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                                                                        EX 10.12

                        BIONUTRICS HEALTH PRODUCTS, INC.

                              EMPLOYMENT AGREEMENT


         This Agreement is made and entered into as of the 30th day of July,
1997, effective as of January 6, 1997 (the "Effective Date"), by and between
BIONUTRICS HEALTH PRODUCTS, INC., a Delaware corporation ("Employer") and a
wholly-owned subsidiary of BIONUTRICS, INC., a Nevada corporation
("Bionutrics"), and STEPHEN H. FRIEDMAN ("Employee").

                                 R E C I T A L S

         A. Employee has served as a consultant to Employer and Bionutrics since
April 15, 1996.

         B. Employer desires to employ Employee, and Employee desires to be
employed by Employer, pursuant to the terms of this Agreement.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, the parties hereto hereby agree as
follows:

                                A G R E E M E N T

         1. EMPLOYMENT; DUTIES. Employer hereby employs Employee, and Employee
hereby accepts such employment, to serve as Executive Vice President, Marketing
and Sales of Employer and in such other executive capacities and for such other
duties and services as shall from time to time be mutually agreed upon by
Employer and Employee. Employee shall report to the President of Employer.
Employee shall devote his full and undivided business time, attention and
efforts to Employer's business and to the performance of Employee's duties under
this Agreement, and shall fully and faithfully perform all duties assigned to
him under this Agreement, consistent with Employee's position hereunder, to the
best of Employee's abilities.

         2. COMPENSATION AND OTHER BENEFITS. During the term of Employee's
employment hereunder, Employee shall be entitled to receive the following
compensation and benefits:

                  (A) BASE SALARY. Employee shall be entitled to receive a per
annum salary of Two Hundred Thousand Dollars ($200,000.00) (the "Base Salary")
as full compensation for all the services rendered by Employee during the term
of Employee's employment hereunder. Employee shall be entitled to receive the
Base Salary in twenty-six (26) equal payments; payments to be made every two
weeks (less all applicable deductions for all taxes, including federal, state,
and FICA, and the Employee's share of the cost of benefit programs in which
Employee participates, etc.), or in such other periodic installments as Employer
and Employee may mutually agree. Employer shall review Employee's performance
and Base Salary under
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this Agreement on April 15, 1997, and no less frequently than every twelve (12)
months thereafter, and Employer may, at the sole discretion of Employer's Board
of Directors, adjust Employee's Base Salary; provided, however, that the Base
Salary may not be reduced below the Base Salary set forth in this Section 2(a).

                  (B) BONUS. Commencing with the fiscal year of Employer
beginning on November 1, 1996, and for each fiscal year thereafter, in addition
to the Base Salary, Employee shall receive a bonus ("Bonus") of up to
twenty-five percent (25%) of the Base Salary in effect at the end of such fiscal
year so long as Employee meets the criteria set forth on Schedule A attached
hereto. At least thirty (30) days prior to the end of each applicable fiscal
year, Employer and Employee shall meet and mutually agree in writing on
Employee's performance criteria for the upcoming year. To receive any Bonus for
the applicable fiscal year, Employee must be employed by Employer on the last
day of Employer's fiscal year. The Board of Directors of Employer, in its sole
discretion, shall determine whether Employee has met such standards and the
amount of Bonus, if any, to be paid to Employee for each fiscal year.

                  (C) VACATION. Employee shall be entitled to three (3) weeks of
vacation per year during each year of employment. For the purposes of this
Section 2(c), the term "year" shall mean each 12-month period beginning on the
Effective Date and on each anniversary of the Effective Date thereafter. No
unused annual vacation time shall be carried forward to future years.

                  (D) RELOCATION. On the earlier of June 1, 1997 or the date
that Employee signs a residence lease or purchases a home in Maricopa County,
Arizona, Employer shall pay Employee, as reimbursement of reasonable relocation
costs and expenses, the amount of Twenty Thousand Dollars ($20,000.00). Until
such date, Employer will continue to pay Employee's reasonable expenses related
to (i) travel to and from Employee's current residence in Connecticut and
Phoenix, Arizona, and (ii) meals and lodging while in Phoenix, Arizona, to
perform Employee's duties under this Agreement.

                  (E) PENSION AND PROFIT SHARING PLANS. Employee shall be
entitled to participate in such pension, profit sharing and deferred
compensation plans and programs, if any, as may be provided from time to time by
Employer to such other comparable level employees of Employer, including any
employee stock option plans and 401(k) retirement plans of Employer.

