Fax sent on May 27, 1998

Sender: Jim Clark

 The Black Bear Micro Roastery Company

Recipient: John Rawls
 Blanc Williams Johnston & Kronstadt, LLP
1900 Avenue of the Stars
Los Angeles, CA 90067-4403


Dear John,

            We received your draft of the settlement agreement on 5/26/98.  Apparently there has been some miscommunication between us.  It was my understanding that we had agreed not to discuss or mention the legal merits of our respective positions.  It was a considerable disappointment to us to discover that Starbucks is attempting to induce us to give, in writing, the appearance that we have done something improper.  I am referring to the wording in paragraph C of the RECITALS on page 1 of your draft.  While it is Starbucks that is doing the "contending", we are being asked, in the same paragraph, to "... cease using the Charbucks name ...", as though we agree that we have done something wrong.  You are going to have to appreciate how offensive this is to us.

            It appears that this matter has the potential to drag on into a protracted negotiation.  Therefore, we wish to make some basic points clear, and specify clear conditions under which we would be willing to proceed.

A)    It is our solemn conviction that we have done nothing wrong.  It does not matter whether we are right or wrong, but only that this is what we firmly believe.

B)     If there are going to be any further informal discussions, Starbucks must approach us from the standpoint of requesting a business favor.

C)    If Starbucks feels that they have some legal merits that support their position, we do not want to hear about it.

D)    We will not discuss said merits with anyone connected with Starbucks.

E)     We will not authorize our attorneys to engage in any discussions with anyone connected with Starbucks.

F)     We have already had our discussions, regarding merits, with Starbucks.  We have done our "homework" and we have paid the bill for same.  Our position is "cast in stone".

G)    If Starbucks wishes to engage in any further discussions,  it would be most productive for Starbucks corporate representative, with decision making capacity, to contact us directly.  The fact that we have been contacted by Starbucks via lawyers says volumes to us.  If Starbucks wants to request something from us, they should have the decency to contact us directly.  Any Starbucks representative contacting us must understand the following points.

1)      We consider Starbucks request for a product name change to be in the category of one business asking another business for a favor.

2)      If we are approached politely and respectfully, we are willing to engage in further discussions with Starbucks, and, as stated previously, we feel such discussions should be directly between the parties involved.

3)      When asking a business favor, it is considered proper business etiquette to offer to pay all expenses that might be incurred by the company granting the favor.

i)                    We have currently incurred $1353 in legal fees.

ii)                   While we don't have a precise accounting at this time, an informal audit of my time shows at least 10 hours.  I (Jim Clark) bill my self out at $150 per hour resulting in an expense of $1500.  While reimbursement of my time has not been discussed in previous discussions, the expense is real and we would be greatly offended if anyone associated with Starbucks felt that we should go to such considerable expense simply for the privilege of granting Starbucks a favor.  We did not foresee the events going the way they have, and it appears to us that this matter could drag on costing us unbearable expense.

iii)                 The foregoing expenses have already been paid.  Therefore, we would expect to be immediately paid by Starbucks to demonstrate good faith, with the full understand that all future expenses would be paid within 30 days of notification.

iv)                 We realize that expending such sums of money, with no guarantees, is not an easy thing to do.  We have already done it, while making clear our willingness to grant Starbucks the favor in question.  We now expect Starbucks to demonstrate it's sincerity in the form of a check in the amount of $2853.

H)    If Starbucks can not accept the position asking for a favor, but rather Starbucks feels justified in making demands, we respectfully ask that there be no further communication other than necessary notifications for court appearances.



            In closing we would just like to say that you have been most polite and respectful.  We sincerely hope that this response is not taken as a personal affront, considering the fact that it appeared we had an agreement in hand.  We fully appreciate your position serving as counsel for Starbucks.   Please understand that we desperately need to end this seemingly endless matter.  It is taking a serious financial and emotional toll on us.  We're certain that Starbucks doesn't have malicious intentions, they're just too large and far to removed from our level of experience to comprehend what they are doing to us.  For our part, we can't just lay down without any good reason to do so.

            It is imperative to us that all communication regarding this matter cease immediately.  Time is money, and we can't afford any more time in this matter, and we will invest no further time in this matter.  We will be willing to have a brief discussion (no more than 15 minutes) with a corporate representative from Starbucks for the purpose of determining if there is any purpose in moving the discussions forward or not.

            We are sending a hard copy of this fax for your records via UPS.


Respectfully yours,


James O. Clark III




Ann O. Clark (president)