EPITOPE INC/OR/, S-4, 1996-11-07

EPITOPE INC/OR/
S-4, 1996-11-07
IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES

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<PAGE>
Registration No. 333-_____
==============================================================================

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

FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________

EPITOPE, INC.
(Exact name of registrant as specified in its charter)

Oregon 3841 93-0779127
(State of incorporation) (Primary Standard Industrial (IRS employer
Classification Code Number identification
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., PRESIDENT AND CHIEF EXECUTIVE OFFICER
Epitope, Inc.
8505 S.W. Creekside Place, Beaverton, Oregon 97008
(503) 641-6115
(Name and address, including zip code, and telephone number, including area
code, of agent for service)

Copies to:
Erich W. Merrill, Jr. Charles W. Mulaney, Jr.
Miller, Nash, Wiener, Hager & Carlsen LLP Rodd M. Schreiber
111 S.W. Fifth Avenue Skadden, Arps, Slate,
Portland, Oregon 97204-3699 Meagher & Flom (Illinois)
(503) 224-5858 333 W. Wacker Drive
Chicago, Illinois 60606
(312) 407-0700

Approximate date of commencement of proposed sale to the public: As soon as
possible after approval by shareholders.

If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [ ]

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Share Offering Price Registration Fee
- --------------------------- ----------------- ----------------- ---------------- ----------------
<C> <C> <C> <C> <C>
Agritope Common Stock,
no par value 10,000,000 Shares (1) (1) $100(1)

(1) Shares of Agritope Group Common Stock are being distributed to holders of the Registrant's outstanding
common stock without consideration. Pursuant to Section 6(b) of the Securities Act of 1933, the amount
of the registration fee for such shares is $100.
</TABLE>
_____________________

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>
[logo]

EPITOPE, INC.
8505 S.W. Creekside Place
Beaverton, Oregon 97008

December , 1996

Dear Shareholder:

You are cordially invited to attend the 1997 annual meeting of
shareholders to be held on February , 1997, at the Oregon
Convention Center, 777 N.E. Martin Luther King Jr. Boulevard, Portland,
Oregon, at 9:00 a.m. Your Board of Directors and management look forward to
personally greeting those present.

At the meeting, you will be asked to elect three Class I directors
to serve on the Board of Directors until the year 2000 annual meeting of
shareholders. You will also be asked to approve a proposal (the "Agritope
Stock Proposal") that will result in an increase in the authorized common
stock of the Company from 30 million shares to 100 million shares, the
creation of a new class of common stock, and a redesignation of the existing
common stock. The key elements of the Agritope Stock Proposal are set forth
below:

Creation of Agritope Stock. A new class of common stock of the
Company would be created, to be called Agritope Common Stock ("Agritope
Stock"). Agritope Stock is intended to reflect the value and track the
performance of the Company's agribusiness and agricultural biotechnology
operations (together, "Agritope"). A total of 40 million shares of Agritope
Stock would be authorized to be issued by the Company.

Redesignation of Existing Common Stock. The Company's existing
common stock would be redesignated as Epitope Medical Products Common Stock
("Medical Products Stock"), with each outstanding share being redesignated as
one share of Medical Products Stock without any further action by the holder.
The Medical Products Stock is intended to reflect the value and track the
performance of the Company's medical products business ("Epitope Medical
Products"). A total of 60 million shares of Medical Products Stock would be
authorized to be issued by the Company.

Distribution of Agritope Stock to Shareholders. Shortly after
shareholder approval, the Company would distribute a total of approximately
6.7 million shares of Agritope Stock to its shareholders, on the basis of one-
half share of Agritope Stock for each outstanding share of existing common
stock. The distribution would be made to shareholders of record at the close
of business on the effective date of the amendment to the Company's Restated
Articles of Incorporation, which is expected to be the date of the annual
meeting. The Agritope Stock issuable in connection with the distribution
would be intended initially to represent 100 percent of the equity value of
the Company attributable to Agritope. Additional shares of Agritope Stock
will be reserved for issuance upon the exercise of outstanding stock options
and warrants and the conversion of outstanding convertible notes as a result
of anti-dilution adjustments relating to the distribution.

The Agritope Stock Proposal is intended to provide investors with
separate securities reflecting the performance of Agritope and Epitope Medical
Products, respectively, while preserving for the Company's businesses the
benefits of being part of a consolidated enterprise. The Board of Directors
believes the Agritope Stock Proposal will enhance shareholder value over the
long term by permitting separate market valuations of Agritope and Epitope
Medical Products, which should result in more accurate market recognition of
the value of each group. The Agritope Stock Proposal is also intended to
provide the Company greater flexibility with regard to raising capital and
using common stock for acquisitions and investments, including strategic
partnering transactions.

IT IS IMPORTANT TO NOTE THAT HOLDERS OF BOTH AGRITOPE STOCK AND
MEDICAL PRODUCTS STOCK WOULD BE COMMON SHAREHOLDERS OF THE COMPANY AND WOULD
BE SUBJECT TO RISKS ASSOCIATED WITH AN INVESTMENT IN THE COMPANY AND ALL ITS
BUSINESSES, ASSETS, AND LIABILITIES. THE COMPANY CAN PROVIDE NO ASSURANCE AS
TO THE DEGREE TO WHICH THE MARKET PRICE OF STOCK RELATED TO EITHER AGRITOPE OR
EPITOPE MEDICAL PRODUCTS WILL REFLECT THE SEPARATE PERFORMANCE OF THE GROUP OR
AS TO THE IMPACT OF THE PROPOSAL ON THE MARKET PRICE OF THE MEDICAL PRODUCTS
STOCK. IN ADDITION, IMPLEMENTATION OF THE AGRITOPE STOCK PROPOSAL WILL, TO AN
EXTENT, MAKE THE CAPITAL STRUCTURE OF THE COMPANY MORE COMPLEX AND MAY GIVE
RISE TO OCCASIONS WHEN THE INTERESTS OF THE HOLDERS OF MEDICAL PRODUCTS STOCK
AND THE HOLDERS OF AGRITOPE STOCK MAY DIVERGE OR APPEAR TO DIVERGE.

At the annual meeting, you will also be asked to approve
amendments to the Company's stock option and stock purchase plans that, among
other changes, would increase the number of shares available for issuance and
would allow the issuance of shares of either class of common stock under the
plans.

YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE NOMINEES FOR
DIRECTOR NAMED IN THE ENCLOSED PROXY STATEMENT AND RECOMMENDS THAT YOU VOTE
FOR THEIR ELECTION TO THE BOARD OF DIRECTORS.

THE BOARD OF DIRECTORS HAS CAREFULLY CONSIDERED THE AGRITOPE STOCK
PROPOSAL AND THE RELATED PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING,
BELIEVES THEIR ADOPTION IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSALS.

Your vote is very important, regardless of the number of shares
you own. Whether or not you plan to attend the Annual Meeting in person, we
urge you to mark, sign, date, and mail the enclosed proxy card promptly in the
accompanying postage prepaid envelope. You may, of course, attend the Annual
Meeting and vote in person even if you have previously mailed your proxy card.

Sincerely yours,
ADOLPH J. FERRO, PH.D.
President and Chief Executive Officer
<PAGE>
EPITOPE, INC.
8505 S.W. Creekside Place
Beaverton, Oregon 97008

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY , 1997

To the Shareholders of Epitope, Inc.:

The annual meeting of the holders of the common stock, no par
value (the "Common Stock"), of Epitope, Inc., an Oregon corporation (the
"Company"), will be held at the Oregon Convention Center, 777 N.E. Martin
Luther King Jr. Boulevard, Portland, Oregon, on ,
February , 1997, at 9:00 a.m., for the following purposes:

1. To elect three Class I directors to serve on the Board of
Directors until the year 2000 annual meeting of
shareholders.

2. To consider and vote on a proposal (the "Agritope Stock
Proposal") to adopt certain amendments to the Company's
Restated Articles of Incorporation that would, among other
things, increase the total authorized common stock of the
Company from 30 million shares to 100 million shares, create
a new class of common stock to be designated Agritope Common
Stock ("Agritope Stock"), and redesignate the existing
Common Stock as Epitope Medical Products Common Stock
("Medical Products Stock"), with each class having the
voting, dividend, liquidation, exchange, and other rights
described in the accompanying Prospectus/Proxy Statement.

3. To consider and vote on a proposal to amend the Epitope,
Inc. 1991 Stock Award Plan to, among other matters, increase
the number of shares available for issuance under the plan
by 3 million shares and, contingent on approval of the
Agritope Stock Proposal, increase the number of shares
available for issuance under the plan by an additional
2 million shares that would be issuable in connection with
awards related to Agritope Stock.

4. To consider and vote on a proposal to amend the Epitope,
Inc. 1993 Employee Stock Purchase Plan to, among other
matters, increase the number of shares available for
issuance under the plan by 250,000 shares and, contingent on
approval of the Agritope Stock Proposal, increase the number
of shares available for issuance under the plan by an
additional 250,000 shares that would be issuable in
connection with purchase rights related to Agritope Stock.

5. To transact such other business as may properly come before
the meeting.

The foregoing items of business are more fully described in the
Prospectus/Proxy Statement accompanying this Notice. Assuming that the
proposals in items 3 and 4 above are approved by the shareholders, the plan
amendments relating to Agritope Stock described in these items will be
implemented only if the Agritope Stock Proposal is approved by the
shareholders.

Only holders of Common Stock of record at the close of business on
December , 1996 will be entitled to vote at the annual meeting of
shareholders and any adjournments thereof.

<PAGE>
By Order of the Board of Directors

Andrew S. Goldstein
Secretary

December , 1996
Beaverton, Oregon

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU
ARE URGED TO MARK, SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ENVELOPE PROVIDED. RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT TO
ATTEND THE MEETING AND TO VOTE YOUR SHARES IN PERSON.

<PAGE>
TABLE OF CONTENTS

Page

PROSPECTUS/PROXY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . .

AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . . . . . . . . . . . .

SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . .
Election of Class I Directors. . . . . . . . . . . . . . . . . . . . . .
The Agritope Stock Proposal. . . . . . . . . . . . . . . . . . . . . . .
Summary Comparison of Existing Epitope Common Stock with Terms of
Medical
Products Stock and Agritope Stock . . . . . . . . . . . . . . . . . .
Stock Plan Proposals . . . . . . . . . . . . . . . . . . . . . . . . . .
Recommendations of the Board . . . . . . . . . . . . . . . . . . . . . .
Recent Developments. . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . .
Comparative Per-Share Financial Information. . . . . . . . . . . . . . .
Epitope Common Stock Price Range and Dividend Policy . . . . . . . . . .

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

THE ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROPOSAL 1: Election of Class I Directors . . . . . . . . . . . . . . . . . .

PROPOSAL 2: The Agritope Stock Proposal . . . . . . . . . . . . . . . . . . .

General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reasons for the Agritope Stock Proposal. . . . . . . . . . . . . . . . .
Management and Accounting Policies . . . . . . . . . . . . . . . . . . .
Description of Medical Products Stock and Agritope Stock . . . . . . . .
Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Transfer Agent and Registrar . . . . . . . . . . . . . . . . . . .
Quotation of Medical Products Stock and Agritope Stock . . . . . . . . .
Financial Advisor. . . . . . . . . . . . . . . . . . . . . . . . . . . .
No Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . .
Effects on Convertible Securities. . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Considerations. . . . . . . . . . . . . . . .

GENERAL PROVISIONS REGARDING THE PROPOSED AMENDMENTS TO THE 1991 STOCK AWARD
PLAN AND 1993 EMPLOYEE STOCK PURCHASE PLAN . . . . . . . . . . . . . . . . . .

PROPOSAL 3: Amendment of 1991 Stock Award Plan . . . . . . . . . . . . . . .

PROPOSAL 4: Amendment of 1993 Employee Stock Purchase Plan . . . . . . . . .

EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .

REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE . . . . . . . . . . . . . . . .

STOCK PRICE PERFORMANCE GRAPH. . . . . . . . . . . . . . . . . . . . . . . . .

PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FINANCIAL ADVISOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNUAL REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DEADLINE FOR SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . .

EXPENSES OF SOLICITATION . . . . . . . . . . . . . . . . . . . . . . . . . . .

OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEXES
Annex I Index of Defined Terms
Annex II Amendment to Epitope Restated Articles of Incorporation
Annex III The Company
Description of Business
Financial Statements
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Annex IV Proposed Amendments to 1991 Stock Award Plan
Annex V Proposed Amendments to 1993 Employee Stock Purchase Plan

<PAGE>
<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 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 , 1996

PROSPECTUS/PROXY STATEMENT
--------------------------

EPITOPE, INC.
8505 S.W. Creekside Place
Beaverton, Oregon 97008

PROSPECTUS PROXY STATEMENT
Agritope Common Stock, no par value 1997 Annual Meeting of Shareholders

This Prospectus and Proxy Statement (the "Prospectus/Proxy Statement") is
being furnished to shareholders of Epitope, Inc., an Oregon corporation (the
"Company" or "Epitope"), in connection with the solicitation of proxies by the
Board of Directors (the "Board") for the annual meeting of shareholders to be
held on , February , 1997, and any adjournments thereof (the
"Annual Meeting").

At the Annual Meeting, shareholders will be asked to elect three Class I
directors to serve on the Board until the year 2000 annual meeting of
shareholders. In addition, Epitope will present a proposal (the "Agritope
Stock Proposal") to adopt an amendment to Epitope's Restated Articles of
Incorporation (the "Articles") that would, among other things, increase
Epitope's authorized common stock, no par value ("Epitope Common Stock"), from
30 million shares to 100 million shares, create a new class of common stock,
Agritope Common Stock, no par value (the "Agritope Stock"), and redesignate
existing Epitope Common Stock as Epitope Medical Products Common Stock
("Medical Products Stock"). At the Annual Meeting, shareholders also will be
asked to approve changes to the 1991 Stock Award Plan (the "Award Plan") and
the 1993 Employee Stock Purchase Plan (the "Purchase Plan," and together with
the Award Plan, the "Stock Plans"). A detailed description of each proposal
is included in this Prospectus/Proxy Statement. An index showing the pages on
which certain terms used in this Prospectus/Proxy Statement are defined is
attached as Annex I.

If the Agritope Stock Proposal is approved, Epitope plans to make a
distribution (the "Distribution") of one-half share of Agritope Stock on each
outstanding share of Epitope Common Stock, or an aggregate of approximately
6.7 million shares of Agritope Stock, to the holders of record at the close of
business on the effective date of the amendment to the Articles (the
"Effective Date"). The Company expects that the Effective Date would be the
date of the Annual Meeting. The Agritope Stock issuable in connection with
the Distribution would be intended initially to represent 100 percent of the
equity value of the Company attributable to Agritope. Additional shares of
Agritope Stock will be reserved for issuance upon the exercise of outstanding
stock options and warrants and the conversion of outstanding convertible notes
as a result of antidilution adjustments relating to the Distribution. Shares
of Epitope Common Stock will be redesignated as Medical Products Stock on the
Effective Date on a one-for-one basis. Except as otherwise required by law or
under certain limited circumstances contained in the Articles as proposed to
be amended, (i) the holders of Medical Products Stock and the holders of
Agritope Stock will vote together as a single voting group and will have
relative voting power based on the respective market capitalizations of each
such class of stock, determined as of each applicable record date and (ii)
dividends on Medical Products Stock will be limited to the Available Medical
Products Dividend Amount and dividends on Agritope Stock will be limited to
the Available Agritope Dividend Amount. In case of the liquidation of
Epitope, holders of Medical Products Stock and Agritope Stock will be entitled
to receive the assets, if any, remaining for distribution to common
shareholders on a per share basis in proportion to the relative market
capitalizations of each such class of stock. Each class of common stock will
be subject, under certain conditions, to both mandatory and optional
provisions for exchange. See "Proposal 2: The Agritope Stock Proposal."

The Agritope Stock Proposal is intended to provide investors with
separate securities reflecting the performance of the Company's agribusiness
and agricultural biotechnology business ("Agritope") and medical products
business ("Epitope Medical Products"), respectively, while preserving for the
Company's businesses the benefits of being part of a consolidated enterprise.
The Board believes the Agritope Stock Proposal will enhance shareholder value
over the long term by permitting separate market valuations of Agritope and
Epitope Medical Products, which should result in more accurate recognition of
the respective value of each group. The Agritope Stock Proposal is also
intended to provide the Company greater flexibility with regard to raising
capital and using common stock for acquisitions and investments, including
strategic partnering transactions. See Annex III, "Description of Business,"
for a description of Agritope and Epitope Medical Products.

HOLDERS OF BOTH AGRITOPE STOCK AND MEDICAL PRODUCTS STOCK WOULD BE
COMMON SHAREHOLDERS OF THE COMPANY AND WOULD BE SUBJECT TO RISKS ASSOCIATED
WITH AN INVESTMENT IN THE COMPANY AND ALL ITS BUSINESSES, ASSETS, AND
LIABILITIES. THE COMPANY CAN PROVIDE NO ASSURANCE AS TO THE DEGREE TO WHICH
THE MARKET PRICE OF STOCK RELATED TO EITHER AGRITOPE OR EPITOPE MEDICAL
PRODUCTS WILL REFLECT THE SEPARATE PERFORMANCE OF THE GROUP OR AS TO THE
IMPACT OF THE PROPOSAL ON THE MARKET PRICE OF THE MEDICAL PRODUCTS STOCK. IN
ADDITION, IMPLEMENTATION OF THE AGRITOPE STOCK PROPOSAL WILL, TO AN EXTENT,
MAKE THE CAPITAL STRUCTURE OF THE COMPANY MORE COMPLEX AND MAY GIVE RISE TO
OCCASIONS WHEN THE INTERESTS OF THE HOLDERS OF MEDICAL PRODUCTS STOCK AND THE
HOLDERS OF AGRITOPE STOCK MAY DIVERGE OR APPEAR TO DIVERGE.

Shares represented by a properly executed proxy will be voted in
accordance with the instructions given in the proxy. If no instructions are
given, shares will be voted according to the recommendations of the Board as
stated on the proxy. Shareholders may revoke the authority granted by their
proxies at any time before the meeting by notice in writing delivered to the
Secretary of the Company, by submitting a subsequently dated proxy, or by
attending the meeting, withdrawing the proxy, and voting in person.

Only Epitope shareholders of record at the close of business on December
, 1996 will be entitled to vote at the Annual Meeting. On that date,
Epitope had outstanding shares of Epitope Common Stock, its only
outstanding class of stock. A majority of the outstanding shares of Epitope
Common Stock, represented in person or by proxy, constitutes a quorum for the
transaction of business.

AN INVESTMENT IN AGRITOPE STOCK AND MEDICAL PRODUCTS STOCK INVOLVES A
HIGH DEGREE OF RISK. SEE "RISK FACTORS."

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

No person is authorized to give any information or to make any
representation not contained in this Prospectus/Proxy Statement in connection
with the offering and solicitation made hereby and, if given or made, such
information or representation should not be relied upon as having been
authorized. This Prospectus/Proxy Statement does not constitute an offer to
sell or a solicitation of any offer to buy the securities offered by this
Prospectus/Proxy Statement or a solicitation of a proxy in any jurisdiction
where, or to or from any person to whom, it is unlawful to make such an offer
or solicitation of an offer or proxy solicitation. Neither the delivery of
this Prospectus/Proxy Statement nor any distribution of the securities offered
pursuant to this Prospectus/Proxy Statement shall create an implication that
there has been no change in the affairs of the Company or that the information
in the documents incorporated herein by reference is correct as of any time
subsequent to the date hereof.

The date of this Prospectus/Proxy Statement is December , 1996 and it
is first being mailed or delivered to Epitope shareholders on or about that
date.

Please mark, sign, and date the enclosed proxy card, and return it
promptly in the enclosed envelope provided for this purpose.
<PAGE>
AVAILABLE INFORMATION

The Company has filed with the Commission a registration statement
(together with all amendments and exhibits, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act") with
respect to Agritope Stock. This Prospectus/Proxy Statement does not contain
all information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and Agritope
Stock, reference is made to the Registration Statement. Statements contained
in this Prospectus/Proxy Statement as to the contents of any contract or other
document which is filed as an exhibit to the Registration Statement are not
necessarily complete, and each such statement is qualified in its entirety by
reference to the full text of such contract or document.

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information
with the Commission. Reports, proxy statements, and other information filed
by the Company may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.; 500
West Madison Street, Chicago, Illinois; and 7 World Trade Center, New York,
New York. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Commission maintains an Internet Web site that
contains reports, proxy and information statements, and other information
regarding reporting companies under the Exchange Act. The address of the
Internet Web site is http://www.sec.gov. Reports, proxy statements, and other
information concerning the Company may be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York, on which the
Epitope Common Stock is listed.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company's Annual Report on Form 10-K for the year ended September
30, 1996, filed with the Commission pursuant to the Exchange Act, is
incorporated in this Prospectus/Proxy Statement by reference. In addition,
all documents filed by the Company pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this Prospectus/Proxy Statement
and prior to the date of the Annual Meeting shall be deemed to be incorporated
by reference in this Prospectus/Proxy Statement and to be a part hereof from
the date of filing of the documents (such documents, and the documents
enumerated above, are hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus/Proxy Statement and the
Registration Statement of which it is a part to the extent that a statement
contained herein or in any other subsequently filed Incorporated Document or
in an accompanying prospectus supplement modifies or supersedes the statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus/Proxy
Statement or the Registration Statement.

This Prospectus/Proxy Statement incorporates documents by reference
which are not presented herein or delivered herewith. These documents, other
than exhibits thereto, are available without charge upon request from
Gilbert N. Miller, Executive Vice President, Chief Financial Officer and
Treasurer, Epitope, Inc. 8505 S.W. Creekside Place, Beaverton, Oregon 97008,
telephone (503) 641-6115. In order to ensure timely delivery of the
documents, any request should be made by February 4, 1997.

The information relating to the Company contained in this
Prospectus/Proxy Statement does not purport to be comprehensive and should be
read together with the information contained in the Incorporated Documents.
<PAGE>
SUMMARY

THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS/PROXY STATEMENT. REFERENCE IS MADE TO, AND THIS SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION CONTAINED IN THIS
PROSPECTUS/PROXY STATEMENT AND THE ANNEXES. CAPITALIZED TERMS USED BUT NOT
DEFINED IN THIS SUMMARY HAVE THE MEANINGS GIVEN ELSEWHERE IN THIS
PROSPECTUS/PROXY STATEMENT. SEE ANNEX I, "INDEX OF DEFINED TERMS."
SHAREHOLDERS ARE URGED TO READ THIS PROSPECTUS/PROXY STATEMENT AND THE ANNEXES
IN THEIR ENTIRETY.

The Company

EPITOPE, INC.

Epitope, Inc. utilizes biotechnology to develop and market medical
diagnostic products, superior new plant varieties, and related products. The
executive offices of Epitope and of its Epitope Medical Products and Agritope
groups are located at 8505 S.W. Creekside Place, Beaverton, Oregon 97008,
telephone (503) 641-6115.

THE EPITOPE MEDICAL PRODUCTS GROUP

The Company's Epitope Medical Products group develops and markets
diagnostic tests and related devices for the detection of HIV, the principal
cause of AIDS, and for the detection of other medical conditions and analytes.
Its oral specimen HIV testing system is marketed under the names
OraSure(registered) and EpiScreen(trademark). Epitope Medical Products will
encompass all of the Company's medical products businesses.

THE AGRITOPE GROUP

The Company's Agritope group historically has focused its efforts on the
development of novel agricultural products using both plant genetic
engineering and other modern methods. Through the recent acquisition of
Andrew and Williamson Sales, Co. ("A&W") on November , 1996, and Agritope's
majority ownership of Vinifera, Inc. ("Vinifera"), Agritope now conducts
operations in each step of the production and distribution chain for a broad
range of fruits, vegetables and plants and has an infrastructure that will
facilitate commercialization of the Company's genetically engineered
agricultural products.

Agritope consists of three major units: Agritope Research and
Development, A&W, and Vinifera. Agritope Research and Development contributes
biotechnology and product development efforts to A&W and Vinifera as well as
to its other business partners. Through A&W, Agritope produces, markets,
distributes and sells a wide variety of fruits and vegetables throughout North
America. Through Vinifera, Agritope believes that it offers the most advanced
grapevine plant propagation and disease screening and elimination programs
available to the worldwide wine and table grape production industry.

THE ANNUAL MEETING

This Prospectus/Proxy Statement and enclosed proxy card are being
furnished in connection with the solicitation of proxies by the Board for use
at the Annual Meeting to be held on , February , 1997, at
9:00 a.m., Pacific time, at the Oregon Convention Center, 777 N.E. Martin
Luther King Jr. Boulevard, Portland, Oregon, and at any adjournments thereof,
pursuant to the accompanying Notice of Annual Meeting of Shareholders. The
Annual Meeting will be held to (i) elect three Class I directors,
(ii) consider the Agritope Stock Proposal and (iii) consider the proposed
amendments to the Stock Plans.

Each nominee for director will be elected if he receives a plurality of
the votes cast at the Annual Meeting. The Agritope Stock Proposal and each
proposal relating to the Stock Plan amendments will be approved if the votes
cast in favor of the proposal at the Annual Meeting exceed the votes cast
opposing the proposal. Shareholders may expressly abstain from voting on the
Agritope Stock Proposal and the proposals for Stock Plan amendments. Neither
abstentions nor shares represented by duly executed and returned proxies of
brokers or other nominees that are expressly not voted on any matter to be
presented at the Annual Meeting will have any effect on the required vote on
the matter.

Only Epitope shareholders of record at the close of business on
December , 1996 (the "Record Date") are entitled to notice of and to vote
at the Annual Meeting. At the close of business on the Record Date,
shares of Epitope Common Stock were outstanding. Each share of Epitope
Common Stock is entitled to one vote on any matter brought before the meeting.
The executive officers and directors of Epitope and their affiliates hold
shares of Epitope Common Stock representing approximately percent of the
outstanding shares of Epitope Common Stock (excluding shares that such persons
have the right to acquire upon the exercise of stock options). See "Principal
Shareholders." A majority of the shares of Epitope Common Stock outstanding
as of the Record Date, represented in person or by proxy at the Annual
Meeting, will constitute a quorum for the transaction of business.

ELECTION OF CLASS I DIRECTORS

W. Charles Armstrong, Adolph J. Ferro, Ph.D., and Roger L. Pringle have
been nominated for election as Class I directors, for a term of office
expiring at the Annual Meeting of Shareholders in the year 2000. The three
nominees are currently members of the Board. See "Proposal 1: Election of
Class I Directors."

THE AGRITOPE STOCK PROPOSAL

GENERAL

Shareholders are being asked to consider and approve the Agritope Stock
Proposal, which if approved would authorize the amendment (the "Amendment") to
the Articles set forth in Annex II. The Amendment would increase Epitope's
authorized common stock from 30 million shares to 100 million shares, create
Agritope Stock as a new class of authorized common stock of Epitope and
redesignate the existing Epitope Common Stock as Medical Products Stock. Each
class would have the voting, dividend, liquidation, exchange, and other rights
described below. See "The Agritope Stock Proposal--Description of Medical
Products Stock and Agritope Stock."

Medical Products Stock and Agritope Stock are intended to reflect the
value and track the performance of Epitope Medical Products and Agritope,
respectively. See Annex III, "The Company--Description of Business," for a
description of Epitope Medical Products and Agritope, respectively.

The Board of Directors has adopted a resolution declaring a distribution
of one-half share of Agritope Stock on each share of Medical Products Stock to
holders of record at the close of business on the Effective Date, subject to
approval of the Agritope Stock Proposal by Epitope shareholders. An aggregate
of approximately 6.7 million shares of Agritope Stock would be issued in the
Distribution. On or about the sixth business day following the Effective
Date, certificates for shares of Agritope Stock will be mailed to holders of
record at the close of business on the Effective Date. The Agritope Stock
issuable in connection with the Distribution would be intended initially to
represent 100 percent of the equity value of the Company attributable to
Agritope. Additional shares of Agritope Stock will be reserved for issuance
upon the exercise of outstanding stock options and warrants and the conversion
of outstanding convertible notes as a result of antidilution adjustments
relating to the Distribution.

Except for the shareholder approval requirement described herein and
requirements of applicable securities laws, no federal or state regulatory
requirements must be complied with or approval obtained in connection with the
Distribution.

IF THE AGRITOPE STOCK PROPOSAL IS NOT APPROVED BY THE SHAREHOLDERS,
AGRITOPE STOCK WILL NOT BE CREATED AND ISSUED, AND THE DISTRIBUTION WILL NOT
OCCUR.

REASONS FOR THE AGRITOPE STOCK PROPOSAL

RISK FACTORS

SHAREHOLDERS SHOULD CONSIDER THE RISK FACTORS DISCUSSED BELOW UNDER
"RISK FACTORS" IN EVALUATING THE AGRITOPE STOCK PROPOSAL.

DESCRIPTION OF MEDICAL PRODUCTS STOCK AND AGRITOPE STOCK

If the Agritope Stock Proposal is approved, Epitope's Articles will be
amended to create Agritope Stock and to establish the following terms for
Medical Products Stock and Agritope Stock:

DIVIDENDS. Dividends on Medical Products Stock and Agritope Stock may
be declared and paid only out of the lesser of funds of Epitope legally
available therefor and the Available Medical Products Dividend Amount (with
respect to Medical Products Stock) or the Available Agritope Dividend Amount
(with respect to Agritope Stock). Subject to such limitations, the Board may,
in its sole discretion, declare and pay dividends exclusively on either class
of common stock, or both classes, in equal or unequal amounts, notwithstanding
the amounts available for payment of dividends on each class, the respective
voting and liquidation rights of each class, the amount of prior dividends
declared on each class, or any other factor. The Company has never paid any
cash dividends on shares of Epitope Common Stock. The Company currently
intends to retain its earnings to finance future growth and therefore does not
anticipate paying any cash dividends on any class of its common stock in the
foreseeable future.

OPTIONAL EXCHANGE. At any time after February 28, 1999, the Company may
exchange each outstanding share of Agritope Stock for any combination of cash
and Medical Products Stock at a 15 percent premium over the average Market
Value of Agritope Stock calculated over the 20-Trading Day period prior to the
first public announcement by the Company of the exchange. Similarly, at any
time after February 28, 1999, the Company may exchange each outstanding share
of Medical Products Stock for any combination of cash and Agritope Stock at a
15 percent premium over the average Market Value of Medical Products Stock
calculated over the 20-Trading Day period prior to the first public
announcement by the Company of the exchange.

MANDATORY DIVIDEND, REDEMPTION, OR EXCHANGE. With certain exceptions,
in the event of the Disposition by Epitope of all or substantially all (i.e.,
80 percent or more on a current market value basis) the properties and assets
allocated to Agritope or Epitope Medical Products, as the case may be, Epitope
is required to either (i) distribute to holders of the relevant class of stock
an amount in cash and/or securities or other property equal to their
proportionate interest in the Fair Value of the Net Proceeds of such
Disposition, either by special dividend or redemption of all or part of the
outstanding shares of such class of stock or (ii) exchange each outstanding
share of the relevant class of stock for the number of shares of common stock
of the other group equal to 115 percent of the ratio of the average Market
Value of one share of the relevant class of stock to the average Market Value
of one share of the other group's stock calculated over the ten-Trading Day
period beginning on the 16th Trading Day after consummation of the
Disposition.

VOTING RIGHTS. Holders of shares of Medical Products Stock and Agritope
Stock will vote together as a single voting group on all matters as to which
holders of common stock generally are entitled to vote, except as otherwise
required by law or as provided in the Articles as proposed to be amended. On
all such matters, each share of Medical Products Stock will have one vote, and
each share of Agritope Stock will have a variable number of votes (which could
be more than, less than, or equal to one) per share equal to the ratio of the
average Market Value of one share of Agritope Stock to the average Market
Value of one share of Medical Products Stock calculated over the 20-Trading
Day period preceding each record date for the matter to be acted upon. As a
result, the two classes of stock will have relative aggregate voting power
proportional to the respective market capitalizations of each group. The
voting rights of either class of stock would also be appropriately adjusted in
the event of certain stock dividends, stock splits or other recapitalizations.
Under Oregon law, certain corporate actions would require the approval of the
holders of the affected class of common stock voting as a separate voting
group.

LIQUIDATION. In the event of a dissolution, liquidation, or winding up
of the Company, whether voluntary or involuntary, holders of outstanding
shares of Medical Products Stock and Agritope Stock will be entitled to
receive the assets, if any, remaining for distribution to common shareholders
on a per share basis in proportion to the relative market capitalizations of
each such class of stock.

INTER-GROUP INTERESTS. The shares of Agritope Stock issuable in
connection with the Distribution would be intended initially to represent
100 percent of the equity value of the Company attributable to Agritope and,
accordingly, Epitope Medical Products will not have an Inter-Group Interest in
Agritope. Similarly, Agritope will not initially have an Inter-Group Interest
in Epitope Medical Products. An Inter-Group Interest would be created only if
a subsequent transfer of cash, assets, products, programs or other property
from Agritope or Epitope Medical Products to the other group is specifically
designated by the Board as creating an Inter-Group Interest (in contrast to
transfers made for other consideration such as transfers as loans or in
purchase and sale transactions) or if outstanding shares of Agritope Stock or
Epitope Medical Products Stock are retired or otherwise cease to be
outstanding following their purchase with funds attributed to the other group.

The amount of any Inter-Group Interest would be expressed in terms of
the number of "Inter-Group Shares Issuable" with respect to an Inter-Group
Interest, which is intended to provide a measure of the Inter-Group Interest
on a basis comparable to an investment in shares of Agritope Stock or Medical
Products Stock, as the case may be. In general, if an Inter-Group Interest is
created by a transfer of cash, assets, products, programs or other property
from Agritope or Epitope Medical Products to the other group, the Inter-Group
Shares Issuable with respect to the Inter-Group Interest in the group
receiving such cash, assets, products, programs or other property would be
increased or the Inter-Group Interest of the receiving group in the other
group, if any, would be reduced at the election of the Board, by an amount
determined by dividing the fair value of the cash, assets, products, programs,
or other property transferred by the average Market Value of one share of
Agritope Stock or Medical Products Stock, as the case may be, calculated over
the 20-Trading Day period preceding the date of transfer. To the extent
outstanding shares of Agritope Stock or Medical Products Stock, as the case
may be, are retired or otherwise cease to be outstanding following their
purchase with funds attributed to the other group, the Inter-Group Shares
Issuable with respect to the Inter-Group Interest in the group represented by
the retired shares would increase on a share for share basis. Shares of
Agritope Stock or Medical Products Stock, as the case may be, purchased with
funds attributed to the other group which remain outstanding (as a result of
being held by a subsidiary included in the group) would not create an Inter-
Group Interest or increase any then-existing Inter-Group Interest but would
represent an outstanding interest in the equity value of the Company
attributable to Agritope or Epitope Medical Products, as the case may be.
Issuances of shares of Agritope Stock or Medical Products Stock, as the case
may be, designated by the Board as reducing an Inter-Group Interest then
existing would reduce the Inter-Group Shares Issuable with respect to the
Inter-Group Interest in the issuing group on a share for share basis (with any
proceeds of such issuances being credited to the group holding the Inter-Group
Interest).

The existence of an Inter-Group Interest in a group will, among other
things, reduce the amount available for payment of dividends to holders of
that group's outstanding stock by a ratio known as the Outstanding Interest
Fraction. The "Outstanding Interest Fraction" means the percentage interest
in the equity value of the Company attributable to a group that is represented
at any time by the outstanding shares of the class of stock for that group,
and the "Inter-Group Interest Fraction" means any remaining percentage
interest in the equity value of the Company attributable to the group that is
represented by an Inter-Group Interest held by the other group. The sum of
the Outstanding Interest Fraction and the Inter-Group Interest Fraction for a
group would always equal 100 percent for the group.

For further information, see "Proposal 2: The Agritope Stock Proposal--
Description of Medical Products Stock and Agritope Stock--Inter-Group
Interests."

MANAGEMENT AND ACCOUNTING POLICIES

The Board has adopted certain policies with regard to accounting and tax
allocations, acquisitions or dispositions of programs, products or assets, and
other matters to govern the management of Agritope and Epitope Medical
Products. With certain exceptions, the Board may change these policies
without a shareholder vote, although it has no present intention to do so.
See "Proposal 2: The Agritope Stock Proposal--Management and Accounting
Policies."

QUOTATION OF MEDICAL PRODUCTS STOCK AND AGRITOPE STOCK

Epitope Common Stock is currently listed on the American Stock Exchange
("AMEX") under the symbol "EPT." The Company intends to apply for inclusion
of Epitope Common Stock on the National Market tier of The Nasdaq Stock Market
(the "Nasdaq National Market") under the symbol "EPTO" so that outstanding
shares can commence trading thereon prior to the Annual Meeting. The Company
also intends to apply for inclusion of Agritope Stock on the Nasdaq National
Market under the symbol "AGTO." Prior to the Effective Date, there will be no
public market for the Agritope Stock. See "Proposal 2: The Agritope Stock
Proposal--Quotation of Medical Products Stock and Agritope Stock."

NO DISSENTERS' RIGHTS

Under Oregon law and the Articles, shareholders will not have any
dissenters' rights of appraisal in connection with the Agritope Stock
Proposal.

TAX CONSIDERATIONS

Epitope has been advised by tax counsel that no gain or loss will be
recognized by either Epitope or its shareholders upon implementation of either
the Agritope Stock Proposal or the Distribution. However, there are no court
decisions bearing directly on transactions similar to the Agritope Stock
Proposal, and the Internal Revenue Service has had under study since 1987 the
federal income tax consequences of transactions similar to the Agritope Stock
Proposal. See "Proposal 2: The Agritope Stock Proposal--Certain Federal
Income Tax Considerations."

FRACTIONAL SHARES

Fractional shares of Agritope Stock will not be issued in the
Distribution. If the number of shares of Agritope Stock to be issued to any
record holder of Medical Products Stock includes a fraction of a whole share,
the Company will pay an amount in cash for the fractional shares. See
"Proposal 2: The Agritope Stock Proposal--Fractional Shares."

SUMMARY COMPARISON OF EXISTING EPITOPE COMMON STOCK
WITH TERMS OF MEDICAL PRODUCTS STOCK AND AGRITOPE STOCK

The following summary is intended only to highlight certain of the terms
of the outstanding Epitope Common Stock and the comparable terms of the
Agritope Stock and Medical Products Stock, if the Agritope Stock Proposal is
approved by shareholders. The following summary is not intended to be
complete and is qualified in its entirety by the detailed information
appearing elsewhere in this Prospectus/Proxy Statement, the annexes hereto,
and the documents incorporated by reference or otherwise referred to herein.

<TABLE>
<CAPTION>
=============================================================================================================================
Agritope Stock Proposal
Existing
Common Stock
---------------------------------------------------------------------
Attribute Medical Products Agritope Stock
Stock
=============================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business All businesses Medical products Agribusiness and
of the Company. business. agricultural
biotechnology
operations.
- -----------------------------------------------------------------------------------------------------------------------------
Distribution - - Existing shares of One-half share of
Epitope Common Agritope Stock will
Stock will be be distributed for
redesignated as each share of
Medical Products Epitope Common
Stock on a one- Stock outstanding
for-one basis. on the Effective
Date.
- -----------------------------------------------------------------------------------------------------------------------------
Shares 12,937,383 12,937,383 6,468,691
outstanding as
of
September 30,
1996 (assuming
the
Distribution
had occurred
on that date)
- -----------------------------------------------------------------------------------------------------------------------------
Authorized 30,000,000 60,000,000 40,000,000
shares
- -----------------------------------------------------------------------------------------------------------------------------
Voting rights One vote per One vote per A variable number
share. share; generally of votes per share
voting with the equal to the ratio
Agritope Stock as of the average
a single voting Market Value of one
group. share of Agritope
Stock to the average Market
Value of one share of Medical
Products Stock calculated
over the 20-Trading Day
period preceding the applicable
record date; generally
voting with the Medical Products
Stock as a single
voting
group.

- -----------------------------------------------------------------------------------------------------------------------------
Dividends Dividends are Dividends are Dividends are
payable out of limited to the limited to the
assets legally lesser of assets lesser of assets
available legally available legally available
therefor. No therefor and the therefor and the
dividends have Available Medical Available Agritope
been paid or are Products Dividend Dividend Amount.
anticipated for Amount. No No dividends are
the foreseeable dividends are anticipated for the
future. anticipated for foreseeable future.
the foreseeable Any dividends on
future. Any Medical Products
dividends on Stock and Agritope
Medical Products Stock may be
Stock and Agritope declared and paid
Stock may be in equal or unequal
declared and paid amounts.
in equal or
unequal amounts.
- -----------------------------------------------------------------------------------------------------------------------------
Liquidation Entitled to net Entitled with Entitled with
rights assets available holders of holders of Medical
for distribution Agritope Stock to Products Stock to
to common net assets net assets
shareholders available for available for
upon distribution to distribution to
liquidation. common common shareholders
shareholders upon upon liquidation,
liquidation, in in proportion to
proportion to the the relative market
relative market capitalizations of
capitalizations of Agritope Stock and
Medical Products Medical Products
Stock and Agritope Stock.
Stock.

- -----------------------------------------------------------------------------------------------------------------------------
Exchange None. Exchangeable at Exchangeable at the
rights the Company's Company's option
option after after February 28,
February 28, 1999, 1999, for any
for any combination of cash
combination of and Medical
cash and Agritope Products Stock at a
Stock at a 15 percent premium
15 percent premium over the average
over the average Market Value of one
Market Value of share of Agritope
one share of Stock calculated
Medical Products over the 20-Trading
Stock calculated Day period prior to
over the 20- public announcement
Trading Day period of the exchange.
prior to public If all or
announcement of substantially all
the exchange. If Agritope's assets
all or are sold (i.e., 80%
substantially all or more on a
Epitope Medical current market
Products' assets are value basis), the
sold (i.e., 80% or Company must either
more on a current (i) distribute to
market value the holders of
basis), the Agritope Stock an amount
Company must in cash and/or
either (i) securities or other
distribute to the property equal to
holders of Medical their proportionate
Products Stock an share of the Fair
amount in cash Value of the Net Proceeds,
and/or securities either by special dividend
or other property or redemption of all
equal to their or part of the
proportionate outstanding shares
share of the Fair of Agritope Stock
Value of the Net or (ii) exchange each
Proceeds, either outstanding share of
by special Agritope Stock for
dividend or the number of
redemption of all shares of Medical
or part of the Products Stock
outstanding shares equal to 115
of Medical percent of the
Products Stock or ratio of the
(ii) exchange each average Market
outstanding share of Value of one share
Medical Products of Agritope Stock
Stock for the to the average
number of shares Market Value of one
of Agritope Stock share of Medical
equal to 115 Products Stock
percent of the calculated over the
ratio of the ten-Trading Day
average Market period beginning on
Value of one share the 16th Trading
of Medical Day after consummation
Products Stock of the Disposition.
to the average
Market Value of one
share of Agritope
Stock calculated over
the ten-day Trading
Day period beginning
on the 16th Trading Day
after consummation of
the Disposition.
- -----------------------------------------------------------------------------------------------------------------------------
Listing American Stock Nasdaq National Nasdaq National
Exchange. Market. Symbol Market. Symbol
Symbol "EPT." "EPTO." "AGTO."
Trading may
commence on
Nasdaq National
Market prior to
Annual Meeting.
Symbol "EPTO."
=============================================================================================================================
</TABLE>
<PAGE>
STOCK PLAN PROPOSALS

At the Annual Meeting, shareholders will also be asked to consider and
approve two proposals to amend the Award Plan and Purchase Plan to authorize
increases in the number of shares available for issuance under the Stock
Plans, to authorize the granting of stock options, awards and purchase rights
in either Medical Products Stock, Agritope Stock or both, and to make other
changes. Shareholders are being asked to approve the increases in shares
available under the Stock Plans and other proposed changes regardless of
whether the Agritope Stock Proposal is approved. If the proposals relating to
the Stock Plans are approved by the shareholders but the Agritope Stock
Proposal is not approved, the plan amendments relating to Agritope Stock,
including the increases in shares relating to awards in Agritope Stock, will
not be implemented.

It is currently anticipated that options to purchase a total of
approximately 95,000 shares of Agritope Stock will have been granted to
certain officers and employees of A&W under the Award Plan prior to the
Effective Date, subject to approval of the Agritope Stock Proposal and the
proposed amendments to the Award Plan. This number excludes options to
purchase Agritope Stock that result from antidilution adjustments to options
previously granted to purchase shares of the existing Epitope Common Stock.
See "Proposal 3: Amendment of 1991 Stock Award Plan" and "Proposal 4:
Amendment of 1993 Employee Stock Purchase Plan."

RECOMMENDATIONS OF THE BOARD

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE NOMINEES FOR CLASS I
DIRECTORS AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR THEIR ELECTION TO THE
BOARD OF DIRECTORS.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AGRITOPE STOCK
PROPOSAL AND THE STOCK PLAN PROPOSALS AND BELIEVES THAT THEIR ADOPTION IS IN
THE BEST INTERESTS OF EPITOPE AND ITS SHAREHOLDERS. ACCORDINGLY, THE BOARD
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE AGRITOPE STOCK
PROPOSAL AND THE STOCK PLAN PROPOSALS.

RECENT DEVELOPMENTS

On November , 1996, the Company acquired Andrew and Williamson Sales,
Co. in exchange for 520,000 shares of Epitope Common Stock. The acquisition
will be accounted for as a pooling of interests. A&W, founded in 1986, is a
fruit and vegetable producer and provides sales and distribution services for
growers from mainland and Baja, Mexico and the San Joaquin Valley in
California. Fred L. Williamson, a founder and president of A&W, became an
executive officer of the Company. He and the other A&W principals entered
into a three-year employment agreement with the Company. For additional
information about the acquisition, see Annex III, "Description of Business--
Agritope--Andrew and Williamson Sales, Co."

SELECTED FINANCIAL DATA

The following table sets forth selected historical consolidated income
and balance sheet data of Epitope, Inc. and its subsidiaries; selected
historical income and balance sheet data of Epitope Medical Products; and
selected historical consolidated income and balance sheet data of Agritope.
The balance sheet data at September 30, 1996 and 1995 and the operating
results data for the years ended September 30, 1996, 1995, and 1994 have been
derived from audited consolidated financial statements and notes thereto
included in this Prospectus/Proxy Statement. The balance sheet data at
September 30, 1994, 1993, and 1992 and consolidated operating results data for
the years ended September 30, 1993 and 1992 for Epitope, Inc. and its
subsidiaries have been derived from audited financial statements not included
in this Prospectus/Proxy Statement. The combined balance sheet data at
September 30, 1994, 1993 and 1992 and combined operating results data for the
years ended September 30, 1993 and 1992 are unaudited, but, in the opinion of
management, include all adjustments necessary for fair presentation. [THE
FOLLOWING FINANCIAL INFORMATION HAS NOT BEEN RESTATED TO GIVE EFFECT TO THE
ACQUISITION OF ANDREW & WILLIAMSON SALES, CO. SUCH ACQUISITION IS EXPECTED TO
BE ACCOUNTED FOR AS A POOLING OF INTERESTS. RESTATED FINANCIAL STATEMENTS
WILL BE FILED BY AMENDMENT TO THIS REGISTRATION STATEMENT.]

<TABLE>
<CAPTION>
COMPARATIVE FINANCIAL DATA
(In thousands, except net loss per share)
<S> <C> <C> <C> <C> <C>
Year ended September 30 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------
Epitope Medical Products
Combined operating results
Revenues. . . . . . . . . . . . . $ 5,594 $ 2,856 $ 2,605 $ 2,759 $ 2,985
Operating costs and expenses. . . 10,881 14,463 8,890 9,376 8,312
Other income (expense), net . . . 6,027 756 236 (1,276) 221
Net profit (loss). . . . . . .. . 739 (10,851) (6,048) (7,893) (5,106)
Pro forma net profit (loss) per share.. .06 (.91) (.60) (.89) (.59)
Pro forma shares used in per share
calculations . . . . . . . . . . 13,440 11,886 10,050 8,828 8,628
Combined balance sheet data
Working capital . . . . . . . . . $ 20,366 $ 15,449 $ 12,609 $ 8,703 $ 5,509
Total assets. . . . . . . . . . . 24,350 21,831 16,317 12,054 8,207
Accumulated deficit . . . . . . . (41,705) (42,444) (31,593) (25,545) (17,652)
Group equity. . . . . . . . . . . 22,532 18,035 14,795 10,954 7,433

Agritope
Combined operating results
Revenues. . . . . . . . . . . . . $ 585 $ 2,110 $ 2,213 $ 524 $ 58
Operating costs and expenses. . . 2,821 9,920 11,703 7,331 2,790
Other income (expense), net . . . 97 166 (94) (29) 72
Net loss. . . . . . . . . . . . . (2,139) (7,645) (9,584) (6,836) (2,660)
Pro forma net loss per share. . . (.34) (1.29) (1.91) (1.55) (.62)
Pro forma shares used in per share
calculations . . . . . . . . . . 6,331 5,943 5,026 4,414 4,314
Combined balance sheet data
Working capital . . . . . . . . . $ 1,264 $ 5,082 $ 4,575 $ - $ 4,114
Total assets. . . . . . . . . . . 10,097 8,303 8,238 2,091 5,922
Long-term debt. . . . . . . . . . - 22 38 57 -
Convertible notes, due 1997 . . . 3,620 3,620 4,070 4,630 5,495
Accumulated deficit . . . . . . . (31,280) (29,141) (21,497) (11,912) (5,076)
Group equity (deficit). . . . . . 5,435 4,312 3,675 (2,983) 227

Epitope, Inc. and Subsidiaries
Consolidated operating results
Revenues. . . . . . . . . . . . . $ 6,179 $ 4,965 $ 4,819 $ 3,283 $ 3,043
Operating costs and expenses. . . 13,702 24,383 20,593 16,707 11,102
Other income (expense), net . . . 6,123 922 141 (1,305) 293
Net loss. . . . . . . . . . . . . (1,400) (18,496) (15,633) (14,729) (7,765)
Net loss per share. . . . . . . . (.11) (1.56) (1.56) (1.67) (.90)
Shares used in per share
calculations . . . . . . . . . . 12,661 11,886 10,050 8,828 8,628
Consolidated balance sheet data
Working capital . . . . . . . . . $ 21,630 $ 20,532 $ 17,184 $ 8,703 $ 9,623
Total assets. . . . . . . . . . . 34,447 30,134 24,555 14,145 14,130
Long-term debt. . . . . . . . . . - 22 38 57 -
Convertible notes, due 1997 . . . 3,620 3,620 4,070 4,630 5,495
Accumulated deficit . . . . . . . (72,985) (71,585) (53,090) (37,457) (22,728)
Shareholders' equity. . . . . . . 27,967 22,347 18,470 7,970 7,660

</TABLE>

<PAGE>
COMPARATIVE PER-SHARE FINANCIAL INFORMATION

The following unaudited information reflects certain comparative per-
share data related to book value and net income (loss) from continuing
operations (i) on a historical basis for the Company and (ii) on a pro forma
basis per share of Medical Products Stock and Agritope Stock giving effect to
the proposed Distribution. The Company has not paid any cash dividends on
Epitope Common Stock.

The information shown below should be read in conjunction with the
financial statements included in this Prospectus/Proxy Statement.

Medical Products
Common Stock Stock Agritope Stock
(Historical) (Pro Forma) (Pro Forma)

Net income (loss) per ($ .11) $ .06 ($ .34)
share for the 12-
month period ended
September 30, 1996

Book value per share $ 2.16 $ 1.74 $ .84
as of September 30,
1996

EPITOPE COMMON STOCK PRICE RANGE AND DIVIDEND POLICY

Epitope Common Stock is listed for trading on the American Stock
Exchange under the symbol EPT. High and low sales prices reported by AMEX
during the periods indicated are shown below. The Company intends to apply
for inclusion of Epitope Common Stock on the Nasdaq National Market under the
symbol "EPTO" so Epitope Common Stock can commence trading thereon prior to
the Annual Meeting.

Year ended September 30 1996 1995
- ------------------------------------------------------------------------------
Sales price per share High Low High Low

First Quarter $ 18 $ 9 1/2 $ 26 $ 18-1/2

Second Quarter 19 1/2 13 7/8 21-7/8 13-5/8

Third Quarter 22 7/8 15 1/2 18-3/8 13-5/8

Fourth Quarter 16 1/8 11 3/4 18 13-3/4

On November 6, 1996, the trading day prior to the Company's
announcement of the Agritope Stock Proposal, and on , 1996, the
closing price of Epitope Common Stock as reported on AMEX was $ $15.25
and $ , respectively. On September 30, 1996, there were 1,085
holders of record of Epitope Common Stock. The Company has never paid any
cash dividends, and the Board of Directors does not anticipate paying cash
dividends in the foreseeable future. The Company intends to retain any future
earnings to provide funds for the operation and expansion of its business.

<PAGE>
RISK FACTORS

Shareholders should carefully consider the matters set forth below, as
well as the other information provided elsewhere in this Prospectus/Proxy
Statement, in evaluating the Agritope Stock Proposal. The Prospectus/Proxy
Statement contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. See "Note Regarding
Forward-Looking Statements."

Risks Related to Two Classes of Common Stock

AS A RESULT OF THE AGRITOPE STOCK PROPOSAL, EPITOPE WILL HAVE TWO
CLASSES OF COMMON STOCK OUTSTANDING. CURRENT SHAREHOLDERS WILL KEEP THEIR
EXISTING EPITOPE COMMON STOCK, WHICH WILL BE REDESIGNATED AS MEDICAL PRODUCTS
STOCK, AND WILL ALSO RECEIVE SHARES OF AGRITOPE STOCK AS A DISTRIBUTION
FOLLOWING APPROVAL OF THE AGRITOPE STOCK PROPOSAL. SHAREHOLDERS SHOULD
CAREFULLY CONSIDER THE FOLLOWING FACTORS IN EVALUATING THE AGRITOPE STOCK
PROPOSAL.

UNUSUAL USE OF TARGETED STOCK. Although "targeted stock," such as
Medical Products Stock and Agritope Stock, is not a new concept, it has been
used in the past primarily by businesses with historical earnings. Because
the methods of stock valuation used for companies with new and developing
businesses with a history of operating losses differ from those used for
companies with more mature businesses and because there are greater
uncertainties associated with developing businesses, the proposed changes in
Epitope's capital structure may have substantially different effects from
those experienced by other companies with targeted stock capital structures.
In addition, the specific features of Medical Products Stock and Agritope
Stock may cause the performance of Medical Products Stock and Agritope Stock
to vary substantially from the performance of the respective businesses.

SHAREHOLDERS OF ONE COMPANY; FINANCIAL IMPACTS ON ONE GROUP COULD AFFECT
THE OTHER. Notwithstanding the allocation of revenues, costs, assets,
liabilities, and shareholders' equity between Epitope Medical Products and
Agritope for the purpose of preparing their respective financial statements,
both holders of Medical Products Stock and holders of Agritope Stock will be
shareholders of Epitope and will continue to be subject to all the risks
associated with an investment in Epitope. The allocation and the change in
the equity structure of Epitope contemplated by the Agritope Stock Proposal
will not affect title to the assets or responsibility for the liabilities of
Epitope. Financial effects arising out of either group, including liabilities
or contingencies, could affect the financial condition and results of
operations of the Company on a consolidated basis and the other group, as well
as the market price of both classes of common stock. For example, liabilities
that may arise out of the operations of one group, such as product
liabilities, may affect the assets or operations of the other group.
Therefore, the financial statements of either group may not completely reflect
the financial condition of that group due to contingencies or commitments
associated with the other group that affect the holders of all classes of
stock.

In addition, any net losses of either group, dividends or distributions
on, or repurchases of, Agritope Stock or Medical Products Stock, and dividends
on or repurchases of any preferred stock that may hereafter be outstanding,
will reduce funds of the Company legally available for the payment of
dividends on both Agritope Stock and Medical Products Stock. Accordingly,
Epitope Medical Products' and Agritope's financial information should be read
in conjunction with Epitope's consolidated financial information. Epitope
will continue to prepare consolidated financial statements and will provide
consolidated financial statements, management's discussion and analysis, and
other relevant information to the holders of Medical Products Stock and
Agritope Stock along with separate financial statements, management's
discussion and analysis, and other relevant information relating to Epitope
Medical Products or Agritope, as applicable. See the financial information,
management's discussion and analysis, and other relevant information regarding
Epitope, Epitope Medical Products and Agritope set forth in Annex III. The
combined financial statements of each group will principally reflect the
combined financial position, results of operations, and cash flows of the
businesses included therein. However, each group's financial information
could also include allocated portions of assets and liabilities that are not
separately identified with the operations of a specific group.

ALLOCATION OF TAX BENEFITS. The Agritope Stock Proposal provides that
to the extent either group is unable to utilize its operating losses to reduce
its current or deferred income tax expense, the losses may be reallocated to
the other group on a quarterly basis. Accordingly, although the actual
payment of taxes is a corporate liability of the Company as a whole, separate
financial statements will be prepared for each group and any such losses that
cannot be utilized by a group might not be carried forward to reduce the taxes
allocable to that group's earnings in the future. This arrangement could
result in a group bearing a disproportionate share of the total corporate tax
liability and reporting lower earnings after taxes in the future than would
have been the case if the group had retained its losses in the form of a net
operating loss carry-forward.

FIDUCIARY DUTIES; POTENTIAL CONFLICTS. The existence of separate
classes of common stock may give rise to occasions when the interests of
holders of Medical Products Stock and holders of Agritope Stock may diverge or
appear to diverge. For example, the Board could decide to (i) convert each
outstanding share of Agritope Stock into shares of Medical Products Stock, or
vice versa, (ii) approve the disposition of all or substantially all the
properties and assets of Agritope or Epitope Medical Products, (iii) allocate
consideration to be received by holders of different classes of Epitope Common
Stock, (iv) allocate resources and financial support to or pursue business
opportunities or operational strategies through one group instead of the other
group, (v) if and to the extent there is an Inter-Group Interest, allocate the
proceeds of issuances of a class of common stock in respect of the decrease in
an Inter-Group Interest, (vi) pay or omit dividends on Agritope Stock or
Medical Products Stock, or (vii) approve transactions involving the transfer
of cash, assets, products, programs or other property from one group to the
other or make other operational or financial decisions with respect to one
group that could be considered to be detrimental to the other group. Although
Epitope is aware of no precedent concerning the manner in which Oregon law
would be applied to the duties of a board of directors in the context of
multiple classes of common stock with divergent interests, Epitope believes
that an Oregon court would hold that a board of directors owes an equal duty
to all shareholders regardless of class and does not have separate or
additional duties to any group of shareholders. That duty is the fiduciary
duty to act in good faith and in a manner it reasonably believes to be in the
best interests of the corporation. At a time when either group represents a
substantially smaller portion of Epitope's business, there is a likelihood
that decisions of the Board made in conformity with the foregoing duty will
favor the larger group to the possible disadvantage of the holders of stock
representing the smaller group. Epitope believes that, under Oregon law, a
good faith determination by a disinterested and adequately informed board of
directors that an action is in the best interests of the corporation should be
a defense to any challenge by or on behalf of the holders of any class of
stock that the action could have a disparate effect on different classes of
stock. Epitope believes that a director would be able to discharge his or her
fiduciary responsibilities even if his or her interests in shares of the
various classes were disproportionate or had disparate values. Other than as
described under "The Agritope Stock Proposal--Management and Accounting
Policies," no specific procedures have been adopted for consideration of
matters involving a divergence of interests between the holders of Agritope
Stock and Medical Products Stock. The Board may also from time to time
establish one or more committees of the Board to review matters presented to
the Board that raise conflict issues and to report to the Board on such
matters.

NO PRIOR MARKET. As discussed above, Medical Products Stock and
Agritope Stock are intended to reflect the value and track the performance of
Epitope Medical Products and Agritope, respectively. Because there has been
no public market for Medical Products Stock (with respect solely to the
business of Epitope Medical Products, as proposed) or for Agritope Stock,
there can be no assurance as to the degree to which the market price of the
classes of common stock will accurately reflect the value and track the
performance of Epitope Medical Products and Agritope, as reflected in their
respective financial statements. In addition, Epitope cannot predict the
impact that certain terms of the securities, such as the ability of the
Company to exchange each share of Medical Products Stock or Agritope Stock for
any combination of cash and stock of the other group, will have on the market
prices of each class of common stock. Accordingly, there can be no assurance
that the combined market values of the Medical Products Stock and the Agritope
Stock held by a shareholder after the Effective Date will equal or exceed the
market value of the existing Epitope Common Stock held by the shareholder
prior to the Effective Date.

NO SEPARATE VOTING RIGHTS. Under the Agritope Stock Proposal, holders
of Medical Products Stock and holders of Agritope Stock would vote together as
a single voting group on all matters as to which holders of common stock
generally are entitled to vote. Except in certain limited circumstances as
provided under Oregon law and in Epitope's Articles as proposed to be amended,
holders of each class of common stock will have no rights to vote on matters
as a separate voting group. Separate meetings of the holders of each class of
common stock will not be held. See "Proposal 2: The Agritope Stock Proposal-
- -Description of Medical Products Stock and Agritope Stock--Voting Rights"
below. Accordingly, except in limited circumstances, holders of shares of one
class of common stock could not bring a proposal to a vote of the holders of
that class of common stock only, but would be required to bring any proposal
to a vote of both classes of common stock.

Certain matters as to which the holders of common stock are entitled to
vote may involve a divergence or the appearance of a divergence of the
interests of holders of Medical Products Stock and holders of Agritope Stock.
The relative aggregate voting power of Agritope Stock and Medical Products
Stock will be adjusted to reflect the relative market capitalizations on each
record date for a meeting of shareholders. The Company anticipates that
Medical Products Stock will initially represent a majority of the Company's
stock entitled to vote. The market capitalizations could be influenced by
many factors, including results of operations of the Company and each of the
groups, results of product development programs, competition, regulatory
matters, intellectual property developments, trading volume, share issuances
and repurchases, and general economic and market conditions. When a matter is
submitted to the shareholders that does not require voting by separate
classes, the holders of either class may not be able to affect the outcome if
the holders of the other class are in substantial agreement as to the matter.

MANAGEMENT AND ACCOUNTING POLICIES SUBJECT TO CHANGE. The Board has
adopted certain management and accounting policies described herein applicable
to the preparation of the financial statements of both groups, the allocation
of corporate expenses, assets and liabilities and other accounting matters,
the reallocation of assets between groups and other matters. These policies
may, except as stated therein, be modified or rescinded in the sole discretion
of the Board without the approval of shareholders, subject to the Board's
fiduciary duty to all holders of Epitope's capital stock, although there is no
present intention to do so. The Board may also adopt additional policies
depending on circumstances prevailing in the future.

EXCHANGE OF MEDICAL PRODUCTS STOCK AND AGRITOPE STOCK. The Board may,
in its sole discretion, determine to exchange shares of either class of common
stock for cash or shares of the other class of common stock (or any
combination thereof) at a 15 percent premium at any time after February 28,
1999. Any such optional exchange could be made at a time when either or both
of Agritope Stock or Medical Products Stock may be considered to be overvalued
or undervalued. In addition, any such conversion in common stock at any
premium would dilute the interests in the Company of the holders of the class
of common stock not subject to exchange and would preclude holders of both
classes of common stock from retaining their investment in a security that is
intended to reflect separately the performance of the relevant group. In
determining whether to exchange one class of common stock into the other class
of common stock, the Board would act in accordance with its good faith
business judgment that any such exchange is in the best interests of the
Company and all of its shareholders, including both the holders of the common
stock being exchanged and the holders of the class of common stock into which
it is to be exchanged. See "Proposal 2: The Agritope Stock Proposal--
Description of Medical Products Stock and Agritope Stock--Exchange Rights"
below.