                  (F) MEDICAL AND DENTAL BENEFITS. Employee shall be entitled to
participate in such group medical, accident and dental plans, if any, as may be
provided from time to time by Employer to such other comparable level employees
of Employer. Until Employee relocates to Phoenix and is a participant in
Employer's issuance plans, Employer shall reimburse Employee for Cobra insurance
costs incurred by Employee for medical and dental plans.

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                  (G) REIMBURSEMENT. Employer shall reimburse Employee for all
reasonable travel and entertainment expenses and other ordinary and necessary
business expenses necessarily incurred by Employee in connection with the
business of Employer and Employee's duties under this Agreement. The term
"business expenses" shall not include any item that is not deductible, in whole
or in part, by Employer for federal income tax purposes. To obtain
reimbursement, Employee shall submit to Employer receipts, bills, or sales slips
for the expenses incurred. Reimbursements shall be made by Employer monthly
within 30 business days of presentation by Employee of reasonably sufficient
evidence of the expenses incurred.

                  (H) OTHER BENEFITS. Employee shall be entitled to receive or
participate in such other fringe benefits, such as holidays, life and long-term
disability insurance and bonus programs, as Employer may make generally
available on a nondiscriminatory basis to all other employees of Employer.

                  (I) STOCK OPTIONS. Employee and Employer shall execute a Stock
Option Agreement and a First Amendment to Stock Option Agreement whereby
Employee shall be provided the option to acquire 150,000 shares of the common
stock of Bionutrics at Five Dollars ($5.00) per share. The options granted shall
vest in one-third increments of 50,000 shares on each of the first three
anniversaries of October 31, 1996; provided, however, that if Employee's
employment is terminated by Employer without Cause, as hereinafter defined,
options shall vest in the same manner as they would have vested if Employee had
remained employed until the end of the Initial Term, as hereinafter defined;
provided further, however, that all unvested options shall be forfeited if
Employee's employment is terminated for Cause.

         3. TERM OF EMPLOYMENT.

                  (A) AT WILL EMPLOYMENT. (i) Employee's employment hereunder is
at will and may be terminated with or without "Cause" (as defined below) and
with or without notice at any time at the option of either Employee or Employer.
No verbal or written communications by any manager or other representative of
Employer shall be considered as implying any agreement contrary to the
foregoing. (ii) Unless terminated sooner by Employee or Employer pursuant to
this Section 3 (a)(i), the term of Employee's employment hereunder shall
continue for two (2) years, through and until January 5, 1999, (the "Initial
Term"). Unless Employer terminates this Agreement by giving written notice to
Employee not less than six months prior to the end of the Initial Term or if
Employee gives written notice to Employer not less than six months prior to the
end of the Initial Term that employee terminates this Agreement, Employee's
employment under this Agreement will automatically renew for an additional two
(2) years, through and until January 5, 2001 (the "Renewal Term").

                  (B) TERMINATION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding
anything to the contrary herein contained:

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                           (I) DEATH. Employee's employment shall be
automatically terminated, without notice, effective upon the date of Employee's
death;

                           (II) TERMINATION FOR "CAUSE." Employer may, at its
option, upon notice to Employee, terminate Employee's employment for "Cause"
effective on the date Employer's Board of Directors determines the existence of
"Cause." For purposes of this Agreement, "Cause" shall be limited to a
determination by Employer that Employee: (A) has been convicted of a felony
involving dishonesty, fraud, theft or embezzlement; (B) has repeatedly failed or
refused, after written notice from Employer, in a material respect to follow
reasonable policies or directives established by Employer; (C) has willfully and
persistently failed, after written notice from Employer, to attend to material
duties or obligations imposed upon him under this Agreement, including those
duties and obligations normally associated with an Executive Vice President,
Marketing and Sales; (D) has performed an act or failed to act, which, if he
were prosecuted and convicted, would constitute a felony involving One Thousand
Dollars ($1,000.00) or more of money or property of Employer; or (E) has
misrepresented or concealed a material fact for purposes of securing employment
with Employer or this Employment Agreement. The existence of "Cause" shall be
determined by Employer's Board of Directors after notice to Employee and after
providing Employee with an opportunity to be heard. Employer shall have the
right to suspend Employee with full pay for any period of time the Board of
Directors of Employer deems, in its sole discretion, necessary or appropriate to
investigate Employee's conduct in connection with this paragraph; or

                           (III) CHANGE IN CONTROL. Employee may, at his option,
upon notice to Employer, terminate Employee's employment effective on the date
of the notice in the event of a Change of Control of Employer (as defined
below).

