has provided to Purchaser a copy of its
business plan for the next five years.

6.11 No Brokers. Agritope has not hired any broker or finder or
incurred any liability for fees or commissions to any such person in connection
with this Agreement, other than American Equities Overseas (UK) Ltd.

6.12 Disclosure. Except as disclosed herein and in the Disclosure
Document, no representation or warranty by Agritope contained in this Agreement
or in the Disclosure Document contains any untrue statement of a material fact,
or omits to state any material fact required to make the statements herein or
therein contained not misleading.

ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Agritope as follows:

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<PAGE>

7.3 No Brokers. Purchaser has not hired any broker or agent or incurred
any liability for fees or commissions to any such person in connection with this
Agreement.

7.4 Litigation. There is no action or proceeding pending or threatened
against Purchaser before any court, other governmental body or arbitrator to
restrain or prohibit the purchase of the Preferred Shares.

ARTICLE VIII
COVENANTS

8.1 Best Efforts. Each party shall use such party's good faith efforts
to cause the transactions contemplated hereby to be consummated as soon as
practicable after the Spin-off has been consummated and the closing of the $9.4
million placement (the "Placement") being made as a condition of the Spin-off
has occurred.

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<PAGE>

ARTICLE IX
CONDITIONS

(a) The Spin-off shall have occurred no later than
February 28, 1998, and the Placement proceeds shall have been
delivered to Agritope.

(b) Agritope shall have delivered certificates
representing the Purchased Shares to the Purchaser.

(c) All representations and warranties of Agritope
contained in this Agreement shall be true and correct in all
respects as of the Closing with the same effect as if such
representations and warranties had been made or given at and
as of the Closing, and all agreements, covenants and
conditions to be performed or met by Agritope on or prior to
the Closing shall have been so performed or met in all
respects, and there shall have been no material adverse
change in the financial or business condition of Agritope.
There shall have been no modification of any material
disclosure contained in the Disclosure Document since the
date of this Agreement.

(d) No action or proceeding shall have been
instituted or threatened before any court, other governmental
body or arbitrator (i) to restrain or prohibit the
transactions contemplated by this Agreement, (ii) that might
restrict the operation of Agritope's business in any material
respect if the purchase and sale of the Preferred Shares
hereunder is consummated, (iii) that might restrict the
ownership of the Preferred Shares or the exercise of any
rights with respect thereto by Purchaser, or (iv) that might
subject any of the parties hereto, to any liability, fine,
forfeiture or penalty on the ground that any of the parties
hereto has violated or will violate any applicable law in
connection with the transactions contemplated hereby.

(e) Purchaser shall have received an opinion of
Agritope's counsel to the effect that when issued and paid
for in accordance with the terms of this Agreement, the
Purchased Shares and Option Shares will be validly issued,
fully paid, and nonassessable, and addressing such other
matters as Purchaser may reasonably request not less than 15
days prior to Closing.

(f) Agritope shall simultaneously close with other
Purchasers who are buying Series A Preferred Stock on the
terms of Series A Preferred Stock Purchase Agreements similar
to this Agreement.

(g) Agritope shall have adopted and filed a
Certificate of Designation in the form attached as Exhibit D
to designate the rights, characteristics and preferences of
the Series A Preferred Stock.

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<PAGE>

(h) Agritope's board of directors shall have adopted
resolutions authorizing election of a Director by holders of
Series A Preferred Stock pursuant to its Certificate of
Incorporation and Bylaws.

(i) The Rights Agreement approved by Agritope's
board of directors shall permit Purchaser and other holders
of Agritope Series A Preferred Stock to convert such shares
to Agritope Common Stock without being deemed "Acquiring
Persons" for purposes of the Rights Agreement and Agritope's
board of directors shall have adopted resolutions to the
effect that such holders are not "Adverse Persons" (as
defined in the Rights Agreement), subject to execution of a
standstill agreement in form and substance satisfactory to
Agritope.

(j) Agritope shall have entered into a Research
Agreement with Purchaser containing mutually agreeable terms.

(k) Agritope shall have delivered to Purchaser an
officer's certificate confirming the correctness of
Agritope's representations and warranties and satisfaction of
the foregoing closing conditions.

(a) The Spin-off shall have occurred and the
Placement proceeds shall have been delivered to Agritope.

(b) Purchaser shall have paid the Purchase Price in
immediately available funds to Agritope.

(c) All representations and warranties of Purchaser
and Agritope contained in this Agreement shall be true and
correct in all respects as of the Closing with the same
effect as if such representations and warranties had been
made or given at and as of the Closing, and all agreements,
covenants and conditions to be performed or met by Purchaser
on or prior to the Closing have been so performed or met in
all respects.

(d) No action or proceeding shall have been
instituted or threatened before any court, other governmental
body or arbitrator to restrain or prohibit the transactions
contemplated in this Agreement or that might subject any of
the parties hereto to any liability, fine, forfeiture or
penalty on the ground that any of the parties hereto has
violated or will violate any applicable law in connection
with the transactions contemplated hereby.

(e) The issuance and sale of the Preferred Shares
shall not violate any applicable state, federal, or foreign
securities laws.

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<PAGE>

ARTICLE X
PURCHASE OPTION

10.1 Grant of Option. Agritope hereby grants Purchaser the option (the
"Option") to purchase up to 785,715 shares of Agritope Series A Preferred Stock
at a price of $7.00 per share on the terms and conditions of this Agreement,
mutatis mutandis. The Option shall expire to the extent not exercised prior to
5:00 P.M. Pacific Standard Time on January 15, 1998. Purchaser may assign the
Option, in whole or in part, to an affiliate or related party, provided the
assignee is a person to whom the Option Shares may be sold without violation of
applicable securities laws. Without limiting the foregoing, the assignee must
not be a U.S. person, as that term is defined on Exhibit B, and must make the
investment representations set forth in Article IV hereof. In addition, the
Option may not be exercised unless the sale complies with Regulation S.

10.2 Exercise of Option. Purchaser (or its assignee) may exercise the
Option by giving Agritope notice thereof ("Notice of Exercise") at any time
before expiration of the Option. The Notice of Exercise shall specify the number
of shares purchased, the name and address of the purchaser if other than the
Purchaser, and a date of closing, which shall be subject to the reasonable
convenience of Agritope. Not later than five business days after the Notice of
Exercise is given, the Purchaser (or its assignee) shall pay the purchase price
in immediately available funds and shall complete and sign a counterpart of this
Agreement if the purchaser is an assignee of the Purchaser. Agritope shall
deliver to the Purchaser (or its assignee, as the case may be) a certificate for
the Option Shares purchased, together with an officer's certificate and an
opinion of Agritope's counsel; such officer's certificate and opinion shall be
substantially similar to those documents delivered at the initial Closing.

ARTICLE XII
OTHER MATTERS

11.1 Notices. Any notice, request, or demand under this Agreement shall
be in writing and shall be deemed to have been duly given and received (i) upon
personal delivery, (ii) upon fax transmission to the recipient at the fax number
listed below, provided that a copy of the fax is promptly deposited for delivery
by one of the methods listed in (iii) or (iv) below, (iii) ten days after
deposit in the mails, if sent certified or comparable form of mail with return
receipt requested, addressed to the recipient at the address listed below, or
(iv) five days after deposit if deposited for delivery with a reputable courier
or express service, addressed to the recipient at the address listed below:

If to Agritope: Agritope, Inc.
8505 S.W. Creekside Place
Beaverton, Oregon 97008
U.S.A.
Attention: President
Fax: 503.520.6196

If to Purchaser: Purchaser's address listed on the cover page

A party may change its address or fax number for purposes of this Section 11.1
by giving the other parties notice of the change.

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<PAGE>

11.2 Amendments and Waiver. This Agreement may be amended or modified
by, and only by, a written instrument executed by each of the parties hereto.
The terms of this Agreement may be waived by, and only by, a written instrument
executed by the party or parties against whom such waiver is sought to be
enforced.

11.3 Expenses. Each party to this Agreement shall pay its own expenses
(including, without limitation, the fees and expenses of such party's counsel
incidental to the preparation of and consummation of this Agreement).

11.4 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not in any way affect the meaning or
interpretation of this Agreement.

11.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument. A facsimile transmission of a signed
original shall have the same effect as delivery of the signed original.

11.6 Parties in Interest; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement shall not be assigned by any
party hereto without the prior written consent of the other party.

11.7 Entire Agreement. This Agreement, together with all exhibits
hereto, constitutes the entire agreement and understanding between the parties
hereto relating to the subject matter hereof and supersedes any prior agreements
and understandings relating to such subject matter.

11.8 Severability. If any restriction in this Agreement exceeds that
permitted under applicable law, it shall be deemed modified to include the
maximum permissible restriction. If any provision is nonetheless held
unenforceable in any jurisdiction, the enforceability of this Agreement in any
other jurisdiction and the enforceability of the remaining provisions in that
jurisdiction shall not be affected.

11.9 Attorney Fees. In the event any party shall seek enforcement of
any covenant, warranty, indemnity, or other term or provision of this Agreement,
the party that prevails in such enforcement proceeding shall be entitled to
recover such reasonable costs and attorney fees which shall be determined by the
arbitrator or court (including any appellate court).

11.10 Survival. All the respective representations, warranties,
covenants, and other agreements of the parties hereunder or contained in any
schedule or certificate given in connection herewith or contemplated hereby
shall survive the Closing Date, except as they may be fully performed prior to
or at the Closing Date.

11.11 Form of Public Disclosures. Except as required by applicable law,
Purchaser shall not make any public disclosure concerning this Agreement and the
transactions contemplated herein unless Agritope has approved in advance the
form and substance thereof.

11.12 Cumulative Rights and Remedies. All the rights and remedies
provided to the parties under this Agreement are cumulative, and none is
exclusive of any other right or remedy a party may have hereunder or under
applicable law.

- 15 -
<PAGE>

11.13 No Third-Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person or entity other than the parties hereto and their
respective successors and permitted assigns.

11.14 Dispute Resolution.

(a) Conduct. Any dispute arising in connection with
this Agreement shall be finally settled by arbitration
referred to and conducted in accordance with the
International Arbitration Rules of the American Arbitration
Association, except as such rules may conflict with the
provisions of this section in which event the provisions of
this section shall control. Any party may be represented by
counsel therein. Any such arbitration shall be conducted by a
panel of one or more arbitrators selected in accordance with
the International Arbitration Rules of the American
Arbitration Association. The arbitration shall be conducted
in English in Portland, Oregon, U.S.A.

(b) Decision. Any decision or award of the arbitral
tribunal shall be final and binding upon the parties to the
arbitration proceeding. The arbitral tribunal's decision
shall include a reasonably detailed statement of the basis
for the decision and computation of the award, if any. The
parties further agree to exclude any right of application or
appeal to any court in connection with any question of law
arising in the course of the arbitration. The award may be
enforced against the parties to the arbitration proceeding or
their assets wherever they may be found. Judgment upon the
award may be entered in any court having jurisdiction thereof
or an application may be made to such court for judicial
acceptance of the award and an order of enforcement, as the
case may be.