DISPOSITION OF GROUP ASSETS. As long as the assets of a group
continue to represent less than substantially all of the properties and assets
of the Company, the Board may approve sales and other dispositions of any
amount of the properties and assets of such group without shareholder
approval, because under the Corporation Act and the Articles as proposed to be
amended, shareholder approval is required only for a Disposition of all or
substantially all of the properties and assets of the entire Company. The
Amendment, however, contains provisions which, in the event of a Disposition
of all or substantially all of the properties and assets of Agritope or
Epitope Medical Products in one transaction or a series of related
transactions, and other than in connection with the Disposition of all or
substantially all of the assets of the entire Company, require the Company, at
its option, either to (i) distribute by dividend or redemption to the holders
of Agritope Stock or Medical Products Stock, as the case may be, an amount in
cash and/or securities or other property equal to their proportionate interest
in the Fair Value of the Net Proceeds of such Disposition or (ii) exchange
outstanding shares of Agritope Stock or Medical Products Stock, as the case
may be, into shares of stock of the other group, such conversion to be at a 15
percent premium. The provisions of the Amendment do not require the Board to
select the option which would result in the distribution with the highest
value or with the smallest effect on the other group. The Board would elect
the option based upon its good faith business judgment. The Amendment does
not require the Company to take such actions upon sales or other dispositions
of less than substantially all of the properties and assets of a group or upon
two or more unrelated sales or other dispositions which together constitute
the sale of substantially all of the properties and assets of a group.

POTENTIAL EFFECTS OF POSSIBLE DISPOSITION OF ASSETS ATTRIBUTED TO A
GROUP. If Agritope or Epitope Medical Products were a separate independent
company and its shares were acquired by another person, certain of those
costs, including corporate level taxes, might not be payable in connection
with such an acquisition. As a result, the consideration that would be
received by shareholders of such a separate independent company in connection
with such a stock acquisition might be greater than the Net Proceeds that
would be received by holders of Agritope or Epitope Medical Products if all or
substantially all of the properties and assets of Agritope or Epitope Medical
Products were sold. In addition, no assurance can be given that the Net
Proceeds per share of Agritope Stock or Medical Products Stock, as the case
may be, to be received in connection with a Disposition of all or
substantially all of the properties and assets of Agritope or Epitope Medical
Products will be equal to or more than the market value per share of Agritope
Stock or Medical Products Stock, as the case may be, prior to or after
announcement of such disposition.

TRANSFER OF FUNDS BETWEEN GROUPS; EQUITY CONTRIBUTIONS BETWEEN GROUPS.
To the extent cash needs of a group exceed its cash balances, the other group
may transfer funds to such group. Such transfers of funds between groups will
be reflected as borrowings or, if determined by the Board, reflected as the
creation of, or an increase or a reduction in any Inter-Group Interest. There
are no specific criteria for determining when a transfer will be reflected as
a borrowing or as the creation of, or an increase or reduction in, any Inter-
Group Interest. The Board expects to make such determinations, either in
specific instances or by setting generally applicable policies from time to
time, after consideration of such factors as it deems relevant, including,
without limitation, the needs of the Company, the financing needs and
objectives of the groups, the investment objectives of the groups, the
availability, cost and time associated with alternative financing sources,
prevailing interest rates and general economic conditions. In addition,
although any increase or decrease in an Inter-Group Interest resulting from a
transfer of funds, or a transfer of assets, products, programs or other
property would be determined by reference to the then current Market Value of
the relevant class of stock, such an increase could occur at a time when such
shares could be considered undervalued and such a decrease could occur at a
time when such shares could be considered overvalued.

LIMITATIONS ON POTENTIAL UNSOLICITED ACQUISITIONS. If Agritope or
Epitope Medical Products were stand-alone companies, any person interested in
acquiring either of such companies without negotiation with management could
seek control of the outstanding stock of such company by means of a tender
offer or proxy contest. Although the Agritope Stock Proposal would create two
classes of common stock that are intended to reflect the separate performance
of the groups, a person interested in acquiring only one group without
negotiation with the Company's management would still be required to seek
control of the voting power represented by all of the outstanding common stock
of the Company entitled to vote on such acquisition, including the class of
common stock related to the other group.

ALLOCATION OF PROCEEDS OF MERGERS OR CONSOLIDATIONS. The Amendment does
not contain any provisions governing how consideration to be received by the
Company's shareholders in connection with a merger or consolidation involving
the Company (in which the common stock is to be converted into other
securities, cash, or other property) is to be allocated among holders of
Agritope Stock and Medical Products Stock. In any such merger or
consolidation, the allocation of consideration would be determined by the
Board and may be materially more than that which might have been allocated to
such holders had the Board chosen a different method of allocation.

RISKS RELATED TO THE COMPANY

NEED FOR ADDITIONAL FUNDS. The Company will allocate $___ million in
cash to Agritope on the Effective Date. As a consequence, Epitope anticipates
that product revenues and cash allocated to Agritope and Epitope Medical
Products will be sufficient to fund their respective operations for the
foreseeable future. The Company is not required to allocate any additional
funds to either group after the Effective Date. The actual future liquidity
and capital requirements of Agritope and Epitope Medical Products, however,
will depend on numerous factors, including the costs and timing of expansion
of manufacturing capacity, the success of development efforts, the costs and
timing of expansion of sales and marketing activities, 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 and enforcing patent claims and
other intellectual property rights, developments related to regulatory and
third party reimbursement matters and other factors. In the event that
additional financing is needed, Agritope or Epitope Medical Products, as the
case may be, may seek to raise additional funds through public or private
financings, collaborative relationships or other arrangements or the Board may
in its discretion allocate funds from one group to the other group through the
creation of or an increase or decrease in an Inter-Group Interest. Any
additional equity financing may be dilutive to shareholders, and debt
financing, if available, may involve restrictive covenants. Collaborative
arrangements, if necessary to raise additional funds, may require the Company
to relinquish its rights to certain of its technologies, products or marketing
territories. The failure of Agritope or Epitope Medical Products, as the case
may be, to raise capital when needed could require it to scale back, delay or
eliminate certain of its programs and could have a material adverse effect on
its respective business, financial condition and results of operations. There
can be no assurance that financing, if required, will be available on
satisfactory terms, if at all.

PATENTS AND PROPRIETARY INFORMATION. The Company has obtained certain
patents, has license rights under other patents, and has filed a number of
patent applications. The Company 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 the
Company has rights will not be challenged, or that the issuance of a patent
will give the Company any material advantage over its competitors in
connection with any of its products. Competitors may be able to produce
products competing with a patented Company product without infringing on the
Company's patent rights. The issuance of a patent to the Company 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 United
States as to the patentability of the Company's products and processes.
Moreover, the degree of protection afforded by foreign patents may be
different from that of United States patents. The Company intends to obtain
patent protection in only a limited number of foreign countries.

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

Trade secrets and confidential know-how are important to the Company's
scientific and commercial success. Although the Company 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 the Company. The work of members of the Company's Scientific
Advisory Board in their respective university laboratories entails contact
with persons outside the Company that could result in certain information
becoming available to others.

DEPENDENCE ON COMMERCIAL AND OTHER RELATIONSHIPS. The Company expects
some of the development, manufacturing and marketing costs of certain of its
products to be paid for by other parties, primarily pharmaceutical and
agricultural companies, through license agreements, joint ventures or other
arrangements. These arrangements, together with revenues from operations, may
not be sufficient to allow the Company to develop, manufacture and market
certain of its planned products. Additionally, the Company currently
distributes and intends to continue distributing a substantial portion of its
products under agreements with other companies. While the Company believes
those companies will have an economic incentive to succeed in performing their
obligations to the Company, the companies will control the resources devoted
to distribution and may be subject to financial or other difficulties
affecting their distribution ability. The Company is attempting to establish
additional research, development and distribution relationships with major
companies having expertise and distribution capabilities compatible with the
Company's current and planned businesses. There can be no assurance that
these relationships will be established or if established will be profitable
for the Company.

GOVERNMENT REGULATION. Many of the Company's products and activities
are subject to regulation by various local, state, and federal regulatory
authorities in the United States and by governmental authorities in foreign
countries where its products may be marketed. In particular, human
therapeutic and diagnostic products are subject to pre-marketing approval by
the United States Food and Drug Administration ("FDA") and comparable agencies
in foreign countries. The process of obtaining these approvals varies
according to the nature and use of the product and can involve lengthy and
detailed laboratory and clinical testing, sampling activities and other costly
and time-consuming procedures. Approval, if it can be obtained, may take
several years. Compliance with relevant regulations and other requirements
may also be costly and time-consuming, and no assurance can be given that the
Company will be able to comply with the applicable requirements or that
necessary approvals will be granted.

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 United States Department of Agriculture ("USDA") and the 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 Annex III, "The
Company--Description of Business--Epitope Medical Products--Government
Regulation" and "The Company--Description of Business--Agritope--Government
Regulation."

PRODUCT LIABILITY AND RECALL RISK. The Company could be subject to
claims for personal injuries or other damages resulting from its products or
services or product recalls. In particular, the Company faces the risk of
litigation in the event of false positive or false negative results resulting
from its oral testing products. A successful claim or series of claims or a
recall of the Company's products could have a material adverse effect on the
Company. The Company carries liability insurance against the negligent acts
of certain of its employees and a general liability insurance policy that
includes coverage for product liability. In addition, the Company 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 terms, if at all. Also, no assurance can be given that such
insurance will adequately protect the Company against all such liabilities.

DEPENDENCE ON KEY PERSONNEL. The Company depends to a large extent on
the abilities and continued participation of its principal executive officers
and scientific personnel. The loss of a significant group of key personnel
could have a material adverse effect on the Company's business, financial
condition and results of operations. Competition for management and
scientific staff in the biomedical and agricultural biotechnology fields is
intense. No assurance can be given that the Company will be able to continue
to attract and retain personnel with sufficient experience and expertise to
satisfy the Company's needs.

POSSIBLE VOLATILITY OF SHARE PRICE AND ABSENCE OF DIVIDENDS. The market
prices for securities of medical technology and agricultural biotechnology
companies, including Epitope Common Stock, historically have been volatile.
See "Summary--Common Stock Price Range and Dividend Policy" for information
regarding the price range in which Epitope Common Stock has traded. Factors
such as announcements of technological innovations or new commercial products
by Epitope 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 Medical Products Stock and Agritope
Stock unrelated to their respective operations. No dividends have been paid
on Epitope Common Stock to date. Epitope does not anticipate paying cash
dividends on any class of common stock in the foreseeable future.

ANTITAKEOVER CONSIDERATIONS. The Oregon statutes applicable to business
corporations, including the Company, contain certain provisions that could
make it more difficult for a party to acquire, or discourage a party from
attempting to acquire, control of the Company without approval of the Board.
In addition, Epitope's Articles contain certain provisions designed to prevent
sudden changes in the composition of the Board and authorizing the Board to
issue up to 1 million shares of preferred stock and to determine the price,
rights, preferences, and privileges of the shares without further shareholder
action. Also, awards made under the Award Plan will vest in full immediately
in the event of a change in control of the Company or similar event. These
provisions may discourage tender offers or other bids for Epitope Common Stock
(or Medical Products Stock and Agritope Stock) at a premium over the market
prices of these securities.

RISKS RELATED PRIMARILY TO EPITOPE MEDICAL PRODUCTS

HISTORY OF LOSSES; UNCERTAINTY OF FUTURE PROFITABILITY. Epitope Medical
Products has experienced significant operating losses since inception and, as
of September 30, 1996, had an accumulated deficit of $41.7 million. Epitope
Medical Products' ability to increase revenues and achieve profitability and
positive cash flows from operations will depend in substantial part on
successful commercialization of its oral HIV testing system, of which there
can be no assurance. See "Risk Factors--Risks Related Primarily to Epitope
Medical Products--Dependence on Single Product Line; Uncertainty of Market
Acceptance of Oral HIV Testing." Epitope Medical Products' ability to
increase revenues and achieve profitability and positive cash flows from
operations will also depend on Epitope Medical Products' ability to complete
the development of and successfully introduce additional diagnostic tests,
including those currently under development. There can be no assurance that
Epitope Medical Products' development efforts will result in commercially
available products, that Epitope Medical Products will obtain required
regulatory clearance or approvals for any new tests, or that any new tests
will achieve a significant level of market acceptance. As such, there can be
no assurance that Epitope Medical Products will achieve or sustain
profitability in the future.

DEPENDENCE ON SINGLE PRODUCT LINE; UNCERTAINTY OF MARKET ACCEPTANCE OF
ORAL HIV TESTING. In order for Epitope Medical Products to increase revenues
and achieve profitability and positive cash flows from operations, its oral
HIV testing system must achieve a significant degree of market acceptance
among health care professionals and insurers. The substantial majority of HIV
tests used by health care professionals are blood-based assays. Health care
professionals will not use the Epitope Medical Products oral HIV testing
system unless they determine that it is an attractive alternative to other
means of HIV testing. In addition, in order to successfully market the oral
HIV testing system for use in connection with screening insurance applicants,
Epitope Medical Products must be able to demonstrate that testing a larger
population of applicants can be done cost effectively using an oral HIV
testing system given the incidence of HIV in the general population and
resulting cost to insurers. There can be no assurance that Epitope Medical
Products' oral HIV testing will ever achieve a significant degree of market
acceptance among either health care professionals or insurers.

INTENSE COMPETITION AND RAPID TECHNOLOGICAL ADVANCES BY COMPETITORS.
Competition in the emerging market for HIV testing is intense and is expected
to increase. The Company believes that the principal competition will come
from existing blood-based HIV assays and from urine-based testing assays.
Furthermore, new testing methodologies could be developed in the future that
render Epitope Medical Products' oral-based HIV test impractical, uneconomical
or obsolete. Most of Epitope Medical Products' competitors have significantly
greater financial, manufacturing, technical, research, marketing, sales,
distribution and other resources. There can be no assurance that Epitope
Medical Products' competitors will not succeed in developing or marketing
technologies and products that are more effective than those developed by
Epitope Medical Products or that would render its technologies or products
obsolete or otherwise commercially unattractive. In addition, there can be no
assurance that competitors will not succeed in obtaining regulatory approval
for these products, or in introducing or commercializing them before Epitope
Medical Products. Such developments could have a material adverse effect on
the Company's and Epitope Medical Products' business, financial condition and
results of operations.

DEPENDENCE ON MARKETING PARTNER. Epitope Medical Products has
historically marketed most of its products by collaborating with
pharmaceutical and diagnostic companies and distributors. Epitope Medical
Products has an agreement with SmithKline Beecham plc ("SB") to market the
group's oral specimen collection device in specified markets and countries.
The agreement also gives SB an exclusive option to develop and market future
bodily fluid diagnostic products proposed by Epitope Medical Products.
Accordingly, Epitope Medical Products' sales, research and development,
financial condition, and results of operations depend to a substantial degree
on the success of SB's marketing efforts, changes in SB's business strategy,
and other factors relating to SB over which Epitope Medical Products has no
control. In addition, SB has the right to terminate its rights and
obligations under the agreement upon 60 days' prior notice. If SB terminates
the agreement and the Company cannot enter into a comparable distribution
agreement with another partner, Epitope Medical Products' business, financial
condition and results of operations could be materially adversely affected.

RISKS RELATED PRIMARILY TO AGRITOPE

HISTORY OF LOSSES: UNCERTAINTY OF FUTURE PROFITABILITY. Agritope has
experienced significant operating losses since inception and, as of
September 30, 1996, had an accumulated deficit of $31.3 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. There can be no assurance that
Agritope's development efforts will result in commercially available
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 achieve profitability in the future.

UNCERTAINTY OF PRODUCT DEVELOPMENT. Agritope's genetically engineered
products are at various stages of development. Although Agritope has achieved
significant technological accomplishments in the development of genetically
engineered plants, 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 Annex III, "The
Company--Description of Business--Agritope." 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.

FLUCTUATION IN QUARTERLY OPERATING RESULTS. Agritope's revenues are
initially expected to derive primarily from the sale of produce and grape
plants. The seasonal nature of the produce and grapevine industries and A&W's
practice of making substantial cash advances to growers makes significant
quarterly fluctuations in Agritope's revenues and cash flows likely. Because
Agritope maintains extensive research and development and production
facilities and a staff of trained personnel, a significant portion of
Agritope's costs are fixed. Therefore, fluctuations in revenues and cash
flows are likely to result in significant fluctuations in quarterly operating
results and financial position.

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, such as fresh market tomatoes, will gain
public acceptance.

TECHNOLOGICAL CHANGE AND COMPETITION. A number of companies are engaged
in research related to plant biotechnology, including companies that rely on
the use of recombinant DNA as a principal scientific strategy and companies
that rely on other technologies. 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. 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 developed with
recombinant DNA or other technologies. With regard to its nongenetically
engineered products, Agritope currently competes with numerous companies.
Some of Agritope's competitors have substantially greater financial, technical
and marketing resources than Agritope.

UNCERTAINTY OF COST RECOVERY; CHANGES IN SUPPLY AND DEMAND. The fresh
produce business is particularly sensitive to fluctuations in product supply
and demand. The supply of produce can be affected by a number of factors,
including weather, government subsidies, and import/export regulations. When
supplies in the market exceed the demand for such products, the market price
may be driven down below the cost of production. In these circumstances it
may become uneconomical to harvest and pack a crop, resulting in a loss of the
costs incurred in growing the crop. Even when market prices are sufficient to
permit recovery of direct harvesting and packing costs, market prices may not
be high enough to permit recovery of growing costs and/or overhead and other
indirect costs.

AGRICULTURAL RISKS: CROP DISEASE; PESTILENCE; WEATHER; OVERPRODUCTION.
Crop disease and pestilence can result in the loss of all or a substantial
portion of a particular crop for the growing season. Even when only a portion
of a crop is damaged, profits on the crop may be reduced or eliminated because
the costs to plant and cultivate the entire crop will have been incurred
although only a portion of it can be sold. While some crop diseases and
pestilence are preventable or treatable, the costs of prevention or treatment
may be high. In addition, weather conditions have a direct effect on the
supply of fresh produce that is brought to market and, accordingly, the prices
received for produce. Storms, frosts, droughts, and floods can damage or
destroy crops resulting in product that is unsuitable for picking, packing,
and sale. Conversely, favorable growing conditions can result in
overproduction of a particular crop and correspondingly low market prices.

DEPENDENCE ON SEASONAL WORK FORCE. The production of fresh produce is
heavily dependent on the availability of a seasonal labor force in order to
harvest crops. The turnover rate among the labor force is high and the pool
of available workers is shrinking. To the extent it becomes necessary to
increase wages to attract labor to farm work, labor costs can be expected to
increase, which may adversely affect Agritope's business, financial condition
and results of operations.

RISKS RELATED TO TRANSPORTING PRODUCE. The majority of fresh produce
produced by Agritope and Agritope financed growers is shipped by truck and is
therefore susceptible to disturbances in the trucking industry both in the
United States and Mexico.

RISKS RELATED TO GROWER FINANCING. Agritope provides financing for the
majority of growers who produce the crops it sells. These financing
arrangements are generally short term and are collateralized by the crop
itself. In the event of crop damage or failure, oversupply or poor market
conditions, it may be impossible to recover the total amount financed.
Agritope maintains reserves against such possible losses. However, there can
be no assurance that these reserves will be sufficient to cover all potential
loses. Any losses in excess of applicable reserves could have a material
adverse effect on Agritope's business, financial condition, and results of
operations.

ACQUISITION-RELATED RISKS. On November , 1996, the Company
acquired A&W. See Annex III, "The Company--Description of Business--Agritope-
- -Andrew and Williamson Sales, Co." A&W operates as part of Agritope.
Acquisitions involve a number of risks, including the diversion of
management's attention to the assimilation of the operations and personnel of
the acquired business, integration of management information systems,
retention of key management personnel, renegotiation of bank credit lines, and
adjustment of relationships with customers and suppliers. No assurance can be
given that the acquisition of A&W will not materially adversely affect
Agritope or that the acquisition will enhance Agritope's performance.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Prospectus, including without
limitation statements containing the words "believes," "anticipates,"
"intends," "expects" and words of similar import, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company or industry results to be materially different
from any future results, performance or achievements expressed or implied by
the forward-looking statements. These factors with respect to the Company
include unexpected interruption of supply or manufacturing operations, changes
in marketing partners' and customers' oral testing, changes in insurance
industry practices, unexpected delays in changes in the Company's business
strategy, adverse growing conditions affecting crops, and other risks and
uncertainties described in this Prospectus/Proxy Statement. Certain of these
factors are discussed in more detail elsewhere in this Prospectus, including
without limitation under the caption "Risk Factors." Given these
uncertainties, shareholders are cautioned not to place undue reliance on the
forward-looking statements. The Company disclaims any obligation to update
any such factors or to publicly announce the result of any revisions to any of
the forward-looking statements contained herein to reflect future events or
developments.

<PAGE>
THE ANNUAL MEETING

TIME AND PLACE

This Prospectus/Proxy Statement and enclosed proxy card are being
furnished to Epitope shareholders in connection with the solicitation of
proxies in the enclosed form ("Proxies") by the Board for use at the Annual
Meeting to be held on February , 1997, at 9:00 a.m., Pacific Time, at the
Oregon Convention Center, 777 N.E. Martin Luther King Jr. Boulevard, Portland,
Oregon, and at any adjournments thereof, pursuant to the accompanying Notice
of Annual Meeting of Shareholders.

PROXIES; MATTERS TO BE CONSIDERED

Shares represented by a properly executed Proxy will be voted in
accordance with the shareholders' instructions given in the Proxy. If no
instructions are given, shares will be voted FOR the election of the three
nominees for Class I Directors and FOR the Agritope Stock Proposal and the
proposed amendments to the Stock Plans. Shareholders may revoke the authority
granted by their Proxies at any time before the meeting by notice in writing
delivered to the Secretary of the Company, by submitting a subsequently dated
Proxy, or by attending the meeting, withdrawing the Proxy, and voting in
person.

At the meeting, action will be taken on the matters set forth in the
accompanying Notice of Annual Meeting of Shareholders and described in this
Prospectus/Proxy Statement. The Board knows of no other matters to be
presented for action at the meeting. If any other matters do properly come
before the meeting, the persons named on the Proxy will have discretionary
authority to vote thereon in accordance with their best judgment.

RECORD DATE; OUTSTANDING SECURITIES

Only Epitope shareholders of record at the close of business on
December , 1996, are entitled to notice of and to vote at the Annual
Meeting. At the close of business on that date, the Company had outstanding
and entitled to vote at the Annual Meeting shares of Epitope Common
Stock, its only outstanding class of stock. Each share of Epitope Common
Stock is entitled to one vote on any matter brought before the meeting. The
executive officers and directors of Epitope and their affiliates hold shares
of Epitope Common Stock representing approximately percent of the
outstanding shares of Epitope Common Stock (excluding shares which such
persons have the right to acquire upon the exercise of stock options). See
"Principal Shareholders."

QUORUM; VOTES REQUIRED

A majority of the shares of Epitope Common Stock outstanding as of the
Record Date, represented in person or by proxy at the Annual Meeting, will
constitute a quorum for the transaction of business. Shares represented by
Proxies that are marked "abstain" will be counted as shares present for
purposes of determining the presence of a quorum on all matters. Proxies
relating to "street name" shares for which the authority to vote is withheld
("broker nonvotes") will nevertheless be treated as shares present for
purposes of determining the presence of a quorum on all matters, but will not
be treated as shares voted in favor of the Agritope Stock Proposal and the
proposed amendments to the Stock Plans.

Each nominee for director will be elected if he receives a plurality of
the votes cast at the Annual Meeting. The Agritope Stock Proposal and each
proposal relating to the Stock Plan amendments will be approved if the votes
cast in favor of the proposal at the Annual Meeting exceed the votes cast
opposing the proposal. Shareholders may expressly abstain from voting on the
Agritope Stock Proposal and the proposals for Stock Plan amendments. Neither
abstentions nor broker nonvotes will have any effect on the required vote on
any matter to be presented at the Annual Meeting.

If the proposed Stock Plan amendments are approved by the shareholders
but the Agritope Stock Proposal is not approved, the provisions of the Stock
Plan amendments relating to Agritope Stock will not be implemented.
Accordingly a vote against the Agritope Stock Proposal will have the effect of
a vote against only those provisions of the proposed amendments dealing with
Agritope Stock. The other provisions of the Stock Plan amendments will be
implemented if approved by the shareholders, regardless of whether the
Agritope Stock Proposal is approved.

DISSENTERS' RIGHTS OF APPRAISAL

Under Oregon law and Epitope's Restated Articles of Incorporation,
shareholders will have no dissenters' rights of appraisal in connection with
the Agritope Stock Proposal or the other matters being submitted to the
shareholders at the Annual Meeting.

BOARD RECOMMENDATION

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE NOMINEES FOR CLASS I
DIRECTORS AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR THEIR ELECTION TO THE
BOARD OF DIRECTORS.

<PAGE>
PROPOSAL 1: ELECTION OF CLASS I DIRECTORS

At the Annual Meeting, shareholders will be asked to elect three Class I
directors. The three nominees for election as Class I directors are currently
members of the Board. The term of office for which each nominee is a
candidate will expire at the annual meeting of shareholders in the year 2000.

In the absence of instructions to the contrary, shares of Epitope Common
Stock represented by properly executed proxies will be voted for the three
nominees, each of whom has consented to be named and to serve if elected. If
a quorum is present, each nominee will be elected if he receives a plurality
of the votes cast by holders of shares entitled to vote at the Annual Meeting.

The Company does not know of anything that would preclude any nominee
from serving. However, should any nominee for any reason become unable or
unwilling to serve as a director, the persons named on the enclosed proxy will
vote the shares represented by each proxy for such substitute nominee as the
Board may approve.
<PAGE>
Certain information with respect to each person nominated for election
as a director and each person whose term of office as a director will continue
after the meeting is set forth below. The number of shares of Epitope Common
Stock beneficially owned by such persons is set forth under "Principal
Shareholders" below.
<TABLE>
<CAPTION>

DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class I (Nominees for Terms of Office to Expire in 2000):

W. Charles Armstrong Private Investor 52 1989

Adolph J. Ferro, Ph.D. President and Chief Executive 54 1990
Officer of the Company

Roger L. Pringle President of The Pringle Company, 55 1989
a management consulting firm,
Portland, Oregon

Class II (Directors whose Terms of Office Expire in 1999):

Andrew S. Goldstein Senior Vice President of Advanced 48 1981
Technology Development -
Epitope Medical Products

R. Douglas Norby Senior Vice President and Chief 61 1989
Financial Officer of Mentor
Graphics Corporation, a computer
software manufacturer,
Wilsonville, Oregon

G. Patrick Sheaffer Chairman, President and Chief 57 1983
Executive Officer of Riverview
Savings Bank, Camas, Washington

Class III (Directors Whose Terms of Office Expire in 1998):

Richard K. Donahue Vice Chairman of NIKE, Inc. a 69 1991
sporting goods manufacturer,
Beaverton, Oregon

Margaret H. Jordan President and Chief Executive 53 1995
Officer of Dallas Medical
Resource, a not-for-profit
medical referral firm,
Dallas, Texas

Michael J. Paxton Chairman, President and Chief 50 1995
Executive Officer of
O'Cedar Holdings, Inc. a
manufacturer of household
cleaning products,
Springfield, Ohio
</TABLE>

W. Charles Armstrong is the former Chairman and Chief Executive Officer
of Bank of America Oregon, a position he held 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.

Richard K. Donahue has been Vice Chairman of NIKE, Inc. since June 1994.
Mr. Donahue served as President and Chief Operating Officer of NIKE, Inc. from
1990 to June 1994 and has served as a director of that company since 1977.
Mr. Donahue is also a partner in the law firm of Donahue & Donahue, Lowell,
Massachusetts, and a director of Courier Corp.

Adolph J. Ferro, Ph.D., has been President and Chief Executive Officer
of the Company since April 1990. Dr. Ferro was Senior Vice President from
November 1988 until April 1990. From July 1987 until November 1988, he was
Vice President of Research and Development. He was a cofounder of
Agricultural Genetic Systems, Inc. which the Company acquired in 1987.
Dr. Ferro is also the President of Agritope, Inc. the Company's wholly owned
subsidiary. Prior to joining the Company, 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 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.

Andrew S. Goldstein is a Senior Vice President of the Company's Epitope
Medical Products group, a position he has held since June 1990. Prior to that
time, he had been Vice President of Product Development from December 1988,
Vice President of Scientific Affairs from July 1987 to December 1988, and Vice
President of Research and Development from 1981 until July 1987. He also has
served as Secretary from December 1988 to February 1993 and from November 1995
to the present and served as Treasurer until March 1991. Mr. Goldstein was
Research Associate and supervisor of the Histocompatibility Laboratory at the
Oregon Health Sciences University ("OHSU"), where he was engaged in paternity
testing and transplantation immunology, from 1974 to 1981. Mr. Goldstein
received a B.S. degree in microbiology from Cornell University in 1969 and an
M.S. degree in cytology from Fordham University in 1973.

Margaret H. Jordan joined Dallas Medical Resource ("DMR") as President
and Chief Executive Officer in February 1996. DMR is a not-for-profit
alliance of major medical organizations of Dallas, Texas, created to make
Dallas a regional, national and international center for medical referrals.
Ms. Jordan had been Vice President of Health Care & Employee Services at
Southern California Edison Co. since December 1992. She had been a Vice
President and Regional Manager with the Kaiser Foundation Health Plan of
Texas, Inc. beginning in 1986, and was an Associate Regional Manager of Kaiser
Foundation Health Plan of Georgia, Inc. from 1984 to 1986. Ms. Jordan
received a B.S. degree in Nursing from Georgetown University in 1964 and an
M.S. degree in Public Health from the University of California, Berkeley in
1972. She also serves on the board of directors of Eckerd Corporation.

R. Douglas Norby has been Senior Vice President and Chief Financial
Officer of Mentor Graphics Corporation since July 1993. Prior to joining
Mentor Graphics Corporation, he had been President and Chief Executive Officer
of Pharmetrix Corporation, a biopharmaceutical company in Menlo Park,
California, since July 1992. Prior to that time, he had been President of
Lucasfilm, Ltd., since 1985 and President and Chief Executive Officer of
LucasArts Entertainment Company since 1990. Prior to joining Lucasfilm, Ltd.,
Mr. Norby was Senior Vice President and Chief Financial Officer of Syntex
Corporation from 1979 to 1985. Mr. Norby also serves on the board of
directors of LSI Logic Corporation.

Michael J. Paxton became Chairman, President and Chief Executive Officer
of O'Cedar Holdings, Inc. in January 1996. From March 1992 until joining
O'Cedar Holdings, Inc. he was President and Chief Executive Officer of The
Haagen-Dazs Company, Inc. Prior to that he was President of the Baked Goods
Division of The Pillsbury Company. Both companies are subsidiaries of Grand
Metropolitan PLC. He has been a director of Agritope, Inc. since September
1992 and is also a director of Transport Corporation of America, Inc.

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

G. Patrick Sheaffer has been President of Riverview Savings Bank in
Camas, Washington, since 1979, and has served as a director of the bank since
1983. In 1993, Mr. Sheaffer also became Chairman and Chief Executive Officer
of Riverview Savings Bank and Riverview Mutual Holding Company, a bank holding
company. He has been a director of the Washington Savings League since 1980.

DIRECTORS' MEETINGS

The Board held 13 meetings during the fiscal year ended September 30,
1996. Each director attended more than 75 percent of the combined total of
meetings of the Board and of committees of the Board on which the director
served at any time during the year.

COMMITTEES OF THE BOARD

The Board has designated an Executive Committee to assist in the
discharge of the Board's responsibilities. The Executive Committee is
composed of three directors, Roger L. Pringle, Chairman, G. Patrick Sheaffer,
and Adolph J. Ferro, Ph.D. The Executive Committee met once during the fiscal
year ended September 30, 1996. The Executive Committee may exercise all the
authority and powers of the Board in the management of the business and
affairs of the Company, except those reserved to the Board by the Oregon
Business Corporation Act.

The Executive Compensation Committee of the Board establishes and
reviews from time to time compensation for executive officers of the Company,
administers the Company's Incentive Stock Option Plan for Key Employees
("ISOP") and the Award Plan, and performs other tasks as the Board may direct.
Members of the Executive Compensation Committee are W. Charles Armstrong,
Chairman, G. Patrick Sheaffer, and R. Douglas Norby. The Executive
Compensation Committee met eight times during the fiscal year ended September
30, 1996.

The Audit Committee of the Board reviews the performance and
independence of the Company's independent accountants. Members of the Audit
Committee are G. Patrick Sheaffer, Chairman, R. Douglas Norby, and Roger L.
Pringle. The Audit Committee met once during the fiscal year ended
September 30, 1996.

The Board does not have a nominating committee.

PROPOSAL 1: BOARD RECOMMENDATION AND VOTE REQUIRED

The Board recommends a vote FOR the election of the nominees for Class I
directors. If a quorum is present at the Annual Meeting, each nominee will be
elected if he receives a plurality of the votes cast.
<PAGE>
PROPOSAL 2: THE AGRITOPE STOCK PROPOSAL

GENERAL

Shareholders are being asked to consider and approve the Agritope Stock
Proposal, which if approved would authorize the Amendment to the Articles in
the form set forth in Annex II. The Amendment would increase the number of
shares of authorized Epitope Common Stock from 30 million to 100 million,
consisting of 60 million shares of Medical Products Stock and 40 million
shares of Agritope Stock, redesignate the existing Epitope Common Stock as
Medical Products Stock, and establish the powers and rights of the Agritope
Stock and Medical Products Stock, and the qualifications, limitations, or
restrictions thereof.

Agritope Stock is intended to reflect the value and track the
performance of Agritope. The Company's Agritope group historically has
focused its efforts on the development of novel agricultural products using
both plant genetic engineering and other modern methods. Through the
acquisition of A&W on November , 1996, and majority ownership of
Vinifera, Agritope now conducts operations in each step of the production and
distribution chain for a broad range of fruits, vegetables and plants and has
an infrastructure that will facilitate commercialization of the Company's
genetically engineered agricultural products. See Annex III, "The Company--
Description of Business--Agritope," for a more complete description of
Agritope.

Agritope consists of three major units: Agritope Research and
Development, A&W, and Vinifera. Agritope Research and Development contributes
biotechnology and product development efforts to A&W and Vinifera as well as
to its other business partners. Through A&W, Agritope produces, markets,
distributes and sells a wide variety of fruits and vegetables throughout North
America. Through Vinifera, Agritope believes that it offers the most advanced
grapevine plant propagation and disease screening and elimination program
available to the worldwide wine and table grape production industry.

Agritope Stock will also reflect the value, if any, of any Inter-Group
Interest in Epitope Medical Products attributable to Agritope. Agritope will
operate as a distinct group within Epitope, but will have access to the
Company's offices, facilities, and administrative staff. On the Effective
Date, Agritope will have approximately 60 employees. In addition, $ million
in cash will be allocated to Agritope on the Effective Date.

On the Effective Date, each outstanding share of Epitope Common Stock
will be redesignated as one share of Medical Products Stock without any action
by the holder. The market price of Medical Products Stock is intended to
reflect the value and track the performance of Epitope Medical Products.
Medical Products Stock will also reflect the value, if any, of any Inter-Group
Interest of Epitope Medical Products in Agritope. Epitope Medical Products
develops and markets diagnostic tests and related devices for the detection of
HIV, the principal cause of AIDS, and for the detection of other medical
conditions and analytes. Its oral specimen HIV testing system is marketed
under the names OraSure(registered) and EpiScreen(trademark). Medical
Products Stock will also reflect the value, if any, of any Inter-Group
Interest in Agritope attributable to Epitope Medical Products. Epitope
Medical Products will encompass all the Company's medical products businesses.
See Annex III, "The Company--Description of Business--Epitope Medical
Products," for a more complete description of Epitope Medical Products.

If shareholders approve the Agritope Stock Proposal, Epitope expects to
file the Amendment with the Secretary of State of Oregon on the date of the
Annual Meeting. At any time prior to filing the Amendment, before or after
approval of the Agritope Stock Proposal by the shareholders, the Board may
abandon the Agritope Stock Proposal without further action by the
shareholders. The Agritope Stock issuable in connection with the Distribution
would be intended initially to represent 100 percent of the equity value of
the Company attributable to Agritope. Additional shares of Agritope Stock
will be reserved for issuance upon the conversion of outstanding stock options
and warrants and as a result of antidilution adjustments related to the
Distribution.

Following the Distribution, the Company may from time to time, by action
of its Board of Directors, (i) offer shares of Agritope Stock and Medical
Products Stock for cash in one or more public offerings, (ii) issue shares of
Agritope Stock and Medical Products Stock as consideration for acquisitions or
investments, (iii) issue shares of Agritope Stock and Medical Products Stock
to employees of the Company pursuant to employee benefit plans, or (iv) issue
shares of Agritope Stock and Medical Products Stock for any other proper
corporate purpose. So long as sufficient authorized shares are available, the
timing, sequence, size, and terms of these transactions would be determined by
the Board of Directors, without further approval of the shareholders, unless
deemed advisable by the Board of Directors or required by applicable law,
regulation, or Nasdaq National Market requirements. Except in connection with
the creation of or increase or decrease in an Inter-Group Interest, the Board
must allocate the net proceeds or other benefits of issuing Epitope Common
Stock to the group represented by the class of stock issued, unless otherwise
approved by the holders of the affected class of common stock voting as a
separate voting group. See "Proposal 2: The Agritope Stock
Proposal--Description of Medical Products Stock and Agritope Stock."

Immediately following the Distribution, there will be no Inter-Group
Interests. An Inter-Group Interest would be created only if a subsequent
transfer of cash, assets, products or other property from Agritope or Epitope
Medical Products to the other is specifically designated by the Board as being
made to create an Inter-Group Interest (in contrast to transfers made for
other consideration such as transfers as loans or in purchase and sale
transactions) or if outstanding shares of Agritope Stock or Medical Products
Stock are retired or otherwise cease to be outstanding following their
purchase with funds attributable to the other.

THE DISTRIBUTION

The Board has adopted resolutions declaring a distribution of one-half
share of Agritope Stock on each outstanding share of Epitope Common Stock to
holders of record at the close of business on the Effective Date, subject to
shareholder approval of the Agritope Stock Proposal. An aggregate of
approximately 6.7 million shares of Agritope Stock would be issued in the
Distribution. On or about the sixth business day following the Effective
Date, certificates for shares of Agritope Stock will be mailed to holders of
record on the Effective Date.

The Distribution ratio was determined by the Board in consultation with
Vector Securities International, Inc. ("Vector Securities"), the Company's
financial advisor in connection with the Agritope Stock Proposal, and is based
on the intended initial trading range of Agritope Stock and the Board's
estimate of the equity value of the Company attributable to Agritope. This
equity value was established by taking into account, among other things, the
assets and liabilities of Agritope and Epitope Medical Products, their recent
historical financial performance relative to competitors that are publicly
traded, their future prospects and the current state of the capital markets,
among other things.

Fractional shares of Agritope Stock will not be issued in the
Distribution. If more than one share of Epitope Common Stock is held by the
same holder of record, Epitope will aggregate the number of shares of Agritope
Stock issuable to that holder in the Distribution. If the aggregate number
includes a fraction of a whole share, Epitope will pay the cash value of the
fractional share to the holder, based on the Effective Date Trading Price.
The "Effective Date Trading Price" of a class of stock is either (i) the
average of the high and low reported sales prices of that class of stock on
the Effective Date, or (ii) if that class of stock is not traded on the
Effective Date, the average of the high and low reported sales prices of that
class of stock on the first day thereafter on which trading occurs, or
(iii) if that class of stock does not trade during the 20-day period following
the Effective Date, the fair value of a share of that class of stock as of the
Effective Date as determined by the Board. 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, which may result in those shareholders receiving a
price for their fractional share interests that is higher or lower than the
price paid by the Company to shareholders of record.

IF THE AGRITOPE STOCK PROPOSAL IS NOT APPROVED BY THE SHAREHOLDERS,
AGRITOPE STOCK WILL NOT BE CREATED AND ISSUED, AND THE DISTRIBUTION WILL NOT
OCCUR.

<PAGE>
REASONS FOR THE AGRITOPE STOCK PROPOSAL

The principal reason for the Board's recommendation of the Agritope
Stock Proposal is its belief that the investment community has historically
focused principally on the products and business of Epitope Medical Products
and that, accordingly, the Epitope Common Stock has traded at prices that
undervalue Agritope. Epitope management believes that the Agritope Stock
Proposal will focus additional market attention on the potential of Agritope
and will maximize the aggregate value of the Company's securities to
shareholders. There can be no assurance, however, that the Agritope Stock
Proposal will have the intended effect.

Management reviewed various potential actions which the Company could
undertake in order to increase market recognition of the value of the
Company's assets used in each of its lines of business. Among the actions
considered were a spin-off to the Company's shareholders of all or part of one
or more of its groups, public offerings of minority interests in one or more
of the groups and the issuance of "targeted stock."

In arriving at its recommendation and determination that the Agritope
Stock Proposal is in the best interests of Epitope and its shareholders, the
Board considered the advice and received the assistance of its financial and
legal advisors. The Board also considered the possible disadvantages of
issuing targeted stock. See "Risk Factors--Risks Related to Two Classes of
Epitope Common Stock." Among the principal factors considered by the Board in
reaching its determination were the following:

1. Separate equity securities would enable investors to gain a better
understanding of the businesses of Epitope Medical Products and
Agritope. The separate reporting of their financial results would
create a framework for increased and more focused equity research
coverage by the investment community.

2. Separate equity securities would enable investors to invest in a
security that tracks the performance of a single line of business.

3. Separate equity securities would afford increased flexibility to
raise capital or make acquisitions or investments, including
strategic partnering transactions, for each group with an equity
security related specifically to that group.

4. Separate equity securities would provide a framework for
structuring incentive plans for employees of each group that can
be tied directly to both the business results and the stock price
performance of the group in which they are employed.

5. The Agritope Stock Proposal preserves the benefit of lower
administrative costs than would be incurred by two separate,
publicly owned entities.

6. Counsel to Epitope advised the Board that the distribution of
Agritope Stock to the Company's shareholders may be effected on a
tax-free basis.

7. By permitting the Board to redeem the stock of either group for
stock of the other group, under certain conditions, the Agritope
Stock Proposal retains for the Board the flexibility to consider
possible future restructuring options.
<PAGE>
MANAGEMENT AND ACCOUNTING POLICIES

The Board has adopted the following policies to govern the management of
Agritope and Epitope Medical Products. Except as otherwise stated below, the
policies may be modified or rescinded in the sole discretion of the Board
without approval of shareholders, subject only to the Board's fiduciary duty
to shareholders. The Board may also adopt additional policies depending on
the circumstances. Any determination of the Board to modify or rescind these
policies or to adopt additional policies, including any decision that would
have disparate impacts on holders of the two classes of common stock, would be
governed by the principles of Oregon law discussed under "Risk Factors--Risks
Related to Two Classes of Common Stock--Fiduciary Duties; Potential
Conflicts." In addition, generally accepted accounting principles require
that any change in accounting policy be preferable (in accordance with such
principles) to the previous policy.

If the Agritope Stock Proposal is approved by shareholders, the Company
will prepare consolidated financial statements of the Company, combined
financial statements of Agritope and combined financial statements of Epitope
Medical Products. The combined financial statements of Agritope and the
combined financial statements of Epitope Medical Products, taken together,
would effectively comprise all the accounts reflected as consolidated
financial statements of the Company. The combined financial statements of
Agritope and the combined financial statements of Epitope Medical Products
will principally reflect the combined financial position, results of
operations and cash flows of the businesses included therein. Notwithstanding
allocations of assets and liabilities for the purpose of preparing group
combined financial statements, holders of both Agritope Stock and Medical
Products Stock would continue to be subject to all the risks associated with
an investment in the Company and all its businesses, assets, and liabilities.
See "Risk Factors--Risks Related to Two Classes of Common Stock--Shareholders
of One Company; Financial Impacts on One Group Could Affect the Other."

REVENUE ALLOCATION. Revenues from the sale of a group's products will
be credited to that group. The cost of research performed by one group for
the benefit of another group will be charged to the group for which the work
is performed in the manner described under "Expense Allocation" below.

EXPENSE ALLOCATION. All direct expenses will be charged to the group
for the benefit of which they are incurred. Corporate and general and
administrative expenses and other shared services or other indirect costs will
be allocated to each group in a reasonable and consistent manner based on
utilization by the group of the services to which the costs relate. To the
extent that transfers of funds between groups are treated as borrowings (as
opposed to the creation of or increase or decrease in an Inter-Group
Interest), inter-group accounts will be established with interest imputed at
the rate then available to the Company for short-term borrowings.

TAX ALLOCATIONS. Income taxes will be allocated to each group based on
the financial statement income, taxable income, credits and other amounts
properly allocable to the group under generally accepted accounting principles
as if each group were a separate taxpayer. Any projected tax benefit
attributable to either group, however, that cannot be utilized by the group to
offset or reduce its current or deferred income tax expense may be allocated
to the other group without any compensating payment or allocation.

ACQUISITIONS OF PROGRAMS, PRODUCTS OR ASSETS. Upon the acquisition by
Epitope from a third party of any additional programs, products or assets
(whether by acquisition of assets or stock, merger, consolidation or
otherwise), the aggregate cost of the acquisition and the programs, products
or assets acquired will be allocated among the groups of Epitope to which the
programs, products or assets are assigned. Such an assignment and allocation
will be made by the Board taking into account such matters as the Board and
its financial advisors, if any, deem relevant.

DISPOSITION OF PROGRAMS, PRODUCTS OR ASSETS. Upon any sale, transfer,
assignment or other disposition by Epitope of any product, program or asset
not consisting of all or substantially all the assets of a group, all proceeds
from the disposition will be allocated to that group unless the holders of
that group's stock approve allocation to the other group. If the program,
product or asset was allocated to more than one group, the proceeds of the
disposition will be allocated among the groups based on their respective
interests in the program, product or asset. Allocation will be made by the
Board taking into account such matters as the Board and its financial
advisors, if any, deem relevant. This policy is not subject to change without
the approval of holders of both classes of common stock, each voting as a
separate voting group.

INTER-GROUP ASSET TRANSFERS. The Board may, at any time and from time
to time, transfer any program, product or other asset from one group to the
other group. All such transfers shall be effected at fair value, as
determined by the Board, taking into account, in the case of a program under
development, the commercial potential of the program, the phase of development
of the program, the expenses associated with realizing any income from the
program, the likelihood and timing of any such realization and other matters
that the Board and its financial advisors, if any, deem relevant. The
consideration for the transfer may be paid by one group to the other in cash
or other property, including the creation of or an increase in the Inter-Group
Interest allocated to the transferring group or a decrease in the Inter-Group
Interest allocated to the recipient group.

ACCESS TO TECHNOLOGY AND KNOW-HOW. Agritope and Epitope Medical
Products will each have access to all technology and know-how of the other
group that may be useful in the group's business, subject to any obligations
or limitations imposed by agreements with third parties. Access by a group
shall be permitted without consideration with respect to technology or know-
how of the other group that existed at the Effective Date, and with respect to
other technology or know-how so long as it is used solely for research and
development purposes. Such access for commercial applications of technology
or know-how that did not exist at the Effective Date shall be permitted only
at fair value, as determined by the Board, unless access without such
consideration is approved by the holders of the class of stock representing
the group that owns the technology. The consideration for access, if any, may
be paid by one group to the other in cash or other property, including an
increase or decrease, as appropriate, in an Inter-Group Interest.

TREATMENT OF DIVIDENDS OR DISTRIBUTIONS. Financial impacts of dividends
or other distributions on, and purchases of Medical Products Stock, will be
attributed entirely to Epitope Medical Products, and financial impacts of
dividends or other distributions on Agritope Stock will be attributed entirely
to Agritope, except that dividends or other distributions on Medical Products
Stock or Agritope Stock (including any dividend of Net Proceeds from the
Disposition of all or substantially all the properties and assets of a group),
as the case may be, will (if at the time there is an Inter-Group Interest)
result in the other group being credited, and the group paying the dividend
being charged (in addition to the charge for the dividend or the distribution
paid), with an amount equal to the product of (i) the aggregate amount of such
dividend or other distribution paid or distributed in respect of outstanding
shares of common stock of the group paying the dividend and (ii) a fraction
the numerator of which is the Interest Fraction relating to the group paying
the dividend and the denominator of which is the related Outstanding Interest
Fraction. Financial impacts of repurchases of common stock of a group the
consideration for which is charged to such group will to such extent be re-
flected in the combined financial statements of such group, and financial
impacts of repurchases of one group's common stock the consideration for which
is charged to the other group will to such extent be reflected in the combined
financial statements of such other group and will result in the creation of,
or an increase or decrease in any then-existing, related Inter-Group Interest.

ISSUANCE OF ADDITIONAL SHARES OF ANY CLASS OF COMMON STOCK. If
additional shares of any class of common stock are issued and sold by Epitope,
the net proceeds will be allocated to and reflected in the financial
statements of the group to which they relate unless attributable to a
reduction in an Inter-Group Interest. This policy is not subject to change
after the Distribution without the approval of the holders of the affected
group's stock, voting as a separate voting group.

ALLOCATION OF BUSINESS OPPORTUNITIES/RESOURCES. The Board expects to
determine, either in specific instances or by adopting generally applicable
policies from time to time, whether to allocate resources and financial
support to, or to pursue business opportunities or operational strategies
through, Agritope or Epitope Medical Products, after consideration of such
factors as it deems relevant.

DESCRIPTION OF MEDICAL PRODUCTS STOCK AND AGRITOPE STOCK

THE FOLLOWING DESCRIPTION IS QUALIFIED BY REFERENCE TO ANNEX II TO THIS
PROSPECTUS/PROXY STATEMENT, WHICH CONTAINS THE FULL TEXT OF THE VOTING,
DIVIDEND, LIQUIDATION, EXCHANGE, AND OTHER RIGHTS OF MEDICAL PRODUCTS STOCK
AND AGRITOPE STOCK.

GENERAL

The Articles currently provide that Epitope is authorized to issue 31
million shares of capital stock, consisting of 30 million shares of Epitope
Common Stock and 1 million shares of Preferred Stock. If the Agritope Stock
Proposal is approved, the Articles will be amended (i) to provide for an
increase in the authorized common stock to 100 million shares, (ii) to create
a new class of common stock, to be designated Agritope Common Stock, no par
value, consisting of 40 million authorized shares and (iii) to redesignate the
existing Epitope Common Stock as Epitope Medical Products Common Stock, no par
value, consisting of 60 million authorized shares. Each class of common stock
will have the voting, dividend, liquidation, exchange, and other rights
described below.

The authorized but unissued shares of Medical Products Stock and
Agritope Stock will be available for issuance by the Company from time to
time, as determined by the Board, for any proper corporate purpose, which
could include raising capital, acquiring other companies or making investments
or providing compensation or benefits to employees. The issuance of such
shares would not be subject to approval by the shareholders of the Company,
unless deemed advisable by the Board or required by applicable law, regulation
or Nasdaq National Market requirements.
<PAGE>
DIVIDENDS

The Articles currently provide that holders of Epitope Common Stock are
entitled to receive, to the extent permitted by law, such dividends as may
from time to time be declared by the Board. If the Agritope Stock Proposal is
approved, the Articles will be amended to provide that cash dividends on
Medical Products Stock and Agritope Stock may be declared and paid only out of
the lesser of (i) funds of Epitope legally available therefor and (ii) the
Available Medical Products Dividend Amount (with respect to Medical Products
Stock) or the Available Agritope Dividend Amount (with respect to Agritope
Stock). Under the Oregon Business Corporation Act (the "Corporation Act"),
the payment of cash dividends is permitted only if after making the payment,
in the judgment of the Board: (a) the Company would be able to pay its debts
as they become due in the usual course of business; and (b) the Company's
total assets would at least equal the sum of its total liabilities plus the
amount that would be needed to satisfy the preferential rights of shareholders
upon dissolution. Subject to the limitations set forth in the Articles as
proposed to be amended and the Corporation Act, the Board may, in its sole
discretion, declare and pay cash dividends exclusively on either class of
common stock, or both, in equal or unequal amounts, notwithstanding the
amounts available for the payment of cash dividends on each class, the
respective voting and liquidation rights of each class, the amounts of prior
cash dividends declared on each class or any other factor.

If the Agritope Stock Proposal had been in effect at September 30, 1996,
the total amount available for cash dividends on Medical Products Stock and
Agritope Stock on September 30, 1996, would have been approximately
$_____________ and $_____________, respectively. Epitope has never paid a
cash dividend on any class of its capital stock and currently intends to
retain all earnings for use in its business.

As stated above, in addition to the statutory limitations under the
Corporation Act, cash dividends on Medical Products Stock and Agritope Stock
would be limited as provided in the Articles to an amount not in excess of the
Available Medical Products Dividend Amount or the Available Agritope Dividend
Amount, respectively. The "Available Dividend Amount" with respect to a
particular class of common stock is defined to mean generally the greatest of
(a) the product of (i) the Outstanding Interest Fraction multiplied by (ii) an
amount equal to the fair value of the net assets allocated to the group
represented by that class of common stock, (b) the product of (i) the
Outstanding Interest Fraction multiplied by (ii) an amount equal to
shareholders' equity allocated to that group as of September 30, 1996,
increased or decreased, as appropriate, to reflect, after September 30, 1996,
(X) the net income or loss of the group, (Y) any dividends or other
distributions (including by reclassification or exchange) declared or paid
with respect to, or repurchases or issuances of, any shares of capital stock
attributed to the group, but excluding dividends or other distributions paid
in shares of capital stock attributed to the group to the holders thereof, and
(Z) any other adjustments to the shareholders' equity of the group made in
accordance with generally accepted accounting principles, or (c) the amount
legally available for the payment of cash dividends determined in accordance
with the Corporation Act applied as if the group were a separate corporation.

At the time of any dividend or other distribution on the outstanding
shares of Medical Products Stock or Agritope Stock (including any dividend of
Net Proceeds from the Disposition of all or substantially all of the
properties and assets of Epitope Medical Products or Agritope), the other
group will (if at such time there is an Inter-Group Interest) be credited, and
the group paying the dividend will be charged (in addition to the charge for
the dividend or other distribution paid or distributed in respect of
outstanding shares of common stock of the group paying the dividend), with an
amount equal to the product of (i) the aggregate amount of such dividend or
distribution paid or distributed in respect of outstanding shares of common
stock of the group paying the dividend times (ii) a fraction the numerator of
which is the Inter-Group Interest Fraction relating to the group paying the
dividends and the denominator of which is the related Outstanding Interest
Fraction.

EXCHANGE RIGHTS

The Articles currently do not provide for any exchange or redemption of
Epitope Common Stock. If the Agritope Stock Proposal is approved, the Articles
will provide that Agritope Stock or Medical Products Stock may be exchanged on
the terms described below. Epitope cannot predict the impact that its ability
to effect such exchanges may have on the market prices for Medical Products
Stock and Agritope Stock.

OPTIONAL EXCHANGE. At any time after February 28, 1999, the Board may
determine to exchange each outstanding share of a group's common stock for a
number of fully paid and nonassessable shares of common stock or the other
group equal to (1) 115 percent of the average market value of one share or
common stock of the group subject to the exchange (the "Exchange Amount")
divided by (2) the average Market Value of one share of the common stock of
the other group or (a) cash equal to the Exchange Amount or (b) any
combination of cash, as determined by the Board, equal to the Exchange Amount.
Average Market Value shall be calculated for a share of common stock during
the 20 Trading Day period preceding the public announcement by the Company of
the exchange.

The optional exchange provision allows Epitope the flexibility to redeem
all outstanding shares of Agritope Stock or Medical Products Stock and leave
outstanding one class of common stock that would represent the equity interest
in all Epitope's businesses. The optional exchange could occur at any future
time after February 28, 1999, if the Board determined that, under the facts
and circumstances then existing, an equity structure consisting of two classes
of common stock was no longer in the best interests of all Epitope's
shareholders. An exchange may be consummated at a time that is
disadvantageous to the holders of either Medical Products Stock or Agritope
Stock. Epitope may make open market purchases of shares of any class of its
common stock in accordance with applicable corporate and securities law
requirements, without payment of the 15 percent premium. See "Risk
Factors--Risks Related to Two Classes of Common Stock--No Rights or Additional
Duties With Respect to the Groups; Potential Conflicts."

MANDATORY DIVIDEND, REDEMPTION OR EXCHANGE OF COMMON STOCK. In the
event of the Disposition, in one transaction or a series of related
transactions, by Epitope of all or substantially all the properties and assets
of Agritope or of Epitope Medical Products (other than in connection with the
Disposition by Epitope of all or substantially all its properties and assets
in one transaction or a series of related transactions) to any person, entity
or group (other than (a) any entity which Epitope, directly or indirectly,
owns all the equity interest or (b) in connection with a Related Business
Transaction), Epitope is required, on or prior to the 85th Trading Day
following the consummation of the Disposition, at the election of the Company,
to either

(1) provided that there are funds of the Company legally available
therefor:

(i) subject to the limitations on dividends set forth above,
declare and pay a dividend in cash and/or in securities (other
than common stock) or other property received as proceeds of such
Disposition to the holders of the class of stock relating to the
group subject to the Disposition having a Fair Value as of the
date of the consummation of such disposition in the aggregate
equal to the product of the Outstanding Interest Fraction of such
group as of the record date for determining the holders entitled
to receive such dividend multiplied by the Fair Value of the Net
Proceeds of such Disposition; or

(ii)(A) if such Disposition involves all (not merely substantially
all) of the properties and assets of a group, redeem all outstanding
shares of the common stock relating to such group for cash and/or
securities (other than common stock) or other property having a Fair
Value as of the date of such consummation in the aggregate amount equal
to the product of the Outstanding Interest Fraction of such group as of
the date of such redemption multiplied by the Fair Value of the Net
Proceeds of such Disposition; or

(ii)(B) if such Disposition involves substantially all (but not
all) of the properties and assets of a group, apply an aggregate amount
of cash and/or securities (other than common stock) or other property
equal to the product of the Outstanding Interest Fraction of such group
as of the date shares are selected for redemption multiplied by the Fair
Value of the Net Proceeds of such Disposition as of the date of such
consummation to the redemption of outstanding shares of common stock of
such group; the number of shares to be redeemed to equal the lesser of
(x) the whole number of shares nearest the number determined by dividing
the aggregate amount so applied to the redemption of such common stock
by the average Market Value of one share of stock relating to the group
subject to the Disposition during the ten-Trading Day period beginning
on the 16th Trading Day following the consummation of such Disposition
and (y) the number of shares of such class of stock outstanding;
provided, however, that the Company may only redeem shares of a class of
common stock pursuant to this paragraph (ii) if the amount to be paid in
redemption of such shares is less than or equal to the Available
Dividend Amount with respect to such class of common stock; or

(2) exchange each outstanding share of the class of stock
relating to the group subject to such Disposition for a number of
fully paid and nonassessable shares of stock of the other group
equal to 115 percent of the ratio of the average Market Value of
one share of the class of stock relating to the group subject to
such Disposition to the average Market Value of one share of
common stock relating to the other group during the ten-Trading
Day period referred to above.

Consequently, holders of stock for the group subject to the Disposition
may receive a greater or lesser premium for their shares than any premium paid
by a third party buyer of the assets. In addition, any such exchange for
shares of stock for the remaining group could be made at a time when the stock
being surrendered is considered to be undervalued and the stock to be received
by shareholders is considered to be overvalued.

The option to convert Agritope Stock into Medical Products Stock and
vice-versa in the event of a Disposition provides the Company with additional
flexibility by allowing the Company to deliver consideration in the form of
shares of stock rather than cash or securities or other properties. This
alternative could be used, for example, in circumstances when the Company did
not have sufficient legally available assets under the Corporation Act to pay
the full amount of an otherwise required dividend or redemption or when the
Company desired to retain such proceeds.

If less than substantially all of the properties and assets of Agritope
or Epitope Medical Products, as the case may be, were disposed of by the
Company in one transaction (even if an additional transaction were consummated
at a later time in which additional properties and assets of Agritope or
Epitope Medical Products, as the case may be, were disposed of by the Company,
which, together with the properties and assets disposed of in the first
transaction, would have constituted substantially all of the properties and
assets of Agritope or Epitope Medical Products, as the case may be, at the
time of the first transaction), the Company would not be required to pay a
dividend on, redeem or convert the outstanding shares of the relevant class of
stock, unless such transactions constituted a series of related transactions.
The second transaction, however, could trigger such a requirement if, at the
time of the second transaction, the properties and assets disposed of in such
transaction constituted at least substantially all of the properties and
assets of Agritope or Epitope Medical Products, as the case may be, at such
time. If less than substantially all of the properties and assets of Agritope
or Epitope Medical Products, as the case may be, were disposed of by the
Company, the holders of the relevant class of stock would not be entitled to
receive any dividend or have their shares redeemed or converted, although the
Board could determine, in its sole discretion, to pay a dividend in an amount
related to the proceeds of such Disposition.

GENERAL EXCHANGE AND REDEMPTION PROVISIONS. Not later than the 10th
Trading Day following the consummation of a Disposition referred to above
under "-- Mandatory Dividend, Redemption or Exchange of Common Stock," the
Company will announce publicly by press release (i) the Net Proceeds of such
Disposition, (ii) the number of shares outstanding of the class of common
stock relating to the group subject to such Disposition, (iii) the number of
shares of such common stock into or for which Convertible Securities are then
convertible, exchangeable or exercisable and the conversion, exchange or exer-
cise price thereof and (iv) the applicable Outstanding Interest Fraction, if
applicable, as of a recent date preceding the date of such notice. Not
earlier than the 26th Trading Day and not later than the 30th Trading Day
following the consummation of such Disposition, the Company will announce
publicly by press release which of the actions specified in clause (1) or (2)
of the first paragraph under "-- Mandatory Dividend, Redemption or Exchange of
Common Stock" it has irrevocably determined to take.

If the Company determines to pay a dividend as described in clause
(1)(i) of the first paragraph under "-- Mandatory Dividend, Redemption or
Exchange of Common Stock," the Company is required, not later than the 30th
Trading Day following the consummation of such Disposition, to cause to be
given to each holder of record of shares of the class of common stock relating
to the group subject to such Disposition and to each holder of record of
Convertible Securities convertible into or exchangeable or exercisable for
shares of such common stock (unless alternate provision for notice to the
holders of such Convertible Securities is made pursuant to the terms of such
Convertible Securities, a notice setting forth (i) the record date for
determining holders entitled to receive such dividend, which shall be not
earlier than the 40th Trading Day and not later than the 50th Trading Day
following the consummation of such Disposition, (ii) the anticipated payment
date of such dividend (which will not be more than 85 Trading Days following
the consummation of such Disposition), (iii) type of property to be paid on
such dividend in respect of outstanding shares of such common stock, (iv) the
Net Proceeds of such Disposition, (v) the Outstanding Interest Fraction as of
a recent date preceding the date of such notice, (vi) the number of outstand-
ing shares of such common stock and the number of shares of such common stock
into or for which outstanding Convertible Securities are then convertible,
exchangeable or exercisable and the conversion, exchange or exercise price
thereof and (vii) in the case of notice to be given to holders of Convertible
Securities, a statement to the effect that a holder of such Convertible
Securities will be entitled to receive such dividend only if such holder
properly converts, exchanges or exercises them on or prior to the record date
referred to in clause (1)(i) of this sentence. Such notice will be sent by
first-class mail, postage prepaid, to each such holder at such holder's
address as the same appears on the transfer books of the Company.