                  (C) SEVERANCE. In the event that Employer terminates this
Agreement without "Cause," as provided in paragraph 3(a)(i), Employer's
obligations provided for in paragraph 2 shall continue until the expiration of
the Initial Term, or any Renewal Term, and in addition, Employer shall pay
Employee a severance amount of Fifty Thousand Dollars ($50,000.00) within 30
days after the date on which Employee's employment terminates. In the event that
Employer exercises its right to issue the six month notice provided for in
paragraph 3(a) above such that there is no Renewal Term, Employer's obligations
provided for in paragraph 2 shall continue through the end of the Initial Term
and in addition, Employer shall pay Employee a severance amount of Fifty
Thousand Dollars ($50,000.00) within 30 days after the date on which Employee's
employment terminates. In the event that Employer terminates this Agreement for
"Cause", as provided in paragraph 3(a)(ii), Employee shall not be entitled to
any severance or continued benefits under this Agreement, except as otherwise
provided by law.

                  (D) CHANGE IN CONTROL. In the event Employee terminates his
employment with Employer as a result of a Change of Control, any unvested
options to acquire Employer's common stock held by Employee shall immediately
vest and become exercisable, notwithstanding the provisions of such options. The
term "Change in Control" of Employer

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shall mean a change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date of this Agreement or,
if Item 6(e) is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 which
serve similar purposes; provided that, without limitation, such a Change in
Control shall be deemed to have occurred if and when (i) any person (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934) other than a current director or officer of Employer becomes the
"beneficial owner" (as defined in Rule 13d- 3 under the Securities Exchange Act
of 1934) directly or indirectly of securities of Employer representing 15% or
more of the combined voting power of Employer's then-outstanding securities,
except that this provision shall not apply to any public or private offering of
Employer's common stock nor shall this provision apply to an acquisition which
has been approved by at least two-thirds of the members of the Board of
Directors who are not affiliates or associates of such person and by at least
80% of the issued and outstanding shares of Employer's common stock beneficially
owned by non-affiliates of such person; (ii) during the period of this
Agreement, individuals who, at the beginning of such period, constituted the
Board of Directors of Employer (the "Original Directors") cease for any reason
to constitute at least a majority thereof, unless the election or nomination for
election of each new director was approved (an "Approved Director") by the
unanimous vote of a Board of Directors constituted entirely of Existing
Directors and/or Approved Directors; (iii) a tender offer or exchange offer is
made whereby the effect of such offer is to take over and control Employer and
such offer is consummated for the ownership of securities of Employer
representing 20% or more of the combined voting power of Employer's
then-outstanding voting securities; (iv) Employer is merged, consolidated or
enters into a reorganization transaction with another person and as the result
of such merger, consolidation or reorganization less than 75% of the outstanding
equity securities of the surviving or resulting person shall then be owned in
the aggregate by the former stockholders of Employer; or (v) Employer transfers
substantially all of its assets to another person or entity which is not a
wholly-owned subsidiary of Employer; provided, however, that notwithstanding the
foregoing no Change of Control shall be deemed to have occurred if such a Change
of Control is a "Consented Change of Control." A "Consented Change of Control"
is any transaction described in clauses (i), (iii), (iv) or (v) above if such
transaction has been unanimously approved by Employer's Board of Directors.
Sales of Employer's Common Stock beneficially owned or controlled by Employee
shall not be considered in determining whether a Change in Control has occurred.

         4. COVENANT NOT TO COMPETE.

                  (A) INTERESTS TO BE PROTECTED. The parties acknowledge that
during the term of Employee's employment with Employer, Employee will perform
essential services for Employer. Employee will be exposed to, have access to,
and be required to work with, a considerable amount of Employer's confidential
information. The parties expressly recognize that should Employee compete with
Employer in any manner whatsoever (as defined in paragraph 4(b) below), it could
seriously impair the goodwill and diminish the value of

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Employer's business. The parties acknowledge that this covenant has an extended
duration; however, they agree that this covenant is reasonable and it is
necessary for the protection of Employer, its stockholders, and employees. For
these and other reasons, and the fact that there are many other employment
opportunities available to Employee if he should terminate his employment, the
parties are in full and complete agreement that the following restrictive
covenants are fair and reasonable and are freely, voluntarily, and knowingly
entered into. Furthermore, each party was given the opportunity to consult with
independent legal counsel before entering into this Agreement.