(c) Costs. Except as the arbitral tribunal may
otherwise determine in its discretion, a party substantially
prevailing in the arbitration shall be entitled to recover
its attorney fees and costs, including the costs and expenses
of its witnesses, and the other parties shall pay the fees,
costs and expenses of the arbitral tribunal and the
administering and appointing authority.

11.15 Governing Law. This Agreement shall be governed by and construed
in accordance with the substantive law (but not the conflict of law rules) of
the state of Oregon.

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<PAGE>

EXHIBIT B

CERTAIN DEFINITIONS UNDER REGULATION S

Set forth below is the text of Rule 902(o) promulgated under
the 1933 Act which defines "U.S. person" as follows:

(o) U.S. Person.

(1) "U.S. person" means:

(i) Any natural person resident in the United
States;

(ii) Any partnership or corporation organized or
incorporated under the laws of the United States;

(iii) Any estate of which any executor or
administrator is a U.S. person;

(iv) Any trust of which any trustee is a U.S.
person;

(v) Any agency or branch of a foreign entity located
in the United States;

(vi) Any nondiscretionary account or similar account
(other than an estate or trust) held by a dealer or other
fiduciary for the benefit or account of a U.S. person;

(vii) Any discretionary account or similar account
(other than an estate or trust) held by a dealer or other
fiduciary organized, incorporated, or (if an individual)
resident in the United States; and

(viii) Any partnership or corporation if: (A)
organized or incorporated under the laws of any foreign
jurisdiction; and (B) formed by a U.S. person principally for
the purpose of investing in shares not registered under the
1933 Act, unless it is organized or incorporated, and owned,
by accredited investors (as defined in Rule 501(a)) who are
not natural persons, estates or trusts.

(3) Notwithstanding paragraph (o)(1), any estate of which any
professional fiduciary acting as executor or administrator is a U.S. person
shall not be deemed a U.S. person if:

(i) An executor or administrator of the estate who
is not a U.S. person has sole or shared investment discretion
with respect to the assets of the estate; and

(ii) The estate is governed by foreign law.

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<PAGE>

(6) Notwithstanding paragraph (o)(1), any agency or branch of
a U.S. person located outside the United States shall not be deemed a "U.S.
person" if:

(i) The agency or branch operates for valid business
reasons; and

(ii) The agency or branch is engaged in the business
of insurance or banking and is subject to substantive
insurance or banking regulation, respectively, in the
jurisdiction where located.

(7) The International Monetary Fund, the International Bank
for Reconstruction and Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank, the United Nations, and
their agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and pension plans shall
not be deemed "U.S. persons."

Set forth below is the text of Rule 9.02(p) promulgated under
the 1933 Act which defines "United States" as follows:

(p) "United States" means the United States of America, its
territories and possessions, any State of the United States, and the District of
Columbia.

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<PAGE>

EXHIBIT C

RIGHTS TO ACQUIRE SHARES

Options to purchase Agritope Common Stock issued or issuable under the 1997
Stock Award Plan, which provides for issuance of options to purchase up to
2,000,000 shares of Agritope Common Stock.

Rights to purchase Agritope Common Stock under the 1997 Employee Stock Purchase
Plan, which provides for the issuance of up to 250,000 shares of Agritope Common
Stock.

Warrants to be issued to Vector Securities International, Inc., in connection
with the Spin-off, as described in the Form S-1.

Warrants to be issued to American Equities Overseas, Inc., or its designees to
purchase 500,000 shares of Agritope Common Stock.

Options granted or to be granted to Purchaser and other purchasers of Agritope
Series A Preferred Stock, representing in the aggregate rights to purchase
785,715 shares of Agritope Series A Preferred Stock at a price of $7.00 per
share.

<PAGE>
EXHIBIT D

Certificate of Designation

[Filed as Exhibit 3.3 to the Company's Registration Statement]

RESEARCH AND DEVELOPMENT AGREEMENT

BETWEEN

AGRITOPE, INC.,

AND

VILMORIN & CIE

Dated December 5, 1997
<PAGE>

TABLE OF CONTENTS
-----------------

<TABLE>
SECTION PAGE
- ------- ----

<S> <C> <C>
1. Definitions............................................................................................ 1

2. Advisory Groups........................................................................................ 3
2.1 Project Advisory Committee.................................................................... 3
2.2 Scientific Advisory Board..................................................................... 4

3. Annual Project Selection............................................................................... 4

4. Selection of Projects at Other Times................................................................... 5

5. Preferred Access; Scope................................................................................ 5
5.1 Right of First Refusal; Failure to Submit Project............................................. 5
5.2 Remedy for Breach............................................................................. 6
5.3 Tomatoes Excluded............................................................................. 6

6. Project Funding........................................................................................ 6
6.1 Amount........................................................................................ 6
6.2 Payment....................................................................................... 6
6.3 Decision Not to Fund.......................................................................... 6
6.4 Minimum Funding............................................................................... 7

7. Conduct of Research.................................................................................... 7
7.1 Location...................................................................................... 7
7.2 Exchange of Technical Information............................................................. 7
7.3 Staffing...................................................................................... 7
7.4 Progress Reports; Research Results............................................................ 8
7.5 Termination................................................................................... 8

8. Ownership and Marketing Rights......................................................................... 8
8.1 Technology; No Transfer....................................................................... 8
8.2 Research License.............................................................................. 8
8.3 Projects that Utilize Agritope Technology, Research Expertise
and Facilities................................................................................ 8
8.4 Baseball Arbitration.......................................................................... 10
8.5 Projects that Utilize Vilmorin Technology and Agritope's Research
Expertise and Facilities...................................................................... 10
8.6 Projects That Utilize Both Agritope Technology and Vilmorin
Technology.................................................................................... 11
8.7 Completion of Defaulted Research Project...................................................... 11
8.8 Most Favored Customer......................................................................... 12
8.9 Access to Technology and Personnel............................................................ 12

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<PAGE>

9. Licenses............................................................................................... 12
9.1 Calculation of Royalties...................................................................... 12
9.2 Royalty Payments.............................................................................. 13
9.3 Reports and Records........................................................................... 14
9.4 Audits........................................................................................ 14
9.5 License to Improvements....................................................................... 15
9.6 Sublicenses................................................................................... 15

10. Patents................................................................................................ 15
10.1 Patents to Agritope Technology................................................................ 15
10.2 Patents for New Technology.................................................................... 15
10.3 Patents for Modified Crops.................................................................... 16
10.4 Status of Patent Applications................................................................. 16
10.5 Patent Maintenance............................................................................ 16
10.6 Election Not to Prosecute or Maintain......................................................... 16
10.7 Patent Costs.................................................................................. 16

11. Infringement by Others................................................................................. 17
11.1 Notice of Infringement........................................................................ 17
11.2 Cooperation................................................................................... 17

12. Representations and Warranties of Agritope............................................................. 17
12.1 Authority..................................................................................... 17
12.2 Ownership..................................................................................... 17
12.3 Noninfringement............................................................................... 17

13. Representations and Warranties of Vilmorin............................................................. 18
13.1 Authority..................................................................................... 18
13.2 Ownership..................................................................................... 18
13.3 Noninfringement............................................................................... 18

14. Covenants of Agritope and Vilmorin..................................................................... 18
14.1 Commercially Reasonable Efforts............................................................... 18
14.2 Marking of Products........................................................................... 18
14.3 Insurance..................................................................................... 18
14.4 Taxes......................................................................................... 19
14.5 Government Approvals.......................................................................... 19

15. Conditions to Effectiveness............................................................................ 19

16. Indemnification........................................................................................ 19
16.1 Indemnification by Agritope................................................................... 19
16.2 Indemnification by Vilmorin................................................................... 19
16.3 Patent Indemnification........................................................................ 20
16.4 Insurance Proceeds............................................................................ 20
16.5 Procedure for Indemnification................................................................. 20

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<PAGE>

16.6 Other Claims.................................................................................. 22
16.7 No Beneficiaries.............................................................................. 23

17. Confidentiality........................................................................................ 23
17.1 Confidentiality Obligation.................................................................... 23
17.2 Use........................................................................................... 23
17.3 Return........................................................................................ 23
17.4 Scope......................................................................................... 23
17.5 Required Disclosure........................................................................... 23
17.6 Patent Applications........................................................................... 24
17.7 Enforcement................................................................................... 24

18. Public Announcements................................................................................... 24
18.1 Scientific Publications....................................................................... 24
18.2 Terms of Agreements........................................................................... 24

19. Term and Termination................................................................................... 24
19.1 Term.......................................................................................... 24
19.2 Termination by Vilmorin....................................................................... 25
19.3 Termination by Agritope....................................................................... 25
19.4 Effect........................................................................................ 25

20. Baseball Arbitration Procedure......................................................................... 25
20.1 Parties....................................................................................... 25
20.2 Proposals..................................................................................... 25
20.3 Decision...................................................................................... 26
20.4 Rules......................................................................................... 26
20.5 Mediation; Process............................................................................ 26

21. Miscellaneous.......................................................................................... 26
21.1 No Agency..................................................................................... 26
21.2 Hiring of Employees........................................................................... 26
21.3 Agreements with Third Parties................................................................. 26
21.4 Cooperation; Additional Documents............................................................. 26
21.5 Notices....................................................................................... 27
21.6 Governing Law................................................................................. 27
21.7 Assignment.................................................................................... 27
21.8 Entire Agreement.............................................................................. 27
21.9 Attorney Fees................................................................................. 27
21.10 Arbitration................................................................................... 27
21.11 Severability.................................................................................. 28
21.12 Force Majeure................................................................................. 28
21.13 Captions...................................................................................... 29
21.14 Modification and Waiver....................................................................... 29
</TABLE>

EXHIBIT A PLANT SPECIES

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<PAGE>

RESEARCH AND DEVELOPMENT AGREEMENT

BETWEEN

AGRITOPE, INC. ("Agritope")
8505 SW Creekside Place
Beaverton, Oregon 97008-7108
U.S.A.

Tel: (503) 641-6115
Fax: (503) 520-6196

and VILMORIN & CIE ("Vilmorin")
71, rue de Beaubourg
75003 Paris
France

Tel: (33) 144 78 10 81
Fax: (33) 142 71 58 96

BACKGROUND AND OBJECTIVES

A. Agritope owns certain molecular genetic technology and know-how that
can be applied to multiple crops. Vilmorin owns certain proprietary germplasm
that may benefit from application of Agritope's technology and know-how.
Vilmorin wishes to have Agritope carry out research and development projects
with the goal of transforming Vilmorin's germplasm to confer commercially
desirable characteristics.