If the Company determines to undertake a redemption pursuant to clause
(1)(ii)(A) of the first paragraph under "-- Mandatory Dividend, Redemption or
Exchange of Common Stock," the Company is required, not earlier than the 35th
Trading Day and not later than the 45th Trading Day prior to the redemption
date, to cause to be given to each holder of record of shares of such class of
common stock, and to each holder of record of Convertible Securities
convertible into or exchangeable or exercisable for shares of such class of
common stock (unless alternate provision for such notice to the holders of
such Convertible Securities is made pursuant to the terms of such Convertible
Securities) a notice setting forth (i) a statement that all shares of such
common stock outstanding on the redemption date will be redeemed, (ii) the
redemption date (which will not be more than 85 Trading Days following the
consummation of such Disposition), (iii) the type of property in which the
redemption price for the shares to be redeemed is to be paid, (iv) the Net
Proceeds of such Disposition, (v) the Outstanding Interest Fraction as of a
recent date preceding the date of such notice, (vi) the place or places where
certificates for shares of such common stock, properly endorsed or assigned
for transfers (unless the Company waives such requirement) are to be surren-
dered for delivery of cash and/or securities or other property, (vii) the
number of outstanding shares of such class of common stock and the number of
shares of such class of common stock into or for which outstanding Convertible
Securities are then convertible, exchangeable or exercisable and the conver-
sion, exchange or exercise price thereof, (viii) in the case of notice to be
given to holders of Convertible Securities, a statement to the effect that a
holder of such Convertible Securities will be entitled to participate in such
redemption only if such holder properly converts, exchanges or exercises such
Convertible Securities on or prior to the redemption date referred to in
clause (ii) of this sentence and a statement as to what, if anything, such
holder will be entitled to receive pursuant to the terms of such Convertible
Securities or, if applicable, the provisions described under "-- Effects on
Convertible Securities" if such holder thereafter converts, exchanges or
exercises such Convertible Securities and (ix) a statement to the effect that,
except as otherwise provided below, dividends on such shares of such common
stock shall cease to be paid as of such redemption date. Each notice will be
sent by first-class mail, postage prepaid to each such holder at such holder's
address as the same appears on the transfer books of the Company.

If the Company determines to undertake a redemption pursuant to clause
(1)(ii)(B) of the first paragraph under "-- Mandatory Dividend, Redemption or
Exchange of Common Stock," the Company is required, not later than the 30th
Trading Day following consummation of the Disposition referred to in such
paragraph, to cause to be given to each holder of record of shares of the
class of common stock relating to the group subject to such Disposition, and
to each holder of record of Convertible Securities that are convertible into
or exchangeable or exercisable for shares of such common stock (unless
alternate provision for such notice to the holders of such Convertible Secu-
rities is made pursuant to the terms of such Convertible Securities), a notice
setting forth (i) a date, not earlier than the 40th Trading Day and not later
than the 50th Trading Day following the consummation of such Disposition in
respect of which such redemption is to be made, on which shares of such class
of common stock will be selected for redemption, (ii) the anticipated redemp-
tion date (which will not be more than 85 Trading Days following the
consummation of such Disposition), (iii) the type of property in which the
redemption price for the shares to be redeemed is to be paid, (iv) the Net
Proceeds of such Disposition, (v) the Outstanding Interest Fraction as of a
recent date preceding the date of such notice, (vi) the number of outstanding
shares of such common stock and the number of shares of such common stock into
or for which outstanding Convertible Securities are then convertible,
exchangeable, exercisable and the conversion, exchange or exercise prior
thereof, (vii) in the case of notice to be given to holders of Convertible
Securities, a statement to the effect that a holder of such Convertible
Securities will be entitled to participate in such selection for redemption
only if such holder properly converts, exchanges or exercises them on or prior
to the date referred to in clause (i) of this sentence and a statement as to
what, if anything, such holder will be entitled to receive pursuant to the
terms of such Convertible Securities or, if applicable, the provisions
described under "-- Effects on Convertible Securities" if such holder
thereafter converts, exchanges or exercises such Convertible Securities and
(viii) a statement that the Company will not be required to register a
transfer of any shares of such class of common stock for a period of 15
Trading Days next preceding the date referred to in clause (i) of this
sentence. Promptly, but not earlier than 40 Trading Days nor more than 50
Trading Days following the consummation of such Disposition, the Company is
required to cause to be given to each holder of shares of such common stock to
be so redeemed a notice setting forth (1) the number of shares of such common
stock held by such holder to be redeemed, (2) a statement that such shares of
such common stock will be redeemed, (3) the redemption date, (4) the kind and
per share amount of cash and/or securities or other property to be received by
such holder with respect to each share of such common stock to be redeemed,
including details as to the calculation thereof, (5) the place or places where
certificates for shares of such common stock, properly endorsed or assigned
for transfer (unless the Company waives such requirement) are to be surren-
dered for delivery of such cash and/or securities or other property, (6) if
applicable, a statement to the effect that the shares being redeemed may no
longer be transferred on the transfer books of the Company after the
redemption date and (7) a statement to the effect that, except as otherwise
provided below, dividends on such shares of such common stock will cease to be
paid as of such redemption date. Such notices will be sent by first-class
mail, postage prepaid to each such holder, at such holder's address as the
same appears on the transfer books of the Company.

In the event of any exchange as described under "-- Optional Exchange of
Common Stock" or "-- Mandatory Dividend, Redemption or Exchange of Common
Stock," the Company will cause to be given to such holder of record of shares
of the class of common stock to be so converted and to each holder of record
of Convertible Securities that are convertible into or exchangeable or
exercisable for shares of such common stock (unless alternate provision for
such notice to the holders of such Convertible Securities is made pursuant to
the terms of such Convertible Securities), a notice setting forth (i) a
statement that all outstanding shares of such common stock will be exchanged,
(ii) the exchange date (which, in the case of an exchange after a Disposition,
will not be more than 85 Trading Days following the consummation of such
Disposition), (iii) the per share number of shares of Agritope Stock or
Medical Products Stock or another class or series of common stock of the
Company, as the case may be, to be received with respect to such share of such
common stock, including details as to the calculation thereof, (iv) the place
or places where certificates for shares of such common stock, properly
endorsed or assigned for transfer (unless the Company waives such requirement)
are to be surrendered for delivery of certificates for shares of such common
stock, (v) the number of outstanding shares of such common stock and the
number of shares of such common stock or for which outstanding Convertible
Securities are then convertible, exchangeable or exercisable and the
conversion, exchange or exercise price thereof, (vi) a statement to the effect
that, except as otherwise provided below, dividends on such shares of such
common stock will cease to be paid as of such conversion date and (vii) in the
case of notice to be given to holders of Convertible Securities, a statement
to the effect that a holder of such Convertible Securities will be entitled to
receive shares of such common stock upon such exchange only if such holder
properly converts, exchanges or exercises such Convertible Securities on or
prior to the exchange date referred to in clause (ii) of this sentence and a
statement as to what, if anything, such holder will be entitled to receive
pursuant to the terms of such Convertible Securities or, if applicable, the
provision described under "-- Effects on Convertible Securities" if such
holder thereafter converts, exchanges or exercises such Convertible
Securities. Such notice will be sent by first-class mail, postage prepaid, to
such holder at such holder's address as the same appears on the transfer books
of the Company.

Neither the failure to mail any notice described above to any particular
holder of shares of any class of common stock or of any Convertible Securities
nor any defect therein would affect the sufficiency thereof with respect to
any other holder of outstanding shares of such common stock or of outstanding
Convertible Securities, or the validity of any such exchange or redemption.

If less than all the outstanding shares of stock are to be redeemed as
described above, shares shall be redeemed by the Company pro rata among the
holders of the relevant class of stock or by any method determined by the
Board to be equitable.

Before any holder of shares of Agritope Stock or Medical Products Stock
shall be entitled to receive certificates representing shares of any kind of
capital stock or cash and/or securities or other property to be received by
the holder with respect to any exchange or redemption of the shares of the
class of common stock, the holder shall surrender at such place as the Company
shall specify certificates for the shares of common stock, properly endorsed
or assigned for transfer (unless the Company waives this requirement). As
soon as practicable after surrender of certificates for the shares of common
stock, the Company will deliver to the holder of the shares so surrendered the
certificates representing the number of whole shares of the kind of capital
stock or cash and/or securities or other property to which the holder is
entitled, together with any fractional payment referred to below. If less
than all the shares represented by any one certificate are to be redeemed, the
Company will issue and deliver a new certificate for the shares of stock not
redeemed.

The Company shall not be required to issue or deliver fractional shares
of any class of capital stock or any fractional securities to any holder of
Agritope Stock or Medical Products Stock, as the case may be, upon any
exchange, redemption, dividend, or other distribution. If more than one share
of Agritope Stock or Medical Products Stock, as the case may be, shall be held
at the same time by the same holder of record, the Company may aggregate the
number of shares of any class of capital stock issuable or the amount of
securities deliverable to the holder upon exchange, redemption, dividend, or
other distribution (including any fractions of shares or securities). If the
number of shares of any class of capital stock or the amount of securities
remaining to be issued or delivered to any holder of record of Agritope Stock
or Medical Products Stock, as the case may be, is a fraction, the Company
shall, if the fraction is not issued or delivered to the holder, pay a cash
adjustment in respect of the fraction in an amount equal to the Fair Value of
the fraction on the fifth Trading Day prior to the date the payment is to be
made.

CERTAIN OTHER EXCHANGE TERMS. The proposed amendment to the Articles
set forth in Annex II contains definitions of "Disposition," "Exchange Date,"
"Fair Value," "Market Value," "Net Proceeds," "Outstanding Interest Fraction,"
"Related Business Transactions," and "substantially all the properties and
assets," as well as provisions with regard to rights to dividends, payment of
issue and transfer taxes, and the treatment of convertible securities after
the Exchange Date.

VOTING RIGHTS

Holders of Epitope Common Stock currently have the right to elect
directors and vote on all other matters requiring action by the shareholders
or submitted to the shareholders for action. Each share of existing Epitope
Common Stock entitles the holder to one vote. If the Agritope Stock Proposal
is approved, the Articles will be amended to provide that holders of shares of
Medical Products Stock and Agritope Stock will vote together as a single
voting group on all matters as to which common shareholders generally are
entitled to vote, except as otherwise required by the Corporation Act or the
Articles as proposed to be amended. On all such matters, each share of
Medical Products Stock will have one vote, and each share of Agritope Stock
will have a variable number of votes (which could be more than, equal to or
less than one) based on the ratio of the average Market Value of one share of
Agritope Stock to the average Market Value of one share of Medical Products
Stock during the 20-Trading Day period immediately preceding the record date
for the matter to be acted on. If shares of only one class of common stock
were outstanding, or if shares of any class of common stock were entitled to
vote as a separate voting group, each share of that class would have one vote.

The Company anticipates that Medical Products Stock would initially
represent a majority of the voting power of all classes entitled to vote in
the election of directors. The relative voting rights of Medical Products
Stock and Agritope Stock are subject to adjustment from time to time as
described above so that a holder's voting rights may more closely reflect the
market value of the holder's equity investment in Epitope. Adjustments in the
relative voting rights of Medical Products Stock and Agritope Stock may
influence an investor interested in acquiring and maintaining a fixed
percentage of Epitope's voting power to acquire that percentage of both
classes of common stock. An investor in only one class of common stock or in
unequal percentages of the outstanding shares in each class will be able to
ascertain his or her voting power with respect to Epitope only after the
relative voting rights of the two classes of stock have been determined as of
the relevant record date. The relative voting power of Agritope Stock and
Medical Products Stock could fluctuate and will be influenced by many factors,
including the results of operations of the Company and each of the groups,
results of product development programs, competition, regulatory matters,
intellectual property developments, trading volume, share issuances and
repurchases, and general economic and market conditions.

The Articles as proposed to be amended would require the approval by the
holders of the affected class of common stock to:

(1) allow any proceeds from the Disposition of the properties or
assets allocated to either group to be used in the business of the other
group without fair compensation;

(2) issue shares of either class of common stock, other
than in connection with transactions affecting an Inter-Group
Interest, without allocating the net proceeds of the issuance to
the group represented by the class of common stock.

In addition to the voting rights provided in the Articles as proposed to
be amended, the approval of the holders of the outstanding shares of a class
of stock, voting as a separate voting group, is required under the Corporation
Act to approve certain amendments to the Articles that would affect the rights
of the shares of the class, to approve certain mergers involving conversion of
or a change in the rights of the class, and in other limited circumstances.
Most matters brought to a shareholder vote, however, will require only the
approval of the holders of Epitope's outstanding capital stock entitled to
vote on matters (including both classes of Epitope's common stock) voting
together as a single voting group. If, when a shareholder vote is taken on
any matter as to which neither class is entitled to vote as a separate voting
group and the holders of one of the two classes have a total number of votes
exceeding the maximum number of votes required to approve the matter, the
holders of that class would be able to control the outcome of the matter. The
Company anticipates that Medical Products Stock would initially represent a
majority of the voting power of all classes entitled to vote in the election
of directors. See "Risk Factors--Investment Risks Related to Two Classes of
Common Stock--No Separate Voting Rights."

LIQUIDATION RIGHTS

Under the Corporation Act and Epitope's existing Articles, in the event
of a voluntary or involuntary liquidation, dissolution or winding up of the
affairs of Epitope, holders of Epitope Common Stock are entitled to receive
the net assets, if any, of Epitope remaining for distribution after Epitope
has satisfied or made provision for its debts and obligations and for payment
to the holders of shares of any class or series of capital stock having
preferential rights to receive distributions of Epitope's net assets. If the
Agritope Stock Proposal is approved, the Articles will be amended to provide
that holders of outstanding shares of Medical Products Stock would share
equally, on a share for share basis, in a portion of the assets of the Company
remaining for distribution to its common shareholders equal to X/Z and the
holders of the outstanding shares of Agritope Stock will share equally, on a
share for share basis, in a portion of the assets of the Company remaining for
distribution to its common shareholders equal to Y/Z, where X is the aggregate
Market Capitalization of the Medical Products Stock, Y is the aggregate Market
Capitalization of the Agritope Stock, and Z is the aggregate Market
Capitalization of the Medical Products Stock and Agritope Stock combined
calculated over the 20-Trading Day period preceding the first public
announcement of the liquidation, dissolution, or winding up. A consolidation,
merger or sale of assets of the Company as a going concern will not be
construed to be a "liquidation," "dissolution," or "winding up."

No holder of Medical Products Stock or Agritope Stock shall have any
special right to receive specific assets of Epitope Medical Products or
Agritope, respectively, in the case of any dissolution, liquidation, or
winding up of the Company.

INTER-GROUP INTERESTS

Agritope Stock issuable pursuant to the Distribution would be intended
initially to represent 100 percent of the equity value of the Company
attributable to Agritope. Accordingly, neither Epitope Medical Products nor
Agritope will initially have an Inter-Group Interest in the other. However,
if at any time shares of Agritope Stock or Medical Products Stock representing
less than 100 percent of the equity value of the Company attributable to a
group are outstanding, the remaining equity value will be attributed to the
other group as an Inter-Group Interest. An Inter-Group Interest would be
created only if a subsequent transfer of cash, assets, products, programs or
other property from a group to the other group is specifically designated by
the Board as being made to create an Inter-Group Interest (in contrast to
transfers made for other consideration such as transfers as loans or in
purchase and sale transactions) or if outstanding shares of the class of stock
relating to a group are retired or otherwise cease to be outstanding following
their purchase with funds attributed to the other group.

The number of "Inter-Group Shares Issuable" with respect to an Inter-
Group Interest means the number of shares of Agritope Stock or Medical
Products Stock, as the case may be, that could be issued or sold by the
Company for the account of (i) Agritope with respect to an Inter-Group
Interest in Epitope Medical Products and (ii) Epitope Medical Products with
respect to an Inter-Group Interest in Agritope. The "Outstanding Interest
Fraction" means the percentage interest in the equity value of the Company
attributable to a group that is represented at any time by the outstanding
shares of the class of stock for that group, and the "Inter-Group Interest
Fraction" means any remaining percentage interest in the equity value of the
Company attributable to the group that is represented by the other group as a
result of an Inter-Group Interest held by the other group. The sum of the
Outstanding Interest Fraction and the Inter-Group Interest Fraction for
Agritope or Epitope Medical Products would always equal 100 percent. The full
definitions of "Inter-Group Shares Issuable," "Outstanding Interest Fraction,"
and Inter-Group Interest Fraction" are set forth in Annex II.

Any Inter-Group Shares Issuable with respect to an Inter-Group Interest
would not be represented by shares of Agritope Stock or Medical Products
Stock, as the case may be, and, therefore, would not be entitled to any voting
rights. In addition, outstanding shares of Agritope Stock or Medical Products
Stock that are held by majority owned subsidiaries of the Company (i.e., as to
which the Company owns a majority of the shares entitled to vote in the
election of directors) would not, in accordance with the Corporation Act, be
entitled to vote on matters presented to shareholders or be counted for quorum
purposes. Accordingly, the Company will not have any voting rights with
respect to any Inter-Group Interest, and the outcome of any vote of a class of
stock would be determined by the holders of the outstanding shares of the
class (excluding any shares held by such majority owned subsidiaries of the
Company).

For financial reporting purposes, shares of Agritope Stock or Medical
Products Stock acquired by consolidated subsidiaries of the Company which are
part of the other group which remain outstanding following their acquisition
would be combined with the Inter-Group Shares Issuable with respect to an
Inter-Group Interest and reported as such other group's investment in Agritope
or Epitope Medical Products, as the case may be. Any differences between the
reported investment and any then existing Inter-Group Interest would be
reconcilable by adding to any then existing Inter-Group Interest the number of
outstanding shares of Agritope Stock or Medical Products Stock held by
consolidated subsidiaries of the Company. Because these shares would still be
outstanding for purposes of the receipt of dividends and payment of redemption
or liquidation amounts, such other group would obtain substantially the same
economic benefits from the outstanding shares as it would have received had
the shares been retired or otherwise ceased to be outstanding following their
purchase and added to the Inter-Group Shares Issuable with respect to an
Inter-Group Interest.

The authorized shares of Agritope Stock or Medical Products Stock in
excess of the total number of shares outstanding will be available for
issuance or sale without further approval by the shareholders of the Company
(except to the extent such approval is required by applicable law, regulation
or Nasdaq National Market requirements) and may be issued at any time at
prices that could dilute the value of the outstanding shares. If there is an
Inter-Group Interest attributed to Agritope with respect to Medical Products
Stock or Epitope Medical Products with respect to Agritope Stock, whenever
shares of Medical Products Stock or Agritope Stock, respectively, are
subsequently issued by the Company, it will determine (i) the number of shares
of Medical Products Stock or Agritope Stock, as the case may be, issued for
the account of the other group in respect of a reduction in any then existing
Inter-Group Interest, the net proceeds from the issuance of which will be
reflected in the combined financial statements of such other group, and (ii)
the number of such shares issued for the account of the issuing group as an
additional equity interest in the issuing group, the net proceeds of which
will be reflected in the combined financial statements of the issuing group.
The Board expects to make the determination, in its sole discretion, after
consideration of such factors as it deems relevant, including, without
limitation, the needs of the Company, the relative levels of internally
generated cash flow of the groups, the capital expenditure plans of and
investment opportunities available to the groups, the long-term business
prospects for the groups and the availability, cost, and time associated with
alternative financing sources. See "Risk Factors--Risks Related to Two
Classes of Common Stock--Fiduciary Duties; Potential Conflicts." Whenever
additional shares of Agritope Stock or Medical Products Stock are issued by
the Company for the account of the other group in respect of a reduction in an
Inter-Group Interest attributable to such other group, the Inter-Group Shares
Issuable with respect to the Inter-Group Interest in the issuing group would
decrease on a share-for-share basis and the related Inter-Group Interest
Fraction would decrease and the related Outstanding Interest Fraction would
increase accordingly. If the Inter-Group Shares Issuable with respect to an
Inter-Group Interest is reduced to zero as a result of the issuance, shares of
Agritope Stock or Medical Products Stock, as the case may be, could no longer
be issued by the Company for the account of the other group unless an Inter-
Group Interest is again created. If the net proceeds of any issuance by the
Company of shares of (i) Agritope Stock are allocated to Agritope or
(ii) Medical Products Stock are allocated to Epitope Medical Products, the
Inter-Group Shares Issuable with respect to an Inter-Group Interest in the
issuing group would not be reduced, but the related Inter-Group Interest
Fraction would decrease and the related Outstanding Interest Fraction would
increase accordingly.

If shares of Agritope Stock or Medical Products Stock are retired or
otherwise cease to be outstanding following their purchase with funds
attributed to the other group, the Inter-Group Shares Issuable with respect to
the Inter-Group Interest in the group represented by the retired shares would
increase on a share-for-share basis and the related Inter-Group Interest
Fraction would increase and the related Outstanding Interest Fraction would
decrease accordingly. If the purchase of shares of Agritope Stock or Medical
Products Stock were attributed to Agritope or Epitope Medical Products,
respectively, the Inter-Group Shares Issuable with respect to the Inter-Group
Interest in the group purchasing the shares would not be increased, but the
Inter-Group Interest Fraction would increase and the related Outstanding
Interest Fraction would decrease accordingly. The Board would, in its sole
discretion, determine whether purchases of Agritope Stock or Medical Products
Stock should be made with consideration attributed to Agritope or Epitope
Medical Products, taking into consideration such factors as it deems relevant,
including, without limitation, the needs of the Company, the relative levels
of internally generated cash flow of the groups, the capital expenditure plans
of the groups, the investment opportunities available to the groups, the long-
term business prospects for the groups and the availability, cost, and time
associated with alternative financing sources.

The Board could, in its sole discretion, determine from time to time to
contribute cash, assets, products, programs or other property of Agritope or
Epitope Medical Products as additional equity to the other group, which would
increase the Inter-Group Shares Issuable with respect to the Inter-Group
Interest in the group receiving such cash, assets, products, programs or other
property by the number determined by dividing the amount of cash or the Fair
Value of the assets, products, programs or other property contributed (as of
the date of contribution) by the average Market Value of one share of Agritope
Stock with respect to an Inter-Group Interest in Agritope attributed to
Epitope Medical Products or one share of Medical Products Stock with respect
to an Inter-Group Interest in Epitope Medical Products attributed to Agritope,
the date of the contribution. In such event, the related Inter-Group Interest
Fraction will increase and the related Outstanding Interest Fraction will
decrease accordingly. The Board could, in its sole discretion, also determine
from time to time to contribute cash, assets, products, programs or other
property of Agritope or Epitope Medical Products to the other group in respect
of a reduction in any then-existing Inter-Group Interest, in which case the
Inter-Group Shares Issuable with respect to the Inter-Group Interest in the
contributing group would be decreased by the number determined by dividing the
amount of cash or the Fair Value of the assets, products, programs or other
property contributed (as of the date of contribution) by the average Market
Value of one share of Agritope Stock with respect to an Inter-Group Interest
in Agritope attributed to Epitope Medical Products or Medical Products Stock
with respect to an Inter-Group Interest in Epitope Medical Products attributed
to Agritope, in each case determined during the 20-Trading Day period
preceding the date of the contribution. In such event, the related Inter-
Group Interest Fraction would decrease and the related Outstanding Interest
Fraction would increase accordingly. The Board could, in its sole discretion,
determine to make contributions or other transfers referred to in this
paragraph taking into consideration such factors as it deems relevant,
including, without limitation, the needs of the Company, the financing needs
and objectives of the groups, the investment objectives of the groups, the
availability, cost, and time associated with alternative financing sources,
prevailing interest rates, and general economic conditions.

Agritope or Epitope Medical Products, as the case may be, will be
credited, and the other group will be charged, with an amount equal to the
product of (i) the Fair Value of any dividend or other distribution paid or
distributed in respect of outstanding shares of Agritope Stock or Medical
Products Stock, as the case may be (including any dividend of Net Proceeds
from the Disposition of all or substantially all the assets and properties of
Agritope or Epitope Medical Products, as the case may be), times (ii) a
fraction, the numerator of which is the related Inter-Group Interest Fraction
on the record date for such dividends or distribution and the denominator of
which is the relevant Outstanding Interest Fraction.

OTHER RIGHTS

Neither the holders of Medical Products Stock nor the holders of
Agritope Stock will have any preemptive rights or any rights to convert their
shares into any other securities of Epitope.

DETERMINATIONS BY THE BOARD

Any determination made by the Board in good faith under any of the
provisions described above under "Description of Medical Products Stock and
Agritope Stock" will be final and binding on all shareholders of Epitope.

DIVIDEND POLICY

Epitope has never paid any cash dividends on shares of Epitope Common
Stock. Epitope currently intends to retain its earnings to finance future
growth and therefore does not anticipate paying any cash dividends on any
class of its common stock in the foreseeable future. For information
concerning limitations on the funds from which dividends on Medical Products
Stock and Agritope Stock may be paid, see "Proposal 2: The Agritope Stock
Proposal--Description of Medical Products Stock and Agritope Stock--
Dividends."

Subject to the limitations in the Corporation Act and in the Articles as
proposed to be amended with respect to dividends on each of Medical Products
Stock and Agritope Stock, the Board would be able in its sole discretion to
declare and pay dividends exclusively on Medical Products Stock or exclusively
on Agritope Stock, or on both, in equal or unequal amounts, notwithstanding
the respective amount of funds available for dividends on each class, the
respective voting and liquidation rights of each class, the amount of prior
dividends declared on each class, or any other factor.

STOCK TRANSFER AGENT AND REGISTRAR

ChaseMellon Shareholder Services, L.L.C., Ridgefield Park, New Jersey,
will act as the registrar and transfer agent for both Medical Products Stock
and Agritope Stock.

QUOTATION OF MEDICAL PRODUCTS STOCK AND AGRITOPE STOCK

The Epitope Common Stock is currently listed on the American Stock
Exchange under the symbol "EPT." Prior to the Effective Date, the Company
intends to apply to withdraw the Epitope Common Stock from listing on AMEX in
conjunction with its approval for quotation on the National Market tier of The
Nasdaq Stock Market under the symbol "EPTO." Accordingly, it is anticipated
that, following the Effective Date, Medical Products Stock will be quoted on
the Nasdaq National Market, under the symbol "EPTO" and that Agritope Stock
will be quoted on the Nasdaq National Market under the symbol "AGTO." Epitope
cannot predict to what extent a public market will develop for the shares of
Agritope Stock or the prices at which the shares of Medical Products Stock and
Agritope Stock may trade in that market or otherwise.

FINANCIAL ADVISOR

Vector Securities has acted as financial advisor to Epitope in
connection with the Agritope Stock Proposal. See "Financial Advisor."

<PAGE>
NO DISSENTERS' RIGHTS

Under the Corporation Act and the Articles, shareholders will not have
any dissenters' rights of appraisal in connection with the Agritope Stock
Proposal.

EFFECTS ON CONVERTIBLE SECURITIES

The Distribution following the approval of the Agritope Stock Proposal
will require adjustments to the conversion rights of outstanding warrants to
purchase Epitope Common Stock (the "Warrants"). Generally, the Warrants
provide that the holder will be entitled to receive the number of shares of
Agritope Stock upon exercise of the Warrant that the holder would have
received if the holder had exercised the Warrant immediately prior to the
Distribution.

Adjustments will also be made to the conversion rights of the Agritope,
Inc., 4% Convertible Notes due 1997 (the "Convertible Notes"). The conversion
privilege of the Convertible Notes will be adjusted so that the holder of a
Convertible Note converted after the Effective Date will receive, in addition
to the shares of Medical Products Stock into which the Convertible Note is
convertible, the same number of shares of Agritope Stock as the holder would
have received had the holder converted the Convertible Note immediately prior
to the Distribution.

The Distribution will also require adjustments to outstanding stock
options granted by Epitope to employees, consultants and directors of Epitope.
The Epitope Board has determined to adjust each option outstanding on the
Effective Date to provide for the division of the option into an option
exercisable for Medical Products Stock and an option exercisable for one share
of Agritope Stock for every two shares of Epitope Common Stock subject to the
original option (with any resultant fractional shares of Agritope Stock
rounded down to the nearest whole number).

The aggregate exercise price of each option and Warrant will be
allocated between Epitope Medical Products and Agritope in proportion to the
respective market capitalizations of Medical Products Stock and Agritope
Stock, based on the Effective Date Trading Price of the stock. All other
terms and conditions of the original options and Warrants will remain the
same.

As of the Effective Date, approximately ___________ shares of Agritope
Stock will be reserved for issuance under the Stock Plans, ISOP, and Agritope,
Inc. Stock Award Plan, or upon conversion of Agritope, Inc. 4% Convertible
Notes due 1997 (the "Convertible Notes") or exercise of outstanding warrants.
See "Proposal 3: Amendment of 1991 Stock Award Plan" and "Proposal 4:
Amendment of 1993 Employee Stock Purchase Plan."

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes the principal federal income tax
consequences of the adoption and implementation of the Agritope Stock Proposal
and the Distribution. The discussion is based on currently existing
provisions of the Internal Revenue Code of 1986, as amended to the date hereof
(the "Code"), Treasury Department regulations thereunder, published positions
of the Internal Revenue Service (the "IRS"), and court decisions. All the
foregoing are subject to change, and any such change could affect the
continuing validity of this discussion. In particular, Congress could enact
legislation affecting the treatment of stock with characteristics similar to
Agritope Stock and Medical Products Stock, or the Treasury Department could
issue regulations that change the current law, including regulations issued
pursuant to its authority under Section 337(d) of the Code. Any future
legislation or regulations could be enacted or promulgated so as to apply
retroactively to the Agritope Stock Proposal or the Distribution. In
addition, this discussion and the opinions of counsel to Epitope are based on
the assumptions that the Agritope Stock Proposal and the Distribution will be
implemented as described herein and that the existing Epitope Common Stock
(and the Medical Products Stock and Agritope Stock to be received) is held as
a capital asset.

The IRS announced in 1987 that it will not issue advance rulings on the
classification of stock with characteristics similar to Agritope Stock and
Medical Products Stock. Accordingly, no rulings have been or will be
requested from the IRS with respect to any of the matters discussed herein.
The opinions of counsel described below are not binding on the IRS.

Because there is uncertainty concerning some of the federal income tax
consequences discussed herein, and because the following discussion does not
describe all tax consequences that may be relevant to a particular
shareholder, shareholders are urged to consult their own tax advisors as to
their respective tax situations, including the applicability and effect of
state, local, foreign and other tax laws.

THE AGRITOPE STOCK PROPOSAL AND THE DISTRIBUTION

In the opinion of Miller, Nash, Wiener, Hager & Carlsen LLP ("Miller
Nash"), the adoption and implementation of the Agritope Stock Proposal and the
Distribution of Agritope Stock will not result in taxable income to Agritope,
Inc. Epitope or its shareholders for federal income tax purposes, except as
stated below.

TAX IMPLICATIONS TO EPITOPE SHAREHOLDERS

IMPLEMENTATION OF THE AGRITOPE STOCK PROPOSAL AND THE DISTRIBUTION. In
the opinion of Miller Nash, Agritope Stock and Medical Products Stock will be
treated as common stock of Epitope for federal income tax purposes, and
Epitope shareholders will not recognize income, gain or loss by reason of the
implementation of the Agritope Stock Proposal or the Distribution. The basis
of the existing Epitope Common Stock held by a shareholder immediately before
the adoption and implementation of the Agritope Stock Proposal will become the
basis of Medical Products Stock and Agritope Stock and will be allocated
between Medical Products Stock and Agritope Stock received in the Distribution
in proportion to the relative fair market values of Medical Products Stock and
Agritope Stock on the distribution date. The holding period of Agritope Stock
and Medical Products Stock will include the holding period of the existing
Epitope Common Stock immediately before the adoption and implementation of the
Agritope Stock Proposal and the Distribution.

Although it is the opinion of Miller Nash that the implementation of the
Agritope Stock Proposal and the Distribution will not result in the
recognition of income, gain or loss or the receipt of a taxable dividend by
Epitope shareholders, there are no federal income tax regulations, court
decisions, or published IRS rulings bearing directly on the effect of the
Distribution. It is possible that the IRS may claim that Agritope Stock or
Medical Products Stock represents property other than stock of Epitope. If
Agritope Stock or Medical Products Stock were treated as property other than
stock of Epitope, the Distribution of Agritope Stock could be taxed as a
dividend to Epitope shareholders in an amount equal to the fair market value
of Agritope Stock, to the extent of Epitope's current and accumulated earnings
and profits, and possibly as capital gain, to the extent that the fair market
value of Agritope Stock distributed to a shareholder exceeded both the
holder's ratable share of such earnings and profits and the holder's tax basis
in Epitope Common Stock.

It is the opinion of Miller Nash that shareholders of Epitope who
receive cash in lieu of a fractional share interest in Agritope Stock as part
of the Distribution will be treated as having received the cash in redemption
of the fractional share interest. If the cash payment exceeds the
shareholder's basis in the fractional share interest deemed surrendered
therefor, the shareholder will realize gain to the extent of the excess cash.
If the cash payment is less than the shareholder's basis in the fractional
share interest exchanged, the shareholder will realize a loss. The gain or
loss will be a capital gain or loss, and will be a long-term capital gain or
loss if the tacked holding period of the fractional share interest is greater
than one year.

SALE OF AGRITOPE STOCK OR MEDICAL PRODUCTS STOCK. Upon the taxable sale
of Agritope Stock or Medical Products Stock, a shareholder will recognize gain
or loss equal to the difference between (i) any cash received plus the fair
market value of any other consideration received and (ii) the tax basis of
Agritope Stock or Medical Products Stock, as the case may be, that was sold.
As noted above, it is the opinion of Miller Nash that Agritope Stock and
Medical Products Stock will be treated as common stock of Epitope for federal
income tax purposes. Thus, in such counsel's opinion, Agritope Stock and
Medical Products Stock will not be treated as "Section 306 Stock."
Accordingly, any gain or loss on the taxable sale of Agritope Stock or Medical
Products Stock will be a capital gain or loss.

EXCHANGE OF AGRITOPE STOCK. Miller Nash is of the opinion that any
exchange of Agritope Stock solely for Medical Products Stock, whether at the
option of Epitope or upon a mandatory exchange, will not result in the
recognition of gain or loss to the holders thereof, pursuant to Section 1036
and/or Sections 368(a)(1)(E) and 354 of the Code (except with respect to any
cash received in lieu of fractional share interests of Medical Products
Stock). Medical Products Stock received upon any such exchange will have the
same tax basis as the holder's basis for the Agritope Stock exchanged
therefor, and the holder's holding period for the Medical Products Stock
received will include the holding period of Agritope Stock exchanged therefor.

Any exchange of Agritope Stock solely for cash, whether at the option of
Epitope or upon a mandatory exchange, will be treated as a distribution in
redemption of Agritope Stock and will be governed by the rules under
Section 302 of the Code, including the stock attribution rules of Section 318.
Depending on the shareholder's actual and constructive ownership of Medical
Products Stock and Agritope Stock at the time of the redemption, the cash
received may be treated as a dividend taxable as ordinary income to the extent
of the shareholder's ratable share of Epitope's earnings and profits.

If Agritope Stock is exchanged for a combination of cash and Medical
Products Stock, a shareholder will realize gain equal to the excess, if any,
of (i) the sum of the cash plus the fair market value of Medical Products
Stock received over (ii) the tax basis of Agritope Stock that was exchanged.
However, any such gain will be recognized (and thus subject to tax) only to
the extent of the cash received. Any gain that is recognized by a shareholder
will be a capital gain, unless the receipt of cash by the shareholder has the
effect of a distribution of a dividend within the meaning of Section 356(a)(2)
of the Code, in which case it will be treated as a dividend taxable as
ordinary income to the extent of the shareholder's ratable share of the
undistributed earnings and profits of Epitope.

ANTIDILUTION ADJUSTMENTS TO CONVERTIBLE SECURITIES. In general, if a
corporation has outstanding convertible securities and distributes shares of
its stock to holders of the stock into which the convertible securities are
convertible, the distribution may result in a taxable stock dividend to the
participating shareholders if the distribution results in an increase in the
shareholders' proportionate interest in the assets or earnings and profits of
the corporation. A distribution of stock, however, will not result in a
taxable stock dividend to the shareholders if the exchange price or exchange
ratio of the convertible securities is fully adjusted to compensate for the
dilution caused by the stock distribution.

Pursuant to action by the Board or the antidilution provisions of the
convertible securities of Epitope, the conversion price and conversion ratio
of the convertible securities will be fully adjusted to reflect the
Distribution. In the opinion of Miller Nash, because of the adjustments, the
Distribution will not result in an increase in the shareholders' proportionate
interest in the assets or earnings and profits of Epitope and therefore the
Distribution will not result in a taxable stock distribution to shareholders.

UNITED STATES ALIEN HOLDERS. Dividend payments received by a United
States Alien (as defined below) holder of Agritope Stock or Medical Products
Stock will be subject to United States federal withholding tax in the same
manner as the holder is subject to federal withholding tax on dividend
payments on the existing Epitope Common Stock. A United States Alien holder
will not be subject to United States federal income or withholding tax on any
gain realized on the taxable sale or exchange of Agritope Stock or Medical
Products Stock unless either (a) the gain is derived from sources within the
United States and the United States Alien is an individual who was present in
the United States for 183 days or more during the taxable year or (b) the
stock sold or exchanged is a "United States Real Property Interest" as defined
in Section 897(c)(1) of the Code at any time during the five years prior to
the sale or exchange of the stock or at any time during the time that the
United States Alien held the stock, whichever time is shorter. Agritope Stock
and Medical Products Stock will be a United States Real Property Interest only
if at any time during the five years prior to the sale or exchange of the
stock or at any time during the period that the United States Alien held the
stock, whichever time is shorter, Epitope is a "United States real property
holding corporation" as defined in Section 897(c)(2) of the Code, and the
United States Alien directly or constructively owned more than 5 percent of
the class of stock of Epitope being sold or exchanged. Epitope is not and
does not believe that it will become a "United States real property holding
corporation" for federal income tax purposes.

A "United States Alien" is any person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual,
a nonresident alien fiduciary or a foreign estate or trust, or a foreign
partnership that includes as a member any of the foregoing persons.

BACKUP WITHHOLDING. Certain noncorporate holders of Agritope Stock or
Medical Products Stock may be subject to backup withholding at a rate of
31 percent on the payment of dividends on the stock. Backup withholding will
apply only if the holder (i) fails to furnish the holder's Taxpayer
Identification Number ("TIN"), which for an individual would be his or her
Social Security number, (ii) furnishes an incorrect TIN, (iii) is notified by
the IRS that the holder has failed to properly report payments of interest or
dividends, or (iv) under certain circumstances fails to certify under
penalties of perjury that the holder has furnished a correct TIN and has not
been notified by the IRS that the holder is subject to backup withholding for
failure to report payments of interest or dividends. Shareholders should
consult their tax advisors regarding their qualification for exemption from
backup withholding and the procedures for obtaining such an exemption, if
applicable.

The amount of any backup withholding from a payment to a holder of
Agritope Stock or Medical Products Stock will be allowed as a credit against
the shareholder's federal income tax liability and may entitle the shareholder
to a refund, provided that the required information is furnished to the IRS.

TAX IMPLICATIONS TO EPITOPE

In the opinion of Miller Nash, Agritope Stock and Medical Products Stock
will be common stock of Epitope and no gain or loss will be recognized by
Epitope by reason of the adoption or implementation of the Agritope Stock
Proposal or the Distribution. If, however, Agritope Stock were treated as
property other than stock of Epitope, Epitope could recognize gain on the
Distribution of Agritope Stock in an amount equal to the difference between
the fair market value of Agritope Stock and its basis in that stock.

<PAGE>
PROPOSAL 2: BOARD RECOMMENDATION AND VOTE REQUIRED

The Board recommends a vote FOR Proposal 2, the Agritope Stock Proposal.
If a quorum is present at the Annual Meeting, Proposal 2 will be approved if
the votes cast in favor of the proposal exceed the votes cast opposing the
action.
<PAGE>
GENERAL PROVISIONS REGARDING THE PROPOSED AMENDMENTS TO
THE 1991 STOCK AWARD PLAN AND 1993 EMPLOYEE STOCK PURCHASE PLAN

Epitope is proposing amendments to the Epitope, Inc. 1991 Stock Award
Plan and 1993 Employee Stock Purchase Plan which would, among other matters,
(i) increase the number of shares available for issuance under the respective
Plans and (ii) authorize the grant of awards, options and rights relating to
Agritope Stock in addition to Medical Products Stock (as redesignated) already
authorized under each Plan. Epitope believes it is desirable to maintain its
flexibility to use option grants to attract, retain and reward key personnel;
to attract and retain qualified persons who are not also officers or employees
of Epitope to serve as directors of Epitope; and to provide employees of
Epitope with the opportunity to purchase shares of either class of common
stock of Epitope on favorable terms. In light of the Agritope Stock Proposal,
Epitope believes that the usefulness of the Stock Plans in achieving these
goals will be impaired if the proposed amendments to the Stock Plans are not
approved. Specifically, Epitope believes that the grant of options for
Agritope Stock under the Award Plan will provide a more effective and direct
incentive for the employees of Agritope than would options for Medical
Products Stock. Similarly, options granted to directors and executive
management for combinations of Agritope Stock and Medical Products Stock will
provide a more effective and direct incentive to promote the success of
Epitope as a whole than would options for Medical Products Stock alone.
Finally, the Board believes that rights to purchase Agritope Stock under the
Purchase Plan will provide a more attractive benefit to Agritope employees
than rights to purchase Medical Products Stock.

The proceeds from the issuance of shares of either class of common stock
on the exercise of options or rights granted under the Stock Plans after the
Effective Date will generally be allocated to the group represented by the
class of common stock issued. In the event that an outstanding option or
right expires or is canceled or forfeited, the shares of Agritope Stock or
Medical Products Stock covered thereby would again be available for the grant
of options or rights under the Stock Plans.
<PAGE>
PROPOSAL 3: AMENDMENT OF 1991 STOCK AWARD PLAN

GENERAL

Shareholders are being asked to consider and approve amendments to the
Epitope, Inc. 1991 Stock Award Plan as described below. The Award Plan was
initially approved by the shareholders at the 1991 annual meeting. Increases
in the number of shares available for issuance under the Award Plan were
approved by the shareholders at the annual meetings in 1993, 1994 and 1995.
In late 1996, the Board adopted, subject to shareholder approval, amendments
to the Award Plan to provide, among other matters, for the issuance of
Agritope Stock under the Award Plan and to provide for a further increase in
the number of shares available for issuance under the Award Plan. A summary
description of certain terms and provisions of the Award Plan as proposed to
be amended follows.

PURPOSE

The purpose of the Award Plan is to promote and advance the interests of
the Company and its shareholders by enabling the Company 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 the Company's shareholders by offering
performance-based stock and cash incentives and other equity-based incentive
awards to promote a proprietary interest in pursuing the long-term growth,
profitability, and financial success of the Company.

AWARDS AND ELIGIBILITY

The Award Plan provides for stock-based awards to (i) employees of the
Company and its subsidiaries, (ii) members of scientific advisory committees
or other consultants to the Company or its subsidiaries ("Advisors"), and
(iii) non-employee directors of the Company. 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 Executive Compensation Committee of the Board (the
"Committee") administers the Award Plan and determines the key employees and
Advisors of the Company and its subsidiaries who are to receive Awards under
the plan and the types, amounts, and terms of Awards. The Committee may
delegate to one or more officers of the Company the authority to grant Awards
to recipients who are not executive officers or directors of the Company and
to determine the nature of the Awards to be granted.

At September 30, 1996, 132 persons held options under the Award Plan,
including each of the Company's seven nonemployee directors and eight
executive officers, 111 other employees, and six Advisors. At that date,
these persons represented the pool of individuals considered to be eligible to
participate in the Award Plan. No stock appreciation rights, restricted
awards, performance awards, or other stock-based awards have been granted
under the Award Plan.

Awards under the Award Plan, other than to nonemployee directors, are
granted at the discretion of the Committee, which determines the recipients
and establishes the terms and conditions of each Award, including the exercise
price, the form of payment of the exercise price, the number of shares subject
to options or other equity rights, and the date or dates on which the options
become exercisable. However, the exercise price of any incentive stock option
granted under the Award Plan may not be less than the fair market value of the
common stock on the date of grant. The exercise price of any nonqualified
stock option generally may not be less than 75 percent of the fair market
value of the common stock on the date of grant.

<PAGE>
DESCRIPTION OF AMENDMENTS TO AWARD PLAN

On , 1996, the Board approved the amendments to the Award
Plan described herein (the "Award Plan Amendments"), subject to approval of
the amendments by the shareholders. If the Agritope Stock Proposal is not
approved by the shareholders, the Award Plan Amendments relating to Agritope
Stock will not be implemented and will be of no effect. The description of
the Award Plan Amendments set forth herein is qualified in its entirety by
reference to Annex IV, which contains the full text of the Award Plan as
proposed to be amended.

The Award Plan Amendments provide for an increase in the number of
shares of Epitope Common Stock (Medical Products Stock if the Agritope Stock
Proposal is approved) authorized for issuance under the Award Plan by
3,000,000 shares to a total of 5,400,000 shares, plus the number of shares
that were available for grant under the ISOP on the date the Award Plan was
adopted. The Award Plan Amendment also provides for the issuance of up to
2,000,000 shares of Agritope Stock under the Award Plan, provided the Agritope
Stock proposal is approved by shareholders. Accordingly, if the Award Plan
Amendments and the Agritope Stock Proposal are both approved, the number of
shares issuable under the Award Plan will be increased by 5,000,000, subject
to adjustment for changes in capitalization. In addition, any shares subject
to Awards under the ISOP or the Award Plan that are canceled or expire prior
to exercise, are settled in cash or are exchanged for other Awards, together
with shares used in full or partial payment of the exercise price of an Award,
will become available for future Awards under the Award Plan. At September
30, 1996, 382,526 shares had been issued under the Award Plan, 2,643,292
shares were subject to outstanding Awards, and 197,181 shares were available
for future grants of Awards.

The Committee would have the discretion to grant Awards relating to
Medical Products Stock, Agritope Stock, or a combination of both to
participants eligible to be granted Awards under the Award Plan. The
Committee could grant Awards relating to both classes of common stock in such
proportion as the Committee determined to be appropriate.

It is currently anticipated that options ("New Options") to purchase a
total of approximately 95,000 shares of Agritope Stock will be granted to
certain officers and employees of A&W under the Award Plan on or prior to the
Effective Date, subject to approval of the Agritope Stock Proposal and the
Award Plan Amendments. Each New Option will: (i) have an exercise price
equal to the Effective Date Trading Price of Agritope Stock, (ii) become
exercisable as to 25 percent of the shares covered by such option on the first
four anniversaries of the Effective Date, and (iii) have a term of ten years.

The Award Plan Amendments also revise the provisions relating to Awards
made to nonemployee directors. As proposed to be amended, Article 14 of the
Award Plan regarding Awards to nonemployee directors would be deleted in its
entirety. Instead, Article 3 of the Award Plan would authorize the Board to
grant Awards to nonemployee directors from time to time in its discretion
subject to the provisions of the Award Plan and in accordance with its
fiduciary obligations to Epitope and its shareholders. See "Executive
Compensation--Compensation of Directors" for details regarding prior option
grants to nonemployee directors under the Award Plan.

If the Agritope Stock Proposal and the Award Plan Amendments are
approved, holders of outstanding options under the Award Plan will each
receive an option to purchase one share of Agritope Stock for every two shares
of Epitope Common Stock for which they hold an outstanding option on the
Effective Date (with any resultant fractional shares of Agritope Stock rounded
down to the nearest whole number). Outstanding options under the ISOP and the
Agritope, Inc., 1992 Stock Award Plan (the "Agritope Plan"), will be similarly
adjusted such that holders of such options will receive an option to purchase
one share of Agritope Stock for every two shares of Epitope Common Stock which
they would be entitled to receive upon exercise of such options outstanding on
the Effective Date. The foregoing options to purchase Agritope Stock are
collectively referred to as "Adjustment Options." On the Effective Date,
outstanding options to purchase Epitope Common Stock will become options to
purchase Medical Products Stock and the shares presently eligible for issuance
under the Award Plan will become shares of Medical Products Stock. The
aggregate exercise price of the original Epitope Common Stock option will be
allocated between the Medical Products Stock option and the related Agritope
Stock option in proportion to the relative market capitalizations of Medical
Products Stock and Agritope Stock, based on the Effective Date Trading Prices
of the stock. Accordingly, the per-share exercise price of the Medical
Products Stock option will be determined by dividing the Effective Date
Trading Price of Medical Products Stock by the sum of the Effective Date
Trading Price of Medical Products Stock plus one-half the Effective Date
Trading Price of Agritope Stock, and multiplying the exercise price of the
original option by the resulting fraction. Similarly, the per-share exercise
price of the Agritope Stock option will be determined by dividing the
Effective Date Trading Price of Agritope Stock by the sum of the Effective
Date Trading Price of Medical Products Stock plus one-half the Effective Date
Trading Price of Agritope Stock, and multiplying the exercise price of the
original option by the resulting fraction. For example, if the original per
share exercise price was $10.00 and the closing prices for the Agritope Stock
and Medical Products Stock on the Effective Date were $6.00 and $12.00,
respectively, the Agritope Stock option exercise price would be $4.00 per
share and the Medical Products Stock option price would be $8.00 per share.

In addition to the amendments to the Award Plan described above, certain
other changes have been approved by the Board that are not subject to
shareholder approval. Due to the anticipated delisting of the Company's
securities from AMEX and concurrent approval for quotation on the Nasdaq
National Market, the definition of fair market value in the Award Plan has
been changed to refer to trading prices on either a stock exchange or an
automated securities interdealer quotation system. Other changes have been
adopted in light of recent amendments promulgated by the Commission to the
insider trading and reporting rules under Section 16 of the Exchange Act. The
changes modify the requirements for the composition of the committee
responsible for approving Awards and administering the Award Plan
(Section 3.2), delete the limitations on transferability of Awards (Section
6.5), authorize the Committee to approve forms of agreements for options
granted to nonemployee directors (Section 14.4), and alter the provisions
relating to adoption of amendments to the Award Plan to, among other things,
require shareholder approval only of amendments that would materially increase
the aggregate number of shares of common stock that may be issued under the
Award Plan (Article 16).

The following table shows (i) the New Options that are expected to be
granted under the Award Plan as of the Effective Date, provided that the
Agritope Stock Proposal and the Award Plan Amendments are approved by the
shareholders, and (ii) the Adjustment Options that would have been issued
under the Award Plan, the ISOP and the Agritope Plan if the Effective Date had
occurred on September 30, 1996. No other grants of Awards under the Award
Plan are now under consideration.

<PAGE>
NEW PLAN BENEFITS
1991 Stock Award Plan

Number of Number of
New Adjustment
Name and Position Options Options
- ----------------- --------- ----------

Adolph J. Ferro, Ph.D. -- 278,102
President and Chief
Executive Officer
Gilbert N. Miller -- 104,552
Executive Vice President
and Chief Financial Officer
Andrew S. Goldstein -- 97,000
Senior Vice President of
Advanced Technology Development--
Epitope Medical Products
John H. Fitchen, M.D. -- 94,400
Senior Vice President and
Chief Operating Officer--
Epitope Medical Products
Richard K. Bestwick, Ph.D. -- 38,052
Senior Vice President and
Chief Operating Officer--
Agritope
All Executive Officers as a Group 15,000 646,806
All Nonemployee Directors as a Group -- 244,302
All Employees as a Group, Excluding 80,000 725,506
Executive Officers

DESCRIPTION OF TERMS OF AWARDS

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

OPTIONS. Options granted under the Award Plan may be either incentive
stock options meeting the requirements of Section 422 of the Code or
nonqualified options, in each case, with respect to shares of Medical Products
Stock, Agritope Stock, or both . Incentive stock options may expire not more
than ten years from the date of grant. The Award Plan does not limit the
maximum term or amount of award 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 the applicable class of common
stock on the date the option is granted. The Award Plan authorizes the
Committee to issue deferred compensation options with an option price
substantially less than the fair market value of a share of Medical Products
Stock or Agritope Stock, as the case may be, 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, 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 the same class of common stock,
the option holder shall automatically be granted a replacement ("reload")
option for a number of shares of such class of common stock equal to the
number of shares delivered upon exercise with an option price equal to the
fair market value of a share of such class of common stock on the date of
exercise and subject to such other terms as the Committee determines.

STOCK APPRECIATION RIGHTS. A recipient of stock appreciation rights
("SARs") will receive, upon exercise, a payment (in cash or in shares of
Agritope Stock or Medical Products Stock) based on the increase in the price
of a share of Agritope Stock or Medical Products Stock, as the case may be,
between the date of grant and the date of exercise. SARs may be granted in
connection with options or other Awards granted under the Award Plan or may be
granted as independent Awards.

RESTRICTED AWARDS. Restricted Awards may take the form of restricted
shares or restricted units. Restricted shares are shares of Agritope Stock or
Medical Products Stock that may be subject to forfeiture if the recipient
terminates employment or service as an 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 the Company until the
expiration of the Restriction Period. From the date of issuance of restricted
shares, the recipient is entitled to the rights of a shareholder with respect
to the shares, including voting and dividend rights.

Restricted units are Awards of units equivalent in value to a share of
Agritope Stock or Medical Products Stock, which similarly may be subject to
forfeiture if the recipient terminates employment or service as an 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 Stock or Medical Products Stock
covered by the restricted units. Payment may be in cash, unrestricted shares
of the applicable class of common stock, or any other form approved by the
Committee.

PERFORMANCE AWARDS. Performance Awards are designated in units
equivalent in value to a share of Agritope Stock or Medical Products Stock, as
the case may be. A performance Award is subject to forfeiture if or to the
extent that the Company, a subsidiary, an operating group, or the recipient,
as specified by the Committee 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 the applicable class of common stock, or any other form
approved by the Committee.

OTHER STOCK-BASED AWARDS. The Committee may grant other Awards that
involve payments or grants of shares of Agritope Stock or Medical Products
Stock or are measured by or in relation to shares of Agritope Stock or Medical
Products Stock. 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.

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 Epitope.

INCENTIVE STOCK OPTIONS. An optionee does not realize taxable income
upon the grant or exercise of an incentive stock option ("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 long-term capital gain and any
loss sustained will be a long-term capital loss, and (b) no deduction is
allowed to Epitope for federal income tax purposes. The exercise of ISOs
gives rise to an adjustment in computing alternative minimum taxable income
that may result in alternative minimum tax liability for the optionee.

If shares of common stock acquired upon the exercise of an ISO are
disposed of prior to the expiration of the two-year and one-year holding
periods described above (a "disqualifying disposition"), then (a) the optionee
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 at exercise (or, if
less, the amount realized on a sale of the shares) over the option price
thereof and (b) Epitope is entitled to deduct such amount. Any further gain
realized is taxed as a short-term or long-term capital gain, as applicable,
and does not result in any deduction to Epitope. 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) ordinary income is
realized by the optionee in an amount equal to the difference between the
option price and the fair market value of the shares on the date of exercise
and (b) Epitope receives a tax deduction for the same amount. Upon
disposition of the shares, appreciation or depreciation after the date of
exercise is treated as a short-term or long-term capital gain or loss, as
applicable, and will not result in any deduction to Epitope.

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 the applicable class of common stock. 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 common
stock or other property delivered to the participant. Epitope 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 common stock or other property delivered to the
participant. However, a participant may elect to recognize compensation
income upon the grant of restricted shares, based on the fair market value of
the shares of common stock 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. Epitope 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, Epitope 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 Epitope 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." Among other requirements contained in Section 162(m),
the material terms of a compensation plan must be approved by shareholders.
Although Awards previously granted under the Award Plan would not qualify for
deductibility under Section 162(m) to the extent that the $1 million threshold
were to be exceeded, the Company may in the future consider structuring Awards
to attempt to meet the requirements of Section 162(m) if it determines the
action to be advisable.

PROPOSAL 3: BOARD RECOMMENDATION AND VOTE REQUIRED

The Board recommends a vote FOR amendment of the Award Plan as described
above to provide for the issuance of up to 2,000,000 shares of Agritope Stock
and an additional 3,000,000 shares of Epitope Common Stock (Medical Products
Stock if the Agritope Stock Proposal is approved) under the plan. If a quorum
is present at the Annual Meeting, Proposal 3 will be adopted if the votes cast
in favor of the proposal at the Annual Meeting exceed the votes cast opposing
the action.

If Proposal 2, the Agritope Stock Proposal, or this Proposal 3 is not
approved by the shareholders, the Award Plan will remain in effect but
Agritope Stock will not be issued under the plan and the options reflected in
the table under the heading "New Plan Benefits" will not be granted. If this
Proposal 3 is approved by the shareholders, the increase in the number of
shares of Epitope Common Stock issuable under the Award Plan will take effect
even if the Agritope Stock Proposal is not approved.

PROPOSAL 4: AMENDMENT OF 1993 EMPLOYEE STOCK PURCHASE PLAN

The Purchase Plan was approved by the shareholders at the 1993 annual
meeting. In late 1996, the Board adopted, subject to shareholder approval,
amendments to the Purchase Plan (the "Purchase Plan Amendments") to permit the
issuance under the plan of up to an additional 500,000 shares of common stock
consisting of up to 250,000 shares of Agritope Stock, available only if the
Agritope Stock Proposal is approved, and up to 250,000 shares of Epitope
Common Stock (Medical Products Stock if the Agritope Stock Proposal is
approved), in each case subject to adjustment for changes in capitalization.
A summary description of certain terms and provisions of the Purchase Plan
reflecting the effect of the Purchase Plan Amendments follows.

The purpose of the Purchase Plan is to give employees of the Company the
opportunity to subscribe for shares of Agritope Stock, Medical Products Stock
or both on an installment basis through payroll deductions.

The Purchase Plan provides for offering and purchase periods to be set
by the Board, but no more than three regular offering periods may be set
during each fiscal year of the Company. The number of offering periods, the
number of shares offered, and the length of each period will be set by the
Board. The 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
Board.

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 Medical Products Stock or Agritope Stock, as applicable,
on the stock exchange or automated securities interdealer quotation system on
which the stock was traded on the day before the offering period commenced
(the "initial subscription price") and (ii) 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 Purchase Plan.

The total value of shares that may be subscribed for in one or more
regular offering periods within any calendar year is limited to $21,250.
Subject to this limitation, the Board 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 Purchase Plan also provides for monthly special offering dates
pursuant to which any employee of the Company may receive a one-year
subscription for a number of shares of either or both Agritope Stock and
Medical Products Stock in such proportions as the Company may determine equal
in the aggregate 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 the Company'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 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.

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.

At September 30, 1996, approximately 148 employees were eligible to
participate in the Purchase Plan, 23,060 shares were subject to outstanding
subscriptions under the plan, and 19,639 shares had been purchased pursuant to
the plan. If the Agritope Stock Proposal and the Purchase Plan Amendments are
approved, each outstanding subscription under the Purchase Plan will be
amended to include the right to purchase one-half share of Agritope Stock for
each share of Epitope Common Stock covered by the subscription as of the
Effective Date and the respective purchase prices of the shares will be
determined in the same manner as for outstanding stock options under the Award
Plan. See "Proposal 3: Amendment of 1991 Stock Award Plan." As of September
30, 1996, executive officers and employees of the Company held outstanding
subscriptions under the Purchase Plan as follows: Dr. Ferro, 279 shares;
Mr. Miller, 391 shares; all executive officers as a group, 1,878 shares; and
all employees other than executive officers as a group, 21,182 shares.
Numbers of shares that may be subject to future individual subscriptions under
the Purchase Plan are not now determinable.

In addition to the Purchase Plan Amendments, which are subject to
shareholder approval at the Annual Meeting, the Board also approved amendments
to the Purchase Plan to (i) reflect the expected delisting of the Epitope
Common Stock on the AMEX and approval for quotation on the Nasdaq National
Market and (ii) authorize the Board to amend or terminate the Purchase Plan
without shareholder 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.

The foregoing is a summary description of certain terms and provisions
of the Purchase Plan and is subject to the detailed terms and provisions
thereof. A copy of the Purchase Plan, as proposed to be amended, is set forth
as Annex V.

FEDERAL INCOME TAX CONSEQUENCES RELATING TO PURCHASE PLAN

The 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 Purchase Plan.

If no disposition of shares purchased under the 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 stock at the commencement of the offering
period (or, if less, the amount realized on sale of the shares in excess of
the purchase price) is taxed to the participant as ordinary income with any
additional gain taxed as a long-term capital gain and any loss sustained
treated as a long-term capital loss, and (b) no deduction is allowed to
Epitope for federal income tax purposes.

If shares purchased under the 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) Epitope is entitled to deduct that
amount. Any further gain realized is taxed as a short-term or long-term
capital gain and will not result in any deduction to Epitope.

PROPOSAL 4: BOARD RECOMMENDATION AND VOTE REQUIRED

The Board recommends a vote FOR amendment of the Purchase Plan as
described above to provide for the purchase of Agritope Stock under the plan.
If a quorum is present at the Annual Meeting, Proposal 4 will be adopted if
the votes cast in favor of the proposal at the Annual Meeting exceed the votes
cast opposing the action.

If Proposal 2, the Agritope Stock Proposal, or this Proposal 4 is not
approved by the shareholders, the Purchase Plan will remain in effect but
Agritope Stock will not be issued under the plan. If this Proposal 4 is
approved by the shareholders, the increase in the number of shares of Epitope
Common Stock issuable under the Purchase Plan will take effect even if the
Agritope Stock Proposal is not approved.
<PAGE>
EXECUTIVE OFFICERS

The following table presents the names, ages and positions of the
Company's executive officers at December , 1996.

NAME OF
EXECUTIVE OFFICER AGE POSITION
- ----------------- --- --------

Adolph J. Ferro, Ph.D. 54 President, Chief Executive
Officer and Director

Gilbert N. Miller 55 Executive Vice President,
Chief Financial Officer and
Treasurer

John H. Fitchen, M.D. 51 Senior Vice President and
Chief Operating Officer--
Epitope Medical Products

Andrew S. Goldstein 48 Senior Vice President of
Advanced Technology
Development--Epitope Medical
Products, Secretary and
Director

Richard K. Bestwick, Ph.D. 42 Senior Vice President and Chief
Operating Officer--
Agritope

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

Byron A. Allen, Jr. 64 Vice President of Corporate
Communications

Fred L. Williamson 56 President and Chief Executive
Officer--Andrew and
Williamson Sales, Co.

Officers of the Company hold office at the discretion of the Board.

For biographical summaries of Dr. Ferro and Mr. Goldstein, see "Proposal 1:
Election of Class I Directors."

Gilbert N. Miller joined the Company in June 1989 as Executive Vice
President and Chief Financial Officer and has served as the Company's
Treasurer since March 1991. He has also been a Senior Vice President of
Agritope, Inc. since September 1992 and its Chief Financial Officer since
December 1991. 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.

John H. Fitchen, M.D., joined the Company in July 1990 as Vice President
of Research and Clinical Activities, was appointed Senior Vice President in
September 1993, and assumed the additional position of Chief Operating
Officer-Epitope Medical Products in November 1994. Prior to joining the
Company, Dr. Fitchen was Associate Chief of Staff for Research at the Portland
Veterans Administration Medical Center in Portland, Oregon, and Professor of
Medicine at OHSU. Dr. Fitchen received his M.D. degree from the University of
Rochester School of Medicine and a B.A. degree from Amherst College. He
completed his clinical training in Internal Medicine at OHSU in 1976 and in
Hematology/Oncology at the University of California, Los Angeles, in 1978.

Richard K. Bestwick, Ph.D., joined Epitope in August 1987 and was
appointed Senior Vice President of Agritope, Inc. in September 1992. He was
appointed to the additional position of Chief Operating Officer of Agritope,
Inc. in October 1996. 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.

Joseph A. Bouckaert joined Vinifera, Inc. as its President and Chief
Executive Officer at the inception of the Company in March 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.

Byron A. Allen, Jr., joined the Company in July 1995. Prior to joining
the Company, from 1993 to 1995, Mr. Allen was Senior Vice President, Equity
Portfolio Manager, for C.J. Lawrence/Deutsche Bank Securities Corporation, New
York. From 1978 to 1993, he was Director of Retail Brokerage Service, C.J.
Lawrence, Incorporated. Mr. Allen holds an A.B. degree from Dartmouth College
and a Master of Business Administration degree from the Amos Tuck School of
Business Administration.

