EMPLOYMENT AGREEMENT

         This  Employment  Agreement is entered into as of December 15, 1998, by
and between D. Ry Wagner ("Employee") and Agritope, Inc., a Delaware corporation
(the "Company").


1.       Services.
         --------

         1.1  EMPLOYMENT.  The  Company  agrees to employ  Employee  as the Vice
President - Research of the Company, and Employee hereby accepts such employment
in accordance with the terms and conditions of this Agreement.  Employment shall
commence  on the date of this  Agreement  and 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,  (b) as set forth on Schedule 1.2 to this Agreement,  and
(c) as  determined by the Board of Directors  from time to time.  Subject to the
provisions of Section 5.2.1,  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.
Employee shall devote his full business time,  attention and best efforts to the
affairs of the Company and its subsidiaries during the term of this Agreement.


         1.3 OUTSIDE ACTIVITIES.  Employee may engage in other activities,  such
as activities involving charitable,  educational, religious and similar types of
organizations  (all  of  which  are  deemed  to  benefit   Employer),   speaking
engagements,  and  similar  type  activities,  and may  serve  on the  board  of
directors of other  corporations  approved by the Board of Directors of Company,
in each case to the extent that such other activities do not materially  detract
from or limit the performance of his duties under this Agreement,  or inhibit or
conflict  in any  material  way  with  the  business  of  the  Company  and  its
subsidiaries.


         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 Board of Directors.


2.       Compensation.
         ------------

         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  Compensation  Committee  of the  Board  of  Directors,  if  there is such a
committee,  or if not,  then by the Board of Directors.  Effective  January 1 of
each year that this Agreement is in effect, such salary may be adjusted annually
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.

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<PAGE>

         2.2 ADDITIONAL EMPLOYEE BENEFITS. Employee shall also have the right to
receive  or  participate  in (a) any  additional  benefits,  including,  but not
limited to, vacation and sick leave policies, 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  and, (b) subject to meeting
eligibility  requirements,  all incentive compensation plans of the Company. The
Company shall  reimburse  Employee for all  reasonable  and  necessary  expenses
incurred in carrying out his duties under this Agreement,  and  substantiated by
Employee.


         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 following terms:


                  2.3.1  TERMINATION.  In the event of termination of employment
of Employee  pursuant to Section  5.2.1,  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.


                  2.3.2 TERMINATION  AFTER CHANGE IN CONTROL.  In the event that
the  termination of the employment of Employee  pursuant to Section 5.2.1 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 of 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).


                  2.3.3 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 semi-annually.


                  2.3.4  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 not be subject to an excise tax
thereon.

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<PAGE>

         2.4      Fees.
                  ----

                  2.4.1 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 or its subsidiaries  shall
belong to the Company or such  subsidiary.  Employee  shall pay or deliver  such
compensation to the Company or the subsidiary promptly upon receipt.


                  2.4.2 For the  purposes of Section 2.4,  "compensation"  shall
include,  but is not  limited to, all  professional  and  nonprofessional  fees,
lecture fees, expert testimony fees,  publishing fees, license 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 or its  subsidiaries  are  involved and
any subject matter that is directly or indirectly researched, tested, developed,
promoted or marketed by the Company or its subsidiaries.


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:  any and all information of a proprietary or secret nature of the Company
and its subsidiaries  which is or may be either  applicable to or related in any
way to  (i)  their  present  or  future  businesses,  (ii)  their  research  and
development or investigations,  or (iii) the business of any of their licensees,
licensors or customers.  The term "Confidential  Information" includes,  without
limitation, trade secrets, processes, data, know-how, improvements,  inventions,
techniques,  marketing  plans,  research and  development  contracts and grants,
strategies and information  concerning customers or vendors,  customer lists and
customer  leads,  new  project  ideas  and  leads,   all  non-public   financial
information,  and all  information  which  is  maintained  in  confidence  or is
designated as confidential by the Company or its subsidiaries for the protection
of their businesses.


         3.2 OWNERSHIP.  Employee acknowledges that all Confidential Information
shall continue to be the exclusive  property of the Company or its subsidiaries,
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.


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<PAGE>

         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 its
subsidiaries,  or during or within the scope of employment by the Company, which
may be subject to protection under federal copyright 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 similar laws.


         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  which
competes with the Company or its subsidiaries;


                  4.1.2  Induce  or  attempt  to  induce  any  person  who is an
employee of the Company or its subsidiaries  during the term of this covenant to
leave the employ of the Company or its subsidiaries; 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 or its  subsidiaries  from any  customer  of the  Company or its
subsidiaries.