B. This Agreement sets forth the terms and conditions under which the
parties will enter into agreements for specific research and development
projects. The research is a preliminary step towards possible commercialization
of the transformed germplasm developed under the terms of this Agreement.

C. Concurrently with the execution of this Agreement, Agritope and
Vilmorin are entering into a stock purchase agreement (the "Stock Purchase
Agreement"), pursuant to which Vilmorin has agreed to purchase shares of
Agritope capital stock upon the terms and conditions set forth therein.

AGREEMENT

Agritope and Vilmorin agree as follows:

1. Definitions. Capitalized terms used but not defined elsewhere in
this Agreement shall have the meanings assigned to them in this Section 1.

"Affiliates" means persons or entities directly or indirectly,
through one or more intermediaries, controlling, controlled by, or
under common control with the specified entity.

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<PAGE>

"Agritope Technology" means Technology owned by Agritope or
licensed to Agritope by third parties with authority to use it as
contemplated by this Agreement.

"Competing Modified Crop" means, when used in reference to a
Crop or Modified Crop, a genetically altered version of germplasm owned
by a third party for the same plant species as the referenced Crop or
Modified Crop.

"Crop" means each vegetable and flower plant species listed on
Exhibit A. Vilmorin may add a Crop to Exhibit A by notice to Agritope
if Vilmorin either has newly commenced marketing of that Crop or has
undertaken actions intended to lead to Vilmorin's marketing of that
Crop, provided that Agritope has not previously entered into an
agreement or commitment with a third party that would be violated by
such addition.

"Field of Use" means with respect to Vilmorin the Crops listed
on Exhibit A and with respect to Agritope everything else.

"Indemnifiable Losses" means, with respect to any claim by an
Indemnitee for indemnification under Section 16 hereof, any and all
losses, liabilities, costs and expenses (including, without limitation,
the costs and expenses of any and all actions, demands, assessments,
judgments, settlements and compromises relating thereto and reasonable
attorney fees and expenses in connection therewith, including attorney
fees before and at trial and in connection with any appeal or petition
for review) suffered by such Indemnitee with respect to such claim.

"Indemnifying Party" means any party required to pay any other
person pursuant to Section 16 hereof.

"Indemnitee" means any party who is entitled to receive
payment from an Indemnifying Party pursuant to Section 16 hereof.

"Indemnity Payment" means the amount an Indemnifying Party is
required to pay an Indemnitee pursuant to Section 16 hereof.

"Insurance Proceeds" means those monies (i) received by an
insured from an insurance carrier or (ii) paid by an insurance carrier
on behalf of the insured, in either case net of any applicable premium
adjustment, retrospectively rated premium, deductible, retention, cost
or reserve paid or held by or for the benefit of such insured.

"Modified Crop" means the genetically altered version of a
Crop that results from a Research Project.

- 2 -
<PAGE>

"New Technology" means any Technology resulting from Research
Projects carried out by Agritope with the funding of Vilmorin as
contemplated by this Agreement, but excluding Modified Crops. New
Technology does not include Technology that is or becomes available to
the public on a royalty-free basis.

"Patent" means a patent, supplemental protection certificate,
plant variety protection certificate, or similar right to exclude
others from making, using, or selling the relevant invention, plant or
genetic material.

"Research Products" means commercially marketable Technology
or other results from Research Projects carried out by Agritope with
the funding of Vilmorin as contemplated by this Agreement, including
(without limitation) gene constructs, gene sequences and markers, and
promoters, but excluding Modified Crops. Research Products does not
include Technology or results that are or become available to the
public on a royalty-free basis.

"Research Project" means each research and development project
performed by Agritope with funding from Vilmorin.

"Technology" means all proprietary DNA sequences, genes,
promoters, gene constructs, and genetic transformation systems and
techniques, inventions and know-how that may be utilized in plant
genetic, plant biological or agricultural research or production
activities or otherwise.

"Trade Secrets" means all confidential information owned by
any party relating to the use or production of Technology. Confidential
information of one party ("Disclosing Party") shall no longer
constitute Trade Secrets when it (i) becomes publicly known without
fault of the other party or its Affiliates, (ii) is or has been
received in good faith by the other party without restriction on use or
disclosure from a third party having no obligation of confidentiality
to Disclosing Party; or (iii) is or has been independently developed by
the other party without reference to Confidential Information received
from Disclosing Party, as evidenced by the other party's written
records.

"Vilmorin Technology" means Technology owned by Vilmorin or
licensed to Vilmorin by third parties with authority to use it as
contemplated by this Agreement.

2. Advisory Groups.

2.1 Project Advisory Committee. Agritope shall establish a
Project Advisory Committee consisting of up to four members, two of whom shall
be designated by Vilmorin. The purpose of the Project Advisory Committee shall
be to make advisory recommendations to Agritope regarding Research Projects to
be conducted by Agritope and funded by Vilmorin.

- 3 -
<PAGE>

2.2 Scientific Advisory Board. In addition to the Project
Advisory Committee, Vilmorin shall be entitled to name one scientist to sit on
the Agritope Scientific Advisory Board as its representative.

3. Annual Project Selection. On an annual basis, Agritope shall decide
which research projects it would like to conduct and Vilmorin shall decide which
research projects it would like to have conducted by Agritope. The principal
steps of the annual project selection process, and the deadlines by which they
are to be completed, are outlined below:

Date Action
---- ------

May 1 Agritope and Vilmorin each submit proposed annual
Research Projects to the Project Advisory Committee.
Research Project proposals submitted by Agritope and
Vilmorin to the Project Advisory Committee shall
disclose each proposed project in sufficient detail
to enable the Project Advisory Committee to evaluate
the different projects and to offer suggestions and
proposals. The description of each project shall
include, without limitation, the identification of
the Crop or Crops to be modified, the Technology to
be used, the intended technical result of the
project, the estimated duration of the project, the
principal contract terms of the project if not
specified in this Agreement, the general parameters
of the commercialization agreement, to the extent
practicable, and such other information as may be
reasonably requested by the Project Advisory
Committee. Agritope also submits a budget of
anticipated costs of each project it proposes.

June 1 Agritope submits to the Project Advisory Committee a
budget of anticipated costs of each project proposed
by Vilmorin.

June 15 The Project Advisory Committee makes its
recommendation to Vilmorin and Agritope as to
Research Projects it believes should be conducted and
funded during the next fiscal year.

August 15 Vilmorin provides Agritope with its decision on which
projects it would like to fund.

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<PAGE>

September 1 Agritope in good faith, with input from Vilmorin,
decides which projects it will undertake and notifies
Vilmorin. The project proposal for a Research
Project, as accepted by the parties, shall constitute
the Research Project agreement between the parties
with respect to such Research Project. Agritope will
make commercially reasonable efforts to conduct all
Research Projects selected for full funding by
Vilmorin, subject to negotiation of the parties'
respective rights with respect to each project.

October 1 Beginning of fiscal year; Agritope initiates selected
Research Projects.

4. Selection of Projects at Other Times. If Agritope or Vilmorin wish
to conduct a Research Project that has not been previously proposed to the
Project Advisory Committee, or wishes to modify a research project that has been
recommended by the Project Advisory Committee, it may at any time submit the new
or modified project proposal to the Project Advisory Committee. The principal
steps that the parties shall take, and the deadlines by which they are to be
completed, are outlined below:

Days Before
Beginning Project Action
----------------- ------

60 Agritope or Vilmorin submit proposed Research
Project and budget to Project Advisory Committee.
The description of each project shall include the
information required for projects proposed under
Section 3.

30 Project Advisory Committee provides Agritope and
Vilmorin with its recommendation. Within 10 days
thereafter, Vilmorin provides Agritope with its
funding decision.

15 Agritope, with input from Vilmorin, decides in
good faith whether to proceed with the proposed
project or modification and notifies Vilmorin. The
project proposal, as accepted by the parties,
shall constitute the Research Project agreement.

0 Agritope initiates Research Project.

5. Preferred Access; Scope.

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<PAGE>

5.1 Right of First Refusal; Failure to Submit Project.
Vilmorin shall have a right of first refusal to fund and participate in any
research project by Agritope involving the genetic alteration of a Crop.
Specifically, Agritope shall not undertake any project involving genetic
alteration of a Crop (other than projects begun or committed as of the date of
this Agreement), unless Agritope has first offered the research project to
Vilmorin, whether or not proposed in accordance with the project selection
procedure described above. If Agritope breaches this obligation, upon learning
of the breach Vilmorin shall have the further right to pay the costs incurred to
date with respect to the project and to assume future project costs, in which
event Vilmorin shall have the same rights with respect to the project as if it
had participated in the project from its inception.

5.2 Remedy for Breach. As a contractual remedy,
notwithstanding 5.1, if Agritope engages in a research project with a third
party in breach of Vilmorin's right of first refusal, and if Vilmorin elects to
take over the project once having learned of it, the third party's rights shall
be canceled as part of the remedial actions taken in connection with Vilmorin's
assumption of the project. In furtherance thereof, Vilmorin shall be entitled to
an equitable remedy in the nature of a mandatory injunction or specific
performance to enforce its rights. Agritope alone shall be responsible for any
damages to any such third party as a result of such cancellation; the cost of
any such damages shall not be included in Agritope's overhead or costs for any
Research Project.

5.3 Tomatoes Excluded. Projects involving tomatoes shall be
excluded from this Agreement and any commercialization agreement between the
parties to the extent that, and in geographical areas where, third parties have
already acquired rights with respect to tomatoes at the date of this Agreement.

6. Project Funding.

6.1 Amount. Unless otherwise agreed, the funding required for
each Research Project shall consist of all out-of-pocket expenses incurred by
Agritope in performing the Research Project, including but not limited to
employee salaries, payroll taxes, and employee benefit costs, costs of
materials, services and supplies, and overhead computed in accordance with
Agritope's usual accounting procedures. The specific terms under which Vilmorin
will fund a project may include annual and/or aggregate dollar limits on its
funding obligations.

6.2 Payment. Except as otherwise agreed by the parties with
respect to any specific project, payments by Vilmorin shall be made within 30
days after receipt from Agritope of a detailed quarterly statement for each
active Research Project setting forth the funds received to date for the
project, the costs incurred to date, and the projected funding requirements for
the next quarter.

6.3 Decision Not to Fund. If Vilmorin elects not to fund a
specific project proposed by Agritope, Agritope may negotiate with third parties
to fund the project on comparable terms or may conduct the project itself
without third-party funding. If Agritope

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<PAGE>

elects not to conduct a project that Vilmorin offered to fund, Vilmorin may
enter into agreements with third parties for the project or may conduct the
project itself.