Fred L. Williamson has been President of Andrew and Williamson Sales,
Co., which produces, markets, distributes and sells a wide variety of fresh
fruits and vegetables throughout North America, since 1987. A&W was acquired
by the Company in , 1996. Mr. Williamson has been involved in the
business of marketing and shipping fresh produce since 1962.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation for the last three
fiscal years of the Chief Executive Officer and the four other most highly
compensated executive officers of the Company (together, the "named executive
officers") during the 1996 fiscal year.

<PAGE>
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards

Securities
Underlying All Other
Name and Principal PositionYear Salary Bonus Options (#)(1) Compensation(2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Adolph J. Ferro, Ph.D. 1996 $214,183 $ 50,000 - $ 4,237
President and Chief Executive1995 200,769 113,245 74,000 5,390
Officer 1994 135,000 - - 3,375

Gilbert N. Miller 1996 128,510 33,075 - 3,206
Executive Vice President,1995 130,962 - 34,000 5,021
Chief Financial Officer,1994 120,000 - - 3,000
and Treasurer

John H. Fitchen, M.D. 1996 147,548 37,200 - 3,540
Senior Vice President and1995 148,606 - 43,000 3,578
Chief Operating Officer--1994 131,250 - - 3,057
Epitope Medical Products

Andrew S. Goldstein 1996 128,510 30,000 - 3,206
Senior Vice President of1995 126,923 - 34,000 3,182
Advanced Technology 1994 105,000 - - 2,625
Development--Epitope Medical
Products

Richard K. Bestwick, Ph.D.(3)1996 91,385 20,160 - 2,280
Senior Vice President and
Chief Operating Officer--
Agritope

(1) Represents the number of shares for which options were awarded. No SARs have been granted to any named executive
officer during the years indicated.

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

(3) Dr. Bestwick was not an executive officer of Epitope during fiscal 1995 or 1994.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES(1)

Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options at Options
Fiscal Year-End at Fiscal Year-
Shares End
Acquired On Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adolph J. Ferro, Ph.D. 20,000 $173,722 496,061 60,143 $2,800,693 $69,583
Gilbert N. Miller 16,000 141,440 181,299 27,805 1,024,121 642
John H. Fitchen, M.D. - - 160,133 28,667 1,001,375 -
Andrew S. Goldstein 25,000 188,034 57,632 18,472 31,058 642
Richard K. Bestwick, Ph.D. 2,750 32,313 165,444 28,556 1,092,090 37,910

</TABLE>

(1) The named executive officers did not hold any SARs at September 30,
1996.

(2) In-the-money stock options are options for which the exercise price is
less than the market value of the underlying stock on a particular date.
The values shown in the table are based on the difference between
$15.0625, which was the average of the high and low sales prices of the
Epitope Common Stock on the AMEX on September 30, 1996, and the
applicable exercise price.

EMPLOYMENT AGREEMENTS

Pursuant to written employment agreements with the Company, the named
executive officers each are entitled to receive one year of salary in the
event of termination without cause (two years in the case of Dr. Ferro) or two
years of salary 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 the Company (three years in the case of Dr.
Ferro). The agreements in each case prohibit the officer from competing with
the Company for one year unless the officer elects to waive the right to
amounts otherwise payable. The agreements do not expire by their terms and
are terminable by the Company on 90 days' notice with cause or, subject to
payment of the salary amounts described above, without cause.

COMPENSATION OF DIRECTORS

Under the terms of the Award Plan in effect during the 1996 fiscal year,
nonemployee directors of the Company were eligible to receive nonqualified
stock options granted on a nondiscretionary basis, as described below.

INITIAL OPTIONS. Upon becoming a nonemployee director, each such
director has been granted a stock option to purchase 50,000 shares of Epitope
Common Stock (an "Initial Option"). A newly-elected Chairman of the Board has
been entitled to receive an Initial Option to purchase an additional 25,000
shares (75,000 shares if not previously a nonemployee director). Until
December 1994, Initial Options were granted at an exercise price equal to 75
percent of the fair market value of a share of Epitope Common Stock on the
date of grant; beginning in December 1994, Initial Options have been granted
at an exercise price equal to the fair market value of a share on the date of
grant minus the lesser of (a) $2.00 or (b) 25 percent of the fair market
value. Each Initial Option becomes exercisable in annual installments based
on continued service as a director and expires at the end of five years
following the director's retirement or one year following the director's
death, disability or cessation of service as a director for any other reason.
An Initial Option will generally become fully exercisable by the date of the
fourth annual meeting of shareholders through which the director has served on
the Board. Initial Options become exercisable in full immediately upon the
happening of a change in control of the Company. A change in control of the
Company would occur on the happening of such events as the beneficial
ownership by a person or group of 30 percent or more of the outstanding common
stock, certain changes in Board membership affecting a majority of positions,
certain mergers or consolidations, a sale or other transfer of all or
substantially all the Company's assets, or approval by the shareholders of a
plan of liquidation or dissolution of the Company, as well as any change in
control required to be reported by the proxy disclosure rules of the
Commission.

Payment of the exercise price may be made in cash or by delivery of
previously acquired shares of common stock having a fair market value equal to
the aggregate exercise price. To the extent that payment is made in
previously acquired shares, the director is automatically granted a
replacement ("reload") option for a number of shares equal to the number
delivered upon exercise with an exercise price equal to the fair market value
of a share of common stock on the date of exercise. Reload options become
exercisable in full six months after the grant date.

RENEWAL OPTIONS. Additional nonqualified stock options have also been
granted to each nonemployee director to purchase 15,000 shares of Epitope
Common Stock ("Renewal Options") as of the December 15 prior to the annual
meeting of shareholders at which the options most recently granted to the
nonemployee director fully vest. Renewal Options vest in three equal annual
installments beginning with the second annual meeting of shareholders
following the date of grant, subject to acceleration of vesting upon the
occurrence of a change in control of the Company. The other terms of Renewal
Options are comparable to those of Initial Options, except that Renewal
Options do not provide for reload options.

AGRITOPE OPTIONS. Mr. Paxton and Mr. Pringle, as nonemployee directors
of Agritope, were each awarded nonqualified options for 50,000 shares of
Agritope common stock under the Agritope Plan. The options have an exercise
price of $5.625 per share, which was equal to 75 percent of the fair market
value of Agritope, Inc. common stock on the date of grant, September 14, 1992,
based on a good faith determination of fair market value by Agritope, Inc.
board of directors. The options are fully vested. Until Agritope, Inc.
ceases to be a wholly owned subsidiary of the Company, shares of Agritope,
Inc. common stock received upon exercise of the foregoing options must be
exchanged for shares of Epitope Common Stock based on a ratio of 2.433 shares
of Agritope, Inc. common stock for each share of Epitope Common Stock.
Accordingly, upon exercise of the foregoing options in full, Messrs. Paxton
and Pringle would each receive a total of 20,552 shares of Epitope Common
Stock, or a corresponding number of shares of Medical Products Stock and
Agritope Stock if the Agritope Stock Proposal is approved.

See "Proposal 3: Amendment of 1991 Stock Award Plan" for an explanation
of the effect of the proposed Award Plan Amendments on Awards to nonemployee
directors.

REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE

The following report of the Executive Compensation Committee of the
Board shall not be deemed to be incorporated by reference into any previous
filing by the Company under either the Securities Act or the Exchange Act that
incorporates future Securities Act or Exchange Act filings in whole or in part
by reference.

GENERAL. The Executive Compensation Committee of the Board, which is
composed of three independent, nonemployee directors, is responsible for
establishing and administering the Company's policies that govern executive
compensation and benefit practices. The Committee evaluates the performance of
the executive officers and determines the salary of the Chief Executive
Officer and annual bonus and related benefits for all executive officers.
Awards to executive officers under the Award Plan are made solely by the
Committee in order to satisfy certain requirements under the Commission's
rules regarding stock transactions with the Company under Section 16 of the
Exchange Act.

COMPENSATION PHILOSOPHY. The Company's executive compensation programs
are designed to (i) align the interests of executive management with the long-
term interests of the shareholders, (ii) motivate Company executives to
achieve the strategic business goals of the Company and recognize their
individual contributions, and (iii) provide compensation opportunities that
are competitive with those offered by other national medical and agricultural
biotechnology companies similar in size and performance to the Company. In
furtherance of these goals, the components of executive compensation include
base salary, merit cash bonuses, stock option grants and other benefits and
are linked to individual performance.

BASE SALARY. At least annually, the Committee sets salaries for
executive officers. Salary levels for other officers are set by the Chief
Executive Officer subject to review and recommendations by the Committee. As
part of its review process, the Committee has considered compensation data
regarding other national biotechnology companies contained in a report by an
outside consultant retained by the Company in fiscal 1995 and in prior years.
The 1995 base salary amounts for executive officers were established at levels
that did not exceed the 50th percentile for comparable-sized biotechnology
companies as reported in the outside consultant's report. For fiscal 1996,
salaries for executive officers were reduced by 5 percent as a part of a
corporate restructuring program.

MERIT CASH BONUSES. Merit bonuses were granted to executive officers in
fiscal 1996 based on a determination that management had achieved performance
goals established at the beginning of the fiscal year.

STOCK OPTION GRANTS. As previously noted, an important goal of the
Company's compensation program is to align the interests of the executive
officers and other key employees with the long-term interests of the Company's
shareholders. In furtherance of this goal, the Board adopted the 1991 Award
Plan, pursuant to which the Company may grant stock-based awards to directors,
officers, and employees of, and consultants and Advisors to, the Company. The
size of individual option grants to executive officers during fiscal 1995 was
determined by the Committee based on the executive's duties and the levels of
option grants for executives with comparable positions at other biotechnology
companies, as summarized in the consultant's report described above. No
grants of stock-based awards were made to executive officers during fiscal
1996.

OTHER COMPENSATION VEHICLES. The Company also has a 401(k) Profit
Sharing Plan (the "401(k) Plan") which allows participants to defer
compensation pursuant to Section 401(k) of the Internal Revenue Code. All
employees of the Company, including executives, are eligible to participate in
the 401(k) Plan if certain qualifications are met. In addition to amounts
that participants may elect to contribute to the 401(k) Plan, the Company
makes matching contributions to the 401(k) Plan in Epitope Common Stock, which
are allocated to all participants. Payments of benefits accrued for 401(k)
Plan participants will be made upon retirement or upon termination of
employment prior to retirement if certain conditions have been met by the
employee prior to termination.

<PAGE>
EXECUTIVE COMPENSATION COMMITTEE:

W. Charles Armstrong, Chairman
R. Douglas Norby
G. Patrick Sheaffer

STOCK PRICE PERFORMANCE GRAPH

The following graph compares the cumulative total returns to investors
in Epitope Common Stock, the Standard & Poors 500 Stock Index, and the Russell
2000 Index for the period from October 1, 1991, through September 30, 1996.
The graph assumes that $100 was invested on September 30, 1991, in Epitope
Common Stock and in each of the above-mentioned indices and that all dividends
were reinvested. The Russell 2000 Index is an index of companies with market
capitalizations similar to that of the Company. It has been selected because
the Company has been unable to identify a peer group of companies for
comparison. No single public or private company has a comparable mix of
technologies under development or products that serve the same markets as the
Company. The Company's management believes that an index of companies with
similar market capitalizations provides a reasonable basis for comparing total
shareholder returns. Shareholders are cautioned that the graph shows the
returns to investors only as of the dates noted and may not be representative
of the returns for any other past or future period.
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG EPITOPE INC., THE S & P 500 INDEX AND THE RUSSELL 2000 INDEX

9/91 9/92 9/93 9/94 9/95 9/96
____ ____ ____ ____ ____ ____

Epitope, Inc. $100 $ 87 $112 $104 $ 73 $ 73

S & P 500 $100 $111 $125 $130 $169 $203

Russell 2000 $100 $109 $145 $149 $184 $208

PRINCIPAL SHAREHOLDERS

The following table sets forth information as of September 30,
1996, regarding the beneficial ownership of Epitope Common Stock by (a) each
person who is known to the Company to be the beneficial owner of more than 5
percent of Epitope Common Stock outstanding, (b) each director and nominee for
election as director, (c) each of the named executive officers, and (d) all
directors and executive officers of the Company as a group.

Amount and Nature
5% Shareholders, Directors of Beneficial Percent of
and Executive Officers Ownership(1)(2) Class
- --------------------------------------------------------------------------
Groupe des Assurances Nationales 1,242,108 9.1%
61 Rue Monceau
Paris 75008 France(3)

W. Charles Armstrong 59,540(4) *

Richard K. Bestwick, Ph.D. 67,382 *

Richard K. Donahue 57,000(4) *

Adolph J. Ferro, Ph.D. 496,901(5) 3.7

John H. Fitchen, M.D. 164,461(4) 1.3

Andrew S. Goldstein 427,921(5) 3.3

Margaret H. Jordan 10,000 *

Gilbert N. Miller 182,961(5) 1.4

R. Douglas Norby 58,750 *

Michael J. Paxton 30,552 *

Roger L. Pringle 114,677 *

G. Patrick Sheaffer 80,000 *

All directors and executive officers
as a group (15 persons) 1,794,545(4)(5) 12.5
- -------------
*Less than 1%

(1) Subject to community property laws where applicable, beneficial
ownership consists of sole voting and investment power except as
otherwise indicated.

(2) Includes shares subject to options and warrants exercisable within 60
days of September 30, 1996, by directors and executive officers as
follows: Mr. Armstrong, 55,000 shares; Dr. Bestwick, 67,382 shares
(including options for 9,750 shares held by his wife); Mr. Donahue,
50,000 shares; Dr. Ferro, 496,061 shares; Dr. Fitchen, 160,133 shares;
Dr. Goldstein, 165,444 shares; Ms. Jordan, 10,000 shares; Mr. Miller,
181,299 shares; Mr. Norby, 55,000 shares; Mr. Paxton, 30,552 shares;
Mr. Pringle, 100,552 shares; Mr. Sheaffer, 67,500 shares; and all
directors and executive officers as a group, 1,454,173 shares.

(3) Includes 595,000 shares subject to warrants exercisable within 60 days
of September 30, 1996 and 128,008 shares issuable upon conversion of
convertible notes.

(4) Includes shares as to which the individual has shared voting and
dispositive power as follows: Mr. Armstrong, 165 shares; Mr. Donahue,
1,000 shares; Dr. Fitchen, 100 shares; and all directors and executive
officers as a group, 2,265 shares.

(5) Does not include 17,035 shares of Epitope Common Stock held in the
401(k) Plan, as to which Messrs. Ferro, Goldstein and Miller share
voting power as trustees of the 401(k) Plan. Messrs. Ferro,
Goldstein and Miller disclaim any economic beneficial interest in such
shares other than the 798, 636, and 711 shares, respectively, allocated
to their individual accounts under the 401(k) Plan.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than 10 percent of the Epitope Common Stock
(collectively, "Reporting Persons") to file reports of ownership and changes
in ownership with the Commission and AMEX. Reporting persons are required by
the Commission's regulations to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely on its review of the copies of such forms and written
representations regarding the absence of a filing requirement received from
Reporting Persons, the Company believes that with respect to the 1996 fiscal
year, all Reporting Persons complied with all applicable filing requirements,
except that T. J. Paulsen, the Company's principal accounting officer until
November 11, 1996, filed one report relating to one transaction after the
filing deadline, and Richard K. Bestwick, Ph.D., and Joseph A. Bouckaert each
filed his initial report of his stockholdings upon becoming an executive
officer of Epitope after the filing deadline.
<PAGE>
CERTAIN TRANSACTIONS

In connection with the December 1987 merger of Agricultural Genetic
Systems, Inc. ("AGS"), with and into Agritope, Inc. Dr. Ferro, as an executive
officer and principal shareholder of AGS, was granted a royalty equal to 4
percent of net sales of products resulting from the technology transferred to
Agritope pursuant to the merger; royalties with respect to a particular
product will be paid for a period equal to the life of the patent on the
product or an equivalent period if a patent is not issued. No such royalties
were paid or payable in fiscal 1996.

In September 1996, the Company extended the expiration date of certain
warrants issued in private placement transactions in September 1991, December
1992, and July and August 1993, to purchase Epitope Common Stock at prices of
$16.00, $16.00, $20.00 and $18.50 per share, respectively. The warrants would
have otherwise expired in September 1996 and March 1997, if not exercised.
The Company extended the expiration date of the warrants to September 30,
1997.

Holders of the warrants included Groupe des Assurances Nationales
("GAN"), which beneficially owns more than 5 percent of the Epitope Common
Stock outstanding. As of September 30, 1996, GAN held 1991 warrants to
purchase 80,000 shares of Epitope Common Stock, 1992 warrants to purchase
270,000 shares of Epitope Common Stock, July 1993 warrants to purchase 195,000
shares of Epitope Common Stock, and August 1993 warrants to purchase 50,000
shares of Epitope Common Stock.

LEGAL OPINIONS

The validity of Agritope Stock has been passed upon by Miller Nash,
Portland, Oregon.

EXPERTS

The financial statements of Epitope, Inc. as of September 30, 1995 and
1996 and for each of the three years in the period ended September 30, 1996,
included in this Prospectus/Proxy Statement have been included in reliance on
the report of Price Waterhouse LLP, independent accountants, given upon the
authority of that firm as experts in auditing and accounting.

FINANCIAL ADVISOR

The Company has retained Vector Securities International, Inc.
("Vector") as the Company's exclusive financial advisor for a period of one
year. Pursuant to this engagement, Vector has provided advisory services to
the Company with respect to with the Agritope Stock Proposal. Vector may also
assist the Company in the solicitation of proxies in connection with the
Annual Meeting. Vector also acted as financial advisor to the Company in
connection with the A&W acquisition transaction.

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP, independent public accountants, examined the
financial statements of the Company for fiscal 1996. No change in independent
public accountants is contemplated for fiscal 1997. The Company expects
representatives of Price Waterhouse LLP to be present at the Annual Meeting
and to be available to respond to appropriate questions from shareholders.
The accountants will have the opportunity to make a statement at the meeting
if they desire to do so.

ANNUAL REPORT

The Company's Annual Report to Shareholders for the fiscal year ended
September 30, 1996, accompanies this Prospectus/Proxy Statement.

DEADLINE FOR SHAREHOLDER PROPOSALS

Shareholders of the Company may submit proposals for inclusion in the
proxy material for the Company's 1998 annual meeting of shareholders. Any
such proposals must meet the shareholder eligibility and other requirements
imposed by rules issued by the Commission and must be received by the Company
at 8505 S.W. Creekside Place, Beaverton, Oregon 97008, Attention: Secretary,
not later than , 1997.

The Company's Bylaws provide that nominations for election to the Board
may be made by the Board or by any shareholder entitled to vote for the
election of directors. Notice of a shareholder's intent to make such a
nomination must be given in writing, by personal delivery or certified mail,
postage prepaid, to the Secretary of the Company and must include the name and
address of the shareholder and each proposed nominee, a representation that
the shareholder is a record holder of common stock and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified
in the notice, a description of any arrangements or understandings pursuant to
which the nominations are to be made, the consent of each proposed nominee to
serve as a director if elected, and such other information regarding each
nominee as would be required to be included in the Company's proxy statement
had the person been nominated by the Board. The notice, with respect to an
election to be held at an annual meeting of shareholders, must be given at
least 60 days in advance of the anniversary of the date of the previous year's
annual meeting of shareholders or, with respect to an election to be held at a
special shareholders meeting, must be given no later than the close of
business on the seventh day following the date on which notice of the meeting
was first given to shareholders.

EXPENSES OF SOLICITATION

Epitope will bear the cost of solicitation of proxies, including the
charges and expenses of brokerage firms and others of forwarding solicitation
material to beneficial owners of stock in connection with the Annual Meeting.
In addition to solicitations by mail, proxies may be solicited by officers and
employees of Epitope in person or by telephone or other means without
additional compensation. Epitope may retain a professional proxy solicitation
firm to assist in the solicitation of proxies at a cost that Epitope estimates
will not exceed $15,000.

OTHER MATTERS

The Board knows of no business to come before the Annual Meeting other
than the matters described in the accompanying Notice of Annual Meeting of
Shareholders. If other business is properly presented for consideration at
the Annual Meeting, the enclosed proxy authorizes the persons named therein to
vote the shares in their discretion.

BY ORDER OF THE BOARD OF DIRECTORS

Andrew S. Goldstein
Secretary
______________________, 1996

<PAGE>
<PAGE>
ANNEX I

EPITOPE, INC.

INDEX OF DEFINED TERMS

Term Page on which Defined

401(k) Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
510(k) Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-11
A&W. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4, III-1
Adjustment Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-8
Agritope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, III-1
Agritope Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agritope Stock Proposal. . . . . . . . . . . . . . . . . . . . . . . . . . .1,
AGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
AIDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
AMEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ASHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7
Available Agritope Dividend Amount . . . . . . . . . . . . . . . . . 34, II-19
Available Dividend Amount. . . . . . . . . . . . . . . . . . . . . . . . . .34
Available Medical Products Dividend Amount . . . . . . . . . . . . . 34, II-20
Award Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Award Plan Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Broker Nonvotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
CDC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, III-1
Convertible Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Convertible Securities . . . . . . . . . . . . . . . . . . . . . . . . . II-20
Corporation Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Disposition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DMR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Effective Date Trading Price . . . . . . . . . . . . . . . . . . . . . . . .30
ELISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3
EPA. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16, III-20, III-12
EpiScreen/OraSure. . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Epitope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, III-1
Epitope Medical Products . . . . . . . . . . . . . . . . . . . . . . .1, III-1
Epitope Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21
FDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20, III-10, III-19
FDA Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-18
FDC Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-11
GAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
HIV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Incorporated Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Initial Subscription Price . . . . . . . . . . . . . . . . . . . . . . . . .49
Initial Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Inter-Group Interest . . . . . . . . . . . . . . . . . . . . . . . . 38, II-23
Inter-Group Interest Fraction . . . . . . . . . . . . . . . . . . . 38, II-24
Inter-Group Shares Issuable. . . . . . . . . . . . . . . . . . . . . 38, II-23
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
ISO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
ISOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
MDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-11
Market Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . II-25
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-26
Medical Products Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Miller Nash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Named Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . .52
Nasdaq National Market . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
NCI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-17
NDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-10
Net Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-26
New Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
NIAID. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-17
OHSU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
OMT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Organon Teknika. . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
OSU. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
OTC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-6
Outstanding Interest Fraction . . . . . . . . . . . . . . . . . . . . . II-26
PACA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-16
PLA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-11
PMA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-19
PMAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-9
PMN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-15
Prospectus/Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . 1
Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Purchase Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchase Plan Amendments . . . . . . . . . . . . . . . . . . . . . . . . . .48
Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Reload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Renewal Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Reporting Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Restriction Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
SAM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-13
SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
SB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20, III-21
SBIR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-17
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
STA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-15
Stock Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
TIN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
TSCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-12
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-26
UAF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III-19
USDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20, III-13
United States Alien. . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
United States Real Property Interest . . . . . . . . . . . . . . . . . . . .42
Vector Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30/59
Vinifera . . . . . . . . . . . . . . . . . . . . . . . . . . .4, III-1, III-19
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
WHO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-2
<PAGE>
ANNEX II

PROPOSED
AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
EPITOPE, INC.

Article V of the Company's Restated Articles of Incorporation is proposed to
be amended and restated to read in its entirety as follows:

ARTICLE V

Description of Capital Stock

A. Authorized Capital Stock

The total number of shares of capital stock which the Corporation
shall be authorized to issue is 101,000,000 shares, divided into classes as
follows:

Title of Class No. of Shares

Epitope Medical Products 60,000,000
Common Stock, no par value
("Medical Products Stock")

Agritope Common Stock 40,000,000
no par value
("Agritope Stock")

Preferred Stock, no par value 1,000,000
("Preferred Stock")

Upon the effectiveness of this Article V, as amended, and without any further
action on the part of the Corporation or its shareholders, each share of the
Corporation's Common Stock, no par value, then issued and outstanding shall be
redesignated as one fully paid and nonassessable share of Medical Products
Stock. The meanings of certain terms used in this Article V are given in
Section E. of this Article V.

B. Description of Preferred Stock

The preferences, limitations, and rights of the shares of
Preferred Stock shall be as follows:

1. Division into Series. The Board of Directors shall have authority
to divide the Preferred Stock into as many series as the Board of Directors
shall from time to time determine, and to issue the Preferred Stock in such
series. The Board of Directors shall determine the number of shares
comprising each series, which number may, unless otherwise provided by the
Board of Directors in creating such series, be increased or decreased from
time to time by action of the Board of Directors. Each series shall be so
designated as to distinguish the shares thereof from the shares of all other
series.

2. Authority of Board of Directors to Determine Preferences,
Limitations, and Relative Rights. The Board of Directors shall have authority
to determine, except as otherwise prescribed in this Article V or by law, the
preferences, limitations, and relative rights, including voting rights, of the
shares of Preferred Stock before the issuance of any shares of such class or
the preferences, limitations, and relative rights, including voting rights, of
the shares of any series of Preferred Stock before the issuance of any shares
of such series. All shares of any such series shall have preferences,
limitations, and relative rights, including voting rights, identical with
those of other shares of the same series and, except to the extent otherwise
provided in the description of such series, of those of other series of the
Preferred Stock.

C. Description of Medical Products Stock and Agritope Stock

The preferences, limitations, and relative rights of the shares of
Medical Products Stock and Agritope Stock shall be as follows:

1. Dividends and Distributions

Subject to the express terms of any outstanding series of
Preferred Stock, dividends may be declared and paid upon Medical Products
Stock or Agritope Stock upon the terms provided for below with respect to each
such class, in such amounts and at such times as the Board of Directors may
determine.

a. Dividends on Medical Products Stock. Dividends on Medical
Products Stock may be declared and paid only out of the lesser of (a) assets
of the Corporation legally available therefor and (b) the Available Medical
Products Dividend Amount.

b. Dividends on Agritope Stock. Dividends on Agritope Stock
may be declared and paid only out of the lesser of (a) assets of the
Corporation legally available therefor and (b) the Available Agritope Dividend
Amount.

c. Discretion as to Dividend Amounts. Subject to the
provisions of paragraphs V.C.1.a. and V.C.1.b., the Board of Directors shall
have the authority to declare and pay dividends exclusively on either class of
common stock or on both classes of common stock in equal or unequal amounts,
notwithstanding the amounts available for the payment of dividends on each
class of common stock, the respective voting and liquidation of rights of each
class of common stock, the amounts of prior dividends declared on each class
or any other factor.

d. Share Dividends. Subject to paragraphs V.C.1.a or V.C.1.b,
as the case may be, and except as permitted by paragraphs V.C.2.a and
V.C.2.b.1, the Board of Directors may declare and pay dividends or
distributions of shares of common stock of a group (or Convertible Securities
convertible into or exchangeable or exercisable for shares of common stock of
a group) on shares of common stock or shares of Preferred Stock only as
follows:

(i) dividends or distributions of shares of Agritope Stock
(or Convertible Securities convertible into or exchangeable or
exercisable for shares of Agritope Stock) on shares of Agritope Stock;

(ii) dividends or distributions of shares of Medical
Products Stock (or Convertible Securities convertible into or
exchangeable or exercisable for shares of Medical Products Stock) on
shares of Medical Products Stock;

(iii) dividends or distributions of shares of Medical
Products Stock (or Convertible Securities convertible into or
exchangeable or exercisable for shares of Medical Products Stock) on
shares of Agritope Stock, but only if the number of shares of Medical
Products Stock to be issued (or the number of such shares which would be
issuable upon conversion, exchange or exercise of any Convertible
Securities to be so issued) is less than or equal to the Inter-Group
Shares Issuable with respect to the Inter-Group Interest in Epitope
Medical Products; and

(iv) dividends or distributions of shares of Agritope Stock
(or Convertible Securities convertible into or exchangeable or
exercisable for shares of Agritope Stock) on shares of Medical Products
Stock, but only if the number of shares of Agritope Stock to be so
issued (or the number of such shares which would be issuable upon
conversion, exchange or exercise of any Convertible Securities to be so
issued) is less than or equal to the Inter-Group Shares Issuable with
respect to the Inter-Group Interest in Agritope.

2. Exchange of Stock.

Shares of common stock of each Group are subject to exchange upon
the terms and conditions set forth below:

a. Optional Exchange. At any time after February 28, 1999, the
Board of Directors may determine to exchange each outstanding share of a
Group's stock for (i) a number of fully paid and nonassessable shares of the
second Group's stock equal to (x) 115 percent of the Average Market Value of
one share of the first Group's Stock (the "Exchange Amount") divided by
(y) the Average Market Value of one share of the second Group's Stock, or
(ii) cash equal to the Exchange Amount, or (iii) any combination of the Second
Group's stock and cash, as determined by the Board of Directors, equal to the
Exchange Amount. In each case, Average Market Value shall be calculated
during the 20-Trading Day period prior to the date of the first public
announcement by the Corporation of the exchange.

b. Mandatory Dividend, Redemption or Exchange in Case of
Disposition of All or Substantially All Group Assets. In the event of the
Disposition, in one transaction or a series of related transactions, by the
Corporation and/or its subsidiaries of all or substantially all the properties
and assets of either Group to one or more persons, entities or groups (other
than (w) the Disposition by the Corporation of its properties and assets in
one transaction or a series of related transactions in connection with the
dissolution, liquidation and winding up of the Corporation and the
distribution of assets to shareholders as referred to in Section V.C.5, (x) in
connection with the Disposition by the Corporation of all the Corporation's
properties and assets in one transaction or a series of related transactions,
(y) to any person, entity or group in which the Corporation, directly or
indirectly, after giving effect to the Disposition, owns all the equity
interest or (z) in connection with a Related Business Transaction), the
Corporation shall, on or prior to 85th Trading Day after the consummation of
such Disposition (the "Group Disposition Date"), at the Corporation's
election, either:

(1) providing that there are funds of the Corporation legally
available therefor:

(A) subject to paragraphs V.C.1.a. and V.C.1.b., declare and pay a
dividend in cash and/or in securities (other than a dividend or distribution
of common stock) or other property to the holders of the outstanding shares of
the Affected Group's stock, having a Fair Value as of the Group Disposition
Date in the aggregate amount equal to the product of the applicable
Outstanding Interest Fraction as of the record date for determining the
holders entitled to receive such dividend multiplied by the Fair Value of the
Net Proceeds of such Disposition; or

(B)(i) subject to the last sentence of this paragraph
V.C.2.b, if such Disposition involves all (not merely substantially all) the
properties and assets of the Affected Group, redeem as of the Redemption Date
all outstanding shares of the Affected Group's stock in exchange for cash
and/or securities (other than common stock) or other property having a Fair
Value as of the Group Disposition Date in the aggregate equal to the product
of the Outstanding Interest Fraction of the Affected Group as of such
Redemption Date and the Net Proceeds of such Disposition; or

(B)(ii) subject to the last sentence of this paragraph
V.C.2.b, if such Disposition involves substantially all (but not all) of the
properties and assets of the Affected Group, apply an aggregate amount of cash
and/or securities (other than common stock) or other property equal to the
product of the Outstanding Interest Fraction of the Affected Group as of the
date shares are selected for redemption multiplied by the Fair Value of the
Net Proceeds of such Disposition as of the Group Disposition Date, to the
redemption of outstanding shares of the Affected Group's stock; the number of
shares to be redeemed to equal the lesser of (x) the whole number of shares
nearest the number determined by dividing the aggregate amount so applied to
the redemption of such stock by the Average Market Value of one share of the
Affected Group's stock during the 10-Trading Day period beginning on the 16th
Trading Day following the Group Disposition Date and (y) the number of shares
of the Affected Group's stock outstanding; or

(2) exchange each outstanding share of the Affected Group's stock
for a number (or fraction) of fully paid and nonassessable shares of the other
Group's stock equal to 115 percent of the ratio, expressed as a decimal
fraction rounded to the nearest seven decimal places, of the Average Market
Value of one share of the Affected Group's stock to the Average Market Value
of one share of common stock of the other group, which Average Market Values
shall be determined as of the 10-Trading Day period described in clause B(ii)
of this paragraph V.C.2.b.

For purposes of this paragraph V.C.2.b.:

(x) "substantially all the properties and assets" of a Group
means a portion of the properties and assets attributed to the Group that
represents at least 80% of the Fair Value of the properties and assets
attributed to the Group as of the date of determination;

(y) in the case of a Disposition of properties and assets of a
Group in a series of related transactions, the Disposition shall not be deemed
to have been consummated until the consummation of the last of the
transactions; and

(z) the Corporation may pay the dividend or redemption price
referred to in clause (1) of this paragraph V.C.2.b. (other than common stock)
or other property, regardless of the form or nature of the proceeds of the
Disposition.

Notwithstanding the provisions of this paragraph V.C.2.b., the Corporation
shall redeem common stock of the Affected Group only if the amount to be paid
in redemption of such stock is less than or equal to the Available Agritope
Dividend Amount (with respect to Agritope Stock) or the Available Medical
Products Dividend Amount (with respect to Medical Products Stock).

c. Notices and Announcements. (1) Not later than the tenth
Trading Day following the consummation of a Disposition referred to in
paragraph V.C.2.b., the Corporation shall announce publicly by press release
(A) the Net Proceeds of the Disposition, (B) the number of outstanding shares
of the Affected Group's stock, (C) the number of shares of the Affected
Group's stock into or for which Convertible Securities are then convertible,
exercisable or exchangeable and the conversion, exercise or exchange prices
thereof; and (D) the Outstanding Interest Fraction as of a recent date
preceding the date of such notice. Not earlier than the 26th Trading Day and
not later than the 30th Trading Day following the consummation of the
Disposition, the Company shall announce publicly by press release which of the
actions specified in clauses (1) or (2) of paragraph V.C.2.b., it has
irrevocably determined to take in respect of such Disposition.

(2) If the Corporation determines to pay a dividend pursuant to clause
(1)(A) of paragraph V.C.2.b., the Corporation shall, not later than the 30th
Trading Day following the consummation of the Disposition, cause to be given
to each holder of record of outstanding shares of the Affected Group's stock
and to each holder of record of Convertible Securities convertible into or
exercisable or exchangeable for shares of the Affected Group's stock (unless
alternate provision for notice to the holders of the Convertible Securities is
made pursuant to the terms of the Convertible Securities), a notice setting
forth (A) the record date for determining holders entitled to receive the
dividend, which shall not be earlier than the 40th Trading Day and not later
than the 50th Trading Day following the consummation of the Disposition, (B)
the anticipated payment date of the dividend (which shall not be more than 85
Trading Days following the consummation of the Disposition), (C) the kind of
shares of capital stock, cash and/or other securities or property to be
distributed in respect of shares of the Affected Group's stock, (D) the Net
Proceeds of the Disposition, (E) the Outstanding Interest Fraction as of a
recent date preceding the date of the notice, (F) the number of outstanding
shares of the Affected Group's stock and the number of shares of the Affected
Group's stock into or for which outstanding Convertible Securities are then
convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof and (G) in the case of a notice to holders of
Convertible Securities, a statement to the effect that a holder of such
Convertible Securities shall be entitled to receive such dividend only if the
holder properly converts, exercises or exchanges such Convertible Securities
on or prior to the record date referred to in clause (A) of this sentence.
Such notice shall be sent by first-class mail, postage prepaid, to each such
holder at the holder's address appearing on the transfer books of the
Corporation.

(3) If the Corporation determines to undertake a redemption of shares of
the Affected Group's stock following a Disposition of all (not merely
substantially all) of the properties and assets of the Affected Group pursuant
to clause (1)(B)(i) of paragraph V.C.2.b., the Corporation shall, not earlier
than the 35th Trading Day and not later than the 45th Trading Day prior to the
Redemption Date, cause to be given to each holder of record of outstanding
shares of the Affected Group's stock and to each holder of record of
Convertible Securities convertible into or exercisable or exchangeable for
shares of the Affected Group's stock (unless alternate provision for notice to
the holders of the Convertible Securities is made pursuant to the terms of the
Convertible Securities), a notice setting forth (A) a statement that all
shares of the Affected Group's stock outstanding on the Redemption Date shall
be redeemed, (B) the Redemption Date (which shall not be more than 85 Trading
Days following the consummation of the Disposition), (C) the kind of shares of
capital stock, cash and/or other securities or property to be paid as a
redemption price in respect of shares of the Affected Group's stock
outstanding on the Redemption Date, (D) the Net Proceeds of the Disposition,
(E) the Outstanding Interest Fraction as of a recent date preceding the date
of such notice, (F) the place or places where certificates for shares of the
Affected Group's stock, properly endorsed or assigned for transfer (unless the
Corporation waives such requirement), are to be surrendered for delivery of
certificates for shares of such capital stock, cash and/or other securities or
property, (G) the number of outstanding shares of the Affected Group's stock
and the number of shares of the Affected Group's stock into or for which
Convertible Securities are then convertible, exercisable or exchangeable and
the conversion, exercise or exchange prices thereof, (H) in the case of a
notice to holders of Convertible Securities, a statement to the effect that a
holder of the Convertible Securities shall be entitled to participate in its
redemption only if the holder properly converts, exercises or exchanges the
Convertible Securities on or prior to the Redemption Date and a statement as
to what, if anything, the holder shall be entitled to receive if the holder
converts, exercises or exchanges the Convertible Securities following the
Redemption Date, and (I) a statement to the effect that, except as otherwise
provided in this Article V, dividends on such shares of such common stock
shall cease to be paid as of the Redemption Date. Such notice shall be sent
by first class mail, postage prepaid, to each holder at such holder's address
appearing on the transfer books of the Corporation.

(4) If the Corporation determines to undertake a redemption of shares of
the Affected Group's stock following a Disposition of substantially all (but
not all) of the properties and assets of a Group pursuant to clause (1)(B)(ii)
of paragraph V.C.2.b., the Corporation shall, not later than the 30th Trading
Day following the consummation of the Disposition, cause to be given to each
holder of record of outstanding shares of the Affected Group's stock, and to
each holder of record of Convertible Securities convertible into or
exercisable or exchangeable for shares of the Affected Group's stock (unless
alternate provision for notice to the holders of the Convertible Securities is
made pursuant to the terms of the Convertible Securities), a notice setting
forth (A) a date not earlier than the 40th Trading Day and not later than the
50th Trading Day following the consummation of the Disposition which shall be
the date on which shares of the Affected Group's stock then outstanding shall
be selected for redemption, (B) the anticipated Redemption Date (which shall
not be more than 85 Trading Days following the consummation of such
Disposition), (C) the kind of shares of capital stock, cash and/or other
securities or property to be paid as a redemption price in respect of shares
of the Affected Group's stock selected for redemption, (D) the Net Proceeds of
the Disposition, (E) the Outstanding Interest Fraction as of a recent date
preceding the date of the notice, (F) the number of outstanding shares of the
Affected Group's stock and the number of shares of the Affected Group's stock
into or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion or exercise prices thereof, (G)
in the case of a notice to holders of Convertible Securities, a statement to
the effect that a holder of the Convertible Securities shall be entitled to
participate in such selection for redemption only if the holder appropriately
converts, exercises or exchanges the Convertible Securities on or prior to the
date referred to in clause (A) of this sentence and a statement as to what, if
anything, the holder shall be entitled to receive if the holder converts,
exercises or exchanges such Convertible Securities following such date and (H)
a statement that the Corporation will not be required to register a transfer
of any shares of the Affected Group's stock for a period of 15 Trading Days
next preceding the date referred to in clause (A) of this sentence. Promptly
following the date referred to in clause (A) of the preceding sentence, but
not earlier than the 40th Trading Day and not later than the 50th Trading Day
following the consummation of the Disposition, the Corporation shall cause to
be given to each holder of shares of the Affected Group's stock to be so
redeemed, a notice setting forth (1) the number of shares of the Affected
Group's stock held by the holder to be redeemed, (2) a statement that such
shares of the Affected Group's stock shall be redeemed, (3) the Redemption
Date (which shall not be more than 85 Trading Days following the consummation
of the Disposition), (4) the kind and per share amount of shares of capital
stock, cash and/or other securities or property to be received by the holder
with respect to each share of the Affected Group's stock to be redeemed,
including details as to the calculation thereof, (5) the place or places where
certificates for shares of the Affected Group's stock, properly endorsed or
assigned for transfer (unless the Corporation waives the requirement), are to
be surrendered for delivery of certificates for shares of such capital stock,
cash and/or other securities or property, (F) if applicable, a statement to
the effect that the shares being redeemed may no longer be transferred on the
transfer books of the Company after the Redemption Date, and (G) a statement
to the effect that, except as otherwise provided in this Article V, dividends
on such shares of the Affected Group's stock will cease to be paid as of the
Redemption Date. The notices referred to in this clause (4) shall be sent by
first-class mail, postage prepaid, to each holder at the holder's address
appearing on the transfer books of the Corporation. If less than all of the
outstanding shares of the Affected Group's stock are to be redeemed pursuant
to clause (1)(B)(ii) of paragraph V.C.2.b., the shares shall be redeemed by
the Corporation pro rata among the holders of the Affected Group's stock or by
such other method as may be determined by the Board of Directors to be
equitable.

(5) In the event of any exchange pursuant to paragraph V.C.2.a., or
pursuant to clause (2) of paragraph V.C.2.b., the Corporation shall not
earlier than the 35th Trading Day and not later than the 45th Trading Day
prior to the Exchange Date cause to be given to each holder of record of
outstanding shares of the Affected Group's stock and to each holder of record
of Convertible Securities convertible into or exercisable or exchangeable for
shares of the Affected Group's stock (unless alternate provision for notice to
the holders is made pursuant to the terms of the Convertible Securities), a
notice setting forth (A) a statement that all outstanding shares of the
Affected Group's stock shall be exchanged, (B) the Exchange Date (which shall
not be more than 85 Trading Days following the consummation of the Disposition
in the event of an exchange pursuant to clause (2) of paragraph V.C.2.b., and
which shall not be more than 85 Trading Days after the date as of which
Average Market Value is determined in the event of an exchange pursuant to
paragraph V.C.2.a, (C) the per share number of shares of the other Group's
stock to be received with respect to each share of the Affected Group's stock
including details as to the calculation thereof, (D) the place or places where
certificates for shares of the Affected Group's stock properly endorsed or
assigned for transfer (unless the Corporation shall waive the requirement),
are to be surrendered for delivery of certificates for shares or such common
stock, (E) the number of outstanding shares of the Affected Group's stock and
the number of shares of the Affected Group's stock into or for which
outstanding Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange prices thereof, (F) a
statement to the effect that, except as provided in this Article V, dividends
on such shares of the Affected Group's stock will cease to be paid as of the
Exchange Date, and (G) in the case of a notice to holders of Convertible
Securities, a statement to the effect that holders of the Convertible
Securities shall be entitled to participate in the exchange only if the
holders appropriately convert, exercise or exchange the Convertible Securities
on or prior to the Exchange Date referred to in clause (B) of this sentence
and a statement as to what, if anything, the holders shall be entitled to
receive if such holders convert, exercise or exchange the Convertible
Securities following the Exchange Date. The notice shall be sent by
first-class mail, postage prepaid, to each holder, at the holder's address
appearing on the transfer books of the Corporation.

(6) Neither the failure to mail any notice required by this paragraph
V.C.2.c., to any particular holder the Affected Group's stock or Convertible
Securities nor any defect therein shall affect the sufficiency thereof with
respect to any other holder or the validity of any exchange or redemption.

d. General Provisions Regarding Exchange or Redemption.
(1) The Corporation shall not be required to issue or deliver fractional
shares of any class of capital stock or any fractional securities to any
holder of any class of common stock upon any exchange, redemption, dividend or
other distribution pursuant to this Section V.C.2. In connection with the
determination of the number of shares of any class of capital stock that shall
be issuable or the amount of securities that shall be deliverable to any
holder of record upon any such exchange, redemption, dividend or other
distribution (including any fractions of shares or securities), the
Corporation may aggregate the number of shares of the Affected Group's stock
held at the relevant time by such holder of record. If the number of shares of
any class of capital stock or the amount of securities remaining to be issued
or delivered to any record holder of the Affected Group's stock is a fraction,
the Corporation shall, if the fraction is not issued or delivered to the
holder, pay a cash adjustment in respect of the fraction in an amount equal to
the Fair Value of the fraction on the fifth Trading Day prior to the date such
payment is to be made (without interest).

(2) No adjustments in respect of dividends shall be made upon the
exchange or redemption of any shares of the Affected Group's stock; provided,
however, that if the Exchange Date or the Redemption Date, as the case may be,
with respect to the Affected Group's stock shall be subsequent to the record
date for the payment of a dividend or other distribution thereon or with
respect thereto, the holders of shares of the Affected Group's stock at the
close of business on such record date shall be entitled to receive the
dividend or other distribution payable on or with respect to such shares on
the date set for payment of such dividend or other distribution, in each case
without interest, notwithstanding the subsequent exchange or redemption of
such shares.

(3) Before any holder of shares of the Affected Group's stock shall be
entitled to receive certificates representing shares of any kind of capital
stock or cash and/or securities or other property to be received by such
holder with respect to shares of the Affected Group's stock pursuant to this
paragraph V.C.2., the holder shall surrender at such place as the Corporation
shall specify certificates for shares of the Affected Group's stock, properly
endorsed or assigned for transfer (unless the Corporation shall waive the
requirement). The Corporation shall as soon as practicable after the surrender
of certificates representing shares of the Affected Group's stock deliver to
the person for whose account shares of the Affected Group's stock were so
surrendered, or to the nominee or nominees of that person, certificates
representing the number of whole shares of the kind of capital stock or cash
and/or securities or other property to which that person shall be entitled,
together with any payment for fractional securities contemplated by paragraph
V.C.2.d.1. If less than all of the shares of the Affected Group's stock
represented by any one certificate are to be redeemed, the Corporation shall
issue and deliver a new certificate for the shares of the Affected Group's
stock not redeemed. The Corporation shall not be required to register a
transfer of (1) any shares of the Affected Group's stock for a period of 15
Trading Days next preceding any selection of shares of the Affected Group's
stock to be redeemed or (2) any shares of the Affected Group's stock selected
or called for redemption.

(4) From and after any applicable Exchange Date or Redemption Date, as
the case may be, all rights of a holder of shares of the Affected Group's
stock that were exchanged or redeemed shall cease except for the right, upon
surrender of the certificates representing shares of the Affected Group's
stock, to receive certificates representing shares of the kind and amount of
capital stock or cash and/or securities or other property for which such
shares were exchanged or redeemed, together with any payment for fractional
securities and rights to dividends as provided above, in each case without
interest, and the holder shall have no other or further rights in respect of
the shares so exchanged or redeemed, including, but not limited to, any rights
with respect to any cash, securities or other properties which are reserved or
otherwise designated by the Company as being held for the satisfaction of the
Company's obligations to pay or deliver any cash, securities or other property
upon the conversion, exercise or exchange of any Convertible Securities
outstanding as of the date of such conversion or redemption. No holder of a
certificate that, immediately prior to the applicable Exchange Date or
Redemption Date for the Affected Group's stock, represented shares of the
Affected Group's stock shall be entitled to receive any dividend or other
distribution with respect to shares of any kind of capital stock in exchange
for which the Affected Group's stock was exchanged or redeemed until surrender
of the holder's certificate for a certificate or certificates representing
shares of that kind of capital stock. Upon surrender, there shall be paid to
the holder the amount of any dividends or other distributions (without
interest) which theretofore became payable with respect to a record date
before the Exchange Date or Redemption Date, as the case may be, but that were
not paid by reason of the foregoing, with respect to the number of whole
shares of the kind of capital stock represented by the certificate or
certificates issued upon such surrender. From and after an Exchange Date or
Redemption Date, as the case may be, for any shares of the Affected Group's
stock, the Corporation shall, however, be entitled to treat the certificates
for shares of the Affected Group's stock that have not yet been surrendered
for exchange or redemption as evidencing the ownership of the number of whole
shares of the kind or kinds of capital stock for which the shares of the
Affected Group's stock represented by the certificates shall have been
exchanged or redeemed, notwithstanding the failure to surrender the
certificates.

(5) The Corporation shall pay any and all documentary, stamp or similar
issue or transfer taxes that may be payable in respect of the issue or
delivery of any shares of capital stock and/or other securities on exchange or
redemption of shares of the Affected Group's stock. The Corporation shall not,
however, be required to pay any tax that may be payable in respect of any
transfer involved in the issue and delivery of any shares of capital stock
and/or other securities in a name other than that in which the shares of the
Affected Group's stock so exchanged or redeemed were registered and no such
issue or delivery shall be made unless and until the person requesting the
issue has paid to the Corporation the amount of any such tax, or has
established to the satisfaction of the Corporation that the tax has been paid.

(6) The date by which any notice is required to be given or any action
taken by the Corporation under this paragraph V.C.2. may be extended by any
reasonable time determined by the Board of Directors as being necessary to
allow the Corporation to take action required to comply with securities or
other applicable law.

(7) The Board of Directors may establish such rules and requirements to
facilitate the effectuation of the transactions contemplated by this
subsection as the Board of Directors shall determine to be appropriate.

e. Effect on Convertible Securities. After any Exchange Date
or Redemption Date on which all outstanding shares of a Group's stock were
exchanged or redeemed, any share of the Affected Group's stock issued upon
conversion, exercise or exchange of any Convertible Security shall,
immediately upon issuance pursuant to such conversion or exercise and without
any notice or any other action on the part of the Corporation or its Board of
Directors or the holder of such share of the Affected Group's stock, be
redeemed for the kind and amount of capital shares of stock, cash and/or other
securities or property that a holder of such Convertible Securities would have
been entitled to receive pursuant to the terms of such Convertible Securities
had such terms provided that the conversion, exercise or exchange privilege in
effect immediately prior to any such exchange or redemption of all outstanding
shares of a Group's common stock would be adjusted so that the holder of any
such Convertible Securities thereafter surrendered for conversion, exercise or
exchange would be entitled to receive the kind and amount of shares of capital
stock, cash and/or other securities or property such holder would have
received as a result of such action had such Convertible Securities been
converted, exercised or exchanged immediately prior thereto. The foregoing
provisions shall not apply to the extent that equivalent adjustments are
otherwise made pursuant to the provisions of such Convertible Security.

3. Voting Rights

a. Medical Products Stock. The holders of Medical Products
Stock, voting together with the holders of Agritope Stock as a single voting
group, shall have the exclusive right to vote for the election of directors
and on all matters requiring action by the shareholders or submitted to the
shareholders for action, except as may be determined by the Board of Directors
in establishing any series of Preferred Stock or as may otherwise be required
by law or this Article V. Each share of Medical Products Stock shall entitle
the holder thereof to one vote.

b. Agritope Stock. The holders of Agritope Stock, voting
together with the holders of Medical Products Stock as a single voting group,
shall have the exclusive right to vote for the election of directors and on
all other matters requiring action by the shareholders or submitted to the
shareholders for action, except as may be determined by the Board of Directors
in establishing any series of Preferred Stock or as may otherwise be required
by law or this Article V. Each share of Agritope Stock shall entitle the
holder thereof to a variable number of votes (which may be more than, equal to
or less than one) equal to the ratio (expressed as a decimal and rounded to
the nearest seven decimal places) of the Average Market Value of one share of
Agritope Stock during the 20-Trading Day period immediately preceding the
record date for the matter to be acted on, to the Average Market Value of one
share of Medical Products Stock during that period. If no shares of Medical
Products Stock are outstanding on that record date, each share of Agritope
Stock shall have one vote.

c. Special Voting Rights. The Corporation shall not, without
approval by the holders of the affected class of common stock at a meeting at
which a quorum is present and the votes cast in favor of the proposal exceed
those cast against:

(i) allow any proceeds from the Disposition of the
properties or assets allocated to any Group represented by such class of
common stock to be used in the business of the other Group without fair
compensation being allocated to the Group whose properties or assets are
disposed of as determined by the Board of Directors; or

(ii) issue, sell or otherwise distribute shares of either
class of common stock without allocating the proceeds or other benefits of
such issuance, sale or distribution to the Group represented by such class of
common stock unless such allocation is made in respect of the reduction of an
Inter-Group Interest.

4. Application of the Provisions of Article V

a. Certain Determinations by the Board of Directors. The Board
of Directors shall make such determinations with respect to the assets and
liabilities to be attributed to the Groups, the items of income and expenses
attributed to the Groups for purposes of determining the Earnings (Loss)
Attributable to the Groups and the application of the provisions of this
section V.C.4. to transactions to be engaged in by the Corporation and the
powers, preferences and relative, participating, optional and other special
rights of the holders of the classes of common stock of the Groups, and the
qualifications and restrictions thereon, provided by these Restated Articles
of Incorporation as may be or become necessary or appropriate to the exercise
of such powers, preferences and relative, participating, optional and other
special rights, including, without limiting the foregoing, the determinations
referred to in the following paragraphs (1), (2), (3), and (4) of this
paragraph V.C.4.a. A record of any such determination shall be filed with the
records of the actions of the Board of Directors.

(1) Upon any acquisition by the Corporation or its subsidiaries of any
assets or business, or any assumption of liabilities, outside of the ordinary
course of business of Agritope or Epitope Medical Products, as the case may
be, the Board of Directors shall determine whether such assets, business and
liabilities (or an interest therein) shall be for the benefit of Epitope
Medical Products or Agritope or whether an interest therein shall be partly
for the benefit of Epitope Medical Products and partly for the benefit of
Agritope and, accordingly, shall be attributed to Epitope Medical Products or
Agritope, or partly to each.

(2) Upon any issuance of any shares of (x) Agritope Stock at a time
when the Inter-Group Shares Issuable with respect to the Inter-Group Interest
in Agritope is more than zero or (y) Medical Products Stock at a time when the
Inter-Group Shares Issuable with respect to the Inter-Group Interest in
Epitope Medical Products is more than zero, the Board of Directors shall
determine, based on the use of the proceeds of such issuance and any other
relevant factors, whether all or any part of the shares of Agritope Stock or
Medical Products Stock so issued should reduce the Inter-Group Shares Issuable
with respect to the applicable Inter-Group Interest and the Inter-Group Shares
Issuable with respect to the applicable Inter-Group Interest shall be adjusted
accordingly.

(3) Upon any issuance by the Corporation or any subsidiary thereof of
any Convertible Securities that are convertible into or exchangeable or
exercisable for shares of Agritope Stock or Medical Products Stock, if at the
time such Convertible Securities are issued the Inter-Group Shares Issuable
with respect to an Inter-Group Interest in Agritope or Epitope Medical
Products, respectively, is greater than zero, the Board of Directors shall
determine whether, upon conversion, exchange or exercise thereof, the issuance
of shares of Agritope Stock or Medical Products Stock, as the case may be,
pursuant thereto shall, in whole or in part, reduce the Inter-Group Shares
Issuable with respect to the applicable Inter-Group Interest, taking into
consideration the use of the proceeds of such issuance of Convertible
Securities in the business of Agritope or Epitope Medical Products and any
other relevant factors.

(4) Upon any redemption or repurchase by the Corporation or any
subsidiary thereof of shares of any Preferred Stock of any class or series or
of other securities or debt obligations of the Corporation, if some of such
shares, other securities or debt obligations were attributed to Agritope and
some of such shares, other securities or debt obligations were attributed to
Epitope Medical Products, the Board of Directors shall determine which, if
any, of such shares, other securities or debt obligations redeemed or
repurchased shall be attributed to Agritope and which, if any, of such shares,
other securities or debt obligations shall be attributed to Epitope Medical
Products and, accordingly, how many of the shares of such series of Preferred
Stock or of such other securities, or how much of such debt obligations, that
remain outstanding, if any, continue to be attributed to Agritope or Epitope
Medical Products.

b. Certain Determinations Not Required. Notwithstanding the
foregoing provisions of this Section V.C.4. or any other provision of this
Article V, at any time when there are not outstanding both (i) one or more
shares of Agritope Stock or Convertible Securities convertible into or
exchangeable or exercisable for Agritope Stock and (ii) one or more shares of
Medical Products Stock or Convertible Securities convertible into or
exchangeable or exercisable for Medical Products Stock, the Corporation
(A) need not attribute any of the assets or liabilities of the Corporation or
any of its subsidiaries to Epitope Medical Products or Agritope or any of the
earnings (or any loss) of the Corporation or any of its subsidiaries to
Epitope Medical Products or Agritope or (B) make any determination required in
connection therewith, nor shall the Board of Directors be required (C) to make
any of the determinations otherwise required by this Article V, and in such
circumstances the holders of the shares of Medical Products Stocks or Agritope
Stock outstanding, as the case may be, shall (unless otherwise specifically
provided by these Restated Articles of Incorporation) be entitled to all the
voting powers, preferences, optional or other special rights of both classes
of common stock without differentiation between Medical Products Stock and
Agritope Stock and any provision of this Article V to the contrary shall no
longer be in effect or operative.

5. Liquidation, Dissolution or Winding Up

Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the rights of the holders of Medical Products
Stock and Agritope Stock shall be as follows:

a. After the Corporation has satisfied or made provision for
its debts and obligations and for the payment to the holders of shares of any
class or series of capital stock having preferential rights to receive
distributions of the net assets of the Corporation (including any accumulated
and unpaid dividends), (i) the holders of Agritope Stock shall share equally,
on a share for share basis, in a percentage of the funds of the Corporation
remaining for distribution to its common shareholders equal to 100% multiplied
by the average daily ratio (expressed as a decimal) of X/Z for the 20-Trading
Day period ending on the Trading Day prior to the date of the public
announcement of such liquidation, dissolution or winding up, and (ii) the
holders of the Medical Products Stock shall share equally, on a share for
share basis, in a percentage of the funds of the Corporation remaining for
distribution to its common shareholders equal to 100% multiplied by the
average daily ratio (expressed as a decimal) of Y/Z for such 20-Trading Day
period, where X is the aggregate Market Capitalization of the Agritope Stock,
Y is the aggregate Market Capitalization of the Medical Products Stock, and Z
is the aggregate Market Capitalization of the Agritope Stock and the Medical
Products Stock.

b. For the purposes of paragraph V.C.5.a., any merger or
business combination involving the Corporation or any sale of all or
substantially all of the assets of the Corporation as a going concern shall
not be treated as a liquidation, dissolution or winding up.

6. Rank

Medical Products Stock and Agritope Stock shall rank junior with
respect to the payment of dividends and the distribution of assets to all
series of the Corporation's Preferred Stock that specifically provide that
they shall rank prior to Medical Products Stock and Agritope Stock. Nothing
herein shall preclude the Board from creating any series of Preferred Stock
ranking on a priority with or prior to Medical Products Stock and Agritope
Stock as to the payment of dividends or the distribution of assets.

7. Determinations by the Board of Directors

Any determinations with respect to any Group or the rights of
holders of any series of common stock made by the Board of Directors of the
Corporation in good faith pursuant to or in furtherance of any provision of
this Article V shall be final and binding on all shareholders of the
Corporation.

D. No Preemptive Rights

No shareholder shall have any preemptive right to acquire
additional shares of the Corporation, whether of shares originally authorized
or other shares which may subsequently be authorized.

E. Definitions

As used in this Article V, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meaning when used in the plural and vice versa), unless another definition is
provided or the context otherwise requires:

1. "Affected Group" means the Group (i) the assets of which are the
subject of a Disposition, or (ii) the common stock of which will cease to be
outstanding as a result of any optional or mandatory exchange.

2. "Agritope" shall mean, at any time, the Group representing the
Corporation's interest in (i) the businesses, products, development programs
or research projects of Agritope, Inc., an Oregon corporation, Andrew and
Williamson Sales, Co., Vinifera, Inc., an Oregon corporation, and any other
agricultural production or agricultural biotechnology business that may be
conducted by the Corporation in the future, (ii) all assets and liabilities of
the Corporation (other than capital stock of a subsidiary) on such date
attributed by the Board of Directors to Agritope or the businesses thereof,
whether or not such assets or liabilities are or were also assets and
liabilities of Agritope, including, without limitation, the assets and
liabilities as of the Effective Date specified in the schedules filed with the
records of the actions of the Board of Directors, (iii) a proportionate
undivided interest in each and every business, asset and liability attributed
to Epitope Medical Products equal to the Inter-Group Interest Fraction in
Epitope Medical Products as of such date, (iv) all properties and assets
transferred to Agritope from Epitope Medical Products (other than pursuant to
paragraph (e)(2)(v) of this Section V.E. after the Effective Date pursuant to
transactions in the ordinary course of business of both Agritope and Epitope
Medical Products or otherwise as the Board of Directors may have directed as
permitted by this Article V, (v) all properties and assets transferred to
Agritope from Epitope Medical Products in connection with a reduction of the
Inter-Group Shares Issuable with respect to the Inter-Group Interest in
Epitope Medical products, (vi) the interest of the Corporation or any of its
subsidiaries in any business or asset acquired and any liabilities assumed by
the Corporation or any of its subsidiaries outside the ordinary course of
business and attributed to Agritope, as determined by the Board of Directors ,
and (vii) from and after the payment date of any dividend or other
distribution with respect to shares of Medical Products Stock (other than a
dividend or other distribution payable in shares of Medical Products Stock,
with respect to which adjustment shall be made as provided in clause (A) of
the definition of "Inter-Group Shares Issuable," an amount of assets or
properties previously attributed to Epitope Medical Products of the same kind
as were paid in such dividend or other distribution with respect to shares of
Medical Products Stock as have a Fair Value on the record date for such
dividend or distribution equal to the product of (1) the Fair Value on such
record date of the aggregate of such dividend or distribution to holders of
shares of Epitope Medical Products declared multiplied by (2) a fraction the
numerator of which is equal to the Inter-Group Interest Fraction in Epitope
Medical Products in effect on the record date for such dividend or
distribution and the denominator of which is equal to the Outstanding Interest
Fraction in Epitope Medical Products in effect on the record date for such
dividend or distribution; provided that from and after any transfer of any
assets or properties from Agritope to Epitope Medical Products, Agritope shall
no longer include such assets or properties so transferred (other than as
reflected in respect of such a transfer by the Inter-Group Interest Fraction.

3. "Available Agritope Dividend Amount," as of any date, shall mean
the greater of:

a. the excess of

(1) the greater of (x) the product of the Outstanding
Interest Fraction in Agritope multiplied by the fair value on that date of the
net assets of Agritope and (y) the product of the Outstanding Interest
Fraction in Agritope multiplied by an amount equal to the shareholders' equity
allocated to Agritope as of September 30, 1996, increased or decreased, as
appropriate, to reflect, after September 30, 1996, (A) the Earnings (Loss)
Attributable to Agritope, (B) any dividends or other distributions (including
by reclassification or exchange) declared or paid with respect to Agritope,
but excluding dividends or other distributions paid in shares of Agritope
Stock or any other class of capital stock attributed to Agritope and (C) any
other adjustments to the shareholders' equity of Agritope made in accordance
with generally accepted accounting principles, over

(2) the sum of the aggregate amount that would be needed
to satisfy any preferential rights to which holders of all outstanding
Preferred Stock not attributed to Epitope Medical Products are entitled upon
dissolution of the Corporation in excess of the par value of such Preferred
Stock, provided that such excess shall be reduced by any amount necessary to
enable Agritope to pay its debts as they become due, and

b. the amount legally available for the payment of dividends
determined in accordance with Oregon law applied as if Agritope were a
separate corporation.

4. "Available Medical Products Dividend Amount," as of any date,
shall mean the greater of:

a. the excess of

(1) the greater of (x) the product of the Outstanding
Interest Fraction in Epitope Medical Products multiplied by the fair value on
that date of the net assets of Epitope Medical Products and (y) the product of
the Outstanding Interest Fraction in Epitope Medical Products multiplied by an
amount equal to the shareholders' equity allocated to Epitope Medical Products
as of September 30, 1996, increased or decreased, as appropriate, to reflect,
after September 30, 1996, (A) the Earnings (Loss) Attributable to Epitope
Medical Products, (B) any dividends or other distributions (including by
reclassification or exchange) declared or paid with respect to, or repurchases
or issuances of, any shares of Medical Products Stock or any other class of
capital stock attributed to Epitope Medical Products, but excluding dividends
or other distributions paid in shares of Medical Products Stock or in shares
of any other class of capital stock attributed to Epitope Medical Products and
(C) any other adjustments to the shareholders' equity of Epitope Medical
Products made in accordance with generally accepted accounting principles,
over

(2) the sum of the aggregate amount that would be needed
to satisfy any preferential rights to which holders of all outstanding
Preferred Stock not attributed to Agritope are entitled upon dissolution of
the Corporation; provided that such excess shall be reduced by any amount
necessary to enable Epitope Medical Products to pay its debts as they become
due, and

b. the amount legally available for the payment of dividends
determined in accordance with Oregon law applied as if Epitope Medical
Products were a separate corporation.