Page 4 - EMPLOYMENT AGREEMENT--D. RY WAGNER
<PAGE>

         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  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,  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 one year
period set forth in this Section, Employee shall be paid one-half of the amounts
otherwise  payable  pursuant to the provisions of Section 2.3; in the event that
the  Employee  shall  have  received  more  than  such  prorata  share  of  such
compensation,  it shall be a  condition  of the  Employee's  rights  under  this
Section that he shall have returned to the Company any amounts in excess of such
prorata 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 the 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 be  required  to do so) to treat such event as a  termination  without
cause.


                  5.2.2 The Company may terminate  Employee's  employment  under
this  Agreement by 30 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
material 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 which an employer reasonably has the right to expect of an employee.


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<PAGE>

                  5.2.3  In  the  event  that  the  Board  of  Directors   shall
reasonably  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 60 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.  Employee  will be entitled to receive
only: (i) salary  payable under Section 2.1 through the day on which  Employee's
employment is terminated,  together with salary,  compensation or benefits which
have been earned or become payable as of the date of termination  but which have
not yet been paid to Employee; and (ii) such other benefits, if any, as shall be
determined to be applicable under the  circumstances  and in accordance with the
Company's plans and practices in effect on the date of termination.


                  5.3.2  In the  event of a  termination  under  Section  5.2.1,
Employee  shall  be  entitled  to  receive  extraordinary  compensation  payable
pursuant  to Section  2.3,  if  applicable.  Employee  will also be  entitled to
receive:  (i) salary  payable  under Section 2.1 through the end of the month on
which Employee's employment is terminated, together with salary, compensation or
benefits  which have been earned or become payable as of the date of termination
but which have not yet been paid to Employee; (ii) maintenance in effect for the
continued benefit of Employee and his dependents, at the expense of the Company,
of all  insured  and  self-insured  medical  and dental  benefit  plans in which
Employee was participating immediately prior to termination,  provided continued
participation  is possible under the general terms and conditions of such plans,
until the earlier of the end of the salary period  provided for in Section 2.3.2
or the date on which Employee obtains  comparable  insurance coverage from a new
employer;  and (iii) such other  benefits,  if any, as shall be determined to be
applicable  under the  circumstances  and in accordance with the Company's plans
and practices in effect on the date of termination.


                  5.3.3 In the event of a termination under Section 5.2.3, or as
a result of Employee's retirement or death, Employee (or Employee's estate) will
be entitled to receive:  (i) salary payable under Section 2.1 through the end of
the month on which  Employee's  employment is terminated,  together with salary,
compensation or benefits which have been earned or become payable as of the date
of  termination  but which have not yet been paid to  Employee;  (ii) such other
benefits,   if  any,  as  shall  be  determined  to  be  applicable   under  the
circumstances and in accordance with the Company's plans and practices in effect
on the date of termination;  and (iii) such other awards or bonuses as the Board
of Directors in its sole discretion may determine.


Page 6 - EMPLOYMENT AGREEMENT--D. RY WAGNER
<PAGE>

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  preliminary  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 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 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's fees at the pre-trial
stage, 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.  Any waiver of any breach
of any 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.


Page 7 - EMPLOYMENT AGREEMENT--D. RY WAGNER
<PAGE>

10.      Mediation and Arbitration.
         -------------------------

         10.1 DISPUTES.  Except as provided in Sections 3 and 4, the Company and
Employee agree to comply with the following  two-step dispute resolution process
with  regard to any  controversy  or claim  arising  out of or  relating to this
Agreement or their employment relationship ("Dispute").


         10.2  MEDIATION.  In the event of a Dispute the  Company  and  Employee
agree  to  submit  it  to  mediation  pursuant  to  the  mediation  services  of
Arbitration Service of Portland,  Inc. ("ASP"). The mediation shall be conducted
in Portland,  Oregon, under the rules of ASP. The mediation will be conducted as
promptly as possible,  and in no event later than 90 days from the date when one
party notifies the other of its intent to submit the Dispute to mediation or the
termination of Employee's  employment,  whichever is later. The Company will pay
the mediator's fees and other administrative costs of the mediation process. The
parties shall bear their own attorneys' fees and other costs.


         10.3 ARBITRATION. In the event the Dispute is not successfully resolved
through  mediation,  the parties  agree that it shall be settled by  arbitration
administered  through the  arbitration  services of ASP in  accordance  with its
rules.  Judgment on the award rendered by the  arbitrators may be entered in any
court having jurisdiction thereof.


         The  arbitrators  shall have the  authority  to award such  remedies or
relief  that a court of the  State of Oregon  could  order or grant in an action
governed by Oregon law, including,  without limitation,  specific performance of
any obligation created under this Agreement,  the issuance of an injunction,  or
the imposition of sanctions for abuse or frustration of the arbitration process,
but  shall  not  be  empowered  to  award  punitive  damages.   The  arbitration
proceedings shall be conducted in Portland, Oregon.