6.4 Minimum Funding. Agritope has granted Vilmorin an option
to purchase up to 785,715 shares of Agritope Series A Preferred Stock at a price
of $7 per share for an aggregate purchase price of $5,500,005. If Vilmorin does
not exercise the option in full, Vilmorin shall be obligated to fund Research
Projects in an amount equal to the difference between $5,500,005 and the actual
aggregate purchase price paid for the shares purchased pursuant to the exercise
of the option, provided, however, that Vilmorin shall not be required to pay
more than $1 million under this Section 6.4. Vilmorin's minimum funding
obligation will be made over a three-year period, commencing on January 1, 1998,
and will be applied to fund Research Projects selected by the parties and
approved for funding in accordance with the selection procedure described above.
The payment described in this section is a minimum funding commitment by
Vilmorin, and is not intended to limit decisions by Vilmorin to fund additional
Research Projects.

7. Conduct of Research.

7.1 Location. Unless otherwise agreed, each Research Project
shall be performed at Agritope's facilities.

7.2 Exchange of Technical Information. Agritope and Vilmorin
shall each make available to the other such technical information as may be
useful to facilitate each Research Project and commercialization of the
resulting Modified Crop, New Technology, or Research Products. Without
limitation, each party shall provide to the other such written information
regarding its Technology related to the Research Project as the other party may
reasonably request, provided the information is available or can be obtained
without unreasonable expense. Each party shall make its personnel who are
involved in a Research Project reasonably available during normal business hours
for consultation by telephone with the other party. In addition, each party
shall allow scientists or other appropriate personnel of the other party to
visit and have access to the first party's laboratories and other facilities, in
order to facilitate the exchange of such information. Reasonable travel costs
incurred by Agritope personnel to visit Vilmorin's facilities shall be
considered costs of the Research Project, which shall be borne by the parties in
the same manner as other costs of the Research Project. Similarly, travel costs
of Vilmorin's personnel incurred at Agritope's request shall be considered costs
of the Research Project. The obligations set forth in this Section 7.2 shall
expire upon completion of the applicable Research Project. Business class air
fare and actual costs for meals and incidentals shall be considered reasonable.

7.3 Staffing. Agritope shall utilize its own staff, whenever
possible, to accomplish its tasks in connection with each Research Project.
Agritope shall use reasonable efforts to make qualified personnel available to
work on the Research Project. Agritope may elect to hire additional qualified
personnel but shall not be required to do so. If Agritope uses outside
contractors or free-lance researchers, it shall notify Vilmorin, who shall have
the

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<PAGE>

right to disapprove or reject any such contractor or free-lance researcher for
projects funded by Vilmorin, in whole or in part.

7.4 Progress Reports; Research Results. Agritope shall provide
Vilmorin with reports describing the status of Agritope's activities and results
of research tasks conducted as part of each Research Project. Routine progress
reports shall be made quarterly or at other mutually agreed intervals.
Significant developments shall be reported as they occur.

7.5 Termination. If Vilmorin reasonably determines that
progress on a Research Project is unsatisfactory, it may elect to terminate its
participation in the Research Project on not less than 180 days' prior written
notice. If the parties agree to a modified or substitute Research Project under
Section 4 in place of an on-going Research Project, then the on-going Research
Project itself may be terminated in connection with such arrangement by mutual
agreement of the parties. Agritope and Vilmorin shall negotiate in good faith
the terms of any such termination.

8. Ownership and Marketing Rights.

8.1 Technology; No Transfer. Unless otherwise agreed with
respect to a particular Research Project, Vilmorin and Agritope shall jointly
own and have equal interests and rights in and to any New Technology and any
Research Products, provided, however, unless otherwise agreed, the right of each
party to market and commercialize New Technology or Research Products shall be
limited to such party's Field of Use. Notwithstanding the previous sentence, if
a party offers to the other party the right to participate in research projects
applying the New Technology or Research Products to a specified crop within the
other party's Field of Use and the other party elects not to participate, the
offering party may market and commercialize the specified crop incorporating the
New Technology or Research Products even though it is not within the offering
party's Field of Use. Nothing in this Agreement transfers ownership of a party's
existing Technology to any other party. Nothing in the Agreement transfers
ownership of any of Vilmorin's Crops to Agritope.

8.2 Research License. Vilmorin shall grant to Agritope a
royalty-free nonexclusive license to use its Crops and Vilmorin Technology in
connection with a Research Project solely for purposes of conducting the
research contemplated by such Research Project. No party shall make any
commercial use of any other's Crops or Technology except as permitted by this or
another written agreement.

8.3 Projects that Utilize Agritope Technology, Research
Expertise and Facilities. This Section 8.3 applies to Research Projects in which
Agritope utilizes only Agritope Technology and Agritope's research expertise and
facilities to modify Vilmorin's Crop (for example, a Research Project in which
Agritope's SAMase gene and promoters are inserted in Vilmorin's melon germplasm
to produce modified melons).

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<PAGE>

8.3.1 Technology Rights. Unless otherwise agreed,
Agritope and Vilmorin will jointly own any New Technology and any
Research Products developed in the course of the Research Project, and
Vilmorin will own the Modified Crop(s). Vilmorin will have the right to
market Modified Crops pursuant to the terms of a commercialization
agreement between Vilmorin and Agritope, which shall include an
obligation to pay royalties or equivalent compensation to Agritope.

8.3.2 Commercialization Agreement. Either prior to,
or at any time during the course of, a Research Project, Vilmorin and
Agritope will negotiate in good faith the terms of a commercialization
agreement. The commercialization agreement will address marketing of
the Modified Crop and compensation of Agritope and Vilmorin. Agritope's
compensation may consist of royalties on seed sales, royalties on sales
of mature crops, royalties based on savings realized by farmers
utilizing the Modified Crops or other mechanisms agreed upon by the
parties.

8.3.3 Exclusive Marketing Rights. If exclusive
marketing rights under the commercialization agreement are desired by
Vilmorin, then Vilmorin will provide to Agritope a marketing plan,
describing Vilmorin's current market share of the Crop and projected
market share for the Modified Crop, both on a geographical basis. Based
on this information, Vilmorin and Agritope will negotiate in good faith
to determine geographical regions (e.g., worldwide, Europe, North
America, or France) in which Vilmorin shall have exclusive or
nonexclusive marketing rights. Agritope shall give Vilmorin exclusivity
in geographical regions where Vilmorin demonstrates a strong likelihood
of obtaining a substantial market share. Any exclusive marketing rights
granted by Agritope to Vilmorin pursuant to this Section 8.3.3 for a
particular geographical region shall become nonexclusive in the event
that Vilmorin does not achieve and maintain a substantial market share
in such geographical region. The definition of "substantial market
share" shall be negotiated in good faith by the parties on a
case-by-case basis for each Modified Crop and shall be included in the
relevant commercialization agreement. For any period during which the
commercialization agreement gives Vilmorin exclusive marketing rights
for a Modified Crop in a region, Agritope will not enter into an
agreement with a third party permitting the marketing of a Competing
Modified Crop in that region.

8.3.4 Lead Time. In addition to any marketing rights
granted in a commercialization agreement pursuant to Section 8.3.3, for
a period of 24 months following the effective date of applicable
regulatory approval for sale of a Modified Crop in the markets
contemplated in the relevant commercialization agreement, Agritope will
not permit the sale by any third party of any Competing Modified Crop.
Thereafter, Agritope may sell or allow such sales by any third party
without restriction in those geographic

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<PAGE>

regions in which Vilmorin does not have exclusive marketing rights for
the Modified Crop pursuant to Section 8.3.3. If, however, a mutually
acceptable commercialization agreement has not been negotiated and
executed by the parties upon the effective date of such approval,
Agritope may enter into an agreement with any third party regarding the
commercialization of Competing Modified Crops.

8.3.5 Election Not to Market. If at any time after
the execution of a commercialization agreement between Agritope and
Vilmorin regarding a Modified Crop, Vilmorin elects not to market or
continue to market the Modified Crop in a particular country,
Vilmorin's rights under the commercialization agreement to market in
that country shall cease and Agritope may market or may enter into an
agreement with any third party regarding the marketing of any Competing
Modified Crop in that country.

8.4 Baseball Arbitration. If, in connection with the
negotiation of a commercialization agreement, the parties are not in agreement
on all the terms, including (without limitation) geographical regions of
exclusivity, royalty rates, or other quantifiable terms, then the provisions of
the commercialization agreement as to such terms shall be determined by
mediation or by binding "baseball" arbitration in accordance with Section 20.

8.5 Projects that Utilize Vilmorin Technology and Agritope's
Research Expertise and Facilities. This Section 8.5 applies to Research Projects
in which Agritope utilizes Vilmorin's Technology and Agritope's research
expertise, Trade Secrets or know-how, and facilities to modify Vilmorin's Crop.

8.5.1 Technology Rights. Unless otherwise agreed as
provided in Section 8.1, Agritope and Vilmorin will jointly own any New
Technology and any Research Products developed in the course of the
Research Project, and Vilmorin will own the Modified Crop(s). Vilmorin
will have the right to market such Modified Crops on the terms of a
commercialization agreement between Agritope and Vilmorin, including an
obligation to pay royalties to Agritope under the commercialization
agreement.

8.5.2 Commercialization Agreement and Exclusive
Marketing Rights. The parties will negotiate in good faith the terms of
a commercialization agreement and exclusive marketing rights for any
Modified Crops resulting from Research Projects under this Section 8.5
in the same manner as provided in Sections 8.3.2 and 8.3.3, the terms
of which are hereby incorporated by reference, mutatis mutandis.

8.5.3 Lead Time, Election Not to Market and Baseball
Arbitration. The provisions of Sections 8.3.4, 8.3.5 and 8.4,
respectively, the terms of which are hereby incorporated by reference,
mutatis mutandis, shall

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<PAGE>

apply to commercialization agreements and marketing rights under this
Section 8.5.

8.6 Projects That Utilize Both Agritope Technology and
Vilmorin Technology or New Technology. If a Research Project shall involve the
use of both Agritope Technology and Vilmorin Technology or New Technology, the
parties shall negotiate in good faith the terms of a commercialization agreement
and exclusive marketing rights for the Modified Crops as provided in Sections
8.3.2 and 8.3.3, mutatis mutandis, provided that in negotiating such terms the
parties will take into consideration the contribution of Vilmorin Technology to
the Research Project. The lead time, election not to market and baseball
arbitration provisions of Sections 8.3.4, 8.3.5 and 8.4, respectively, mutatis
mutandis, shall apply to any such commercialization agreements and marketing
rights.