5. "Average Market Value" with respect to a specified period means
the average of the Market Values of the specified security on each Trading Day
of the period.

6. "Convertible Securities" shall mean any securities (including
warrants and employee stock options) of the Corporation that are convertible
into, exchangeable for or evidence the right to purchase any shares of any
class of common stock, whether upon conversion, exercise, or exchange,
pursuant to antidilution provisions of such securities or otherwise.

7. "Disposition" shall mean the sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or contribution of assets
or stock or otherwise) of any properties or assets, other than by pledge,
hypothecation or grant of any security interest in such properties or assets.

8. "Distribution" means the initial distribution of Agritope Stock to
holders of record of Epitope Common Stock on the Effective Date.

9. "Earnings (Loss) Attributable" to a particular Group for any
period, shall mean the net income or loss of such Group for such period (or
for the fiscal periods of the Corporation commencing prior to the Effective
Date and after September 30, 1996, pro forma net income or loss of such Group
as if the Effective Date were September 30, 1996) determined in accordance
with generally accepted accounting principles, with all income and expenses of
the Corporation being allocated between Groups in a reasonable and consistent
manner in accordance with policies adopted by the Board of Directors;
provided, however, that as of the end of any fiscal quarter of the
Corporation, any projected tax benefit attributable to a Group that cannot be
utilized by such Group to offset or reduce its allocated tax liability may be
allocated to the other Group without any compensating payment or allocation.

10. "Effective Date" shall mean the date on which this Article V, as
amended, shall become effective.

11. "Epitope Medical Products" shall mean, at any time, the Group
representing the Corporation's interest in (i) the businesses, products,
development programs or research projects relating to the development and
marketing of diagnostic tests and related products and services for the
detection of medical conditions and analytes, the devices developed and
marketed under the brand names OraSure and EpiScreen, and any medical products
business conducted by the Corporation in the future; (ii) all assets and
liabilities of the Corporation (other than capital stock of a subsidiary) on
such date attributed by the Board of Directors to Epitope Medical Products or
the businesses thereof, whether or not such assets or liabilities are or were
also assets and liabilities of Epitope Medical Products, including, without
limitation, the assets and liabilities as of the Effective Date specified in
the schedules filed with the records of the actions of the Board of Directors;
(iii) a proportionate undivided interest in each and every business asset and
liability attributed to Agritope equal to the Inter-Group Interest in Agritope
as of such date; (iv) all properties and assets transferred to Epitope Medical
Products from Agritope (other than a transaction pursuant to clause (v) of
this Section V.E.11) after the Effective Date pursuant to transactions in the
ordinary course of business of both Epitope Medical Products and Agritope or
otherwise as the Board of Directors may have directed as permitted by this
Article V; (v) all properties and assets transferred to Epitope Medical
Products from Agritope in connection with a reduction of the Inter-Group
Shares issuable with respect to the Inter-Group Interest; and (vi) the
interest of the Corporation or any of its subsidiaries in any business or
asset acquired and any liabilities assumed by the Corporation or any of its
subsidiaries outside of the ordinary course of business and attributed to
Epitope Medical Products, as determined by the Board of Directors; and
(vii) from and after the payment date of any dividend or other distribution
with respect to shares of Agritope Stock (other than a dividend or other
distribution payable in shares of Agritope Stock, with respect to which
adjustment shall be made as provided in clause (A) of the definition of
"Inter-Group Shares Issuable," an amount of assets or properties previously
attributed to Agritope of the same kind as were paid in such dividend or other
distribution with respect to shares of Agritope Stock as have a Fair Value on
the record date for such dividend or distribution equal to the product of
(1) the Fair Value on such record date of the aggregate of such dividend or
distribution to holders of shares of Agritope declared multiplied by (2) a
fraction the numerator of which is equal to the Inter-Group Interest Fraction
in Agritope in effect on the record date for such dividend or distribution and
the denominator of which is equal to the Outstanding Interest Fraction in
Agritope in effect on the record date for such dividend or distribution;
provided that from and after any transfer of any assets or properties from
Epitope Medical Products to Agritope, Epitope Medical Products shall no longer
include such assets or properties so transferred (other than as reflected in
respect of such a transfer by the Inter-Group Interest Fraction).

12. "Exchange Date" shall mean the date, if any, fixed for the
exchange of shares of a class of capital stock as set forth in a notice to
holders of such capital stock in accordance with the provisions of this
Article V.

13. "Fair Value" shall mean, in the case of equity securities or debt
securities of a class that has previously been Publicly Traded for a period of
at last 15 months, the Market Value thereof (if such value, as so defined, can
be determined) or, in the case of an equity security or debt security that has
not been Publicly Traded for at least such period, the fair value per share of
stock or per other unit of such other security, on a fully distributed basis,
as determined in the good faith judgment of the Board of Directors; and in the
case of property other than securities, the value determined in good faith
judgment of the Board of Directors. Any such determination of Fair Value
shall be described in a statement filed with the records of the actions of the
Board of Directors.

14. "Market Value" of any class of capital stock of the Corporation on
any day shall mean the average of the high and low reported sales prices
regular way of a share of such class on such day (if such day is a Trading
Day, and if such day is not a Trading Day, on the Trading Day immediately
preceding such day) or in case no such reported sale takes place on such
Trading Day the average of the reported closing bid and asked prices regular
way of a share of such class on such Trading Day, in either case on the
national market tier of The Nasdaq Stock Market, or if the shares of such
class are not quoted on The Nasdaq Stock Market on such Trading Day, the
average of the closing bid and asked prices of a share of such class in the
over-the-counter market on such Trading Day as furnished by any New York Stock
Exchange member firm selected from time to time by the Corporation, or if such
closing bid and asked prices are not made available by any such New York Stock
Exchange member firm on such Trading Day, the market value of a share of such
class as determined by the Board of Directors; provided that for purposes of
determining the Market Value of a share of any class of capital stock for any
period the "Market Value" of any share of any class on any day prior to the
"ex-dividend" date or any similar date for any dividend or distribution paid
or to be paid with respect to such class of capital stock shall be reduced by
the Fair Value of the per share amount of such dividend or distribution as
determined by the Board of directors and (b) the "Market Value" of any share
of any class on any day prior to (i) the effective date of any subdivision (by
stock split or otherwise) or combination (by reverse stock split or otherwise)
of outstanding shares of such class of capital stock or (ii) any "ex-dividend"
date or any similar date for any dividend or distribution with respect to any
such class of capital stock shall be appropriately adjusted, as determined by
the Board of Directors, to reflect such subdivision, combination, dividend or
distribution.

15. "Group" shall mean Epitope Medical Products or Agritope.

16. "Group's stock" and words of similar import mean Agritope Stock
with respect to Agritope and Medical Products Stock with respect to Epitope
Medical Products.

17. "Inter-Group Interest" means the interest of one Group in the
equity value of the Company attributable to the other Group.

18. "Inter-Group Interest Fraction" means a fraction the numerator of
which is the number of Inter-Group Shares Issuable with respect to the
Inter-Group Interest in a Group as of such date and the denominator of which
is the sum of (a) such number plus (b) the aggregate number of outstanding
shares of such Group's stock as of such date. A statement setting forth the
Inter-Group Interest Fraction as of the record date for any dividend or
distribution on any class of common stock, as of the effective date of any
conversion, exchange or exercise of Convertible Securities into or for shares
of a Group's stock and as of the end of each fiscal quarter of the Corporation
shall be filed by the Secretary of the Corporation in the records of the Board
of Directors of the Corporation not later than ten days after such date.

19. "Inter-Group Shares Issuable" with respect to an Inter-Group
Interest shall as of the Effective Date be zero; provided, however, that such
number shall from time to time thereafter be:

(A) adjusted, if before such adjustment greater than zero, as
determined by the Board of Directors to be appropriate, to reflect equitably
any subdivision (by stock split or otherwise) or combination (by reverse stock
split or otherwise) of Agritope Stock or Medical Products Stock, as the case
may be, or any dividend or other distribution of shares of Agritope Stock or
Medical Products Stock or any reclassification of Agritope Stock or Medical
Products Stock, as the case may be;

(B) with respect to an Inter-Group Interest in Agritope, decreased
(but to not less than zero), by action of the Board of Directors by (1) the
number of shares of Agritope Stock issued or sold by the Corporation that,
immediately prior to such issuance or sale, were included (as determined by
the Board of Directors) in the Inter-Group Shares Issuable with respect to the
Inter-Group Interest in Agritope, (2) the number of shares of Agritope Stock
issued upon conversion, exchange or exercise of Convertible Securities that,
immediately prior to the issuance or sale of such Convertible Securities, were
included in the Inter-Group Shares Issuable with respect to the Inter-Group
Interest in Agritope, (3) the number of shares of Agritope Stock issued by the
Corporation as a dividend or other distribution (including in connection with
any reclassification or exchange of shares) to holders of Medical Products
Stock, (4) the number of shares of Agritope Stock issued upon the conversion,
exchange or exercise of any Convertible Securities issued by the Corporation
as a dividend or other distribution (including in connection with any
reclassification of exchange of shares) to holders of Medical Products Stock,
or (5) the number (rounded, if necessary, to the nearest whole number) equal
to the quotient of (a) the aggregate Fair Value as of the date of contribution
of properties or assets (including cash) transferred from Agritope to Epitope
Medical Products in consideration for a reduction in the Inter-Group Shares
Issuable with respect to the Inter-Group Interest in Agritope divided by
(b) the Average Market Value of one share of Agritope Stock calculated during
the 20-Trading Day period preceding the date of such transfer; and

(C) with respect to an Inter-Group Interest in Medical Products
decreased (but to not less than zero), by action of the Board of Directors by
(1) the number of shares of Medical Products Stock issued or sold by the
Corporation that, immediately prior to such issuance or sale, were included
(as determined by the Board of Directors) in the Inter-Group Shares Issuable
with respect to the Inter-Group Interest in Epitope Medical Products, (2) the
number of shares of Medical Products Stock issued upon conversion, exchange or
exercise of Convertible Securities that, immediately prior to the issuance or
sale of such Convertible Securities, were included in the Inter-Group Shares
Issuable with respect to the Inter-Group Interest in Epitope Medical Products,
(3) the number of shares of Medical Products Stock issued by the Corporation
as a dividend or other distribution (including in connection with any
reclassification or exchange of shares) to holders of Agritope Stock, (4) the
number of shares of Medical Products Stock issued upon the conversion,
exchange or exercise of any Convertible Securities issued by the Corporation
as a dividend or other distribution (including in connection with any
reclassification or exchange of shares) to holders of Agritope Stock, or
(5) the number (rounded, if necessary, to the nearest whole number) equal to
the quotient of (a) the aggregate Fair Value as of the date of contribution of
properties or assets (including cash) transferred from Epitope Medical
Products to Agritope in consideration for a reduction in the Inter-Group
Shares Issuable with respect to the Inter-Group Interest in Epitope Medicalc
Products divided by (b) the Average Market Value of one share of Medical
Products Stock calculated during the 20-Trading Day period preceding the date
of such transfer; and

(D) with respect to an Inter-Group Interest in Agritope, increased by
(1) the number of outstanding shares of Agritope Stock repurchased by the
Corporation for consideration that is attributed to Epitope Medical Products
pursuant to this Article V and (2) the number (rounded, if necessary, to the
nearest whole number) equal to the quotient of (a) the Fair Value of
properties or assets (including cash) theretofore attributed to Epitope
Medical Products that are contributed to Agritope in consideration of an
increase in the Inter-Group Shares Issuable with respect to the Inter-Group
Interest in Agritope, divided by (b) the Average Market value of one share of
Agritope Stock calculated during the 20-Trading Day period preceding the date
of such contribution.

(E) with respect to an Inter-Group Interest in Epitope Medical
Products, increased by (1) the number of outstanding shares of Medical
Products Stock repurchased by the Corporation for consideration that is
attributed to Agritope pursuant to this Article V and (2) the number (rounded,
if necessary, to the nearest whole number) equal to the quotient of (a) the
Fair Value of properties or assets (including cash) theretofore attributed to
Agritope that are contributed to Epitope Medical Products in consideration of
an increase in the Inter-Group Shares Issuable with respect to the Inter-Group
Interest in Epitope Medical Products, divided by (b) the Average Market Value
of one share of Medical Products Stock calculated during the 20-Trading Day
period preceding the date of such contribution.

20. "Market Capitalization" of any class or series of capital stock of
the Corporation on any day shall mean the product of (i) the Market Value of
one share of such class or series on that day and (ii) the number of shares of
such class or series outstanding on that day.

21. "Net Proceeds" as of any date, with respect to any Disposition of
any of the properties and assets of a Group, means an amount if any equal to
the gross proceeds of such Disposition after any payment of, or reasonable
provision, as determined by the Board of Directors, for, (a) any taxes payable
by the Corporation in respect of such Disposition or in respect of any
resulting dividend or redemption pursuant to paragraph V.C.2.b.1. (or which
would have been payable but for the utilization of tax benefits attributable
to the other Group), (b) any transaction costs, including, without limitation,
any legal, investment banking and accounting fees and expenses and (c) any
liabilities and other obligations (contingent or otherwise) of, or attributed
to, the Group, including, without limitation, any indemnity or guarantee
obligations incurred in connection with the Disposition or any liabilities for
future purchase price adjustments and any preferential amounts plus any
accumulated and unpaid dividends and other obligations in respect of Preferred
Stock attributed to the Group. For purposes of this definition, any properties
and assets of the Group remaining after such Disposition shall constitute
"reasonable provision" for such amount of taxes, costs and liabilities
(contingent or otherwise) as the Board of Directors determines can be expected
to be supported by such properties and assets.

22. "Outstanding Interest Fraction" means a fraction the numerator of
which shall be the aggregate number of shares of a Group's stock outstanding
on such date and the denominator of which shall be the sum of (a) such number
plus (b) the number of Inter-Group Shares Issuable with respect to an
Inter-Group Interest in such Group as of such date. A statement setting forth
the Outstanding Interest Fraction as of the record date for the payment of any
dividend or distribution on any class of common stock and as of the end of
each fiscal quarter of the Corporation shall be filed by the Secretary of the
Corporation in the records of the actions of the Board of Directors not later
than ten days after such date.

23. "Publicly Traded" with respect to any security shall mean
(i) registered under Section 12 of the Securities Exchange Act of 1934, as
amended (or any successor provision of law), and (ii) listed (on any national
securities exchange registered under Section 7 of the Securities Exchange Act
of 1934, as amended (or any successor provision of law), that is the successor
to either such exchange) or quoted in The Nasdaq Stock Market (or any
successor system).

24. "Redemption Date" shall mean the date fixed by the Board of
Directors as the effective date for a redemption of shares of any class of
common stock as set forth in a notice to holders thereof required pursuant to
this Article V.

25. "Related Business Transaction" shall mean any Disposition of all
or substantially all of the properties and assets of a Group in a transaction
or series of related transactions in which the Corporation receives as
proceeds of such Disposition primarily equity securities (including, without
limitation, capital stock, convertible securities, partnership or limited
partnership interests and other types of equity securities, without regard to
the voting power or contractual or other management or governance rights
related to such equity securities) of the purchaser or acquiror of such assets
and properties of the Group, any entity which succeeds (by merger, formation
of a joint venture enterprise or otherwise) to such assets and properties of
the Group or a third party issuer, which purchaser, acquiror or other issuer
is engaged or proposes to engage primarily in one or more businesses similar
or complementary to the business conducted by the Group prior to such
Disposition, as determined in good faith by the Board of Directors.

26. "Trading Day" shall mean each weekday other than any day on which
any relevant class of common stock is not traded on any national securities
exchange or The NASDAQ Stock Market or in the over-the-counter market.

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Annex III
THE COMPANY

DESCRIPTION OF BUSINESS

Epitope, Inc. ("Epitope" or the "Company"), is an Oregon corporation
incorporated in 1981. Its Epitope Medical Products group ("Epitope Medical
Products") develops and markets oral specimen collection kits and related
diagnostic tests for the detection of the Human Immunodeficiency Virus
("HIV"), the cause of Acquired Immune Deficiency Syndrome ("AIDS"), and for
the detection of other medical conditions and analytes. Epitope Medical
Products' oral specimen HIV testing system is marketed by the Company under
the name EpiScreen(TM) and by SmithKline Beecham plc ("SB") under the name
OraSure(R). The Company's Agritope group ("Agritope") historically has
focused its efforts on the development of novel agricultural products using
plant genetic engineering and other modern methods. Through its acquisition
of Andrew and Williamson Sales, Co. ("A&W") on November , 1996 and its
majority ownership of Vinifera, Inc. ("Vinifera"), Agritope now conducts
operations in each step of the production and distribution chain for a broad
range of fruits, vegetables and plants and has an established infrastructure
that will facilitate commercialization of the Company's genetically engineered
agricultural products.

Epitope Medical Products

Epitope Medical Products' lead product, a patented collection device
used as part of an oral fluid diagnostic system ("EpiScreen/OraSure"), is
designed for use in the detection of HIV and other medical conditions and
analytes. The Company markets the device under the brand name EpiScreen in
the United States for use in screening life insurance applicants, and in
certain foreign countries for use in professional markets. In February 1995,
the Company entered into a Development, License and Supply Agreement with SB,
under which SB is marketing the device in the U.S. and certain foreign
countries as part of an integrated test system to physicians, hospitals and
other healthcare professionals under the brand name OraSure. Subject to
obtaining required regulatory approvals, the Company intends to market the
system for over-the-counter sale through SB in the United States and through
SB or other distributors in international markets.

The EpiScreen/OraSure device consists of a small, treated cotton-fiber
pad on a nylon handle that is placed in the patient's mouth for two minutes.
The device collects oral mucosal transudate ("OMT"), a serum-derived fluid
that, unlike saliva, contains high concentrations of HIV antibodies in people
infected with the virus. As a result, OMT testing is a highly accurate method
for detecting HIV infection. Because EpiScreen/OraSure uses a non-invasive,
needle-free collection method, the Company believes that oral fluid testing
has several significant advantages over blood-based testing systems for both
healthcare professionals and patients.

Epitope Medical Products also markets HIV-1 Western blot confirmatory
test kits used to confirm positive results of initial screening tests for
HIV-1 infection. Its OraSure HIV-1 Western blot confirmatory test kit is used
in conjunction with oral-fluid based screening tests, while its EPIBlot(R)
HIV-1 Western blot confirmatory test kit is used in conjunction with
blood-based screening tests. The kits are distributed worldwide under an
exclusive agreement with Organon Teknika Corporation ("Organon Teknika"), a
member of the Akzo Pharma group of Akzo Nobel, NV.

The EpiScreen/OraSure HIV-1 device and the OraSure HIV-1 Western blot
and EPIBlot confirmatory tests have all received clearance from the U.S. Food
and Drug Administration ("FDA") for sale to professional markets in the United
States.

Background

Acquired Immune Deficiency Syndrome is caused by the Human
Immunodeficiency Virus. HIV attacks the immune system, slowly weakening the
body's ability to ward off infection and certain forms of cancer. When these
complications develop, the HIV infection has progressed to clinically
diagnosed AIDS. HIV is spread through sexual contact, blood transfusions, the
sharing of intravenous needles, accidental needle sticks, or contact between a
mother and her child during gestation, childbirth, or breast-feeding. There
is currently no known cure for HIV/AIDS. However, the recent introduction of
a new class of anti-HIV drugs called protease inhibitors, when used in
combination with nucleoside analogs (e.g., AZT), has shown promising results
in slowing progress of the disease. Clinical studies have demonstrated that
the early detection and treatment of HIV can help to curb the effects of the
disease and significantly prolong the life of the patient. Other studies have
shown that treatment with AZT of an HIV-infected pregnant woman may prevent
the transmission of HIV from the mother to her child.

According to the World Health Organization ("WHO"), an estimated 24
million adults and 1.5 million children have been infected with HIV worldwide,
and approximately 10,000 new infections occur each day. WHO also estimates
that over 6 million cases of AIDS have occurred worldwide to date. In North
America, an estimated 1.3 million people have been infected with HIV. AIDS is
currently the leading cause of death for Americans between the ages of 25 and
44. It is estimated that approximately 800,000 people in the United States
are living with the HIV virus. According to the Centers for Disease Control
and Prevention ("CDC"), total federal funding budgeted for HIV/AIDS in 1995
was over $2.7 billion.

Based on industry estimates, the Company believes that approximately 60
million HIV tests were performed in the U.S. in 1995. Of these tests,
approximately 30 million were performed in connection with blood donor
screening, 20 million were performed in healthcare settings such as hospitals
and clinics, 5 million were performed in connection with life insurance
applications, and the balance were performed by public health departments and
the military. Currently, substantially all HIV tests are performed by testing
a patient's blood. There are a number of blood tests for HIV, the most common
of which is the enzyme-linked immunosorbent assay ("ELISA"). In order to
reduce the possibility that an individual without HIV will be diagnosed as
having the virus (a false positive), most countries require the retesting of
the blood sample using a second, more specific test to confirm an initial
positive test result. The most commonly used confirmatory test is the Western
blot.

The Company believes that blood testing has a number of disadvantages
which increase healthcare costs and patient inconvenience, pose a risk of
infection to healthcare professionals and make testing uneconomic or
unavailable in certain applications or settings. The disadvantages of blood
testing include:

Risk of HIV Infection. Blood tests involve the use of needles or
lancets to obtain blood from the patient. Healthcare professionals collecting
blood risk contracting HIV if accidentally stuck by the needle or lancet used
to obtain blood from an infected patient.

Limited Access. Because blood must be collected by trained
professionals, its collection is often difficult or prohibitively expensive in
certain settings. For example, community-based outreach programs, homeless
shelters, rural communities, and other remote settings often lack healthcare
professionals trained in blood collection. As a result, blood testing may not
be available in some of these settings.

Higher Overall Cost. The cost of collecting a blood specimen represents
a significant component of the total cost of HIV testing. Furthermore, when a
healthcare professional must travel to the subject's office or home to collect
a blood sample, as is often the case with life insurance applicant testing,
the cost of collecting the blood specimen is substantially increased.

Patient Discomfort. Blood tests require the use of needles or lancets
that are uncomfortable for patients. In addition, patients with small or
damaged veins, such as intravenous drug users, the elderly and young children,
may require multiple needle sticks in order to obtain an adequate blood
sample.

Epitope Oral Specimen Collection Technology

In order to address the significant drawbacks associated with
blood-based tests, Epitope developed and patented a device to collect oral
fluid instead of blood. The EpiScreen/OraSure device, shaped like a small
toothbrush, consists of a cotton-fiber pad treated with a proprietary salt
solution. The pad, which is mounted on a nylon handle, is placed in the
patient's mouth between the lower cheek and gum for two minutes. The pad
collects oral mucosal transudate, a serum-derived fluid that, unlike saliva,
contains high concentrations of antibodies. OMT contains approximately four
times the amount of antibodies found in ordinary whole saliva. Following
collection, the pad is sealed in a specimen vial containing a proprietary
preservative solution. The treated pad enhances the collection, and the
preservative solution enhances the stabilization, of antibodies and other
analytes originating from the oral mucosae. The specimen in the vial is
stable for three weeks at room temperature, although in most cases laboratory
testing takes place within one to three days.

A schematic representation of the oral fluid collection procedure is
shown below.

[Graphic material demonstrating specimen collection procedure,
containing illustrations and the following captions:

Peel open package.
Place pad between lower cheek and gum. Rub back and forth
until moist.
Keep the pad in place for 2 minutes (maximum 5 minutes)
while timing.
Open vial in upright position.
Insert pad to bottom of vial.
Break the pad handle by snapping it against the side of the
vial.
Replace the cap with a snap.]

Products

EpiScreen/OraSure. In December 1994, the Company received clearance
from the FDA to sell EpiScreen/OraSure to professional markets for the ELISA
screening of HIV-1 antibodies. The device is marketed directly by the Company
under the trade name EpiScreen for use by the U.S. life insurance industry and
in certain international markets, and is marketed by SB under the trade name
OraSure to healthcare professionals in the United States and a number of other
countries. See "Epitope Medical Products--Marketing."

The EpiScreen/OraSure oral specimen collection and HIV-1 testing system
is easily administered and involves three steps: (i) collection of an oral
specimen using the EpiScreen/OraSure collection device, (ii) ELISA screening
of the specimen for HIV antibodies at a laboratory, and (iii) laboratory
confirmation of positive screening test results with the FDA-cleared OraSure
Western blot kit. A trained healthcare professional then conveys test results
and provides appropriate counseling to the patient.

The EpiScreen/OraSure HIV-1 testing system represents a highly accurate
alternative to traditional blood tests. In clinical trials, EpiScreen/OraSure
provided the correct result or triggered appropriate follow-up testing in
3,569 out of 3,570 (99.97%) cases. The Company believes EpiScreen/OraSure has
several advantages over blood tests, as outlined in the following table.

Feature Blood Test EpiScreen/OraSure
- ------- ---------- -----------------

Safety Poses risk of HIV Eliminates risk of
infection through needle-stick accidents
accidental needle sticks

Invasiveness Requires use of a Uses non-invasive
needle or lancet collection technique

Ease of use Requires blood Sample collection
collection by a requires minimal
trained healthcare training
professional

Portability Generally performed in Can be used rapidly and
a physician's office efficiently in almost
or other healthcare any setting
setting

Cost Requires a nurse or Eliminates the need for
other trained healthcare and costs associated
professional with a trained
healthcare professional

Oral-based and Serum-based Western Blot Confirmatory Tests. Epitope
Medical Products has also developed, and in June 1996 received FDA clearance
to market, an oral-based HIV-1 Western blot confirmatory test. This test uses
the original oral specimen to confirm positive results of initial
EpiScreen/OraSure HIV-1 ELISA screening tests. Epitope Medical Products has
also marketed EPIblot, a serum-based Western blot HIV-1 confirmatory test kit
since 1987. The kit is used to confirm the positive results of initial blood-
based screening tests for HIV-1 infection.

Markets

Insurance Industry. Epitope Medical Products believes there is a
significant need in the life insurance industry for an easy-to-administer,
non-invasive and cost-effective HIV testing system such as EpiScreen. In the
United States, approximately 5 million HIV tests were administered in 1995 by
the life insurance industry in connection with the issuance of new policies.
In addition, data from the American Council of Life Insurance and the Health
Insurance Association of America indicate that over $1.5 billion in
AIDS-related death benefits were paid in 1994. The organizations also
cautioned that, due to difficulty in identifying all AIDS-related claims, the
data may significantly understate the financial impact of AIDS on the
insurance industry.

Current HIV testing of life insurance applicants involves the use of a
paramedic or other trained healthcare professional to obtain a blood sample.
The cost to the insurance company for an HIV test includes the cost of the
paramedic as well as the cost of the collection kit and laboratory testing
services. These costs average approximately $55 to $70, of which $35 to $50
is the cost of the paramedic. As a result, insurance companies have generally
limited HIV testing to policies with face amounts of $100,000 or more. Based
on industry statistics, Epitope Medical Products estimates that in 1994 over
9 million policies were issued for face amounts of less than $100,000,
representing 68% of all policies issued. Epitope Medical Products believes
that the use of EpiScreen can significantly reduce the cost of HIV testing to
the insurance industry because collection of an oral fluid specimen can be
performed by insurance agents or other persons without professional medical
training, eliminating the cost of the paramedic and making testing at policy
levels below $100,000 a cost-effective practice. Moreover, the Company
believes that insurance companies may adopt EpiScreen for use in connection
with applications for insurance policies with face amounts at and above
$100,000.

Epitope Medical Products also believes that the use of EpiScreen will
allow the insurance industry to address "anti-selection." Anti-selection
occurs when an individual who knows that he or she is infected with HIV
intentionally applies for one or more life insurance policies that do not
entail HIV testing. Epitope Medical Products believes that the availability of
two recently approved over-the-counter ("OTC") HIV blood tests may increase
the incidence of anti-selection. By allowing insurance companies to lower the
policy level at which HIV testing is cost-effective, the use of EpiScreen may
allow insurance companies to reduce their exposure to losses from anti-
selection and thereby to lower overall claims costs.

An additional advantage of the EpiScreen testing system is that the oral
specimen used for HIV testing can also be used to identify smokers and users
of cocaine. Cotinine, a metabolite of nicotine, can be detected using
OraSure/EpiScreen. The FDA has advised Epitope Medical Products that
EpiScreen may be used for cocaine testing for the purpose of life insurance
risk assessment while a 510(k) notice is undergoing final review, and may be
used for cotinine testing generally. In a presentation at the 105th annual
meeting of The American Academy of Insurance Medicine, a major life insurance
company reported results of the use of the EpiScreen testing system in Canada
and in the Bahamas from 1992 to 1995. The life insurance company reported
that agent collection reduced its testing costs by $65 per application.
During the four-year study period, the insurer found that it saved $1.7
million by using EpiScreen for HIV and cocaine testing. In addition, the life
insurance company determined that it realized $1.6 million in increased
premiums as a result of identifying smokers who claimed on their applications
that they were non-smokers.

Physician and Clinical Market. Through SB, Epitope Medical Products is
marketing its oral HIV testing system to the physician, hospital and other
professional healthcare provider markets under the brand name OraSure. OraSure
is now offered to physicians and hospitals in the United States by over 3,300
sales representatives in the SB distribution network. In connection with the
introduction of OraSure to the physician community in August 1996, SB created
the OraSure Confidential Testing Network, a nationwide network for consumers
to identify doctors in their area who offer confidential HIV testing with
OraSure. The Network is accessible to consumers through a toll-free number
(1-800-OraSure) and on the Internet (www.OraSure.com). The SB product launch
was accompanied by an advertising campaign featuring two-page spreads in major
medical professional publications. The OraSure brand was also a major sponsor
of the 1996 AIDS Candlelight March in Washington, D.C., conducted in
connection with the display of the National AIDS Quilts.

OTC Market. A recent study published in the New England Journal of
Medicine reported that 44% of Americans age 18 to 24 and 33% of Americans age
25 to 44 were "very or somewhat likely" to purchase over-the-counter home-
collection HIV tests. According to the United States Census Bureau, as of
July 1996 there were 24.7 million Americans in the 18 to 24 age group and 83.7
million in the 25 to 44 age group. Thus, based on the study, the number of
people "very or somewhat likely" to purchase OTC home-collection HIV tests in
the U.S. exceeds 35 million individuals.

Epitope Medical Products and SB are currently conducting clinical trials
to support an application for FDA clearance to market OraSure as a home
collection testing system. If FDA clearance is obtained, Epitope Medical
Products and SB plan to market the OraSure device for OTC sale as part of an
integrated system including laboratory testing and counseling. Epitope
Medical Products believes the non-invasiveness and ease of use of OraSure
represent significant benefits to the home user over traditional blood-based
methods. There can be no assurance that Epitope Medical Products will receive
FDA clearance to market OraSure to the OTC market on a timely basis, if at
all. See "Description of Business--Epitope Medical Products--Government
Regulation."

If Epitope Medical Products receives FDA clearance of the OraSure home
collection system, a consumer could purchase OraSure at retail outlets such as
pharmacies, drug stores, and other commercial facilities or through a mail
order program. The consumer would collect the specimen and mail it in a
postage prepaid envelope to an SB laboratory for testing. The consumer would
obtain his or her test results and counseling by calling a toll-free number
and providing a confidential identification number included with the test. SB
has established an arrangement under which the American Social Health
Association ("ASHA") would provide test results and counseling to the caller.
ASHA is the leading provider of AIDS counseling services in the United States,
handling over 4,000 calls per day on the National AIDS Hotline.

International. In light of the worldwide scope of the HIV epidemic,
Epitope Medical Products believes there are significant opportunities for sale
of EpiScreen/OraSure in international markets. Epitope Medical Products
believes that the ease of use, portability, increased safety and lower cost of
oral fluid testing will provide significant advantages over blood tests in
international markets. Epitope Medical Products has initiated an
international marketing program that offers a complete EpiScreen testing
system. The program features direct assistance to distributors in
establishing EpiScreen programs that include laboratory services, cooperation
from screening test manufacturers, and provision of Western blot confirmatory
kits in each country. Epitope is currently marketing EpiScreen to
distributors in Canada, Thailand, Argentina and South Africa for use in
professional markets. SB also markets OraSure to the professional market in
several Latin American and African countries and the European Community
through its network of distributors. See "Epitope Medical
Products--Marketing."

Products Under Development

EpiScreen/OraSure. Oral mucosal transudate contains many constituents
found in blood serum. Because of this feature, the Company believes
EpiScreen/OraSure is a platform technology with a wide variety of potential
applications beyond HIV testing. For example, the EpiScreen/OraSure device
may be useful for the diagnosis of a variety of infectious diseases in
addition to HIV, such as viral hepatitis and a number of childhood diseases.
The Company recently applied for regulatory clearance in Canada to market
EpiScreen for the detection of measles, mumps and rubella. In addition, the
Company believes that the use of oral specimens may allow physicians to
diagnose diseases more readily in children without subjecting them to the
discomfort of drawing a blood sample, thereby increasing the frequency of
testing for diseases.

The Company believes the EpiScreen/OraSure device also has potential
application in the detection of drugs of abuse, such as cocaine. A 510(k)
notification for this use is currently undergoing FDA review and, if approved,
will allow Epitope Medical Products to market EpiScreen/OraSure to
professional markets in addition to the life insurance industry. Under an
agreement with STC Technologies, Inc., Epitope Medical Products is conducting
U.S. clinical trials for other drugs of abuse. Physicians may also find the
device useful for monitoring levels and adjusting dosages of therapeutic
drugs, such as those that are toxic at levels only slightly above the level at
which they are effective. Monitoring of these drugs currently requires
frequent blood tests to determine drug concentration. The Company believes
oral fluid testing would eliminate the discomfort and inconvenience associated
with this frequent blood testing.

OraQuick. Epitope Medical Products is currently developing OraQuick(R)
HIV, a one-step, rapid-format oral fluid testing system designed to provide
test results within ten minutes. Epitope Medical Products believes that
OraQuick has significant potential as a rapid laboratory-based HIV test and as
an OTC home-based HIV test. Epitope Medical Products has substantially
completed a prototype of OraQuick HIV. Like EpiScreen/OraSure, OraQuick is a
platform technology with a variety of potential applications in addition to
HIV testing. Modifications of the basic OraQuick technology may allow use of
this approach for detection of antibodies against the ulcer-causing bacterium
Helicobacter pylori, as well as for a variety of infectious diseases such as
syphilis, viral hepatitis, and childhood infections. There can be no
assurance that Epitope Medical Products will complete development of any of
these products or, in the event of successful development, will receive
applicable regulatory clearances or will profitably market the products.

Marketing

Life Insurance Industry. Epitope Medical Products currently markets its
EpiScreen device for use in screening life insurance applicants for HIV,
cocaine, and nicotine. The Company maintains a six-member direct sales force
that markets and sells EpiScreen to the main insurance testing laboratories in
the United States and Canada. The major laboratories currently using the
EpiScreen device include LabOne, Inc., Osborn Laboratories, Clinical Reference
Laboratory, Inc. and GIB Laboratories. Epitope Medical Products also markets
the use of EpiScreen directly to life insurance companies.

U.S. Professional and OTC. In February 1995, Epitope Medical Products
entered into a Development, License and Supply Agreement with SB (the
"Agreement") for the OraSure HIV-1 oral specimen collection device and certain
future diagnostic products. Under the Agreement, SB will sell the OraSure
device to the professional markets in the United States. In addition, if and
when regulatory clearance is received, SB will market the OraSure device to
the U.S. OTC market. SB paid Epitope Medical Products a one-time license fee
of $5 million for the rights granted under the Agreement.

The Agreement provides that SB generally has responsibility for
advertising, promotion, distribution, and regulatory approval expenses in its
markets. Epitope Medical Products will manufacture the OraSure devices for
sale to SB at predetermined transfer prices and will receive certain royalties
on SB product sales. A portion of SB's costs in obtaining and maintaining
regulatory approvals will be credited against royalties payable to Epitope
Medical Products.

The Agreement permits SB to fund Epitope Medical Products' ongoing
development of diagnostic products and technology for its term, which lasts
for a minimum of 15 years, subject to earlier termination on 60 days' notice
if SB elects to stop marketing the products in all markets. SB has the option
to market those products developed with SB funding, which Epitope will
initially manufacture for agreed-upon prices and royalties.

International. Epitope Medical Products also employs a direct sales
force for the marketing and sale of EpiScreen in certain international
markets. The Company complements its direct sales efforts through the use of
selected international distributors who have the expertise and capabilities
appropriate for marketing EpiScreen. In addition, under the terms of the SB
Agreement, SB will act as exclusive director of the OraSure HIV-1 oral
specimen collection device in the professional markets in certain countries,
including the European Economic Community and certain African, Middle Eastern,
and Latin American countries. Epitope Medical Products has retained all
rights to distribute products in markets other than those reserved to SB.

Western Blot Distribution. Epitope Medical Products has entered into
supply and distribution agreements with Organon Teknika Corporation, a member
of the Pharma Division of Akzo Nobel, NV, an international chemical and
pharmaceutical manufacturer based in Arnhem, The Netherlands. The supply
agreement provides that Organon Teknika will supply the HIV-1 antigen used to
manufacture Western blot confirmatory test kits. The distribution agreement
grants Organon Teknika the exclusive right to purchase Western blot
confirmatory test kits from Epitope Medical Products and to market them
worldwide. Epitope Medical Products and Organon Teknika are negotiating terms
for continuing the supply and distribution arrangement after the existing
agreements expire on March 31, 1997.

Competition

Competition in the emerging market for HIV testing is intense and is
expected to increase. The Company believes that the principal competition
will come from existing blood-based HIV assays and from urine-based testing
assays. Epitope Medical Products' competitors include specialized
biotechnology firms as well as pharmaceutical companies with biotechnology
divisions and medical diagnostic companies, many of which have considerably
greater financial, technical, and marketing resources than Epitope Medical
Products. Competition may intensify as technological advances are made and
become more widely known and as products reach the market in greater numbers.
Furthermore, new testing methodologies could be developed in the future that
render Epitope Medical Products' oral-based HIV test impractical, uneconomical
or obsolete. There can be no assurance that Epitope Medical Products'
competitors will not succeed in developing or marketing technologies and
products that are more effective than those developed by Epitope Medical
Products or that would render its technologies or products obsolete or
otherwise commercially unattractive. In addition, there can be no assurance
that competitors will not succeed in obtaining regulatory approval for these
products, or in introducing or commercializing them before Epitope Medical
Products. Such developments could have a material adverse effect on the
Company's and Epitope Medical Products' business, financial condition and
results of operations.

Three companies have submitted applications to the FDA for OTC HIV blood
testing: Direct Access Diagnostics, Home Access Health Corp., and ChemTrak
Incorporated. The FDA has approved a home collection kit for HIV blood
testing developed by Direct Access Diagnostics and another home collection kit
for HIV blood testing developed by Home Access Health Corp.

Cambridge Biotech Corporation and BioRad Laboratories, Inc. manufacture
HIV Western blot confirmatory tests, and Waldheim Pharmazeutika manufactures
immunofluorescent HIV confirmatory tests, which compete with Epitope Medical
Products' EPIblot HIV-1 Western blot serum-based confirmatory test kits.

Several other companies market or have announced plans to market oral
specimen collection devices and tests outside the United States and have
announced plans to seek FDA approval of such tests in the United States.
Epitope Medical Products expects the number of devices competing with its
EpiScreen/OraSure device to increase as the benefits of oral specimen-based
testing become more widely accepted. Epitope Medical Products expects that FDA
approval of the EpiScreen device will also encourage potential competitors to
develop oral diagnostic products. No such devices have yet been approved by
the FDA for HIV testing. See "Epitope Medical Products--Government
Regulation."

The United States Food and Drug Administration ("FDA") recently approved
an HIV ELISA screening test for use with urine. However, no Western blot or
other confirmatory test using urine has been approved by the FDA to date. The
Company believes that absence of an FDA-approved confirmatory test for urine
poses a significant disadvantage to urine testing because a patient who
receives an initial positive screening result must return to give a second,
blood-based sample for confirmatory testing. The Company also believes that
urine collection can be difficult, inconvenient and potentially embarrassing
for the patient, and that privacy and chain-of-custody issues are further
impediments to routine use of urine-based HIV tests.

Government Regulation

General. Many of Epitope Medical Products' proposed and existing
diagnostic products are subject to regulation by the FDA, other federal,
state, and local agencies, and comparable bodies in foreign countries. Such
regulation governs almost all aspects of development and marketing, including
the introduction, advertising, promotion, manufacturing practices, labeling,
distribution, and record keeping for the products. In the United States,
different types of diagnostic products are regulated differently by the FDA,
as discussed below. As part of the FDA clearance process, Epitope Medical
Products often must demonstrate that its products are both safe and effective
for a particular indication or application.

Drugs and Biological Products. Generally, drugs and biological products
require FDA approval before marketing. The steps required before a drug or
biological product may be marketed in the United States include: (1)
preclinical laboratory and animal tests; (2) submission of an application for
an investigational new drug or biological product, which must become effective
before human clinical trials may commence; (3) human clinical trials; (4)
submission of a Product License Application ("PLA") for the biological product
or a New Drug Application ("NDA") for most other new drug products; and (5)
approval of the PLA or NDA.

Preclinical safety and initial efficacy testing is usually undertaken in
animals. Results of such preclinical and other laboratory tests are submitted
to the FDA before human clinical trials can begin. Clinical trials are
typically conducted in three phases. Phase I uses human subjects to determine
safety and tolerance. Phase II uses a limited patient population to determine
effectiveness and dosage and to identify side effects. Compounds found
effective and safe in Phase II are further tested in Phase III with an
expanded patient population at geographically dispersed clinical study sites.
Each phase may last from one to two years or more.

Most products are not approved because of the failure to demonstrate
safety, effectiveness, or both. The FDA may suspend clinical trials at any
time if it is felt that subjects or patients are being exposed to an
unacceptable health risk. Obtaining FDA approval requires substantial time
and effort. There can be no assurance that any approval will be granted to
Epitope Medical Products on a timely basis, if at all. As part of the
approval process, the FDA may require Epitope Medical Products to initiate
post-approval marketing studies.

Medical Devices. Medical devices are classified either in Class I,
Class II, or Class III. Class I devices are subject only to general control
provisions of the Federal Food, Drug, and Cosmetic Act, as amended (the "FDC
Act"). These provisions include requirements that a device not be adulterated
or misbranded. Class II devices are those for which general controls are
insufficient to provide a reasonable assurance of safety and efficacy and for
which a "generic" performance standard or other special controls are
appropriate. Devices that do not meet the criteria for Class I or II are
placed in Class III. Class I and II devices, those Class III devices
initially marketed prior to passage of the Medical Device Amendments of 1976
("MDA") for which premarket approval applications ("PMAs") are not yet
required, and devices substantially equivalent to such devices, may be
marketed upon FDA clearance of a section 510(k) notification (a "510(k)
Notice"). Other Class III devices may be commercially marketed only after FDA
approval of a PMA. Generally, the process of obtaining FDA approval of a PMA
is similar to that for obtaining approval of a biological or other drug
product.

Based upon the information provided in a 510(k) Notice regarding the
device's intended use and technological features, the FDA will determine
whether the device is "substantially equivalent" to a predicate device, i.e.,
a device legally marketed which did not require a PMA. If a device is found
to be substantially equivalent to a predicate device, it may be freely
marketed in the United States so long as the device is otherwise in compliance
with the FDC Act. If it is not so found, it will be considered a Class III
device requiring a PMA. Substantial equivalence means that the FDA has found
that the device has the same intended use as the predicate device, and either
has the same technological characteristics or has different characteristics,
but there is information in the 510(k) Notice that shows the device is as safe
and effective as the predicate and does not present different questions of
safety and effectiveness.

EpiScreen/OraSure Collection Device. Use of the EpiScreen/OraSure
collection device for applications involving the detection of antibodies to
HIV is regulated by the FDA as use of a Class III medical device requiring a
PMA. In December 1994, the FDA approved Epitope Medical Products' PMA for use
of the Episcreen/Orasure device in HIV screening. Post-approval marketing
studies are underway as required as part of the FDA's approval of the
EpiScreen/OraSure device. In June 1996, the FDA approved the PMA for use of
the OraSure oral specimen-based Western blot confirmatory test kit for HIV-1
diagnosis.

In February 1995, Epitope Medical Products submitted a 510(k) Notice for
use of EpiScreen for cocaine testing. The submission is currently undergoing
FDA review. See "Business--Epitope Medical Products--Products Under
Development--EpiScreen." In the meantime, the FDA has advised Epitope Medical
Products that EpiScreen may be used for cocaine testing for the purposes of
life insurance risk assessment.

Western Blot Test Kits. Epitope Medical Products' HIV-1 Western blot
serum-based confirmatory test kits are used to confirm whether individuals are
infected with HIV-1. They are regulated by the FDA as biological products,
unlike most other diagnostic tests which are regulated as medical devices. In
March 1991, the FDA cleared the EPIblot HIV-1 serum-based confirmatory test
kit for commercial distribution. As noted above, a PMA seeking permission to
market the OraSure oral specimen-based Western blot confirmatory test kit for
HIV-1 diagnosis was approved by the FDA in June 1996.

Manufacturing Regulations. Every company that manufactures drugs,
biological products, or medical devices distributed in the United States is
subject to inspections by the FDA and must comply with the FDA's Current Good
Manufacturing Practices regulations. These regulations govern, among other
matters, manufacture, testing, release, packaging, distribution, and
documentation.

Other. Epitope Medical Products is also subject to regulation by the
Occupational Safety and Health Administration and may be subject to regulation
by the U.S. Environmental Protection Agency ("EPA") under the Toxic Substances
Control Act ("TSCA"), the Resource Conservation and Recovery Act, and other
legislation. Epitope Medical Products is also subject to foreign regulations
governing, for example, human clinical trials and marketing with respect to
products distributed outside the United States. Approval processes vary from
country to country, and the length of time required for approval or to obtain
other clearances may in some cases be longer than that required for U.S.
governmental approvals. The extent of potentially adverse governmental
regulation affecting Epitope Medical Products that might arise from future
legislative or administrative action cannot be predicted.

Agritope

Historically, Agritope has focused on the development and
commercialization of novel agricultural products using plant genetic
engineering and other modern methods. Through its acquisition of A&W and its
majority ownership of Vinifera, Agritope positioned itself as a vertically
integrated agribusiness with the production, distribution and marketing
infrastructure necessary to realize better the value of its proprietary
technology. Agritope's products now include a broad range of fruits,
vegetables and plants produced using technologically advanced farming and
plant propagation techniques designed to incorporate advances in
biotechnology, plant breeding, and crop production.

Agritope Research and Development

Agritope's biotechnology research and development program is focused on
using the tools and techniques of plant genetic engineering to regulate the
synthesis of ethylene in ripening fruits and vegetables. Ethylene gas is a
plant hormone which in higher plant species is responsible for fruit ripening
and vegetable senescence as well as numerous other physiological effects.
Agritope 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 postharvest 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 United States Department
of Agriculture ("USDA") Marketing Research Report have estimated postharvest
losses of 30% and 40% for strawberries shipped from Florida to the Chicago and
New York markets. In the U.S. fruit and vegetable markets, postharvest losses
are estimated to amount to several billion dollars annually.

Postharvest 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.

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 packers/shippers, better control of
product perishability may result in improved inventory flexibility and
control, and more uniform product quality.

Agritope 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 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 enzyme produced by the SAMase
gene degrades SAM into 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 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. See
"Description of Business--Epitope, Inc.--Patents and Proprietary Information."

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
commercialization.

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:

Tomato Product Evaluation
Raspberry Product Evaluation
Melon Transformation
Brassica Transformation
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.

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 into this market, Agritope and A&W 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-
third equity ownership interest in STA. Sunseeds provides elite tomato
germplasm and breeding expertise in the development of transgenic varieties.
A&W contributes testing and production acreage and will oversee the production
and wholesale distribution of fresh tomatoes to the fresh produce industry.

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 to be
conducted by A&W that, if successful, will lead to regulatory submissions and,
if regulatory clearances are received, commercial-scale seed production.
Subsequently, A&W would commence commercial tomato production and sales to the
industry.

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 is also conducting 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 United States, 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 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
commercially successful public domain varieties. A&W would undertake
commercial production and distribution of any improved raspberry products
resulting from this program.

Melon. The U.S. wholesale fresh melon market is estimated at $282
million annually. As with tomatoes, perishability 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 Limagrain, Clause Semences, and its U.S. affiliate Harris
Moran Seed Company ("Harris Moran"), Agritope is developing commercial melon
varieties with controlled ripening and increased postharvest product life.
Transgenic melons containing Agritope's ethylene control gene are currently
being evaluated jointly by Harris Moran and Agritope technicians. If
successfully developed, the melons will be distributed by A&W and third party
distributors.

Brassica. Agritope has an agreement with Sakata Seed America ("Sakata")
to develop new varieties of certain Brassica species (broccoli and
cauliflower). Sakata is the leading hybrid broccoli and cauliflower seed
supplier in the U.S. Sakata provided Agritope with germplasm from selected
breeding lines and funds to develop broccoli and cauliflower plants
integrating Agritope ripening control technology. Agritope received payment
from Sakata upon the transfer of genetically engineered plants to be used for
the production of hybrid seeds. If the seeds are commercialized, Agritope
will receive a royalty on sales made by Sakata.

Additional 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, lettuce, 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.

Andrew and Williamson Sales, Co.

As part of its vertical integration strategy, Agritope acquired A&W on
November __, 1996. A&W is a wholly owned operating subsidiary based in San
Diego, California with sales offices in San Diego and Bakersfield, California
and Nogales, Arizona. A&W, founded in 1986, produces fruits and vegetables
and provides sales and distribution services for growers from both mainland
and Baja, Mexico and the San Joaquin Valley in California. A&W produces and
distributes a diversified mix of fresh fruits and vegetables including vine
ripe cherry, roma and fresh market tomatoes, strawberries, raspberries,
melons, tree fruits, table grapes, cucumbers, squash, green, red and yellow
peppers, Brussels sprouts and asparagus. In addition to fresh strawberries,
A&W processes and sells frozen strawberry products. A&W ships fresh produce
every day of the year from its facilities in San Diego and ships seasonally
from its other sites. A&W is one of the United States' largest distributors
of vine ripe cherry and fresh market tomatoes. It is also a major shipper of
fresh strawberries, melons and cucumbers throughout North America. In
connection with its distribution operations, A&W also provides technical
support and short-term loans to certain growers. See Note 13 to Financial
Statements included herein.

The Company acquired A&W pursuant to an Acquisition and Merger Agreement
with A&W and its shareholders, under which a subsidiary of the Company was
merged into A&W. The Company issued 520,000 shares of common stock of
Epitope, Inc., in exchange for all the outstanding common stock of A&W. A&W
also repaid certain loans due to its shareholders. The acquisition was
accounted for as a pooling of interest and qualifies as a tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended.

The Company has agreed to register for resale the shares issued to the
shareholders of A&W, who have represented they have no present intention to
sell the shares. Fifteen percent of the shares will bear a legend prohibiting
sale without the Company's consent. The shareholders have agreed that these
shares will be returned to the Company to satisfy claims for breach of
representations and/or warranties arising within approximately one year after
closing.

The four principals of A&W have entered into three-year employment and
five-year noncompetition agreements with the Company. Fred L. Williamson,
president of A&W, is an executive officer of the Company.

Vinifera, Inc.

Vinifera, Inc. was incorporated in 1993 to participate in the grapevine
nursery business. Through proprietary processes, Vinifera propagates and
grafts grape plants for sale to vineyards and to growers of table grapes.
Industry sources have estimated that 44 million grafted wine grape 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 studier 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 Napa, California, with facilities in
Woodburn, Oregon and Petaluma, California. Its library of grape 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.
The first vines produced are expected to be sold in 1997. Vinifera is
currently in the process of establishing similar ventures in other countries
with large grape and wine production industries.

Vinifera was formed in 1993 as a wholly owned subsidiary of Agritope,
Inc. In June 1995, Agritope, Inc. agreed to sell its equity interest in
Vinifera to a purchaser which subsequently failed to make scheduled payments
of the purchase price. As part of a settlement of claims based on the
purchaser's default, the purchaser retained a minority interest in Vinifera
and relinquished the majority interest to Agritope, Inc. in August 1996.

Competition

The agribusiness and plant biotechnology industry is highly competitive.
Competitors include independent companies that specialize in agribusiness or
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,
Calgene Inc., DNAP Holding and Zeneca Seeds 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. Agritope believes that it can compete
successfully with companies in these markets by developing products that offer
unique and desirable attributes with superior quality.

The produce markets in which Agritope sells its products are highly
competitive. For example, competition in the fresh tomato market is expected
to intensify as other companies introduce tomatoes developed through
biotechnology and as existing "gas green" tomato producers react to
competitive pressures by growing and marketing traditionally developed vine
ripe tomatoes.

In other crops, competition may intensify as technological developments
occur within the agricultural biotechnology industry. In competing with such
companies, Agritope relies primarily on the experience of its production,
sales and marketing staff at A&W, the qualifications of its scientific staff,
and its technological capabilities.

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.

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 allows the growing and shipping
of its 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 its 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.

The FDA has also issued a food additive regulation permitting the use of
the kanr selectable marker gene, which encodes for the enzyme APH(3')II in
genetically engineering tomatoes, cotton and canola. Agritope tomato products
will fall under this regulation. It is uncertain whether additional food
additive regulations will need to be issued to cover additional fruit and
vegetable products which use the kanr selectable marker gene.

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
marketing of products derived using the tools and techniques of genetic
engineering.

The FDA is currently considering modifying its policy on foods developed
through genetic engineering to include a Premarket Notification ("PMN")
procedure. This policy modification could require companies that develop
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.

The federal regulatory agencies most involved in the business of A&W,
the production and marketing of fresh fruit and vegetables, are the USDA and
the FDA. The USDA sets standards for raw produce and governs its inspection
and certification. Under the Perishable Agricultural and Commodities Act
("PACA"), the USDA exercises broad control over the marketing of produce in
domestic and foreign commerce, sets standards of fair conduct as to
representations, sales, delivery, shipment and payment for goods and regulates
the licensing of produce merchants and brokers.

Almost every aspect of federal regulation is accompanied by regulation
on the state level. In addition, in its Mexican operations, A&W must comply
with the requirements of Mexican law, most importantly Mexico's environmental
protection law.

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.

To date, Agritope to the best of its knowledge has successfully
functioned within the scope of applicable laws and regulations, including
rules administered by the USDA, the FDA and the Mexican Ministry of
Agriculture. Agritope believes it is in compliance with all applicable laws
and regulations pertaining to the development and commercialization of its
products.

Epitope, Inc.
Supplies

The HIV-1 antigen needed to manufacture Epitope Medical Products's
Western blot HIV confirmatory test kits is available from only a limited
number of sources. Organon Teknika, the exclusive distributor of the test
kits, is required to supply Epitope Medical Products' requirements for antigen
for the term of its distribution agreement with Epitope Medical Products,
which ends in March 1997. The parties are negotiating terms for continuing
the supply arrangement. If for any reason Organon Teknika should no longer be
able to supply Epitope Medical Products's antigen needs, management believes
Epitope Medical Products would be able to obtain or produce its own supply of
antigen at a competitive cost. Epitope Medical Products has obtained a
license from the National Technical Information Service which is required for
the production of the HIV-1 antigen currently used in Epitope Medical
Products's Western blot test kits.

Other materials used by Agritope and Epitope Medical Products in
manufacturing, production, and research and development operations are widely
available from a variety of sources.

Grants and Contracts

The Company participates in United States Small Business Innovation
Research ("SBIR") programs sponsored by either the Department of Health and
Human Services or the Department of Agriculture. 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. Epitope Medical Products has received funds in the
past from the National Institute of Allergy and Infectious Diseases ("NIAID")
for work in developing a rapid test to detect HIV antibodies in oral fluid
specimens and from the National Cancer Institute ("NCI") to fund research for
the treatment of cancer by exploiting a deficiency of certain compounds in
cancer cells.

Agritope was awarded from the USDA a Phase I grant of $50,000 in 1994
and a Phase II grant of $200,000 in 1995 for development of diagnostic tests
for the detection of grapevine leafroll virus. Agritope has been awarded
grant support in the past from the Oregon Strawberry Commission and Oregon
Raspberry and Blackberry Commission for antifungal biocontrol research. The
Company also receives funds for research and development programs from its
strategic partners.

The Company intends to continue to participate in the SBIR programs,
similar grant programs and projects with strategic partners, as it deems
appropriate. The Company regularly makes applications for new grants, but
there is no assurance that grant support will be continued.

Patents and Proprietary Information

Epitope Medical Products has obtained patents in the United States and
certain foreign countries for the EpiScreen/OraSure and OraQuick devices and
related technology. Epitope Medical Products has applied for additional
patents, both in the United States and in certain foreign countries, on the
EpiScreen/OraSure collection device and a number of other technologies and
products. 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. The Company anticipates filing patent applications for protection
on future products and technology. United States 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 the Company is subject to trade
secret protection. To reduce the risk of loss of trade secret protection
through disclosure, the Company requires its employees and consultants to
enter into confidentiality agreements. The Company 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
the Company's success. Competitors may be able to produce products competing
with a patented Company product without infringing on the Company's patent
rights. Issuance of a patent in one country generally does not prevent
manufacture or sale of the patented product in other countries. The issuance
of a patent to the Company 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.

Personnel

At September 30, 1996, the Company and its subsidiaries had 113 full-
time employees, including 66 persons in Epitope Medical Products, 29 in
Agritope, and 18 in corporate administration and support. Epitope Medical
Products employees included 18 persons in research and product development,
eight in administration and marketing, 29 in manufacturing and production, and
ten in regulatory affairs and quality assurance. Agritope employees included
19 in research and development and ten at the Vinifera grape plant nursery
operation which also employs seasonal part-time employees as needed. The
Company considers its relations with its employees to be excellent. None of
its employees are represented by labor unions.

The Company employs nine persons holding Ph.D. or M.D. degrees with
specialties in the following disciplines: analytical chemistry, bacteriology
and public health, biochemistry, biophysics, hematology and internal medicine,
immunology, molecular biology, organic chemistry, plant biology and plant
pathology. From time to time, the Company also engages the services of
scientists as consultants to augment the skills of its scientific staff.

Scientific Advisory Board

The Company also utilizes the services of a Scientific Advisory Board.
The Scientific Advisory Board meets periodically to review the Company's
research and development efforts and to apprise the Company of scientific
developments pertinent to the Company's business. The Scientific Advisory
Board comprises chair Eugene W. Nester, Ph.D., Professor and Chair, Department
of Microbiology, University of Washington; Roger N. Beachy, Ph.D., Member,
Scripps Family Chair, and Head, Division of Plant Biology, The Scripps
Research Institute, and Co-Director of International Laboratory for Tropical
Agricultural Biotechnology; Peter R. Bristow, Ph.D., Associate Plant
Pathologist, Washington State University; J. Richard George, Ph.D., Vice
President of Scientific Affairs of Epitope Medical Products; Lesley M.
Hallick, Ph.D., Vice President for Academic Affairs, Oregon Health Sciences
University; Daniel Malamud, Ph.D., Professor and Chair, Department of
Biochemistry, University of Pennsylvania School of Dental Medicine; and
James I. Mullins, Ph.D., Professor of Microbiology and Medicine, University of
Washington.

Properties

The Company leases approximately 35,600 square feet of office,
manufacturing, and laboratory space in Beaverton, Oregon, under two leases
that terminate January 31, 2000. Each lease calls for fixed monthly payments
over its term. The Company also entered into a five-year lease, effective
October 1, 1996, for 2,265 square feet of warehouse space used to store
inventory and equipment.

Agritope, Inc., owns a 15-acre farm which it leases to Vinifera, Inc.,
for use in connection with Vinifera, Inc.'s grapevine micropropagation
operations. Greenhouse capacity at the farm currently totals 60,000 square
feet. Agritope, Inc., also uses a portion of the Company's office space and
research and development facilities in Beaverton, Oregon.

In addition to leasing Agritope, Inc.'s Oregon farm and greenhouse,
Vinifera leases 2,000 square feet of office space in Napa, California under a
lease that expires August 31, 1998 and 250,000 square feet of greenhouse space
in Petaluma, California under a lease that expires January 31, 2001.

A&W leases its main distribution facility in San Diego, California, from
Fred Andrew and Fred L. Williamson, under a lease agreement expiring August
31, 2001, with an option to extend the lease term for an additional five
years. A&W also leases a 1,000 square foot sales office in Bakersfield,
California, on a month-to-month basis. A&W utilizes 10,000 square feet of a
cold storage facility in San Diego, California, for its frozen strawberry
operations. A&W has right to use the cold storage space through January 18,
1998.

Legal proceedings.

The Company is not a party to any pending material legal proceedings.

<PAGE>
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations.

On February __, 1997, the shareholders will vote on a proposal to create two
new classes of common stock, one that will track the performance of the
Company's agricultural operations and one that will track the performance of
the Company's medical products business. The accompanying consolidated
financial statements have been prepared to reflect the operating results and
financial condition of the Company and its subsidiaries. In addition,
combined proforma financial statements have been prepared to reflect, on a
separate basis, assuming shareholder approval of the proposal, the operating
results and financial condition of the two groups.

Under the proposed plan, a new class of common stock called Agritope Common
Stock (Agritope Stock) will be distributed to Epitope shareholders in the
ratio of one-half share of Agritope Stock for each outstanding share of
existing common stock. In addition, Epitope shareholders will retain their
existing common stock which will be redesignated as Epitope Medical Products
Common Stock (Epitope Medical Products Stock) on a share-for-share basis. The
approval of the distribution will not result in any transfer of assets or
liabilities of the Company. The Company and its subsidiaries will continue to
hold title to all its assets and be responsible for all its liabilities.
Holders of the Epitope Medical Products and Agritope common stock will have no
specific claim against the assets attributed for financial statement
presentation purposes to the group whose performance is associated with the
class of stock they hold. Liabilities or contingencies of either group that
affect the Company's resources or financial condition could affect the
financial condition or results of operations of both groups.

The combined operating statements include the cost of certain services which
are provided on a centralized basis for the benefit of both groups ("Shared
Services"). Such expenses have been allocated to each group using activity
indicators which, in the opinion of management, represent a reasonable measure
of the respective group's utilization of or benefit from such Shared Services.
Interest earned on investments has been allocated to each group in direct
proportion to the allocation of Shared Services. See Note 2 to Financial
Statements.

The following discussion is a summary of key factors management considers
necessary in reviewing the results of operations, liquidity and capital
resources of the Company and its Epitope Medical Products and Agritope groups.

Epitope Medical Products

Results of Operations

The table below shows the percentage of Epitope Medical Products's total
revenue contributed by each of its principal products and by grants and
contracts.
<TABLE>
<CAPTION>

Fiscal Year 1996 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Percentage of Revenues from:
Oral Specimen Collection Devices. 59% 34% 34%
HIV Confirmatory Tests. . . . . . 28% 64% 65%
Grants and Contracts. . . . . . . 13% 2% 1%

Revenues. Epitope Medical Products' product sales increased 73% in 1996, to
$4.9 million, and 9% in 1995 as a result of expanded sales volume of its lead
product, the EpiScreen/OraSure oral specimen collection device. Approximately
39% of 1996 sales were attributable to shipments in the fourth quarter. Grant
and contract revenues amounted to $729,000 in 1996 due to funding of research
projects by the group's marketing partner, SmithKline Beecham plc. ("SB").
Revenues in 1994 were $2.6 million.

