JULY 6, 1998

John Rawls

Blanc Williams Johnston & Kronstadt, LLP

1900 Avenue of the Stars

17 Floor

Los Angeles, Ca 90067-4403

Re: Starbucks Coffee Company / Black Bear Micro Roastery

Dear John,

   I am responding to your correspondence of 6/26/98.  The only reason I am responding is that you have been such a reasonable individual to deal with.  As you will recall, in my 5/27/98 fax I stated that I wanted to be contacted only by a corporate representative, and that I would talk to said representative for 15 minutes to determine if there was any purpose in going any further with the discussions.  Since it is you who has contacted me, I will endeavor to make our position as clear as possible.

   When the 5/21/98 draft of the proposed Settlement Agreement arrived here, it became painfully clear that said agreement would involve considerably more negotiation than we were anticipating, and that $2,500 was not going to come close to covering our expenses.  I believe the root of the problem is that we are dealing with a large corporation, and that none of the individuals at, or representing Starbucks is in any way capable of realistically relating to our situation, a very small, startup business.  That is an assumption that I am making, and based on that assumption I will make no attempt to create any level of reasonable understanding.  Instead, I will state our position in plain and simple language, and I will respectfully ask that you don't make any attempt to "read between the lines", but rather look directly at what I am putting in print.

A)   We are not in the business of letter writing, and do not make any money in said pursuit.

B)   We will not allow any large corporation to involve us in any pursuit that can threaten our financial existence, and we will regard attempts to engage us in such activities as harassment.

C)   We will not engage in any further communication with any individual from, or representing Starbucks Corporation, except under the following conditions:

1)     We must receive a payment from Starbucks in the amount of $2,800.00 to compensate us for expenses already incurred and paid for by us.

2)     Starbucks must agree, in writing, to pay all future expenses that we might incur as a result of any further negotiations regarding this matter, and that said payments will be paid within 30 days of invoicing.  Starbucks must understand that there will be "clearly anticipated" legal expenses that will be invoiced.

3)     Starbucks must clearly understand that if the foregoing payment is made, and if the foregoing conditions are met, that there is absolutely no guarantee that any further discussions will prove successful.

D)   We firmly maintain that the matter regarding Charbucks Blend is not a legal matter, and we will not engage in any discussions with attorneys until, and only if a firm agreement has been reached between corporate representatives from the parties involved.

Respectfully yours,

Jim Clark