8.7 Completion of Defaulted Research Project.

8.7.1 If Agritope shall be in default under the terms
of a Research Project agreement and shall fail to have cured such
default within 30 days after notice from Vilmorin (or if cure cannot be
accomplished within 30 days, shall fail to commence cure within 30 days
of such notice and thereafter diligently and continuously work to
accomplish cure as soon as possible), then Vilmorin shall have the
following remedies:

(a) It may terminate the Research Project pursuant to
the terms of Section 19.2; or

(b) It may extend the time for Agritope's performance
of such Research Project, with an appropriate suspension or
modification of Vilmorin's funding obligations until Agritope
has cured the default; or

(c) It may assume performance of the balance of the
Research Project at its expense. If Vilmorin assumes such
performance obligation, (i) it may, with the consent of
Agritope, which consent shall not be unreasonably withheld,
employ the employees or contractors of Agritope who have been
working on the Research Project for the purpose of completing
the Research Project, (ii) it shall be given access to, and
copies of, all research materials obtained or assembled by
Agritope for such Research Project, or prepared in connection
with the work performed by Agritope on the Research Project
prior to its default and (iii) it shall have the license and
right to use all relevant Agritope Technology reasonably
needed for completion of the Research Project.

8.7.2 Upon Vilmorin completing any Research Project
under this Section 8.7, the rights of the parties with respect to any
New Technology or Modified Crops shall be as set forth in 8.1. The
marketing of the Modified

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<PAGE>

Crop obtained as a result shall be on the terms of the
commercialization agreement and marketing rights negotiated by the
parties under Sections 8.3, 8.5, or 8.6, as the case may be, provided
Vilmorin shall be entitled to deduct from any royalties payable to
Agritope the excess of reasonable costs incurred by Vilmorin in order
to complete the Research Project, as compared to the funding Vilmorin
would have made under the Research Project if Agritope had not
defaulted.

8.8 Most Favored Customer. During the term of this Agreement,
it is Agritope's intention to deal with Vilmorin under this Agreement, Research
Project agreements, and commercialization agreements entered into in the future
pursuant to this Agreement as a most favored customer. Specifically, if Agritope
has entered into an agreement with a third party regarding Technology to be
applied to or commercialization of a Crop, and Agritope has previously entered
into or subsequently enters into a Research Project agreement or
commercialization agreement with Vilmorin (pursuant to this Agreement) for the
same Crop, everything else being equal (taking into account factors including,
without limitation, the nature of the Technology, the geographic market, and the
project goals), Vilmorin will be offered the same terms offered to the third
party. In all events, during the term of this Agreement, Agritope will have a
continuing obligation to deal with Vilmorin in good faith with regard to
Research Projects for a Crop and the marketing of a Modified Crop where the same
Crop has become the subject of a similar project or commercialization agreement
with a third party on materially different terms than the agreement to which
Vilmorin is a party, including consideration of whether any modification of the
terms of the Vilmorin agreement is appropriate under the circumstances.

8.9 Access to Technology and Personnel. In furtherance of the
purposes of this Agreement and the relationship of the parties under it, during
the term of this Agreement, each of the parties will provide the other a
reasonable right of access to its Technology and research personnel, as
requested from time to time, including (without limitation) the right to visit
the other party's facilities, to observe research operations and ask questions,
to be provided copies of documents and samples of other materials upon request,
and in general to share information; provided, however, a party may exclude from
such access material and information that is proprietary to a third party or
subject to a disclosure restriction under an agreement with a third party.
Subject to Section 7.2, each party will bear the expense of its personnel travel
and related costs in any visitations arranged under this Section 8.9.

9. Licenses. Unless otherwise agreed, the following terms and
conditions shall apply to any license granted by Agritope to Vilmorin pursuant
to this Agreement or a commercialization agreement, and to any other obligation
of Vilmorin to pay royalties to Agritope and, conversely, to any license granted
to Agritope by Vilmorin and Agritope's obligations to pay royalties.

9.1 Calculation of Royalties. Any royalty, license fee, or
equivalent compensation (collectively referred to as royalties in this Section
9) on the sale of any

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<PAGE>

Modified Crop shall be calculated based on the method agreed to by the parties
in the applicable commercialization agreement. Any royalty on the use of
Vilmorin Technology shall be calculated on the method agreed to by the parties
in the applicable Research Project agreement. Any royalty on the
commercialization of New Technology or Research Products shall be calculated
based on the method agreed to by the parties.

9.2 Royalty Payments. Royalty payments shall be made as
follows:

9.2.1 Royalties for amounts received in any calendar
quarter shall be paid within 45 days after the end of the calendar
quarter.

9.2.2 The obligation to pay a royalty on any Modified
Crop shall extend to any Modified Crop (a) that has been manufactured
or sold or has been or will be used in a country in which a valid and
enforceable Patent exists for the Agritope Technology incorporated in
the Modified Crop, (b) that constitutes or has been produced using
Agritope Trade Secrets, or (c) that has been sold in a country in which
no third party is lawfully selling, without Agritope's permission, a
Competing Modified Crop utilizing the Agritope Technology incorporated
in the Modified Crop.

9.2.3 Agritope and Vilmorin shall each pay a royalty
to the other with respect to its commercialization of New Technology
and Research Products within or without its Field of Use; provided,
however, that the royalty payable by Vilmorin under a commercialization
agreement upon its sale of a Modified Crop incorporating New Technology
shall satisfy this royalty obligation with respect to the incorporated
New Technology. The royalty shall be at a rate mutually agreed by the
parties. If the parties are unable to agree on a royalty rate, the rate
shall be determined by binding "baseball" arbitration in accordance
with Section 20.

9.2.4 The obligation to pay royalties on any Modified
Crop shall cease on a country-by-country basis, at such time and in the
event that (a) the Patent rights held in such country for the Modified
Crop are abandoned or expire or a court of competent jurisdiction in
the country in question renders a final decision from which no appeal
is or can be taken of invalidity or unenforceability of the Patent
rights, (b) the Modified Crop no longer constitutes or is produced
using Agritope Trade Secrets, and (c) a third party begins lawfully
selling, without Agritope's permission, a Competing Modified Crop
utilizing the Agritope Technology incorporated in the Modified Crop. If
in such decision one or more claims of the Patent rights in a country
are valid and permit the Modified Crop to be sold in such country free
of infringing a third party's rights, the obligation of Vilmorin to pay
with respect to the Modified Crop covered by such claims shall not be
affected. If a third party's rights are infringed so that Modified
Crops cannot be sold in the country or countries where such third party
rights are in force, Agritope may obtain a

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<PAGE>

license from such third party at its expense to permit Vilmorin to sell
the Modified Crops in such country or countries. If Agritope cannot or
does not obtain such a license, Vilmorin may itself attempt to obtain
such a license, but in such event Vilmorin shall be entitled to
subtract from any royalties due Agritope as a result of sales of
Modified Crops in such country or countries the amount of royalties
Vilmorin is obliged to pay such third party under its license.

9.2.5 All royalty payments shall be made in United
States Dollars ("Dollars"); provided, however, that if the proceeds of
the sales upon which such royalty payments are based are received by
Agritope or Vilmorin in a foreign currency or other form that is not
convertible or exportable in Dollars, and Agritope or Vilmorin (as the
case may be) does not have ongoing business operations or bank accounts
in the country in which the currency is not convertible or exportable,
Vilmorin or Agritope shall pay such royalties in the currency of the
country in which such sales were made by depositing such royalties in
the payee's name in a bank designated by such payee in such country.
Royalties in Dollars shall be computed by converting the royalty in the
currency of the country in which the sales were made at the exchange
rate for Dollars prevailing at the close of the last business day of
the quarter for which royalties are being calculated based upon the
applicable rate published in the Wall Street Journal (or other
comparable publication if that source is no longer available).

9.2.6 In the event the royalties set forth in the
applicable agreement are higher than the maximum royalties permitted by
the law or regulations of a particular country, the royalty payable for
sales in such country shall be equal to the maximum permitted royalty
under such law or regulations.

9.3 Reports and Records.

9.3.1 With the royalty payment for each calendar
quarter, the payor shall provide a written report to the payee with
respect to all amounts received during the quarter as to which
royalties are payable, stating the amounts thereof, showing the
calculation of royalties, and containing such other information as the
payee may reasonably request.

9.3.2 Vilmorin, Agritope, and their respective
sublicensees shall keep records adequate to verify each royalty report,
for a period of at least three years from the date of the report.

9.4 Audits. A party may, not more often than annually, request
that an audit of payor's and/or any sublicensee's records be performed by a
certified public accountant selected by the requesting party and reasonably
satisfactory to the payor, in order

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<PAGE>

to confirm the accuracy of payor's royalty reports, calculations, and payments.
Payor and its sublicensees shall cooperate with such an audit and shall permit
access to such records and facilities as may be requested in connection with the
audit. Payor shall pay the costs of the audit if the audit reveals underpayment
of royalties by more than 5 percent for the period covered by the audit.
Otherwise, the costs of the audit shall be borne by the requesting party.

9.5 License to Improvements. Vilmorin hereby grants Agritope a
royalty-free, nonexclusive perpetual license to make, use and sell any
improvements made by Vilmorin to Agritope's Technology in connection with any
Research Project or Modified Crop.

9.6 Sublicenses.

9.6.1 (a) Vilmorin may sublicense its rights and
interests under this Agreement in New Technology and Research Products
and under commercialization agreements for Modified Crops to any
Affiliate of Groupe Limagrain (Vilmorin's parent); provided, however,
that if any such sublicensee is divested by Groupe Limagrain so that it
is no longer an Affiliate of Groupe Limagrain, then unless Agritope
shall consent to such sublicense, the sublicense shall be terminated
effective with such divestiture. (b) Except as provided in (a),
Vilmorin may grant third parties sublicenses only with the prior
written consent of Agritope. Any approved sublicense must be reflected
in a written agreement explicitly requiring that the sublicensee comply
with Vilmorin's obligations under this Agreement and any other
agreement defining the license. Vilmorin shall supply Agritope with a
copy of each signed sublicense agreement.

9.6.2 Any sublicense shall provide that Agritope is
granted a royalty-free, nonexclusive perpetual license to make, use,
and sell any improvements made by the sublicensee to Agritope's
Technology.

9.6.3 Agritope may sublicense its rights and
interests under this Agreement in New Technology, Research Products,
and Vilmorin Technology incorporated therein to any third party only
with the prior written consent of Vilmorin, which consent shall not be
unreasonably withheld. Any approved sublicense must be reflected in a
written agreement requiring that the sublicensee comply with Agritope's
obligations under this Agreement and any other agreement defining the
license. Agritope shall supply Vilmorin with a copy of each signed
sublicense agreement.

10. Patents.

10.1 Patents to Agritope Technology. Agritope shall have the
exclusive right to obtain Patent protection for any Agritope Technology.

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<PAGE>

10.2 Patents for New Technology. Vilmorin and Agritope shall
jointly have the right to apply for Patents for any New Technology developed in
the course of a Research Project. If either Agritope or Vilmorin elects not to
apply for such a Patent in one or more countries, the other party shall have the
right to do so in those countries at its expense. The party applying for such a
Patent shall allow the other to review the application and important prosecution
documents a reasonable time before filing them, and consider in good faith any
comments received. Each party shall cooperate with the other and shall execute
all documents reasonably requested by the other in connection with the filing
and prosecution of such Patent applications.