The oral specimen collection device, which is sold by the Company under the
trade name EpiScreen(TM) and by SB under the trade name OraSure(R), accounted
for revenues of $3.3 million in 1996, as compared to the $981,000 in 1995, and
$833,000 in 1994. The significant increase in sales volume resulted from FDA
clearances for expanded use of EpiScreen/OraSure.

Epitope Medical Products' Western blot HIV confirmatory test produced sales
revenues of $1.5 million for 1996, 15% below prior year levels. Reduced sales
to international markets accounted for the decline. In 1995, on the strength
of increased market share in the U.S., confirmatory tests produced revenues of
$1.8 million, representing a 7% increase over the prior fiscal year.

As of September 30, 1996, Epitope Medical Products had firm orders totaling
$1.8 million and $450,000, respectively, for delivery within 90 days of oral
specimen collection devices and HIV confirmatory tests, as compared to
$488,000 and $329,000, respectively, of firm orders for delivery within 90
days as of September 30, 1995.

Gross Margins. Gross margins on product sales improved to 44.9% of sales in
1996 as a result of increased sales volume of EpiScreen/Orasure devices.
Margins on EpiScreen/OraSure sales were negative in 1995 and 1994.

Research and Development Expenses. Research and development expenses declined
31% to $3.2 million in 1996 as a result of cost reductions associated with the
Company's September 1995 restructuring program as well as lower levels of
clinical trials activity. Research and development expenses increased from
$3.7 million in 1994 to $4.6 million in 1995. The increase resulted primarily
from increased research projects and clinical trial activities.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses declined 25% to $5.0 million in 1996 primarily due to
cost reductions implemented in the Company's restructuring program. Selling,
general and administrative expenses increased by $3.6 million to $6.7 million
in 1995 as a result of increased sales and marketing expenses associated with
product launch following the December 1994 FDA approval of EpiScreen/OraSure
device for use in HIV screening. Selling, general and administrative expenses
for 1995 included approximately $607,000 for severance payments and other
costs associated with implementing the restructuring program. Selling,
general and administrative expenses also included $3.0 million, $3.6 million
and $1.9 million for the allocation of Shared Services in 1996, 1995 and 1994,
respectively.

Other Income, Net. Other income for 1996 included $5.2 million related to
license fees earned from SB as a result of FDA approval of an extension of
dating for the OraSure/EpiScreen device. Other income increased from $236,000
in 1994 to $756,000 in 1995. The increase resulted primarily from higher
levels of investment income.

Liquidity and Capital Resources

Cash, cash equivalents and marketable securities allocated to Epitope Medical
Products as of year-end totaled $19.2 million in 1996 and $17.3 million in
1995. At September 30, 1996, Epitope Medical Products had working capital of
$20.4 million, as compared to $15.6 million at September 30, 1995.

In the combined financial statements, cash equal to 20% of the Company's cash,
cash equivalents and marketable securities has been allocated to Agritope.
Historically, cash was transferred to the Agritope operations in the form of
intercompany loans. For the purpose of preparing the separate statements of
Epitope Medical Products and Agritope, such transfers and intercompany
balances have been reflected as equity investments in Agritope. If the
creation of a second class of common stock is approved, the Company will
allocate $ million of cash to Agritope as additional contributed capital.

Proceeds from the issuance of equity securities of the Company,
augmented by funding from strategic partners and other research grants have
represented the primary source of funds for meeting Epitope Medical Products'
requirements for operations, working capital and business expansion.

Epitope Medical Products anticipates that it will continue to need funds
to support its operations and ongoing research and development projects as
well as to provide additional manufacturing capacity and related increases in
working capital. Epitope Medical Products intends to utilize cash reserves,
cash generated from sales of products and research funding from SB and other
strategic partners to provide the necessary funds. Epitope may also receive
additional funds from the sale of equity securities or from the exercise of
outstanding stock options and warrants.

<PAGE>
Agritope
Results of operations

The table below shows the percentage of Agritope's total revenue contributed
by each of its principal products and by grants and contracts:

</TABLE>
<TABLE>
<CAPTION>

Fiscal Year 1996 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Percentage of Revenues from:
Grape Plants. . . . . . . . . . . --% 4% 1%
Packaged Fresh Flowers. . . . . . --% 91% 97%
Grants and Contracts. . . . . . . 100% 5% 2%

Revenues. Revenues declined from $2.1 million in 1995 to $585,000 in 1996.
Revenues for 1994 were $2.2 million. Revenues in 1995 and 1994 included
product sales of $2.0 and $2.2 million, respectively, from the Company's
unprofitable wholesale fresh flower packaging and distribution operations
which were divested in the third quarter of fiscal 1995. A grant from the
U.S. Department of Agriculture plus grants from strategic partners accounted
for the increase of grant and contract revenues from $94,000 in 1995 to
$585,000 in 1996.

Research and Development Expenses. Research and development expenses in 1996,
1995 and 1994 totaled $1.3 million, $2.2 million and $2.4 million,
respectively. The decrease from 1995 to 1996 resulted from the divestiture of
certain businesses. See Note 3 to the financial statements.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses in 1996, 1995, and 1994 were $1.5 million, $4.5
million and $4.8 million, respectively. The higher cost levels in 1995 and
1994 resulted from increased costs at Agritope's Agrimax and Vinifera business
units. Selling, general and administrative expenses include $1.1 million,
$1.9 million and $1.7 million for the allocation of Shared Services in 1996,
1995 and 1994, respectively.

Liquidity and Capital Resources

Cash, cash equivalents and marketable securities allocated to Agritope as of
year-end totaled $4.9 million at September 30, 1996 and $4.2 million at
September 30, 1995. At September 30, 1996, Agritope had working capital of
$1.3 million, as compared to $5.1 million at September 30, 1995. The decrease
in working capital was principally attributable to the reclassification to
current liabilities of $3.6 million of convertible notes which are due June
30, 1997. The Company has received an offer from a representative of the
holders of such notes to convert them into common stock of the Company. The
Company is currently evaluating the offer. See Note 13 to Financial
Statements.

In the combined financial statements, cash equal to 20% of the Company's cash,
cash equivalents and marketable securities has been allocated to Agritope.
Historically, cash was transferred to the Agritope operations in the form of
intercompany loans. For the purpose of preparing the separate statements,
such transfers and intercompany balances have been recharacterized as equity
investments in Agritope. If the creation of a second class of common stock is
approved, the Company will allocate $ million of cash to Agritope as
additional contributed capital.

Proceeds from the issuance of equity securities of the Company, augmented by
funding from strategic partners and other research grants, represent the
primary source of funds for meeting Agritope's requirements for operations,
working capital and business expansion.

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 receive
additional funds from the sale of equity securities or the exercise of
outstanding stock options and warrants.

Agritope's investments include the book value of the investment in two Agrimax
affiliates. Agrimax holds an equity interest of approximately 9% in UAF,
L.P., a fresh flower distribution in Tampa, Florida and a 19.5% interest in
Petal, USA, Inc., which operates a similar business in St. Paul, Minnesota.
These equity interests were obtained in connection with divestiture of the
Agrimax fresh flower distribution business. See Note 3 to Financial
Statements.

Epitope, Inc. and Subsidiaries

Results of Operations

The Company reported revenues of $6.2 million, $5.0 million and $4.8 million,
respectively, for the years ended September 30, 1996, 1995 and 1994. Product
sales in 1996 increased due to higher sales volume for Epitope Medical
Products, which more than offset a $2.0 million reduction in product sales for
Agritope. Grant and contract revenues increased $681,000 for Epitope Medical
Products due to research funding received from SB and $491,000 for Agritope
which was attributable primarily to a Phase II SBIR grant.

Net losses for 1996, 1995 and 1994 amounted to $1.4 million, $18.5 million and
$15.6 million, respectively. The significant improvement in operating results
in 1996 was due to (1) increased sales volumes and improved gross margins for
Epitope Medical Products' EpiScreen/OraSure oral specimen collection device,
(2) a $5.2 million fee and accrued interest from SB to Epitope Medical
Products, (3) cost reductions realized as a result of a September 1995
restructuring program, and (4) reduced operating losses as a result of
divestiture of two Agritope business units.

The Company incurred expenses $4.1 million, $5.5 million and $3.6 million in
1996, 1995 and 1994, respectively, to provide Shared Services to Epitope
Medical Products and Agritope. The decrease in such costs in 1996 represented
costs savings realized from the restructuring program implemented in September
1995. Such costs increased in 1995 over 1994 levels as the Company increased
its infrastructure to respond to current growth and anticipated levels of
activity for both groups. See Note 2 to Financial Statements.

Liquidity and Capital Resources

Cash, cash equivalents and marketable securities on hand as of September 30,
1996 and 1995 totaled $24.5 million and $21.3 million. At September 30, 1996,
the Company had working capital of $21.6 million, as compared to $20.5 million
at September 30, 1995.

Proceeds from the issuance of equity securities represent the primary source
of funds for meeting the Company's requirements for operations, working
capital and business expansion. During 1996, the Company received proceeds of
$5.9 million from the exercise of warrants and options to purchase common
stock, as compared to $21.0 million in 1995.

The Company anticipates that it will continue to need funds to support ongoing
research and development projects as well as to provide additional
manufacturing capacity and related increases in working capital. The Company
intends to utilize cash reserves, cash generated from sales of products and
research funding from SB and other strategic partners to provide the necessary
funds. The Company may also receive additional funds from the sale of equity
securities or the exercise of outstanding stock options and warrants.

Financial Statements and Supplementary Data.

The following table presents summarized quarterly results of operations for
each of the fiscal quarters in the Company's fiscal years ended September 30,
1996 and 1995. These quarterly results are unaudited, but, in the opinion of
management, have been prepared on the same basis as the Company's audited
financial information and include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the information
set forth therein. The data should be read in conjunction with the Financial
Statements and related notes included in Item 14 of this Annual Report on
Form 10-K.
<PAGE>

</TABLE>
<TABLE>
<CAPTION>

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
(In thousands, except net loss per share)

First Second Third Fourth
Epitope Medical Products Quarter Quarter Quarter Quarter Total
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended September 30, 1996
Revenues........................ $ 1,225 $ 1,207 $ 1,107 $ 2,055 $ 5,594
Operating costs and expenses.... 2,510 2,819 2,507 3,045 10,881
Other income, net............... 224 218 5,345 240 6,027
Net income (loss)............... (1,061) (1,394) 3,945 (751) 739
Pro forma net income (loss)
per share .................... (.08) (.11) .29 (.06) .06
Year ended September 30, 1995
Revenues........................ $ 715 722 873 546 2,856
Operating costs and expenses.... 2,679 3,288 3,823 4,673 14,463
Other income net................ 101 149 277 229 756
Net loss........................ (1,863) (2,417) (2,673) (3,898) (10,851)
Pro forma net loss per share.... (.17) (.21) (.22) (.31) (.91)

First Second Third Fourth
Agritope Quarter Quarter Quarter Quarter Total
- ---------------------------------------------------------------------------------------------
Year ended September 30, 1996
<S> <C> <C> <C> <C> <C>
Revenues........................ $ 87 $ 263 $ 165 $ 70 $ 585
Operating costs and expenses.... 675 690 690 766 2,821
Other income (expense), net..... (3) 5 79 16 97
Net loss........................ (591) (423) (446) (679) (2,139)
Pro forma net loss per share.... (.09) (.07) (.06) (.11) (.34)

Year ended September 30, 1995
Revenues........................ $ 419 $ 953 $ 695 $ 43 $ 2,110
Operating costs and expenses.... 2,891 3,433 2,201 1,395 9,920
Other income, net............... 33 65 31 37 166
Net loss........................ (2,439) (2,415) (1,475) (1,316) (7,645)
Pro forma net loss per share.... (.44) (.41) (.24) (.21) (1.29)

First Second Third Fourth
Epitope, Inc. and Subsidiaries Quarter Quarter Quarter Quarter Total
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended September 30, 1996
Revenues........................ $ 1,311 $ 1,470 $ 1,272 $ 2,126 $ 6,179
Operating costs and expenses.... 3,185 3,510 3,197 3,810 13,702
Other income, net............... 222 223 5,425 253 6,123
Net (loss) income............... (1,652) (1,817) 3,500 (1,431) (1,400)
Net (loss) income per share..... (.13) (.14) .25 (.11) (.11)

Year ended September 30, 1995
Revenues........................ $ 1,135 $ 1,675 $ 1,569 $ 586 $ 4,965
Operating costs and expenses.... 5,571 6,721 6,025 6,066 24,383
Other income, net............... 134 214 308 266 922
Net loss........................ (4,302) (4,832) (4,148) (5,214) (18,496)
Net loss per share.............. (.39) (.41) (.34) (.42) (1.56)

</TABLE>
<PAGE>
Index to Financial Statements
Historical Financial Statements
Report of Independent Accountants

Epitope Medical Products
Combined Balance Sheets at September 30, 1996 and 1995
Combined Statements of Operations for years ended September 30, 1996, 1995,
and 1994
Combined Statements of Changes in Group Equity for years ended September 30,
1996, 1995, and 1994
Combined Statements of Cash Flows for years ended September 30, 1996, 1995,
and 1994

Agritope
Combined Balance Sheets at September 30, 1996 and 1995
Combined Statements of Operations for years ended September 30, 1996, 1995,
and 1994
Combined Statements of Changes in Group Equity for years ended September 30,
1996, 1995, and 1994
Combined Statements of Cash Flows for years ended September 30, 1996, 1995,
and 1994

Epitope, Inc and Subsidiaries
Consolidated Balance Sheets at September 30, 1996 and 1995
Consolidated Statements of Operations for years ended September 30, 1996,
1995, and 1994
Consolidated Statements of Changes in Shareholders' Equity for years ended
September 30, 1996, 1995, and 1994
Consolidated Statements of Cash Flows for years ended September 30, 1996,
1995, and 1994
Notes to Financial Statements

Supplemented Financial Statements (to be filed via Amendment No. 1)

Agritope (merged with Andrew and Williamson Sales, Co. in a pooling of
interests)

Combined Balance Sheets at September 30, 1996 and 1995
Combined Statements of Operations for years ended September 30, 1996, 1995,
and 1994
Combined Statements of Changes in Group Equity for years ended September 30,
1996, 1995, and 1994
Combined Statements of Cash Flows for years ended September 30, 1996, 1995,
and 1994

Epitope, Inc. and Subsidiaries (merged with Andrew and Williamson Sales, co.
in a pooling of interests)

Combined Balance Sheets at September 30, 1996 and 1995
Combined Statements of Operations for years ended September 30, 1996, 1995,
and 1994
Combined Statements of Changes in Shareholders' Equity for years ended
September 30, 1996, 1995, and 1994
Combined Statements of Cash Flows for years ended September 30, 1996, 1995,
and 1994

<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 shareholders'/group
equity, and of cash flows present fairly, in all material respects, the
financial position of Epitope Medical Products group and Agritope group (as
described in Note 1 to these financial statements) and Epitope, Inc. and its
subsidiaries at September 30, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period
ended September 30, 1996, 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.

PRICE WATERHOUSE LLP

Portland, Oregon
October 28, 1996, except for Note 13 as to which the date is November 6, 1996.
<PAGE>
<TABLE>
<CAPTION>

Epitope Medical Products
Combined Balance Sheets

SEPTEMBER 30 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents (Note 2)..................... $ 795,787 $ 13,210
Marketable securities (Note 2)......................... 18,818,120 17,080,246
Trade accounts receivable, net (Note 2)................ 1,147,599 231,621
Other accounts receivable.............................. 174,083 382,753
Inventories (Note 2)................................... 1,157,930 1,433,746
Prepaid expenses....................................... 89,518 103,399
--------------------------
Total current assets................................... 22,183,037 19,244,975

Property and equipment, net (Notes 2 and 4)............ 1,542,757 1,989,769
Patents and proprietary technology, net (Note 2)....... 601,234 415,010
Investments in affiliated companies.................... - 142,510
Other assets and deposits (Note 5)..................... 22,758 38,328
--------------------------
$24,349,786 $21,830,592

Liabilities and Group Equity
Current liabilities
Accounts payable....................................... $ 449,170 $ 819,424
Salaries, benefits and other accrued liabilities
(Notes 2 and 9)...................................... 1,368,166 2,976,167
--------------------------
Total current liabilities.............................. 1,817,336 3,795,591

Group equity (Note 6)
Contributed capital..................................... 64,237,350 60,479,315
Accumulated deficit..................................... (41,704,900) (42,444,314)
--------------------------
22,532,450 18,035,001
--------------------------

$24,349,786 $21,830,592

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Epitope Medical Products
Combined Statements of Operations

FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues
Product sales.............................. $ 4,864,378 $ 2,806,850 $ 2,580,798
Grants and contracts....................... 729,271 48,672 24,560
--------------------------------------------
5,593,649 2,855,522 2,605,358

Costs and expenses
Product costs.............................. 2,681,429 3,163,012 2,141,319
Research and development costs............. 3,165,838 4,617,246 3,681,326
Selling, general and administrative expenses 5,033,491 6,682,860 3,066,896
--------------------------------------------
10,880,758 14,463,118 8,889,541

Loss from operations (5,287,109) (11,607,596) (6,284,183)

Other income, net.......................... 6,026,523 756,424 235,926
--------------------------------------------
Net income (loss).......................... $ 739,414 $(10,851,172) $(6,048,257)

Pro forma net income (loss) per share...... $ .06 $ (.91) $ (.60)

Pro forma weighted average number of shares
outstanding................................ 13,440,396 11,886,234 10,050,129

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Epitope Medical Products
Combined Statements of Changes in Group Equity

Contributed Accumulated
capital deficit Total
------------------------------------------
<S> <C> <C> <C>
Balances at September 30, 1993. . . . . . . . $36,498,615 $(25,544,885) $ 10,953,730
Common stock issued upon
exercise of options . . . . . . . . . . . . 636,293 - 636,293
Common stock issued as
compensation. . . . . . . . . . . . . . . . 318,386 - 318,386
Compensation expense for
stock option grants . . . . . . . . . . . . 823,350 - 823,350
Common stock issued upon
exercise of warrants. . . . . . . . . . . . 9,718,259 - 9,718,259
Common stock issued in
private placement . . . . . . . . . . . . . 17,057,563 - 17,057,563
Equity issuance costs . . . . . . . . . . . . (3,335,261) - (3,335,261)
Net cash to Agritope . . . . . . . . . . . . (14,463,206) (14,463,206)
Net loss for the year. . . . . . . . . . . . - (6,048,257) (6,048,257)
------------------------------------------

Balances at September 30, 1994. . . . . . . . 47,253,999 (31,593,142) 15,660,857
Common stock issued upon
exercise of options . . . . . . . . . . . . 2,145,673 - 2,145,673
Common stock issued as
compensation. . . . . . . . . . . . . . . . 196,802 - 196,802
Compensation expense for
stock option grants . . . . . . . . . . . . 1,056,335 - 1,056,335
Common stock issued upon
exercise of warrants. . . . . . . . . . . . 18,892,750 - 18,892,750
Equity issuance costs . . . . . . . . . . . . (735,390) - (735,390)
Net cash to Agritope. . . . . . . . . . . . . (8,330,854) (8,330,854)
Net loss for the year . . . . . . . . . . . . - (10,851,172) (10,851,172)
------------------------------------------
Balances at September 30, 1995 . . . . . . . 60,479,315 (42,444,314) 18,035,001
Common stock issued upon
exercise of options. . . . . . . . . . . . 5,058,973 - 5,058,973
Common stock issued as compensation. . . . . 76,231 - 76,231
Compensation expense for stock
option grants. . . . . . . . . . . . . . . 815,019 - 815,019
Common stock issued upon
exercise of warrants . . . . . . . . . . . 826,600 - 826,600
Equity issuance costs. . . . . . . . . . . . (152) - (152)
Net cash to Agritope . . . . . . . . . . . . (3,018,636) - (3,018,636)
Net income for the year. . . . . . . . . . . - 739,414 739,414
------------------------------------------
Balances at September 30, 1996. . . . . . . . $64,237,350 $(41,704,900) $22,532,450

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Epitope Medical Products
Combined Statements of Cash Flows

FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss).............................. $ 739,414 $(10,851,172) $(6,048,257)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization................... 792,885 795,298 651,076
(Gain) loss on disposition of property.......... (1,098) 318 1,541
Increase in accounts receivable and
other receivables............................. (707,308) (76,549) (180,767)
Increase (decrease) in inventories.............. 275,816 (375,640) (272,279)
Decrease in prepaid expenses.................... 13,881 38,031 43,354
Decrease (increase) in other assets and deposits 15,570 (42,658) (6,227)
Increase (decrease) in accounts payable and
accrued liabilities............................ (1,978,255) 2,273,364 329,875
Common stock issued as compensation for services 76,231 196,802 318,386
Compensation expense for stock option grants and
deferred salary increases...................... 815,019 1,056,335 915,351
--------------------------------------
Net cash provided by (used in) operating
activities...................................... 42,155 (6,985,871) (4,247,947)

Cash flows from investing activities
Investment in marketable securities............. (47,608,270) (16,194,994) (5,603,414)
Proceeds from sale of marketable securities..... 45,870,396 4,718,162 -
Additions to property and equipment............. (180,112) (1,112,292) (461,914)
Proceeds from sale of property.................. 7,432 1,085 1,000
Expenditures for patents and proprietary
technology..................................... (358,319) (126,927) (185,805)
Investment in affiliated companies.............. 142,510 42,552 64,938
--------------------------------------
Net cash used in investing
activities..................................... (2,126,363) (12,672,414) (6,185,195)

Cash flows from financing activities
Principal payments under installment purchase and
capital lease obligations......................
Proceeds from issuance of common stock.......... 5,885,573 21,038,423 24,387,702
Cost of common stock issuance................... (152) (735,390) (310,849)
Cash to Agritope................................ (3,018,636) (8,330,854) (14,463,206)
-------------------------------------
Net cash provided by financing activities....... 2,866,785 11,972,179 9,613,647
Net increase (decrease) in cash and cash
equivalents.................................... 782,577 (7,686,106) (819,495)
Cash and cash equivalents at beginning of year.. 13,210 7,699,316 8,518,811
--------------------------------------
Cash and cash equivalents at end of year........ $ 795,787 $ 13,210 $7,699,316

</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
<CAPTION>
Agritope
Combined Balance Sheets

SEPTEMBER 30 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents (Note 2)..................... $ 4,903,476 $ 4,246,687
Trade accounts receivable, net (Note 2)................ 264,986 135,866
Other accounts receivable.............................. 32,337 993,790
Inventories (Note 2)................................... 509,745 -
Prepaid expenses....................................... 812 56,064
------------------------
Total current assets................................... 5,711,356 5,432,407

Property and equipment, net (Notes 2 and 4)............ 1,286,196 555,003
Patents and proprietary technology, net (Note 2)....... 510,244 140,757
Investment in affiliated companies (Note 3)............ 2,448,623 1,974,833
Other assets and deposits (Note 5)..................... 140,513 200,430
------------------------
$10,096,932 $ 8,303,430

Liabilities and Group Equity
Current liabilities
Current portion of installment notes payable........... $ - $ 17,758
Convertible notes, due 1997 (Notes 5 and 13)........... 3,620,003 -
Accounts payable....................................... 91,474 125,971
Salaries, benefits and other accrued liabilities
(Notes 2 and 9)...................................... 735,478 206,349
------------------------
Total current liabilities.............................. 4,446,955 350,078

Long-term portion of installment notes payable........ - 21,749
Convertible notes, due 1997 (Notes 5 and 13)........... - 3,620,003
Minority interest..................................... 215,407 -

Group equity (Note 6)
Contributed capital..................................... 36,714,932 33,452,632
Accumulated deficit..................................... (31,280,362) (29,141,032)
------------------------
5,434,570 4,311,600
------------------------
$10,096,932 $ 8,303,430

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Agritope
Combined Statements of Operations

FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues
Product sales.............................. $ - $ 2,015,318 $ 2,179,742
Grants and contracts....................... 585,485 94,370 33,642
---------------------------------------
585,485 2,109,688 2,213,384

Costs and expenses
Product costs.............................. - 3,235,675 4,575,149
Research and development costs............. 1,338,703 2,204,993 2,368,880
Selling, general and administrative expenses 1,482,694 4,479,498 4,759,219
---------------------------------------
2,821,397 9,920,166 11,703,248

Loss from operations...................... (2,235,912) (7,810,478) (9,489,864)
Other income (expense), net................ 96,582 165,822 (94,467)
---------------------------------------
Net loss................................... $(2,139,330) $(7,644,656) $(9,584,331)

Pro forma net loss per share............... $ (.34) $ (1.29) $ (1.91)

Pro forma weighted average number of shares
Outstanding................................ 6,330,710 5,943,117 5,025,064

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Agritope
Combined Statements of Changes in Group Equity

Contributed Accumulated
capital deficit Total
----------------------------------------------
<S> <C> <C> <C>
Balances at September 30, 1993 . . . $ 8,928,684 $(11,912,045) $ (2,983,361)
Common stock issued as
compensation. . . . . . . . . . . 50,392 - 50,392
Compensation expense for
stock option grants . . . . . . . 343,922 - 343,922
Common stock issued upon
exchange of convertible notes . . 559,964 - 559,964
Equity issuance costs . . . . . . . (40,267) - (40,267)
Net cash from Epitope Medical Products. . . . . . 14,463,206 - 14,463,206
Net loss for the year . . . . . . . (9,584,331) (9,584,331)
---------------------------------------------
Balances at September 30, 1994. . . 24,305,901 (21,496,376) 2,809,525
Common stock issued as
compensation. . . . . . . . . . . 69,998 - 69,998
Compensation expense for
stock option grants . . . . . . . 318,375 - 318,375
Common stock issued upon
exchange of convertible notes . . 449,991 - 449,991
Equity issuance costs . . . . . . . (22,487) - (22,487)
Net cash from Epitope Medical Products. . . . . . 8,330,854 - 8,330,854
Net loss for the year . . . . . . . (7,644,656) (7,644,656)
---------------------------------------------
Balances at September 30, 1995. . . 33,452,632 (29,141,032) 4,311,600
Common stock issued as compensation 14,500 - 14,500
Compensation expense for stock
option grants . . . . . . . . . . 229,164 - 229,164
Net cash from Epitope Medical Products. . . . . . 3,018,636 - 3,018,636
Net loss for the year . . . . . . . - (2,139,330) (2,139,330)
---------------------------------------------
Balances at September 30, 1996 . . . $36,714,932 $(31,280,362) $ 5,434,570

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Agritope
Combined Statements of Cash Flows

FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss....................................... $(2,139,330) $(7,644,656) $(9,584,331)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization................... 294,045 663,380 505,135
Loss on disposition of property................. - 500 74,130
Decrease (increase) in accounts receivable and
other receivables............................. 832,333 (945,501) (140,268)
Increase in inventories......................... (509,745) 88,737 (385,928)
Decrease (increase) in prepaid expenses......... 55,252 (55,639) 36,965
Decrease (increase) in other assets and deposits (36,219) 9,137 6,562
Increase (decrease) in accounts payable and
accrued liabilities............................ 494,632 (104,680) 67,457
Common stock issued as compensation for services 14,500 69,998 50,392
Compensation expense for stock option grants and
deferred salary increases...................... 229,164 318,375 343,922
--------------------------------------
Net cash used in operating activities........... (765,368) (7,600,349) (9,025,964)

Cash flows from investing activities
Additions to property and equipment............. (886,646) (238,558) (2,128,837)
Proceeds from sale of property.................. 13,258
Expenditures for patents and proprietary
technology..................................... (411,943) (178,208) 135
Investment in affiliated companies.............. (473,790) 610,146
Minority Interest in affiliated companies....... 215,407 - -
---------------------------------------
Net cash (used in) provided by investing
activities..................................... (1,556,972) 206,638 (2,128,702)

Cash flows from financing activities
Principal payments under installment purchase
and capital lease obligations.................. (39,507) (16,137) (20,726)
Cash from Epitope Medical Products.............. 3,018,636 8,330,854 14,463,206
---------------------------------------
Net cash provided by financing activities....... 2,979,129 8,314,717 14,442,482

Net increase (decrease) in cash and cash
equivalents.................................... 656,789 921,006 3,287,816
Cash and cash equivalents at beginning of year.. 4,246,687 3,325,681 37,865
----------------------------------------
Cash and cash equivalents at end of year........ $4,903,476 $4,246,687 $3,325,681

</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
Epitope, Inc. and Subsidiaries
Consolidated Balance Sheets

SEPTEMBER 30 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents (Note 2)..................... $ 5,699,263 $ 4,259,897
Marketable securities (Note 2)......................... 18,818,120 17,080,246
Trade accounts receivable, net (Note 2)................ 1,412,585 367,487
Other accounts receivable.............................. 206,420 1,376,543
Inventories (Note 2)................................... 1,667,675 1,433,746
Prepaid expenses....................................... 90,330 159,463
-------------------------
Total current assets................................... 27,894,393 24,677,382

Property and equipment, net (Notes 2 and 4)............ 2,828,953 2,544,772
Patents and proprietary technology, net (Note 2)....... 1,111,478 555,767
Investment in affiliated companies (Note 3)............ 2,448,623 2,117,343
Other assets and deposits (Note 5)..................... 163,271 238,758
-------------------------
$34,446,718 $30,134,022

Liabilities and Shareholders' Equity
Current liabilities
Current portion of installment notes payable........... $ - $ 17,758
Convertible notes, due 1997 (Notes 5 and 13)........... 3,620,003 -
Accounts payable....................................... 540,644 945,395
Salaries, benefits and other accrued liabilities
(Notes 2 and 9)...................................... 2,103,644 3,182,516
-------------------------
Total current liabilities.............................. 6,264,291 4,145,669

Long-term portion of installment notes payable......... - 21,749

Convertible notes, due 1997 (Notes 5 and 13)............ - 3,620,003

Commitments and contingencies (Notes 6, 8, 9, 10 and 11) - -
Minority Interest...................................... 215,407 -

Shareholders' equity (Note 6)
Preferred stock, no par value - 1,000,000 shares authorized;
no shares issued or outstanding........................ - -
Common stock, no par value - 30,000,000 shares
authorized; 12,937,383 and 12,485,130 shares issued and
outstanding, respectively.............................. 100,952,282 93,931,947
Accumulated deficit..................................... (72,985,262) (71,585,346)
-------------------------
27,967,020 22,346,601
-------------------------

$34,446,718 $30,134,022

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Epitope, Inc. and Subsidiaries
Consolidated Statements of Operations

FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues
Product sales.............................. $ 4,864,378 $ 4,822,168 $ 4,760,540
Grants and contracts....................... 1,314,756 143,042 58,202
--------------------------------------------
6,179,134 4,965,210 4,818,742

Costs and expenses
Product costs.............................. 2,681,429 6,398,687 6,716,468
Research and development costs............. 4,504,541 6,822,239 6,050,206
Selling, general and administrative expenses 6,516,185 11,162,358 7,826,115
--------------------------------------------
13,702,155 24,383,284 20,592,789

Loss from operations (7,523,021) (19,418,074) (15,774,047)

Other income, net...................... 6,123,105 922,246 141,459
--------------------------------------------
Net loss................................... $ (1,399,916) $(18,495,828) $(15,632,588)

Net loss per share......................... $ (.11) $ (1.56) $ (1.56)

Weighted average number of shares
outstanding................................ 12,661,420 11,886,234 10,050,129

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Epitope, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity

Common Stock Accumulated
Shares Dollars deficit Total
---------------------------------------------------------
<S> <C> <C> <C> <C>
Balances at September 30, 1993. . . 9,091,922 $ 45,427,299 $ (37,456,930) $ 7,970,369
Common stock issued upon
exercise of options . . . . . . . 52,488 636,293 - 636,293
Common stock issued as
compensation. . . . . . . . . . . 19,678 368,778 - 368,778
Compensation expense for
stock option grants . . . . . . . - 1,167,272 - 1,167,272
Common stock issued upon
exercise of warrants. . . . . . . 618,291 9,718,259 - 9,718,259
Common stock issued upon
exchange of convertible notes . . 28,672 559,964 - 559,964
Common stock issued in
private placement . . . . . . . . 1,115,500 17,057,563 - 17,057,563
Equity issuance costs . . . . . . . - (3,375,528) - (3,375,528)
Net loss for the year . . . . . . . - - (15,632,588) (15,632,588)
---------------------------------------------------------
Balances at September 30, 1994. . . 10,926,551 71,559,900 (53,089,518) 18,470,382
Common stock issued upon
exercise of options . . . . . . . 183,525 2,145,673 - 2,145,673
Common stock issued as
compensation. . . . . . . . . . . 16,013 266,800 - 266,800
Compensation expense for
stock option grants . . . . . . . - 1,374,710 - 1,374,710
Common stock issued upon
exercise of warrants. . . . . . . 1,336,000 18,892,750 - 18,892,750
Common stock issued upon
exchange of convertible notes . . 23,041 449,991 - 449,991
Equity issuance costs . . . . . . . - (757,877) - (757,877)
Net loss for the year . . . . . . . - - (18,495,828) (18,495,828)
---------------------------------------------------------
Balances at September 30, 1995. . . 12,485,130 93,931,947 (71,585,346) 22,346,601
Common stock issued upon
exercise of options . . . . . . . 386,550 4,886,118 - 4,886,118
Common stock issued as compensation 19,353 263,586 - 263,586
Compensation expense for stock
option grants . . . . . . . . . . - 1,044,183 - 1,044,183
Common stock issued upon
exercise of warrants. . . . . . . 46,350 826,600 - 826,600
Equity issuance costs . . . . . . . (152) - (152)
Net loss for the year . . . . . . . - - (1,399,916) (1,399,916)

---------------------------------------------------------
Balances at September 30, 1996 . . . 12,937,383 $ 100,952,282 $(72,985,262) $ 27,967,020

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Epitope, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss....................................... $(1,399,916) $(18,495,828) $(15,632,588)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization................... 1,099,051 1,458,677 1,156,211
(Gain) loss on disposition of property.......... (1,098) 819 75,671
Decrease (increase) in accounts receivable and
other receivables............................. 125,025 (1,022,050) (321,035)
Increase in inventories......................... (233,929) (286,903) (658,207)
Decrease (increase) in prepaid expenses......... 69,133 (17,608) 80,319
Decrease (increase) in other assets and deposits (32,770) (33,521) 335
Increase in accounts payable and accrued
liabilities.................................... (1,483,623) 2,168,684 397,332
Common stock issued as compensation for services 90,731 266,800 368,778
Compensation expense for stock option grants and
deferred salary increases...................... 1,044,183 1,374,710 1,259,273
---------------------------------------
Net cash used in operating activities........... (723,213) (14,586,220) (13,273,911)

Cash flows from investing activities
Investment in marketable securities............. (47,608,270) (16,194,994) (5,603,414)
Proceeds from sale of marketable securities..... 45,870,396 4,718,162 -
Additions to property and equipment............. (1,066,758) (1,350,850) (2,590,751)
Proceeds from sale of property.................. 7,432 14,343 1,000
Expenditures for patents and proprietary
technology..................................... (770,262) (305,135) (185,670)
Investment in affiliated companies.............. (331,280) 652,698 64,938
Minority interest in affiliated companies....... 215,407 - -
---------------------------------------
Net cash used in investing
activities..................................... (3,683,335) (12,465,776) (8,313,897)

Cash flows from financing activities
Principal payments under installment purchase and
capital lease obligations...................... (39,507) (16,137) (20,724)
Proceeds from issuance of common stock.......... 5,885,573 21,038,423 24,387,702
Cost of common stock issuance................... (152) (735,390) (310,849)
--------------------------------------
Net cash provided by financing activities....... 5,845,914 20,286,896 24,056,129

Net increase (decrease) in cash and cash
equivalents.................................... 1,439,366 (6,765,100) 2,468,321

Cash and cash equivalents at beginning of year.. 4,259,897 11,024,997 8,556,676
---------------------------------------
Cash and cash equivalents at end of year........ $ 5,699,263 $ 4,259,897 $ 11,024,997

</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>

Notes to Financial Statements

Note 1 The Company

Epitope, Inc. (the Company or Epitope) is an Oregon corporation utilizing
biotechnology to develop and market medical diagnostic products through its
Epitope Medical Products group (Epitope Medical Products) and superior new
plants and related products through its Agritope group (Agritope). Upon
approval of the proposal to create a new class of common stock (the Agritope
Stock Proposal), the capital structure of Epitope will be modified to include
two classes of common stock, Epitope Medical Products Common Stock and
Agritope Common Stock. The Epitope Medical Products group (Epitope Medical
Products) will include the medical products business conducted by the Company.
The Agritope group (Agritope) will include the agribusiness and agricultural
biotechnology operations of the Company.

Note 2 Summary of Significant Accounting Policies

BASIS OF PRESENTATION. The accompanying consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in
consolidation. Assets and liabilities of majority-owned subsidiaries are
included in these statements. Minority-owned investments and joint ventures
are accounted for using the equity method. Investments of less than 20% are
carried at cost.

The accompanying combined financial statements of the Epitope Medical Products
and Agritope groups have been prepared using the amounts included in the
consolidated financial statements of the Company. Assets and liabilities
directly attributable to each group are included in the respective balance
sheets of the applicable group. Cash and marketable securities, other than
cash held directly by Agritope, Inc. and its subsidiaries, have been allocated
80% to Epitope Medical Products and 20% to Agritope. Cash advanced by the
Company to business units of the Agritope group has been reflected as paid-in-
capital in the accompanying combined financial statements.

Certain services such as accounting, finance, general management, human
resources investor relations, information systems and payroll are provided by
the Company on a centralized basis for the benefit of both groups (Shared
Services). Such expenses have been allocated between Epitope Medical Products
and Agritope in the accompanying combined financial statements using activity
indicators which, in the opinion of management, represent a reasonable measure
of the respective group's utilization of such shared services. The activity
measurement indicators will be reviewed periodically and adjusted to reflect
changes in utilization. The accompanying combined financial statements also
include an adjustment to allocate interest income in the same proportion as
the allocation of Shared Services between the two groups. Future interest
income will be based on amounts earned by each group. Shared Services are
included under the caption "Selling, general and administrative expenses" as
follows:

YEAR ENDED SEPTEMBER 30 1996 1995 1994
- ----------------------------------------------------------------------------
Epitope Medical Products . . . $3,028,181 $3,575,069 $1,899,969
Agritope . . . . . . . . . . . 1,069,249 1,892,370 1,735,688
-------------------------------------
Consolidated . . . . . . . . . $4,097,430 $5,467,439 $3,635,657

The allocation of interest income is included under the caption "Other
income, net" as follows:

YEAR ENDED SEPTEMBER 30 1996 1995 1994
- ----------------------------------------------------------------------------
Epitope Medical Products . . . $1,025,030 $ 756,743 $ 237,467
Agritope . . . . . . . . . . . 361,938 408,097 216,934
-------------------------------------
Consolidated . . . . . . . . . $1,386,968 $1,164,840 $ 454,401

If the Agritope Stock Proposal is approved, the Company will provide holders
of Epitope Medical Products and Agritope common stock separate financial
statements, management's discussion and analysis of financial condition and
results of operations, descriptions of businesses and other relevant
information for each group. Notwithstanding the attribution of assets and
liabilities (including contingent liabilities) to each group for the purposes
of preparing their respective historical and future financial statements, this
attribution and the change in capitalization contemplated in the Agritope
Stock Proposal will not affect legal title to such assets or responsibility
for such liabilities of the Company or any of its subsidiaries. Holders of
each class of common stock will be common shareholders of the Company and
would be subject to risks associated with an investment in the Company and all
its businesses, assets, and liabilities. Liabilities or contingencies of
either group that affect the Company's resources or financial condition could
affect the financial condition and results of operations of either group.

Under the Agritope Stock Proposal, dividends to be paid to the holders of
either class of common stock will be limited to the lesser of funds of the
Company legally available for the payment of dividends or the Available
Medical Products Dividend Amount or Available Agritope Dividend Amount as
defined in the Company's Articles of Incorporation. The Company has never
paid any cash dividends on shares of Epitope common stock. The Company
currently intends to retain any of its earnings to finance future growth and,
therefore, does not anticipate paying any cash dividends on either class of
common stock in the foreseeable future.

Except as stated in the amended Articles of Incorporation, the accounting
policies applicable to preparation of financial statements of either group may
be modified or rescinded at the sole discretion of the Board of Directors of
the Company without the approval of shareholders, although there is no
intention to do so. In addition, generally accepted accounting principles
require that any change in accounting policy be preferable (in accordance with
such principles) to the previous policy.

CASH AND CASH EQUIVALENTS; MARKETABLE SECURITIES. For purposes of the
consolidated balance sheets and statements of cash flows, the Company
considers all highly liquid investments with maturities at time of purchase of
three months or less to be cash equivalents. At September 30, 1996,
marketable securities consisted of commercial paper and U.S. Treasury
securities with an original maturity period greater than three months, but
generally less than 12 months. The Company's policy is to invest its excess
cash in securities that maximize (a) safety of principal, (b) liquidity for
operating needs, and (c) after-tax yields.

Effective October 1, 1994, the Company adopted Financial Accounting Standards
Board Statement No. 115 (SFAS 115), Accounting for Certain Investments in Debt
and Equity Securities. Pursuant to SFAS 115, the Company has categorized all
of its investments as available-for-sale securities and, accordingly,
unrealized gains and losses on such investments, if material, will be carried
as a separate component of shareholders' equity. Such unrealized gains and
losses were immaterial as of September 30, 1996 and 1995.

INVENTORIES. Inventories are recorded at the lower of standard cost (which
approximates actual cost on a first-in, first-out basis) or market. Inventory
components are summarized as follows:

Epitope Medical Products
September 30 1996 1995
- ---------------------------------------------------------------------------

Raw materials. . . . . . . . $ 522,824 $ 657,568
Work-in-process. . . . . . . 389,642 379,470
Finished goods . . . . . . . 192,882 295,032
Supplies . . . . . . . . . . 52,582 101,676
-----------------------------------------------
$1,157,930 $ 1,433,746
Agritope
September 30 1996 1995
- ---------------------------------------------------------------------------

Work-in-process. . . . . . . $ 471,208 -
Finished goods . . . . . . . 38,537 -
----------------------------------------------
$ 509,745 $ -
Consolidated
September 30 1996 1995
- ---------------------------------------------------------------------------

Raw materials. . . . . . . . $ 522,824 $ 657,568
Work-in-process. . . . . . . 860,850 379,470
Finished goods . . . . . . . 231,419 295,032
Supplies . . . . . . . . . . 52,582 101,676
-----------------------------------------------
$1,667,675 $ 1,433,746

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 lives of the
related assets (three to seven years). Leasehold improvements are amortized
over the shorter of estimated useful lives or the terms of related leases.
When assets are sold or otherwise disposed, 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. Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" (SFAS 121), becomes effective for the
Company's fiscal year commencing October 1, 1996. SFAS 121 requires that
long-lived assets and related goodwill be reviewed for impairment and written
down to fair value whenever events or changes in circumstances indicate that
the carrying value may not be recoverable. Management is currently analyzing
the effects of adopting SFAS 121 and intends to adopt it in the quarter ending
December 31, 1996. The estimated impact of the impending adoption has not
been determined.

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 an agreement pursuant to which it acquired
Agritope's patented ethylene control technology in 1987. A co-inventor of the
technology relinquished all rights to future compensation under the agreement
in exchange for a one-time cash payment, a research grant and a limited
non-exclusive license to use the technology for one crop. The total
consideration of $365,000 is included in Agritope's combined balance sheet
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:

1996 1995 1994
- -----------------------------------------------------------------------------
Amortization for the year ended
September 30,
Epitope Medical Products . . . . $ 172,095 $ 130,313 $ 101,339
Agritope . . . . . . . . . . . . 42,456 23,964 13,487
----------------------------------
Consolidated $ 214,551 $ 154,277 $ 114,826

Accumulated Amortization at
September 30, . . . . . . . .
Epitope Medical Products . . . . $ 621,110 $ 449,015 $ 318,702
Agritope . . . . . . . . . . . . 79,907 37,451 13,487
----------------------------------
Consolidated $ 701,017 $ 486,466 $ 332,189

REVENUE RECOGNITION. Product revenues are generally derived from the sale of
products and are recognized as revenue when the related products are shipped.
Grant and contract revenues include funds received under research and
development agreements with various entities. Such revenues are recognized in
accordance with contract terms.

Accounts receivable are stated net of an allowance for doubtful accounts as
follows:

September 30 1996 1995
- ------------------------------------- -------------------------------------
Epitope Medical Products . . . . . . . . . $ 6,872 $ 6,872
Agritope . . . . . . . . . . . . . . . . . 19,571 65,172
-----------------------------
Consolidated $ 26,443 $ 72,044

RESEARCH AND DEVELOPMENT. Research and development expenditures are comprised
of those costs associated with the Company's own ongoing research and
development activities including the costs to prepare for, obtain and compile
clinical studies and other information to support product license
applications. 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. In 1993, the Company adopted SFAS No. 109
"Accounting for Income Taxes,"(SFAS 109) which requires the use of the asset
and liability method approach for accounting for income taxes. Under SFAS
109, 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.

To date, both Epitope Medical Products and Agritope have experienced operating
losses. Actual tax payment is a liability of Epitope as a whole. The
Agritope Stock Proposal provides that either group may be allocated the tax
benefit of such losses and future losses to reduce current or deferred tax
expense and that such losses will not be carried forward to reduce the losses
of the group which incurred such losses. Accordingly, either group may report
lower earnings than if such losses had been retained for the benefit of the
group which incurred such losses.

NET INCOME (LOSS) PER SHARE. Net income (loss) per share has been computed
using the weighted average number of shares of common stock and common stock
equivalents outstanding during the period. Common stock equivalents consist
of the number of shares issuable upon exercise of outstanding warrants,
options and convertible notes less the number of shares assumed to have been
purchased for the treasury with the proceeds from the exercise of such. Net
income (loss) per share for Epitope Medical Products and Agritope is presented
on a proforma basis assuming that the distribution of Agritope common stock
and redesignation of Epitope, Inc. common stock as Epitope Medical Products
common stock pursuant to the Agritope Stock Proposal had occurred on October
1, 1993.

SUPPLEMENTAL CASH FLOW INFORMATION. Non-cash financing and investing
activities not included in the consolidated statements of cash flows are
summarized as follows:

Epitope Medical Products
YEAR ENDED SEPTEMBER 30 1996 1995 1994
- ------------------------------------------------------------------------------
Discount on private placement of common stock - - 3,024,413

Agritope
YEAR ENDED SEPTEMBER 30 1996 1995 1994
- ------------------------------------------------------------------------------
Conversion of notes to equity (Note 5). . . - $ 427,496 $ 600,231
Investment in nonconsolidated subsidiary. . - 2,584,979 -

SUPPLEMENTAL PROFIT AND LOSS INFORMATION. In September 1995, management
announced a company-wide reduction in work force whereby 48 employees were
terminated. The Company charged $607,000 to results of operations for
severance payments and related expenses for this program. As of September 30,
1996 and 1995, $55,000 and $475,000, respectively, of these charges remain
accrued and are included in the accompanying balance sheets of the Company and
Epitope Medical Products under the caption "Salaries, benefits and other
accrued liabilities."

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 financial statements as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could vary from these
estimates.

Note 3 Investment in Affiliated Companies

In June 1995, Agritope agreed to sell its wholly owned subsidiary, Vinifera,
Inc. to VF Holdings, Inc. ("VF"), an affiliate of a Swiss investment group,
pursuant to a stock purchase agreement. VF subsequently failed to make all
the payments required under the VF Agreement. As part of a settlement of
claims based on VF's default, VF retained a minority interest in Vinifera and
relinquished the majority interest to Agritope in August 1996.

In May 1995, Agrimax Floral Products, Inc. (Agrimax), a wholly owned
subsidiary, transferred control of its Charlotte facility to Universal
American Flowers, Inc. (UAF), a privately held importer of high quality fresh
flowers engaged in distribution to customers in the eastern U.S. from
facilities in Tampa, Florida and Hammond, Louisiana. As of October 27, 1995,
Agrimax merged the Charlotte fresh flower operation with those of UAF in
return for an equity interest of approximately 18% in the merged entity, UAF,
L.P. In addition to tangible operating assets, Agrimax transferred to UAF,
L.P., the rights to use its proprietary floral preservative as well as the
Fresche Blossoms(reg-trade-mark), Everguard(reg-trade-mark) and Fresche
Blossoms Express(trademark) trademarks. In May 1996, the equity interest of
Agrimax was reduced to 9% as a result of a recapitalization of UAF L.P.

The St. Paul, Minnesota, facility of Agrimax ceased operations in June 1995.
In June 1996, Agrimax contributed inventory and operating assets to Petals,
US, Inc.("Petals"), a newly formed affiliate of a Canadian fresh flower
wholesaler, in return for a 19.5% equity interest in Petals.

The investments by Agrimax are included, at cost, in the accompanying
consolidated balance sheets of the Company and combined balance sheets of
Agritope under the caption "Investment in affiliated companies."

For the years ended September 30, 1995, 1994 respectively, the accompanying
financial statements of the Company and Agritope include revenues of $2.0
million and $2.2 million, and operating losses of $3.8 million, and $6.4
million attributable to the Agrimax and Vinifera business units. The
accompanying statements of operations of the Company and Agritope for the year
ended September 30, 1995, includes the results of operations of Agrimax and
Vinifera through May and also includes a charge of $500,000 primarily
attributable to the disposition of Agrimax which is included in the
accompanying consolidated balance sheets of the Company and combined balance
sheets of Agritope as of September 30, 1995 under the caption "Salaries,
benefits and other accrued liabilities."

Note 4 Property and Equipment

Property and equipment are summarized as follows:

SEPTEMBER 30 1996 1995
- -----------------------------------------------------------------------------
Epitope Medical Products
Research and development laboratory equipment . $ 1,056,883 $ 898,716
Manufacturing equipment . . . . . . . . . . . . 1,291,546 1,296,416
Office furniture and equipment. . . . . . . . . 1,899,948 2,041,897
Leasehold improvements. . . . . . . . . . . . . 1,084,660 1,084,660
Construction in progress. . . . . . . . . . . . 134,557 70,961
-----------------------------
5,467,594 5,392,650
Less accumulated depreciation and amortization (3,924,837) (3,402,881)
-----------------------------
$ 1,542,757 1,989,769

Agritope
Land. . . . . . . . . . . . . . . . . . . . . . $ 30,020 $ 30,020
Buildings and improvements. . . . . . . . . . . 717,508 717,508
Research and development laboratory equipment . 220,919 196,255
Manufacturing equipment . . . . . . . . . . . . 351,538 -
Office furniture and equipment. . . . . . . . . 140,452 95,338
Leasehold improvements. . . . . . . . . . . . . 23,962 23,962
Construction in progress. . . . . . . . . . . . 499,980 34,650
-----------------------------
1,984,379 1,097,733
Less accumulated depreciation and amortization (698,183) (542,730)
-----------------------------
$ 1,286,196 $ 555,003
<PAGE>
Consolidated
Land. . . . . . . . . . . . . . . . . . . . . . $ 30,020 $ 30,020
Buildings and improvements. . . . . . . . . . . 717,508 717,508
Research and development laboratory equipment . 1,277,802 1,094,971
Manufacturing equipment . . . . . . . . . . . . 1,643,084 1,296,416
Office furniture and equipment. . . . . . . . . 2,040,400 2,137,235
Leasehold improvements. . . . . . . . . . . . . 1,108,622 1,108,622
Construction in progress. . . . . . . . . . . . 634,537 105,611
----------------------------
7,451,973 6,490,383
Less accumulated depreciation and amortization (4,623,020) (3,945,611)
----------------------------
$ 2,828,953 $ 2,544,772

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 are unsecured, mature on June 30, 1997 and bear interest at
the rate of 4% per annum which is payable on each June 30 and December 31
until all outstanding principal and interest on the notes have been paid in
full. The notes are convertible into common stock of the Company at a
conversion price of $19.53 per share. In the event of an initial public
offering of Agritope common stock, the notes would be automatically converted
to shares of Agritope common stock at 90% of the public offering price.

During the years ended September 30, 1995 and 1994, respectively, investors
exchanged $449,991 and $559,964 principal amount of convertible notes for the
Company's common stock at a price of $19.53 per share. In conjunction with
the exchanges, unamortized debt issuance costs of $22,487 and $40,267 related
to such notes were recognized as equity issuance costs during 1996 and 1995,
respectively. Debt issuance costs are included in other assets and are being
amortized over the five-year life of the notes. Amortization expense of debt
issuance costs for the years ended September 30, 1996, 1995 and 1994,
respectively, totaled $96,136, $91,715 and $121,000, leaving an unamortized
balance of $197,077 and $315,708 at September 30, 1996 and 1995, respectively.

Note 6 Shareholders' Equity

AUTHORIZED CAPITAL STOCK. The Company's amended articles of incorporation
authorize 1,000,000 shares of preferred stock and 30,000,000 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 RESERVED FOR FUTURE ISSUANCE. As of September 30, 1996, the
following shares of the Company's common stock were reserved for future
issuance, as more fully described below:

PURPOSE SHARES

Outstanding warrants. . . . . . . . . . . . . . . 2,012,990
Outstanding stock options . . . . . . . . . . . . 3,365,726
Employee Stock Purchase Plan subscriptions. . . . 42,699
Conversion of notes (Note 5). . . . . . . . . . . 185,352
-----------------
5,606,767

If the Agritope Stock Proposal is approved, the Company will issue to the
holders of the above rights to purchase shares of Epitope common stock or to
convert notes into such shares, as applicable, the equivalent rights with
respect to Agritope common stock on the basis of one-half share of Agritope
common stock for each right to purchase one share of Epitope common stock.

COMMON STOCK WARRANTS. As of September 30, 1996, the following warrants to
purchase shares of common stock were outstanding:

DATE OF ISSUANCE Shares Price Expiration Date
- ------------------------------------------------------------------------------

September 26, 1991. . . . . 171,500 $16.00 September 30, 1997
December 23, 1992 . . . . . 988,390 18.50 September 30, 1997
July 20, 1993 . . . . . . . 375,000 20.00 September 30, 1997
August 1, 1993. . . . . . . 200,000 18.50 September 30, 1997
October 17, 1994. . . . . . 50,000 18.50 September 30, 1997
November 22, 1994 . . . . . 228,100 18.50 September 30, 1997
--------------
2,012,990

STOCK AWARD PLANS. The Company's 1991 Stock Award Plan (the 1991 Plan) was
approved by the shareholders during 1991, replacing the Company's Incentive
Stock Option Plan (ISOP). The 1991 Plan provides for stock-based awards to
employees, outside directors and members of scientific advisory committees or
other consultants. Awards which may be granted under the 1991 Plan include
qualified incentive stock options, nonqualified stock options, stock
appreciation rights, restricted awards, performance awards and other
stock-based awards.

Under the terms of the 1991 Plan, qualified incentive stock options on shares
of common stock may be granted to eligible employees, including officers, of
the Company at an exercise price not less than the fair market value of the
stock on the date of grant. The maximum term during which any option may be
exercised is ten years from the date of grant. To date, options have been
granted with four-year vesting schedules.

Options issued to employees under the Incentive Stock Option Plan (ISOP) were
issued at prices not less than the fair market value of a share of common
stock on the date of grant. The options are exercisable after one year from
the date of grant at the rate of 25% per year cumulatively and expire ten
years from the date of grant.

The Agritope, Inc. 1992 Stock Award Plan (the 1992 Plan) was adopted by
Agritope and approved by the Company in 1992. The 1992 Plan, which has
provisions similar to those of the Company's 1991 Plan, authorizes issuance of
2,000,000 shares of Agritope common stock. Until Agritope is no longer a
wholly owned subsidiary of the Company, shares issued pursuant to exercise of
options under the 1992 Plan will be converted into shares of the Company's
common stock based on the ratio of the fair market value of the Company's
common stock to the fair market value of Agritope common stock on the date of
the grant.

The 1991 Plan and 1992 Plan also provide that nonqualified options may be
granted at a price not less than 75% of the fair market value of a share of
common stock on the date of grant. The option term and vesting schedule of
such awards may either be unlimited or have a specified period in which to
vest and be exercised. For the discounted nonqualified options issued, the
Company amortizes, on a straight-line basis over the vesting period of the
options, the difference between the exercise price and the fair market value
of a share of stock on the date of grant. As of September 30, 1996, 197,181
shares of Epitope common stock remain available for grant under the Company's
stock award plans.

In October 1995, the Financial Accounting Standards Board issued SFAS 123,
"Accounting for Stock-Based Compensation." 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 APB Opinion 25,
"Accounting for Stock Issued to Employees," but with additional financial
statement disclosure. The Company plans to elect the disclosure-only
alternative commencing in fiscal 1997 and therefore does not anticipate that
SFAS 123 will have a material impact on its financial position or results of
operations.

Options granted and outstanding under the Company's stock option plans are
summarized as follows:

<TABLE>
<CAPTION>
1996 1995 1994
Shares Price Shares Price Shares Price
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of period . 3,636,103 $1.09-$24.94 3,483,432 $ 1.09-$24.94 3,052,653 $1.09-$24.94
Granted. . . . . . . . 901,379 9.81-18.13 802,050 14.94-18.88 589,850 14.38-22.94
Exercised. . . . . . . (386,550) 1.09-17.13 (183,525) 1.84-22.50 (52,488) 12.43-22.50
Canceled . . . . . . . (785,206) 14.38-24.00 (465,854) 7.38-22.94 (106,583) 8.50-22.94
---------- ---------- ----------
Outstanding at
end of period . . . . . 3,365,726 $3.50-$24.94 3,636,103 $1.09-$24.94 3,483,432 $1.09-$24.94

Exercisable. . . . . . . 2,302,212 $3.50-$24.94 2,002,925 $1.09-$24.94 1,557,505 $1.09-$24.94
</TABLE>

Pursuant to the 1991 Plan, 973, 3,680 and 11,741 shares of common stock were
also awarded to consultants and members of the Company's scientific advisory
committees during 1996, 1995, and 1994, respectively.

EMPLOYEE STOCK PURCHASE PLANS. In 1991, the shareholders approved the
Company's adoption of the 1991 Employee Stock Purchase Plan (1991 ESPP)
covering a maximum of 100,000 shares of common stock for subscription over two
offering periods. The purchase price for stock purchased under the 1991 ESPP
for each of the two 24-month subscription periods was the lesser of 85% of the
fair market value of a share of common stock at the commencement of the
subscription period or the fair market value at the close of each subscription
period. An employee may also elect to withdraw at any time during the
subscription period and receive the amounts paid plus interest at the rate of
6%. During April 1994, 676 shares, at a purchase price of $14.00 per share,
were issued to employees for the second 1991 ESPP purchase period which closed
March 31, 1994.

The 1993 Employee Stock Purchase Plan (1993 ESPP), as amended and restated
effective February 1, 1993, covers a maximum of 250,000 shares of common stock
for subscription over established offering periods. The Company'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, provided that no
more than three offering periods (other than Special Offering Subscriptions as
described below) may be set during each fiscal year of the Company. Other
provisions of the 1993 ESPP are similar to the 1991 ESPP. During April, 1996,
10,106 shares were issued at a price of $11.90 per share. As of September 30,
1996, 42,820 shares of common stock were subscribed for during two offerings
under the 1993 ESPP. Shares subscribed for under these 1993 ESPP offerings
may be purchased over 24 months and have initial subscription prices of $12.33
and $8.77 per share for the various offerings.

The 1993 ESPP was amended to allow the Company, at its discretion, to provide
Special Offering Subscriptions whereby an employee's annual increase in
compensation could be deferred for a one-year period. At the end of the one-
year period, the employee can elect to receive the deferred compensation
amount in the form of cash or shares of the Company's common stock. The
purchase price for stock issued under a Special Offering Subscription is the
lesser of 85% of the fair market value of a share of common stock on the first
day of the calendar month the employee's increase was effective or the fair
market value at the close of the one-year subscription period. During 1995
and 1994, respectively, 5,569 and 2,314 Special Offering Subscription shares
were issued to employees at an average price of $15.26 and $15.24 per share.
<PAGE>
Note 7 Income Taxes

As of September 30, 1996, the Company had net operating loss carryforwards of
approximately $66.7 million and $50.0 million, respectively, to offset federal
and state taxable income. Approximately $6.9 million of the Company's net
operating loss carryforwards were generated as a result of deductions related
to the exercise of stock options. When utilized, such carryforwards, as tax
effected, will be reflected in the Company's financial statements as an
increase in shareholders' equity rather than a reduction of the provision for
income taxes.

As of September 30, 1996 the Company had total gross deferred tax assets of
approximately $28.4 million, consisting primarily of $24.5 million of net
operating loss carryforwards, $1.1 million of research and development tax
credit carryforwards and $2.0 million of accrued deferred compensation costs.
No benefit for these assets has been reflected in the accompanying
consolidated financial statements as they do not satisfy the recognition
criteria set forth in Statement of Financial Accounting Standards No. 109
(SFAS 109). Accordingly, a valuation allowance of $28.4 million, representing
a $1.1 million decrease since the prior fiscal year end, has been recorded.

The expected tax benefit of approximately $476,000 for the year ended
September 30, 1996 is increased by approximately $61,000 for the effect of
state and local taxes (net of federal impact),$1.1 million for the effect of
the decrease in valuation allowance, and $840,000 for the effect of stock
option deductions included in the valuation allowance and is reduced by
approximately $2.5 million for the effect of Vinifera Inc.'s net operating
loss carryforwards and certain state net operating loss carryforwards being
removed from the consolidated tax group.

Note 8 Research and Development Arrangements

In February 1995, the Company entered into a Development, License and Supply
Agreement with SmithKline Beecham, plc (SB) pursuant to which the Company will
conduct research and development projects funded by SB. Agritope also
performed research work in 1995 with respect to raspberries which was
partially funded by Sweetbriar Development, Inc. under a License Agreement
dated October 18, 1994 and with respect to grapevine disease diagnostics
funded by a Phase I grant from the U.S. Department of Agriculture under the
Small Business Innovation Research Program.

During 1994, the Company participated in a National Cancer Institute program
whereby the Company received funding for research toward the treatment of
cancer. 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."

Note 9 Distribution and Supply Contracts

The Company has entered into several contractual arrangements, including those
discussed in the following paragraphs, for distribution of certain of its
products to customers.

The Company continues to maintain supply and distribution agreements with
Organon Teknika Corporation (Organon Teknika), whereby Organon Teknika
supplies the Company's antigen requirements and exclusively distributes the
Company's EPIblot HIV confirmatory tests (EPIblot) on a worldwide basis. As
of April 1, 1994, the Company renewed the agreements which have an initial
termination date of March 31, 1997 (with successive one-year renewal periods
thereafter) and include pricing incentives based on volumes purchased by
Organon Teknika and penalties for failure to purchase specified minimum
quarterly volumes. For the years ended September 30, 1996, 1995 and 1994,
respectively, revenues generated from sales of EPIblot to Organon Teknika were
$1,539,164, $1,808,431, and $1,688,200, including export sales of $62,539,
$72,369 and $320,700. The Company has notified Organon Teknika that it
intends to renew the agreements on mutually acceptable, but revised, terms
prior to the scheduled termination date.

LabOne, Inc. (previously Home Office Reference Laboratory, Inc.) purchases
oral specimen devices from the Company for use in insurance testing in return
for non-exclusive distribution rights in the United States and Canada under an
agreement which expires on March 13, 2000, with an automatic five-year
renewal, unless either party notifies the other of intent not to renew at
least 180 days prior to the initial expiration date. For the years ended
September 30, 1996, 1995 and 1994, respectively, revenue generated from
product sales to LabOne, Inc. was $1,327,544, $525,628 and $477,186 including
export sales of $394,747, $58,500 and $110,933.

SB has an exclusive agreement to market the Company's oral specimen collection
device worldwide, except in several foreign countries and to the insurance
industry in the U.S., Canada and Japan.