11.      Notices.
         -------

         All notices or other  communications  hereunder shall be deemed to have
been duly given and made if in writing and if served by personal  delivery  upon
the party for whom it is intended, if delivered by registered or certified mail,
return  receipt  requested,  or by a  national  courier  service,  or if sent by
facsimile, provided that the facsimile is promptly confirmed by


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<PAGE>

telephone confirmation thereof, to the person at the address set forth below, or
such  other  address as may be  designated  in  writing  hereunder,  in the same
manner, by such person:


         To Employee:

                  D. Ry Wagner
                  16160 SW Upper Boones Ferry Road
                  Portland, Oregon 97224-7744
                  Telephone:  (503) 670-7702
                  Facsimile:  (503) 670-7703

         To Company:

                  Agritope, Inc.
                  16160 SW Upper Boones Ferry Road
                  Portland, Oregon 97224-7744
                  Telephone:  (503) 670-7702
                  Facsimile:  (503) 670-7703
                  Attention:  Chief Executive Officer

         With a copy to:

                  Tonkon Torp LLP
                  888 SW Fifth Avenue, Suite 1600
                  Portland, OR  97204
                  Telephone:  (503) 802-2004
                  Facsimile:  (503) 972-3704
                  Attention:  Brian G. Booth


12.      Withholding.
         -----------

         All  payments  to be made to  Employee  under  this  Agreement  will be
subject to required withholding taxes and other deductions.


13.      Successors; Binding Agreement.
         -----------------------------

         13.1 Any Successor (as  hereinafter  defined) to Company shall be bound
by this  Agreement.  At  Employee's  request,  Company  will  seek  to have  any
Successor  assent to the  fulfillment by Company of its  obligations  under this
Agreement.  For purposes of this  Agreement,  "Successor"  shall mean any person
that succeeds to, or has the practical ability to control (either immediately or
with  the  passage  of  time),   Company's  business  directly,   by  merger  or
consolidation,  or indirectly,  by purchase of the Employer's voting securities,
all or substantially all of its assets or otherwise.


Page 9 - EMPLOYMENT AGREEMENT--D. RY WAGNER
<PAGE>

         13.2 For  purposes  of this  Agreement,  "Company"  shall  include  any
corporation  or other entity  which is the  surviving  or  continuing  entity in
respect of any amalgamation, merger, consolidation,  dissolution, asset or stock
acquisition or other form of business combination.


14.      Miscellaneous.
         -------------

         14.1  Except  to the  extent  that the terms of this  Agreement  confer
benefits that are more favorable to Employee than are available  under any other
employee benefit or executive  compensation plan of Company in which Employee is
a participant,  Employee's  rights under any such employee  benefit or executive
compensation  plan shall be determined in accordance with the terms of such plan
(as it may be modified or added to by Company from time to time).


         14.2  This  Agreement  constitutes  the  entire  understanding  between
Company and Employee  relating to the  employment of Employee by Company and its
subsidiaries and supersedes and cancels all prior agreements and  understandings
with  respect to the subject  matter of this  Agreement.  Employee  shall not be
entitled to any  payment or benefit  under this  Agreement  which  duplicates  a
payment  or  benefit  received  or  receivable  by  Employee  under  such  prior
agreements and understandings.


         14.3 This  Agreement  may be amended but only by a  subsequent  written
agreement of the parties.


         14.4  This  Agreement  shall be  binding  upon and  shall  inure to the
benefit of Employee, his heirs, executors, administrators and beneficiaries, and
shall be binding upon and inure to the benefit of Company and its successors and
assigns.


         14.5 This Agreement  shall be construed in accordance  with the laws of
the state of Oregon, without regard to any conflicts of laws rules thereof.


         14.6 All captions used herein are intended  solely for  convenience  of
reference and shall in no way limit any of the provisions of this Agreement.


Page 10 - EMPLOYMENT AGREEMENT--D. RY WAGNER
<PAGE>

IN WITNESS HEREOF, the parties have executed this Employment Agreement as of the
date first hereinabove written.



EMPLOYEE                                             AGRITOPE, INC.





                                                  By
-----------------                                    --------------------------
D. Ry Wagner                                         President and
                                                     Chief Executive Officer


Page 11 - EMPLOYMENT AGREEMENT--D. RY WAGNER
<PAGE>

Schedule 1.2
Schedule 1.2 to Employment Agreement--D. Ry. Wagner





                          Specific Duties of Employee
                          ---------------------------


                              Duties of Employee as
                              ---------------------

                            Vice President - Research
                            -------------------------





         Responsible  for research  activities  of the Company.  Duties  include
supervising  and  planning  all  research   activities,   preparation  of  grant
applications and  administration of grants,  publication of scientific  results,
liaison with  scientific  community,  serve as the Company's  representative  on
scientific  advisory  board,  liaison  with  respect to research  activities  of
strategic  partners and licensees,  and participation in negotiation of licenses
and strategic partner agreements.


Schedule 1.2