10.3 Patents for Modified Crops. Vilmorin shall have the first
right to apply for Patents for any Modified Crop developed in the course of a
Research Project. If Vilmorin elects not to apply for such a Patent in one or
more countries, Agritope shall have the right to do so in those countries at its
expense. The party applying for such a Patent shall allow the other to review
the application and important prosecution documents a reasonable time before
filing them, and consider in good faith any comments received. Each party shall
cooperate with the other and shall execute all documents reasonably requested by
the other in connection with the filing of such Patent applications.

10.4 Status of Patent Applications. Each party shall keep the
other reasonably informed about any Patent applications it prepares or files for
Modified Crops or New Technology resulting from a Research Project, and upon
request shall provide copies to the other party. Each shall keep the other
reasonably informed of the course of prosecution of the applications. All
information disclosed under this Section 10.4 shall be considered Confidential
Information for purposes of Section 17 until publicly disclosed.

10.5 Patent Maintenance. Except as provided below, each party
shall pay all maintenance fees and other amounts required, and take all other
action reasonably required, to keep any Patents it owns that underlie New
Technology or Modified Crops, or for New Technology or Modified Crops in full
force and effect for the maximum term.

10.6 Election Not to Prosecute or Maintain. If a party elects
not to continue to prosecute or maintain any Patent application or Patent it
holds for New Technology or Modified Crops, it shall notify the other party at
least 90 days before the deadline for taking action to prosecute or maintain the
application or Patent, and if requested by the other party, take all action
required to prosecute or maintain the application or Patent at the other party's
expense.

10.7 Patent Costs. Except as otherwise agreed, Agritope's
costs of obtaining Patents for New Technology developed in the course of a
Research Project or for Modified Crops shall be considered costs of the
corresponding Research Project and borne by the parties accordingly. Except as
otherwise agreed or provided herein, costs of maintaining issued Patents in
force shall be borne by the Patent holder.

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<PAGE>

11. Infringement by Others.

11.1 Notice of Infringement. If a party learns of any
infringement or threatened infringement of the other party's Patents covering
any Modified Crops, New Technology, or Research Products, that party shall
promptly give the Patent holder notice of the infringement or threatened
infringement. The Patent holder shall have the right, but not the obligation, to
institute proceedings to enjoin any such infringement or recover any damages
therefor. If the Patent holder does not institute such proceedings within 90
days after receiving notice from the other party of actual infringement of
Patents covering Modified Crops, New Technology, or Research Products, in which
such other party has an interest on account of a commercialization agreement,
such other party shall have the right to institute such proceedings at its own
expense and to retain any damages recovered.

11.2 Cooperation. Each party shall provide the other with such
information concerning any infringement of Patents for Modified Crops, New
Technology, or Research Products, as the other may reasonably request and shall
cooperate with the other in connection with any legal action or settlement
negotiations. Each party agrees to be joined as a party to infringement
proceedings properly instituted by the other for infringement of Patents for
such Modified Crops, New Technology, or Research Products, if necessary or
desirable.

12. Representations and Warranties of Agritope. Agritope represents and
warrants to Vilmorin as follows:

12.1 Authority. Agritope has full power and authority to
execute, deliver, and perform this Agreement. The provisions of this Agreement
do not conflict with any other agreement to which Agritope is a party or by
which it is bound.

12.2 Ownership. Agritope is the owner of or has the right to
use Agritope Technology. Except as disclosed in the applicable commercialization
agreement, Agritope has the right to license to Vilmorin any Agritope Technology
needed to permit Vilmorin to make, use, and sell any Modified Crop or Research
Product and to use New Technology.

12.3 Noninfringement. No claim has been asserted by any person
to the effect that the development, sale, or use of products using Agritope
Technology currently infringes any patent. To the best of Agritope's knowledge,
use of Agritope Technology in any Research Project will not infringe in any
material respect the proprietary rights of any third person.

AGRITOPE MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO AGRITOPE
TECHNOLOGY OR THE RESULTS OF ANY RESEARCH PROJECT, INCLUDING BUT NOT LIMITED TO
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
AGRITOPE DOES NOT WARRANT THE EFFICACY OR SAFETY OF ANY TECHNOLOGY OR MODIFIED
CROP PROVIDED OR LICENSED TO VILMORIN.

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<PAGE>

13. Representations and Warranties of Vilmorin. Vilmorin represents and
warrants to Agritope as follows:

13.1 Authority. Vilmorin has full power and authority to
execute, deliver, and perform this Agreement. The provisions of this Agreement
do not conflict with any other agreement to which Vilmorin is a party or by
which it is bound.

13.2 Ownership. Vilmorin is the owner of or has the right to
permit Agritope to use the Crops and Vilmorin Technology to be utilized in any
Research Project. Vilmorin has the right to license to Agritope any Vilmorin
Technology needed to permit Agritope to make, use, and sell any Research Product
and to use New Technology.

13.3 Noninfringement. No claim has been asserted by any person
to the effect that the development, sale, or use of its Crops or Vilmorin
Technology to be utilized in any Research Project currently infringes any
patent. To the best of Vilmorin's knowledge, use of its Crops or Vilmorin
Technology in any Research Project will not infringe in any material respect the
rights of any third person.

VILMORIN MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO VILMORIN
TECHNOLOGY OR THE RESULTS OF ANY RESEARCH PROJECT, INCLUDING BUT NOT LIMITED TO
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
VILMORIN DOES NOT WARRANT THE EFFICACY OR SAFETY OF ANY CROP PROVIDED OR
LICENSED TO AGRITOPE.

14. Covenants of Agritope and Vilmorin.

14.1 Commercially Reasonable Efforts. Vilmorin shall use
commercially reasonable efforts to further develop, market, promote, and sell
Modified Crops. Vilmorin shall bear all costs and expenses of doing so. If
either party elects not to commercialize and market any New Technology or
Research Product for a crop within its Field of Use in a particular geographic
market, then the other party shall have the right, upon reasonable notice, to
market such New Technology or Research Product for such crop in such geographic
market.

14.2 Marking of Products. Agritope and Vilmorin each shall
legibly mark all Modified Crops, New Technology, Research Products and other
goods incorporating or produced using Technology licensed from Agritope or
Vilmorin (or the packaging containing such goods) with a statement identifying
any patents incorporated therein or used in the production thereof and a
statement that the goods have been produced under license from Agritope or
Vilmorin. A party may omit reference to patents that have expired.

14.3 Insurance. During the term of this Agreement, Agritope
and Vilmorin each shall maintain such comprehensive general liability insurance,
including products liability insurance, with such company and containing such
provisions as shall be satisfactory

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<PAGE>

to the other, as will adequately insure both Agritope and Vilmorin against the
risks associated with the manufacture, sale, and use of goods incorporating or
made using Technology licensed from the other or New Technology with a loss
payable endorsement naming both parties as a beneficiary. Such policy shall
provide that the coverage thereunder shall not be terminated without at least 30
days' prior written notice to the other party. Agritope and Vilmorin shall upon
request provide the other with a certificate of insurance evidencing such
insurance coverage.

14.4 Taxes. Each party shall pay all fees, taxes, and other
charges levied upon it under applicable law by government authorities upon or in
connection with any sales or other transactions covered by this Agreement,
including without limitation taxes on sales, use, transactions, license fee
payments, or inventory, other than franchise taxes or taxes on the other party's
net income.

14.5 Government Approvals. Agritope and Vilmorin will use
commercially reasonable efforts to obtain all permits, licenses, and approvals
from government authorities necessary for the parties to sell Modified Crops,
Research Products, or other goods incorporating or made using New Technology or
Technology licensed from Agritope or Vilmorin; provided, however, that neither
Agritope nor Vilmorin shall be liable or responsible to the other due to a
failure to obtain such permits, licenses, or approvals.

15. Conditions to Effectiveness. This Agreement and the rights and
obligations of the parties set forth herein shall not become effective until the
following conditions are satisfied:

15.1 The spin-off of Agritope from Epitope, Inc. and the $9.4
million placement as disclosed in Agritope's Registration Statement on Form S-1
under Amendment No. 3 dated December 5, 1997, each shall have occurred ; and

15.2 The closing of the Stock Purchase Agreement shall have
occurred.

16. Indemnification.

16.1 Indemnification by Agritope. Agritope will indemnify,
defend and hold harmless Vilmorin and its directors, officers, employees, and
agents from and against any and all Indemnifiable Losses arising out of or due
to, directly or indirectly: (i) liabilities incurred in the course of the
business or operations of Agritope, except to the extent resulting from a breach
of Vilmorin's warranties set forth herein; and (ii) any material breach of any
warranty made in this Agreement by Agritope.

16.2 Indemnification by Vilmorin. Vilmorin will indemnify,
defend and hold harmless Agritope and each of its directors, officers,
employees, and agents from and against any and all Indemnifiable Losses arising
out of or due to, directly or indirectly: (i) liabilities incurred in the course
of the business or operations of Vilmorin, including liabilities arising out of
the commercial use of any Modified Crop, except to the extent

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<PAGE>

resulting from a breach of Agritope's warranties set forth herein; and (ii) any
material breach of any warranty made in this Agreement by Vilmorin.

16.3 Patent Indemnification. Agritope and Vilmorin each will
indemnify, defend and hold harmless the other, and its directors, officers,
employees and agents, from and against any and all Indemnifiable Losses arising
out of, or due to, directly or indirectly, alleged infringement of any third
party's patents or proprietary rights by the use or inclusion of Agritope
Technology or Vilmorin Technology, as the case may be, in (or in connection
with) Modified Crops, Research Products, or New Technology.

16.4 Insurance Proceeds. The amount that any Indemnifying
Party is or may be required to pay to any Indemnitee pursuant to Sections 16.1,
16.2, or 16.3 hereof will be reduced (including, without limitation,
retroactively) by any Insurance Proceeds and other amounts actually recovered by
or on behalf of such Indemnitee in reduction of the related Indemnifiable Loss.
If an Indemnitee shall have received an Indemnity Payment in respect of an
Indemnifiable Loss and shall subsequently actually receive Insurance Proceeds or
other amounts in respect of such Indemnifiable Loss as specified above, then
such Indemnitee will pay to such Indemnifying Party a sum equal to the amount of
such Insurance Proceeds or other amounts actually received. Notwithstanding the
foregoing, nothing in this section grants to an Indemnitee any direct or
indirect rights or benefits to insurance coverage, nor requires an Indemnifying
Party to make any claim for insurance coverage.