In 1995, SB made an initial license fee payment of $1 million to the Company.
SB also placed $5 million in escrow for future payment to the Company, of
which $1 million was designated for reimbursement of future research project
work and $4 million was designated as an additional license fee to be paid
upon FDA approval of a pending request to amend the labeling of the Company's
oral specimen collection device to indicate a two-year shelf life. The
initial $1 million license fee was included as deferred revenue under the
caption "Salaries, benefits and other accrued liabilities" in the accompanying
consolidated balance sheets as of September 30, 1995. The escrowed funds are
not reflected in the Company's financial statements.

In April 1996, the FDA granted the Company's request for extended dating and
SB disbursed $4 million plus interest from escrow. Accordingly the Company
recognized income of $5 million in 1996 operating results.

Note 10 Commitments

The Company leases office, manufacturing, warehouse and laboratory facilities
under operating lease agreements which require minimum annual payments as
follows:

Epitope
Medical
YEAR ENDING SEPTEMBER 30 Products Agritope Consolidated
------------------------ ---------- -------- ------------

1997. . . . . . . . . . . . . . . . . . $ 345,577 $189,551 $ 535,128
1998. . . . . . . . . . . . . . . . . . 345,576 185,394 530,970
1999. . . . . . . . . . . . . . . . . . 346,356 150,000 496,356
2000. . . . . . . . . . . . . . . . . . 109,992 150,000 259,992
2001. . . . . . . . . . . . . . . . . . -- 50,000 50,000
---------- -------- ----------
$1,147,501 $724,945 $1,872,446

Under the agreements for the lease of its office and laboratory facilities,
the Company is obligated to the lessor for its share of certain expenses
related to the use, operation, maintenance and insurance of the property.
These expenses, payable monthly in addition to the base rent, are not included
in the amounts shown above. Rent expense aggregated $538,665, $749,530 and
$616,750 for the years ended September 30, 1996, 1995 and 1994, respectively.

The Company is also contingently liable for a lease of which has been assigned
to UAF, L.P. and the lease of property which has been subleased to Petals USA,
Inc. in the following amounts:
<PAGE>
YEAR ENDING SEPTEMBER 30
-----------------------------------------------------------

1997. . . . . . . . . . . . . . . . . . 328,953
1998. . . . . . . . . . . . . . . . . . 341,304
1999. . . . . . . . . . . . . . . . . . 347,184
----------
$1,017,441

Note 11 Profit Sharing and Savings Plan

The Company established a profit sharing and deferred salary savings plan in
1986 and restated the plan in 1991. All 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, the Company 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% of an
employee's basic contribution, not to exceed 2.5% of an employee's
compensation. The Board of Directors has the authority to increase or
decrease the 50% match at any time. During 1996, 1995 and 1994, respectively,
the Company contributed $73,315 (4,653 shares totaling $73,279 and the
remainder in cash), $97,631 (5,562 shares totaling $97,607 and the remainder
in cash), and $79,981 (4,632 shares totaling $79,807 and the remainder in cash
to the plan. As of September 30, 1996, 17,035 shares are held by the plan.
<PAGE>
Note 12 Geographic Area Information

The Company's products are included in the medical products and agricultural
products industry segments. (See Note 1 for a description of the Company's
business.) The Company's products are sold principally in the United States,
Canada and Europe. Operating loss represents revenues less operating
expenses. In computing operating loss, allocated corporate administration
expenses have been included; however, other income and expense items such as
interest expense, miscellaneous income, and other charges have not been added
or deducted. Other assets primarily represent cash and cash equivalents,
marketable securities, and prepaid insurance.

<TABLE>
<CAPTION>
Epitope Medical Products
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Geographic Identifiable
Areas Sales Operating Loss Assets
In thousands 1996 1995 1994 1996 1995 1994 1996 1995 1994
- --------------------------------------------------------------------------------------------
United
States.... $4,903 $2,630 $2,062 $ (5,287) $(11,608) $(6,284) $4,604 $3,768 $3,464
Canada..... 404 78 111 -- -- -- --
Latin
America... 100 - - -- -- -- --
Europe..... 65 72 329 -- -- -- --
Other...... 122 76 103 -- -- -- --
-----------------------------------------------------------------------------
$5,594 $2,856 $2,605 $ (5,287) $(11,608) $(6,284) $4,604 $3,768 $3,464

Agritope

Geographic Identifiable
Areas Sales Operating Loss Assets
In thousands 1996 1995 1994 1996 1995 1994 1996 1995 1994
- --------------------------------------------------------------------------------------------
United
States.... $ 585 $2,110 $2,213 $ (2,236) $(7,810) $(9,490) $ 5,351 $3,923 $4,050
- -------------------------------------------------------------------------------------------
$ 585 $2,110 $2,213 $ (2,236) $(7,810) $(9,490) $ 5,351 $3,923 $4,050

Epitope, Inc. Consolidated

Geographic Identifiable
Areas Sales Operating Loss Assets
In thousands 1996 1995 1994 1996 1995 1994 1996 1995 1994
- --------------------------------------------------------------------------------------------
United
States.... $5,488 $4,739 $4,276 $ (7,523) $(19,418) $(15,774) $9,955 $7,691 $7,514
Canada..... 404 78 111 -- -- -- --
Latin
America... 100 - - -- -- -- --
Europe..... 65 72 329 -- -- -- --
Other...... 122 76 103 -- -- -- --
-----------------------------------------------------------------------------
$6,179 $4,965 $4,819 $ (7,523) $(19,418) $(15,774) $9,955 $7,691 $7,514
</TABLE>

Note 13 Subsequent Event

On November 6, 1996, the Company entered into an Acquisition and Merger
Agreement (Merger Agreement) with Andrew and Williamson Sales Co. (A&W) and
its shareholders. A&W is a producer and wholesale distributor of fruits and
vegetables based in San Diego, California. Under the terms of the Merger
Agreement, the Company will issue 520,000 shares of common stock of Epitope,
Inc. in exchange for all of the outstanding common stock of A&W. The merger,
which is expected to be consummated in November 1996, will be accounted for as
a pooling of interests and will qualify as a tax-free reorganization.

On October 25, the Company received an offer from a representative of the
holders of the $3.6 million convertible notes due June 30, 1997, whereby the
holders proposed to convert such notes into common stock of the Company at a
price of $14 or the average closing price of such stock for the five trading
days ending November 8, 1996, whichever is lower. The Company intends to
accept the offer. The closing price of the Company's common stock on October
24, 1996, was $14.25.

<PAGE>
<PAGE>
EDGAR note: For purposes of EDGAR, { } indicates text that will be marked as
new and [ ] indicates text that will be marked as deleted.

Annex IV
Proposed Amendments to
1991 Stock Award Plan

EPITOPE, INC.

AMENDED AND RESTATED 1991 STOCK AWARD PLAN

ARTICLE 1
ESTABLISHMENT AND PURPOSE

1.1 Establishment; Amendment and Restatement. Epitope, Inc.
("Corporation"), hereby establishes the Epitope, Inc., 1991 Stock Award Plan
(the "Plan"), effective as of January 8, 1991, subject to shareholder approval
as provided in Article [18] {17}. The Plan was {previously} amended and
restated [as set forth herein] effective March 25, 1991 [and]{,} December 8,
1992[. [The Plan was subsequently amended effective]{,} December 14, 1993,
November [14] {15}, 1994, and December[, 1994.]] {13, 1994, and is further
amended and restated as set forth herein effective _____________, 1996.}

1.2 Purpose. The purpose of the Plan is to promote and advance
the interests of Corporation and its shareholders by enabling Corporation to
attract, retain, and reward key employees, outside advisors, and directors of
Corporation and its subsidiaries. It is also intended to strengthen the
mutuality of interests between such employees, advisors, and directors and
Corporation's shareholders. The Plan is designed to meet this intent by
offering stock options and other equity-based incentive awards, thereby
providing a proprietary interest in pursuing the long-term growth,
profitability, and financial success of Corporation.

ARTICLE 2
DEFINITIONS

2.1 Defined Terms. For purposes of the Plan, the following terms
shall have the meanings set forth below:

"Advisor" means a member of an Advisory Committee of Corporation
or a Subsidiary, or any other consultant selected by the Committee, who is
neither an employee of Corporation or a Subsidiary nor a Non-Employee
Director.

"Advisory Committee" means a scientific advisory committee to
Corporation or a Subsidiary.

{}"Agritope Share" means a share of Agritope Stock.

"Agritope Stock Proposal Date" means the effective date of the
amendment of Corporation's Articles of Incorporation to create Agritope Stock
and to redesignate Corporation's previously existing common stock as Medical
Products Stock.

"Agritope Stock" means the Agritope Group Common Stock, no par
value, of Corporation or any security of Corporation issued in substitution,
exchange, or in lieu of such stock.

"Award" means an award or grant made to a Participant of Options,
Stock Appreciation Rights, Restricted Awards, Performance Awards, or Other
Stock-Based Awards pursuant to the Plan.

"Award Agreement" means an agreement as described in Section 6.4.

"Board" means the Board of Directors of Corporation.

"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor thereto, together with rules,
regulations, and interpretations promulgated thereunder. Where the context so
requires, any reference to a particular Code section shall be construed to
refer to the successor provision to such Code section.

"Committee" means the committee appointed by the Board to
administer the Plan as provided in Article 3 of the Plan.

"Common Stock" means the Common Stock, no par value, of
Corporation or any security of Corporation issued in substitution, exchange,
or [lieu thereof.] {in lieu of such stock. For all periods after the Agritope
Stock Proposal Date, references in this Plan to Common Stock include either
Agritope Stock, Medical Products Stock, or both, as the context may require.}

"Continuing Restriction" means a Restriction contained in
Sections [6.5(g), 17.4, 17.5,] {6.5(h), 16.4, 16.5,} and [17.7] {16.7} of the
Plan and any other Restrictions expressly designated by the Committee in an
Award Agreement as a Continuing Restriction.

"Corporation" means Epitope, Inc., an Oregon corporation, or any
successor corporation.

"Deferred Compensation Option" means a Nonqualified Option granted
with an option price less than Fair Market Value on the date of grant pursuant
to Section 7.9 of the Plan.

"Disability" means the condition of being "disabled" within the
meaning of Section 422(c)(7) of the Code. However, the Committee may change
the foregoing definition of "Disability" or may adopt a different definition
for purposes of specific Awards.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute. Where the
context so requires, any reference to a particular section of the Exchange
Act, or to any rule promulgated under the Exchange Act, shall be construed to
refer to successor provisions to such section or rule.

"Fair Market Value" means [on any given date] {with respect to
either Agritope Shares or Medical Products Shares, on a particular day,
without regard to any restrictions (other than a restriction which, by its
terms, will never lapse)}, the mean between the reported high and low sale
prices [of Common Stock, as reported for such date by the American Stock
Exchange (or such other exchange on which the Common Stock may be listed) or,
if Common Stock was not traded on such date, on the next preceding day on
which Common Stock was]{, or, if there is no sale on such day, the mean
between the reported bid and asked prices, for that day of Shares of the
applicable class on the securities exchange or automated securities
interdealer quotation system on which such Shares shall have been} traded.

"Incentive Stock Option" or "ISO" means any Option granted
pursuant to the Plan that is intended to be and is specifically designated in
its Award Agreement as an "incentive stock option" within the meaning of
Section 422 of the Code.

{}"Medical Products Share" means a share of Medical Products
Stock.

"Medical Products Stock" means the Medical Products Group Common
Stock, no par value, of Corporation or any security of Corporation issued in
substitution, exchange, or in lieu of such stock.

"Non-Employee Director" means a member of the Board who is not an
employee of Corporation or any Subsidiary.

"Nonqualified Option" or "NQO" means any Option, including a
Deferred Compensation Option, granted pursuant to the Plan that is not an
Incentive Stock Option.

"Option" means an ISO, an NQO, or a Deferred Compensation Option.

"Other Stock-Based Award" means an Award as defined in
Section 11.1.

"Participant" means an employee of Corporation or a Subsidiary, an
Advisor, or a Non-Employee Director who is granted an Award under the Plan.

"Performance Award" means an Award granted pursuant to the
provisions of Article 10 of the Plan, the Vesting of which is contingent on
performance attainment.

"Performance Cycle" means a designated performance period pursuant
to the provisions of Section 10.3 of the Plan.

"Performance Goal" means a designated performance objective
pursuant to the provisions of Section 10.4 of the Plan.

"Plan" means this Epitope, Inc., 1991 Stock Award Plan, as
{amended and restated and} set forth herein and as it may be hereafter amended
[and] from time to time.

"Reporting Person" means a Participant who is subject to the
reporting requirements of Section 16(a) of the Exchange Act.

"Restricted Award" means a Restricted Share or a Restricted Unit
granted pursuant to Article 9 of the Plan.

"Restricted Share" means an Award described in Section 9.1(a) of
the Plan.

"Restricted Unit" means an Award of units representing Shares
described in Section 9.1(b) of the Plan.

"Restriction" means a provision in the Plan or in an Award
Agreement which limits the exercisability or transferability, or which governs
the forfeiture, of an Award or the Shares, cash, or other property payable
pursuant to an Award.

"Retirement" means:

(a) For Participants who are employees, retirement from active
employment with Corporation and its Subsidiaries [on] {at} or after age
65, or such earlier retirement date as approved by the Committee for
purposes of the Plan;

(b) For Participants who are Non-Employee Directors, termination
of membership on the Board after attaining age 70, or such earlier
retirement date as approved by the Committee for purposes of the Plan;
and

(c) For Participants who are Advisors, termination of service as
an Advisor after attaining age 70, or such earlier retirement date as
approved by the Committee for purposes of the Plan.

However, the Committee may change the foregoing definition of "Retirement" or
may adopt a different definition for purposes of specific Awards.

"Share" means a share of Common Stock.{ For all periods after the
Agritope Stock Proposal Date, references in this Plan to Shares include either
Agritope Shares, Medical Products Shares, or both, as the context may
require.}

"Stock Appreciation Right" or "SAR" means an Award to benefit from
the appreciation of Common Stock granted pursuant to the provisions of
Article 8 of the Plan.

"Subsidiary" means a "subsidiary corporation" of Corporation[,]
within the meaning of Section 425 of the Code, namely any corporation in which
Corporation directly or indirectly controls 50 percent or more of the total
combined voting power of all classes of stock having voting power.

"Vest" or "Vested" means:

(a) In the case of an Award that requires exercise, to be
or to become immediately and fully exercisable and free of all
Restrictions (other than Continuing Restrictions);

(b) In the case of an Award that is subject to forfeiture, to be
or to become nonforfeitable, freely transferable, and free of all
Restrictions (other than Continuing Restrictions);

(c) In the case of an Award that is required to be earned by
attaining specified Performance Goals, to be or to become earned and
nonforfeitable, freely transferable, and free of all Restrictions (other
than Continuing Restrictions); or

(d) In the case of any other Award as to which payment is not
dependent solely upon the exercise of a right, election, exercise, or
option, to be or to become immediately payable and free of all
Restrictions (except Continuing Restrictions).

2.2 Gender and Number. Except where otherwise indicated by the
context, any masculine or feminine terminology used in the Plan shall also
include the opposite gender; and the definition of any term in Section 2.1 in
the singular shall also include the plural, and vice versa.

ARTICLE 3
ADMINISTRATION

3.1 General. [The] {Except as provided in Section 3.7, the} Plan
shall be administered by a Committee composed as described in Section 3.2.

3.2 Composition of the Committee. The Committee shall be
appointed by the Board [and shall consist of not less than a sufficient number
of disinterested members of the Board so as to qualify the Committee to
administer the Plan as contemplated by] { from among its members in a number
and with such qualifications as will meet the requirements for approval by a
committee pursuant to }Rule 16b-3 under the Exchange Act. The Board may from
time to time remove members from, or add members to, the Committee. Vacancies
on the Committee, however caused, shall be filled by the Board. The initial
members of the Committee shall be the members of Corporation's existing
Executive Compensation Committee. The Board may at any time replace the
Executive Compensation Committee with another Committee. In the event that
the Executive Compensation Committee shall cease to satisfy the requirements
of Rule 16b-3, the Board shall appoint another Committee satisfying such
requirements.

3.3 Authority of the Committee. The Committee shall have full
power and authority (subject to such orders or resolutions as may be issued or
adopted from time to time by the Board) to administer the Plan in its sole
discretion, including the authority to:

(a) Construe and interpret the Plan and any Award Agreement;

(b) Promulgate, amend, and rescind rules and procedures relating
to the implementation of the Plan;

(i) Select the employees and Advisors who shall be granted
Awards;

(ii) Determine the number and types of Awards to be granted
to each such Participant;

(iii) Determine the number of Shares, or Share equivalents,
to be subject to each Award {and whether the Shares subject to an
Award are to be Agritope Shares, Medical Products Shares, or a
combination of both};

(iv) Determine the option price, purchase price, base
price, or similar feature for any Award; and

[(iv)]{(v)} Determine all the terms and conditions of all
Award Agreements, consistent with the requirements of the Plan.

Decisions of the Committee, or any delegate as permitted by the Plan, shall be
final, conclusive, and binding on all Participants.

3.4 Action by the Committee. A majority of the members of the
Committee shall constitute a quorum for the transaction of business. Action
approved by a majority of the members present at any meeting at which a quorum
is present, or action in writing by [a majority of] {all} the members of the
Committee, shall be the valid acts of the Committee.

3.5 Delegation. Notwithstanding the foregoing, the Committee may
delegate to one or more officers of Corporation the authority to determine the
recipients, types, amounts, and terms of Awards granted to Participants who
are not Reporting Persons.

3.6 Liability of Committee Members. No member of the Committee
shall be liable for any action or determination made in good faith with
respect to the Plan, any Award, or any Participant.

3.7 Awards to Non-Employee Directors. The [Committee shall have
no discretion as to any aspects of Awards to Non-Employee Directors, which
Awards] {Board may grant Awards from time to time to Non-Employee Directors.
Awards to Non-Employee Directors }shall be governed by [Article 14.] {and
shall be subject to the terms and conditions set forth in an Award Agreement
in a form approved by the Board.}

3.8 Costs of Plan. The costs and expenses of administering the
Plan shall be borne by Corporation.

ARTICLE 4
DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN

4.1 Duration of the Plan. The Plan is effective January 8, 1991,
subject to approval by Corporation's shareholders as provided in Article [18]
{17}. The Plan shall remain in effect until Awards have been granted covering
all the available Shares or the Plan is otherwise terminated by the Board.
Termination of the Plan shall not affect outstanding Awards.

4.2 Shares Subject to the Plan.

{4.2.1 General.} The shares which may be made subject to Awards
under the Plan shall be Shares of Common Stock, which may be either authorized
and unissued Shares or reacquired Shares. No fractional Shares shall be
issued under the Plan. {If an Award under the Plan is canceled or expires for
any reason prior to having been fully Vested or exercised by a Participant or
is settled in cash in lieu of Shares or is exchanged for other Awards, all
Shares covered by such Awards shall be made available for future Awards under
the Plan. Furthermore, any Shares used as full or partial payment to
Corporation by a Participant of the option, purchase, or other exercise price
of an Award and any Shares covered by a Stock Appreciation Right which are not
issued upon exercise shall become available for future Awards.

4.2.2 Medical Products Shares.} The maximum number of { Medical
Products} Shares for which Awards may be granted under the Plan shall be
[3,217,499] {5,400,000 Medical Products} Shares, plus [ any] {the number of}
Shares {which were} available for grant under Corporation's [existing]
Incentive Stock Option Plan for Key Employees of Epitope, Inc. (the "ISOP"),
{on January 8, 1991,} subject to adjustment pursuant to Article [15] {14.

4.2.3 Agritope Shares. The maximum number of Agritope Shares for
which Awards may be granted under the Plan shall be 2,000,000 Agritope Shares,
subject to adjustment pursuant to Article 14.

4.2.4 Availability of Shares for Future Awards}. If an Award
under the Plan or under the ISOP is canceled or expires for any reason prior
to having been fully Vested or exercised by a Participant or is settled in
cash in lieu of Shares or is exchanged for other Awards, all Shares covered by
such Awards shall be made available for future Awards under the Plan.
Furthermore, any Shares used as full or partial payment to Corporation by a
Participant of the option, purchase, or other exercise price of an Award and
any Shares covered by a Stock Appreciation Right which are not issued upon
exercise shall become available for future Awards.

ARTICLE 5
ELIGIBILITY

5.1 Employees and Advisors. Officers and other key employees of
Corporation and its Subsidiaries (who may also be directors of Corporation or
a Subsidiary) and Advisors who, in the Committee's judgment, are or will be
contributors to the long-term success of Corporation shall be eligible to
receive Awards under the Plan.

5.2 Non-Employee Directors. All Non-Employee Directors shall be
eligible to receive Awards [pursuant to Article 14] {as provided in
Section 3.7} of the Plan.

ARTICLE 6
AWARDS

6.1 Types of Awards. The types of Awards that may be granted
under the Plan are:

(a) Options governed by Article 7 of the Plan;

(b) Stock Appreciation Rights governed by Article 8 of the Plan;

(d) Performance Awards governed by Article 10 of the Plan; and

(e) Other Stock-Based Awards or combination awards governed by
Article 11 of the Plan.

In the discretion of the Committee, any Award may be granted alone, in
addition to, or in tandem with other Awards under the Plan.

6.2 General. Subject to the limitations of the Plan, the
Committee may cause Corporation to grant Awards to such Participants, at such
times, of such types, in such amounts, for such periods, with such option
prices, purchase prices, or base prices, and subject to such terms,
conditions, limitations, and restrictions as the Committee, in its discretion,
shall deem appropriate. Awards may be granted as additional compensation to a
Participant or in lieu of other compensation to such Participant. A
Participant may receive more than one Award and more than one type of Award
under the Plan.

6.3 Nonuniform Determinations. The Committee's determinations
under the Plan or under one or more Award Agreements, including without
limitation, [(a)] {6.3.1} the selection of Participants to receive Awards,
[(b)] {6.3.2} the type, form, amount, and timing of Awards, [(c)] {6.3.3} the
terms of specific Award Agreements, and [(d)] {6.3.4} elections and
determinations made by the Committee with respect to exercise or payments of
Awards, need not be uniform and may be made by the Committee selectively among
Participants and Awards, whether or not Participants are similarly situated.

6.4 Award Agreements. Each Award shall be evidenced by a written
Award Agreement between Corporation and the Participant. Award Agreements
may, subject to the provisions of the Plan, contain any provision approved by
the Committee.

6.5 Provisions Governing All Awards. All Awards shall be subject
to the following provisions:

{(a) Type of Shares. Each Award Agreement shall specify
whether the Award covers Agritope Shares, Medical Products Shares,
or a specified combination of both.}

[(a)]{(b)} Alternative Awards. If any Awards are designated in
their Award Agreements as alternative to each other, the exercise of all
or part of one Award automatically shall cause an immediate equal (or
pro rata) corresponding termination of the other alternative Award or
Awards.

[(b)]{(c)} Rights as Shareholders. No Participant shall have any
rights of a shareholder with respect to Shares subject to an Award until
such Shares are issued in the name of the Participant.

[(c)]{(d)} Employment Rights. Neither the adoption of the Plan
nor the granting of any Award shall confer on any person the right to
continued employment with Corporation or any Subsidiary or the right to
remain as a director of Corporation or a member of any Advisory
Committee, as the case may be, nor shall it interfere in any way with
the right of Corporation or a Subsidiary to terminate such person's
employment or to remove such person as an Advisor or as a director at
any time for any reason, with or without cause.

[(d) Nontransferable. Each Award (other than Restricted Shares after they
Vest) shall not be transferable otherwise than by will or the laws of descent
and distribution and shall be exercisable (if exercise is required) during the
lifetime of the Participant, only by the Participant or, in the event the
Participant becomes legally incompetent, by the Participant's guardian or
legal representative.]

(e) Termination Of Employment. The terms and conditions under
which an Award may be exercised, if at all, after a Participant's
termination of employment or service as an Advisor or as a Non-Employee
Director shall be determined by the Committee and specified in the
applicable Award Agreement.

(f) Change in Control. The Committee, in its discretion, may
provide in any Award Agreement that in the event of a change in control
of Corporation (as the Committee may define such term in the Award
Agreement), as of the date of such change in control:

(i) All, or a specified portion of, Awards requiring
exercise shall become fully and immediately exercisable,
notwithstanding any other limitations on exercise;

(ii) All, or a specified portion of, Awards subject to
Restrictions shall become fully Vested; and

(iii) All, or a specified portion of, Awards subject to
Performance Goals shall be deemed to have been fully earned.

The Committee, in its discretion, may include change in control
provisions in some Award Agreements and not in others, may include
different change in control provisions in different Award Agreements,
and may include change in control provisions for some Awards or some
Participants and not for others.

(g) Reporting Persons. With respect to all Awards granted to
Reporting Persons, the Award Agreement shall provide that:

(i) Awards requiring exercise shall not be exercisable
until at least six months after the date the Award was granted,
except in the case of the death or Disability of the Participant;
and

(ii) Shares issued pursuant to any other Award may not be
sold by the Participant for at least six months after acquisition,
except in the case of the death or Disability of the Participant;

provided, however, that (unless an Award Agreement provides otherwise)
the limitation of this Section [6.5(g)] {6.5(h)} shall apply only if or
to the extent required by Rule 16b-3 under the Exchange Act {or any
applicable successor provision} . Award Agreements for Awards to
Reporting Persons shall also comply with any future restrictions imposed
by such Rule 16b-3.

(h) Service Periods. At the time of granting Awards, the
Committee may specify, by resolution or in the Award Agreement, the
period or periods of service performed or to be performed by the
Participant in connection with the grant of the Award.

ARTICLE 7
OPTIONS

7.1 Types of Options. Options granted under the Plan may be in
the form of Incentive Stock Options or Nonqualified Options (including
Deferred Compensation Options). The grant of each Option and the Award
Agreement governing each Option shall identify the Option as an ISO or an NQO.
In the event the Code is amended to provide for tax-favored forms of stock
options other than or in addition to Incentive Stock Options, the Committee
may grant Options under the Plan meeting the requirements of such forms of
options.

7.2 General. Options shall be subject to the terms and
conditions set forth in Article 6 and this Article 7 and shall contain such
additional terms and conditions, not inconsistent with the express provisions
of the Plan, as the Committee {(or the Board with respect to Awards to Non-
Employee Directors)} shall deem desirable.

7.3 Option Price. Each Award Agreement for Options shall state
the option exercise price per Share of Common Stock purchasable under the
Option, which shall not be less than:

(a) $1 per share in the case of a Deferred Compensation Option;

(b) 75 percent of the Fair Market Value of a Share on the date of
grant for all other Nonqualified Options; or

7.4 Option Term. The Award Agreement for each Option shall
specify the term of each Option, which may be unlimited or may have a
specified period during which the Option may be exercised, as determined by
the Committee.

7.5 Time of Exercise. The Award Agreement for each Option shall
specify, as determined by the Committee:

(a) The time or times when the Option shall become exercisable
and whether the Option shall become exercisable in full or in graduated
amounts over a period specified in the Award Agreement;

(b) Such other terms, conditions, and restrictions as to when the
Option may be exercised as shall be determined by the Committee; and

(c) The extent, if any, [that] {to which} the Option shall remain
exercisable after the Participant ceases to be an employee, Advisor, or
director of Corporation or a Subsidiary.

An Award Agreement for an Option may, in the discretion of the Committee,
provide whether, and to what extent, the Option will become immediately and
fully exercisable (i) in the event of the death, Disability, or Retirement of
the Participant, or (ii) upon the occurrence of a change in control of
Corporation.

7.6 Method of Exercise. The Award Agreement for each Option
shall specify the method or methods of payment acceptable upon exercise of an
Option. An Award Agreement may provide that the option price is payable in
full in cash or, at the discretion of the Committee:

(a) In installments on such terms and over such period as the
Committee shall determine;

(b) In previously acquired Shares (including Restricted Shares);

(d) By delivery (in a form approved by the Committee) of an
irrevocable direction to a securities broker acceptable to the
Committee:

(i) To sell Shares subject to the Option and to deliver all
or a part of the sales proceeds to Corporation in payment of all
or a part of the option price and withholding taxes due; or

(ii) To pledge Shares subject to the Option to the broker
as security for a loan and to deliver all or a part of the loan
proceeds to Corporation in payment of all or a part of the option
price and withholding taxes due; or

(e) In any combination of the foregoing or in any other form
approved by the Committee.

If Restricted Shares are surrendered in full or partial payment of an Option
price, a corresponding number of the Shares issued upon exercise of the Option
shall be Restricted Shares subject to the same Restrictions as the surrendered
Restricted Shares.

7.7 Special Rules for Incentive Stock Options. In the case of an
Option designated as an Incentive Stock Option, the terms of the Option and
the Award Agreement shall be in conformance with the statutory and regulatory
requirements specified in Section 422 of the Code, as in effect on the date
such ISO is granted. ISOs may be granted only to employees of Corporation or
a Subsidiary. ISOs may not be granted under the Plan after January 8, 2001,
unless the ten-year limitation of Section 422(b)(2) of the Code is removed or
extended.

7.8 Restricted Shares. In the discretion of the Committee, the
Shares issuable upon exercise of an Option may be Restricted Shares if so
provided in the Award Agreement.

7.9 Deferred Compensation Options. The Committee may, in its
discretion, grant Deferred Compensation Options with an option price less than
Fair Market Value to provide a means for deferral of compensation to future
dates. The option price shall be determined by the Committee subject to
Section 7.3(a) of the Plan. The number of Shares subject to a Deferred
Compensation Option shall be determined by the Committee, in its discretion,
by dividing the amount of compensation to be deferred by the difference
between the Fair Market Value of a Share on the date of grant and the option
price of the Deferred Compensation Option. Amounts of compensation deferred
with Deferred Compensation Options may include amounts earned under Awards
granted under the Plan or under any other compensation program or arrangement
of Corporation as permitted by the Committee. The Committee shall grant
Deferred Compensation Options only if it reasonably determines that the
recipient of such an Option is not likely to be deemed to be in constructive
receipt for income tax purposes of the income being deferred.

7.10 Reload Options. The Committee, in its discretion, may
provide in an Award Agreement for an Option that in the event all or a portion
of the Option is exercised by the Participant using previously acquired
Shares, the Participant shall automatically be granted a replacement Option
(with an option price equal to the Fair Market Value of a Share on the date of
such exercise) for a number of Shares equal to (or equal to a portion of) the
number of shares surrendered upon exercise of the Option. Such reload Option
features may be subject to such terms and conditions as the Committee shall
determine, including without limitation, a condition that the Participant
retain the Shares issued upon exercise of the Option for a specified period of
time.

ARTICLE 8
STOCK APPRECIATION RIGHTS

8.1 General. Stock Appreciation Rights shall be subject to the
terms and conditions set forth in Article 6 and this Article 8 and shall
contain such additional terms and conditions, not inconsistent with the
express terms of the Plan, as the Committee {(or the Board with respect to
Awards to Non-Employee Directors)} shall deem desirable.

8.2 Nature of Stock Appreciation Right. A Stock Appreciation
Right is an Award entitling a Participant to receive an amount equal to the
excess (or if the Committee shall determine at the time of grant, a portion of
the excess) of the Fair Market Value of a Share of Common Stock on the date of
exercise of the SAR over the base price, as described below, on the date of
grant of the SAR, multiplied by the number of Shares with respect to which the
SAR shall have been exercised. The base price shall be designated by the
Committee in the Award Agreement for the SAR and may be the Fair Market Value
of a Share on the grant date of the SAR or such other higher or lower price as
the Committee shall determine.

8.3 Exercise. A Stock Appreciation Right may be exercised by a
Participant in accordance with procedures established by the Committee. The
Committee may also provide that a SAR shall be automatically exercised on one
or more specified dates or upon the satisfaction of one or more specified
conditions. In the case of SARs granted to Reporting Persons, exercise of the
SAR shall be limited by the Committee to the extent required to comply with
the applicable requirements of Rule 16b-3 under the Exchange Act.

8.4 Form of Payment. Payment upon exercise of a Stock
Appreciation Right may be made in cash, in installments, in Shares, by
issuance of a Deferred Compensation Option, or in any combination of the
foregoing, or in any other form as the Committee shall determine.

ARTICLE 9
RESTRICTED AWARDS

9.1 Types of Restricted Awards. Restricted Awards granted under
the Plan may be in the form of either Restricted Shares or Restricted Units.

(a) Restricted Shares. A Restricted Share is an Award of Shares
transferred to a Participant subject to such terms and conditions as the
Committee deems appropriate, including, without limitation, restrictions
on the sale, assignment, transfer, or other disposition of such
Restricted Shares and may include a requirement that the Participant
forfeit such Restricted Shares back to Corporation upon termination of
Participant's employment (or service as an Advisor) for specified
reasons within a specified period of time or upon other conditions, as
set forth in the Award Agreement for such Restricted Shares. Each
Participant receiving a Restricted Share shall be issued a stock
certificate in respect of such Shares, registered in the name of such
Participant, and shall execute a stock power in blank with respect to
the Shares evidenced by such certificate. The certificate evidencing
such Restricted Shares and the stock power shall be held in custody by
Corporation until the Restrictions thereon shall have lapsed.

(b) Restricted Units. A Restricted Unit is an Award of units
(with each unit having a value equivalent to one Share) granted to a
Participant subject to such terms and conditions as the Committee deems
appropriate, and may include a requirement that the Participant forfeit
such Restricted Units upon termination of Participant's employment (or
service as an Advisor) for specified reasons within a specified period
of time or upon other conditions, as set forth in the Award Agreement
for such Restricted Units.

9.2 General. Restricted Awards shall be subject to the terms and
conditions of Article 6 and this Article 9 and shall contain such additional
terms and conditions, not inconsistent with the express provisions of the
Plan, as the Committee {(or the Board with respect to Awards to Non-Employee
Directors)} shall deem desirable.

9.3 Restriction Period. Restricted Awards shall provide that
such Awards, and the Shares subject to such Awards, may not be transferred,
and may provide that, in order for a Participant to Vest in such Awards, the
Participant must remain in the employment (or remain as an Advisor) of
Corporation or its Subsidiaries, subject to relief for reasons specified in
the Award Agreement, for a period commencing on the date of the Award and
ending on such later date or dates as the Committee may designate at the time
of the Award (the "Restriction Period"). During the Restriction Period, a
Participant may not sell, assign, transfer, pledge, encumber, or otherwise
dispose of Shares received under or governed by a Restricted Award grant. The
Committee, in its sole discretion, may provide for the lapse of restrictions
in installments during the Restriction Period. Upon expiration of the
applicable Restriction Period (or lapse of Restrictions during the Restriction
Period where the Restrictions lapse in installments) the Participant shall be
entitled to settlement of the Restricted Award or portion thereof, as the case
may be. Although Restricted Awards shall usually Vest based on continued
employment (or service as an Advisor) and Performance Awards under Article 10
shall usually Vest based on attainment of Performance Goals, the Committee, in
its discretion, may condition Vesting of Restricted Awards on attainment of
Performance Goals as well as continued employment (or service as an Advisor).
In such case, the Restriction Period for such a Restricted Award shall include
the period prior to satisfaction of the Performance Goals.

9.4 Forfeiture. If a Participant ceases to be an employee or
Advisor of Corporation or a Subsidiary during the Restriction Period for any
reason other than reasons which may be specified in an Award Agreement (such
as death, Disability, or Retirement) the Award Agreement may require that all
non-Vested Restricted Awards previously granted to the Participant be
forfeited and returned to Corporation.

9.5 Settlement of Restricted Awards.

(a) Restricted Shares. Upon Vesting of a Restricted Share Award,
the legend on such Shares will be removed and the Participant's stock power
will be returned and the Shares will no longer be Restricted Shares. The
Committee may also, in its discretion, permit a Participant to receive, in
lieu of unrestricted Shares at the conclusion of the Restriction Period,
payment in cash, installments, or by issuance of a Deferred Compensation
Option equal to the Fair Market Value of the Restricted Shares as of the date
the Restrictions lapse.

(b) Restricted Units. Upon Vesting of a Restricted Unit Award, a
Participant shall be entitled to receive payment for Restricted Units in an
amount equal to the aggregate Fair Market Value of the Shares covered by such
Restricted Units at the expiration of the Applicable Restriction Period.
Payment in settlement of a Restricted Unit shall be made as soon as
practicable following the conclusion of the applicable Restriction Period in
cash, in installments, in Shares equal to the number of Restricted Units, by
issuance of a Deferred Compensation Option, or in any other manner or
combination of such methods as the Committee, in its sole discretion, shall
determine.

9.6 Rights as a Shareholder. A Participant shall have, with
respect to unforfeited Shares received under a grant of Restricted Shares,
all the rights of a shareholder of Corporation, including the right to vote
the shares, and the right to receive any cash dividends. Stock dividends
issued with respect to Restricted Shares shall be treated as additional Shares
covered by the grant of Restricted Shares and shall be subject to the same
Restrictions.

ARTICLE 10
PERFORMANCE AWARDS

10.1 General. Performance Awards shall be subject to the terms
and conditions set forth in Article 6 and this Article 10 and shall contain
such other terms and conditions not inconsistent with the express provisions
of the Plan, as the Committee {(or the Board with respect to Awards to Non-
Employee Directors)} shall deem desirable.

10.2 Nature of Performance Awards. A Performance Award is an
Award of units (with each unit having a value equivalent to one Share) granted
to a Participant subject to such terms and conditions as the Committee deems
appropriate, including, without limitation, the requirement that the
Participant forfeit such Performance Award or a portion thereof in the event
specified performance criteria are not met within a designated period of time.

10.3 Performance Cycles. For each Performance Award, the
Committee shall designate a performance period (the "Performance Cycle") with
a duration to be determined by the Committee in its discretion within which
specified Performance Goals are to be attained. There may be several
Performance Cycles in existence at any one time and the duration of
Performance Cycles may differ from each other.

10.4 Performance Goals. The Committee shall establish
Performance Goals for each Performance Cycle on the basis of such criteria and
to accomplish such objectives as the Committee may from time to time select.
Performance Goals may be based on performance criteria for Corporation, a
Subsidiary, or an operating group, or based on a Participant's individual
performance. Performance Goals may include objective and subjective criteria.
During any Performance Cycle, the Committee may adjust the Performance Goals
for such Performance Cycle as it deems equitable in recognition of unusual or
nonrecurring events affecting Corporation, changes in applicable tax laws or
accounting principles, or such other factors as the Committee may determine.

10.5 Determination of Awards. As soon as practicable after the
end of a Performance Cycle, the Committee shall determine the extent to which
Performance Awards have been earned on the basis of performance in relation to
the established Performance Goals.

10.6 Timing and Form of Payment. Settlement of earned
Performance Awards shall be made to the Participant as soon as practicable
after the expiration of the Performance Cycle and the Committee's
determination under Section 10.5, in the form of cash, installments, Shares,
Deferred Compensation Options, or any combination of the foregoing or in any
other form as the Committee shall determine.

ARTICLE 11
OTHER STOCK{-}BASED AND COMBINATION AWARDS

11.1 Other Stock-Based Awards. The Committee {(or the Board with
respect to Awards to Non-Employee Directors)} may grant other Awards under the
Plan pursuant to which Shares are or may in the future be acquired, or Awards
denominated in or measured by Share equivalent units, including Awards valued
using measures other than the market value of Shares. Such Other Stock-Based
Awards may be granted either alone, in addition to, or in tandem with, any
other type of Award granted under the Plan.

11.2 Combination Awards. The Committee may also grant Awards
under the Plan in tandem or combination with other Awards or in exchange of
Awards, or in tandem or combination with, or as alternatives to, grants or
rights under any other employee plan of Corporation, including the plan of any
acquired entity. No action authorized by this section shall reduce the amount
of any existing benefits or change the terms and conditions thereof without
the Participant's consent.

ARTICLE 12
DEFERRAL ELECTIONS

The Committee may permit a Participant to elect to defer receipt
of the payment of cash or the delivery of Shares that would otherwise be due
to such Participant by virtue of the exercise, earn{-}out, or Vesting of an
Award made under the Plan. If any such election is permitted, the Committee
shall establish rules and procedures for such payment deferrals, including,
but not limited to: (a) payment or crediting of reasonable interest on such
deferred amounts credited in cash, (b) the payment or crediting of dividend
equivalents in respect of deferrals credited in Share equivalent units, or (c)
granting of Deferred Compensation Options.

ARTICLE 13
DIVIDEND EQUIVALENTS

Any Awards may, at the discretion of the Committee, earn dividend
equivalents. In respect of any such Award which is outstanding on a dividend
record date for Common Stock, the Participant may be credited with an amount
equal to the amount of cash or stock dividends that would have been paid on
the Shares covered by such Award, had such covered Shares been issued and
outstanding on such dividend record date. The Committee shall establish such
rules and procedures governing the crediting of dividend equivalents,
including the timing, form of payment, and payment contingencies of such
dividend equivalents, as it deems are appropriate or necessary.

ARTICLE 14
[NON-EMPLOYEE DIRECTORS

14.1 General. Awards shall be made to Non-Employee Directors only under this
Article 14. No person, including the members of the Board or the Committee,
shall have any discretion as to the selection of eligible recipients or the
determination of the type, amount, or terms of Awards pursuant to this Article
14.

14.2 Eligibility. The persons eligible to receive Awards pursuant to this
Article 14 are all Non-Employee Directors.

14.3 Director Options.

(a) Initial Director Options. Upon the effective date of the Plan (the
"Effective Date"), the Chairman of the Board of Directors shall be granted a
Nonqualified Option (a "Director Option") to purchase 75,000 Shares, and each
other person who is then a Non-Employee Director shall be granted a Director
Option to purchase 50,000 Shares, with an Option price equal to 75 percent of
the Fair Market Value of a Share on the Effective Date. Each person who
becomes a Non-Employee Director after the Effective Date but prior to December
15, 1994, shall be granted an Initial Option to purchase 50,000 Shares, with
an Option price equal to 75 percent of the Fair Market Value of a Share on the
date of grant. Each person who becomes a Non-Employee Director on or after
December 15, 1994, shall be granted, on the date such person becomes a
Non-Employee director, an Initial Option to purchase 50,000 Shares with an
Option price equal to the Fair Market Value of a Share on such date minus the
lesser of (a) $2.00 or (b) 25 percent of the Fair Market Value of a Share on
such date. A Non-Employee Director elected as Chairman of the Board of
Directors after the Effective Date shall be granted, as of the date of such
election, an Initial Option to purchase 75,000 Shares (or, if such person has
previously received an Initial Option, an Initial Option to purchase an
additional 25,000 shares) with an Option price equal to the Fair Market Value
of a Share on such date minus the lesser of (a) $2.00 or (b) 25 percent of the
Fair Market Value of a Share on such date.

(b) Renewal Director Options. Each Non-Employee Director shall be granted a
Nonqualified Option to purchase 15,000 Shares ("Renewal Option") on the
December 15 prior to the Annual Meeting of Shareholders at which the most
recently granted of the Non-Employee Director's Initial Options or Renewal
Options shall fully vest, with an Option price equal to the Fair Market Value
of a Share on the grant date.

14.4 Award Agreements. Each Award of Initial Options and Renewal Options made
pursuant to this Article 14 shall be governed by and shall be subject to the
terms and conditions set forth in an Award Agreement in the forms attached to
this Plan as Exhibit A and Exhibit B, respectively. Except to the extent
otherwise provided in this Article 14 or in such Award Agreement, each such
Award shall be governed by Article 7 of the Plan. With respect to each person
who becomes a Non-Employee Director after the Effective Date, the Award
Agreement for his or her Initial Option shall be in substantially the same
form as Exhibit A, but with the dates of annual meetings specified in such
Award Agreement adjusted to refer to dates subsequent to such person becoming
a Non-Employee Director.

ARTICLE 15]
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.

[15.1] {14.1} Plan Does Not Restrict Corporation. The existence
of the Plan and the Awards granted hereunder shall not affect or restrict in
any way the right or power of the Board or the shareholders of Corporation to
make or authorize any adjustment, recapitalization, reorganization, or other
change in Corporation's capital structure or its business, any merger or
consolidation of the Corporation, any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting Corporation's capital stock or
the rights thereof, the dissolution or liquidation of Corporation or any sale
or transfer of all or any part of its assets or business, or any other
corporate act or proceeding.

[15.2] {14.2} Adjustments by the Committee. In the event of any
change in capitalization affecting the Common Stock of Corporation, such as a
stock dividend, stock split, recapitalization, merger, consolidation,
split-up, combination or exchange of shares or other form of reorganization,
or any other change affecting the Common Stock, such proportionate
adjustments, if any, as the Committee, in its sole discretion, may deem
appropriate to reflect such change, shall be made with respect to the
aggregate number of Shares for which Awards in respect thereof may be granted
under the Plan, the maximum number of Shares which may be sold or awarded to
any Participant, the number of Shares covered by each outstanding Award, and
the price per Share in respect of outstanding Awards. The Committee may also
make such adjustments in the number of Shares covered by, and price or other
value of any outstanding Awards in the event of a spin-off or other
distribution (other than normal cash dividends), of Corporation assets to
shareholders.

ARTICLE [16] {15}
AMENDMENT AND TERMINATION

Without further approval of Corporation's shareholders, the Board
may at any time terminate the Plan, or may amend it from time to time in such
respects as the Board may deem advisable, except that the Board may not,
without approval of the shareholders, make any amendment [which would (i)
materially increase the benefits accruing to Participants under the Plan,
(ii)] {that would }materially increase the aggregate number of shares of
Common Stock [which] {that} may be issued under the Plan (except for
adjustments pursuant to Article [15 of the Plan), or (iii) materially modify
the requirements as to eligibility for participation in the Plan] {14 of the
Plan)}. Without further shareholder approval, the Board may amend the Plan to
take into account changes in applicable securities, federal income tax laws,
and other applicable laws. Further, should the provisions of Rule 16b-3, or
any successor rule, under the Exchange Act be amended, the Board, without
further shareholder approval, may amend the Plan as necessary to comply with
any modifications to such rule.[ The provisions of Article 14 of the Plan
shall not be amended more than once every six months, other than to comport
with changes in the Code or in Rule 16b-3 under the Exchange Act.]

ARTICLE [17] {16}
MISCELLANEOUS

[17.1] {16.1} Tax Withholding.

[(a)] {16.1.1} General. Corporation shall have the right to
deduct from any settlement, including the delivery or vesting of Shares, made
under the Plan any federal, state, or local taxes of any kind required by law
to be withheld with respect to such payments or to take such other action as
may be necessary in the opinion of Corporation to satisfy all obligations for
the payment of such taxes. The recipient of any payment or distribution under
the Plan shall make arrangements satisfactory to Corporation for the
satisfaction of any such withholding tax obligations. Corporation shall not
be required to make any such payment or distribution under the Plan until such
obligations are satisfied.

[(b)] {16.1.2} Stock Withholding. The Committee, in its sole
discretion, may permit a Participant to satisfy all or a part of the
withholding tax obligations incident to the settlement of an Award involving
payment or delivery of Shares to the Participant by having Corporation
withhold a portion of the Shares that would otherwise be issuable to the
Participant. Such Shares shall be valued based on their Fair Market Value on
the date the tax withholding is required to be made. Any stock withholding
with respect to a Reporting Person shall be subject to such limitations as the
Committee may impose to comply with the requirements of the Exchange Act.

[17.2] {16.2} Unfunded Plan. The Plan shall be unfunded and
Corporation shall not be required to segregate any assets that may at any time
be represented by Awards under the Plan. Any liability of Corporation to any
person with respect to any Award under the Plan shall be based solely upon any
contractual obligations that may be effected pursuant to the Plan. No such
obligation of Corporation shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of Corporation.

[17.3] {16.3} Payments to Trust. The Committee is authorized to
cause to be established a trust agreement or several trust agreements
whereunder the Committee may make payments of amounts due or to become due to
Participants in the Plan.

[17.4] {16.4} Annulment of Awards. Any Award Agreement may
provide that the grant of an Award payable in cash is provisional until cash
is paid in settlement thereof or that grant of an Award payable in Shares is
provisional until the Participant becomes entitled to the certificate in
settlement thereof. In the event the employment (or service as an Advisor or
membership on the Board) of a Participant is terminated for cause (as defined
below), any Award which is provisional shall be annulled as of the date of
such termination for cause. For the purpose of this Section [17.4] {16.4},
the term "for cause" shall have the meaning set forth in the Participant's
employment agreement, if any, or otherwise means any discharge (or removal)
for material or flagrant violation of the policies and procedures of
Corporation or for other job performance or conduct which is materially
detrimental to the best interests of Corporation, as determined by the
Committee.

[17.5] {16.5} Engaging in Competition With [the] Corporation .
Any Award Agreement may provide that, if a Participant terminates employment
with Corporation or a Subsidiary for any reason whatsoever, and within 18
months after the date thereof accepts employment with any competitor of (or
otherwise engages in competition with) Corporation, the Committee, in its sole
discretion, may require such Participant to return to Corporation the economic
value of any Award that is realized or obtained (measured at the date of
exercise, Vesting, or payment) by such Participant at any time during the
period beginning on the date that is six months prior to the date of such
Participant's termination of employment with Corporation.

[17.6] {16.6} Other Corporation Benefit and Compensation
Programs. Payments and other benefits received by a Participant under an
Award made pursuant to the Plan shall not be deemed a part of a Participant's
regular, recurring compensation for purposes of the termination indemnity or
severance pay law of any state or country and shall not be included in, [nor]
{or} have any effect on, the determination of benefits under any other
employee benefit plan or similar arrangement provided by Corporation or a
Subsidiary unless expressly so provided by such other plan or arrangements, or
except where the Committee expressly determines that an Award or portion of an
Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
cash compensation. Awards under the Plan may be made in combination with or
in tandem with, or as alternatives to, grants, awards, or payments under any
other Corporation or Subsidiary plans, arrangements, or programs. The Plan
notwithstanding, Corporation or any Subsidiary may adopt such other
compensation programs and additional compensation arrangements as it deems
necessary to attract, retain, and reward employees and directors for their
service with Corporation and its Subsidiaries.

[17.7] {16.7} Securities Law Restrictions. No Shares shall be
issued under the Plan unless counsel for Corporation shall be satisfied that
such issuance will be in compliance with applicable federal and state
securities laws. Certificates for Shares delivered under the Plan may be
subject to such stop-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed, and any applicable federal or state securities law. The
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

[17.8] {16.8} Governing Law. Except with respect to references
to the Code or federal securities laws, the Plan and all actions taken
thereunder shall be governed by and construed in accordance with the laws of
the state of Oregon.

ARTICLE [18] {17}
SHAREHOLDER APPROVAL

The [adoption of the Plan and the grant of Awards under the Plan
are expressly subject to the approval of the Plan by the affirmative vote of
the holders of a majority of the shares present, or represented, and entitled
to vote thereon at the 1991 annual meeting of Corporation's shareholders.

[exhibits deleted]
<PAGE>
EDGAR note: For purposes of EDGAR, { } indicates text that will be marked as
new and [ ] indicates text that will be marked as deleted.

ANNEX V
PROPOSED AMENDMENTS TO
1993 EMPLOYEE STOCK
PURCHASE PLAN

EPITOPE, INC.

1993 EMPLOYEE STOCK PURCHASE PLAN
[FIRST] {SECOND} AMENDMENT AND RESTATEMENT

1. Purpose of the Plan. This plan, as amended and restated [by
the First] {effective _____________, 1996, by this Second} Amendment and
Restatement [effective May 1, 1993](the "Plan"), shall be known as the
"Epitope, Inc., 1993 Employee Stock Purchase Plan." The purpose of the Plan
is to permit employees of Epitope, Inc. [(the ]"Company"){(}"Corporation"),
and of its Subsidiaries (as hereinafter defined) to obtain or increase a
proprietary interest in [the Company] {Corporation} by permitting them to make
installment purchases of shares of [the Company's] { Corporation's} Common
Stock (as hereinafter defined) through payroll deductions. The Plan is
intended to qualify as an "employee stock purchase plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986 (the "Code").

2. Definitions.

{Agritope Stock. The Agritope Group Common Stock, no par
value, of Corporation or any security of Corporation issued in
substitution, exchange, or in lieu of such stock.

Agritope Stock Proposal Date. The effective date of the
amendment of Corporation's Articles of Incorporation to create the
Agritope Stock and to redesignate Corporation's previously
existing common stock as Medical Products Stock.}

Board of Directors. The Board of Directors of [the Company]
{Corporation} or a committee thereof duly authorized for the
purposes of administering this Plan.

Common Stock. [The Company's] {Corporation's} no par value
common stock [as presently constituted and shares of common stock
which may be issued by the Company in exchange for or
reclassification thereof.] {and any security of Corporation issued
in substitution, exchange, or in lieu of such stock. For all
periods after the Agritope Stock Proposal Date, references in this
Plan to Common Stock include Agritope Stock or Medical Products
Stock, or both, as the context may require.}

Eligible Employees. Those persons who on the applicable
Offering Date are employees of [the Company] { Corporation} or a
Subsidiary except those who, immediately prior to the applicable
Offering Date, would be deemed under Section 423(b)(3) of the Code
to own stock possessing 5 percent or more of the total combined
voting power or value of all classes of stock of [the Company]
{Corporation} or any other corporation that constitutes a parent
or subsidiary corporation of [ the Company] {Corporation} within
the meaning of that section.

Maximum Purchase Price. 85 percent of the mean between the
reported high and low sale prices [of Common Stock on the American
Stock Exchange]{, or, if there is no sale on such day, the mean
between the reported bid and asked prices, of Common Stock
(whether Agritope Stock or Medical Products Stock) on the
securities exchange or automated securities interdealer quotation
system on which Common Stock shall have been traded} on the last
trading day preceding the applicable Offering Date [on which such
Exchange shall have been open]{.

Medical Products Stock. The Medical Products Group Common
Stock, no par value, of Corporation or any security of Corporation
issued in substitution, exchange, or in lieu of such stock}.

Monthly Compensation. For an Eligible Employee on the
payroll of [the Company] {Corporation} or a Subsidiary for the
entire calendar month preceding the applicable Offering Date, the
compensation paid or accrued to such Eligible Employee for such
month plus, in the case of such an Eligible Employee whose
compensation for such month was based wholly or partly on a bonus,
commission, profit sharing, or similar arrangement for which no
accrual was made for such month, an amount equal to the portion
attributable to one month of the amount accrued to such Eligible
Employee as of the day preceding the applicable Offering Date, on
the books of [the Company] {Corporation} or its Subsidiaries in
accordance with such arrangement. For all other Eligible
Employees, Monthly Compensation shall be the monthly rate of
compensation in effect immediately prior to the applicable
Offering Date. For all purposes of the Plan, Monthly Compensation
shall include any amount which is contributed by [the Company] {
Corporation} or a Subsidiary pursuant to a salary reduction
agreement and which is not includable in the gross income of an
Eligible Employee under Code Sections 125 (relating to "cafeteria
plans") or 402(a)(8) (relating to elective contributions under a
"401(k)" plan).

Offering Dates. Such dates as may be set by the Board of
Directors, provided that no more than three Offering Dates (other
than Special Offering Dates for purposes of Special Offerings
pursuant to Section 6 of this Plan) may be set during each fiscal
year. The first day of each calendar month, commencing June 1,
1993, shall be a Special Offering Date. Except as otherwise
expressly provided in this Plan, all references to Offering Dates
shall include Special Offering Dates.

Offering Periods. Such periods as may be set by the Board
of Directors for the offering of Common Stock pursuant to this
Plan.

Participant. An Eligible Employee who subscribes for the
purchase of shares of Common Stock under the Plan in accordance
with the Plan (including an Eligible Employee who participates in
a Special Offering pursuant to Section 6 of this Plan.

Purchase Dates. Such dates as may be set by the Board of
Directors for the purchase of Common Stock, provided that (i)
Purchase Dates shall be no less than six months and no more than
24 months after the termination of the applicable Offering Period
and (ii) Purchase Dates may be any earlier date of purchase
pursuant to the terms of this Plan, including Sections 11
(termination of employment), 12 (retirement or disability), and 13
(death).

Purchase Periods. The period beginning on the termination
of an Offering Period and ending on the applicable Purchase Date.

Purchase Price. The lesser of (i) the Maximum Purchase
Price[,] or (ii) the mean between the reported high and low sale
prices{, or, if there is no sale on such day, the mean between the
reported bid and asked prices,} of Common Stock on the [American
Stock Exchange] { securities exchange or automated securities
interdealer quotation system on which Common Stock shall have been
traded} on the applicable Purchase Date or on the last day
preceding such date [on which such Exchange shall have been open].
The Purchase Price per share shall be subject to adjustment in
accordance with the provisions of Section 17 of this Plan.

Special Offering. An offering pursuant to Section 6 of this
Plan.

Subsidiary. A domestic corporation of which, on the
applicable Offering Date, [the Company] {Corporation} or a
Subsidiary of [the Company] {Corporation} owns at least 51 percent
of the total combined voting power of all classes of stock and
whose employees are authorized to participate in the Plan by the
Board of Directors of [the Company] {Corporation}.

3. The Offering. The number of shares of Common Stock subject to
the Plan shall be 250,000 {shares of Agritope Stock and 500,000 shares of
Medical Products Stock}, subject to adjustment as provided in Section 17 of
this Plan. During each Offering Period, [the Company] {Corporation} may
offer, at the applicable Purchase Price, for subscription by Eligible
Employees in accordance with the terms of the Plan, such number of authorized
and unissued shares of its Common Stock subject to the Plan as may be
determined by the Board of Directors [of the Company].

4. Subscriptions.

a. Shares Subject to Subscription. Except as provided in
Section 6 of this Plan with respect to Special Offerings, during each Offering
Period, each Eligible Employee shall be entitled to subscribe for the number
of whole shares of [Common] { Agritope Stock and Medical Products} Stock
offered during such Offering Period designated by him in accordance with the
terms of the Plan; provided, however, that for any Offering Period, the Board
of Directors may set a minimum, a maximum, or both a minimum and a maximum
number of shares that may be subscribed for during such Offering Period. In
no event may any employee subscribe for shares (under any one or more Offering
Periods which have Offering Dates within any calendar year) which would have a
total value (computed as the number of shares subscribed for during each such
Offering Period multiplied by the Maximum Purchase Price for each such
Offering Period) in excess of $21,250.

b. Further Limitation on Subscriptions. Notwithstanding
Section 4.a of this Plan, the maximum number of shares that may be subscribed
for by an Eligible Employee shall be further limited and reduced to the extent
that the number of shares owned by such Eligible Employee immediately after
any Offering Date for purposes of Section 423(b)(3) of the Code plus the
maximum number of shares set forth in Section 4.a of this Plan would exceed
5 percent of the total combined voting power or value of all classes of stock
of [the Company] {Corporation} or a parent or subsidiary corporation of [the
Company] {Corporation} within the meaning set forth in Section 423(b)(3) of
the Code.

c. Subscription Agreements. Subscriptions pursuant to the Plan
shall be evidenced by the completion and execution of subscription agreements
in the form provided by [the Company] { Corporation} and delivery of such
agreements to [the Company] { Corporation}, at the place designated by [the
Company] {Corporation}, prior to the expiration of each Offering Period. No
subscription agreement shall be subject to termination or reduction during the
Offering Period to which it relates without written consent of [ the Company]
{Corporation}.

d. Over Subscription. In the event that the aggregate number of
shares {of Agritope Stock or Medical Products Stock} subscribed for pursuant
to the Plan as of any Purchase Date shall exceed the number of shares {of
Agritope Stock or Medical Products Stock} offered for sale during the Offering
Period related to such Purchase Date, then each subscription for such Offering
Period pursuant to which a purchase is effected shall be reduced to the number
of shares {of Agritope Stock and Medical Products Stock} that such
subscription would cover in the event of a proportionate reduction of all
subscriptions for such Offering Period outstanding on such Purchase Date so
that the aggregate number of shares subject to all such subscriptions would
not exceed the number of shares offered for sale during such Offering Period.
In making such reductions, fractions of shares shall be disregarded and each
subscription shall be for a whole number of shares.

5. Payment of Purchase Price. Except as otherwise specifically
provided in the Plan, the Purchase Price of all shares purchased hereunder
shall be paid in equal installments through payroll deduction from the
Participant's compensation during the applicable Purchase Period, without the
right of prepayment. The Maximum Purchase Price multiplied by the number of
shares subscribed for shall be withheld in substantially equal installments on
each pay period during the applicable Purchase Period.

6. Special Offers.

a. Definitions. For purposes of this Section 6, capitalized
terms not otherwise defined in Section 2 of this Plan shall have the following
meanings:

Annual Increase. The gross annual amount (before any
applicable withholding) by which an employee's compensation would
otherwise be increased during the one-year period following an
Annual Review Date for such employee had the employee not been
subject to a Special Offering Subscription pursuant to this
Section 6.

Annual Review Date. The effective date, which may be an
employee's anniversary date, of an increase in compensation on
account of the employee's annual compensation review by [the
Company] {Corporation}.

Special Offering Date. The first day of each calendar month
commencing June 1, 1993.

Special Offering Subscription. A subscription pursuant to
this Section 6 for the number of whole shares of [Common Stock
]{Agritope Stock or Medical Products Stock (or a combination of
both)} equal to an Eligible Employee's Annual Increase as of an
Annual Review Date divided by the Maximum Purchase Price for the
Special Offering Date which falls on or immediately follows the
Annual Review Date.

Special Purchase Date. For each Participant with a Special
Offering Subscription, the one-year anniversary of the Annual
Review Date corresponding to the subscription.

Special Purchase Period. The period from a Participant's
Annual Review date [preceeding] {preceding} a Special Offering
Date through the corresponding Special Purchase Date.

b. Subscription. As of each Annual Review Date for each Eligible
Employee:

i. [The Company] {Corporation} may, in its discretion,
provide the Eligible Employee a Special Offering Subscription in
lieu of any increase in cash compensation during the following
year; or

ii. The Eligible Employee may make an irrevocable election
to receive a Special Offering Subscription in lieu of any increase
in cash compensation during the following year.

{In either case, the Special Offering Subscription shall be (at the discretion
of Corporation) for Agritope Stock, Medical Products Stock, or a combination
of both (specified by reference to relative percentages of the Annual
Increase). For example, Corporation could specify that an employee's Special
Offering Subscription for a $2,400 Annual Increase would be 75 percent (or
$1,800) for Agritope Stock and 25 percent (or $600) for Medical Products
Stock.}

c. Subscription Agreement. Each Special Offering Subscription
shall be evidenced by the completion of a Special Offering Subscription
Agreement in the form provided by [the Company] {Corporation}.

d. Payment of Purchase Price. For each Special Offering
Subscription, [the Company] {Corporation} shall credit to an account for the
Participant an amount equal to the Annual Increase in equal installments as of
each payment date for the Participant during the Special Purchase Period.

e. Right to Terminate Election or Reduce Number of Shares.
Notwithstanding Sections 9 and 10 of this Plan, a Participant subject to a
Special Offering Subscription may terminate the Special Offering Subscription
or reduce the number of shares covered by the Special Offering Subscription
only as of the Special Purchase Date (or an earlier Purchase Date upon the
occurrence of one or more of the events described in Sections 11, 12, or 13).
Such a termination or reduction must be made by written notice to [the
Company] {Corporation} and must be received by [the Company] {Corporation} no
later than the last business day before the Special Purchase Date (or such
earlier Purchase Date).

f. Withholding. Participants shall be subject to applicable
state and federal tax withholding and employment taxes on the shares purchased
pursuant to a Special Offering Subscription or upon payment of the amounts
credited to the Participant's account. [The Company's] {Corporation's}
obligation to issue shares shall be conditioned on the payment by the
Participant (or other arrangement satisfactory to [the Company)] {
Corporation)} of all applicable withholding taxes.

7. Application of Funds; Participants' Accounts. All amounts
withheld from and paid by Participants hereunder shall be deposited in [the
Company's] {Corporation's} general corporate account to be used for any
corporate purposes; provided, however, that [the Company] {Corporation} shall
maintain a separate bookkeeping account for each Participant hereunder
reflecting all amounts withheld from and paid by such Participant with respect
to each Purchase Period under the Plan. No interest shall be credited to such
separate accounts.