                  (B) NON-COMPETITION. During the term of Employee's employment
with Employer and for the period ending 12 months after the termination of
Employee's employment with Employer, Employee shall not (whether directly or
indirectly, as owner, principal, agent, director, officer, manager, employee,
partner or in any other capacity) engage or become financially interested in any
competitive business conducted within the Restricted Territory (as defined
below) or solicit, canvas or accept, or authorize any other person, firm or
entity to solicit, canvas or accept, from any customers of Employer, any
competitive business within the Restricted Territory for Employee or for any
other person, firm or entity. As used herein, the term "customers" of Employer
shall mean any persons, firms or entities that purchased goods or services from
Employer during the period of Employee's employment with Employer; the term
"competitive business" shall mean any business which sells or provides or
attempts to sell or provide products or services the same as or substantially
similar to the products or services sold or provided by Employer; and the term
"Restricted Territory" shall mean any area in which Employer conducts business.

                  (C) EQUITABLE RELIEF. In the event a violation of any of the
restrictions contained in this Section 4 is established, Employer shall be
entitled to preliminary and permanent injunctive relief as well as damages and
an equitable accounting of all earnings, profits and other benefits arising from
such violation, which right shall be cumulative and in addition to any other
rights or remedies to which Employer may be entitled. In the event of a
violation of any provision of Section 4(b) of this Agreement, the period for
which those provisions would remain in effect shall be extended for a period of
time equal to that period beginning when such violation commenced and ending
when the activities constituting such violation shall have been finally
terminated in good faith.

                  (D) RESTRICTIONS SEPARABLE. If the scope of any provision of
this Section is found by a court to be too broad to permit enforcement to its
full extent, then such provision shall be enforced to the maximum extent
permitted by law. The parties agree that the scope of any provision of this
Section 4 may be modified by a judge in any proceeding to enforce this
Agreement, so that such provision can be enforced to the maximum extent
permitted by law. Each and every restriction set forth in this Section is
independent and severable from the others, and no such restriction shall be
rendered unenforceable by virtue of the fact that, for any reason, any other or
others of them may be unenforceable in whole or in part.

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         5. MISCELLANEOUS.

                  (A) THIRD-PARTY BENEFICIARY. Bionutrics shall at all times be
and remain a third-party beneficiary under this Agreement and all documents,
instruments, and agreements made and entered into pursuant hereto.

                  (B) NOTICES. All notices required or permitted to be given
hereunder shall be in writing and shall be deemed given when delivered in
person, or three (3) business days after being placed in the hands of a courier
service (e.g., DHL or Federal Express) prepaid or faxed provided that a
confirming copy is delivered by first-class U.S. Mail, postage prepaid,
addressed as follows:

                  If to Employer:

                           Bionutrics Health Products, Inc.
                           2425 E. Camelback Road, Suite 650
                           Phoenix, Arizona 85016
                           Attention:  President
                           FAX:  (602) 508-0115


                  With a Copy to:

                           O'Connor, Cavanagh, Anderson,
                            Killingsworth & Beshears
                           One East Camelback Road, Suite 1100
                           Phoenix, Arizona  85012-1656
                           Attention:  Jean E. Harris, Esq.

                  If to Employee:

                           Stephen H. Friedman
                           ___________________________
                           ___________________________
                           FAX:  (602) _______________

                  With a Copy to:

                           Nancy B. Schess, Esq.
                           Klein, Zelman, Rothermel & Dichte, L.L.P.
                           485 Madison Avenue
                           New York, New York  10022

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and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section.

                  (C) ENTIRE AGREEMENT. This Agreement and any Schedules or
Exhibits hereto constitute the entire agreement between the parties and shall be
binding upon and inure to the benefit of the parties hereto and their respective
legal representatives, successors and permitted assigns. Except as set forth
herein, the provisions of this Agreement supersede any and all other agreements
or understandings, whether oral or written, with respect to Employee's
employment by Employer.

                  (D) NON-WAIVER. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege conferred in this Agreement
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.

                  (E) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.

                  (F) APPLICABLE LAW. This agreement shall be governed and
controlled as to validity, enforcement, interpretation, construction, effect and
in all other respects by the internal laws of the state of Arizona applicable to
contracts made in that state.

                  (G) CONSTRUCTION. The parties hereto acknowledge and agree
that each party has had the opportunity to participate in the drafting of this
Agreement and have this document reviewed by the respective legal counsel for
the parties hereto and that the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be
applied to the interpretation of this Agreement. No inference in favor of, or
against, any party shall be drawn from the fact that one party has drafted any
portion hereof.

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

                                        EMPLOYER:

                                        BIONUTRICS HEALTH PRODUCTS, INC.,
                                        a Delaware corporation


                                        By:   /s/  Ronald H. Lane
                                              ----------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------


                                        EMPLOYEE:


                                              /s/  Stephen H. Friedman
                                              ----------------------------------
                                              ----------------------------------

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