16.5 Procedure for Indemnification.

16.5.1 If a party shall receive notice of any claim
or action brought, asserted, commenced or pursued by any person or
entity not a party to this Agreement (hereinafter a "Third Party
Claim"), with respect to which another party is or may be obligated to
make an Indemnity Payment, it shall give such other party prompt notice
thereof (including any pleadings relating thereto), specifying in such
reasonable detail as is known to it the nature of such Third Party
Claim and the amount or estimated amount thereof; provided, however,
that the failure of a party to give notice as provided in this Section
16.5 shall not relieve the other party of its indemnification
obligations under this Section 16, except to the extent that such other
party is actually prejudiced by such failure to give notice.

16.5.2 For any Third Party Claim concerning which
notice is required to be given, and, in fact, is given under Section
16.5.1, the Indemnifying Party shall defend in a timely manner, to the
extent permitted by law, such Third Party Claim through counsel
appointed by the Indemnifying Party and reasonably acceptable to the
Indemnitee. Once an Indemnifying Party has commenced its defense of an
Indemnitee, it cannot withdraw from such defense until conclusion of
the matter, unless the Indemnified Party agrees to the withdrawal or
the Indemnitee is also defending the claim. The

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<PAGE>

Indemnitee shall have the right to participate in the defense of the
Third Party Claim by employing separate counsel at its own expense.

16.5.3 If a party responds to a notice of a Third
Party Claim by denying its obligation to indemnify the other party, or
if the Indemnifying Party fails to defend in a timely or reasonably
satisfactory manner, the Indemnitee shall be entitled to defend such
Third Party Claim through counsel appointed by it. In addition, if it
is later determined that such party wrongfully denied such claim, or
the Indemnifying Party failed to defend timely or in a reasonably
satisfactory manner, then the Indemnifying Party shall (i) reimburse
the Indemnitee for all reasonable costs and expenses (including
attorney fees before and at trial and in connection with any appeal or
petition for review, but excluding salaries of officers and employees)
incurred by the Indemnitee in connection with its defense of such Third
Party Claim; and (ii) be estopped from challenging a judgment, order,
settlement, compromise, or consent judgment resolving the Third Party
Claim entered into in good faith by the Indemnitee (if such claim has
been resolved prior to the conclusion of the proceeding between the
Indemnitee and Indemnifying Party). An Indemnifying Party, after
initially rejecting a claim for defense or indemnification, may defend
and indemnify the Indemnitee, at any time prior to the resolution of
said Third Party Claim, for such claim, provided that (x) the
Indemnifying Party reimburses the Indemnitee for all reasonable costs
and expenses (including attorney fees before and at trial and in
connection with any appeal or petition for review, but excluding
salaries of officers and employees) incurred by the Indemnitee in
connection with its defense of such Third Party Claim up to the time
the Indemnifying Party assumes control of the defense of such claim
(including costs incurred in the transition of the defense from the
Indemnitee to the Indemnifying Party); and (y) the assumption of the
defense of the Third Party Claim is not expected to prejudice or cause
harm to the Indemnitee.

16.5.4 With respect to any Third Party Claim for
which indemnification has been claimed hereunder, no party shall enter
into any compromise or settlement, or consent to the entry of any
judgment which (i) does not include as a term thereof the giving by the
third party of a release to the Indemnitee from all further liability
concerning such Third Party Claim on terms no less favorable than those
obtained by the party entering into such compromise, settlement or
consent; or (ii) imposes any obligation on the Indemnitee without such
Indemnitee's written consent (such consent not to be withheld
unreasonably), except an obligation to pay money which the Indemnifying
Party has agreed to pay and has the ability to pay on behalf of the
Indemnitee. In the event that an Indemnitee enters into any such
compromise, settlement or consent without the written consent of the
Indemnifying Party (other than as contemplated by Section 16.5.3
hereof), the entry of such compromise, settlement or consent shall
relieve the Indemnifying

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<PAGE>

Party of its indemnification obligation related to the claims
underlying such compromise, settlement or consent.

16.5.5 Upon final judgment, determination, settlement
or compromise of any Third Party Claim, and unless otherwise agreed by
the parties in writing, the Indemnifying Party shall pay promptly on
behalf of the Indemnitee, or to the Indemnitee in reimbursement of any
amount theretofore required to be paid by the Indemnitee, the amount so
determined by final judgment, determination, settlement or compromise.
Upon the payment in full by the Indemnifying Party of such amount, the
Indemnifying Party shall succeed to the rights of such Indemnitee to
the extent not waived in settlement, against the third party who made
such Third Party Claim and any other person who may have been liable to
the Indemnitee with respect to the indemnified matter.

16.5.6 In connection with defending against Third
Party Claims, the parties shall cooperate with and assist each other by
making available all employees, books, records, communications,
documents, items and matters within their knowledge, possession or
control that are necessary, appropriate or reasonably deemed relevant
with respect to defense of such claims; provided, however, that nothing
in this Section 16.5.6 shall be deemed to require the waiver of any
privilege, including the attorney-client privilege, or protection
afforded by the attorney work product doctrine. In addition, regardless
of the party actually defending a Third Party Claim for which there is
an indemnity obligation under Sections 16.1, 16.2, or 16.3 hereof, the
parties shall give each other regular status reports relating to such
action with detail sufficient to permit the other party to assert and
protect its rights and obligations under this Agreement.

16.6 Other Claims. Any claim for an Indemnifiable Loss which
does not result from a Third Party Claim shall be asserted by written notice
from the Indemnitee to the Indemnifying Party within 120 days of first learning
thereof. All such claims that are not timely asserted pursuant to this section
shall be deemed to be forever waived. The Indemnitee's written notice shall
contain such information as the Indemnitee has regarding the alleged breach.
Such Indemnifying Party shall have a period of 120 days (or such shorter time
period as may be required by law as indicated by the Indemnitee in the written
notice) within which to respond thereto. If such Indemnifying Party does not
respond within such 120-day period (or lesser period), such Indemnifying Party
shall be deemed to have accepted responsibility to make payment for the amount
of Indemnifiable Loss and shall have no further right to contest the validity of
such claim. If such Indemnifying Party does respond within such 120-day (or
lesser) period and rejects such claim in whole or in part, such Indemnitee shall
be free to pursue such remedies as may be available under applicable law or
under this Agreement.

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<PAGE>

16.7 No Beneficiaries. Except to the extent expressly provided
otherwise in this Section 16, the indemnification provided for by this Section
16 shall not inure to the benefit of any third party or parties and shall not
relieve any insurer who would otherwise be obligated to pay any claim of the
responsibility with respect thereto or, solely by virtue of the indemnification
provisions hereof, provide any such subrogation rights with respect thereto and
each party agrees to waive such rights against the other to the fullest extent
permitted.

17. Confidentiality. Information disclosed by any party ("Disclosing
Party") to another ("Recipient") shall be protected from disclosure as follows:

17.1 Confidentiality Obligation. Recipient shall keep
confidential any nonpublic information about Disclosing Party's technology or
existing or proposed business or products ("Confidential Information") whether
written, oral, embodied in product samples, or in other forms. Recipient shall
protect Confidential Information from disclosure by using reasonable care, but
at least the same degree of care as Recipient uses to protect its own
confidential information. Recipient may disclose Confidential Information to its
employees who need to know Confidential Information in connection with this
Agreement and who agree to be bound by the restrictions imposed on Recipient by
this Section 17.1. A breach of this Section 17.1 by Recipient's employees shall
be deemed a breach by Recipient.

17.2 Use. Recipient shall not use or allow others to use
Confidential Information, except for purposes contemplated by this Agreement.

17.3 Return. At Disclosing Party's request or termination or
expiration of this Agreement, Recipient shall return all materials furnished by
Disclosing Party that contain Confidential Information, without retaining any
copies, except to the extent Recipient reasonably requires the materials in
order to perform its obligations or exercise its continuing rights under this
Agreement. Recipient may retain in its confidential files one copy of written
Confidential Information for record purposes only. Upon request, Recipient will
state in writing under oath whether it has complied with this Section 17.3.

17.4 Scope. This Section 17 shall survive termination of this
Agreement and shall remain in effect as long as Recipient possesses Confidential
Information, but shall not apply to Confidential Information that: (i) is or
becomes publicly available through no fault of Recipient; or (ii) is or has been
received in good faith by Recipient without restriction on use or disclosure
from a third party having no obligation of confidentiality to Disclosing Party;
or (iii) is or has been independently developed by Recipient without reference
to Confidential Information received from Disclosing Party, as evidenced by
Recipient's written records.

17.5 Required Disclosure. If Recipient is required by law or
judicial or administrative process to disclose Confidential Information provided
by Disclosing Party, Recipient shall promptly notify Disclosing Party and allow
Disclosing Party a reasonable time to oppose such law or process. If disclosure
is nonetheless required, Recipient may

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<PAGE>

disclose only the Confidential Information that, in the written opinion of
counsel acceptable to Disclosing Party, Recipient is legally required to
disclose. Recipient shall use its commercially reasonable efforts to limit the
dissemination of Confidential Information that is disclosed; for example, by
obtaining the Agreement of the agency to which Confidential Information is
disclosed to treat the Confidential Information as confidential.

17.6 Patent Applications. The parties acknowledge that
Recipient may wish to disclose Confidential Information in a patent application
covering an invention by Recipient or a jointly owned invention. Disclosing
Party shall not unreasonably withhold consent to Recipient's disclosing in the
patent application such Confidential Information as Recipient is required to
disclose, in the written opinion of patent counsel acceptable to Disclosing
Party.

17.7 Enforcement. In the event of a default under this Section
17 by Recipient, Disclosing Party shall be entitled to injunctive relief in
addition to any other available remedies, including damages.

18. Public Announcements.

18.1 Scientific Publications. Subject to Section 18.2, no
party shall publish any report or make public any information about the Research
Projects without the prior written consent of the other party. Without
limitation, approval may be withheld unless the party wishing to publish or
disclose has first provided the full text of the proposed publication to the
other, obtained the other's written consent to publication, and made any changes
reasonably requested by the other.

18.2 Terms of Agreements. No party shall make a public
announcement or other disclosure of the existence or terms of this Agreement or
any other agreement between the parties, except as may be required by applicable
law. Vilmorin acknowledges that Agritope is required by law to file all material
agreements, which may include this Agreement or any other agreement between the
parties, with the Securities and Exchange Commission, and agrees that Agritope
may do so without Vilmorin's further consent.

19. Term and Termination.

19.1 Term. The term of this Agreement shall commence upon
satisfaction of the conditions set forth in Section 15 and, unless earlier
terminated as provided below, shall continue until the earlier of (i) expiration
of all Patents (and absence of all Trade Secrets) for Technology used in
Modified Crops, which Modified Crops are themselves the subject of
commercialization agreements that are in force between the parties and (ii) the
date on which Vilmorin's interest in Agritope falls below 214,285 shares of
capital stock. Such number of shares shall be appropriately adjusted to take
into account stock splits, reverse stock splits, stock dividends, or similar
recapitalization.