8. Issuance of Shares. Shares purchased under the Plan shall,
for all purposes, be considered to have been issued, sold, and purchased at
the close of business on the applicable Purchase Date. Prior to each
applicable Purchase Date, no Participant shall have any rights as a holder of
any shares covered by a subscription agreement. Promptly after each Purchase
Date, [the Company] {Corporation} shall issue and deliver to the Participant a
stock certificate or certificates representing the whole number of shares
purchased by the Participant during the Purchase Period ending with such
Purchase Date and refund to the Participant in cash any excess amount in his
account relating to such Purchase Period. No adjustment shall be made for
dividends or for the other rights for which the record date is prior to the
applicable Purchase Date, except as may otherwise be provided in Section 17.

9. Right to Terminate Subscription. Except as provided in
Section 6 of this Plan, each Participant shall have the right, at any time
after the expiration of each Offering Period and prior to the applicable
Purchase Date, to terminate his subscription relating to such Offering Period
by written notice to [the Company] {Corporation} and receive a prompt refund
in cash of the total amount in his account with respect to the applicable
Purchase Period.

10. Right to Reduce Number of Shares. Except as provided in
Section 6 of this Plan, each Participant shall have the right, at any time
after the expiration of each Offering Period and prior to the applicable
Purchase Date, to make, by written notice to [the Company] {Corporation}, a
one-time-only reduction in the number of shares covered by his subscription
agreement relating to such Offering Period, provided that such right shall
only apply to Purchase Periods of 12 months or more. Upon such reduction of
shares, an appropriate reduction shall be made in the Participant's future
payroll deductions during the applicable Purchase Period and the excess amount
in the Participant's account with respect to such Purchase Period resulting
from such reduction shall be promptly refunded to the Participant in cash or,
at the option of the Participant, shall be applied in equal amounts against
all future installment payments of the Maximum Purchase Price of the reduced
number of shares to be purchased during the applicable Purchase Period.

11. Termination of Employment. Upon termination of employment of
a Participant for any reason other than retirement, disability or death,
including by reason of the sale of the Subsidiary by which the Participant is
employed such that [the Company] {Corporation} or a Subsidiary of [the
Company] {Corporation} no longer owns at least 51 percent of the total
combined voting power of all classes of stock of the Subsidiary, a Participant
shall have, during the period of three months following his termination date,
but prior to the applicable Purchase Date, the right with respect to each
Purchase Period for which he has an account under the Plan to elect to receive
either a refund in cash of the total amount of his account relating to such
Purchase Period or the whole number of shares that can be purchased at the
applicable Purchase Price with such amount together with any remaining cash in
his account relating to such Purchase Period. Each election must be in
writing and delivered to [the Company] { Corporation} within the
aforementioned period. If the Participant elects to receive shares, the
Purchase Date shall be the date the Participant's election is delivered to
[the Company] {Corporation}. In the event the Participant does not make a
timely election with respect to any Purchase Period for which he has an
account under the Plan, he shall be deemed to have elected to receive a cash
refund of the amount of his account relating to such Purchase Period.

12. Retirement; Disability. A participant who retires or whose
employment is terminated by reason of any injury or illness of such a serious
nature as to disable the Participant from resuming employment with [the
Company] {Corporation} shall have all of the rights described in Section 11
above and shall have the additional right to elect, in the manner described in
Section 11, to prepay in cash in a lump sum the entire unpaid balance of the
Purchase Price of the shares covered by his subscription agreement relating to
each Purchase Period and to receive such shares. The Purchase Date for this
purpose shall be the date on which both the Participant's election and the
lump-sum cash payment shall have been delivered to [the Company]
{Corporation}. For purposes of the Plan, a termination of employment at or
after age 60 for any reason shall be considered retirement.

13. Death. In the event of the death of a Participant while in
the employ of [the Company] {Corporation} or a Subsidiary and prior to full
payment of the Maximum Purchase Price for the shares covered by his
subscription with respect to each Purchase Period, or the death of a retired
or disabled Participant prior to the exercise of his rights described in
Section 12 above, his personal representative shall have, during the period of
three months following the Participant's death, but prior to the applicable
Purchase Date, the rights described in Section 12. In the event of the death
of a Participant who previously terminated employment by reason other than
retirement or disability prior to full payment of the Maximum Purchase Price
for the shares covered by his subscription with respect to each Purchase
Period and prior to the exercise of his rights described in Section 11, his
personal representative shall have the rights described in Section 11.

14. Temporary Layoff; Leaves of Absence. A Participant's
installment payments with respect to each Purchase Period shall be suspended
during any period of absence from work due to temporary layoff or leave of
absence without pay. If such Participant returns to active employment within
the applicable Purchase Period, installment payments shall resume and, except
as provided below with respect to Special Offering Subscriptions, the
Participant shall be entitled to elect either to make up the deficiency in his
account with respect to such Purchase Period immediately with a lump-sum cash
payment, or to have future installments with respect to such Purchase Period
uniformly increased to make up the deficiency, or to have an appropriate
reduction made in the number of shares covered by his subscription agreement
with respect to such Purchase Period to eliminate the deficiency. The
election (together with the lump-sum cash payment, if applicable) must be
delivered to [the Company] {Corporation} within ten days of the Participant's
return to active employment but prior to the applicable Purchase Date. If the
Participant fails to make a timely election, the appropriate reduction of
shares shall be made in accordance with the above. If the Participant does
not return to active employment within the applicable Purchase Period, he
shall have the right to elect to receive either a refund in cash of the total
amount of his account with respect to such Purchase Period or the whole number
of shares which can be purchased at the applicable Purchase Price with such
amount together with any remaining cash in his account with respect to the
Purchase Period. The election must be in writing and delivered to [the
Company] {Corporation} prior to, and shall be effective as of, the applicable
Purchase Date. In the event the Participant does not make a timely election
with respect to any Purchase Period, he shall be deemed to have elected to
receive the cash refund with respect to that Purchase Period. For Special
Offering Subscriptions under Section 6 of the Plan, no amounts with respect to
Annual Increase will be credited during a period of absence from work due to
temporary layoff or leave of absence without pay and such amounts will not be
made up after return to active employment.

15. Insufficiency of Compensation. In the event that for any
payroll period, for reasons other than termination of employment for any
reason, temporary layoff, or leave of absence without pay, a Participant's
compensation (after all other proper deductions from his compensation) becomes
insufficient to permit the full withholding of his installment payment, the
Participant may pay the deficiency in cash when it becomes due. In the event
that, in a subsequent payroll period, the Participant's compensation becomes
sufficient to make the full installment payment and there still remains a
deficiency in his account, the deficiency must then be eliminated through the
election of one of the alternatives described in Section 14. The Participant
must deliver his election to [the Company] {Corporation} within ten days of
the end of such subsequent payroll period but prior to the applicable Purchase
Date. In the event that on the applicable Purchase Date there remains a
deficiency in such a Participant's account or, in the event a Participant
described above fails to make a timely election, the appropriate reduction of
shares shall be made in accordance with Section 13.

16. Interest. Any person who becomes entitled to receive any
amount of cash refund from any account maintained for him pursuant to any
provision of the Plan shall be entitled to receive in cash, at the same time,
simple interest on the amount of such refund at the rate of 6 percent per
annum. Any refund shall be deemed to be made from the most recent payment or
payments made by the Participant pursuant to the Plan.

17. Effect of Certain Stock Transactions. If at any time after
the day preceding the Offering Date for each Purchase Period, and prior to the
issue and sale by [the Company] { Corporation} of all the shares of Common
Stock covered by Participants' subscription agreements with respect to each
Purchase Period for which the Offering Date has occurred, [the Company]
{Corporation} shall effect a subdivision of shares of Common Stock or other
increase (by stock dividend or otherwise) of the number of shares of Common
Stock outstanding, without the receipt of consideration by [the Company]
{Corporation} or another corporation in which it is financially interested and
otherwise than in discharge of [the Company's] {Corporation's} obligation to
make further payment for assets theretofore acquired by it or such other
corporation or upon conversion of stock or other securities issued for
consideration, or shall reduce the number of shares of Common Stock
outstanding by a consolidation of shares, then (a) in the event of such an
increase in the number of such shares outstanding, the number of shares of
Common Stock then subject to Participants' subscription agreements with
respect to such Purchase Period shall be proportionately increased and the
Maximum Purchase Price and the Purchase Price per share for such Purchase
Period shall be proportionately reduced, and (b) in the event of such a
reduction in the number of such shares outstanding, the number of shares of
Common Stock then subject to subscription agreements with respect to such
Purchase Period shall be proportionately reduced and the Maximum Purchase
Price and the Purchase Price per share for such Purchase Period shall be
proportionately increased. Except as provided in this Section 17, no
adjustment shall be made under this Plan or any subscription agreement by
reason of any dividend or other distribution declared or paid by [the Company]
{Corporation}.

18. Merger, Consolidation, Liquidation or Dissolution. In the
event of any merger or consolidation of which [the Company] {Corporation} is
not to be the survivor (or in which [the Company] { Corporation} is the
survivor, but becomes a subsidiary of another corporation), or the liquidation
or dissolution of [the Company] { Corporation}, each Participant shall have
the right immediately prior to such event to elect to receive the number of
whole shares that can be purchased at the Purchase Price applicable to each
Purchase Period with respect to which such Participant has subscribed for
purchase of Common Stock with the full amount that has been withheld from and
paid by him pursuant to the subscription agreement relating to such Purchase
Period, together with any remaining excess cash in his account relating to
such Purchase Period. If such election is not made with respect to the amount
in a Participant's account for any Purchase Period, the Participant's
subscription agreement shall terminate and he shall receive a prompt refund in
cash of the total amount in such account.

19. Limitation on Right to Purchase. Notwithstanding any
provision of the Plan to the contrary, if at any time a Participant is
entitled to purchase shares of Common Stock on a Purchase Date, taking into
account such Participant's rights, if any, to purchase Common Stock under the
Plan and all other stock purchase plans of [the Company] {Corporation} and of
other corporations that constitute parent or subsidiary corporations of [the
Company] {Corporation} within the meaning of Sections 425(e) and (f) of the
Code, the result would be that, during the then current calendar year, such
Participant would have first become entitled to purchase under the Plan and
all such other plans a number of shares of Common Stock of [the Company]
{Corporation} that would exceed the maximum number of shares permitted by the
provisions of Section 423(b)(8) of the Code, then the number of shares that
such Participant shall be entitled to purchase pursuant to the Plan on such
Purchase Date shall be reduced by the number that is one more than the number
of shares that represents the excess, and any excess amount in his account
resulting from such reduction shall be promptly refunded to him in cash.

20. Non-Assignability. None of the rights of an Eligible
Employee under the Plan or any subscription agreement entered into pursuant
hereto shall be transferable by such Eligible Employee otherwise than by will
or the laws of descent and distribution, and during the lifetime of an
Eligible Employee such rights shall be exercisable only by him.

21. Shares Not Purchased. Shares of Common Stock subject to the
Plan that are not subscribed for during each successive Offering Period and
shares subscribed for pursuant to such Offering Period that thereafter cease
to be subject to any subscription agreement hereunder shall remain subject to
and reserved for use in connection with a later Offering Period established by
the Board of Directors.

22. Construction; Administration. All questions with respect to
the construction and application of the Plan and subscription agreements
thereunder and the administration of the Plan shall be settled by the
determination of the Board of Directors or of one or more other persons
designated by it, which determinations shall be final, binding and conclusive
on [the Company] {Corporation} and all employees and other persons. All
Eligible Employees shall have the same rights and privileges under the Plan.

23. Termination or Amendment. [The Plan may be amended or
terminated by] {Without further approval of Corporation's shareholders,} the
Board of Directors[, provided that no such amendment or termination shall (a)
adversely affect the rights of employees under subscription agreements
theretofore entered into pursuant to the Plan, or (b) increase the maximum
number of shares of Common Stock offered] {may at any time terminate the Plan
or may amend the Plan from time to time in such respects as the Board of
Directors may deem advisable, except that the Board of Directors may not,
without the approval of Corporation's shareholders, make any amendment that
would materially increase the aggregate number of Shares that may be issued}
under the Plan or decrease the price per [share, except] {Share (except for
adjustments} pursuant to Section 17[.] {of the Plan.)}

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS/PROXY STATEMENT

Item 20. Indemnification of Directors and Officers.

Unless a corporation's articles of incorporation provide otherwise, the
Oregon Business Corporation Act (the "Oregon Act") requires the
indemnification of an individual made a party to a proceeding because the
individual is or was a director or officer of the corporation against
reasonable expenses incurred in connection with the proceeding if the
individual is wholly successful on the merits or otherwise. The Oregon Act
permits the corporation to indemnify other employees and agents to the same
extent. In addition, the Oregon Act allows the 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;

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

(e) In connection with any proceeding (other than a
proceeding by or in the right of the corporation) charging
improper personal benefit to the individual, the individual was
not adjudged liable on the basis that he or she improperly
received personal benefit.

The Oregon Act also authorizes a court to order indemnification upon
application of the director or officer, whether or not the above standards of
conduct have been met, if the court determines that the officer or director is
fairly and reasonably entitled to indemnification in view of all the relevant
circumstances and the corporation's articles of incorporation do not prohibit
such resort to the court. In addition, the Oregon Act provides that the
indemnification described above is not exclusive of any other rights to which
officers or directors may be entitled under the corporation's articles of
incorporation or bylaws, or under any agreement, action of its board of
directors, vote of shareholders, or otherwise. The restated articles of
indemnification of the Registrant do not limit any rights of indemnification
otherwise available to the Registrant's directors and officers under the
Oregon Act.

Article III of the restated articles of incorporation of the Registrant
permits the Registrant to indemnify its directors, officers, employees, and
agents to the fullest extent permitted by law. Article V of the bylaws of the
Registrant requires such indemnification for directors or former directors, or
any individual who may have served at its request as a director of another
corporation in which it owns shares of capital stock or of which it is a
creditor, against expenses and liability, including attorney fees, actually
and necessarily incurred by such individual in connection with any threatened,
pending, or completed arbitration, mediation, action, suit, or proceeding to
which the individual is a party because of service to the Registrant.
Article V of the bylaws further provides that the foregoing right of
indemnification shall not be deemed exclusive of any other rights to which the
individual may be entitled under the restated articles of incorporation,
bylaws, agreement, action of the shareholders, or otherwise. The Registrant
may, but is not required to, offer the same rights of indemnification, on a
case-by-case basis, to the officers, employees, and agents of the Registrant.

In addition to the foregoing right of indemnity, the Registrant has
entered into indemnification agreements with all current officers and
directors. Each indemnification agreement makes provisions of the Oregon Act
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. Procedures are also set forth in the indemnification agreements for
the defense of claims by the Registrant and in the event that there is a
change or potential change in control of the Registrant.

Section 60.367 of the Oregon Revised Statutes (a part of the Oregon Act)
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 shareholders who
accepted the dividend or distribution, knowing the same to have been made in
violation of the Oregon Act or the articles of incorporation. The section
also provides that any such director shall be entitled to contribution from
the other directors who voted for or assented to the dividend or distribution
without complying with the applicable standards of conduct prescribed by the
Oregon Act.

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

Item 21. Exhibits and Financial Statement Schedules.

(a) The exhibits to the Registration Statement required by Item 601 to
Regulation S-K are listed in the index to exhibits following the signature
page of this Registration Statement.

(b) All schedules are omitted because of the absence of the conditions
under which they are required or because the required information is included
in the financial statements or related notes.

Item 22. Undertakings.

(a) The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(b) (1) The undersigned Registrant hereby undertakes as follows:
that prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this Registration Statement, by
any person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition
to the information called for by other items of the applicable form.

(2) The Registrant undertakes that every prospectus: (i) that
is filed pursuant to paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Securities Act
and is used in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the Registration Statement and will
not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(c) 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.
This undertaking shall not apply to claims covered by insurance against
liability arising under the Securities Act.

(d) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
Prospectus/Proxy Statement pursuant to Item 4, 10(b), 11, or 13 of this form,
within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding to
the request.

(e) The undersigned Registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Beaverton, state of
Oregon, on November 6, 1996.

EPITOPE, INC.

By /s/ ADOLPH J. FERRO, Ph.D.

Adolph J. Ferro, Ph.D., President
and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on November 6, 1996, by the following
persons in the capacities indicated.

Signature Title
- --------- -----

/s/ ADOLPH J. FERRO, PH.D. President, Chief Executive Officer
Adolph J. Ferro, Ph.D. and Director
(Principal Executive Officer)

/s/ GILBERT N. MILLER Executive Vice President,
Gilbert N. Miller Chief Financial Officer and
Treasurer
(Principal Financial Officer)

*TERRY J. PAULSEN Accounting Manager
Terry J. Paulsen (Principal Accounting Officer)

*RICHARD K. DONAHUE Director
Richard K. Donahue

*ANDREW S. GOLDSTEIN Director
Andrew S. Goldstein

*MARGARET H. JORDAN Director
Margaret H. Jordan

*R. DOUGLAS NORBY Director
R. Douglas Norby

*MICHAEL J. PAXTON Director
Michael J. Paxton

*ROGER L. PRINGLE Director
Roger L. Pringle

*G. PATRICK SHEAFFER Director
G. Patrick Sheaffer

*By /s/ ADOLPH J. FERRO
Adolph J. Ferro, Ph.D.
(Attorney-in-Fact)
<PAGE>
INDEX TO EXHIBITS

Exhibit
Number Exhibit
- ------- -------
2 Acquisition and Merger Agreement among Epitope, Inc., Thamscoe, Inc.,
Andrew and Williamson Sales, Co., and the shareholders of Andrew and
Williamson Sales, Co., dated as of November 6, 1996. Incorporated by
reference to Exhibit 2 to the Company's Current Report on Form 8-K
dated November 6, 1996.

3.1 Restated Articles of Incorporation, as amended, of the Registrant.
Incorporated by reference to Exhibit 3.1 to the Registrant's Current
Report on Form 8-K dated May 29, 1991.

3.2 Restated Bylaws, as amended, of the Registrant. Incorporated by
reference to Exhibit 3.2 to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1991.

4.1 Restated Articles of Incorporation, as amended, of the Registrant.
Incorporated by reference to Exhibit 3.1 to the Registrant's Current
Report on Form 8-K dated May 29, 1991.

4.2 Article V of Restated Articles of Incorporation as proposed to be
amended. Included in Part I as Annex II to the Prospectus/Proxy
Statement included in this Registration Statement.

4.3 Specimen form of stock certificate for Agritope Common Stock (to be
filed by amendment).

4.4 Note Purchase Agreement dated June 10, 1992, among Agritope, Inc.,
the Registrant, and certain investors. Copies of the agreements with
individual investors shall be filed with the Commission upon request
pursuant to Item 601, Instruction 2. Incorporated by reference to
Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarterly period ended June 30, 1992.

5 Opinion of Miller, Nash, Wiener, Hager & Carlsen LLP regarding
legality of the Agritope Common Stock (to be filed by amendment).

8 Opinion of Miller, Nash, Wiener, Hager & Carlsen LLP regarding tax
matters (to be filed by amendment).

10.1 Incentive Stock Option Plan of Registrant, as amended. Incorporated
by reference to Exhibit 10.1 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended September 30, 1994 (the "1994 10-
K").

10.2 Amended and Restated Epitope, Inc., 1991 Stock Award Plan ("1991
Plan"). Incorporated by reference to Exhibit 10.2 to the 1994 10-K.

10.3 Agritope, Inc., 1992 Stock Award Plan. Incorporated by reference to
Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1992 (the "1992 10-K").

10.4 Form of Nonqualified Stock Option Agreement issued to certain
officers and directors of Registrant pursuant to Agritope, Inc., 1992
Stock Award Plan. Incorporated by reference to Exhibit 10.4 to the
1992 10-K.

10.5 Lease dated July 17, 1990, among Registrant, Koll Woodside
Associates, a California general partnership, and Petula Associates,
Ltd., an Iowa corporation. Incorporated by reference to Exhibit 10.5
to the 1994 10-K.

10.6 Fourth Amendment dated May 20, 1994, to Lease dated July 17, 1990,
among Registrant, Koll Woodside Associates, a California general
partnership, and Petula Associates, Ltd., an Iowa corporation.
Incorporated by reference to Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarterly period ended
June 30, 1994 ("June 1994 10-Q").

10.7 Business Park Lease dated May 5, 1994, among Registrant, Koll
Woodside Associates, a California general partnership, and Petula
Associates, Ltd., an Iowa corporation. Incorporated by reference to
Exhibit 10.2 to the June 1994 10-Q.

10.8 Business Park Lease dated as of December 16, 1994, among Registrant,
Petula Associates, Ltd., an Iowa corporation, and Koll Portland
Associates, a California general partnership. Incorporated by
reference to Exhibit 10.1 to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarterly period ended December 31, 1994.

10.9 Lease Agreement dated as of October 15, 1993, between Kathryne L.
Brown and Agrimax Floral Products, Inc. Incorporated by reference to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarterly period ended December 31, 1993 ("December 1993
10-Q").

10.10 Office/Warehouse Lease dated as of August 25, 1994, between Tonka Bay
Associates as agent for M Corp. of Illinois and Agrimax Floral
Products, Inc. Incorporated by reference to Exhibit 10.10 to the
1994 10-K.

10.11 Agreement dated December 9, 1987, between Registrant and Adolph
Ferro, Ph.D. Incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-1 (No. 33-18722) (the
"1988 S-1").

10.12 Distribution Agreement dated as of April 1, 1994, between Registrant
and Organon Teknika Corporation. Incorporated by reference to
Exhibit 10.3 to the June 1994 10-Q.

10.13 Supply Agreement dated as of April 1, 1994, between Registrant and
Organon Teknika Corporation. Incorporated by reference to Exhibit
10.4 to the June 1994 10-Q.

10.14 Form of Indemnification Agreement for directors and officers.

10.15 Amended and Restated Employment Agreement dated January 8, 1991,
between Andrew S. Goldstein and Registrant. Incorporated by
reference to Exhibit 10.28 to the Registrant's Annual Report on Form
10-K for the year ended September 30, 1991 (the "1991 10-K").

10.16 Amended and Restated Employment Agreement dated January 9, 1991,
between Adolph J. Ferro, Ph.D., and Registrant. Incorporated by
reference to Exhibit 10.29 to the 1991 10-K.

10.17 Employment Agreement dated January 28, 1990, between Gilbert N.
Miller and Registrant. Incorporated by reference to Exhibit 10.19 to
the 1994 10-K.

10.18 Employment Agreement dated July 1, 1990, between John H. Fitchen,
M.D. and Registrant. Incorporated by reference to Exhibit 10.20 to
the 1994 10-K.

10.19 Employment Agreement dated July 15, 1995, between Byron A. Allen,
Jr., and Registrant. Incorporated by reference to Exhibit 10.23 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995.

10.20 Employment Agreement dated May 31, 1995, between Joseph Bouckaert and
Vinifera, Inc.

10.21 Employment Agreement dated August 17, 1992, between Richard K.
Bestwick, Ph.D., and Agritope, Inc.

10.22 Development, License and Supply Agreement between Registrant and
SmithKline Beecham plc dated February 24, 1995, as amended. Portions
of this agreement have been granted confidential treatment.
Incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarterly
period ended June 30, 1995.

21 Subsidiaries of the Registrant (to be filed by amendment).

23.1 Consent of Price Waterhouse LLP.

23.2 Consents of Miller, Nash, Wiener, Hager & Carlsen LLP. Included in
Exhibits 5 and 8.

24 Powers of Attorney.

27 Financial Data Schedule.

99 Form of proxy (to be filed by amendment).

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

<PAGE>
EXHIBIT 10.14

INDEMNIFICATION AGREEMENT

This INDEMNIFICATION AGREEMENT is made and entered into as of the 14th
day of June, 1989 by and between _____________ ("Indemnitee") and Epitope,
Inc., an Oregon corporation (the "Company").

RECITALS

A. The Company has recognized the difficulty that publicly held
corporations are having in attracting and retaining qualified directors,
officers and key employees as a result of the increasing risk of claims and
actions against them arising out of their association with the Company.

B. Indemnitee is an officer, director and/or key employee of the
Company.

C. Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company.

D. In view of the mutual desire of the parties that Indemnitee render
valuable services to the Company, the parties have agreed to enter into this
Indemnification Agreement.

THEREFORE IT IS AGREED:

1. Definitions. The following definitions shall apply to this
Agreement:

1.1. "Act" shall be the Oregon Business Corporation Act and all
amendments thereto hereinafter enacted.

1.2. "Expenses" shall include, without limitation, expenses of
investigations, judicial or administrative proceedings or appeals and
attorneys' fees and disbursements and any expenses of establishing a right to
indemnification under this Agreement.

1.3. "Liability" means the obligation to pay a judgment,
settlement, penalty, fine, including an excise tax assessed with respect to an
employee benefit plan, or reasonable Expenses incurred with respect to a
Proceeding.

1.4. "Party" includes an individual who was is or is threatened to
be made a named defendant or respondent in a proceeding.

1.5. "Proceeding" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal.

2. Indemnification. The Company shall indemnify Indemnitee against
Liability and Expenses actually and necessarily incurred by him or her in any
Proceeding in which he or she is made a Party by reason of being or having
been a director, officer or key employee of the Company, except in relation to
matters as to which indemnification is prohibited by the Act; but such
indemnification shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under any bylaw or agreement of the Company,
general or specific action of the Company's board of directors, vote of the
Company's shareholders or otherwise.

3. Procedure for Indemnification. After the final disposition of
any Proceeding in which Indemnitee may be entitled to indemnification pursuant
to this Agreement, Indemnitee may send to the Company a written request for
indemnification. The Company shall, in accordance with the provisions of the
Act regarding determination and authorization of indemnification, make a
finding whether the indemnification requested is permitted by the laws of the
state of Oregon no later than 60 days following receipt by the Company of such
request. The Company shall cause the indemnification requested to be
authorized and paid unless the Company finds that the indemnification
requested is not so permitted. Indemnitee shall be given an opportunity to be
heard and to present evidence in connection with the consideration of the
party or parties determining Indemnitee's right to indemnification under the
Act. If the Company does not authorize indemnification hereunder, Indemnitee
shall have the right to seek court-oredered indemnification in accordance with
the provisions of the Act. In any such action, neither the making of, nor the
failure to make, any finding by the Company that indemnification of the
Indemnitee is proper or not proper in the circumstances shall be a defense to
such action or create a presumption that the Indemnitee has not met the
standard of conduct required by the Act. In making its determination and in
any court proceeding, the Company shall have the burden of proving that
Indemnitee has not met the standard of conduct required by the Act to entitle
Indemnitee to indemnification.

4. Procedure for Advancement of Expenses. The Company shall pay for
or reimburse the reasonable Expenses incurred by Indemnitee as a result of
being Party to a Proceeding promptly upon receipt of a written request for
payment of such Expenses that is in accordance with the requirements of the
Act for such written statements. Such written statement shall also include or
be accompanied by documentation of the Expenses incurred certified true and
correct by Indemnitee. When available, such documentation of expenses shall
include copies of bills or statements evidencing the Expenses incurred. If
the requirements of this Section 4 are met, the Company shall pay the amount
requested promptly notwithstanding the absence of a final disposition of the
Proceeding.

5. Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses or Liability incurred by Indemnitee in the
preparation, investigation, defense, appeal or settlement of any Proceeding
but not, however, for the total amount thereof, the Company shall indemnify
Indemnitee for the portion of such Expenses or Liability to which Indemnitee
is entitled in accordance with this Agreement.

6. Insurance. The Company may, but shall not be required to, purchase
and keep in force during the term of this Agreement a policy or policies of
liability insurance on behalf of Indemnitee against Liability and Expenses
incurred in any Proceeding. Nothing herein shall be construed to prohibit
Indemnitee from maintaining his or her own policy of liability insurance.

7. Exclusions. The Company shall not be liable to make any payment
hereunder:

7.1. If it shall be finally adjudicated that such payment is
prohibited by law;

7.2. On account of any Proceeding brought under Section 16(b) of
the Securities Exchange Act of 1934, as such law is amended from time to time,
or under any similar law that replaces Section 16(b), in which judgment is
rendered against Indemnitee for an accounting for profits made from the
purchase or sale by Indemnitee of the securities of the Company;

7.3. For Liability or Expenses in any Proceeding brought by
Indemnitee against the Company unless (I) the Proceeding is brought as a
Proceeding for indemnity under this Agreement, (ii) Indemnitee is successful
in whole or in part in a Proceeding or (iii) the indemnification is included
in a settlement of the Proceeding or is awarded by a court;

7.4. To the extent payment is actually made to Indemnitee under a
valid, enforceable and collectible insurance policy, whether provided by the
Company or by Indemnitee (the "Insurance Policy"), by or out of a fund created
by the Company and under the control of a trustee or otherwise (the "Fund") or
from other sources provided by the Company ("Other Sources"); or

7.5. For amounts paid in settlement of a claim effected without
the Company's prior written consent, which consent shall not be unreasonably
withheld. If Indemnitee shall become obligated or required to pay any amount
that the Company would be obligated to pay hereunder except for the exclusion
in Section 7.4, the Company shall advance such amount to Indemnitee if payment
is not reasonably expected to be made under the Insurance Policy, by the Fund
or from Other Sources prior to the time that Indemnitee must make such
payment, provided, however, that Indemnitee shall immediately pay over to the
Company, from the funds Indemnitee later receives under the Insurance Policy,
from the Fund or from Other Sources, an amount equal to the amount advanced.

8. Defense of Claim. If any Proceeding asserted or commenced against
Indemnitee is also asserted or commenced against the Company, the Company
shall be entitled to participate in the Proceeding at its own expense and,
except as otherwise provided herein below, to the extent that it may wish the
Company shall be entitled to assume the defense thereof. After notice from
the Company to Indemnitee of its election to assume the defense of any such
Proceeding, Indemnitee shall have the right to employ Indemnitee's own counsel
in such Proceeding, but the Expenses of such counsel incurred after notice
from the Company to Indemnitee of its assumption of the defense thereof shall
be the Expenses of Indemnitee, and the Company may not be obligated to
Indemnitee under this Agreement for any Expenses subsequently incurred by
Indemnitee in connection therewith other than the reasonable costs of
investigation, travel and lodging Expenses arising out of Indemnitee's
participation in the defense of such Proceeding unless (i) otherwise
authorized by the Company, (ii) Indemnitee's counsel shall have reasonably
concluded, and so notified the Company in writing, that there may be a
conflict of interest between the Company and Indemnitee in the conduct of the
defense of such Proceeding or (iii) the Company shall not in fact have
employed counsel to assume the defense of such Proceeding. If the Company may
be obligated for some or all of the Expenses of Indemnitee under this Section
8, the determination of Indemnitee's entitlement to indemnification shall be
made in accordance with Section 3.

9. Change in Control.

9.1. The Company agrees that, if there is a Change in Control (as
hereinafter defined) of the Company, then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnification and
Expense advances under this Agreement, the Company shall seek legal advice
only from special, independent counsel selected by the Company with the
consent of Indemnitee, which consent shall not be unreasonably withheld, with
respect to matters arising out of this Agreement, including but not limited to
the right of Indemnitee to indemnification hereunder. Such counsel shall,
among other things, render its written opinion to the Company and Indemnitee
as to whether and to what extent Indemnitee would be permitted to be
indemnified under the Act and as to the amount of reasonable indemnification.
Such written opinion shall be binding upon the Company and Indemnitee. The
Company shall agree to pay the reasonable fees of such special counsel and to
indemnify fully such counsel against any and all expenses, including attorney
fees, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

9.2. For the purpose of this Section 9, a "Change in Control"
shall be deemed to have occurred if:

9.2.1. Any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "1934 Act"), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as their
ownership of the Company, becomes the "Beneficial Owner," as defined in Rule
13d-3 under the 1934 Act, directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting power of
the Company's then outstanding voting securities ("Voting Stock");

9.2.2. During any period of twenty-four (24) consecutive
months, not including any period prior to the execution of this Agreement,
individuals who at the beginning of such period constitute the board of
directors of the Company and any new director, other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in Section 9.2.1 or 9.2.3, whose election was
approved by a vote of at least two-thirds (2/3rds) of the shares entitled to
vote, cease for any reason to constitute a majority of the board; or

9.2.3. The stockholders of the Company (i) approve a
merger or consolidation of the Company with any other corporation, other than
a merger or consolidation that would result in the Voting Stock outstanding
immediately prior thereto continuing to represent, either by remaining
outstanding or by being converted into Voting Stock of the surviving entity,
at least seventy percent (70%) of the combined voting power of the Voting
Stock of the Company or such surviving entity outstanding immediately after
such merger or consolidation, (ii) approve a plan of complete liquidation of
the Company or (iii) approve an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

10. Potential Chanqe in Control.

10.1. In the event of a Potential Change in Control (as hereinafter
defined), the Company shall, upon written request by Indemnitee, create a
trust (the "Trust") for the benefit of Indemnitee and from time to time upon
written request of Indemnitee shall fund the Trust in an amount sufficient to
satisfy any and all Expenses reasonably anticipated at the time of each such
request to be incurred in connection with investigating, preparing for and
defending any Proceeding for which Indemnitee may be entitled to
indemnification under this Agreement, and any and all Liability for which
Indemnitee is entitled to indemnification hereunder from time to time actually
paid, reasonably anticipated or proposed to be paid. The amount or amounts to
be deposited in the Trust pursuant to the foregoing funding obligations shall
be determined in accordance with the provisions of the Act with regard to
determination and authorization of indemnification.

10.2. The terms of the Trust shall provide that upon a Change in
Control:

10.2.1. The Trust shall not be revoked or the principal
thereof invaded without the prior written consent of Indemnitee;

10.2.2. The trustee of the Trust (the "Trustee") shall
advance, within two (2) business days of a written request by Indemnitee in
accordance with the requirements of Section 4, any and all Expenses to
Indemnitee, and Indemnitee hereby agrees to reimburse the Trust under the
circumstances under which Indemnitee would be required to reimburse the
Company pursuant to the Act and Section 4;

10.2.3. The Trust shall continue to be funded by the
Company in accordance with the funding obligation set forth above;

10.2.4. The Trustee shall promptly pay to Indemnitee all
amounts for which Indemnitee shall be entitled to indemnification pursuant to
this Agreement or otherwise; and

10.2.5. All unexpended funds in the Trust shall revert to
the Company upon a final determination by the special counsel established in
accordance with Section 9 or a court of competent jurisdiction, as the case
may be, that Indemnitee has been fully indemnified under the terms of this
Agreement.

10.3. The Trustee shall be selected by Indemnitee with the consent
of the Company, which consent shall not be unreasonably withheld, and all
reasonable expenses, fees and other disbursements of the Trustee in connection
with the establishment and administration of the Trust shall be paid by the
Company.

10.4. Nothing in this Section 10 shall relieve the Company of any
of its obligations under this Agreement.

10.5. A "Potential Change in Control" shall be deemed to have
occurred if: (i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control; (ii) any person,
including the Company, publicly announces an intention to take or to consider
taking actions that, if consummated, would constitute a Change in Control;
(iii) any person, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, who is or becomes the
beneficial owner, directly or indirectly, of stock of the Company representing
nine and one-half percent (9.5%) or more of the combined voting power of the
Company's then outstanding Voting Stock, increases his or her beneficial
ownership of such stock by five (5) percentage points or more over the
percentage so owned by such person; or (iv) the board of directors adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control has occurred.

11. Nonexclusivity and Continuation of Rights. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights
consistent with the laws of the state of Oregon to which Indemnitee may be
entitled under the Company's articles of incorporation, bylaws or any other
agreement, vote of shareholders or otherwise, both as to action in
Indemnitee's official capacity and as to action in another capacity while
holding office or while employed by or acting as agent for the Company, and
shall continue notwithstanding that Indemnitee may have ceased to be connected
with the Company.

12. Heirs, Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the heirs, successors and assigns of the
Company and Indemnitee.

13. Severability. Wherever possible, each provision in this Agreement
shall be interpreted in such manner as to be effective and valid under the
laws of the state of Oregon, but if any provision of this Agreement shall be
invalidated by any court of competent jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

14. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall
do all acts necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

15. Modification and Amendment. No amendment, modification,
termination or claimed waiver of any of the provisions hereof shall be valid
unless in writing and signed by both of the parties hereto.

16. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which
it is so mailed:

If to Indemnitee: If to the Company:

Name Epitope, Inc.
Address Attn.: Corporate Secretary
City, State ZIP 15425 S.W. Koll Parkway
Beaverton, Oregon 97006

or to such other address as may have been furnished to the other party.

17. Governinq Law. This Agreement shall be governed by and construed
in accordance with the laws of the state of Oregon.

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

INDEMNITEE EPITOPE, INC., an Oregon
corporation

_____________________________ By ___________________
Gilbert N. Miller Title: _________________

<PAGE>
EXHIBIT 10.20

EMPLOYMENT AND NONCOMPETITION AGREEMENT

THIS AGREEMENT is made as of this 31st day of May, 1995 by and
between Vinifera, Inc., an Oregon corporation (the "Company"), and Joseph A.
Bouckaert ("Bouckaert").

W I T N E S S E T H :

WHEREAS, the Company is engaged in the business of propagating
superior varieties of grape vines in commercial quantities (the "Business");
and

WHEREAS, Bouckaert is employed by the Company as its President and
possesses expertise in technology and know-how in areas relevant to the
Business; and

WHEREAS, the Company and Bouckaert mutually desire that the Company
continue to employ Bouckaert as its President following a change of control of
the Company on the effective date hereof.

NOW, THEREFORE, in consideration of the covenants and agreements of
the parties herein contained, the parties hereto agree as follows:

1. Employment and Duties. The Company hereby agrees to employ
Bouckaert as the President and Chief Executive Officer of the Company on the
terms and conditions set forth herein, and Bouckaert hereby agrees to remain
in the employ of the Company on such terms and conditions. Bouckaert shall
serve without additional compensation as a director or in such additional
offices of the Company or any of its affiliates to which Bouckaert may be duly
appointed or elected. Bouckaert shall perform such duties as shall be
reasonably assigned to him from time to time by the Board of Directors of the
Company. Bouckaert agrees to devote substantially all of his business' time
and effort to the diligent and faithful performance of such duties. Before
engaging in any outside business activity, Bouckaert will obtain the consent
of the Board of Directors, which shall not be unreasonably withheld.

2. Term. The term of Bouckaert's employment hereunder shall
commence on the date hereof and shall continue until the fifth anniversary of
the date hereof. Such term may be extended as the parties subsequently may
agree.

3. Compensation. As compensation for his performance of
services as an employee hereunder, Bouckaert shall be entitled to receive:

a. a salary at the annual rate of One Hundred Sixty
Thousand Dollars ($160,000.00) ("Salary") payable in substantially
equal monthly installments, Bouckaert's salary may be adjusted
after the completion of his first year of service and each year
thereafter under this Agreement at the discretion of the Company's
board of directors;

b. a one-time signing bonus of Forty Thousand Dollars
($40,000.00) payable upon execution of this Agreement; and

c. incentive stock options to purchase 400,000 shares of
the Company's common stock if and as approved (which approval will
not be unreasonably withheld) by the Board of Directors in
connection with the adoption of an employee stock option plan for
the Company. Such stock options shall vest annually in four (4)
equal amounts, commencing upon the completion of Bouckaert's second
year of service under this Agreement, dependent on continued
employment. The exercise price for each stock option shall be
equal to the fair market value of one share of the Company's common
stock at the time such stock option is granted.

Bouckaert shall also be entitled to receive the benefits set forth
on Schedule A hereto.

4. Commissions. Bouckaert shall be entitled to receive
commissions equal to one percent (1%) of all equity investment capital
Bouckaert is directly responsible for raising for the Company, payable in each
case within thirty (30) days of the Company's receipt of each said investment;
provided, however, that the Company shall be under no obligation to accept any
particular offer of investment at any time, and the terms and conditions of
any proposed investment (whether or not introduced by Bouckaert) shall at all
times be in the sole discretion of and determined solely by the Board of
Directors of the Company; and, further provided that in the determination of
whether Bouckaert is in any case "directly responsible" for an equity
investment shall be in the sole discretion of the board of directors of the
Company to be determined reasonably and in good faith. For purposes of this
Agreement, Bouckaert shall be deemed "directly responsible" for those accepted
investments in which he both initiated the contact and actively participated
in securing the investments.

5. Waiver of Acceleration. As a condition to this Agreement and
the Stock Purchase Agreement, Bouckaert hereby forever waives any right of
acceleration of vesting of stock options for shares of the Company's stock
based on a "Change in Control," as that term is defined in that certain Award
Agreement under the Vinifera, Inc. 1993 Award Plan dated March 9, 1993,
between Bouckaert and the Company (the "Plan").

6. Confidential Information; Inventions.

a. In the course of his employment by the Company,
Bouckaert has acquired and will continue to acquire information and
knowledge respecting the proprietary and confidential affairs of
the Company and the Business, including without limitation
confidential information with respect to the Company's products,
technology, know-how, processes, customer lists and distribution
methods ("Confidential Information"). Accordingly, Bouckaert
agrees that he shall not during the period of his employment
hereunder of thereafter use for his own or any other person's or
entity's benefit any such Confidential Information acquired during
the term of his employment with the Company. Further, during the
period of his employment hereunder and thereafter, Bouckaert shall
not, without the written consent of the Board of Directors of the
Company or a person duly authorized thereby, disclose to any
person, other than an employee of the Company or a person to whom
disclosure is reasonably necessary or appropriate in connection
with the performance by Bouckaert of his duties hereunder, any
Confidential Information obtained by him while in the employ of the
Company.

b. Bouckaert agrees that all memoranda, notes, records,
papers or other documents and all copies thereof containing
Confidential Information, some of which may be prepared by him, and
all objects associated therewith in any way obtained by him shall
be the Company's property. Bouckaert shall not, except for the
Company's use, copy or duplicate any of the aforementioned
documents or objects, nor remove them from the Company's
facilities, nor use any information concerning them except for the
Company's benefit, either during his employment or thereafter.
Bouckaert agrees that he will deliver the original and all copies
of all of the aforementioned documents, including, but not limited
to, computer files and objects, if any, that may be in his
possession to the Company on termination of his employment, or at
any other time upon the Company's request.

c. Bouckaert agrees to disclose to Company and to assign
to Company all of Bouckaert's rights in any designs, discoveries,
improvements and ideas, whether or not patentable, including,
without limitation upon the generality of the foregoing, novel or
improved products, processes, technology and know-how, which either
(a) relate to (i) the Business or (ii) bouckaert's actual or
demonstrably anticipated research or development, or (b) result
from any work performed by Bouckaert for the Company (hereinafter
collectively "Inventions"), conceived or reduced to practice at any
time during Bouckaert's employment by the Company, either solely or
jointly with others and whether or not developed on Bouckaert's own
time or with the resources of the Company. Bouckaert agrees that
Inventions first reduced to practice within one (1) year after
termination of Bouckaert's employment by Bouckaert shall be
presumed to have been conceived during such employment unless
Bouckaert can establish specific events giving rise to the
conception which occurred after such employment. Further, except
as otherwise expressly set forth herein, Bouckaert disclaims and
will not assert any rights in Inventions actually made or as having
been made, conceived or acquired prior to employment by the
Company.

7. No Competition. Subject to Section 8(a)(iv), Bouckaert
agrees that during his employment by the Company and during a period ending
three (3) years after termination of such employment, he will not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director or otherwise with, or have any financial interest in, or aid
or assist anyone else in the conduct of, the business of the type conducted by
the Company or that competes with the Company or the Business in any
geographic area where the Business is being conducted, at the time of
termination of Bouckaert's employment with the Company hereunder; provided,
however, that the foregoing agreement shall not preclude the passive ownership
for investment purposes only of not more than 5% of the equity securities of a
corporation which has such securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended. Bouckaert further agrees that
during his employment with the Company he shall not make preparations to
engage in any activity which would be prohibited by the foregoing provisions
of this Paragraph 7.

8. Termination of Employment.

a. Bouckaert's employment shall terminate, or be subject
to termination, prior to the term specified in Paragraph 2 hereof,
as follows:

(i) Death. Bouckaert's employment hereunder shall
terminate upon his death.

(ii) Disability. Except as prohibited by applicable
law, in the event Bouckaert becomes physically or mentally
disabled so as to become unable, for a period of more than
ninety (90) consecutive working days or for more than ninety
(90) working days in the aggregate during any twelve-month
period, to perform his duties hereunder or substantially a
full-time basis, the Company may, at its option, terminate
Bouckaert's employment hereunder upon not less than ten (10)
days' written notice.

(iii) Cause. The Company may, at any time, terminate
Bouckaert's employment hereunder for Cause. For the purposes
of this Agreement, the Company shall have "Cause" to
terminate Bouckaert's employment under upon (A) Bouckaert's
engaging in misconduct which is injurious to the Company or
its affiliates, (B) the material breach by Bouckaert of any
of the provisions of this Agreement, which violation
continues for a period of ten (10) days following notice from
the Company to Bouckaert stating, with reasonable
specificity, the nature of such alleged breach, or (C)
Bouckaert's conviction of a felony or a plea by Bouckaert of
nolo contendere to a felony.

(iv) Without Cause. The Company may, at any time,
terminate Bouckaert's employment hereunder without cause and
without the requirement of any reason or justification. In
the event Bouckaert is terminated without cause, he will be
bound by the provisions of Section 7 only for the period
during which he receives severance payments in accordance
with Section 8(b).

b. Cessation of Salary and Benefits After Termination. In
the event of the termination of Bouckaert's employment all payments
of salary and benefits under Paragraph 3 hereof shall cease, and
Bouckaert shall not be entitled to receive any compensation or
payment on account of such including, but not limited to, those
rights set forth in the Plan. In the event of the termination of
Bouckaert's employment pursuant to Paragraph 8(a)(iv) hereof,
Bouckaert shall be entitled to receive, in lieu of any other
compensation or payment as a result of such termination, and as
liquidated damages therefor, severance payments equal to the
payments of his Salary under Paragraph 3(a), at the time such
payment would have been made, and the continuation of medical
benefits for twelve (12) months following the date of such
termination. In the event the Board of Directors elect not to
renew this Agreement, Bouckaert shall receive such severance
payments for eight (8) months following the date Bouckaert receives
notice of the Board's intent not to renew or the expiration of this
Agreement, whichever comes first.

9. Notices. For the purposes of this Agreement, notices and all
other communications under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed as follows or by facsimile transmission:

If to Bouckaert:

Joseph A. Bouckaert
22 Dolphin Isle
Novato, California 94949
Facsimile: (415) 883-4981

With a copy to:

Simpson, Aherne & Garrity
1900 South Norfolk Street
Suite 260
San Mateo, California 94403
Attn: Ronald F. Garrity
Facsimile: (415) 358-6991

If to the Company:

Vinifera, Inc.
8505 S.W. Creekside Place
Beaverton, Oregon 97028
Attention: President
Facsimile: 502-641-8665

With a copies to:

Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, Illinois 60611-3608
Attention: Stephen M. Slavin
Facsimile: 312-755-1925

Cooley & Godward
One Maritime Plaza
20th Floor
San Francisco, California 94111
Attention: Howard Irvin
Facsimile: 415-951-3699

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

10. Miscellaneous.

a. No provisions of this Agreement may be amended unless
such amendment, modification or discharge is agreed to in writing
signed by the parties hereto.

b. No waiver by any party hereto of any breach of, or
compliance with, any condition or provision of this Agreement by
the other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time. No such waiver shall be enforceable unless expressed in a
written instrument executed by the party against whom enforcement
is sought.

c. This Agreement constitutes the entire agreement of the
parties on the subject matter hereof and no agreements or
representations, oral or otherwise, expressed or implied, with
respect to the subject matter hereof have been made by either party
which are not set forth expressly in this Agreement. This
Agreement expressly supersedes the employment agreement between
Bouckaert and the Company dated February 1, 1993, which prior
agreement is hereby terminated.

d. If a court of competent jurisdiction should decide that
any of the provisions of Paragraphs 6, 7 or 8 are not enforceable,
in whole or in part, the parties declare it is their intention that
such unenforceable provisions be deemed reformed so that they apply
only to the maximum extent to which they can be enforced.
Bouckaert acknowledges that his violation, or threatened violation,
of the provisions of Paragraph 6, 7 or 8 would cause the Company
irreparable injury and, in addition to any other remedies to which
the Company may be entitled, the Company shall be entitled to
injunctive relief.

e. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and Bouckaert
and his heirs, executors, administrators and legal representatives.

f. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Oregon applicable to contracts made and to be performed
therein between residents thereof.

g. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.

h. This Agreement has been jointly drafted by the
respective representatives of the Company and Bouckaert and no
party shall be considered as being responsible for such drafting
for the purpose of applying any rule construing ambiguities against
the drafter or otherwise. No draft of this Agreement shall be
taken into account in construing this Agreement.

BOUCKAERT ACKNOWLEDGES HAVING READ AND SIGNED THIS AGREEMENT AND
HAVING RECEIVED A COPY THEREOF, INCLUDING THE FOLLOWING NOTICE:

This Agreement does not apply to an Invention for which no
equipment, supplies, facility, trade secret information or other property of
the Company was used and which was developed entirely on Bouckaert's own time,
unless (a) the Invention relates (i) to the Business or (ii) to the Company's
actual or demonstrably anticipated research or development, or (b) the
Invention results from any work performed by Bouckaert for the Company or any
current or prior affiliate of the Company.

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

Joseph A. Bouckaert

VINIFERA, INC.

By: Robert Chanson

Title: President

<PAGE>
EXHIBIT 10.21

EMPLOYMENT AGREEMENT

This Employment Agreement is entered into as of August 17, 1992,
between Richard K. Bestwick ("Employee") and Agritope, Inc., an Oregon
corporation (the "Company").

1. Services.

1.1 Employment. The Company agrees to employ Employee as a
Senior Vice President of the Company, and Employee hereby accepts such
employment in accordance with the terms and conditions of this Agreement.
Employment shall continue until terminated pursuant to the terms of this
Agreement.

1.2 Duties. Employee shall have the position named in
Section 1.1 with such powers and duties appropriate to that office (a) as may
be provided by the bylaws of the Company and (b) as determined by the
president of the Company from time to time. Employee's position and duties
may be changed from time to time during the term of this Agreement, and
Employee's place of work may be relocated, at the sole discretion of the
Company's board of directors.

1.3 Outside Activities. Employee shall obtain the consent
of the board of directors before he engages, either directly or indirectly, in
any other professional or business activities that would require an
appreciable portion of Employee's time and effort to the detriment of the
Company's business. Such consent will not be unreasonably withheld.

1.4 Direction of Services. Employee shall at all times
discharge his duties in consultation with and under the supervision and
direction of the Company's president and board of directors.

2. Compensation and Expenses.

2.1 Salary. As compensation for services under this
Agreement, the Company shall pay to Employee a regular salary to be
established each year by the board of directors. Effective January 1 of each
year that this Agreement is in effect, such salary may be adjusted unless the
board of directors in its discretion determines not to do so. Payment shall
be made on a monthly basis, less all amounts required by law to be withheld or
deducted, at such times as shall be determined by the board of directors.

2.2 Additional Employee Benefits. Employee shall also have
the right to receive or participate in any additional benefits, including, but
not limited to, insurance programs, profit sharing or pension plans, and
medical reimbursement plans, which may from time to time be made available by
the Company to its employees.

2.3 Extraordinary Compensation. Employee shall have the
right, in addition to all other compensation provided for in this Section 2,
to additional extraordinary compensation in accordance with the terms set
forth in Schedule 2.3 attached to this Agreement.

2.4 Fees. All compensation earned by Employee, other than
pursuant to this Agreement, as a result of services performed on behalf of the
Company or as a result of or arising out of any work done by Employee in any
way related to the scientific or business activities of the company shall
belong to the Company. employee shall pay or deliver such compensation to the
Company promptly upon receipt. For the purposes of this provision,
"compensation" shall include, but is not limited to, all professional and
nonprofessional fees, lecture fees, expert testimony fees, publishing fees,
royalties, and any related income, earnings, or other things of value; and
"scientific or business activities of the Company" shall include, but not be
limited to, any project or projects in which the Company is involved and any
subject matter that is directly or indirectly researched, tested, developed,
promoted, or marketed by the Company.

2.5 Expenses. The Company shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out his duties under
this Agreement. Employee shall present to the Company from time to time an
itemized account of such expenses in such form required by the Company.

3. Confidential Information.

3.1 Access to Information. Employee acknowledges that in
the course of his employment he will have access to proprietary information,
trade secrets, and other confidential information, that such information is a
valuable asset of the Company, and that its disclosure or unauthorized use
will cause the Company substantial harm. As used in this Agreement, the term
"Confidential Information" means: (a) proprietary information of the Company
and (b) information designated by the Company as confidential or which
Employee knows or should know is confidential.

3.2 Ownership. Employee acknowledges that all Confidential
Information shall continue to be the exclusive property of the Company,
whether or not prepared in whole or in part by Employee and whether or not
disclosed to Employee or entrusted to his custody in connection with his
employment by the Company.

3.3 Nondisclosure and Nonuse. Unless authorized or
instructed in writing by the Company, or required by legally constituted
authority, Employee will not, except as required in the course of the
Company's business, during or after his employment, disclose to others or use
any Confidential Information, unless and until, and then only to the extent
that, such items become available to the public, other than by his act or
failure to prevent accidental or negligent loss or release to any unauthorized
person of the Confidential Information.

3.4 Return of Confidential Information. Upon request by
the Company during or after his employment, and without request upon
termination of employment pursuant to this Agreement, Employee will deliver
immediately to the Company all Confidential Information; Employee will
thereafter retain no excerpts, notes, photographs, reproductions, or copies
thereof.

3.5 Work Made for Hire. Employee agrees that all creative
work, including without limitation designs, drawings, specifications,
techniques, models, and processes, prepared or originated by Employee for the
Company, or during or within the scope of employment by the Company, whether
or not subject to protection under federal copyright or other law, constitutes
work made for hire, all rights to which are owned by the Company; and, in any
event, Employee assigns to the Company all rights, title, and interest,
whether by way of copyright, trade secret, or otherwise, in all such work,
whether or not subject to protection by copyright or other law.

3.6 Duration. The obligations set forth in this Section 3
will continue beyond the term of employment of Employee by the Company and for
so long as Employee possesses Confidential Information.

4. Noncompetition.

4.1 Covenant. Subject to the provisions of Section 4.3,
Employee covenants that Employee will not, throughout the United States,
either individually or as a director, officer, partner, employee, agent,
representative, or consultant with any business, directly or indirectly during
the term of employment and for one year thereafter:

4.1.1 Engage or prepare to engage in any
business that competes with the Company;

4.1.2 Induce or attempt to induce any
person who is an employee of the Company during the term
of this covenant to leave the employ of the Company; or

4.1.3 Solicit, divert, or accept orders for
products or services that are substantially competitive
with the products or services sold by the Company from
any customer of the Company.

4.2 Enforcement. Employee acknowledges and agrees that the
time, scope, and other provisions of this Section 4 have been specifically
negotiated by sophisticated parties with the advice and consultation of
counsel and specifically hereby agrees that such time, scope, and other
provisions are reasonable under the circumstances. Employee further agrees
that if, at any time, despite the express agreement of the parties hereto, a
court of competent jurisdiction holds that any portion of this Section 4 is
unenforceable for any reason, the maximum restrictions reasonable under the
circumstances, as determined by such court, will be substituted for any such
restrictions held unenforceable.

4.3 Release from Obligation. In the event that Employee
shall be entitled to extraordinary compensation pursuant to the provisions of
Section 2.3, Employee may elect to waive all rights to receive such
compensation from and after the date of such waiver in exchange for the
release of Employee from the obligations of Sections 4.1.1 and 4.1.3. Such
waiver shall be in writing, shall state that it is in consideration for the
release of Employee from the obligations of Sections 4.1.1 and 4.1.3 of this
Agreement, and shall be effective when delivered to the Company. In the event
of such a waiver, the amounts payable pursuant to the provisions of Section
2.3 shall be prorated through the period commencing on the date of termination
of employment and ending on the date of delivery of the written notice of
waiver to the Company. For example, if such waiver is delivered to the
Company six months after the commencement of the 12-month period set forth in
paragraph 1 of Schedule 2.3, Employee shall be paid one-half of the amounts
otherwise payable pursuant to the provisions of Section 2.3; in the event that
Employee shall have received more than such pro rata share of such
compensation, it shall be a condition of Employee's rights under this Section
that he shall have returned to the Company any amounts in excess of such pro
rata share with the delivery of the waiver notice to the Company.

5. Termination.

5.1 Voluntary Resignation. Employee may terminate his
employment under this Agreement by 90 days' written notice to the Company.

5.2 Termination by the Company.

5.2.1 The Company may terminate Employee's
employment under this Agreement without cause by 90
days' written notice to Employee. If the Company shall
substantially diminish Employee's salary, duties, or
title, or shall relocate the principal place where
Employee's duties are performed to a place outside of
the Portland metropolitan area, then Employee may elect
(but shall not required) to treat such event as a
termination without cause.

5.2.2 The Company may terminate Employee's
employment under this Agreement by 90 days' written
notice given at any time within six months after the
Company determines that Employee (a) has committed a
material breach of his obligations under this Agreement,
and failed to cure such breach promptly after receipt of
written notice thereof from the board of directors of
the Company, (b) has willfully and continuously failed
or refused to comply with the policies, standards, and
regulations of the Company, (c) has been guilty of
fraud, dishonesty, or other acts of misconduct in
rendering services on behalf of the Company or (d) has
failed to otherwise comply with the standards of
behavior that an employer has the right to expect of an
employee.

5.2.3 In the event that the board of
directors shall determine that Employee has become
physically or mentally disabled such that Employee shall
be unable to render services to the Company to the same
nature and extent as such services were rendered
immediately prior to the disability, the board of
directors may terminate Employee's employment under this
Agreement by 15 days' written notice effective any time
after the date 13 weeks following the determination of
disability.

5.3 Compensation Upon Termination.

5.3.1 In the event of a termination
under Section 5.1 or 5.2.2, Employee shall not be
entitled to receive any compensation otherwise payable
pursuant to Sections 2.2 or 2.3 of this Agreement, and
Employee's regular compensation pursuant to Section 2.1
shall be prorated and payable until the date of
termination, except to the extent expressly provided to
the contrary in writing in any insurance policy covering
Employee or any employee benefit plan in which Employee
participates.

5.3.2 In the event of a termination under
Section 5.2.1, Employee shall be entitled to receive
compensation payable pursuant to Section 2.3, if
applicable, and Employee's compensation pursuant to
Section 2.1 or 2.2 shall be prorated and payable until
the date of termination, except to the extent expressly
provided to the contrary in writing in any insurance
policy covering Employee or any employee benefit plan in
which Employee participates.

5.3.3 In the event of a termination under
Section 5.2.3, Employee's compensation pursuant to
Sections 2.1 and 2.2 shall be prorated and payable until
the date of termination, except to the extent expressly
provided to the contrary in writing in any insurance
policy covering Employee or any employee benefit plan in
which Employee participates.

6. Remedies. The respective rights and duties of the Company
and Employee under this Agreement are in addition to, and not in lieu of,
those rights and duties afforded to and imposed upon them by law or at equity.
Employee acknowledges that breach of this Agreement will cause irreparable
harm to the Company and agrees to the entry of a temporary restraining order
and permanent injunction by any court of competent jurisdiction to prevent
breach or further breach of this Agreement. Such remedy shall be in addition
to any other remedy available to the Company at law or in equity.

7. Severability of Provisions. The provisions of this Agreement
are severable, and if any provision hereof is held invalid or unenforceable,
it shall be enforced to the maximum extent permissible, and the remaining
provisions of the Agreement shall continue in full force and effect.

8. 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.
Additionally, in the event a suit or action is filed to enforce this Agreement
or with respect to this Agreement, the prevailing party shall be reimbursed by
the other party for all costs and expenses incurred in connection with the
suit or action, including without limitation reasonable attorney fees at trial
or on appeal.

9. Nonwaiver. Failure of the Company at any time to require
performance of any provision of this Agreement shall not limit the right of
the Company to enforce the provision. No provision of this Agreement or
breach thereof may be waived by either party except by a writing signed by
that party. A waiver of any breach of a provision of this Agreement shall be
construed narrowly and shall not be deemed to be a waiver of any succeeding
breach of that provision or a waiver of that provision itself or of any other
provision.
10. General Terms and Conditions. This Agreement constitutes
the entire understanding of the parties relating to the employment of Employee
by the Company, and supersedes and replaces all written and oral agreements
heretofore made or existing by and between the parties relating thereto. This
Agreement shall be construed in accordance with the laws of the state of
Oregon, without regard to any conflicts of laws rules thereof. This Agreement
shall inure to the benefit of any successors or assigns of the Company. All
captions used herein are intended solely for convenience of reference and
shall in no way limit any of the provisions of this Agreement.

IN WITNESS HEREOF, the parties have executed this Employment
Agreement as of the date first hereinabove written.

AGRITOPE, INC.

- -------------------------------- By ---------------------------
Richard K. Bestwick, Ph.D. Adolph J. Ferro, President
<PAGE>
Schedule 2.3 to Employment Agreement

Extraordinary Compensation

1. Termination. In the event of the termination of the employment of
Employee pursuant to Section 5.2.1 of the Agreement, Employee shall continue
to be paid the salary provided in Section 2.1 for 12 months in the manner and
at the times at which regular compensation was paid to Employee during the
term of his employment under the Agreement.

2. Termination after Change in Control. At any time after the common
stock of the Company has been registered pursuant to the terms of the
Securities Exchange Act of 1934, in the event that the termination of the
employment of Employee pursuant to Section 5.2.1 of the Agreement either (a)
occurs within 12 months following a change in control, within the meaning of
the Securities Exchange Act of 1934, or sale of substantially all the assets
of the Company, or (b) is contingent upon such a change in control or sale of
assets, Employee shall continue to be paid the salary provided in Section 2.1
for 24 months; provided, however, that the present value of the stream of
payments to be made to Employee shall not exceed 295 percent of Employee's
Annualized Includable Compensation (in which event the payments shall be
reduced pro rata such that the present value thereof does not exceed such
amount).

3. Definitions. The term Annualized Includable Compensation shall
mean the average annual compensation payable by the Company that was
includable in the gross income of Employee for the taxable years in the Base
Period. The term Base Period shall mean the period consisting of the most
recent five taxable years ending before the date on which the change in
ownership or control occurs. Present value shall be determined by using a
discount rate equal to 120 percent of the applicable Federal Rate (determined
under Section 1274(d) of the Internal Revenue Code of 1986, as amended)
compounded semiannually.

4. Change in Law. The parties agree that in the event Section 280G
or Section 4999 of the Internal Revenue Code is amended after the date hereof
with the effect that any of the compensation payable to Employee by the
Company pursuant to the foregoing provisions either (i) is not deductible for
tax purposes from the gross income of the Company, or (ii) subjects Employee
to a federal excise tax thereon, then, unless the parties otherwise agree, the
foregoing provisions may be modified at the discretion of the board of
directors in order to comply with the amended provisions of the Internal
Revenue Code in order that, to the greatest extent possible, such compensation
shall be so deductible by the Company and Employee shall be subject to an
excise tax thereon.

<PAGE>
EXHIBIT 23.1

Consent of Independent Accountants

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Epitope, Inc., of our report dated
October 28, 1996, except for Note 13 as to which the date is November 6, 1996
relating to the financial statements of Epitope Medical Products group,
Agritope group and Epitope, Inc., which appears in such Prospectus. We also
consent to the references to us under the headings "Experts" and "Independent
Accountants."

PRICE WATERHOUSE LLP

Portland, Oregon
November 7, 1996

<PAGE>
EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the person whose signature
appears below constitutes and appoints ADOLPH J. FERRO, Ph.D., GILBERT N.
MILLER, and each of them his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in his name,
place, and stead, in any and all capacities, to sign a registration statement
on Form S-4 of Epitope, Inc., relating to a distribution of shares of a new
class of common stock, no par value per share, designated Agritope Common
Stock, and any and all amendments (including post-effective amendments) to the
registration statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or each of them or their or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.