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19.2 Termination by Vilmorin. Vilmorin may terminate this
Agreement (a) in its entirety if Agritope defaults in its obligations and does
not cure the default within 30 days after notice, or (b) with respect to any
Research Project, if Agritope defaults in its obligations under the terms of the
Research Project agreement and does not cure the default within 30 days after
notice (or if cure cannot be accomplished within 30 days, shall fail to commence
cure within 30 days of such notice and thereafter diligently and continuously
work to accomplish cure as soon as possible). If Vilmorin terminates a Research
Project under clause (b), it shall pay Agritope for the costs incurred and
obligations assumed for the Research Project through the date of termination, as
reasonably determined and documented by Agritope.

19.3 Termination by Agritope. Agritope may terminate this
Agreement (a) in its entirety if Vilmorin defaults in its obligations and does
not cure the default within 30 days after notice, or (b) with respect to any or
all Research Projects, upon 180 days' prior written notice, if Agritope
determines, in its reasonable discretion, that further work on the Research
Project or Projects is unlikely to result in a marketable product and provides
the reasons for its determination to Vilmorin.

19.4 Effect. Termination of this Agreement shall not affect
the parties' rights and obligations under those provisions that by their terms
survive termination or are to be performed at or after termination including,
without limitation, provisions regarding ownership of Technology, royalties,
licenses, sublicensing, patents, and confidentiality. In addition, termination
of this Agreement will not affect the rights and obligations of the parties
under Research Project agreements, commercialization agreements, and other
agreements that may be entered into by the parties pursuant to the terms hereof.
The licenses and other rights to Technology, Patents, Trade Secrets, Modified
Crops or New Technology granted under this Agreement, or under Research Project
agreements or commercialization agreements entered into pursuant to the terms of
this Agreement, are intended to be intellectual property rights within the scope
of United States Bankruptcy Code Section 365(n). In the event either party
becomes a debtor subject to a proceeding under Chapter 7 or Chapter 11 of the
Bankruptcy Code, the other party shall be entitled to claim the benefit of all
protections and rights afforded by said Section 365(n) with respect to the
intellectual property rights granted to it by the debtor as licensor.

20. Baseball Arbitration Procedure. When this Agreement requires that a
matter be resolved by "baseball" arbitration, the parties shall follow the
procedures set forth in this Section 20.

20.1 Parties. The parties to the arbitration shall be Agritope
and Vilmorin.

20.2 Proposals. As part of the arbitration procedure, each of
the two parties will submit to the arbitrator its proposed terms for the
commercialization agreement or other disputed matter, including those upon which
agreement has been reached with the other party and those not agreed.

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20.3 Decision. The arbitrator shall have only the authority to
select the proposal proposed by one of the parties to the arbitration, based on
which proposal the arbitrator believes constitutes the more commercially
reasonable proposal. The arbitrator shall not have the authority to impose
additional terms or a compromise of the two parties' proposals. The parties may
amend their proposals until the arbitration hearing.

20.4 Rules. The arbitration shall be conducted in English in
accordance with the United Nations Commission on International Trade Law
Arbitration Rules as then in force and the terms of this Section 20. The
appointing authority shall be the American Arbitration Association and the
arbitration shall take place in Portland, Oregon, United States of America. The
arbitration shall be heard and determined by a single arbitrator. The parties
agree that the decision of the arbitral tribunal will be final and binding. All
notices to be given in connection with the arbitration shall be given pursuant
to Section 21.5 of this Agreement.

20.5 Mediation; Process. Before commencing an arbitration
under this Section 20, upon the request of either party the parties agree to use
mediation in an effort to resolve any differences between their proposals.
Whether mediation is requested or not, each party agrees to submit to the other
the proposal such party intends to provide to the arbitrator and, upon request
of the other party, to negotiate in good faith any proposed compromises or
adjustments in an effort to arrive at a mutually acceptable resolution. Such
negotiations may continue until a final decision is made by the arbitrator.

21. Miscellaneous.

21.1 No Agency. Nothing in this Agreement creates any
partnership, employment, or agency relationship between the parties. No party
shall have the right to act on behalf of or bind any other, and none shall take
any action that could lead a third party to believe it has the right to do so.

21.2 Hiring of Employees. Except as provided in Section 8.7,
during the term of this Agreement and for a period of one year after expiration
or termination of this Agreement, neither party nor any of its Affiliates shall
offer employment to or employ any person who was employed within the preceding
12 months by the other party, except with the prior written consent of the other
party (which shall not be unreasonably withheld if a party did not induce the
employee to leave his or her employment with the other party).

21.3 Agreements with Third Parties. This Agreement shall not
prohibit the parties from entering into agreements with third parties except as
expressly set forth herein.

21.4 Cooperation; Additional Documents. Each party shall
cooperate with the other and shall execute such additional documents as may be
necessary or desirable in order to effect or evidence the transactions
contemplated by this Agreement.

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<PAGE>

21.5 Notices. Notices required or permitted hereunder shall be
in writing and shall be deemed given when received, when personally delivered or
sent by facsimile, five business days after being sent by registered or
certified mail, return receipt requested, or two business days after being sent
by courier service, in each case to the addresses set forth on the first page of
this Agreement or to such other address that the parties may hereafter specify
by written notice. The original of any notice sent by facsimile transmission
shall be sent promptly by registered or certified mail or overnight courier to
the recipient.

21.6 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the state of Oregon without regard to
the choice of law rules thereof, excluding the United Nations Convention on
Contracts for the International Sale of Goods.

21.7 Assignment. (a) Vilmorin may assign its rights and
interests under this Agreement in Research Products and New Technology and under
commercialization agreements for Modified Crops to any Affiliate of Groupe
Limagrain (Vilmorin's parent); provided, however, that if any such assignee
thereafter is divested by Groupe Limagrain so that it is no longer an Affiliate
of Groupe Limagrain, then unless Agritope shall consent to such assignment, the
assignment shall be terminated effective upon such divestiture. Agritope may
assign its rights and interests hereunder to any of its Affiliates. (b) Except
as provided in (a), no party may assign its rights or delegate its duties under
this Agreement without the prior written consent of the other parties. A
transfer of a controlling interest in a party shall constitute an assignment.
Any purported assignment without the other parties' consent shall be void and
shall constitute a breach of this Agreement.

21.8 Entire Agreement. This Agreement (including the attached
Exhibits) constitutes the entire agreement and understanding between the parties
with respect to its subject matter and supersedes any prior agreement or
understanding.

21.9 Attorney Fees. In the event of a default under this
Agreement, the defaulting party shall reimburse the nondefaulting party for all
costs and expenses reasonably incurred by the nondefaulting party in connection
with the default, including without limitation attorney fees.

21.10 Arbitration. Except for disputes requiring mediation or
"baseball" arbitration in accordance with Section 20, any dispute, controversy,
or claim arising out of or in connection with this Agreement, or the breach,
termination, or validity thereof, shall be settled by final and binding
arbitration conducted in English in accordance with the United Nations
Commission on International Trade Law Arbitration Rules as then in force and the
terms of this Section 21.10. The appointing authority shall be the American
Arbitration Association and the arbitration shall take place in Portland,
Oregon, United States of America. The arbitration shall be heard and determined
by a single arbitrator. The award shall be made and shall be payable in United
States Dollars, free of any tax or any other deduction. The award shall include
interest from the date of any breach or other violation of this Agreement. The
arbitrator shall also fix an appropriate rate of interest from the date of

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the breach or other violation to the date when the award is paid in full. If the
amount in controversy exceeds $10,000, the arbitrator's decision shall include a
statement specifying in reasonable detail the basis for and computation of the
award, if any. In any arbitration proceeding, each party shall be entitled to
discovery to the extent agreed upon or, in the absence of agreement, determined
by the arbitrator. In making such determination, the arbitrator shall balance
the benefits of discovery against its burdens and expenses, considering the
nature and complexity of the case, the amount in controversy, and the
possibility of unfair surprise or advantage that may result if discovery is
restricted. To the extent that discovery is allowed by the arbitrator, the
arbitrator shall have all the authority of a court incidental to such discovery
including, but not limited to, authority to order production of documents and
other materials, to issue orders to appear and submit to deposition, and to
impose appropriate sanctions against any party for failing to comply with any
order. A party substantially prevailing in the arbitration shall also be
entitled to recover such amount for its costs and attorney fees incurred in
connection with the arbitration as shall be determined by the arbitrator.
Judgment upon the arbitration award may be entered in any court having
jurisdiction. Nothing herein shall prevent any party from resorting to a court
of competent jurisdiction in those instances where injunctive relief may be
appropriate. In such instances, the prevailing party shall be entitled to
recover from the other party all reasonable attorney fees incurred at trial, on
appeal, and on any petition for review, together with such other expenses,
costs, and disbursements as may be allowed by law. The parties agree that the
award of the arbitral tribunal will be the sole and exclusive remedy between
them regarding any and all claims and counterclaims presented to the tribunal.
All notices to be given in connection with the arbitration shall be given
pursuant to Section 21.5 of this Agreement.

21.11 Severability. If in any judicial proceeding or
arbitration a court or arbitrator shall refuse to enforce all the provisions of
this Agreement, any unenforceable provisions shall be deemed eliminated from
this Agreement for the purpose of such proceeding to the extent necessary to
permit the remainder of the Agreement to be enforced in such proceeding.

21.12 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 shall, upon giving
written notice to the other parties, be excused from such performance to the
extent of such prevention, restriction, interference or delay, provided that the
affected party shall use its commercially reasonable efforts to avoid or remove
such causes of non-performance and shall continue performance with the utmost
dispatch whenever such causes are removed. When such circumstances arise, the
parties shall discuss what, if any, modification of the terms of this Agreement
may be required in order to arrive at an equitable solution. If such an event of
force majeure suspends performance of a Research Project for more than 6 months,
either party shall be free to terminate the same without any further liability
or obligation to the other for such Research Project. If such an event of force
majeure suspends performance of this Agreement for more than 12 months, either
party shall be free to terminate this Agreement without further liability or
obligation to the other;

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provided that termination shall not affect the parties' obligations under those
provisions that by their terms survive termination or are to be performed at or
after termination.

21.13 Captions. The captions in this Agreement are for
convenience only and shall not affect the meaning of this Agreement.

21.14 Modification and Waiver. No amendment of this Agreement
or any waiver of its provisions shall be deemed to have occurred unless
expressed in a writing signed by the party to be bound.

Dated as of this 5th day of December, 1997.

AGRITOPE, INC.

By /s/ Gilbert N. Miller
Title Executive Vice President

VILMORIN & CIE

By /s/ Pierre Lefebvre
Title C.E.O.

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EXHIBIT A

[

* Bracketed material has been omitted and filed separately with the Commission
pursuant to a request for confidential treatment.

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